Court Opinion

ID: 3175016
Source: CourtListenerOpinion
Date Created: 2016-02-05 09:56:55.865271+00
Date Added: 2024-06-11T12:57:04.032754
License: Public Domain

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                            FOURTH DISTRICT

                        MUNICOMMERCE LLC,
                             Appellant,

                                    v.

                         NAVIDOR, LTD. (Sic),
                              Appellee.

                             No. 4D15-169

                          [ February 3, 2016 ]

  Appeal of a non-final order from the Circuit Court for the Fifteenth
Judicial Circuit, Palm Beach County; Lucy Chernow Brown, Judge; L.T.
Case No. 2014CA010501XXXXMB.

  Robin Bresky of the Law Offices of Robin Bresky, Boca Raton, for
appellant.

   Stephen M. Cohen, Palm Beach Gardens, for appellee.

TAYLOR, J.

    In this commercial contract case, MuniCommerce LLC appeals from a
non-final order compelling mediation and arbitration. We agree that the
trial court failed to apply the plain language of the Independent Sales
Agent Agreement between MuniCommerce and Appellee, Navidor, Ltd., in
compelling mediation and arbitration. Navidor waived its contractual right
to mediation and/or arbitration when MuniCommerce terminated the
Agreement upon an alleged violation under Section 10(e) of the Agreement.

   MuniCommerce is a limited liability company in Boca Raton that offers
merchant accounts and payment solutions for merchants. Navidor, Ltd
was a non-exclusive, independent sales agent for MuniCommerce. Navidor
solicited prospective merchants and performed other services on behalf of
MuniCommerce pursuant to an Independent Sales Agent Agreement.

  The Agreement between the parties included a provision for mediation
and arbitration, except “in the case of termination by MuniCommerce, LLC
under Section 10 of this agreement.           Subsection 10(e) permitted
MuniCommerce to terminate the agreement if it determined in good faith
that the sales agent’s conduct under the agreement constituted unsound
business practices.

    Pursuant to Section 10(e) of the Agreement, MuniCommerce terminated
the Agreement after determining that Navidor had engaged in unsound
business practices. MuniCommerce subsequently filed a complaint
against Navidor for breach of contract, equitable relief, injunction, unjust
enrichment, tortious interference, and punitive damages. The complaint
alleged that Navidor interfered with MuniCommerce’s client relationships,
misused proprietary and confidential information in an attempt to start a
new business, stole and registered several of appellant’s merchant
accounts, depriving MuniCommerce of commissions and fees, and
received commissions without deducting minimum fees.

    Navidor moved to compel mediation and arbitration. It argued that the
waiver provision in Section 17 of the Agreement is unenforceable and
unconscionable because it allows MuniCommerce the unilateral ability to
terminate the contract and avoid mediation and arbitration. Navidor
pointed out in a memorandum of law that before MuniCommerce’s notice
of termination on August 11, 2014, Navidor declared MuniCommerce was
in breach of the agreement in a July 29, 2014 letter. The letter alleged a
breach for nonpayment of equipment rental fees and improper charges for
quota and ISO fees not authorized by the agreement. Navidor contended
that the waiver provision did not apply because Navidor claimed a breach
first. It argued that the waiver provision was unconscionable because it
allowed MuniCommerce to opt out of mediation and arbitration after
Navidor declared a breach, and without giving Navidor a chance to
establish that termination of the contract was unfounded.

    The trial court concluded that the waiver was not enforceable because
it would allow MuniCommerce to avoid arbitration any time Navidor
declared a breach, and the waiver did not apply if Navidor alleged a breach
first.

   Construction of an arbitration provision is reviewed de novo. Bari
Builders, Inc. v. Hovstone Props. Fla., LLC, 155 So. 3d 1160, 1162 (Fla. 4th
DCA 2014).

   By its plain terms, the mediation and arbitration provision does not
apply to MuniCommerce’s termination for cause under subsection 10(e) of
the contract. There was no agreement to mediate or arbitrate these
grounds for termination.

   Navidor’s prior letter to MuniCommerce was not a termination of the

                                     2
contract, and there was no evidence that MuniCommerce’s grounds for
termination were pretextual. There was no basis for the court to find that
the waiver of arbitration and mediation did not apply if a sales agent
alleged a breach by MuniCommerce before MuniCommerce terminated the
contract. The court could not rewrite the contract.

   For the waiver to be unconscionable, Navidor had to show at least a
modicum of both procedural and substantive unconscionability. See
Basulto v. Hialeah Auto., 141 So. 3d 1145, 1159 (Fla. 2014) (quoting with
approval VoiceStream Wireless Corp. v. U.S. Commc'ns, Inc., 912 So. 2d 34,
39 (Fla. 4th DCA 2005)).

  The waiver in the Independent Sales Agent Agreement does not allow
MuniCommerce to terminate for any reason to unilaterally avoid mediation
and arbitration. And the waiver is not so outrageously unfair that it is
substantively unconscionable. See Woebse v. Health Care & Ret. Corp. of
Am., 977 So. 2d 630, 632 (Fla. 2d DCA 2008) (discussing substantive
unconscionability).

   We therefore reverse the order compelling mediation and arbitration.

   Reversed.

CIKLIN, C.J., and GROSS, J. concur.

                           *          *      *

   Not final until disposition of timely filed motion for rehearing.

                                      3