Northrop and Johnson Yachts-Ships, Inc. v. Royal Van Lent Shipyard, B v.

• Court: Court of Appeals for the Eleventh Circuit
• Decided: March 26, 2021
• Docket: 20-13442
• Status: Unpublished

Opinion

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[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT ________________________

No. 20-13442 Non-Argument Calendar ________________________

D.C. Docket No. 0:19-cv-62878-KMW

NORTHROP AND JOHNSON YACHTS-SHIPS, INC., a Florida Corporation,

Plaintiff - Appellant,

versus

ROYAL VAN LENT SHIPYARD, B.V., a Netherlands Corporation, FEADSHIP AMERICA, INC., a Florida Corporation,

Defendants - Appellees.

________________________

Appeal from the United States District Court for the Southern District of Florida ________________________

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Before NEWSOM, BRANCH, and ANDERSON, Circuit Judges.

PER CURIAM:

Northrop and Johnson Yachts-Ships, Inc. (“Northrop”) appeals the district

court’s order dismissing its complaint and compelling arbitration under the New

York Convention. Northrop sued Feadship America, Inc. (“Feadship America”)

and Royal Van Lent Shipyards, B.V. (“Royal Van Lent”) for an allegedly unpaid

commission on the construction of a luxury yacht. The sole question in this appeal

is whether Northrop agreed in writing to arbitrate its claims—if it did, then the

motion to compel arbitration was properly granted. Because we conclude that

Northrop did agree in writing to arbitrate its claims, we affirm.

I

Northrop is a brokerage company that negotiates deals between buyers and

sellers of yachts. In February 2014, Northrop entered into an agreement with two

private clients to sell their current yacht and purchase a new and larger yacht.

Shortly thereafter, and at the request of Feadship America (acting as an agent of

Royal Van Lent), Northrop introduced the clients to the Feadship America brand

and one of its 217-foot yacht models called “Project F809.” The clients soon

agreed to purchase Project F809, which would be built by Royal Van Lent. Two

directors from Royal Van Lent, the director of Feadship America, and the CEO and

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a broker from Northrop negotiated the sale at the Lauderdale Yacht Club in

Broward County, Florida.

Because the clients wished eventually to buy a larger yacht than Project

F809, Northrop alleges that the “negotiations culminated in a confidential

commission agreement for Project F809 on or about May 21, 2015, which

specifically contemplated the Clients’ purchase of another Royal Van Lent yacht in

the future.” That understanding was memorialized in a Commission Agreement

between Northrop and Royal Van Lent. The Commission Agreement established

that:

[Northrop] is to receive a commission of [€2,000,000] for the sale of [Project] [F]809. If the client will build one new yacht in the future with Royal van Lent Shipyard, [Northrop] is entitled to a minimum additional commission of [€1,200,000] on top of the standard negotiated commission. This additional commission is understood to be a bonus for accepting a reduced commission with project [F]809.

It is understood by both parties that this commission will be the only commission to be paid by [Royal Van Lent], any other or additional claim for commission will be the sole responsibility of [Northrop]. [Northrop] will use its best efforts during the build and warranty periods to moderate between parties when necessary.

The Commission Agreement also contained an arbitration clause, which provided

that “[a]ny dispute arising out of or in connection with this Agreement shall be

finally settled in accordance with The Arbitration Rules of the Netherlands

Arbitration Institute (NAI).”

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After Project F809 was delivered to the clients in April 2016, Northrop,

Feadship America, and Royal Van Lent continued to discuss the construction of

the second contemplated yacht. And Northrop continued to mediate between the

clients and Feadship America and Royal Van Lent. For example, at the request of

the clients, Northrop recommended other shipyards for the construction of the

second yacht. At the same time, Northrop kept Feadship America and Royal Van

Lent apprised of the situation in the hopes that they would compete for the project.

As late as November 2017, Northrop met with the clients to discuss the potential

purchase of a second Royal Van Lent yacht.

Northrop alleges that in January 2018, it learned that the clients had entered

into an independent agreement with Royal Van Lent for the construction of a

second yacht called “Project F819.” According to Northrop, Royal Van Lent and

Feadship America “intentionally and surreptitiously excluded Northrop . . . from

the negotiations on the deal.” Northrop then unsuccessfully sought to recover from

Royal Van Lent and Feadship America the commission that Northrop believed it

was due for the second yacht project. At some point, Royal Van Lent and

Feadship America disclosed the confidential Commission Agreement to the clients,

which caused the clients to engage a different broker to sell the first yacht—Project

F809. As a result of these events, Northrop alleges, among other things, that it lost

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out on the “the industry standard commission . . . of 5% of the contracted sales

price of Project F819.”

