Opinion ID: 2686878
Heading Depth: 3
Heading Rank: 1

Heading: The District Court’s Decision to Reverse

Text: The trial court, relying on the Seifert standard, denied the dealership’s motion to compel arbitration. Nevertheless, the Third District reversed the trial court’s order, in part; requiring the buyers and the dealership to proceed to arbitration under the Clause. The Third District failed to perform a Seifert analysis in making its decision, and did not provide any explanatory reasoning. In general, if there is no showing for each of the elements set forth in Seifert, the motion to compel arbitration must be denied. In this case, the record shows that the trial court had legally sufficient grounds under the first prong of the Seifert standard to deny the dealership’s motion to compel arbitration when it found that no arbitration agreements between these parties existed. See Seifert, 750 So. 2d at 636. The trial court further concluded that even if any arbitration agreement existed between the buyers and the dealership, it was unenforceable due to procedural and substantive unconscionability. The trial court specifically found that the buyers were unable to understand any of the purported arbitration agreement documents. Furthermore, none of the dealership’s employees involved -9- in the deal with the buyers could explain arbitration as an alternative dispute remedy in an understandable way. The buyers argue that under the circumstances of the case presented on appeal, the Third District’s analysis should have addressed the Seifert standard. We agree. The Third District’s decision reversing, in part, the trial court’s judgment pertaining to the Clause does not conform to our controlling precedent governing disputed motions to compel arbitration set forth in Seifert. Contrary to the trial court’s finding, the Third District determined that the Clause was a valid arbitration agreement entered into under the FAA, and was enforceable on a limited basis. The Clause states in pertinent part: “This contract evidences a transaction involving interstate commerce. Any arbitration under this contract shall be governed by the Federal Arbitration Act . . . .” The Third District states the following pertinent points concerning its decision: Where, as here, the parties execute an arbitration agreement in a transaction involving interstate commerce, the Federal Arbitration Act (“FAA”), 9 U.S.C. § 1, is implicated. Parties are allowed to choose state law for “the rules under which . . . arbitration will be conducted.” By their Florida choice of law, the parties have specified the procedures of the Florida Arbitration Code as being applicable to this transaction. See Ch. 682, Fla. Stat. (2004). While this is permissible, the arbitration agreements in this case must still be enforced in a way which is consistent with the substantive provisions of the FAA. Under the FAA, an arbitration agreement in a transaction involving interstate commerce “shall be valid, irrevocable, and - 10 - enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. “Section 2 prohibits the states from placing greater restrictions on arbitration clauses than those that apply to other contract provisions.” “A court must enforce an arbitration agreement according to its terms, absent an established ground for setting aside the contractual provision, such as fraud, duress, coercion, or unconscionability.” Basulto, 22 So. 3d at 589 (internal citations omitted; omission in original). In Basulto, the Third District aptly observes that the FAA was implicated. Accordingly, we now examine the specific requirements for entertaining disputed arbitration agreements governed by this federal statute.