O'Keefe Architects v. Ced Const. Partners

944 So. 2d 181, 31 Fla. L. Weekly Supp. 673, 2006 Fla. LEXIS 2420, 2006 WL 2971783
CourtSupreme Court of Florida
DecidedOctober 19, 2006
DocketSC05-1417
StatusPublished
Cited by35 cases

This text of 944 So. 2d 181 (O'Keefe Architects v. Ced Const. Partners) is published on Counsel Stack Legal Research, covering Supreme Court of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
O'Keefe Architects v. Ced Const. Partners, 944 So. 2d 181, 31 Fla. L. Weekly Supp. 673, 2006 Fla. LEXIS 2420, 2006 WL 2971783 (Fla. 2006).

Opinion

944 So.2d 181 (2006)

O'KEEFE ARCHITECTS, INC., Petitioner,
v.
CED CONSTRUCTION PARTNERS, LTD., et al., Respondents.

No. SC05-1417.

Supreme Court of Florida.

October 19, 2006.

*182 Lee L. Haas of Haas and Castillo, P.A., Clearwater, FL and Deborah A. Gibson of *183 the Marks Law Firm, P.A., Orlando, FL, for Petitioner.

Kevin P. Kelly and Amanda G. Simmons of GrayRobinson, P.A., Orlando, FL, and Kerey Marie Carpenter, Maitland, FL, for Respondent.

PARIENTE, J.

We have for review O'Keefe Architects, Inc. v. CED Construction Partners Ltd., 909 So.2d 370 (Fla. 5th DCA 2005), in which the Fifth District Court of Appeal certified conflict with Reuter Recycling of Florida, Inc. v. City of Dania Beach, 859 So.2d 1271 (Fla. 4th DCA 2003). The conflict issue is whether under the Florida Arbitration Code,[1] a statute of limitations defense is subject to arbitration when the arbitration agreement provides that claims, disputes or other matters arising out of or relating to the contract are to be decided by arbitration, but also provides that a demand for arbitration cannot be made when institution of legal or equitable proceedings based on the underlying claim would be barred by the applicable statute of limitations. We have jurisdiction. See art. V, § 3(b)(4), Fla. Const.

Because the Florida Arbitration Code allows parties to agree to arbitrate any controversy, the question of whether a dispute is subject to arbitration is a matter of contract interpretation. We hold that a broad agreement to arbitrate includes determining defenses to an otherwise arbitrable claim, including the statute of limitations.[2]

FACTS AND PROCEDURAL HISTORY

On August 30, 1997, O'Keefe Architects, Inc. ("O'Keefe") contracted with Vero Club Partners Ltd. ("Vero Club"), to design a 184-unit housing project. On January 7, 1999, O'Keefe entered into a nearly identical contract with Clearwater Phase I Partners Ltd. ("Phase I"), to design a 240-unit housing project. CED Construction Partners Ltd. ("CED") was the general contractor on both projects.

After discovering latent construction and design defects on their properties, Vero Club and Phase I demanded that CED fix the problems. CED did so and Vero Club and Phase I assigned CED their rights to make a claim for damages against O'Keefe for the defects. CED then filed a demand with the American Arbitration Association for arbitration against O'Keefe and several subcontractors for damages arising from negligent design and construction of both projects. O'Keefe objected to the arbitration on several grounds, including that some of the claims were barred by the statute of limitations and, therefore, were not subject to arbitration under the contracts.

Relevant to the statute of limitations issue, the arbitration clauses in both contracts provide:

7.1 Claims, disputes or other matters in question between the parties to this Agreement arising out of or relating to this Agreement or breach thereof shall be subject to and decided by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association currently in effect unless the parties mutually agree otherwise.
7.2 Demand for arbitration shall be filed in writing with the other party to *184 this Agreement and with the American Arbitration Association. A demand for arbitration shall be made within a reasonable time after the claim, dispute or other matter in question has arisen. In no event shall the demand for arbitration be made after the date when institution of legal or equitable proceedings based on such claim, dispute or other matter in question would be barred by the applicable statutes of limitations.

After the arbitrators ruled adversely to O'Keefe on several issues, including the statute of limitations, O'Keefe filed a complaint for declaratory relief against Vero Club, Phase I, and CED. O'Keefe asserted that only Vero Club and Phase I, and not CED, were authorized to bring the arbitration claims because the contracts were not assignable. O'Keefe also raised the statute of limitations defense and asserted that the trial court was required to decide this issue. The trial court entered an order compelling the completion of arbitration and staying the circuit court case. Regarding O'Keefe's statute of limitations defense, the trial court found that this issue was a matter for the arbitrators to decide.

O'Keefe appealed the order to the Fifth District. In a brief decision, the Fifth District affirmed the trial court in all respects. See O'Keefe, 909 So.2d at 370. The district court wrote "only to reiterate that an issue concerning whether a demand for arbitration is timely is a question of fact to be decided by arbitration, and not the trial court. This concept encompasses the position that arbitration is unnecessary because of the expiration of the statute of limitations." Id. (citations omitted). However, the Fifth District certified conflict with Reuter Recycling, in which the Fourth District reviewed an arbitration agreement that contained similar language regarding timeliness and reversed the trial court's order refusing to enjoin the arbitration.[3]

ANALYSIS

Both parties agree that the Florida Arbitration Code (FAC), rather than the Federal Arbitration Act (FAA), applies in this case. Because both parties are Florida corporations involved in Florida construction projects, interstate commerce is not involved and, thus, the provisions of the FAC control. Cf. Musnick v. King Motor Co., 325 F.3d 1255, 1258 n. 2 (11th Cir.2003) ("[T]he FAA applies to all arbitration agreements involving interstate commerce. . . .") (citing Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 121 S.Ct. 1302, 149 L.Ed.2d 234 (2001)); Wachovia Securities, LLC v. Vogel, 918 So.2d 1004, 1007 (Fla. 2d DCA 2006) ("Where . . . interstate commerce is involved, federal law governs the analysis of the arbitration proceeding.").

The FAC provides that "[t]wo or more parties . . . may include in a written contract a provision for the settlement by arbitration of any controversy thereafter arising between them relating to such contract or the failure or refusal to perform the whole or any part thereof." § 682.02, Fla. Stat. (2005) (emphasis supplied). If a *185 dispute arises regarding a party's refusal to comply with an agreement to arbitrate, the court is required to compel arbitration if it "is satisfied that no substantial issue exists as to the making of the agreement or provision." § 682.03(1), Fla. Stat. (2005).

In ruling on a motion to compel arbitration of a dispute, the court must consider three issues: "(1) whether a valid written agreement to arbitrate exists; (2) whether an arbitrable issue exists; and (3) whether the right to arbitration was waived." Seifert v. U.S. Home Corp., 750 So.2d 633, 636 (Fla.1999). The issue here, whether O'Keefe's statute of limitations defense to an otherwise arbitrable claim is also subject to arbitration, falls under the second of these considerations.[4]

Arbitration clauses are creatures of contract.

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944 So. 2d 181, 31 Fla. L. Weekly Supp. 673, 2006 Fla. LEXIS 2420, 2006 WL 2971783, Counsel Stack Legal Research, https://law.counselstack.com/opinion/okeefe-architects-v-ced-const-partners-fla-2006.