Court Opinion

ID: 9840147
Source: CourtListenerOpinion
Date Created: 2023-09-15 14:05:19.407351+00
Date Added: 2024-06-11T10:08:34.604272
License: Public Domain

DISTRICT COURT OF APPEAL OF FLORIDA
                       SECOND DISTRICT

   THE MacDOUGALD FAMILY LIMITED PARTNERSHIP, LLP, a Nevada
 limited liability partnership; STEPHEN MITCHELL WATERS 2020 MLB
   IRREVOCABLE TRUST AGREEMENT; STEPHEN M. WATERS; GARY
                     MARKEL; and ROBERT KLEINERT,

                               Appellants,

                                    v.

RAYS BASEBALL CLUB, LLC, a Florida limited liability company; 501SG,
 LLC, a Delaware limited liability company; and STUART STERNBERG,
                              individually,

                                Appellees.

                               No. 2D23-9

                          September 15, 2023

Appeal pursuant to Fla. R. App. P. 9.130 from the Circuit Court for
Pinellas County; Amy M. Williams, Judge.

Courtney L. Fernald and Amy Dilday of Englander and Fischer LLP, St.
Petersburg; and Chris W. Altenbernd of Banker Lopez Gassler P.A.,
Tampa, for Appellants.

Shirin M. Vesely and Adam B. Brouillet of Trenam, Kemker, Scharf,
Barkin, Frye, O'Neill & Mullis, P.A., St. Petersburg; Joseph H. Varner III
and Bradford D. Kimbro of Holland & Knight LLP, Tampa; and Randall A.
Brater of Arentfox Schiff LLP, Washington, D.C., for Appellees.
BLACK, Judge.

     The Limited Partners of Tampa Bay Rays Baseball, Ltd., appeal
from the order compelling binding arbitration of the Limited Partners'
claims against Rays Baseball Club, LLC; 501SG, LLC; and Stuart
Sternberg.1 We reverse.
     Tampa Bay Rays Baseball, Ltd. (the Partnership), was formed in
1995. The Limited Partners are the limited partners in the Partnership;
501SG is the managing partner and sole general partner of the
Partnership. Mr. Sternberg is 501SG's chief executive officer and
manager. Rays Baseball Club, LLC (RBC), formed in 2019, is a wholly-
owned subsidiary of the Partnership, with the Partnership as RBC's sole
member. As relevant to this appeal, the Limited Partners and 501SG are
the only parties to the Partnership's controlling document (the
Partnership Agreement).
     In June 2022, the Limited Partners filed the underlying lawsuit
against RBC, 501SG, and Mr. Sternberg. The Limited Partners raised
the following claims: fraudulent transfer, citing chapter 726, Florida
Statutes; violation of the Florida Deceptive and Unfair Trade Practices
Act; tortious interference; unjust enrichment; accounting; and injunctive
relief. Of the six claims brought in the lawsuit, only one identifies 501SG
as a defendant; the remaining five claims are brought against RBC and
Mr. Sternberg or only against RBC. Following limited discovery and
consolidation of this lawsuit with two previously filed lawsuits, RBC,
501SG, and Mr. Sternberg moved for binding arbitration pursuant to the

     1 For purposes of this opinion, MacDougald Family Limited

Partnership, LLP; Stephen Mitchell Waters 2020 MLB Irrevocable Trust
Agreement; Stephen M. Waters; Gary Markel; and Robert Kleinert—the
appellants—are referred to as the Limited Partners.
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Partnership Agreement. The arbitration provision of the Partnership
Agreement provides:
     If at any time during the existence of the Partnership, any
     question, disagreement, difference or controversy including,
     without limitation, determination of whether cause exists
     under Section 7.4 [Resignation, Removal, Death, or Disability
     of Managing Partner] or Section 10.3 [Removal of a General
     Partner for Cause], shall arise between any of the Partners
     concerning the meaning or interpretation of this
     Agreement, then the Managing Partner or any General
     Partner may direct that such question, disagreement,
     difference or controversy be submitted to nonbinding
     mediation in St. Petersburg, Florida, in accordance with the
     mediation rules then obtaining of the American Mediation
     Association (or such other rules as to which the parties may
     agree), and all of the Partners agree to participate in such
     mediation. If such mediation does not result in a resolution
     of the issue, then the Managing Partner or any General
     Partner may direct that such question, disagreement,
     difference or controversy be submitted to and determined by
     binding arbitration in St. Petersburg, Florida, in accordance
     with the rules then obtaining of the American Arbitration
     Association.
(Emphasis added.)
     The Limited Partners argued below, as they argue on appeal, that
the arbitration provision plainly applies only to disagreements between
the partners "concerning the meaning or interpretation of th[e]
[Partnership] Agreement" and that none of the claims raised in the
underlying lawsuit concern the meaning or interpretation of the
Partnership Agreement. The Limited Partners pointedly argued that the
arbitration provision does not provide for arbitration of "all claims or
controversies between the parties," "all claims arising out of or relating to
the Partnership Agreement," or similarly broad language. RBC, 501SG,
and Mr. Sternberg contended that the claims at issue should be
arbitrated because the claims in the previously-filed lawsuits had been

