Royal Atlantic Health Spa, Inc. v. B.L.N., Inc.

677 So. 2d 1385, 1996 Fla. App. LEXIS 8865, 1996 WL 471147
CourtDistrict Court of Appeal of Florida
DecidedAugust 21, 1996
DocketNo. 95-2754
StatusPublished
Cited by3 cases

This text of 677 So. 2d 1385 (Royal Atlantic Health Spa, Inc. v. B.L.N., Inc.) 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
Royal Atlantic Health Spa, Inc. v. B.L.N., Inc., 677 So. 2d 1385, 1996 Fla. App. LEXIS 8865, 1996 WL 471147 (Fla. Ct. App. 1996).

Opinion

PARIENTE, Judge.

Appellant, Royal Atlantic Health Spa, Inc. (Royal), appeals from a dismissal of its Application to Confirm Arbitration Award against B.L.N., Inc., d/b/a Paulding Design Group. The basis for the dismissal was that the arbitration award was against Paulding Design Group (Paulding Design), the fictitious name under which B.L.N., Inc. (B.L.N.) did business and that, accordingly, B.L.N. was not a party to the arbitration proceedings. We reverse because there is an unresolved issue as to whether B.L.N. waived any objection to the award being entered under its fictitious name by its full participation in the arbitration proceeding.

Royal entered an agreement with Paulding Design, an architectural design firm, for interior design services in connection with the renovation of Royal’s spa facilities. The agreement did not contain any mention of B.L.N. and was, in fact, signed by A. Robert Paulding as president of Paulding Design. The agreement contained an arbitration clause requiring all disputes to be arbitrated in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association unless the parties mutually agreed otherwise.

In accordance with this agreement, Royal filed a demand for arbitration against Pauld-ing Design, claiming breach of contract. Philip M. Warren, Esq. appeared as counsel for Paulding Design at the arbitration hearing. An arbitration award was subsequently entered in favor of Royal for $17,000.

Royal timely filed an Application to Confirm Arbitration Award against “B.L.N., Incorporated, d/b/a Paulding Design Group,” seeking confirmation of the arbitration award. See § 682.12, Fla. Stat. (1995). Attorney Warren, who had previously appeared in the arbitration proceeding on behalf of Paulding Design, filed a motion to dismiss, alleging that the complaint failed to state a cause of action because B.L.N. was not a party to the arbitration proceeding. Prior to a hearing on the motion to dismiss, Royal filed a Supplement to Application to Confirm Arbitration Award, alleging that B.L.N. had appeared and participated in the arbitration proceeding under its duly registered fictitious name, Paulding Design, and had failed to file any objection to being sued in its fictitious name rather than its corporate name.

We find that the trial court erred in granting the motion to dismiss for failure to state a cause of action. The pleadings alleged that B.L.N. appeared and participated in the arbitration proceeding under its fictitious name; that counsel for B.L.N. filed a notice of appearance in that proceeding using the fictitious name; and that the same counsel used the fictitious name in two separate requests for postponement of the arbitration. B.L.N. does not claim that it is not doing business as Paulding Design nor does it dispute that it controlled the defense in the arbitration proceeding.

It is true that “[cjorporations are legal entities and should sue and be sued in their corporate name.” RHPC, Inc. v. Gardner, 533 So.2d 312, 314 (Fla. 2d DCA 1988). However, as recognized by Gardner,

persons who are sued by the wrong name may nevertheless appear and defend the action, and if they fail to object to the misnomer by appropriate pleading or motion they may be bound by a judgment resulting from the litigation. In addition, although not nominal parties, persons may become de facto parties defendant if they have control of the defense in furtherance of their own interest and enjoy all the rights of actual parties.

Id. (citations omitted) (emphasis supplied).

In Gardner, the plaintiff improperly brought suit against the fictitious name “Riverside Hospital,” rather than naming the correct corporate entity in its complaint. Id. at 313-14. Process was served on “Riverside Hospital” by serving the registered agent for the corporate entity. Id. at 313. Counsel for the corporate entity appeared on behalf of “Riverside Hospital” and defended the action. Id. The second district found that because the correct corporate entity was served with process and appeared in the lawsuit, “it became a de facto party ... bound by the result of the lawsuit unless it objected] to the misnomer.” Gardner, 533 So.2d at 314.

[1387]*1387“The purpose of the fictitious name statute is to provide notice to one dealing with a business of the real party in interest.” Roth v. Nautical Eng’g Corp., 654 So.2d 978, 980 (Fla. 4th DCA 1995).1 Compliance with the fictitious name statute, however, may be waived. See id.; Gardner. A party may waive compliance with the fictitious name statute not only in litigation, but in arbitration proceedings as well. In the context of arbitration, “just as a party who has a right to arbitration can waive that right by participating in a judicial proceeding, so can a party having a right to a judicial determination of an arbitrable issue waive that right by participating in arbitration.” Victor v. Dean Witter Reynolds, Inc., 606 So.2d 681, 685 (Fla. 5th DCA 1992), review denied, 614 So.2d 502 (Fla.1993); see also Insignia Homes, Inc. v. Hinden, 675 So.2d 673 (Fla. 4th DCA 1996) (homeowner waived defense that she was not party to contract including arbitration clause by admitting to execution of contract in pleadings and by entering into arbitration with contractor on other issues).

In Koch v. Waller & Co., 439 So.2d 1041, 1043 (Fla. 4th DCA 1983), an arbitration proceeding was brought against the appellant, William Koch, individually and in his capacity as corporate representative. Koch participated throughout the arbitration proceedings and “never objected to, nor raised the issue of his status as an individual defendant.” Id. An award was entered against Koch’s company and against him individually. When the appellees filed an application to confirm the arbitration award, Koch opposed confirmation, arguing for the first time that he had signed the contract in a representative capacity and was thus not personally hable. This court held that Koch had waived this defense by failing to raise it in the arbitration proceeding.

The very purpose of arbitration would be frustrated by allowing defenses which could have been raised at the arbitration proceeding to be raised belatedly when confirmation of the award is sought:

Arbitration clauses are placed in contracts to ensure the availability of a convenient and efficient forum for the expeditious resolution of disputes. Indeed, “[s]peed is one of the great advantages of commercial arbitration.” Necchi Sewing Mach. Sales Corp. v. Necchi, S.p.A., 369 F.2d 579, 582 (2d Cir.1966). To achieve this end, most states have enacted statutory schemes which regulate arbitration and guarantee due process. “Arbitration laws are passed to expedite and facilitate the settlement of disputes and avoid the delay caused by litigation. It was never intended that these laws should be used as a means of furthering and extending delays.” Radiator Specialty Co. v. Cannon Mills, Inc., 97 F.2d 318, 319 (4th Cir.1938). Appellant’s position in the case at bar is a prime example of dilatory posturing which runs afoul of the spirit and express provisions of Chapter 682, the Florida Arbitration Code.

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Bluebook (online)
677 So. 2d 1385, 1996 Fla. App. LEXIS 8865, 1996 WL 471147, Counsel Stack Legal Research, https://law.counselstack.com/opinion/royal-atlantic-health-spa-inc-v-bln-inc-fladistctapp-1996.