Court Opinion

ID: 4693588
Source: CourtListenerOpinion
Date Created: 2021-06-08 14:00:45.976791+00
Date Added: 2024-06-11T08:05:24.291150
License: Public Domain

USCA11 Case: 20-14764   Date Filed: 06/08/2021   Page: 1 of 26

                                                       [DO NOT PUBLISH]

           IN THE UNITED STATES COURT OF APPEALS

                  FOR THE ELEVENTH CIRCUIT
                    ________________________

                           No. 20-14764
                       Non-Argument Calendar
                     ________________________

                  D.C. Docket No. 1:19-cv-24235-JB

THE TAYLOR GROUP, INC.,
a Mississippi corporation,
TAYLOR MACHINE WORKS, INC.,
a Mississippi corporation,
SUDDEN SERVICE, INC.,
a Mississippi corporation,

                                                        Plaintiffs-Appellees,

                               versus

INDUSTRIAL DISTRIBUTORS INTERNATIONAL CO.,
a Florida corporation,

                                                       Defendant-Appellant.
            USCA11 Case: 20-14764          Date Filed: 06/08/2021      Page: 2 of 26

                                ________________________

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

                                        (June 8, 2021)

Before NEWSOM, LUCK, and ANDERSON, Circuit Judges.

PER CURIAM:

       Industrial Distributors International Co. appeals the district court’s order

denying its motion to compel Taylor Group 1 to arbitrate its trademark infringement

claims. We affirm.

           FACTUAL BACKGROUND AND PROCEDURAL HISTORY

       This case is about three separate agreements: a distribution agreement, in

which Taylor Group granted Taylor Machine Works International, Inc. 2 the right to

distribute its products overseas; a marketing agreement, in which Taylor

International granted International Distributors the right to market its products in the

Dominican Republic; and an asset purchase agreement, in which Taylor Group

purchased the overseas distribution rights it had granted to Taylor International.

International Distributors contends Taylor Group is bound by the marketing

       1
           We refer to The Taylor Group, Inc., Taylor Machine Works, Inc., and Sudden Service,
Inc., as “Taylor Group.”
       2
           Despite the name, Taylor International was not owned by the Taylor family.
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agreement’s arbitration clause, even though Taylor Group is not a party to the

marketing agreement.

      The Distribution Agreement. Taylor Group manufactures forklifts. In

1991, Taylor Group entered a distribution agreement with Taylor International,

granting it “overseas distribution rights to TAYLOR® equipment and parts.” The

distribution agreement provided that Taylor International would “be the sole export

management organization engaged by” Taylor Group outside the United States and

Canada. The distribution agreement also said it was:

      UNDERSTOOD      AND     AGREED    THAT    [TAYLOR]
      INTERNATIONAL, AS AN INDEPENDENT BUSINESS, [WAS] A
      SEPARATE LEGAL ENTITY FROM TAYLOR [GROUP], AND
      THE RELATIONSHIP ESTABLISHED [WAS] THAT OF A BUYER
      AND SELLER, [TAYLOR] INTERNATIONAL BUYING THE SAID
      PRODUCTS FROM TAYLOR [GROUP] FOR RESALE TO
      OTHERS    FOR    ITS   OWN    ACCOUNT.    [TAYLOR]
      INTERNATIONAL [WAS] NOT, IN ANY SENSE, AN AGENT OF
      TAYLOR [GROUP] AND HA[D] NO AUTHORITY TO
      TRANSACT ANY BUSINESS IN [TAYLOR GROUP’S] NAME OR
      TO INCUR ANY OBLIGATION OR LIABILITY FOR OR
      AGAINST TAYLOR [GROUP], OR TO BIND TAYLOR [GROUP]
      IN ANY MANNER WHATSOEVER.

“The Agreement [was] not assignable in whole or in part by either party,” and it

was “agreed that the right extended by TAYLOR [GROUP] to sell TAYLOR

products [was] not an asset of [TAYLOR] INTERNATIONAL, but belong[ed] at all

times to TAYLOR [GROUP], subject to the terms of th[e] Agreement.”

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       After Taylor Group entered into the distribution agreement with Taylor

International, International Distributors’ president, Paolo Amore, reached out to

Taylor Group to purchase parts for customers in the Dominican Republic who were

having trouble getting replacement parts for their Taylor forklifts. Taylor Group

referred Amore to Taylor International, and International Distributors continued to

purchase Taylor parts from Taylor International for a couple of years. Taylor

International’s president, Doug Hulse, invited Amore to tour the Taylor factory and

meet the Taylor family. Amore accepted the invitation and Hulse introduced Amore

to the Taylors.

