Court Opinion

ID: 4036072
Source: CourtListenerOpinion
Date Created: 2016-09-22 15:06:29.358696+00
Date Added: 2024-06-11T14:37:06.759307
License: Public Domain

Supreme Court of Florida
                                  _____________

                                  No. SC14-1349
                                  _____________

                           JUAN MENDEZ, JR., etc.,
                                 Petitioner,

                                         vs.

               HAMPTON COURT NURSING CENTER, LLC,
                           Respondent.

                               [September 22, 2016]

PERRY, J.

      Juan Mendez, Jr. (the “son”), as personal representative of the estate of Juan

Mendez, Sr. (the “father”), seeks review of the decision of the Third District Court

of Appeal in Mendez v. Hampton Court Nursing Center, LLC, 140 So. 3d 671 (Fla.

3d DCA 2014), on the ground that it expressly and directly conflicts with decisions

of the district courts of appeal on whether a nursing home resident is bound by an

arbitration clause in a nursing home contract, when the resident neither signed nor

otherwise agreed to the contract. We have jurisdiction. See art. V, § 3(b)(3), Fla.

Const.
      This case concerns whether the father is bound by an arbitration clause in a

nursing home contract signed by Hampton Court and the son, but not the father.

The Third District found “that the father is bound by the arbitration provision

contained in the agreement for care executed by his son, and to which the father

was the intended third-party beneficiary.” Mendez, 140 So. 3d at 676. We

disagree. Accordingly, we quash the Third District’s decision and remand for

further proceedings consistent with this opinion.

                              I. Facts and Procedure

      Hampton Court Nursing Center (“Hampton Court”) admitted the father to its

nursing home facility in 2009. At that time, the son signed a nursing home

contract with Hampton Court, providing for the father’s residency and care at

Hampton Court. The contract included an arbitration clause. The father did not

sign the contract.

      While under Hampton Court’s care in 2011, the father developed an eye

infection that eventually required the removal of his left eye. In 2012, the son filed

suit on the father’s behalf in the Circuit Court for the Eleventh Judicial Circuit,

Miami-Dade County, alleging negligence and statutory violations. Hampton Court

moved to compel arbitration and stay the judicial proceedings. The circuit court

heard argument and granted the motion. The father appealed, but passed away

while the appeal was pending. See id. at 673.

                                         -2-
      On appeal from the trial court’s order, the Third District affirmed. Id. at

676. Citing Alterra Healthcare Corp. v. Estate of Linton ex rel. Graham, 953 So.
2d 574 (Fla. 1st DCA 2007), the Third District held that the father was the intended

third-party beneficiary of the nursing home contract, and accordingly, Hampton

Court could bind him to its contract even though he never signed it. Mendez, 140
So. 3d at 674.

                              II. The Conflict Cases

      “Third persons who are not parties to an arbitration agreement generally are

not bound by the agreement.” 21 Williston on Contracts § 57:19, at 181 (4th ed.

2001). Notwithstanding that principle, the district courts disagree on whether a

nursing home resident is bound by an arbitration clause in a nursing home contract,

when the resident neither signed nor otherwise agreed to the contract.

      The First and Third Districts held that the resident is bound by the contract,

because the resident is the intended third-party beneficiary of the contract. See

Mendez, 140 So. 3d at 674; Alterra Healthcare, 953 So. 2d at 579. Both courts

emphasized that the resident is bound irrespective of whether the resident signed

the contract, or whether the signing party had authority to act on the resident’s

behalf. See Mendez, 140 So. 3d at 674; Alterra Healthcare, 953 So. 2d at 579. As

discussed below, we reject this view.

                                         -3-
      On similar facts, the Second, Fourth, and Fifth Districts held differently.