Northrop then sued Royal Van Lent and Feadship America for the alleged

failure of the defendants to pay Northrop a commission for the construction of the

second yacht—Project F819. Northrop brought Florida state-law tort claims

against Royal Van Lent for procuring cause (quantum meruit) and unjust

enrichment. Northrop also brought a Florida state-law claim against Royal Van

Lent and Feadship America for tortious interference with an advantageous business

relationship.

After removing the case to federal court, Royal Van Lent and Feadship

America moved to dismiss and compel arbitration. They argued that the Federal

Arbitration Act (“FAA”) mandated enforcement of the Commission Agreement’s

arbitration provision because the provision was governed by the New York

Convention (“Convention”). 1 Royal Van Lent also argued that the Commission

Agreement’s arbitration provision covered Northrop’s claims and that Feadship

1 “The New York Convention generally requires the courts of signatory nations to give effect to private arbitration agreements and to enforce arbitral awards made in other signatory nations.” Escobar v. Celebration Cruise Operator, Inc., 805 F.3d 1279, 1284 (11th Cir. 2015). The United States and the Netherlands are signatories to the Convention. And the Federal Arbitration Act vests federal courts with subject-matter jurisdiction over arbitration claims arising under the Convention—including in cases removed from state court. See 9 U.S.C. § 203 (“An action or proceeding falling under the Convention shall be deemed to arise under the laws and treaties of the United States. The district courts of the United States . . . shall have original jurisdiction over such an action or proceeding, regardless of the amount in controversy.”); 9 U.S.C. § 205 (providing for removal of such actions from state courts). 5 USCA11 Case: 20-13442 Date Filed: 03/26/2021 Page: 6 of 13

America could invoke the arbitration provision under a theory of equitable

estoppel.

Northrop opposed the motion on the grounds that the New York Convention

did not apply because the parties did not have an agreement in writing to arbitrate

the claims at issue. Specifically, Northrop argued that the Commission Agreement

governed only the commission due to Northrop for the sale of the first yacht

(Project F809)—and not the commission due for the construction of the second

yacht (Project F819), and that the latter formed the basis of the suit. Northrop also

argued that its claims arose outside the scope of the arbitration provision. Finally,

Northrop argued that Feadship America could not invoke the arbitration provision

as a non-signatory to the Commission Agreement.

The district court concluded that the parties agreed to arbitrate the dispute

because the Commission Agreement and its arbitration provision governed

Northrop’s claims. Accordingly, it granted Royal Van Lent and Feadship

America’s motion to dismiss and compel arbitration under the New York

Convention. Northrop timely appealed.

II

Northrop argues that the district court erred in dismissing its complaint and

compelling arbitration because the parties did not agree to arbitrate Northrop’s

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claims concerning Project F819.2 Northrop contends that there was no agreement

to arbitrate for two reasons. First, Northrop maintains that the Commission

Agreement governs only the commission fee for the sale of Project F809—and not

the commission fee for the sale of Project F819. Second, and relatedly, Northrop

argues that its claims concern only the commission due on the defendants’ sale of

Project F819 to the clients. Therefore, Northrop submits that its claims for

commission related to Project F819 fall outside the scope of the Commission

Agreement’s arbitration provision and the New York Convention does not apply.

We address these arguments in order.

To determine whether Northrop should be compelled to arbitrate its claims,

we turn first to the applicability of the New York Convention. “The New York

Convention generally requires the courts of signatory nations to give effect to

private arbitration agreements and to enforce arbitral awards made in other

signatory nations.” Escobar v. Celebration Cruise Operator, Inc., 805 F.3d 1279,

1284 (11th Cir. 2015). Section 201 of the FAA provides for the enforcement of the

Convention in United States courts. Lindo v. NCL (Bahamas), Ltd., 652 F.3d

1257, 1262 (11th Cir. 2011); see also 9 U.S.C. § 201 (“The [Convention] shall be

enforced in United States courts in accordance with this chapter.”). For purposes

2 We review de novo a district court’s grant of a motion to dismiss and compel arbitration. Spirit Airlines, Inc. v. Maizes, 899 F.3d 1230, 1232 (11th Cir. 2018).

