Court Opinion

ID: 6333203
Source: CourtListenerOpinion
Date Created: 2022-04-20 15:02:27.871926+00
Date Added: 2024-06-11T09:23:26.462242
License: Public Domain

Third District Court of Appeal
                               State of Florida

                         Opinion filed April 20, 2022.
       Not final until disposition of timely filed motion for rehearing.

                            ________________

                            No. 3D21-0281
               Lower Tribunal Nos. 20-245 AP, 20-615 CC
                          ________________

                         UniFirst Corporation,
                                  Appellant,

                                     vs.

                  Stronger Collision Center, LLC,
                                  Appellee.

      An Appeal from the County Court for Miami-Dade County, Stephanie
Silver, Judge.

     The Gardner Law Firm, and John W. Gardner and Sara K. Grover
(Brandon), for appellant.

     Law Office of Keith Chasin, and Keith Chasin, for appellee.

Before HENDON, MILLER and BOKOR, JJ.

     BOKOR, J.
      UniFirst Corporation appeals the trial court’s grant of Stronger

Collision’s motion to dismiss UniFirst’s claim seeking enforcement of an

arbitral award. 1 The issue turns on whether the applicable law and the terms

of the parties’ contract permitted UniFirst to proceed with an ex parte

arbitration after Stronger Collision elected not to participate or whether

UniFirst should have first sought a court order to compel arbitration before

proceeding. 2 As explained below, under the contract’s choice of New York

law, we conclude that UniFirst appropriately proceeded to arbitration.

      UniFirst and Stronger Collision entered into a contract with an

arbitration provision and a selection of New York law. 3        Subsequently,

1
  As the order on appeal not only grants a motion to dismiss but also denies
the substantive relief sought by UniFirst, the plaintiff below, we have
jurisdiction as an appeal of a final order. Fla. R. App. P. 9.030(b)(1)(A); see
also Hoffman v. Hall, 817 So. 2d 1057, 1058 (Fla. 1st DCA 2002) (“The
traditional test for finality is whether the decree disposes of the cause on its
merits leaving no questions open for judicial determination except for
execution and enforcement of the decree if necessary.”).
2
  We review issues of law and issues of contract interpretation de novo. All
Seasons Condo. Ass'n, Inc. v. Patrician Hotel, LLC, 274 So. 3d 438, 445
(Fla. 3d DCA 2019) (“[T]he interpretation of a contract involves a pure
question of law that is subject to a de novo standard of review.”).
3
  The arbitration provision at issue reads as follows:

      All disputes of whatever kind between Customer and UniFirst
      based upon past, present or future acts, whether known or
      unknown, and arising out of or relating to the negotiation or
      performance of this Agreement shall be resolved exclusively by
      final and binding arbitration. The arbitration shall be conducted
      in the capital city of the state where Customer has its principal

                                       2
UniFirst demanded arbitration, which Stronger Collision refused. UniFirst did

not seek to compel arbitration. Instead, UniFirst proceeded to arbitration in

Tallahassee, Florida, under the expedited procedures of the commercial

arbitration rules of the American Arbitration Association (AAA), in

accordance with the contract. Stronger Collision timely received notice of

this proceeding, but did not participate.

      After an ex parte arbitration under the expedited AAA procedures, the

arbitrator issued an award in UniFirst’s favor. UniFirst sought enforcement

of that award in a court of competent jurisdiction in Miami-Dade County.

      place of business (or some other location mutually agreed to by
      Customer and Unifirst) pursuant to the Expedited Procedures of
      the Commercial Arbitration Rules of the American Arbitration
      Association and shall be governed by the Federal Arbitration Act.
      Customer acknowledges that, with respect to all such disputes,
      it has voluntarily and knowingly waived any right it may have to
      a jury trial or to participate in a class action or class litigation as
      a representative of any other persons or as a member of any
      class of persons, or to consolidate its claims with those of any
      other persons or class of persons. If this prohibition against class
      litigation is ruled to be unenforceable for any reason in any
      proceeding, then prohibition against class litigation shall be void
      and of no force and effect in that proceeding. This paragraph is
      governed by New York Law (exclusive of choice of law). The
      arbitrators shall award to the substantially prevailing party, if any,
      as determined by the arbitrators, all of its costs and fees. “Costs
      and fees” are defined as all reasonable pre-award expenses of
      the arbitration, including the arbitrators’ fees, administrative
      costs, travel expenses, out-of-pocket expenses, such as copying
      and telephone expenses, court costs, witness fees and attorney
      fees.

