Navigating the Nonbinding Arbitration Minefield in Florida

Vol. 81, No. 5 May 2007 Pg 18 Daniel Morman and Jonathan Whitcomb Featured Article

This article will examine the various aspects and applications of nonbinding arbitration in Florida along with the unwanted surprises that come with the territory. Opening with a detailed overview of the statutory provisions of F.S. §44.103 along with related case law and a discussion of Fla. R. Civ. P. 1.800 and 1.820, the article will continue with a summary of nonbinding arbitration as related to condominiums, and to a lesser extent, cooperatives, homeowner associations, mobile home park lot tenancies, medical malpractice, and certain disputes between municipalities and sign owners. The focus of this article will be solely upon civil disputes. Matters related to criminal disputes and binding arbitration are outside the scope of discussion.

The Starting Place — F.S. §44.103(1) through (4)
Chapter 44 of the Florida Statutes governs mediation alternatives to judicial action. F.S. §44.103 sets forth the procedure for and impact of nonbinding arbitration in most civil matters. The statute applies to contested civil cases already filed, but not yet tried. As will be illustrated in the discussion that follows, most reported cases addressing F.S. §44.103 relate to whether a trial de novo following nonbinding arbitration is allowed or whether an order or judgment confirming the nonbinding arbitration “decision” should be entered.

F.S. §44.103 is divided into six subsections. Subsection (1) provides that court-ordered, nonbinding arbitration is to be conducted according to rules adopted by the Supreme Court.2 Pursuant to rules adopted by the Supreme Court,3 a court may refer any contested civil matter in a circuit or county court to nonbinding arbitration.4

The Second District Court of Appeal, in Contractor’s Management Systems of NH, Inc. v. Acree Air Conditioning, Inc., 799 So. 2d 320, 321 (2d DCA 2001), stated: “Under section 44.103, Florida Statutes (2000), and Florida Rule of Civil Procedure 1.8305 [sic], a court may refer any civil action to nonbinding arbitration on its own motion or that of a party.” Indeed, Fla. R. Civ. P. 1.8006 provides that a civil action may be referred to arbitration upon stipulation of the parties, upon motion of any party, or by the court. Therefore, any contested civil matter is eligible for nonbinding arbitration, but for the limited exceptions contained in Rule 1.800.

Section 44.103(3) provides that arbitrators are to be compensated by the parties in most cases; however, there is a fee cap of $1,500 per diem. If the court determines that a party is indigent or compromised in his or her ability to pay, an arbitrator may be partially or fully compensated from state funds.7 There are provisions in the statute for reimbursement of the state in the event that it outlays funds to compensate an arbitrator, and the statute encourages the use of volunteer arbitrators “whenever possible.”

Subsection (4) addresses powers of the arbitrators. A sole arbitrator or the chief arbitrator — in the case of a panel — shall have the power to administer oaths and conduct the proceedings in the manner provided for by the rules.8 The arbitrators have the power to subpoena witnesses and documents upon the request of a party as well.

Trial De Novo Following Nonbinding Arbitration
Following an arbitration decision, either party may request a trial de novo. There are ramifications for making or not making such a request. Subsection (5) is the provision of F.S. §44.103 cited most often in reported cases and refers to the ruling following arbitration as being a “decision.” While the title of F.S. §44.103 is “[c]ourt-ordered, nonbinding arbitration,” subsection (5) provides that the decision is, in fact, binding if a trial de novo is not requested within the time frame provided under the rules.9 If the time to request a trial de novo has expired, the arbitration decision is referred to the presiding judge who is directed to enter an order or judgment to carry out the terms of the decision. Upon request of a party, executions may issue upon such judgments.

While a more detailed discussion of Fla. R. Civ. P. 1.820 will follow later in this article, Rule 1.820(h) provides that the time for filing a motion for trial is within 20 days after service on the parties of the arbitration decision. If a party fails to request a trial de novo within the specified time frame, the arbitration decision becomes final, and the presiding judge should reduce the decision to a judgment or order as appropriate. On the issue of whether the rule permitted additional days for service by mail, the Fourth District Court of Appeal in Furia v. Ziccarelli, 935 So. 2d 103, 104-05 (Fla. 4th DCA 2006), ruled that when a nonbinding arbitration decision is mailed to the parties, each party has 25 days from the date of mailing within which to file for a trial de novo. The court cited Rule 1.090(e) as being applicable to service of the nonbinding arbitration decision and authority for tacking on the additional five days.