       The Marketing Agreement. In 1999, Taylor International entered into a

“marketing agreement” with International Distributors. The marketing agreement

had an arbitration clause that provided: “In the event of a dispute between the

Company and the Agent, the International Chamber of Commerce shall be the

arbitrating body.” The marketing agreement provided that Taylor International

“grant[ed] to [International Distributors] the right to market the equipment” in the

Dominican Republic. Taylor International later added Colombia to International

Distributors’ territories.

       International Distributors agreed that it would not sell or recommend any

products that were not “genuine or new [Taylor International] products

manufactured by or for [Taylor International].” The marketing agreement also

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provided that International Distributors would service Taylor International’s

“products already in operation” in International Distributors’ territories.

International Distributors agreed that it would not “use the name ‘[Taylor

International]’ or any [Taylor International] trademark or trade name” except as

“approved in writing” by Taylor International. The parties agreed that the marketing

agreement could not be assigned “in whole or in part” and that it could be terminated

by either party on ninety days’ written notice.

      In May 2018, Taylor International sent a letter to International Distributors

terminating the marketing agreement “effective 90 calendar days” from the date of

the letter. In the letter, Taylor International said that International Distributors could

still order parts “under the current terms and conditions” until the ninety-day

termination period ended. That same day, Hulse emailed Taylor Group and said that

Taylor International had “issued [International Distributors] the 90 day notice of

cancellation.” Hulse noted that the marketing agreement allowed “cancellation for

any reason by either side,” but he explained that the termination was for many

reasons, including “[c]ustomer complaints,” “[p]oor business levels,” and a “[l]ack

of service support.”

      The Asset Purchase Agreement and Trademark Dispute.                         In early

September 2019, Taylor Group purchased some of Taylor International’s assets,

including the overseas distribution rights covered by the 1991 distribution

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agreement. After it bought back the international distribution rights, Taylor Group

learned that International Distributors was using Taylor brand trademarks on its

website to represent itself as an authorized dealer of Taylor brand equipment and

parts, so Taylor Group sued International Distributors for trademark infringement

and unfair competition.     International Distributors filed a motion to compel

arbitration based on the arbitration clause in the marketing agreement.

      International Distributors argued that the International Chamber of Commerce

panel should decide “in the first instance” whether Taylor Group—which did not

sign the marketing agreement—was bound to arbitrate under the agreement. But if

the arbitration question was for the district court, International Distributors argued

that Taylor Group was “bound to arbitrate under several theories,” including that:

(1) Taylor Group assumed the marketing agreement when it purchased Taylor

International’s assets; (2) Taylor International was acting as Taylor Group’s agent

when Taylor International entered the marketing agreement with International

Distributors; and (3) Taylor Group should be estopped from opposing arbitration

because of its distribution agreement with Taylor International and the fact that

Taylor Group benefitted from the marketing agreement.

      Taylor Group opposed arbitration because, as a non-party to the marketing

agreement, it could not be compelled to arbitrate. Taylor Group argued that: (1) it

did not assume the marketing agreement, since Taylor International terminated the

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marketing agreement before Taylor Group purchased its assets; (2) Taylor

International did not act as Taylor Group’s agent, since it had no authority to bind

Taylor Group to the marketing agreement; and (3) Taylor Group was not equitably

estopped from opposing arbitration, since Taylor International was not Taylor

Group’s “affiliate,” Taylor Group did not knowingly receive any direct benefits from

the marketing agreement, and International Distributors could not compel arbitration

by basing its defense on the marketing agreement.

       After reviewing the briefing and affidavits, and holding a hearing, the district

court denied International Distributors’ motion to compel arbitration.3 The district

court concluded that it had the authority to answer the arbitrability question because

“the question of whether a non-party is bound by an arbitration clause [was] within

the sound discretion of the court and not an arbitrator.” The district court explained

that “[a]lthough an arbitrator may have the authority to decide the scope of the claims

of the parties that have agreed to proceed to arbitration, that cannot encompass the

issue of whether its jurisdiction applies to non-signatories” because, by definition,

non-signatories have not agreed to the arbitration clause’s language.

