Court Opinion

ID: 3172483
Source: CourtListenerOpinion
Date Created: 2016-01-27 16:05:25.411293+00
Date Added: 2024-06-11T12:17:08.255185
License: Public Domain

Third District Court of Appeal
                               State of Florida

                          Opinion filed January 27, 2016.
         Not final until disposition of timely filed motion for rehearing.

                               ________________

                               No. 3D15-1652
                           Consolidated: 3D15-1124
                          Lower Tribunal No. 15-6405
                             ________________

                               Glasswall, LLC,
                                    Appellant,

                                        vs.

                 Monadnock Construction, Inc., et al.,
                                    Appellees.

     Appeals from non-final and final orders from the Circuit Court for Miami-
Dade County, John W. Thornton, Jr. and William Thomas, Judges.

      Crabtree & Auslander, John G. Crabtree, Charles Auslander, George R.
Baise, Jr., and Brian C. Tackenberg, for appellant.

      Duane Morris LLP, Alvin D. Lodish and Richard D. Shane, for appellees.

Before WELLS, ROTHENBERG and EMAS, JJ.

      WELLS, Judge.
      In this consolidated appeal1, Glasswall, LLC appeals from a non-final order

denying its motion for a temporary injunction to stay a New York arbitration and

from a non-final order granting the appellees’ motion to stay the underlying cases

in this matter pending conclusion of the New York arbitration.            We have

jurisdiction. See Fla. R. App. P. 9.130(a)(3)(B), (a)(3)(C)(iv). Finding that the

construction contracts at issue sufficiently demonstrate the parties’ intent that an

arbitrator decide issues of arbitrability, we affirm.

      Glasswall is the manufacturer of impact-resistant windows and door systems

used in high-rise commercial and residential buildings. Manadnock Construction,

Inc. is the general contractor for two high-rise apartment buildings being

constructed on the waterfront in Queens, New York.           On January 3, 2013,

Monadnock and Glasswall entered into AIA-modified contracts2 pursuant to which

Glasswall agreed to manufacture window assemblies for the New York project in

return for $13 million. When a dispute arose over Glasswall’s ability to timely

deliver its product, Monadnock instituted an arbitration proceeding with the

American Arbitration Association (“AAA”) in New York, seeking various

1The parties to 3D15-1124 are Glasswall, LLC and Monadnock Contruction, Inc.
The parties to 3D15-1652 are Glasswall, Monadnock, HPS 50th Avenue
Associates, LLC, HPS Borden Avenue Associates, LLC, The Related Companies,
and Bruce Beal.
2 “AIA” stands for The American Institute of Architects. AIA contracts are
“commonly used in the construction industry.” Higley S. Inc. v. Park Shore Dev.
Co., 494 So. 2d 227, 228 (Fla. 2d DCA 1986).

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remedies and damages for Glasswall’s purported breaches of the parties’ contracts.

For their part, Glasswall, its owner Ugo Colombo, and Colombo’s wife, Sara Jayne

Kennedy, each filed suits in Miami-Dade County Circuit Court challenging the

propriety of the arbitration proceeding initiated by Monadnock in New York and

asserting claims against Monadnock and the other appellees, several of which are

the subject of this appeal (lower court case numbers 15-6405, 14-2090, and 14-

5447).3

        The parties then filed competing motions, with Glasswall seeking a

temporary injunction to stay the New York arbitration and Monadnock seeking to

stay the instant circuit court cases pending the outcome of the New York

arbitration—the crux of the motions centering on whether the parties had agreed to

submit the issue of arbitrability to an arbitrator. Upon finding that the parties’

contracts evidenced a “clear and unmistakable” intent that an arbitrator decide

issues of arbitrability because the agreements explicitly incorporated the

Construction Industry Arbitration Rules of the AAA, the trial court entered

separate orders denying Glasswall’s motion for a temporary injunction and

granting Monadnock’s motion for a stay of the cases brought here pending

arbitration. Glasswall appealed both orders which this has court consolidated for

all purposes. For the following reasons we affirm.

3   Glasswall voluntarily dismissed lower court case number 15-6017.

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         The subject construction contracts contain identical provisions wherein

Glasswall and Monadnock agreed that claims arising out of their agreements

would be subject to mediation followed by binding arbitration, both administered

by the AAA in accordance with its construction industry rules and procedures in

effect on the date of the agreements:

         ARTICLE 6 MEDIATION                    AND    BINDING       DISPUTE
         RESOLUTION

         § 6.1 MEDIATION

         § 6.1.1 Any claim arising out of or related to this Subcontract, except
         claims as otherwise provided in Section 4.1.54 and except those
         waived in this Subcontract, shall be subject to mediation as a
         condition precedent to binding dispute resolution.

         § 6.1.2 The parties shall endeavor to resolve their claims by
         mediation which, unless the parties mutually agree otherwise, shall be
         administered by the American Arbitration Association in accordance
         with its Construction Industry Mediation Procedures in effect on the
         date of the Agreement. A request for mediation shall be made in
         writing, delivered to the other party to this Subcontract and filed with
         the person or entity administering the mediation. The request may be
         made concurrently with the filing of binding dispute resolution
         proceedings but, in such event, mediation shall proceed in advance of
         binding dispute resolution proceedings, which shall be stayed pending
         mediation for a period of 60 days from the date of filing, unless stayed
         for a longer period by agreement of the parties or court order. If an
         arbitration is stayed pursuant to this Section, the parties may
         nonetheless proceed to the selection of the arbitrators(s) and agree
         upon a schedule for later proceedings.

               ....