Award of Attorneys’ Fees and Costs
There are ramifications that follow if a party moves for a trial de novo. Under F.S. §44.103(6), the party who filed for a trial de novo may be assessed the arbitration costs, court costs, and other reasonable costs of the party,10 including attorney’s fees, investigation expenses, and expenses for expert or other testimony or evidence incurred after the arbitration hearing if the judgment upon the trial de novo is not more favorable than the arbitration decision.

Surprisingly, there are few reported opinions that address disputes over such assessments of attorneys’ fees and costs.

In Connell v. City of Plantation, 901 So. 2d 317, 320 (Fla. 4th DCA 2005), the court considered a motion to tax costs by a plaintiff who prevailed in nonbinding arbitration. A motion for trial de novo was not filed by the defendant. Noting that F.S. §44.103(6) does not address awards of fees and costs when the arbitration decision is not challenged, the court relied upon F.S. §57.041 and granted the plaintiff’s motion. In dicta, the court acknowledged that without knowing the amount of costs at the time the arbitration decision is entered, it may be difficult for the losing party to determine whether to move for a trial de novo.

In Centex-Rooney Construction Co., Inc. v. Martin County, 725 So. 2d 1255 (Fla. 4th DCA 1999), the prevailing party in a trial de novo sought to tax arbitration fees incurred in a nonbinding arbitration proceeding. The party against whom the arbitration decision was rendered timely moved for the trial de novo. The trial court granted the prevailing party’s motion. On appeal, the court held that “the trial court did not abuse its discretion in placing ultimate responsibility for the arbitration fees” on the losing party.11

In Francis v. Akerly, 884 So. 2d 455, 456 (Fla. 4th DCA 2004), the court ruled that a contingency risk multiplier could not be applied in calculating a fee award under F.S. §44.103(6). Rather, fees were required to be calculated by multiplying a reasonable hourly rate by the number of hours expended. In support of its ruling, the court found that the purpose of F.S. §44.103 is similar to F.S. §768.79, Florida’s offer of judgment statute, and Fla. R. Civ. P. 1.442 (regarding proposals for settlement) — each is intended to promote settlement.12

The Francis court failed to set forth the primary distinction between nonbinding arbitration and offers of judgment. The language of F.S. §44.103(6) merely provides that the court may award costs and fees. Conversely, F.S. §768.79(6) provides that the party shall be awarded costs and fees when certain conditions are met. The word “may” denotes a permissive term as opposed to the mandatory connotation of the word “shall.”13 Therefore, the trial court has discretion in determining whether to award fees and costs against the losing party who moved for a trial de novo.

Entry of Judgment or Order for Trial De Novo
A series of cases arising out of the Fourth District illustrates that, absent a timely motion for a trial de novo, the trial court must enter a judgment or order affirming the decision rendered in the arbitration.

In Johnson v. Levine, 736 So. 2d 1235 (Fla. 4th DCA 1999),14 a plaintiff moved for entry of judgment against a defendant that was determined to be liable in a decision rendered in a nonbinding arbitration proceeding involving multiple defendants. Although the plaintiff moved for a postarbitration trial against defendants who were exonerated in the arbitration, the defendant determined to be liable had not so moved. When the presiding judge denied the plaintiff’s motion for entry of judgment against the defendant who was found liable, the plaintiff sought a writ of mandamus.15 The Fourth District accepted jurisdiction and ruled that the trial court was required to enforce the arbitration decision and enter a judgment against such defendant. The judge was without authority to order a trial of all claims against all defendants.16

Similarly, in Klein v. J.L. Howard, Inc., 600 So. 2d 511 (Fla. 4th DCA 1992), the Fourth District ruled that the trial court was required to enforce an arbitration decision rendered following nonbinding arbitration when the parties failed to move for a trial de novo within 20 days of service of the decision. The court ruled further that it did not matter that the arbitration decision itself was untimely rendered.