See Perry ex rel. Perry v. Sovereign Healthcare Metro W., LLC, 100 So. 3d 146,

147-48 (Fla. 5th DCA 2012); Fletcher v. Huntington Place Ltd. P’ship, 952 So. 2d
1225, 1227 (Fla. 5th DCA 2007); Lepisto v. Senior Lifestyle Newport Ltd. P’ship,

78 So. 3d 89, 92 (Fla. 4th DCA 2012); In re Estate of McKibben, 977 So. 2d 612,

613 (Fla. 2d DCA 2008). These decisions analyzed the facts using an agency law

framework and held that a resident was not bound by a contract that he or she did

not sign, where the signing party did not agree to the contract on the resident’s

behalf or lacked the authority to act for the resident. See Perry, 100 So. 3d at 147-

48; Fletcher, 952 So. 2d at 1227; Lepisto, 78 So. 3d at 92; McKibben, 977 So. 2d

at 613. The Fifth District explicitly considered and rejected the type of third-party

beneficiary argument upheld in Mendez and Alterra Healthcare. See Perry, 100
So. 3d at 147-48.

                    III. The Third-Party Beneficiary Doctrine

      Hampton Court urges us to adopt the rule of Mendez and Alterra Healthcare:

that under the third-party beneficiary doctrine, a nursing home resident may be

bound by a contract to which the resident never agrees. We disagree.

      The doctrine of third-party beneficiaries provides that under certain

circumstances, a person may sue to enforce a contract, even though the person is

not a party to the contract. See 11 Fla. Jur. 2d Contracts § 206, at 406-07 (2008).

                                        -4-
“To establish an action for breach of a third party beneficiary contract, [the third-

party beneficiary] must allege and prove the following four elements: ‘(1)

existence of a contract; (2) the clear or manifest intent of the contracting parties

that the contract primarily and directly benefit the third party; (3) breach of the

contract by a contracting party; and (4) damages to the third party resulting from

the breach.’ ” Found. Health v. Westside EKG Assocs., 944 So. 2d 188, 194-95

(Fla. 2006) (quoting Networkip, LLC v. Spread Enters., Inc., 922 So. 2d 355, 358

(Fla. 3d DCA 2006)); see also Patrick John McGinley, 21 Fla. Prac., Elements of

an Action § 603:1 (2015-2016 ed.).

      Critically, the third-party beneficiary doctrine enables a non-contracting

party to enforce a contract against a contracting party—not the other way around.

See, e.g., Espinosa v. Sparber, Shevin, Shapo, Rosen & Heilbronner, 612 So. 2d
1378, 1380 (Fla. 1993); Shingleton v. Bussey, 223 So. 2d 713, 715 (Fla. 1969).

The third-party beneficiary doctrine does not permit two parties to bind a third—

without the third party’s agreement—merely by conferring a benefit on the third

party. Mendez and Alterra Healthcare are not in accord with this principle.

      We have previously held that “[w]e see no reason to allow [the non-

contracting third-party beneficiary] to enjoy the benefits of the [contract] without

bearing its burdens as well.” Nat’l Gypsum Co. v. Travelers Indem. Co., 417 So.
2d 254, 256 (Fla. 1982) (holding that the non-contracting third-party beneficiary

                                         -5-
had to comply with the contract’s pre-litigation notice requirements if the third

party wanted to sue to enforce the contract). We distinguish National Gypsum,

however, because the third-party beneficiary in that case sued to enforce a contract

between other parties; here, the father’s estate sued for negligence and statutory

violations—not to enforce the son’s contract with Hampton Court.

      This distinction is consistent with many of the authorities cited in Justice

Polston’s dissenting opinion. For instance, the dissent observes that “Florida

courts have required third-party beneficiaries to arbitrate,” Polston, J., dissenting

op. at 16 (quoting Kong v. Allied Prof’l Ins. Co., 750 F.3d 1295, 1302 (11th Cir.