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of our jurisdiction, “[a]n action or proceeding falling under the Convention shall be

deemed to arise under the laws and treaties of the United States.” 9 U.S.C. § 203.

And defendants may remove “an arbitration agreement or award falling under the

Convention” from state to federal court. 9 U.S.C. § 205.

An arbitration agreement falls under the Convention when “four

jurisdictional prerequisites are . . . met”:

(1) there is an agreement in writing within the meaning of the Convention; (2) the agreement provides for arbitration in the territory of a signatory of the Convention; (3) the agreement arises out of a legal relationship, whether contractual or not, which is considered commercial; and (4) a party to the agreement is not an American citizen, or that the commercial relationship has some reasonable relation with one or more foreign states.

Bautista v. Star Cruises, 396 F.3d 1289, 1295, 1295 n.7 (11th Cir. 2005).

Northrop does not assert an affirmative defense under the Convention. And

Northrop challenges only one of the four jurisdictional elements—whether there

exists an agreement in writing to arbitrate this dispute. Accordingly, that question

is the focus of this appeal.

In determining whether the parties agreed to arbitrate the dispute within the

meaning of the Convention, “FAA principles guide [our] analysis.” Doe v.

Princess Cruise Lines, Ltd., 657 F.3d 1204, 1213 n.9 (11th Cir. 2011); Mitsubishi

Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626 (1985) (“The

court is to make this determination by applying the federal substantive law of

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arbitrability, applicable to any arbitration agreement within the coverage of the

Act.” (citation and internal quotation marks omitted)). Under the FAA, we apply a

“presumption in favor of arbitration[.]” Princess Cruise Lines, Ltd., F.3d at 1214.

That presumption is stronger when the Convention is implicated. See Bautista,

396 F.3d at 1295 (“[W]e are mindful that the Convention Act generally establishes

a strong presumption in favor of arbitration of international commercial disputes.”

(citation and internal quotation marks omitted); Lindo, 652 F.3d at 1275(“[U]nder

the Convention and Supreme Court and Circuit precedent, there is a strong

presumption in favor of freely-negotiated contractual choice-of-law and forum-

selection provisions, and this presumption applies with special force in the field of

international commerce.”). Thus, we conduct a “very limited inquiry.” Id.

(quotation omitted). Under that inquiry, “[i]n the absence of an affirmative

defense, a district court must compel arbitration under the Convention if four

jurisdictional requirements are met.” Alberts v. Royal Caribbean Cruises, Ltd.,

834 F.3d 1202, 1204 (11th Cir. 2016).

Northrop does not dispute that the Commission Agreement set forth the

terms of Northrop’s commission for the sale of Project F809. And Northrop does

not dispute that the arbitration provision would govern “[a]ny dispute arising out of

or in connection with” the sale of Project F809. The question we must answer is

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whether the parties agreed in writing to arbitrate this dispute arising from the sale

of Project F819.

First we consider whether the Commission Agreement governs the second

yacht—Project F819. It plainly does. To begin, the Commission Agreement

expressly contemplates Project F819. In addition to providing that Northrop was

“to receive a commission of [€2,000,000] for the sale of [Project F809,]” the

Commission Agreement provided that “[i]f the client will build one new yacht in

the future with Royal van Lent Shipyard, [Northrop] is entitled to a minimum

additional commission of [€1,200,000] . . . on top of the standard negotiated

commission.” As Northrop’s complaint acknowledges, the Project F809

“negotiations culminated in a confidential commission agreement . . . which

specifically contemplated the Clients’ purchase of another Royal Van Lent yacht in

the future.” And Northrop does not dispute that Project F819 is the “one new

yacht in the future” referenced in the Commission Agreement. Thus, the

Commission Agreement—and its arbitration provision—governs both yachts.

Northrop argues that the Commission Agreement’s reference to “one new

yacht in the future” was merely an “aspirational goal” and that the sole purpose of

the Commission Agreement was to create a two-part payment structure for the sale

of Project F809. Northrop also maintains that the Commission Agreement did not

govern Project F819 because the phrase “on top of the standard negotiated

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commission” meant that the parties would engage in future negotiations. We are

not persuaded by these arguments.

