CHARLES DAVIS v. BANK OF AMERICA, N. A.

• Court: District Court of Appeal of Florida
• Decided: September 30, 2022
• Docket: 21-2795
• Status: Published

Opinion

DISTRICT COURT OF APPEAL OF FLORIDA SECOND DISTRICT

CHARLES DAVIS,

Appellant,

v.

BANK OF AMERICA, N.A.; PNC BANK NATIONAL ASSOCIATION; and C&K INVESTMENT LLC d/b/a CITY LIMIT AUTO SALES,

Appellees.

No. 2D21-2795

September 30, 2022

Appeal pursuant to Fla. R. App. P. 9.130 from the Circuit Court for Hillsborough County; Emily A. Peacock, Judge.

Aldo Bollinger of Bollinger Law Group, PLLC, St. Petersburg, for Appellant.

Tricia J. Duthiers of Liebler, Gonzalez & Portuondo, Miami, for Appellee Bank of America, N.A.

No appearance for remaining Appellees.

SILBERMAN, Judge. Charles Davis appeals the trial court's order denying his

motion to dismiss Bank of America's (BOA) Counterclaim/Third-

Party Complaint with prejudice or his alternative motion to compel

arbitration and motion to transfer venue. Because the trial court

erred in denying Davis's motion to compel arbitration, we reverse

and remand for entry of an order granting that motion. We affirm

the remainder of the trial court's order as it pertains to Davis.

I. FACTUAL BACKGROUND

Davis was the sole member, manager, and registered agent of

C&K Investment, LLC d/b/a City Limit Auto Sales (C&K). Davis

opened a business checking account with BOA on behalf of C&K.

He signed a signature card for the account as C&K's manager,

acknowledging and agreeing that the account is governed by

various documents, including a deposit agreement. By its terms,

the agreement is binding on BOA, C&K as the account owner, and

on all persons "with authority to withdraw funds from the account

or otherwise operate the account." The record reflects that Davis

had such authority. The deposit agreement also contains

provisions addressing arbitration, jurisdiction and venue, and

liability.

2 The jurisdiction and venue provision states the following:

Any action or proceeding regarding your account or this deposit agreement must be brought in the state in which the financial center that maintains your account is located. You submit to the personal jurisdiction of that state. . . . If a Claim is submitted to arbitration and the state where that financial center is located is not reasonably convenient for you, then you and we will attempt to agree on another location. If you and we are unable to agree on another location, then the location will be determined by the Administrator or arbitrator.

Except for certain limitations concerning class actions and jury trial

waivers, the agreement provides that either party may compel

binding arbitration.

In March 2017 Davis deposited a $30,000 check payable to

C&K into C&K's account at BOA. The following day he obtained a

$20,000 cashier's check from the C&K account payable to himself.

The very next day BOA entered a "return item chargeback" on the

C&K account as the $30,000 check did not clear. This resulted in

an overdraft of C&K's account due to insufficient funds. The record

reflects that BOA sent multiple statements to C&K reflecting that

the account had a negative balance of $20,422.45. In July 2017

BOA "force closed" C&K's overdrawn account.

3 As alleged in Davis's second amended complaint against PNC

Bank, in September 2018 he deposited the $20,000 cashier's check

into his personal PNC account. Although the cashier's check

indicated on its face that it was void after 90 days from its issuance

in March 2017, BOA honored the check and transferred the funds

into Davis's PNC account. Davis asserted that PNC refused to

release the funds to Davis and froze his account without

explanation.

Based on allegations contained in the pleadings, at some point

PNC and BOA entered into an indemnification agreement and PNC

returned the cashier's check to BOA.1

II. PROCEDURAL BACKGROUND

Davis sued PNC for breach of contract and civil theft based on

its freezing of his account and its failure to release to him the funds

from the cashier's check. PNC then sued BOA as a third-party

defendant pursuant to the indemnification agreement.

