Court Opinion

ID: 4690148
Source: CourtListenerOpinion
Date Created: 2021-05-26 15:03:55.712075+00
Date Added: 2024-06-11T08:04:58.197548
License: Public Domain

Third District Court of Appeal
                               State of Florida

                          Opinion filed May 26, 2021.
       Not final until disposition of timely filed motion for rehearing.

                            ________________

                             No. 3D20-1075
                       Lower Tribunal No. 19-31273
                          ________________

                      Johan F. Hagstrom, et al.,
                                 Appellants,

                                     vs.

       Co.Fe.Me. USA Marine Exhaust, LLC, etc., et al.,
                                 Appellees.

     An appeal from the Circuit Court for Miami-Dade County, Maria de
Jesus Santovenia, Judge.

     EPGD Attorneys at Law, P.A., and Alberto M. Manrara, for appellants.

      Tosolini, Lamura, Rasile & Toniutti, and S. David Sheffman, for
appellees.

Before LINDSEY, MILLER, and LOBREE, JJ.

     MILLER, J.
      Appellant, Johan F. Hagstrom, appeals the denial of his petition to

enjoin an arbitration initiated by his former employer, appellee, Co.Fe.Me.

USA Marine Exhaust, LLC (“Marine Exhaust”), a dissolved Florida Limited

Liability Company, by and through Giuseppe Mereghetti.1              We have

jurisdiction. See Fla. R. App. P. 9.130(a)(3)(C)(iv). Finding arbitration was

properly invoked, we affirm.

                                BACKGROUND

      In 2008, Marine Exhaust, a now-dissolved Florida limited liability

company, hired Hagstrom to serve as its managing member. Hagstrom and

Marine Exhaust signed an employment contract providing for an initial one-

year term with annual renewals at the sole discretion of the company. The

contract contained an arbitration clause, reading, “[a]ny controversy, claim

or dispute arising out of or relating to [the] Agreement or the employment

relationship, either during the existence of the employment relationship or

afterwards, between the parties hereto, their assignees, their affiliates, their

attorneys, or agents, shall . . . be settled by arbitration.”

      On the same day that the parties executed the employment contract,

Hagstrom, individually, and Mereghetti, on behalf of Co.Fe.Me. USA, Inc.

1
   Rena Hagstrom and Viking Marine Exhaust, Inc. are also styled as
appellants. The order on appeal, however, does not adjudicate their
interests.

                                         2
(“CUSA”), signed an operating agreement governing the internal affairs of

Marine Exhaust.     The operating agreement divided the interest of the

company between its two members, Hagstrom, the minority interest owner,

and CUSA, the majority interest owner. The agreement contained non-

competition provisions and a broad arbitration clause, requiring the parties

to submit “any dispute” to arbitration.

      In late 2019, Marine Exhaust filed a written demand for arbitration with

the American Arbitration Association against Hagstrom. It alleged that, after

serving as the managing member of the company for nearly a decade,

Hagstrom formed a competitor entity, Viking Marine Exhaust, Inc., in

violation of contractual non-compete and loyalty provisions, and then

secretly and fraudulently dissolved Marine Exhaust.

      Hagstrom responded to the demand by filing a petition to enjoin or stay

the arbitration proceedings in the circuit court. The lower tribunal convened

a limited evidentiary hearing and subsequently denied relief. The instant

appeal ensued.

                                  ANALYSIS

      Recognizing “strong public policy” considerations, Florida law has

historically favored agreements to resolve disputes by arbitration. 13 Parcels

LLC v. Laquer, 104 So. 3d 377, 380 (Fla. 3d DCA 2012) (citation omitted).

                                          3
This preference is codified in the Revised Florida Arbitration Code, which

provides that an arbitration clause “is valid, enforceable, and irrevocable

except upon a ground that exists at law or in equity for the revocation of a

contract.” § 682.02(1), Fla. Stat. Although arbitration is unquestionably “a

matter of consent, not coercion,” and parties cannot be compelled to arbitrate

when they have not agreed to do so, any doubts regarding arbitrability are

resolved in favor of arbitration. Volt Info. Scis., Inc. v. Bd. of Trs. of Leland

Stanford Junior Univ., 489 U.S. 468, 479, 109 S. Ct. 1248, 1256, 103 L. Ed.