2014)); that “[o]rdinarily, a third party beneficiary is bound by an arbitration clause

in the contract under which the party claims third party beneficiary status,”

Polston, J., dissenting op. at 3 (quoting 8 Fla. Prac., Constr. Law Manual § 7:38

(2015-2016 ed.)); and that “traditional principles of state law allow a contract to be

enforced by or against nonparties to the contract through . . . third-party

beneficiary theories,’ ” Polston, J., dissenting op. at 16 (quoting Arthur Andersen

LLP v. Carlisle, 556 U.S. 624, 631 (2009) (emphasis removed)). We agree that

when a plaintiff sues under a contract to which the plaintiff is not a party—unlike

the father in this case—we will ordinarily enforce an arbitration clause contained

in that contract, absent some other valid defense. Cf. Nat’l Gypsum, 417 So. 2d at

256. However, the rule of National Gypsum, does not apply here because the

                                         -6-
father does not bring suit as a third-party beneficiary for the benefit of a contract

signed by others. The circumstances presented in National Gypsum are not

presented here. Neither Justice Polston’s dissenting opinion, Mendez, nor Alterra

Healthcare makes this distinction, and none finds support from National Gypsum.

      Mendez and Alterra Healthcare also run contrary to the purpose behind the

third-party beneficiary doctrine, which is to do justice for the non-contracting

third-party beneficiary. From the early days of the third-party beneficiary

principle, its proponents recognized that the third-party beneficiary rule was

grounded in principles of justice and equity. See, e.g., Arthur L. Corbin, Law of

Third Party Beneficiaries in Pennsylvania, 77 U. Penn. L. Rev. 1, 6 (1928); Samuel

Williston, Contracts for the Benefit of a Third Person, 15 Harv. L. Rev. 767, 772-

73 (1902). The seminal case establishing the third-party beneficiary doctrine

argued that “manifest justice” required the establishment of the third-party

beneficiary doctrine, even if traditional contract principles demanded a different

result. Lawrence v. Fox, 20 N.Y. 268, 275 (1859) (plurality opinion).

      Justice Polston’s dissent disapproves of these authorities, criticizing them as

old. See Polston, J., dissenting op. at 14, 17. Lawrence is now “universally

recognized as the landmark case in the evolution of the contract law of third party

beneficiaries in the United States.” 9 Corbin on Contracts § 42.3, at 16 (rev. ed.

2007). Professor Williston’s writings are instructive “because almost immediately

                                         -7-
after Lawrence v. Fox was decided, contract law became dominated by the

doctrinal reasoning of the classical contract school, as exemplified . . . in the

commentaries of figures like . . . Williston.” Melvin A. Eisenberg, Third-Party

Beneficiaries, 92 Colum. L. Rev. 1358, 1365 (1992). Professor Corbin’s thoughts

are especially noteworthy because he “had more influence on the sustained

development of [the third-party beneficiary] rule than anyone else before him or

since.” Anthony Jon Waters, The Property in the Promise: A Study of the Third

Party Beneficiary Rule, 98 Harv. L. Rev. 1109, 1172 (1985). If Lawrence and

Professors Corbin’s and Williston’s writings are invalid merely because of their

age, then so is Marbury v. Madison, 5 U.S. (1 Cranch) 137 (1803).

      Neither Mendez nor Alterra Healthcare squares with the principles of justice

and equity underlying the third-party beneficiary doctrine: both decisions permit

contracting parties to bind the non-contracting party without the non-contracting

party’s consent. See Mendez, 140 So. 3d at 674-76; Alterra Healthcare, 953 So. 2d

at 579. We would never enforce an admission agreement if a nursing home

obtained a resident’s signature by threatening the violent destruction of the

resident’s property unless the resident signed the agreement. Cf. Casto v. Casto,

508 So. 2d 330, 335 (Fla. 1987) (invalidating a prenuptial agreement in part

because of the husband’s ultimatum that the wife “sign the agreement or he would

blow up the house and throw Clorox all over her clothes”). If we will not enforce a

                                          -8-
contract when a party agrees under threat or duress, then we should not enforce a

contract in the absence of the party’s agreement altogether.

                     IV. Agency Law and Medical Incapacity

      Justice Polston’s dissent also attempts to distinguish this case on other

grounds, claiming that the son signed the admissions contract as a representative of

his father. Polston, J., dissenting op. at 18. The record in this case does not

support this analysis.