4   No argument is made that this exception is at issue in these consolidated appeals.

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      § 6.2 BINDING DISPUTE RESOLUTION

      For any claim subject to, but not resolved by mediation pursuant to
      Section 6.1, the method of binding dispute resolution shall be as
      follows:

      (Check the appropriate box. If the Contractor and . . . Manufacturer do
      not select a method of binding dispute resolution below, or do not
      subsequently agree in writing to a binding dispute resolution method
      other than litigation, claims will be resolved by litigation in a court of
      competent jurisdiction.)

             [X] Arbitration pursuant to Section 6.3 of this Agreement

             [ ] Litigation in a court of competent jurisdiction

             [ ] Other (specify)

      § 6.3 ARBITRATION

      § 6.3.1 If the Contractor and . . . Manufacturer have selected
      arbitration as the method of binding dispute resolution in Section 6.2,
      any claim subject to, but not resolved by, mediation shall be subject to
      arbitration which, unless the parties mutually agree otherwise, shall be
      administered by the American Arbitration Association in accordance
      with its Construction Industry Arbitration Rules in effect on the date
      of the Agreement. . . .

      The relevant Construction Industry Arbitration Rule of the AAA in effect at

the time of the parties’ agreements, which was incorporated by reference into the

subject construction contracts, provides that the arbitrator has the power to rule on

his or her own jurisdiction, including the arbitrability of a claim:

      R-9 Jurisdiction

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   (a) The arbitrator shall have the power to rule on his or her own
      jurisdiction, including any objections with respect to the existence,
      scope or validity of the arbitration agreement.

   (b) The arbitrator shall have the power to determine the existence or
      validity of a contract of which an arbitration clause forms a part. Such
      an arbitration clause shall be treated as an agreement independent of
      the other terms of the contract. A decision by the arbitrator that the
      contract is null and void shall not for that reason alone render invalid
      the arbitration clause.

   (c) A party must object to the jurisdiction of the arbitrator or to the
       arbitrability of a claim or counterclaim no later than the filing of the
       answering statement to the claim or counterclaim that gives rise to the
       objection. The arbitrator may rule on such objections as a preliminary
       matter or as part of the final award.

      While arbitrability is generally an issue for a trial court to decide, “courts are

required to enforce privately negotiated agreements to arbitrate.” Rintin Corp.,

S.A. v. Domar, Ltd., 766 So. 2d 407, 408-09 (Fla. 3d DCA 2000). In Rintin, this

court addressed a contract which like the one presently before us, did not include

specific language indicating that the issue of arbitrability of a dispute would be

submitted to an arbitral panel but did incorporate a reference to Florida’s

International Arbitration Act. There, we decided that such reference constituted

“clear and unmistakable” evidence that the parties intended that arbitrability be

determined by the arbitral panel:

            . . . Rintin and Domar executed a shareholders’ agreement
      containing an arbitration clause that read, in pertinent part, as follows:

                   Any controversy arising from the interpretation,
             performance or termination of this agreement or its

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              noncompliance that cannot be settled by the parties . . .
              will be submitted to arbitration . . . according to the
              provisions of Florida International Arbitration Act
              (FIAA) and the rules of the American Arbitration
              Association (AAA).

              ....

              In the instant, case, although the parties did not include specific
       language indicating that the issue of arbitrability of a dispute will be
       submitted to an arbitral panel, they did include a specific reference to
       the FIAA which contains such a provision. The inclusion of this
       reference is “clear and unmistakable” evidence of the parties’ intent to
       be governed by the FIAA and its provision requiring the submission
       of the issue of arbitrability of a dispute to the arbitral panel.

Id. at 408, 409.

       We find Rintin to be sufficiently analogous to this case to conclude that by

incorporating the Construction Industry Rules of the AAA which make the issue of

arbitrability subject to arbitration, there is “clear and unmistakable” evidence of

Glasswall’s and Monadnock’s intent to submit the issue of arbitrability to an

arbitrator.

       In so holding, we note that the parties are in agreement that the majority of

federal courts considering similar circumstances where the AAA’s arbitration rules

have been incorporated by reference into a contract likewise have found that the

parties sufficiently evidenced their intent to have arbitrators, not a court, hear and

decide issues of arbitrability. See, e.g., Oracle Am., Inc. v. Myriad Group A.G.,

724 F.3d 1069, 1074 (9th Cir. 2013) (“Virtually every circuit to have considered

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the issue has determined that incorporation of the American Arbitration

Association’s (AAA) arbitration rules constitutes clear and unmistakable evidence

that the parties agreed to arbitrate arbitrability.”); Petrofac, Inc. v. DynMcDermott

Petroleum Operations Co., 687 F.3d 671, 675 (5th Cir. 2012) (“We agree with

most of our sister circuits that the express adoption of [AAA] rules presents clear

and unmistakable evidence that the parties agreed to arbitrate arbitrability.”);

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

Cir. 2005) (“By incorporating the AAA rules . . . into their agreement, the parties

clearly and unmistakably agreed that the arbitrator should decide whether the

arbitration clause is valid.”). To this end, we decline Glasswall’s invitation to side

with those few courts which have found otherwise.5

      Accordingly, we find the trial court properly denied Glasswall’s motion for a

temporary injunction and properly entered a stay of the multiple lower court

proceedings pending the New York arbitration.

      Affirmed.

5In particular, we disregard the California state appellate decision in Ajamian v.
CantorCO2e, L.P., 137 Cal. Rptr. 3d 773 (Cal. Ct. App. 2012), upon which
Glasswall heavily relies, as that case arose in the wholly non-analogous context of
an un-negotiated employment agreement between an employer and its employee.
There, the court refused to enforce an arbitration provision incorporated into the
employment agreement finding it was “unconscionable” to do so because of the
“unequal bargaining power” of the parties. Id. at 793, 795-96. No argument has
been made here that Glasswall was not on equal footing with Monadnock when it
negotiated and executed the construction agreements at issue here.

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