       Having determined that it was the one that had to decide, the district court

concluded that Taylor Group could not be compelled to arbitrate under any of

       3
           After the parties consented to proceed before the magistrate judge, the district court
referred the case “entirely” to the magistrate judge.
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International Distributors’ theories. First, the district court found that Taylor Group

did not assume the marketing agreement when it purchased some of Taylor

International’s assets. Taylor Group, the district court explained, did not assume any

of Taylor International’s liabilities and only purchased specific assets, which did not

include the marketing agreement. The failure to include the marketing agreement

“[did] not appear to be an oversight” because “the record show[ed] that [Taylor]

International terminated the agreement,” and advised Taylor Group of the

termination, a year before the asset purchase agreement.

      Second, the district court found that Taylor International did not act as Taylor

Group’s agent. The district court explained that the distribution agreement “plainly

undermine[d] the argument that there was an agency relationship between [Taylor]

International and [Taylor Group]” because it “specifically disclaim[ed] any agency

relationship.” The record also “show[ed] that Taylor [Group] did not exercise

control over [Taylor] International,” as was required for an agency relationship.

      Third, the district court also found that Taylor Group was not estopped from

opposing arbitration of its trademark claims. International Distributors advanced

three “species” of estoppel, arguing that Taylor Group was estopped because:

(1) Taylor International was its “affiliate”; (2) International Distributors’ defense to

Taylor Group’s trademark claims was based on the marketing agreement; and

(3) Taylor Group accepted benefits from the marketing agreement. The district court

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rejected the argument that Taylor International was Taylor Group’s “affiliate”

because “the ‘heart’ of the definition of affiliate” is control and Taylor Group “did

not exercise control over [Taylor] International.” Next, the district court rejected

International Distributors’ argument that because its defense to Taylor Group’s

claims was based on the marketing agreement, Taylor Group was estopped from

opposing arbitration of its claims. That argument, the district court explained, was

not supported by any authority and the theory of estoppel did not apply because

Taylor Group was seeking to enforce intellectual property rights that were unrelated

to the marketing agreement with the arbitration clause. Finally, the district court

rejected International Distributors’ argument that Taylor Group knowingly received

direct benefits from the marketing agreement because the benefit Taylor Group

received “was the sale of Taylor [Group] products in the Dominican Republic and

Colombia” and “sales alone are not a direct benefit.”

      International Distributors appeals the district court’s order denying its motion

to compel arbitration.

                           STANDARD OF REVIEW

      “We review de novo a district court’s denial of a motion to compel

arbitration,” Kroma Makeup EU, LLC v. Boldface Licensing + Branding, Inc., 845

F.3d 1351, 1354 (11th Cir. 2017), “accept[ing] the district court’s findings of fact

that are not clearly erroneous,” Multi-Fin. Sec. Corp. v. King, 386 F.3d 1364, 1366

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(11th Cir. 2004). “Contract interpretation is a question of law and is subject to de

novo review.” Am. Cas. Co. of Reading, Pa. v. Etowah Bank, 288 F.3d 1282, 1285

(11th Cir. 2002).

                                  DISCUSSION

      International Distributors argues that the district court erred by deciding the

question of arbitrability because that question was for the International Chamber of

Commerce panel, not the district court. Even if the question was properly before the

district court, International Distributors contends that the district court erred in

concluding that Taylor Group could not be compelled to arbitrate under the

marketing agreement’s arbitration clause. International Distributors argues that the

district court erred in concluding that: 1) Taylor Group was not estopped from

opposing arbitration; 2) Taylor Group was not a third-party beneficiary to the

contract; 3) Taylor International did not act as Taylor Group’s agent; and 4) Taylor

Group did not assume the contract when it purchased Taylor International’s assets.

We address these arguments below.

        The District Court Properly Decided the Question of Arbitrability

      International Distributors argues that the district court should not have

decided the question of arbitrability because International Distributors and Taylor

International agreed that the International Chamber of Commerce panel would have

the power to determine its jurisdiction. But International Distributors’ motion to

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compel arbitration asked the district court “to determine if there [was] a basis for

binding Taylor Group or its subsidiaries to arbitration.” That is what the district

court did. Only because the district court’s answer was “no” does International

Distributors now argue that the district court should not have decided the question.

Nevertheless, International Distributors is wrong.