2d 488 (1989); see also Bos. Bank of Com. v. Morejon, 786 So. 2d 1245,

1247 (Fla. 3d DCA 2001).

      In accord with these principles, the role of the court in determining

arbitrability is limited to the following inquiries: “(1) whether a valid written

agreement to arbitrate exists; (2) whether an arbitrable issue exists; and (3)

whether the right to arbitration was waived.” Seifert v. U.S. Home Corp., 750

So. 2d 633, 636 (Fla. 1999) (citation omitted).

      As relevant to our analysis in this case, Hagstrom does not dispute he

assented to not one, but two separate arbitration provisions. Instead, he

argues as a non-signatory, Marine Exhaust cannot enforce the terms of the

operating agreement and the employment contract is expired and

unenforceable. We respectfully disagree with both assertions.

                                       4
      “A limited liability company is bound by and may enforce the operating

agreement, regardless of whether the company has itself manifested assent

to the operating agreement.” § 605.0106(1), Fla. Stat. Thus, the absence

of Marine Exhaust’s signature on the operating agreement is of no legal

significance and we decline to disturb the finding below the parties were

bound by the operating agreement.

      Further, as evidenced by the plain language of the employment

contract, the parties contemplated and contracted for annual renewals. The

pertinent clause contains no requirement that any such extension be

reduced to writing, and the unrefuted allegations established Hagstrom

remained continuously employed, performing his required managerial duties

under the contract, until the company was dissolved. These facts support

the conclusion the parties intended to effectuate renewal after the initial one-

year period expired, and both considered themselves bound by the terms of

the written contract. 2 See 17A Am. Jur. 2d Contracts § 17 (2021) (“If, after

the expiration of a contract, the parties to the contract continue to perform

under the contract's terms, the parties' relationship is generally governed by

a new, implied in fact contract that incorporates the terms, or substantially

2
  The contract required written notice as a prerequisite to termination or
resignation.

                                       5
the same terms, of the expired contract.”) (citations omitted); Rothman v.

Gold Master Corp., 287 So. 2d 735, 736 (Fla. 3d DCA 1974) (Where “an

agreement expires by its terms and without more the parties continue to

perform as before, an implication arises that they have mutually assented to

a new contract containing the same provisions as the old; and ordinarily the

existence of such a contract is determined by the objective test, that is,

whether a reasonable man [or woman] would think the parties intended to

make such a new binding agreement.”) (citation omitted); Rubenstein v.

Primedica Healthcare, Inc., 755 So. 2d 746, 749 (Fla. 4th DCA 2000)

(“[W]here an agreement expires by its terms and without more, the parties

continue to perform as before, an implication arises that they have mutually

assented to a new contract containing the same provisions as the old.”)

(citation omitted).

      Hagstrom contends, however, that any action under the employment

contract is barred by the statute of limitations. Under the narrow scope of

our review, his contention fails. Firstly, the contract does not limit the period

in which arbitration can be demanded. Secondly, “[o]nce it is determined . . .

that the parties are obligated to submit the subject matter of a dispute to

arbitration, ‘procedural’ questions which grow out of the dispute and bear on

its final disposition should be left to the arbitrator.” John Wiley & Sons, Inc.

                                       6
v. Livingston, 376 U.S. 543, 557, 84 S. Ct. 909, 918, 11 L. Ed. 2d 898 (1964).

Hence, such issues as “delay, laches, statute of limitations, and untimeliness

raised to defeat compelled arbitration are issues of procedural arbitrability

exclusively reserved for resolution by the arbitrator.” Martin Domke, et al.,

Domke on Commercial Arbitration, 1 Domke on Com. Arb. § 15:16 (2020)

(citation omitted); see Fed. Contracting, Inc. v. Bimini Shipping, LLC, 128 So.

3d 904, 905 (Fla. 3d DCA 2013) (“[T]he determination whether Bryan's claim

is time-barred by the [applicable] statute of limitation is one for the arbitrator

to decide.”) (citation omitted); O'Keefe Architects, Inc. v. CED Constr.

Partners, Ltd., 944 So. 2d 181, 188 (Fla. 2006) (“We hold that under [Florida

law], a broad agreement to arbitrate, such as the one at issue in this case,

includes the determination of statute of limitations defenses.”); Howsam v.