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ordered to be arbitrated and "it's all the same subject matter. . . . [The
Limited Partners] are suing on their rights under the [P]artnership
[A]greement."
      In its order granting the motion to compel arbitration, the court
found that the allegations of the underlying lawsuit are "substantially
similar" to allegations in one of the previously filed lawsuits for which
arbitration had been compelled; that the Partnership Agreement is
"central to the[] [underlying] claims"; that the arbitration provision is
valid; that arbitrable issues exist; and that the right to arbitrate has not
been waived.
      "This court employs 'a de novo standard to review the circuit
court's construction of the arbitration agreement and its application of
the law to the facts found.' " Spring Lake NC, LLC v. Figueroa, 104 So. 3d
1211, 1214 (Fla. 2d DCA 2012) (quoting New Port Richey Med. Invs., LLC
v. Petscher ex rel. Stern, 14 So. 3d 1084, 1086 (Fla. 2d DCA 2009)).
"[T]he 'scope of the arbitration clause' is a pure matter of contractual
interpretation." Beck Auto Sales, Inc. v. Asbury Jax Ford, LLC, 249 So. 3d
765, 768 (Fla. 1st DCA 2018). And "[d]etermining whether an arbitrable
issue exists requires the court to examine the plain language of the
parties' arbitration agreement." Bailey v. Women's Pelvic Health, LLC,
309 So. 3d 698, 701 (Fla. 1st DCA 2020). "Although any doubts
regarding the scope of an arbitration clause should be resolved in favor of
arbitration, where the contract provision is not doubtful, arbitration
should not be ordered." Ocwen Fed. Bank FSB v. LVWD, Ltd., 766 So. 2d
248, 249 (Fla. 4th DCA 2000) (citation omitted).
      While the arbitration provision in this case uses the generally broad
in scope "concerning," see Jackson v. Shakespeare Found., Inc., 108 So.
3d 587, 591-93 (Fla. 2013), it restricts the nature or subject matter of

                                      4
the dispute to the "meaning or interpretation" of the Partnership
Agreement.2 The latter language is determinative here, rendering the
arbitration provision narrow in scope. See, e.g., BREA 3-2 LLC v.
Hagshama Fla. 8 Sarasota, LLC, 327 So. 3d 926, 933 (Fla. 3d DCA 2021)
(applying "well-established case law" to conclude that an arbitration
clause requiring "any dispute under this agreement" to be submitted to
arbitration is "undoubtedly narrow"), review denied, No. SC21-1493,
2022 WL 71014 (Fla. Jan. 7, 2022); Fla. Dep't of Ins. v. World Re, Inc.,
615 So. 2d 267, 269-70 (Fla. 5th DCA 1993) (concluding that the
"arbitration provision limit[ed] issues requiring arbitration to differences
of opinion arising from the interpretation of the contract" and that where
"[n]one of the[] issues appear to require any interpretation of the
agreement in question" arbitration was not required). To conclude that
the arbitration provision in this case is so broad as to encompass claims
that do not involve interpretation of the Partnership Agreement would
require us to ignore the words "meaning or interpretation," something we
cannot do. See Seifert v. U.S. Home Corp., 750 So. 2d 633, 636 (Fla.
1999) ("[C]ourts have given different meaning to [arbitration] clauses on
the basis of the actual terminology used."); Beck Auto Sales, 249 So. 3d
at 769 ("[W]e cannot ignore the fact that the arbitration provision used
the specific phrase 'derives from,' rather than a more general term, like,
say 'relates to.' "); see also World Re, 615 So. 2d at 270 (reversing the
order compelling arbitration where the arbitration provision's "language
is narrowly tailored to limit the arbitration requirement to disagreements

     2 "Concerning," in this context, has no materially different meaning

than "relating to," "about," "with reference to," and "regarding." See Ham
v. Portfolio Recovery Assocs., 308 So. 3d 942, 948-49 (Fla. 2020).
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regarding the interpretation of the contract, something that is not
necessary to resolve the issues raised in the amended complaint").
     The arbitration provision at issue restricts the arbitration
requirement to disagreements concerning the meaning or interpretation
of the Partnership Agreement. None of the claims raised by the Limited
Partners in the underlying lawsuit relate to or bear upon the
interpretation of the Partnership Agreement. That they share similarities
with previously raised claims that do concern the meaning of the
Partnership Agreement does not change the analysis. Neither does the
Limited Partners' reference to the Partnership Agreement to establish the
existence of the Partnership and to provide context for their claims.
     The Limited Partners' claims are not within the scope of the
arbitration provision of the Partnership Agreement.3 The trial court
therefore erred in granting the motion to compel arbitration.
     Reversed and remanded.

KHOUZAM and MORRIS, JJ., Concur.

Opinion subject to revision prior to official publication.

     3 Our conclusion as to the scope of the arbitration provision

renders moot the Limited Partners' argument regarding RBC's and Mr.
Sternberg's authority or standing to invoke arbitration as nonparties to
the Partnership Agreement, as well as their argument that 501SG, Mr.
Sternberg, and RBC waived any rights they may have had to compel
arbitration, and nothing in this opinion should be construed as a
comment on those arguments.
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