                                        3
Stronger Collision contested the award, arguing, among other grounds, that

UniFirst’s ex parte award cannot be enforced because of the failure to first

seek an order compelling arbitration. The trial court agreed, applying Florida

law to conclude that the arbitration provision required UniFirst to first seek a

court order compelling arbitration prior to arbitrating its dispute, ex parte,

under the agreed-to arbitration rules.

      This was error, as UniFirst complied with the applicable New York law

and the expedited procedures under the commercial arbitration rules of the

AAA as elected in the parties’ contract. The parties do not dispute that the

arbitration provision is “governed by New York Law” as the exclusive choice

of law. Choice-of-law provisions in Florida are presumptively valid and must

be enforced unless strong public policy considerations warrant invalidating a

contracting party’s choice to be bound by the laws of another state. See,

e.g., Se. Floating Docks, Inc. v. Auto-Owners Ins. Co., 82 So. 3d 73, 80 (Fla.

2012). Further, “[w]here the language of the contract clearly indicates that

AAA rules govern, they are expressly incorporated into the contract.”

Younessi v. Recovery Racing, LLC, 88 So. 3d 364, 365 (Fla. 4th DCA 2012).

                                         4
Thus, we apply New York law and the AAA rules to determine UniFirst’s

entitlement to ex parte arbitration under the contract. 4

      The relevant AAA rule permits ex parte arbitration if the respondent

does not reply to arbitration notices, as was the case here. 5 New York law

also provides that “[a] party aggrieved by the failure of another to arbitrate

may apply for an order compelling arbitration.”        N.Y. C.P.L.R. 7503(a)

(emphasis added). “May” is a permissive term. Nothing in the use of the

language “may apply for an order compelling arbitration” mandates that a

party must apply for such an order before seeking arbitration under the

4
  Although we apply New York law, Stronger Collision also argues that
binding caselaw from this court prohibits the enforcement of such an award
obtained after ex parte arbitration. See Chicago Ins. Co. v. Tarr, 638 So. 2d
106, 107 (Fla. 3d DCA 1994) (“Ex parte arbitration awards will not be
enforced unless the insurance policy provides for ex parte arbitration.”).
Stronger Collision’s reliance on Tarr is misplaced. First, the defendant in
Tarr was not a party to the arbitration sought. Id. (“Chicago was not made a
party to the arbitration.”). Second, unlike the insurance policy in Tarr, which
did not provide for ex parte arbitration, the agreement in this case clearly
states that arbitration shall be governed by the commercial arbitration rules
of the AAA, which do provide for ex parte arbitration. Here, Stronger
Collision was both a party to the arbitration agreement which provided for ex
parte arbitration, and UniFirst specifically demanded arbitration with Stronger
Collision. UniFirst sought ex parte arbitration, as permitted under the rules,
only after Stronger Collision refused the demand to arbitrate.
5
  See American Arbitration Association, Commercial Arbitration Rules and
Mediation          Procedures,         R-31        (Oct.        1,       2013),
https://adr.org/sites/default/files/Commercial%20Rules.pdf (“Unless the law
provides to the contrary, the arbitration may proceed in the absence of any
party or representative who, after due notice, fails to be present or fails to
obtain a postponement.”).

                                       5
procedures agreed to by the parties. See, e.g., In re Cnty. of Suffolk v.

Suffolk Chapter, Civ. Serv. Emps. Ass'n, Inc., Loc. No. 852, 86 A.D.2d 892,

892 (N.Y. App. Div. 1982) (reversing the trial court’s vacation of an arbitration

award and explaining that “filing of the notice of intent, while advisable, is not

mandatory in light of the use of the permissive ‘may’”).

      Here, Stronger Collision elected not to participate in the arbitration after

receiving UniFirst’s demand. UniFirst was, therefore, within its rights under

New York law to file a demand for arbitration with the AAA without first

exercising its permissive option to seek a court order compelling arbitration.

The rules agreed to by the parties do not require a court order to compel

arbitration and explicitly permit ex parte arbitration where not prohibited by

law. Accordingly, UniFirst complied with New York law and the contractual

language (incorporating AAA expedited procedures) before seeking and

obtaining an arbitral award. The trial court erred in dismissing the petition to

enforce the arbitral award on that basis.

      Reversed and remanded.

                                        6