      First, we cannot conclude that the son was the father’s representative. When

“the totality of the evidence is susceptible to multiple inferences and

interpretations, the existence and scope of an agency relationship are generally

questions of fact.” Villazon v. Prudential Health Care Plan, Inc., 843 So. 2d 842,

853 (Fla. 2003); see also Goldschmidt v. Holman, 571 So. 2d 422, 424 (Fla. 1990)

(“[T]he existence of an agency relationship is normally one for the trier of fact to

determine, [except where] there [is] no evidentiary question . . . for the [factfinder]

to resolve.” (citation omitted)). In this case, the record contains conflicting

evidence on the question of agency. On one hand, the nursing home contract

contains the son’s signature on a line labeled “Resident’s Representative.” On the

other hand, the record also contains the son’s affidavit attesting to the fact that the

father had not granted the son any written authorization to act as the father’s agent,

nor had the father “otherwise directed, appointed, or instructed [the son] in any

                                          -9-
way on or prior to [the date of the father’s admission to Hampton Court] to carry

out [the father’s] affairs for him relating to any matter.” We need not remand to

the trial court to hold an evidentiary hearing and determine whether the son was

the father’s representative, however, because Hampton Court expressly disclaims

any reliance on agency principles. See Hampton Court’s Answer Br. 5 (stating that

“an argument . . . based on principles of Agency Law [sic] . . . has no relevance in

cases like this one”); id. at 14 (noting that Hampton Court has “made no argument

based on agency law principles”); Oral Arg. at 33:39 (Q: “So are you saying [that

the son was] the father’s agent?” A: “No, Your Honor. No.”).

      Finally, we hold that the father’s mental capacity does not impact the

outcome of this case. Hampton Court explicitly concedes that a nursing home

resident’s “mental capacity or competence is irrelevant to the question of whether

an individual can be bound to the terms of a contract as a third party beneficiary.”

Hampton Court’s Answer Br. 13-14; id. at 18 (observing that a nursing home

resident’s “capacity to give informed consent or make medical decisions . . . is

irrelevant in a third party beneficiary analysis”); id. at 30 (“[The father’s] mental

status is irrelevant to a proper third party beneficiary analysis.”). If Hampton

Court were concerned that the father lacked the required mental capacity to execute

binding contracts, it could have availed itself of the Legislature’s comprehensive

statutory scheme governing incapacitated individuals. See Florida Guardianship

                                         - 10 -
Law, ch. 744, Fla. Stat. (2015). Any adult person—presumably including an

individual affiliated with Hampton Court—could have petitioned for a court to

adjudicate the father incapacitated and appoint a guardian. See §§ 744.3201,

744.334, Fla. Stat. An appointed guardian would have held the power to contract

on the father’s behalf for his residency at Hampton Court. See § 744.441(21), Fla.

Stat. Hampton Court elected not to seek appointment of a guardian, and we

decline to use common law contract principles to conduct an end-run around the

Legislature’s comprehensive guardianship scheme.

                                   V. Conclusion

      We hold that the third-party beneficiary doctrine does not bind the father to

the arbitration agreement in Hampton Court’s nursing home admission agreement,

to which he never agreed. Accordingly, we quash the Third District’s decision

below, and remand to that court for further proceedings not inconsistent with this

opinion. We approve the decisions in Perry, Lepisto, McKibbin, and Fletcher, to

the extent those decisions are consistent with this opinion.

      It is so ordered.

LABARGA, C.J., and PARIENTE, LEWIS, and QUINCE, JJ., concur.
CANADY, J., dissents with an opinion.
POLSTON, J., dissents with an opinion.

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION, AND
IF FILED, DETERMINED.

                                        - 11 -
CANADY, J., dissenting.

      I am sympathetic to the view that the third-party beneficiary doctrine should

not be employed to impose the arbitration provisions of the nursing home contract

at issue in this case on the estate of Juan Mendez, Sr., who was not a party to the

contract. The application of that doctrine is highly problematic in this case where

there is no suggestion that Mendez exercised his will to obtain the benefit of any

provision of the contract or otherwise manifested his assent to the contract. But the

view adopted by the majority concerning the scope of the third-party beneficiary

doctrine as the ground for quashing the district court’s decision is not based on any

argument presented by the Petitioner. Because I conclude that the Petitioner has

made no argument that justifies quashing the decision on review, I dissent.