We take Northrop’s complaint at its own word that the Commission

Agreement “specifically contemplated the Clients’ purchase of another Royal Van

Lent yacht in the future.” And the two-part payment structure of the Commission

Agreement confirms that understanding. Under that structure, Northrop would

receive a “bonus” of a specified amount for the construction of a second yacht

because Northrop accepted a “reduced commission” for the construction of the first

yacht. Although it is true that the Commission Agreement speaks of a “standard

negotiated commission” on the second yacht, Northrop’s complaint fails to allege

that the parties would have negotiated the commission on Project F819. To the

contrary, Northrop’s complaint affirmatively asserts that it is “entitled” to the

industry standard of “5% of the sales price for Project F819.”

Next, we consider whether Northrop’s claims fall within the scope of the

Commission Agreement’s arbitration provision. They do. The arbitration

provision states that “[a]ny dispute arising out of or in connection with this

Agreement shall be finally settled in accordance with The Arbitration Rules of the

Netherlands Arbitration Institute (NAI).” We have consistently held that such

language is broad in scope. See, e.g., Cooper v. Meridian Yachts, Ltd., 575 F.3d

1151, 1162 (11th Cir. 2009) (holding that a provision that covered “all disputes

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arising out of or in connection with” an agreement was “clearly meant to be read

broadly”); Gregory v. Electro-Mech. Corp., 83 F.3d 382, 386 (11th Cir. 1996).

There is no doubt that the arbitration provision covers Northrop’s claims.

Specifically, Northrop’s quantum merit and unjust enrichment claims concern

allegedly unpaid commission for the sale of Project F819, and the Commission

Agreement governed the commissions due to Northrop. Thus, Northrop’s quantum

meruit and unjust enrichment claims go to the heart of the agreement between the

parties. Similarly, Northrop’s claim that the defendants tortiously interfered by

disclosing the terms of the Commission Agreement to the clients falls squarely

within the scope of the arbitration provision. The Commission Agreement

provided that “[b]oth parties will keep this agreement strictly confidential as well

as the final sales price of the yacht.” And Northrop alleges that the defendants

tortiously interfered by disclosing the terms of the Commission Agreement to the

clients.3

In short, the Commission Agreement governs Project F809 and Project

F819, so the arbitration provision applies to both projects. And Northrop’s claims

3 Even if there were some doubt about the scope of an arbitration provision, under the FAA, “any doubts concerning the scope of arbitral issues should be resolved in favor of arbitration.” Solymar Invs., Ltd. v. Banco Santander S.A., 672 F.3d 981, 988 (11th Cir. 2012) (quoting First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 945 (1995)).

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fall within the scope of the arbitration provision. 4 Accordingly, the parties agreed

in writing to arbitrate Northrop’s claims, and Northrop cannot avoid the express

terms of the agreement it signed by bringing equitable tort claims rather than

breach of contract claims. McBro Plan. & Dev. Co. v. Triangle Elec. Const. Co.,

741 F.2d 342, 344 (11th Cir. 1984), abrogated on other grounds by Lawson v. Life

of the S. Ins. Co., 648 F.3d 1166, 1171 (11th Cir. 2011) (“[I]t is well established

that a party may not avoid broad language in an arbitration clause by attempting to

cast its complaint in tort rather than contract.”). Accordingly, the district court did

not err in compelling arbitration under the Convention.

AFFIRMED.

4 Northrop argues that the district court erred when it allowed Feadship America to invoke the arbitration provision because it was not a signatory to the Commission Agreement. A party who is a non-signatory to an arbitration agreement may nevertheless compel arbitration under the doctrine of equitable estoppel in two circumstances: (1) “when the plaintiff-signatory must rely on the terms of the written agreement in asserting its claims,” or (2) “when the plaintiff-signatory alleges substantially interdependent and concerted misconduct by the signatories and non-signatories, and such alleged misconduct is founded in or intimately connected with the obligations of the underlying agreement[.]” Lavigne v. Herbalife, Ltd., 967 F.3d 1110, 1118–19 (11th Cir. 2020) (cleaned up); see also GE Energy Power Conversion France SAS, Corp. v. Outokumpu Stainless USA, LLC, 140 S. Ct. 1637, 1642 (2020) (holding that the New York Convention does not prohibit the application of domestic equitable estoppel doctrines). Here, Feadship America may invoke the Commission Agreement’s arbitration provision under the second theory of equitable estoppel. Northrop alleged that “Royal Van Lent and Feadship America intentionally and unjustifiably interfered with the business relationship [between] Northrop . . . and its Clients by unilaterally disclosing the confidential commission agreement for Project F809[.]” Thus, Northrop’s tortious interference claim alleges interdependent and concerted misconduct between Royal Van Lent and Feadship America that violated express obligations in the Commission Agreement. 13