In Connell,following court-ordered nonbinding arbitration, the defendant paid over the principal amount set forth in the award to the plaintiff. The plaintiff thereafter moved the court to enter final judgment on the arbitration decision and award costs as demanded in the complaint. The trial court declined to do so, as the amount set forth in the arbitration decision had been paid. The Fourth District reversed, ruling that F.S. §44.103(5) leaves no discretion with the trial judge and that entry of a judgment was nothing more than a ministerial act.17

Finally, in United Automobile Insurance Co. v. Ortiz, 931 So. 2d 1025, 1027 (Fla. 4th DCA 2006), the trial judge referred all issues pending in the dispute to nonbinding arbitration. The court ruled that the arbitrator had jurisdiction to decide all outstanding issues and that judgment was properly entered by the trial court, as neither party timely filed a motion for new trial.

In Bacon Family Partners, L.P. v. Apollo Condominium Association, Inc., 852 So. 2d 882, 888 (Fla. 2d DCA 2003), the Second District considered the flip side of the issue presented in the previous series of cases, i.e., whether the trial court may deny a timely filed motion for trial de novofollowing service of an arbitration decision. The district court ruled at the outset that the issue to be decided was a question of law that itself was to be reviewed on a de novo standard. Just as the requirement to enter judgment upon an arbitration decision following expiration of the time to move for a trial de novo is mandatory, so too is the requirement that the trial court grant a timely filed motion for trial de novo. There simply is no discretion whatsoever on the part of the trial judge on this matter.

Issues Related to Multiple Parties and Claims
Issues sometimes arise when there are multiple parties to an action, or where there are multiple claims at issue. In Morgan v. Southeast Service Corp., 861 So. 2d 1224, 1226-27 (Fla. 2d DCA 2003), the plaintiffs filed an action against a shopping mall, a store, and a janitorial service to redress injuries allegedly sustained as a result of a slip and fall. The trial court entered an order directing all parties to participate in nonbinding arbitration. Following the arbitration hearing, the arbitrator entered a decision apportioning fault and setting forth the total amount to be awarded for damages and costs sustained and incurred by the plaintiffs. Only one of the defendants — the janitorial service — timely moved for a new trial, on the issue of liability only. The other defendants moved to reduce the arbitration award to judgment. The Second District ruled that because the claim against the janitorial service was a single claim, the trial court erred when it ruled that the trial de novo could be restricted to the issue of liability. Therefore, the trial de novo would have to address all issues pending against the janitorial service company. As to the remaining defendants, the Second District held that the trial court properly entered a judgment against them that effectively affirmed the arbitration decision.

In Broward Yachts, Inc. v. Denison, 871 So. 2d 954, 956 (Fla. 4th DCA 2004), two counts in the plaintiff’s complaint were referred to nonbinding arbitration. Following arbitration, the plaintiff prevailed on the first claim and lost on the second. Neither party moved for a trial de novo on the first claim, but the plaintiff did so move with respect to the second claim. The plaintiff then moved the court to enter a money judgment on the first claim. After the trial judge denied this motion, the plaintiff petitioned for a writ of mandamus. The Second District granted the relief sought and directed the trial court to enter judgment on the first claim.

The Morgan and Broward Yachts courts cite cases previously discussed in this article. In Morgan, the district court discusses Bacon Family Partners. The court in Bacon Family Partners was faced with an injunction claim and competing damage claims in the complaint and counterclaim. The parties proceeded with nonbinding arbitration and a decision was awarded. The defendant moved for a trial de novo only as to the portion of the decision on the injunction and denial of its claim for damages on the counterclaim. There was no motion for new trial on the denial of the plaintiff’s claim for damages in the complaint. The appellate court ruled that there was nothing in F.S. §44.103 or Rule 1.820 that gave the trial court any discretion to deny a party’s timely filed motion for new trial.18 The Morgan court also discusses Johnson. The following quoted language from the Johnson court is instructive:

We can find nothing in section 44.103 that requires a trial on all issues against all defendants in a case having multiple and alternative claims against multiple defendants. Certainly there is nothing about the term trial de novo that suggests such a result. The phrase simply refers to a proceeding that begins anew, not to the range of the issues so tried. . . .