      Our law recognizes the “sanctity” of the right “to freely contract[.]” State

Farm Fire & Cas. Co. v. Marshall, 554 So. 2d 504, 505 (Fla. 1989). Accordingly,

contracts to which competent parties have given their assent are declared invalid

only if there is a compelling justification for doing so. See, e.g., Powertel, Inc. v.

Bexley, 743 So. 2d 570, 574 (Fla. 1st DCA 1999) (“Florida courts may properly

decline to enforce a contract on the ground that it is unconscionable. To support a

determination of unconscionability, however, the court must find that the contract

is both procedurally unconscionable and substantively unconscionable.” (citation

omitted)). The obverse of the right to freely contract is the right not to be bound

                                         - 12 -
by a contract without assent. Contract law—including the law governing contracts

to arbitrate—is about protecting and enforcing the expression of the will of the

contracting parties. Just as courts should not invalidate the expressed will of

contracting parties without compelling justification, courts should not impose

contractual obligations on a nonparty without compelling justification.

      The Petitioner here presents no argument explaining why the third-party

beneficiary doctrine is by its own terms inapplicable in this case. Instead, the

Petitioner relies on the effect of section 400.151, Florida Statutes (2009), which

sets forth requirements for nursing home contracts. The Petitioner argues that

where a nursing home contract has not been executed in accordance with the

requirements of section 400.151 any remedy under the third-party beneficiary

doctrine is foreclosed. According to the Petitioner, the common law third-party

beneficiary doctrine is wholly displaced by the statute.

      This argument would preclude a remedy in circumstances where the third-

party beneficiary doctrine could quite appropriately be applied—e.g., where the

nonparty intended beneficiary nursing home resident had affirmatively sought to

enforce a provision of the contract. Accepting the logic of the argument regarding

the displacement of the common law would also entail displacing remedies based

on contract implied in the law or contract implied in fact in circumstances where

affording such remedies would be appropriate under existing law. The Legislature

                                        - 13 -
could, of course, displace the third-party beneficiary doctrine and the law regarding

contracts implied in law and in fact, but nothing in the regulatory requirements of

section 400.151 suggests that the failure to observe the formalities required by the

statute should result in the wholesale displacement of common law remedies. The

statute does not expressly displace existing common law remedies, and to displace

those remedies by implication in this context is manifestly unreasonable.

      The Petitioner’s reliance on section 400.151 is unpersuasive. And no ground

has been presented to justify quashing the decision on review.

POLSTON, J., dissenting.

      Instead of applying well-settled contract law regarding third-party

beneficiaries, the majority creates a manifest injustice “standard” by turning

reasoning from old law review articles and a plurality opinion from an 1800s New

York case on its head. The majority’s decision will allow courts to arbitrarily

disavow arbitration clauses as occurs here by Hampton Court being denied

arbitration with Juan Mendez, Jr., the very person who signed the contract at issue.

                                          I.

      The Third District Court of Appeal explained the facts and procedural

history of the case as follows:

            On March 13, 2009, the father was admitted to the facility. On
      the day the father was admitted, a doctor employed by the facility
      determined the father lacked the capacity to give informed consent or
      make medical decisions. The admission forms included an agreement

                                        - 14 -
     for care (“the agreement”). The agreement is the contract under
     which the facility provided the father with the various residential,
     nursing, and other services associated with residency at a nursing
     home facility. The agreement contained a broad arbitration clause, as
     follows:
            Any controversy or claim arising out of or relating to the
            Agreement, or the breach thereof, shall be settled by
            arbitration in accordance with the provisions of the
            Florida Arbitration Code found at Chapter 682, Florida
            Statutes, and judgment upon the award rendered by the
            arbitrator(s) may be entered in any court having
            jurisdiction thereof.
     Although the son was not acting under a power of attorney at that
     time, he signed the agreement on a signature line indicating “signature
     of resident’s representative.” Below that signature block, the
     agreement included the following language:
            In the event that the resident has appointed a
            representative to control his/her assets, and even if such
            appointment has not been made through a legal
            document, the resident’s representative shall be fully
            bound to the extent of those assets to the terms of this
            Agreement.
            The father resided at the facility for approximately four years,
     from early 2009 until his death in late 2013. His residency included
     years before and after the incident giving rise to this lawsuit. In July
     2011, while residing at the facility, the father’s eye became infected
     and had to be removed. The father subsequently gave the son power
     of attorney. In December 2012, the son brought suit against the
     facility on behalf of the father. The facility moved to compel
     arbitration on the basis of the arbitration clause in the agreement. The
     son asserted that the arbitration clause was not binding on the father,
     who was not a party to the agreement. The trial court compelled
     arbitration and this appeal [affirms].