      There is no evidence that Taylor Group, a non-party to the marketing

agreement, agreed to submit the question of arbitrability to arbitration. In First

Options of Chicago, Inc. v. Kaplan, the Supreme Court made clear that if “the parties

did not agree to submit the arbitrability question itself to arbitration, then the court

should decide that question just as it would decide any other question that the parties

did not submit to arbitration, namely, independently.” 514 U.S. 938, 943 (1995).

International Distributors concedes that only it “and [Taylor] International agreed

that the [International Chamber of Commerce panel would have] the power to

determine its jurisdiction.” That does not include Taylor Group and we cannot

“assume . . . parties agreed to arbitrate arbitrability unless there is clear and

unmistakable evidence that they did so.” Id. at 944 (quotation omitted; alterations

adopted). The marketing agreement’s arbitration clause says that “[i]n the event of

a dispute between the Company and the Agent, the International Chamber of

Commerce shall be the arbitrating body.” That is all. There is no mention of Taylor

Group or any non-party. Therefore, we cannot say that Taylor Group “clear[ly] and

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unmistakabl[y]” agreed to arbitrate this threshold question. Absent “clear and

unmistakable evidence” to the contrary, “the question whether the parties have a

valid arbitration agreement at all is for the court, not the arbitrator, to decide.” See

Terminix Int’l Co., LP v. Palmer Ranch Ltd. P’ship, 432 F.3d 1327, 1332 (11th Cir.

2005) (quotation omitted).

       International Distributors suggests that we should err on the side of arbitration

because Taylor Group would suffer no “irreparable harm” by being compelled to

arbitrate because “Taylor [Group] can simply move to vacate any award against it if

the arbitrators exceed their powers.” But even-if-its-wrong-the-courts-can-vacate-it

is not the test we apply and the Supreme Court has explained that, although a “party

. . . can ask a court to review [an] arbitrator’s decision,” courts “will set that decision

aside only in very unusual circumstances.” Kaplan, 514 U.S. at 942. For this reason,

“who—court or arbitrator—has the primary authority to decide whether a party has

agreed to arbitrate can make a critical difference to a party resisting arbitration.” Id.

That is why we require “clear and unmistakable evidence” that a party has agreed to

submit the question of arbitrability to arbitration, and because International

Distributors has shown no evidence that non-party Taylor Group did so, the district

court did not err by deciding the question of arbitrability. See Chastain v. Robinson-

Humphrey Co., Inc., 957 F.2d 851, 854 (11th Cir. 1992) (“If a party has not signed

an agreement containing arbitration language, such a party may not have agreed to

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submit grievances to arbitration at all.        Therefore, before sending any such

grievances to arbitration, the district court itself must first decide whether or not the

non-signing party can nonetheless be bound by the contractual language.”).

                Taylor Group Cannot be Compelled to Arbitrate its Claims

      The Federal Arbitration Act “places arbitration agreements on an equal

footing with other contracts and requires courts to enforce them according to their

terms.” Hearn v. Comcast Cable Commc’ns, LLC, 992 F.3d 1209, 1213 (11th Cir.

2021) (quotation omitted); see also 9 U.S.C. § 2 (“A written provision in any . . .

contract evidencing a transaction involving commerce to settle by arbitration a

controversy thereafter arising out of such contract or transaction . . . shall be valid,

irrevocable, and enforceable, save upon such grounds as exist at law or in equity for

the revocation of any contract.”). There is no dispute that Taylor International and

International Distributors would be required to arbitrate their disputes under the

marketing agreement’s arbitration clause. The question here is whether Taylor

Group, a non-party to the marketing agreement, is bound by that agreement to

arbitrate its trademark infringement claims.

      State law “governs the issue whether a contract may be enforced by or against

a nonparty.” Kong v. Allied Prof’l Ins. Co., 750 F.3d 1295, 1302 (11th Cir. 2014)

(citations omitted); see also Arthur Andersen LLP v. Carlisle, 556 U.S. 624, 630

(2009) (The Federal Arbitration Act does not “alter background principles of state

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contract law regarding the scope of agreements (including the question of who is

bound by them).”). Although the marketing agreement selects New Jersey law, the

parties agreed at the hearing “that there was no substantive difference between the

law of Florida and New Jersey.” In its motion to compel, International Distributors

primarily relied on Florida law and the district court did the same.