Nothing in the structure and purpose of the statute purports to mandate an omnibus trial in a multi-issue, multi-party case where the adverse parties to discrete claims have failed to request a trial after non-binding arbitration. . . . Each claim by this plaintiff against each separate defendant stands along and can be treated. . . entirely separate from and alternative to the other claim.19

The foregoing analysis by the Johnson court was also cited by the Fourth District in State v. Bellsouth Telecommunications, Inc., 859 So. 2d 1278, 1281 (Fla. 4th DCA 2003). The case was a complex dispute that was referred to nonbinding arbitration. On one of the claims, the arbitrator ruled in favor of the Florida Department of Transportation (FDOT). On another claim, the arbitrator ruled in favor of three other parties. Another party timely moved for a new trial but ultimately settled with FDOT. The three parties who prevailed on the second claim moved the trial court to enter final judgment on that claim against FDOT since it failed to timely move for a new trial. FDOT argued that its claims were encompassed within those of the party that moved for a new trial and that FDOT was, therefore, not required to file a separate motion within 20 days. Citing Johnson, the trial court rejected FDOT’s argument and entered judgment against FDOT on the second claim since FDOT failed to timely request a trial de novo.

The Second District, in Patterson v. Allstate Insurance Company, 884 So. 2d 178, 180-81 (Fla. 2d DCA 2004), considered a case where a plaintiff sought to voluntarily dismiss an action without prejudice after it received an adverse ruling in nonbinding arbitration. The defendant then moved the trial court to enter judgment in its favor. Citing Bacon Family Partners for the proposition that F.S. §44.103(5) contains mandatory language leaving the trial judge no discretion but to enforce the arbitration decision, the Second District affirmed the trial court order granting the defendant’s motion. The voluntary dismissal would have allowed the plaintiff to refile the action. The district court ruled that the defendant was entitled to a disposition on the merits that would preclude further litigation on the same subject matter.20

Procedural Aspects of Nonbinding Arbitration —
Fla. R. Civ. P. 1.800 and 1.820
A comprehensive overview of nonbinding arbitration under F.S. §44.103 is not complete without a discussion of the Florida Rules of Civil Procedure that govern the conduct of the arbitration proceedings. Two rules apply — Rule 1.820 and, to a lesser extent, Rule 1.800. Common in both rules are deferrals to local practice as established by the chief judge of the circuit where the case is pending.

Rule 1.800 is noteworthy for two reasons. First, it sets forth one method in which a dispute may be referred to arbitration, i.e., upon stipulation of the parties.21 Therefore, in Friendly Homes of the South, Inc. v. Fontice, 932 So. 2d 634, 637 (Fla. 2d DCA 2006), when a dispute arose as to whether the litigants entered into a valid arbitration agreement, the court ruled that the issue of the validity of any agreement to arbitrate was irrelevant. Since the parties entered into a stipulation to arbitrate after the lawsuit was commenced, the matter was ordered to be referred to arbitration regardless of whether there was a valid agreement to arbitrate.22 Of greater significance are the five categories of actions set forth in Rule 1.800 that may not be referred to arbitration. The categories are 1) bond estreatures, 2) habeas corpus or other extraordinary writs, 3) bond validations, 4) civil or criminal contempt, and 5) such other matters as may be specified by order of the chief judge in the circuit.

Rule 1.820 sets forth the hearing procedures for nonbinding23 arbitration as well as those for completion of the arbitration process and the time for filing a motion for a new trial. Not surprisingly, as with the case of F.S. §44.103, most of the reported cases deal with disputes over whether a party is entitled to a trial de novo.