Mendez v. Hampton Court Nursing Ctr., LLC, 140 So. 3d 671, 673 (Fla. 3d DCA

2014).

                                           II.

                                      - 15 -
       The majority obliterates longstanding Florida contract law applicable to

third-party beneficiaries and denies Hampton Court’s right to arbitrate, even

though arbitration provisions are favored. Jackson v. Shakespeare Found., Inc.,

108 So. 3d 587, 593 (Fla. 2013) (“Courts generally favor [arbitration] provisions,

and will try to resolve an ambiguity in an arbitration provision in favor of

arbitration.”).

       The law is well settled that the rights of third-party beneficiaries are limited

by the terms of the contract. See 2 Williston on Contracts § 364A, at 873-74 & n.5

(3d ed. 1959) (collecting cases holding that a third-party beneficiary’s right is

limited by the terms of the contract). Our district courts in Florida have long held

this includes contractual arbitration provisions. 8 Florida Construction Law

Manual § 7:38 (2015-2016 ed.) (“Ordinarily, a third party beneficiary is bound by

an arbitration clause in the contract under which the party claims third party

beneficiary status.”). “Florida courts have required third-party beneficiaries to

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

“ ‘[T]raditional principles’ of state law allow a contract to be enforced by or

against nonparties to the contract through ‘assumption, piercing the corporate veil,

alter ego, incorporation by reference, third-party beneficiary theories, waiver and

estoppel.’ ” Arthur Andersen LLP v. Carlisle, 556 U.S. 624, 631 (2009) (quoting

21 Williston on Contracts § 57.19, at 183 (4th ed. 2001)) (emphasis added).

                                         - 16 -
      To hold that arbitration is not required, the majority arbitrarily applies a

manifest justice “standard,” relying on law review articles from 1902 and 1928,

and dicta from an 1859 New York plurality opinion. Majority op. at 8; Lawrence

v. Fox, 20 N.Y. 268, 275 (1859) (stating that manifest justice might result in a

different outcome from the case before it). Essentially, the majority asserts that,

because the third-party beneficiary doctrine was originally based upon principles

of equity, the doctrine should yield when a court believes that enforcing an

arbitration clause would be manifestly unjust. The majority attempts to persuade

the reader of the propriety of turning the “manifestly just” language from the 1800s

plurality on its head by quoting a 2007 edition of Corbin on Contracts and fairly

recent law review articles regarding Professors Williston and Corbin. However,

the majority ignores the fact that the two treatises that currently bear the names of

Professors Williston and Corbin do not support the majority’s position. See 21

Williston on Contracts § 57:19, at 183 (4th ed. 2001) (“[N]onsignatories may be

bound by arbitration agreements entered into by others where they have no greater

rights than those of the party through whom they claim, applying traditional

principles of agency and contract law, including assumption, piercing the corporate

veil, alter ego, incorporation by reference, third-party beneficiary theories, waiver,

and estoppel.”); 9-46 Corbin on Contracts § 46.9 (2015) (“Absent a contract term

to the contrary, the beneficiary will be subject to an arbitration clause in the

                                         - 17 -
contract for two reasons: (1) such holdings conform to the general principle that

the terms of the contract define and limit the rights of the third party beneficiary;

(2) there is a strong public policy in favor of arbitration.”). The majority’s position

is simply out of step with binding legal doctrine.