BOA filed affirmative defenses directed to PNC's third-party

complaint and a Counterclaim/Third-Party Complaint against Davis

1Our record does not contain a copy of the indemnification agreement. 4 and C&K. The Counterclaim/Third-Party Complaint sought a

declaratory judgment against Davis and C&K with respect to the

parties' rights and obligations concerning the $20,000 cashier's

check.

In response to BOA's Counterclaim/Third-Party Complaint,

Davis filed a motion to dismiss with prejudice or in the alternative a

motion to compel arbitration and motion to transfer venue of the

Counterclaim/Third-Party Complaint. The trial court denied

Davis's motions.

Davis has raised multiple issues on appeal, including that the

trial court erred in denying his challenge to venue and in refusing to

enforce the arbitration provision contained in the deposit

agreement. We address these two issues but reject without

discussion Davis's other issues. We also address an argument

made by BOA regarding service of process on C&K.

III. VENUE

On appeal, review of a contractual provision as to venue is de

novo where there are no factual issues to be resolved. See Se.

Concrete Constructors, LLC v. W. Sur. Co., 331 So. 3d 763, 765 (Fla.

2d DCA 2021); Am. Boxing & Athletic Ass'n v. Young, 911 So. 2d

5 862, 864 (Fla. 2d DCA 2005). Where the trial court must resolve

factual issues relating to venue, we determine whether the trial

court's factual findings are supported by competent substantial

evidence or are clearly erroneous; we review de novo the trial court's

legal conclusions. See Breed Techs., Inc. v. AlliedSignal Inc., 861

So. 2d 1227, 1230 (Fla. 2d DCA 2003); Wynn Drywall, Inc. v.

Aequicap Program Adm'rs, Inc., 953 So. 2d 28, 30 (Fla. 4th DCA

2007).

Davis argues that as to BOA's Counterclaim/Third-Party

Complaint against him, venue is not proper in Hillsborough County

but instead would be proper in Missouri. He asserts that the BOA

account was established in Missouri and that C&K was a Missouri

entity that has been dissolved. However, the deposit agreement

provides that any action as to the account or the deposit agreement

"must be brought in the state in which the financial center that

maintains your account is located."

Davis did not establish that the BOA financial center that

maintained the C&K account was located outside of Hillsborough

County at the time of the events giving rise to this litigation. In

fact, the account statements contained in our record list a Tampa

6 address for BOA in the section titled "Customer service

information."

Further, Davis is a Hillsborough County resident and initiated

his lawsuit against PNC in Hillsborough County to enforce his

rights to the funds represented by "a Cashier's Check issued by

Bank of America, guaranteed by Bank of America, drawn on Bank

of America's own funds and signed by a cashier guaranteeing the

funds in the amount of $20,000." Under Florida Rule of Civil

Procedure 1.180(a), a third-party defendant such as BOA may

assert against a plaintiff such as Davis "any defenses that the

defendant has to the plaintiff's claim. The third-party defendant

may also assert any claim against the plaintiff arising out of the

transaction or occurrence that is the subject matter of the plaintiff's

claim against the defendant."

Davis's claim against PNC arises from the cashier' check he

obtained from BOA and deposited into his PNC account and from

PNC's handling of that check. PNC's claim for indemnification

against BOA arises from the same cashier's check and the

indemnification agreement between PNC and BOA. And BOA's

claim against Davis arises from the circumstances surrounding

7 Davis's purchase of the cashier's check, his later deposit of that

check with PNC, and his claim for the funds represented by that

In light of the circumstances, we conclude that Davis has not

established error in the trial court's denial of his challenge to venue

in Hillsborough County.

IV. ARBITRATION

We review the denial of a request to compel arbitration de

novo. Stacy David, Inc. v. Consuegra, 845 So. 2d 303, 306 (Fla. 2d

DCA 2003). "Courts generally favor [arbitration] provisions, and will

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

arbitration." Jackson v. Shakespeare Found., Inc., 108 So. 3d 587,

593 (Fla. 2013). Because "[a]rbitration provisions are contractual in

nature[,] . . . [t]he intent of the parties to a contract, as manifested

in the plain language of the arbitration provision and contract itself,

determines whether a dispute is subject to arbitration." Id. (citing

Seifert v. U.S. Home Corp., 750 So. 2d 633, 636 (Fla. 1999)).