      Under Florida law, generally a “party who has not agreed to be bound by an

arbitration agreement cannot be compelled to arbitrate.” Massa v. Michael Ridard

Hosp. LLC, 306 So. 3d 1106, 1109 (Fla. Dist. Ct. App. 2020). But non-parties can

be “bound to arbitration agreements under the theories of (1) incorporation by

reference; (2) assumption; (3) agency; (4) veil piercing/alter ego; and (5) estoppel.”

Id. A non-party to an arbitration agreement may also be bound to arbitrate if the

non-party “has received something more than an incidental or consequential benefit

of the contract, or if the [non-party] is specifically the intended third-party

beneficiary of the contract.” Germann v. Age Inst. of Fla., Inc., 912 So. 2d 590, 592

(Fla. Dist. Ct. App. 2005) (citations omitted). International Distributors raises four

of these theories: (1) estoppel; (2) third-party beneficiary; (3) agency; and (4)

assumption. All are without merit.

      1. Taylor Group Cannot be Compelled to Arbitrate by Estoppel.

      International Distributors argues that Taylor Group is estopped from

“asserting lack of signature to avoid arbitration” because Taylor Group’s “claim

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[was] based in some way on the contract that contained the arbitration clause” and

Taylor Group “directly benefitted from the contract.”

             a. Taylor Group’s Trademark Claims are not Based on the Marketing
                Agreement.

      Taylor Group’s claims are not based on the marketing agreement.

International Distributors concedes this point in its brief: “To be sure, [Taylor

Group’s] trademark claims do not seek to enforce the [Marketing] Agreement.”

Instead, International Distributors contends that Taylor Group must arbitrate its

claims because of “the fact that the [Marketing] Agreement serves as a defense to

the trademark claims.” International Distributors cites no case for the proposition

that a non-party to an agreement whose claims are not based on the agreement may

nevertheless be estopped from opposing arbitration of its claims because a

defendant’s theory of defense invokes the agreement. The cases it does cite stand

only for the uncontroversial point that if a plaintiff’s claims are based on the contract

containing the arbitration clause, it cannot oppose arbitration. See, e.g., McBro

Planning & Dev. Co. v. Triangle Elec. Const. Co., Inc., 741 F.2d 342, 344 (11th Cir.

1984) (holding that plaintiff was estopped from opposing arbitration because its

claims were “intimately founded in and intertwined with the underlying contract

obligations”); Jackson v. Shakespeare Found., Inc., 108 So. 3d 587, 595 (Fla. 2013)

(holding that plaintiff must arbitrate its claim because the claim was “inextricably

intertwined with both the transaction from which the contract arose and the contract
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itself—the reliance element of the claim emanate[d] from the transaction from which

the contract arose, and the damages element of the claim [arose] from the execution

and existence of the contract itself”).

      International Distributors contends that by raising the marketing agreement as

a defense to Taylor Group’s trademark infringement claims, it meets the “significant

relationship” test. In Jackson, the Florida Supreme Court held that a plaintiff must

arbitrate her claim when her claim has a “significant relationship” to the contract.

108 So. 3d at 593. “[A] significant relationship is described to exist between an

arbitration provision and a claim if there is a ‘contractual nexus’ between the claim

and the contract.” Id. “A contractual nexus exists between a claim and a contract if

the claim presents circumstances in which the resolution of the disputed issue

requires either reference to, or construction of, a portion of the contract.” Id.

      Here, the marketing agreement is wholly unrelated to Taylor Group’s

trademark claims based on conduct beginning in September 2019—over a year after

the marketing agreement was terminated. As Taylor Group points out, “the fact that

[Taylor International] may have at one time authorized [International Distributors]

to sell TAYLOR® equipment and parts in Colombia and the Dominican Republic

provides no defense to [International Distributors’] ongoing use of the TAYLOR®

Marks—in Miami and elsewhere—long after termination of the Marketing

Agreement.” Because the marketing agreement was terminated long before Taylor

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Group alleges that International Distributors infringed trademarks, Taylor Group’s

trademark “claims present no circumstances in which the resolution of the disputed

issue requires either reference to, or construction of, a portion of the contract,” and,

thus, there is no “significant relationship” between the marketing agreement and

Taylor Group’s trademark claims.