      Using its manifest injustice “standard,” the majority reasons that Juan

Mendez, Jr., should not be required to arbitrate his father’s claims because his

father did not sign the nursing home contract that included the arbitration clause.

But Juan Mendez, Jr., signed the admissions contract on the line labeled

“Resident’s Representative.” Now, the son seeks to disavow the terms of the

contract that he signed as a representative of his father, while currently acting as a

representative of his father’s estate. It is not manifestly unjust to enforce the terms

of a contract against the same person who signed it.1

      Additionally, the majority attempts to distinguish the claim at issue in this

case from a claim raised by a third-party beneficiary. The majority agrees that

“when a plaintiff sues under a contract to which the plaintiff is not a party . . . we

will ordinarily enforce an arbitration clause contained in that contract.” Majority

op. at 7. But the majority claims that here “the father does not bring suit as a third-

      1. The majority once again misses the point in its discussion of agency law
and medical incapacity. See majority op. at 10-12. Third-party beneficiary
contract law, not agency law, controls this case.

                                         - 18 -
party beneficiary for the benefit of a contract signed by others.” Id. This is

nonsensical. Perhaps the majority’s claim is related to its assertion that “the

father’s estate sued for negligence and statutory violations—not to enforce the

son’s contract with Hampton Court.” Id. at 6. However, Hampton Court’s duty to

provide care to the father only arose based upon the contract signed by the son for

the benefit of the father. Therefore, perhaps the majority is intending to hold that

the enforcement of the contract would be manifestly unjust because the claim is

outside the scope of the arbitration clause? This apparent mixture of different legal

theories is incomprehensible and certainly not the law.

      Further, the majority incorrectly states that the district courts disagree on

whether a nursing home resident is bound by an arbitration clause in a nursing

home contract when the resident did not sign or otherwise agree to the contract.

Majority op. at 3. To the contrary, the district courts have all applied well-settled

third-party beneficiary law and held that those residents are bound by the

arbitration clauses.

      The majority acknowledges that the First and Third Districts have held that

those residents are bound as a third-party beneficiary. Majority op. at 3. Indeed,

the Third District has explained that “[a]rbitration clauses in contracts are binding

on third party beneficiaries.” Orion Ins. Co. v. Magnetic Imaging Sys. I, 696 So.
2d 475, 478 (Fla. 3d DCA 1997) (citing Terminix Int’l Co., LP v. Ponzio, 693 So.

                                        - 19 -
2d 104, 109 (Fla. 5th DCA 1997) (“As third party beneficiaries, these additional

plaintiffs are bound by the arbitration provision.”); see also Zac Smith & Co., Inc.

v. Moonspinner Condo. Ass’n, Inc., 472 So. 2d 1324, 1324 (Fla. 1st DCA 1985)

(holding that “an arbitration clause in a contract is binding on a third-party

beneficiary”). This is true even if the third-party beneficiary did not sign the

contract containing the arbitration agreement: “[A] nonsignatory to an arbitration

agreement may be bound to arbitrate if the nonsignatory has received something

more than an incidental or consequential benefit of the contract, or if the

nonsignatory is specifically the intended third-party beneficiary of the contract.”

Germann v. Age Inst. of Fla., Inc., 912 So. 2d 590, 592 (Fla. 2d DCA 2005).

      But the majority incorrectly states that the Second, Fourth, and Fifth

Districts hold otherwise. Majority op. at 3-4 (stating that “[t]he First and Third

Districts held that the resident is bound by the contract, because the resident is the

intended third-party beneficiary of the contract” but that “[t]he Second, Fourth, and

Fifth Districts held differently”).

      The Second, Fourth, and Fifth Districts all acknowledge that third-party

beneficiaries can be bound by arbitration provisions. See Terminix, 693 So. 2d at

109 (citing Raffa Assocs. v. Boca Raton Resort & Club, 616 So. 2d 1096 (Fla. 4th

DCA 1993); Zac Smith, 472 So. 2d 1324). For example, the Fifth District has

explained that “Florida courts have generally held that arbitration clauses in

                                         - 20 -
contracts may be enforced by and are binding on third party beneficiaries.”