Dean Witter Reynolds, Inc., 537 U.S. 79, 84, 123 S. Ct. 588, 592, 154 L. Ed.

2d 491 (2002) (“‘[P]rocedural questions which grow out of the dispute and

bear on its final disposition’ are presumptively not for the judge, but for an

arbitrator, to decide.”) (citation omitted); see also Del Webb Comtys., Inc. v.

Carlson, 817 F.3d 867, 873 (4th Cir. 2016) (“Procedural questions arise once

the obligation to arbitrate a matter is established, and may include such

issues as the application of statutes of limitations, notice requirements,

laches, and estoppel.”) (citations omitted).

                                        7
      Thus, having determined the parties assented to arbitration, we next

examine whether the dispute is arbitrable.         “[T]he test for determining

arbitrability of a particular claim under a broad arbitration provision is whether

a ‘significant relationship’ exists between the claim and the agreement

containing the arbitration clause, regardless of the legal label attached to the

dispute.” Seifert, 750 So. 2d at 637-38 (citation omitted); see Hedden v. Z

Oldco, LLC, 301 So. 3d 1034, 1037 (Fla. 2d DCA 2019) (“Whether an

arbitrable issue exists . . . depends on whether there is a ‘significant

relationship’ or ‘nexus’ between the dispute and the contract containing the

arbitration provision.”) (citation omitted); Waterhouse Constr. Grp., Inc. v.

5891 SW 64th St., LLC, 949 So. 2d 1095, 1100 (Fla. 3d DCA 2007)

(“[B]ecause counts I and V are predicated on events directly relating to the

performance of both agreements at issue, we find them to be arbitrable.”).

      In the instant dispute, both agreements contain broad arbitration

clauses, encompassing “any dispute” or “controversy” between the parties.

Further, the agreements expressly forbid the alleged acts of self-dealing and

unfair competition that comprise the basis for the arbitration action. The

operating agreement requires Hagstrom to “promote, enhance and carryout

the business purpose” of the company, while exercising “due loyalty.”

Similarly, the employment contract contains a non-competition clause,

                                        8
prohibiting Hagstrom from “directly or indirectly” soliciting business,

performing services, or delivering goods “that are competitive to those of”

Marine Exhaust. Consequently, the trial court properly determined there was

a sufficient nexus between the allegations and the applicable contracts to

establish arbitrability. See Seifert, 750 So. 2d at 640 (“If the contract places

the parties in a unique relationship that creates new duties not otherwise

imposed by law, then a dispute regarding a breach of a contractually-

imposed duty is one that arises from the contract. Analogously, such a claim

would be one arising from the contract terms and therefore subject to

arbitration where the contract required it.”) (citations omitted); Kaplan v.

Kimball Hill Homes Fla., Inc., 915 So. 2d 755, 759 (Fla. 2d DCA 2005)

(“Where an arbitration agreement provides for the arbitration of disputes

relating to a contract, ‘[t]ort claims based on duties that are dependent upon

the existence of the contractual relationship between the parties are normally

arbitrable.’”) (quoting Stacy David, Inc. v. Consuegra, 845 So. 2d 303, 306

(Fla. 2d DCA 2003)); see also First Options of Chi., Inc. v. Kaplan, 514 U.S.

938, 943, 115 S. Ct. 1920, 1923, 131 L. Ed. 2d 985 (1995) (“[T]he arbitrability

of the merits of a dispute depends upon whether the parties agreed to

arbitrate that dispute.”) (citations omitted).

                                        9
      Lastly, we consider waiver. Here, Marine Exhaust invoked arbitration

at the onset of the dispute, dispelling any suggestion of relinquishment of the

right to arbitration. See Miller & Solomon Gen. Contractors, Inc. v. Brennan's

Glass Co., Inc., 824 So. 2d 288, 291 (Fla. 4th DCA 2002) (“Because, the first

substantive filing made by the Appellants was a motion to stay invoking the

contractual arbitration clause, we conclude the trial court erred in finding that

the Appellants waived their right to arbitration.”).

      Given these circumstances, we conclude the trial court providently

found the elements of arbitrability were satisfied and there was no legal

impediment to arbitration. See Audio Visual Innovations, Inc. v. Spiessbach,

119 So. 3d 522, 527 (Fla. 2d DCA 2013). Accordingly, we affirm the well-

reasoned order under review.

      Affirmed.

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