       International Distributors disputes that the marketing agreement was ever

terminated, but the district court found that it was and that finding is supported by

substantial evidence in the record.4 See Thelma C. Raley, Inc. v. Kleppe, 867 F.2d

1326, 1328 (11th Cir. 1989) (“a finding of fact [is not] clearly erroneous if the record

[contains] substantial evidence to support it”). In its May 2018 letter, Taylor

International told International Distributors that “any / all agreements that [were]

currently in place between [Taylor International] and [International Distributors]

[were] terminated effective 90 calendar days” from the date of the letter, which

would be August 14, 2018. That same day, Hulse told Taylor Group that Taylor

       4
          International Distributors argues that the district court erred because it “resolv[ed] factual
disputes” on the affidavits without holding an evidentiary hearing. But International Distributors
does not explain why an evidentiary hearing was necessary. A district court may resolve a motion
without live testimony. See Fed. R. Civ. P. 43 (“When a motion relies on facts outside the record,
the court may hear the matter on affidavits or may hear it wholly or partly on oral testimony or on
depositions.”). Even so, the district court asked the parties whether there was a “need for an
evidentiary hearing on the motion to compel.” International Distributors said that the district court
could resolve the motion by “rely[ing] on the affidavits” alone. That is what the district court did.
The failure to hold an evidentiary hearing—even if it was error—was invited by International
Distributors and, thus, we cannot address the issue. See Pensacola Motor Sales Inc. v. E. Shore
Toyota, LLC, 684 F.3d 1211, 1231 (11th Cir. 2012) (“A party that invites an error cannot complain
when its invitation is accepted.”).
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International had “issued [International Distributors] the 90 day notice of

cancellation,” and though Hulse noted that the marketing agreement allowed

“cancellation for any reason by either side,” he explained that the termination was

for many reasons, including “[c]ustomer complaints,” “[p]oor business levels,” and

a “[l]ack of service support.”

      According to International Distributors, a series of emails between Amore and

Hulse show that Taylor International “withdrew the termination notice before it

became effective.” But those emails confirm the termination rather than undermine

it. On August 13, 2018—one day before the ninety-day termination period ended—

Hulse emailed Amore and said it was “sad that it took a letter of cancellation for

[Amore] to once again surface.”         Hulse offered to buy back International

Distributors’ trucks and “stock parts.” Amore responded that he was “on vacation

with [his] family, cruising the outer islands of the Bahamas” and would respond

when he returned from vacation. The termination became effective the next day. A

week later, Amore responded, disputing Taylor International’s reasons for

terminating the marketing agreement. Hulse and Amore continued arguing by email

for months, both sticking to their positions. International Distributors identified no

email from Hulse “withdrawing” the termination of the marking agreement.

      Next, International Distributors argues that the marketing agreement could not

have been terminated because “that termination would be wrongful.” International

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Distributors does not explain what was “wrongful” about the termination. To the

extent International Distributors disputes Taylor International’s reasons for

terminating the marketing agreement, those reasons were given only as a courtesy.

The marketing agreement allowed for termination by either party “at any time . . .

with or without cause.”

      International Distributors also argues that the marketing agreement could not

have been terminated because Taylor International continued to accept and fulfill

orders from International Distributors. But those orders were not a continuation of

the marketing agreement. While the marketing agreement allowed International

Distributors to resell Taylor forklifts and required International Distributors to

provide warranty service for those forklifts, after Taylor International sent

International Distributors the termination letter, the only business between the two

companies was a few parts orders.

      The communications between Taylor International and International

Distributors confirm that the parts orders were not placed under the marketing

agreement.    The emails between Amore and Hulse show that International

Distributors was trying to be reinstated as an authorized dealer of Taylor forklifts

and asked for an in-person meeting.          At that meeting, Taylor International

maintained the termination of the marketing agreement and explained why it would

not reinstate International Distributors. Whatever their new agreement was for parts

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orders, it did not revive the marketing agreement containing the arbitration clause

that International Distributors seeks to use as a defense here.

             b. Taylor Group did not Receive Direct Benefits from the Marketing
                Agreement.

      International Distributors argues that Taylor Group should be estopped from

opposing arbitration because it “directly benefited” from the marketing agreement

by accepting and fulfilling orders and relying on International Distributors to provide

warranty service. “[W]here a company knowingly accepted the benefits of an

agreement with an arbitration clause, even without signing the agreement, that

company may be bound by the arbitration clause.” MAG Portfolio Consult, GMBH

v. Merlin Biomed Group LLC, 268 F.3d 58, 61 (2d Cir. 2001) (quotation marks

omitted). But the “benefits must be direct—which is to say, flowing directly from

the agreement,” not a “benefit derived from an agreement . . . where the

nonsignatory exploits the contractual relation[ship] of parties to an agreement, but

does not exploit (and thereby assume) the agreement itself.” Id.

