HERBERT JEAN v. BAYVIEW LOAN SERVICING, LLC, etc.

• Court: District Court of Appeal of Florida
• Decided: February 10, 2021
• Docket: 20-0969
• Status: Published

Opinion

Third District Court of Appeal State of Florida

Opinion filed February 10, 2021. Not final until disposition of timely filed motion for rehearing.

________________

No. 3D20-0969 Lower Tribunal No. 19-10064 ________________

Herbert Jean, Appellant,

vs.

Bayview Loan Servicing, LLC, etc., et al., Appellees.

An appeal from a nonfinal order from the Circuit Court for Miami-Dade County, Carlos Guzman, Judge.

Anthony V. Falzon, P.A., and Anthony V. Falzon, for appellant.

Greenberg Traurig P.A., and Paul B. Ranis (Fort Lauderdale), for appellees.

Before MILLER, GORDO, and BOKOR, JJ.

MILLER, J. Appellant, Herbert Jean, challenges a nonfinal order compelling

arbitration in his lawsuit against appellees, Bayview Loan Servicing, LLC and

Bayview Asset Management, LLC (collectively “Bayview”). We have

jurisdiction. Fla. R. Civ. P. 9.130(a)(3)(C)(iv). Concluding that “disputed

factual issues regarding the making of the arbitration agreement” preclude

the summary procedure engaged by the court below, we reverse and

remand for an evidentiary hearing. Am. Mgmt. Servs., Inc. v. Merced, 186

So. 3d 612, 614 (Fla. 4th DCA 2016) (citations omitted).

BACKGROUND

Jean filed suit against his employer, Bayview, under the Fair Labor

Standards Act, seeking damages for unpaid overtime compensation. See

29 U.S.C. § 201 et seq. Bayview terminated his employment and, relying

upon its “Dispute Resolution and Arbitration Policy,” subjecting all

employment “disputes, claims or controversies” to arbitration, moved to

compel arbitration. Appended to its motion were affidavits alleging all

employees, including Jean, were required to electronically sign the Policy as

a condition of continued employment. Although Bayview did not produce a

signed copy, it filed computer screenshots purportedly demonstrating Jean

“necessarily” received, viewed, and electronically acknowledged the Policy.

2 Jean opposed the motion with a counter-affidavit denying he had ever

received, reviewed, or signed the Policy. He further contended all required

employment documents were manually signed, and suggested that, because

Bayview was capable of technologically overriding his assigned credentials,

the electronic acknowledgment was either forged or falsified. Finally, Jean

alleged the documents submitted by Bayview demonstrated an internal

inconsistency, calling into question whether they actually bore an electronic

acknowledgment.

He then requested an evidentiary hearing to resolve the competing

factual issues surrounding the formation of the agreement. The lower

tribunal denied the request, found the parties were bound by the Policy, and

ordered the matter to arbitration. The instant appeal ensued.

LEGAL ANALYSIS

“Arbitration is strictly ‘a matter of consent,’ and thus ‘is a way to resolve

those disputes—but only those disputes—that the parties have agreed to

submit to arbitration.’” Granite Rock Co. v. Int’l Brotherhood of Teamsters,

561 U.S. 287, 299, 130 S. Ct. 2847, 2857, 177 L. Ed. 2d 567 (2010) (citations

omitted). Hence, the threshold issue in determining the propriety of a motion

to compel arbitration is whether the parties assented to arbitration. H.

3 Michael Muniz, Compelling Arbitration of Disputes: The Florida v. Federal

Law Quagmire, 80-DEC Fla. B.J. 31, 31 (2006).

In accord with these principles, the law has long recognized a

distinction between challenges to the formation, or very existence, of an

arbitration agreement, which must be resolved by the court, and challenges

to the continuing validity or scope of such an agreement, which are

arbitrable. Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 444,

126 S. Ct. 1204, 1208, 163 L. Ed. 2d 1038 (2006); see also § 682.02(2), Fla.

Stat.; Specht v. Netscape Commc’ns Corp., 306 F.3d 17, 26 (2d Cir. 2002)

(“It is well settled that a court may not compel arbitration until it has resolved

‘the question of the very existence’ of the contract embodying the arbitration

clause.”) (citation omitted).