Hirshenson v. Spaccio, 800 So. 2d 670, 673 (Fla. 5th DCA 2001) (citing cases);

see also Lion Gables Realty Ltd. v. Randall Mech., Inc., 65 So. 3d 1098, 1099 (Fla.

5th DCA 2011). The Fourth District also recognizes that “ordinarily a third-party

beneficiary of a contract is bound by an arbitration clause in that contract.” Raffa

Assocs., 616 So. 2d at 1097; see also Martha A. Gottfried, Inc. v. Paulette Koch

Real Estate, Inc., 778 So. 2d 1089, 1090 (Fla. 4th DCA 2001) (“[A] third party

beneficiary to a contract can be compelled to arbitrate.”). Further, the Second

District recently held, in Pulte Home Corp. v. Bay at Cypress Creek Homeowners’

Ass’n, Inc., 118 So. 3d 957, 958 (Fla. 2d DCA 2013), that third-party beneficiaries

can be compelled to arbitrate. In a parenthetical, the Second District explained

that, “[a]s a basic derivative of the principle that a third-party beneficiary steps into

the shoes of a contracting party and is subject to all provisions of [the] contract, a

third-party beneficiary of a contract containing an arbitration provision can be

compelled to arbitrate.” Id. (quoting J. Douglas Uloth & J. Hamilton Rial, III,

Equitable Estoppel as a Basis for Compelling Nonsignatories to Arbitrate—A

Bridge Too Far?, 21 Rev. Litig. 593, 602 (Summer 2002)).

      The majority cites the Fifth District’s decision in Perry ex rel. Perry v.

Sovereign Healthcare of Metro West, LLC, 100 So. 3d 146 (Fla. 5th DCA 2012),

as the basis for its claim that the Fifth District has disavowed general third-party

                                         - 21 -
beneficiary doctrine in regard to nursing home contracts, but the holding in Perry,
100 So. 3d at 147-48, was based upon the fact that the person who signed the

contract in that case only signed as a guarantor for payment on behalf of the

resident, not as the resident’s representative or the resident’s power of attorney.

This difference is legally significant. See Fed. Deposit Ins. Corp. v. Univ. Anclote,

Inc., 764 F.2d 804, 806 (11th Cir. 1985) (“A guaranty is a collateral promise to

answer for the debt or obligation of another.” (citing Nicolaysen v. Flato, 204 So.
2d 547, 549 (Fla. 4th DCA 1967))).

      Lepisto v. Senior Lifestyle Newport Limited Partnership, 78 So. 3d 89, 92

(Fla. 4th DCA 2012), and Fletcher v. Huntington Place Limited Partnership, 952
So. 2d 1225, 1227 (Fla. 5th DCA 2007), cited by the majority, are likewise

distinguished on the basis that the contract indicated that the signor was a financial

guarantor, not a representative for the resident. Finally, the majority cites In re

Estate of McKibbin v. Alterra Health Care Corp., 977 So. 2d 612 (Fla. 2d DCA

2008), but that decision does not mention third-party beneficiaries at all. The

Second District does explain that “there was no evidence that [the resident] was

mentally or physically incapacitated to make decisions for herself,” which is

factually different from the case before us. Id. at 613.

                                             III.

                                         - 22 -
      In conclusion, I would follow well-settled contract law regarding third-party

beneficiaries and not create a manifest injustice standard that allows the court to

disavow arbitration proceedings on an ad hoc basis. I would not deny Hampton

Court the right to arbitrate with Juan Mendez, Jr., the same person who signed the

contract as the representative for his father.

      I dissent.

Application for Review of the Decision of the District Court of Appeal - Direct
Conflict of Decisions

      Third District - Case No. 3D13-1855

      (Miami-Dade County)

Charles M. P. George of The Law Offices of Charles M-P George, Coral Gables,
Florida; Christopher Wayne Wadsworth and Raymond Renato Dieppa of
Wadsworth Huott, LLP, Miami, Florida,

      for Petitioner

Thomas Anthony Valdez of Quintairos, Prieto, Wood & Boyer, P.A., Tampa,
Florida,

      for Respondent

                                         - 23 -