Court Opinion

ID: 3061720
Source: CourtListenerOpinion
Date Created: 2015-10-14 00:51:26.504228+00
Date Added: 2024-06-11T12:46:33.206388
License: Public Domain

[DO NOT PUBLISH]

                IN THE UNITED STATES COURT OF APPEALS

                         FOR THE ELEVENTH CIRCUIT
                          ________________________           FILED
                                                    U.S. COURT OF APPEALS
                                 No. 10-12261         ELEVENTH CIRCUIT
                             Non-Argument Calendar     NOVEMBER 5, 2010
                           ________________________        JOHN LEY
                                                            CLERK
                      D.C. Docket No. 0:10-CV-60162-CMA

KEREN PETERS,
individually and on behalf of all others similarly situated,

                                                    lllllllllllllllllllllPlaintiff - Appellee,

                                        versus

THE KEYES COMPANY,
a Florida corporation,

                                                 lllllllllllllllllllllDefendant - Appellant.

                           ________________________

                    Appeal from the United States District Court
                        for the Southern District of Florida
                          ________________________

                                (November 5, 2010)

Before TJOFLAT, WILSON and PRYOR, Circuit Judges.
PER CURIAM:

      The Keyes Company appeals the denial of its motion to compel Keren

Peters to arbitrate her complaint against Keyes. Peters sued Keyes for allegedly

violating federal and state laws by collecting an administrative brokerage fee

under a real estate purchase agreement between Peters and Bank United, and

Keyes moved to compel arbitration based on an arbitration clause in that

agreement. The district court ruled that Keyes could not compel Peters to arbitrate

because Keyes was not a party to or a third-party beneficiary of the agreement.

We affirm.

      Peters and Bank United executed a purchase agreement that identified

Keyes as the broker and escrow agent. A section of the agreement titled

“Additional terms” provided that Keyes would collect an administrative brokerage

fee of $499 from Peters. That section also provided that Keyes, as broker, had a

“right to place a lien on the Property to ensure payment of services rendered” and

“[f]or purposes of [that] paragraph, [Keyes] [would] be treated as a party to [the]

Contract.”

      The agreement contained a dispute resolution clause that Peters and Bank

United would mediate or, if necessary, arbitrate any disputes other than those

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involving deposits, but that clause allowed arbitration of any dispute with Keyes

only if Keyes consented in writing to be a party to the proceeding:

      16. DISPUTE RESOLUTION: This contract will be construed under
      Florida law. All controversies, claims and other matters in question
      arising out of or relating to this transaction or this Contract or its breach
      will be settled as follows:
             (a) Disputes concerning entitlement to deposits made and agreed
             to be made: Buyer and Seller will have 30 days from the date
             conflicting demands are made to attempt to resolve the dispute
             through mediation. If that fails, Escrow Agent will submit the
             dispute, if so required by Florida law, to Escrow Agent’s choice
             of arbitration, a Florida court, or the Florida Real Estate
             Commission (“FREC”). Buyer and Seller will be bound by any
             resulting award, judgment or order. A broker’s obligation . . . to
             timely notify the FREC of an escrow dispute and timely resolve
             the escrow dispute through mediation, arbitration, interpleader or
             an escrow disbursement order, if the broker so chooses, applies to
             brokers only and does not apply to title companies, attorneys or
             other escrow companies.
             (b) All other disputes: Buyer and Seller will have 30 days from
             the date a dispute arises between them to attempt to resolve the
             matter through mediation, failing which the parties will resolve
             the dispute through neutral binding arbitration in the county
             where the Property is located. . . . Any dispute with a real estate
             licensee or [broker] named in Paragraph 19 will be submitted to
             arbitration only if the licensee’s broker consents in writing to
             become a party to the proceeding. This clause will survive
             closing.

Peters purchased the property from Bank United, and Keyes collected from Peters

the administrative brokerage fee.