In formation challenges, the court generally acts as a gatekeeper,

charged with determining the “existence of a legally enforceable assent to

submit to arbitration.” Alan Scott Rau, Everything You Really Need to Know

About “Separability” in Seventeen Simple Propositions, 14 Am. Rev. Int'l Arb.

1, 17 (2003); see also § 682.02, Fla. Stat.; AT & T Techs. Inc. v. Commc'ns

Workers, 475 U.S. 643, 649, 106 S. Ct. 1415, 1418, 89 L. Ed. 2d 648 (1986)

(“Unless the parties clearly and unmistakably provide otherwise, the question

of whether the parties agreed to arbitrate is to be decided by the court, not

4 the arbitrator.”) (citation omitted). This is because prematurely ordering

arbitration before resolving whether an agreement exists, “could result in an

arbitrator deciding no agreement was ever formed.” Will-Drill Res., Inc. v.

Samson Res. Co., 352 F.3d 211, 219 (5th Cir. 2003). Logically, such an

outcome could not stand, as it “would be a statement that the arbitrator never

had authority to decide the issue.” Id.; see also United Steelworkers v.

Warrior & Gulf Navigation Co., 363 U.S. 574, 582, 80 S. Ct. 1347, 1353, 4 L.

Ed. 2d 1409 (1960) (“For arbitration is a matter of contract and a party cannot

be required to submit to arbitration any dispute which he [or she] has not

agreed so to submit.”).

Conversely, in challenges falling within the latter category, the parties

have formed a binding agreement. Consequently, issues surrounding the

continuing validity, application, scope, and enforceability are most-often

delegated to the arbitrator for resolution. See, e.g., A T & T Techs., Inc., 475

U.S. at 648-49, 106 S. Ct. at 1418 (“[A]rbitrators derive their authority to

resolve disputes only because the parties have agreed in advance to submit

such grievances to arbitration.”) (citation omitted); Jones v. Waffle House,

Inc., 866 F.3d 1257, 1267 (11th Cir. 2017) (Parties have manifested the clear

and unmistakable “requisite intent [to] delegat[e] [to arbitration gateway

issues when the] provision at issue commit[s] to arbitration ‘any issue

5 concerning the validity, enforceability, or scope of this loan or the Arbitration

agreement,’ or, ‘any and all disputes arising out of or in connection with this

Agreement, including any question regarding its existence, validity, or

termination,’ or, finally, ‘any issue regarding whether a particular dispute or

controversy is . . . subject to arbitration.’”) (fifth alteration in original) (citations

omitted); Price v. Int’l Brotherhood of Teamsters, Chauffeurs,

Warehousemen & Helpers, 457 F.2d 605, 610 (3d Cir. 1972) (“A court will

defer to arbitrators or committees when they are exercising their delegated

power to decide unforeseen or unresolved problems arising out of gaps or

content in the contract.”).

Here, Jean challenged the formation of the arbitration agreement.

Thus, the trial court was charged with determining the threshold issue of

whether an agreement to arbitrate existed.

Ordinarily, the court would have been well-within its discretion to

summarily declare Jean assented to arbitration. See § 682.03(1)(b), Fla.

Stat. However, here, in the absence of credibility determinations derived

from live testimony, the disputed factual claims surrounding the making of

the agreement were incapable of any informed resolution. Am. Mgmt.

Servs., Inc., 186 So. 3d at 614 (“When a party seeks to compel arbitration

and the other party opposed the motion, the trial court must first determine

6 whether there are disputed factual issues regarding the making of the

arbitration agreement . . . If the court determines that there is a substantial

disputed issue, then it must set an expedited evidentiary hearing.”) (citations

omitted). Accordingly, by failing to conduct an evidentiary hearing, we

conclude the trial court exceeded its discretion in finding a valid contract

existed and we reverse and remand for such a hearing on the merits of the

respective claims of the parties.

Reversed and remanded.