Most of the provisions of Rule 1.820 are self-explanatory and have not been subject to considerable dispute. The chief arbitrator has the authority to commence and adjourn hearings but may not hold persons in contempt24 or impose sanctions.25 Procedures for the hearing are set by the chief judge of the judicial circuit and are to be included in the notice of arbitration hearing. Absent good cause for excuse, parties are required to appear.26 Hearings are to be conducted informally with testimony to be kept at a minimum and matters to be presented to arbitrators primarily through statements and arguments of counsel.27 Chief arbitrators have the power to issue instructions necessary for the expeditious and orderly conduct of the hearing. Such instructions are not subject to appeal.28 If a party fails to appear at the hearing, the arbitration panel may nonetheless render a decision based upon the presentation of the parties who were present.29 Nonbinding arbitration hearings may be transcribed.30 The arbitration must be completed within 30 days of the first arbitration hearing unless extended — but no extensions past 60 days from the first hearing are allowed. Within 10 days of final adjournment, the arbitrators are to notify the parties in writing of the decision. The decision is to be under seal and filed with the clerk at the time parties are notified of the decision.31

Subsection (h) provides that if a motion for trial is not made within 20 days of service of the decision, the decision shall be referred to the presiding judge, who shall enter such orders and judgments necessary to carry out same. The Second District ruled in Venetoff v. Papas, 732 So. 2d 453 (Fla. 2d DCA 1999), that when a dispute arises on the issue of whether a party actually received the notice of decision, such party is entitled to an evidentiary hearing on the issue. Filing a pretrial notice within 20 days after the arbitration decision was rendered was sufficient to satisfy the provisions of Rule 1.820(h), even if a document styled as a “motion for trial de novo” was not filed, since the dissatisfied party timely made known its desire for a trial.32 However, if a motion for trial is filed after the arbitration hearing is concluded but before the arbitration decision is actually rendered, the motion is premature. Therefore, judgment must be entered on the decision after expiration of 20 days following service thereof.33 When arbitrators failed to notify parties of their decision, the Fifth District ruled that the arbitration procedure and the decision could not be enforced.34

Condominium-related Disputes — F.S. §718.112(2)(k) and F.S. §718.1255
Nonbinding arbitration is a mandatory condition precedent to maintaining a civil action in matters involving certain disputes between condominium associations and unit owners.35 F.S. §718.112(2)(k) provides that the bylaws of a condominium association must contain a provision for mandatory nonbinding arbitration as provided for in F.S. §718.1255 — the statute that outlines the procedure for nonbinding arbitration involving such disputes.

As to what constitutes a “dispute” that is subject to mandatory nonbinding arbitration, F.S. §718.1255(1) sets forth two distinct situations. The first, under F.S. §718.1255(1)(a), involves the authority of the governing body or board of directors to require an owner to take action with respect to his or her unit and alter or add to a common area or element. The second, under F.S. §718.1255(1)(b), involves the failure of a governing body to properly conduct elections, give adequate notice of meetings, properly conduct meetings, and allow inspection of books and records. Matters relating to title to a unit or common area, warranties, assessments and fees and related collection matters, evictions, breach of fiduciary duty by a director, and damage claims resulting from an alleged failure to maintain common areas are explicitly excluded from the definition of a “dispute” and are not subject to mandatory nonbinding arbitration.

The cases narrowly limit fact patterns for those disputes that are subject to mandatory nonbinding arbitration. In National Ventures v. Water Glades 300 Condominium Association, 847 So. 2d 1070, 1073 (Fla. 4th DCA 2003), when a unit owner filed for nonbinding arbitration and sold his unit before the arbitration decision was rendered, it was held that the mandatory nonbinding arbitration provisions in F.S. §718.1255 did not limit access to Florida courts since he was no longer a unit owner. On the flip side, in Clark v. England, 715 So. 2d 365 (Fla. 5th DCA 1998), the Fifth District ruled that an arbitrator lacked jurisdiction over a unit owner engaged in an otherwise qualifying dispute. Although the person was a unit owner when the complaint was filed, she was not a unit owner at the time the cause of action arose. In Ruffin v. Kingswood E. Condominium Association, Inc., 719 So. 2d 951, 952 (Fla. 4th DCA 1998), the Fourth District ruled that an arbitrator lacked subject matter jurisdiction to enjoin the son of a unit owner from entering association property since the son was not a unit owner. In United Grand Condominium Owners, Inc. v. Grand Condominium Association, Inc., 929 So. 2d 24, 25 (Fla. 3d DCA 2006), it was held that mandatory nonbinding arbitration also only applies to disputes involving residential condominiums.36
Disagreements involving assessments are statutorily excluded from the mandatory nonbinding arbitration requirements of F.S. §718.1255.37 While disputes involving a director of a condominium association are subject to mandatory nonbinding arbitration, those involving maintenance fees are not.38 Therefore, lawsuits involving unit owners and condominium associations may need to be bifurcated. This can result in a stay of nonarbitable claims until a decision is rendered on pending arbitration claims.