Both federal statutory provisions and the Florida arbitration

code require courts to consider three elements when ruling on a

motion to compel arbitration: "(1) whether a valid written agreement

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

whether the right to arbitration was waived." Shotts v. OP Winter

Haven, Inc., 86 So. 3d 456, 464 (Fla. 2011) (quoting Seifert, 750 So.

2d at 636).

As to the first element, it is "for the court, not the arbitrator, to

determine 'whether a valid written agreement to arbitrate exists.' "

Id. at 471 (quoting Seifert, 750 So. 2d at 636). An arbitration

agreement is not valid and will be unenforceable if it violates public

policy. See id. (citing Glob. Travel Mktg., Inc. v. Shea, 908 So. 2d

392, 398 (Fla. 2005)).

Davis contends that he is not individually bound by the

deposit agreement because he signed the account signature card on

behalf of C&K. In the alternative, he asserts that if he is bound by

the agreement, then he is entitled to compel arbitration of BOA's

claims under that agreement. He does not otherwise challenge the

validity and enforceability of the arbitration provision. While BOA

maintains that Davis is bound by the deposit agreement, it argues

unpersuasively that arbitration of the claims should not be

compelled and should be resolved in court based on equity.

9 Based on the terms of the deposit agreement and the record

before us, we agree with BOA that the deposit agreement is binding

on Davis as a person with authority to withdraw funds from the

account and to operate the account. Simply put, Davis has not

established anything to the contrary.

As to the second element, a court must consider whether an

arbitrable issue exists. See Shotts, 86 So. 3d at 464 (citing Seifert,

750 So. 2d at 636). "Determining 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) (citing Lake City Fire & Rescue

Ass'n, Local 2288 v. City of Lake City, 240 So. 3d 128, 130 (Fla. 1st

DCA 2018)). Further, "[c]ontracts with arbitration clauses create a

presumption of arbitrability." Id. (quoting Robertson Grp., P.A. v.

Robertson, 67 So. 3d 1112, 1114 (Fla. 1st DCA 2011)).

In its Counterclaim/Third-Party Complaint BOA asserts that

pursuant to the deposit agreement Davis "is personally responsible

for overdrafts, fees, and other debts associated" with C&K's

account. It seeks a declaration of the parties' rights, a declaration

that Davis's claims against PNC are null and void, and a judgment

10 in its favor including attorney's fees, court costs, and such other

relief as is "just and proper."

The provisions of the deposit agreement dealing with resolving

claims and arbitration specify that they apply to "any claim, dispute

or controversy (whether under a statute, in contract, tort, or

otherwise and whether for money damages, penalties or declaratory

or equitable relief)" made by either party against the other, "arising

from or relating in any way to this deposit agreement . . . or the

deposit relationship between us." Based on the nature of BOA's

claim and the terms of the deposit agreement, an arbitrable issue

exists.

As to the third element, courts must determine whether the

right to arbitrate has been waived. See Shotts, 86 So. 3d at 464

(citing Seifert, 750 So. 2d at 636). "The right to arbitration, like any

contract right, can be waived." Raymond James Fin. Servs., Inc. v.

Saldukas, 896 So. 2d 707, 711 (Fla. 2005) (quoting Nat'l Found. for

Cancer Rsch. v. A.G. Edwards & Sons, Inc., 821 F.2d 772, 774 (D.C.

Cir. 1987)). The Florida Supreme Court has "defined 'waiver' as the

voluntary and intentional relinquishment of a known right or

conduct which implies the voluntary and intentional

11 relinquishment of a known right." Id. "[A] party may waive his or

her right to arbitration by filing a lawsuit without seeking

arbitration, by filing an answer to a pleading seeking affirmative

relief without raising the right to arbitration, and by moving for

summary judgment." Green Tree Servicing, LLC v. McLeod, 15 So.

3d 682, 687 (Fla. 2d DCA 2009) (internal citations omitted).