      Taylor Group did not receive direct benefits from the marketing agreement.

The record shows that International Distributors placed its orders with Taylor

International and then Taylor International ordered the equipment from Taylor

Group to resell to International Distributors. At most, Taylor Group made money

from the contractual relationship between Taylor International and International

Distributors, but simply making money as a result of a contract between other parties
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is not a “direct benefit” that binds a non-party to the contract. See, e.g., Morgan

Stanley DW Inc. v. Halliday, 873 So. 2d 400, 403 (Fla. Dist. Ct. App. 2004) (holding

that a non-signatory trust beneficiary was not bound by an arbitration clause despite

the contract generating income that ultimately flowed to the non-signatory). As for

the warranty service International Distributors provided, that was a direct benefit to

Taylor International, not Taylor Group.        Under the marketing agreement, the

equipment International Distributors agreed to service in the Dominican Republic

was “[e]quipment sold or serviced by [Taylor International],” not Taylor Group.

Thus, the “direct benefits” of the marketing agreement flowed to Taylor

International, not Taylor Group.

      2. Taylor Group was not a Third-Party Beneficiary of the Marketing
         Agreement.

      International Distributors argues that the district court did not address its

theory that Taylor Group was a third-party beneficiary of the marketing agreement.

But International Distributors conceded in the district court that “[t]he analysis of

whether a non-signatory is a third-party beneficiary to a contract containing an

arbitration clause is the same as the analysis applicable to direct benefits estoppel.”

Thus, the district court’s rejection of International Distributors’ direct-benefits

estoppel theory also applied to its third-party-beneficiary theory.

      Taylor Group was not a third-party beneficiary of the marketing agreement.

“A non-party is the specifically intended beneficiary only if the contract clearly
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expresses an intent to primarily and directly benefit the third party or a class of

persons to which that person belongs.” Bochese v. Town of Ponce Inlet, 405 F.3d

964, 983 (11th Cir. 2005). Here, the marketing agreement expressed the opposite

intent.      It said that Taylor International and International Distributors were

“independent businessmen who ha[d] joined together for their mutual benefit, but

only to best realize their individual goals.” Taylor Group, as we explained above,

did not receive a direct benefit from the contract so it could not be an intended third-

party beneficiary. See Germann, 912 So. 2d at 592 (To be bound as a third-party

beneficiary, “a nonsignatory to an arbitration agreement” must have “received

something more than an incidental or consequential benefit of the contract.”).

          3. Taylor International did not Sign the Marketing Agreement as Taylor
             Group’s Agent.

          International Distributors argues that Taylor Group is bound by the arbitration

clause in the marketing agreement because Taylor International entered the

marketing agreement as Taylor Group’s agent. “The essential elements necessary

to establish an actual agency relationship are (1) acknowledgment by the principal

that the agent will act for him, (2) acceptance by the agent of the undertaking, and

(3) control by the principal over the agent’s actions.” Roman v. Bogle, 113 So. 3d

1011, 1016 (Fla. Dist. Ct. App. 2013).

          Taylor Group explicitly rejected an agency relationship with Taylor

International in the distribution agreement. The distribution agreement provided that
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“Taylor International, as an independent business, [was] a separate legal entity from

Taylor [Group], and the relationship established [was] that of a buyer and seller,”

with “Taylor International buying the said products from Taylor [Group] for resale

to others for its own account.” The distribution agreement also made clear that

“Taylor International [was] not, in any sense, an agent of Taylor [Group] and ha[d]

no authority to transact any business in [Taylor Group’s] name or to incur any

obligation or liability for or against Taylor [Group], or to bind Taylor [Group] in any

manner whatsoever.” Taylor Group’s “considerable efforts” to avoid an agency

relationship shows that Taylor Group did not acknowledge that Taylor International

would act on its behalf. Commodity Futures Trading Comm’n v. Gibraltar Monetary

Corp., Inc., 575 F.3d 1180, 1189 (11th Cir. 2009) (“[C]onsiderable efforts to avoid

an agency designation is palpable evidence” that a party “did not intend to consent

or acquiesce to an agency relationship.”).

      Taylor Group also had no control over Taylor International’s actions.