F.S. §718.1255(4) sets forth the procedures that must be followed to resolve qualifying disputes. A party must first provide written notice to his or her adversary setting forth the specific nature of the dispute, along with a demand for relief and notice of intention to file for arbitration if relief is not granted. Only after this is done may a party petition for nonbinding arbitration with the division.39 The petition must have supporting proof that the foregoing notice requirements were satisfied. Indeed, prior to filing suit, a party to a dispute must petition the division for nonbinding arbitration.40 The petition must be accompanied by a $50 filing fee.41 The petition must provide written notice of the specific nature of the dispute, contain a demand for relief, and provide notice of the intent to file an arbitration petition or other legal action in the event the dispute is not resolved, or else it will be dismissed without prejudice.42 Upon receipt of the petition, it will be evaluated by the division to determine the nature of the dispute.43 The petition, once evaluated, will be served upon all respondents.44 Before the filing of the respondent’s answer, any party to the dispute may petition for mediation under the statute or any rules of the division.45 If all parties agree, the dispute will be referred to mediation. Notwithstanding the foregoing, the arbitrator may refer the matter to mediation at any time.46 The division has also promulgated rules governing the conduct of mandatory nonbinding arbitration.47

The arbitration decision is final unless a complaint for a trial de novo is filed within 30 days.48The Fourth District ruled that the 30-day rule is a strict deadline in that the five-day mailbox rule does not apply when computing time.49 The party moving for the trialde novo has the initial burden of persuasion with respect to the litigation.50 If the party moving for a trial de novo does not receive a more favorable result at trial, such party shall be assessed the other’s costs, including attorneys’ fees.51

Cooperatives, Homeowner Associations, and Mobile Home-related Disputes
The law regarding mandatory nonbinding arbitration for disputes involving cooperatives is the same for those related to condominiums. F.S. §719.106(1)(i) requires that a provision for mandatory nonbinding arbitration of disputes be contained in the bylaws of a cooperative. F.S. §719.1255 states that the division shall provide for alternative dispute resolution in accordance with the provisions of F.S. §718.1255.

F.S. §720.311(1)(b) provides for permissive nonbinding arbitration of disputes involving homeowner associations. While the procedures are somewhat similar to those for condominium related disputes, the main difference is that they are not mandatory and parties can bypass arbitration by going directly to court.52

Disputes involving mobile home parking lot tenancies utilize a different approach. F.S. §723.0381(1) requires mediation under F.S. §723.038 as a condition precedent to filing suit. However, once suit is filed, F.S. §723.0381(2) permits the court to refer the action to nonbinding arbitration under F.S. §44.103.

Medical Malpractice and Related Matters
F.S. §766.107 governs the use of nonbinding arbitration in medical malpractice actions. Any party can move for referral to nonbinding arbitration pursuant to F.S. §766.107(1). The chief judge of the judicial circuit is required to prepare three lists of arbitrators from which to select.53 The plaintiff’s counsel shall select one arbitrator from its list, the defendant an arbitrator from its list, and the selected arbitrators shall select a third from the third and final list of arbitrators.54 A party can waive its selection if not selected within 20 days of the creation of the lists and the chief judge will select the arbitrator from the appropriate list.55 F.S. §766.107(2)(b) requires disinterested arbitrators and sets forth procedures to disqualify arbitrators. F.S. §766.107(3) sets forth the arbitration procedure. F.S. §766.107(4) provides that a party may demand a trial de novo after the conclusion of the nonbinding arbitration with such notice as is required by the rules of the Supreme Court. Unlike F.S. §§44.103 and 718.1255, F.S. §766.107 does not provide a penalty for moving for a trial de novo if the result at trial is less favorable than that received during arbitration.