      Peters filed a complaint “on behalf of herself and all others similarly

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situated” against Keyes. Peters alleged that Keyes violated the Real Estate

Settlement Procedures Act, 12 U.S.C. § 2607(b), and the Florida Deceptive and

Unfair Trade Practices Act, Fla. Stat. § 501.204(1), by collecting an administrative

brokerage fee that was “unearned, duplicate[d] [its] commission,” and was

unrelated to “any settlement services [it] performed.” Peters sought compensatory

damages and injunctive relief.

      Keyes moved to compel Peters to arbitrate her complaint. Keyes argued that

Peters had agreed to arbitrate “[a]ll controversies, claims or other matters in

question arising out of or related to” the real estate transaction. Keyes also argued

that it could enforce the arbitration clause as a third-party beneficiary of the

contract.

      The district court denied the motion to compel arbitration. The district court

ruled that Keyes could not force Peters to arbitrate her complaint based on the

decision of the Florida District Court of Appeal in Nestler-Poletto Realty, Inc. v.

Kassin, 730 So. 2d 324 (1999). In Nestler-Poletto, brokers in a real estate

transaction moved to compel the seller of the property to arbitrate her complaint

that the brokers breached their fiduciary duty and acted negligently by failing to

disclose a defect in the title of the property. Id. at 325. The brokers based their

motion to compel on an arbitration clause in the contract executed by the buyer

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and seller. Id. The arbitration clause provided that all disputes other than those

involving deposits would be submitted first to mediation and, if that failed, to

binding arbitration. Id. Paragraph 16 of the contract provided, “Any disputes with

a real estate licensee . . . will be submitted to arbitration only if the licensee’s

broker consents in writing to become a party to the proceeding.” Id. The trial

court denied the motion to compel arbitration, and the appellate court affirmed.

The appellate court ruled that the general rule in favor of arbitration did not

empower the brokers, who were “non-parties to an agreement containing an

arbitration provision[,] to force the parties to arbitrate when [those] parties . . .

waived arbitration.” Id. at 326. The court also rejected the argument of the

brokers that they were third-party beneficiaries of the agreement “by virtue of their

signing it under the brokerage clause” or of the “principal’s agreement to

arbitrate.” Id. The court ruled that the brokers were “regarded as a party to the

contract only as to the brokerage clause, and [were] otherwise purely an incidental

participant.” Id.

      Keyes is in the identical position as the brokers in Nestler-Poletto. Under

Florida law, a court may not compel arbitration “in the absence of express

language in the parties’ contract mandating arbitration of such disputes.” Seifert

v. U.S. Home Corp., 750 So. 2d 633, 642 (Fla. 1999). The plain language of the

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arbitration clause in the purchase agreement executed by Peters and Bank United

bound only them to arbitrate disputes involving matters other than deposits.

Although the arbitration clause provided that Keyes could not be forced to submit

to arbitration, that right of assent did not give Keyes, a non-party, a right to

compel arbitration. See Nestler-Poletto, 730 So. 2d at 326.

      “‘Non-parties to a contract containing an arbitration clause cannot compel

parties to a contract to arbitrate unless it is determined that they are a third party

beneficiary to the contract,’” Fla. Power & Light Co. v. Road Rock, Inc., 920 So.

2d 201, 203 (Fla. Dist. Ct. App. 2006) (quoting Nestler-Poletto, 730 So. 2d at

326)), and Keyes cannot claim that status. To qualify as a third-party beneficiary,

the purchase agreement had to be executed “for the primary and direct benefit of”

Keyes. Morgan Stanley DW Inc. v. Halliday, 873 So. 2d 400, 403 (Fla. Dist. Ct.

App. 2004). The agreement contained nothing to suggest that Peters and Bank

United intended to benefit Keyes, much less that “the arbitration clause was done

for [Keyes’s] primary and direct benefit.” Id.

      The decision to deny Keyes’s motion to compel arbitration is AFFIRMED.

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