Nothing here suggests that Davis waived any right to compel

arbitration. He did not file suit against BOA; rather, he filed suit

against PNC based on its handling of the cashier's check he had

deposited. PNC then brought a claim against BOA, leading BOA to

file its Counterclaim/Third-Party Complaint against Davis and

C&K. Davis then responded with his motion to dismiss and

alternative motion to compel arbitration and to transfer venue.

Because BOA has not established that Davis waived the right to

compel arbitration, we reverse the trial court's order denying

Davis's motion to compel arbitration.

V. BOA'S ARGUMENTS AS TO SERVICE OF PROCESS ON C&K

BOA argues that the trial court's order should be affirmed as

to both Davis and C&K. However, BOA glosses over a crucial

12 procedural problem regarding C&K. In its Counterclaim/Third-

Party Complaint BOA added C&K as a named party to the litigation.

However, it did not provide formal service of process of that

pleading to C&K. See § 48.062, Fla. Stat. (2021) (providing

acceptable methods of service of process on a limited liability

company). Instead, it appears BOA provided a copy of its

Counterclaim/Third-Party Complaint to Davis's personal counsel

through the Florida Courts E-filing Portal.

As noted previously, Davis responded to BOA's pleading by

filing, on his own behalf, a motion to dismiss and alternative

motions to compel arbitration and to transfer venue. Davis pointed

out that BOA had added C&K as a party to the litigation but had

not served C&K with process.

C&K did not respond to BOA's Counterclaim/Third-Party

Complaint and did not make an appearance in the trial court or in

this appeal. In its order denying Davis's motion and alternative

motions, and despite the lack of service or any appearance in the

case by C&K, the trial court directed both Davis and C&K to file

answers to BOA's pleading.

13 BOA, through its appellate counsel, has argued to this court

that C&K was provided with proper service because: 1) Davis is the

sole member, manager, and registered agent of C&K; 2) BOA's

Counterclaim/Third-Party Complaint was provided to Davis's

counsel; 3) Davis's responsive motion "raised substantive

arguments on behalf of C&K"; and 4) Davis waived service of

process on C&K by raising those substantive arguments.

We are puzzled and troubled by counsel's argument that

simply providing a copy of BOA's pleading to Davis's lawyer,

apparently through the Florida Court's E-Filing Portal, constitutes

service of process on C&K. This argument and the others described

above were made without citation to any legal authority that

actually supports those arguments.

Counsel quotes from section 48.062 dealing with service of

process on limited liability companies. However, counsel ignores

the requirements of that statute in arguing that providing a copy of

BOA's pleading to Davis's counsel constitutes formal service of

process. The cases that counsel cites involve significantly different

circumstances and are inapposite. Indeed, counsel cites to cases

regarding waiver when a defending party agrees to accept service of

14 process by mail, yet counsel fails to acknowledge that nothing in

this record reflects that C&K, Davis, or Davis's counsel agreed to

accept service on C&K by copy of BOA's pleading to Davis's counsel.

We are further troubled by counsel's argument that Davis's

motions made in response to BOA's pleading were also made on

behalf of C&K and constitute a waiver of service. It is clear from

those motions that they were filed only on Davis's behalf.

We make these observations due to the lack of legal authority

or record support identified in BOA's brief and during oral

argument for the above-described contentions. However, because

C&K has not been served in this litigation and has not appeared in

this appeal, we do not address further that portion of the trial

court's order directing C&K to respond to BOA's

Counterclaim/Third-Party Complaint.

VI. CONCLUSION

We affirm the trial court's order to the extent that it denied

Davis's motion to dismiss BOA's claim and his motion to transfer

venue. We reverse the trial court's order to the extent that it denied

Davis's motion to compel arbitration, and we remand for the trial

court to enter an order compelling arbitration in accordance with

15 the deposit agreement. See Yam Exp. & Imp. LLC v. Nicaragua

Tobacco Imps., Inc., 298 So. 3d 1173, 1175 (Fla. 3d DCA 2020).

Affirmed in part; reversed in part; and remanded.

CASANUEVA and SMITH, JJ., Concur.

Opinion subject to revision prior to official publication.