Reconstruction and Relocation Agreements Between Municipalities and Sign Owners
F.S. §70.20(4) allows for parties involved in disputes between municipalities and sign owners to request mandatory nonbinding arbitration if they fail to enter into a reconstruction and relocation agreement. The statute provides that each party shall select an arbitrator and the two selected arbitrators shall in turn select a third arbitrator to compose a three arbitrator panel. The arbitrators shall then proceed to construct and present to the parties a reconstruction and relocation agreement. If the parties accept the agreement, each is responsible for their share of the costs of the arbitration. The arbitrators take an active role in resolving the dispute by actually constructing and drafting an agreement rather than rendering a decision as in other nonbinding arbitrations. As the arbitration occurs prior to initiation of suit, there is no provision for a trial de novo. Rather, F.S. §70.20(5) allows for the possibility of eminent domain proceedings to resolve such disputes absent an agreement.

Conclusion
Unlike mediation, the provisions for nonbinding arbitration in F.S. §44.103 that govern most civil disputes are permissive, not mandatory. However, the term “nonbinding” is often a misnomer. The rules contain hard deadlines that require strict compliance. Absent the timely filing of a motion for a trial de novo, parties will be bound by the arbitration decision. Savvy practitioners understand that they may pick and choose certain portions of the arbitration decision to accept on behalf of their clients and move for a trial de novo with regard to only the unacceptable portions of the decision.

Nonbinding arbitration is a condition precedent to the filing of a lawsuit over certain disputes involving condominium and cooperative associations and their respective unit owners and shareholders. If such disputes are governed by the mandatory nonbinding arbitration provisions of Florida Statutes, a party may waive his or her day in court by failing to comply with statutory guidelines.

At the end of the day, it can be said that nonbinding arbitration can be a trap for the unwary. It is highly recommended that practitioners carefully review applicable Florida Statutes, rules of procedure, and local administrative orders and rules prior to engaging in this process.

