Kel Homes, LLC v. Burris

933 So. 2d 699, 2006 WL 2033904
CourtDistrict Court of Appeal of Florida
DecidedJuly 21, 2006
Docket2D06-595
StatusPublished
Cited by32 cases

This text of 933 So. 2d 699 (Kel Homes, LLC v. Burris) is published on Counsel Stack Legal Research, covering District Court of Appeal of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kel Homes, LLC v. Burris, 933 So. 2d 699, 2006 WL 2033904 (Fla. Ct. App. 2006).

Opinion

933 So.2d 699 (2006)

KEL HOMES, LLC, Appellant,
v.
Michael and Tonia BURRIS, individually, Appellees.

No. 2D06-595.

District Court of Appeal of Florida, Second District.

July 21, 2006.

*700 Jeffrey Sanford Kaufman of Kaufman, Englett & Lynd, P.A., Orlando, for Appellant.

Kelly A. Greene of Kelly A. Greene, P.A., Kissimmee, for Appellee.

STRINGER, Judge.

Kel Homes, LLC, appeals from the trial court's order that denied its motion to dismiss the Burrises' complaint based on the arbitration provision in Kel Homes' contract with them. We affirm the trial court's determination that the count for specific performance is not within the scope of the arbitration provision of the contract. However, we reverse the trial court's determination that the count for fraud in the inducement is not within the scope of the arbitration provision, and we remand for further proceedings concerning the validity of the arbitration provision.

*701 In June 2004, the Burrises entered into a contract for the construction of a residence in Polk County with Kel Homes. After Hurricanes Charley, Frances, and Jeanne hit Polk County, Kel Homes attempted to terminate the contract pursuant to the "acts of God" provision of the contract. Upon receiving the termination letter, the Burrises filed suit, seeking specific performance in one count and damages for fraud in the inducement in a separate count.[1] Kel Homes moved to dismiss both counts, relying upon the arbitration provision in the parties' contract. The trial court denied this motion as to both counts on this basis, essentially finding that neither count came within the scope of the arbitration provision. However, the trial court did agree that the fraud in the inducement count failed to state a cause of action due to lack of facts and gave the Burrises leave to amend. This is the order that Kel Homes appeals.

At issue in this case is the proper interpretation of two separate provisions of the contract between Kel Homes and the Burrises, which appear on their face to conflict as to what claims come within the scope of the arbitration provision. These provisions state, in pertinent part:

24. Arbitration Agreement. It is hereby agreed that any and all claims, disputes and controversies by or between the Buyer and Seller arising from or related to the subject home identified herein, or to any defect in or to the subject home or the real property on which the subject home is situated, or the sale of the subject home by the Seller, including, without limitation, any claim for breach of contract, neglect or intentional misrepresentation or nondisclosure in the inducement, execution or performance of any contract, including this arbitration agreement, and breach of any alleged duty to good faith and fair dealing, shall be submitted to binding arbitration by and pursuant to the rules of Construction Arbitration Services, Inc. (hereinafter "CAS") in effect at the time of the request for arbitration.
. . . .
28. Default. If the Buyer fails to perform according to the terms of this agreement, including the failure or refusal to close or execute and deliver such documents to procure a mortgage, upon which this agreement is conditioned, then this agreement shall be deemed breached by the Buyer and the Seller shall be relieved of all obligations hereunder and shall be entitled to retain all deposits (initial and/or additional) paid and/or payable by the Buyer, as liquidated damages, consideration for the execution of this agreement and in full settlement of any and all claims; whereupon, all parties shall be relieved of all obligations here under. In the event of Seller's default, the buyer's sole and exclusive remedy shall be limited to either a suit for specific performance (but not monetary damages) or the return of the deposit. The Seller's inability to perform under the terms of the contract as a result of conditions or events beyond the Seller's reasonable control and beyond reasonable cost limits, shall preclude the Buyer's remedy of specific performance. A condition precedent to the Buyer filing suit for specific performance shall be: (i) Buyer shall have been in full and complete compliance *702 with all of the terms of this agreement and shall have tendered all payments due hereunder; (ii) Buyer shall have provided the Seller with written notice of Seller's default and shall have allowed Seller a reasonable period of time to cure such default; and, (iii) Buyer shall have notified Seller, in writing, that Seller has failed to cure the default within [a] reasonable period of time not to exceed 30 days.

(Emphasis added.) The issue is how to read these provisions so as to give effect to both.

Count for Specific Performance

As to the count for specific performance, Kel Homes argues such action falls within the scope of the arbitration provision because the term "suit" as used in paragraph 28 should be read to mean "arbitration." This argument is based on the general proposition that courts favor arbitration and will interpret ambiguities liberally in favor of arbitration. The Burrises, on the other hand, contend that a "suit" is not an "arbitration" and that the contract plainly says that they can file a "suit" for specific performance. Thus, according to the Burrises, their claim for specific performance does not fall within the scope of the arbitration provision. The Burrises are correct on this point for several reasons.

First, the parties do not dispute the general proposition that "words in a contract are presumed to have been used with their ordinary and customary meaning." Emergency Assocs. of Tampa, P.A. v. Sassano, 664 So.2d 1000, 1003 (Fla. 2d DCA 1995) (quoting Pottsburg Utils., Inc. v. Daugharty, 309 So.2d 199, 201 (Fla. 1st DCA 1975)). As the Burrises properly point out, the word "suit" is ordinarily understood to mean a proceeding in a court of law. Black's Law Dictionary defines "suit" as "[a] generic term, of comprehensive signification, referring to any proceeding by one person or persons against another or others in a court of law." Black's Law Dictionary 1434 (6th ed. 1990). By contrast, "arbitration" is defined as "[a] process of dispute resolution in which a neutral third party (arbitrator) renders a decision after a hearing at which both parties have an opportunity to be heard." Black's Law Dictionary 104 (6th ed. 1990). Thus, it is clear that the terms "suit" and "arbitration" are not generally understood to have the same meaning, and the term "suit" would not normally be interpreted to encompass an arbitration proceeding.

Kel Homes relies on this court's decision in Fewox v. McMerit Construction Co., 556 So.2d 419 (Fla. 2d DCA 1989), for the proposition that the term "suit" includes arbitration proceedings. However, the underlying rationale of Fewox does not support the application of its holding to this case.

In Fewox, a dispute arose between property owners, their contractor, and the contractor's surety on a performance bond. The contract between the property owners and the contractor required them to resolve their dispute through arbitration. The parties did so, and the contractor's surety paid the arbitration award.

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Cite This Page — Counsel Stack

Bluebook (online)
933 So. 2d 699, 2006 WL 2033904, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kel-homes-llc-v-burris-fladistctapp-2006.