International Distributors argues that “[t]he degree of control by Taylor [Group]

[was] high” because Taylor Group “ha[d] the absolute right to accept or reject

orders.” But Taylor Group’s ability to accept or reject an order from Taylor

International does not show that Taylor Group had “control” over Taylor

International. The ability to accept or reject an order from a customer shows that

Taylor Group had control over its own manufacturing capacity, not its customers.

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Without any evidence that Taylor Group had the power to control Taylor

International’s business—beyond rejecting an order—International Distributors

cannot show control and, thus, cannot show an actual agency relationship. Virgilio

v. Ryland Group, Inc., 680 F.3d 1329, 1336 (11th Cir. 2012) (“An essential element

of the existence of an actual agency relationship is control by the principal over the

actions of the agent.” (quotation omitted)).5

       International Distributors contends that “[e]ven if Taylor International was not

[Taylor Group’s] [a]gent in fact, Taylor [Group] is nonetheless estopped to deny that

the [marketing] [a]greement was executed on behalf of Taylor [Group]” under a

theory of apparent agency. “Apparent agency exists only if” there is: “1) a

representation by the purported principal; 2) reliance on that representation by a third

party; and 3) a change in position by the third party in reliance on the

representation.” Ocana v. Ford Motor Co., 992 So. 2d 319, 326 (Fla. Dist. Ct. App.

2008). “‘Apparent authority’ does not arise from the subjective understanding of

the person dealing with the purported agent, nor from appearances created by the

       5
          International Distributors argues that Taylor International made Taylor Group a party to
the marketing agreement because “the Company” in the agreement referred to Taylor Group, not
Taylor International. This argument is not supported by the contract language. The marketing
agreement never mentions Taylor Group, only Taylor International and International Distributors.
The “products” that International Distributors agreed to resell in the Dominican Republic are
“[Taylor International] products.” The equipment International Distributors agreed to service was
“[e]quipment sold or serviced by [Taylor International].” And the arbitration clause, which
International Distributors concedes was between International Distributors and Taylor
International, said it was between “the Company and the Agent.” In short, “the Company” was
Taylor International, not Taylor Group in disguise.
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purported agent himself; instead, ‘apparent authority’ exists only where the principal

creates the appearance of an agency relationship.” Id.

      International Distributors argues that Taylor Group represented Taylor

International as its “international division” and that International Distributors relied

on that representation when it entered into the marketing agreement.                But

International Distributors couldn’t have relied on Taylor Group’s representation.

The marketing agreement between Taylor International and International

Distributors said that its parties were acting as “independent businessmen . . . only

to best realize their individual goals.” In other words, even if Taylor Group made

some representation of Taylor International’s “apparent authority,” International

Distributors agreed that it understood Taylor International was not acting with that

authority, but only on its own behalf when it entered into the marketing agreement.

      4. Taylor Group did not Assume the Marketing Agreement.

      International Distributors finally argues that Taylor Group was bound by the

arbitration clause because it assumed the marketing agreement in its asset purchase

agreement with Taylor International. There are several problems with this theory.

First, the asset purchase agreement was “limited” to specific assets listed in

section 2.1, which did not include the marketing agreement. Second, at the time of

the purchase, the marketing agreement was no longer one of Taylor International’s

assets because it had been terminated and the marketing agreement specifically

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excluded “any liability or obligation . . . relating to, resulting from, or arising out of,

any former operation of [Taylor International] that had been discontinued or

disposed of prior to the Closing.” Third, even if it was still an asset, the marketing

agreement could not have been purchased by Taylor Group because it could not be

assigned. The marketing agreement provided that it was “not assignable in whole

or in part by either party.” Thus, Taylor Group cannot be compelled to arbitrate

under a theory of assumption.

                                    CONCLUSION

       International Distributors moved to compel Taylor Group to arbitrate its

trademark claims, relying on the arbitration clause in a marketing agreement that

Taylor Group did not sign.        Taylor Group was not a party to the marketing

agreement, its trademark claims were not based on the marketing agreement, it did

not receive a direct benefit from the marketing agreement, it was not a third-party

beneficiary of the marketing agreement, neither party to the marketing agreement

acted as Taylor Group’s agent, and Taylor Group never assumed the marketing

agreement. Therefore, International Distributors cannot show that Taylor Group was

bound to the marketing agreement’s arbitration clause. Thus, we affirm the district

court’s denial of International Distributors’ motion to compel arbitration.

       AFFIRMED.

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