¹ Merriam-Webster online, tinyurl.com/2hwnxu.
² See Fla. R. Civ. P. 1.820.
³ Id.
⁴ Fla. Stat. §44.103(2).
⁵ The rule governing nonbinding arbitration is Fla. R. Civ. P. 1.820, not 1.830.
⁶See Fla. R. Civ. P 1.800.
⁷ See also Fla. Stat. §44.108 which provides “[m]ediation and arbitration should be accessible to all parties regardless of financial status.”
⁸ See Fla. R. Civ. P. 1.820.
⁹ Fla. R. Civ. P. 1.820(h).
¹⁰The statute is vague as it fails to specify who is “the party.” This could lead to confusion if there are multiple parties to the action.
¹¹Centex-Rooney Construction Co., Inc. v. Martin Cty., 725 So. 2d 1255, 1262 (Fla. 4th D.C.A. 1999).
¹²Francis v. Akerly, 884 So. 2d 455, 456 (Fla. 4th D.C.A. 2004).
¹³See Cunningham v. Anchor Hocking Corporation, 558 So. 2d 93, 99 (Fla. 1st D.C.A. 1990); Ralston, Inc. v. Miller, 357 So. 2d 1066, 1070 (Fla. 3d D.C.A. 1978).
¹⁴This case was cited by several courts when presented with issues relating to multiple parties and claims. It will be discussed at greater length later.
¹⁵Johnson v. Levine, 736 So. 2d 1235, 1237-1238 (Fla. 4th D.C.A. 1999).
¹⁶Id. at 1239-40.
¹⁷Connell v. City of Plantation, 901 So. 2d 317, 319 (Fla. 4th D.C.A. 2005).
¹⁸Bacon Family Partners, L.P. v. Apollo Condominium Ass’n, Inc., 852 So. 2d 882, 888-889 (Fla. 2d D.C.A. 2003).
¹⁹Morgan,861 So. 2d 1226-27 (quoting Johnson, 736 So. 2d at 1239-40). This holding from Johnson was also cited by Broward Yachts, Inc., 871 So. 2d at 956.
²⁰Patterson v. Allstate Insurance Company, 884 So. 2d 178, 180-81 (Fla. 2d D.C.A. 2004).
²¹See also Fla. R. Civ. P. 1.700(a).
²²Friendly Homes of the South, Inc. v. Fontice, 932 So. 2d 634, 637 (Fla. 2d D.C.A. 2006).
²³Fla. Stat. §44.103 refers to the arbitration procedure as being “nonbinding,” while Fla. R. Civ. P. 1.820 refers to it as being “Non-Binding.”
²⁴See Fla. R. Civ. P. 1.800.
²⁵Fla. R. Civ. P. 1.820(a).
²⁶Fla. R. Civ. P. 1.820(b).
²⁷Fla. R. Civ. P. 1.820(c).
²⁸Fla. R. Civ. P. 1.820(d).
²⁹Fla. R. Civ. P. 1.820(e).
³⁰Fla. R. Civ. P. 1.820(f).
³¹Fla. R. Civ. P. 1.820(g).
³²Nicholson-Kenny Capital Mgmt., Inc. v. Steinberg, 932 So. 2d 321, 324 (Fla. 4th D.C.A. 2006).
³³Stowe v. Universal Property & Casualty Insurance Company, 937 So. 2d 156, 158 (Fla. 4th D.C.A. 2006).
³⁴Gallardo v. Scott, 821 So. 2d 1237, 1241 (Fla. 5th D.C.A. 2002).
³⁵Fla. Stat. §718.1255(1)(a) provides that alternative dispute resolution for disputes between unit owners and condominium associations is needed to, inter alia, reduce court dockets. See Neate v. Cypress Club Condominium Inc., 718 So. 2d 390, 392 (Fla. 4th D.C.A. 1998). Cf., Fla. Stat. §44.103 where nonbinding arbitration must be ordered by the court and only applies in contested civil actions.
³⁶See also F.A.C. §61B-45.013(8).
³⁷Villorin v. Village of Kings Creek Condominium Assoc., Inc.,789 So. 2d 1157, 1158 (Fla. 3d D.C.A. 2001).
³⁸Woodlake Redevelopment Corp. v. Woodlake Condominium Assoc. of Marco Shores, Inc., 671 So. 2d 253, 254 (Fla. 2d D.C.A. 1996).
³⁹“Division” means the Division of Florida Land Sales, Condominiums, and Mobile Homes of the Department of Business and Professional Regulation. But see Fla. Stat. §718.103(17).
⁴⁰Fla. Stat. §718.1255(4)(a). Cf. Sterling Condominium Ass’n v. Herrera, 690 So. 2d 703, 704 (Fla. 3d D.C.A. 1997) (which holds that where parties were already engaged in litigation for over two years, the mandatory nonbinding arbitration procedure of Fla. Stat. §718.1255(4) did not apply).
⁴¹Fla. Stat. §718.1255(4)(a).
⁴²Fla. Stat. §718.1255(4)(b).
⁴³Fla. Stat. §718.1255(4)(c).
⁴⁴Fla. Stat. §718.1255(4)(d).
⁴⁵Fla. Stat. §718.1255(4)(e).
⁴⁶Id.
⁴⁷See generally, F.A.C. Chapter 61B-45.
⁴⁸Fla. Stat. §718.1255(4)(k).
⁴⁹Cypress Bend Condominium Ass’n, Inc. v. Dexner, 705 So. 2d 681, 682 (Fla. 4th D.C.A. 1998). Cf. Furia v. Zicarelli, 935 So. 2d at 103-04.
⁵⁰Kahn v. Village At Eagles Condominium Ass’n, Inc., 693 So. 2d 1029, 1030 (Fla. 2d D.C.A. 1997).
⁵¹See Fla. Stat. §718.1255(4)(k). See also Huff v. Village of Stuart Assoc., 741 So. 2d 1217, 1218-19 (Fla. 4th D.C.A. 1999).
⁵²Fla. Stat. §720.311(2)(b).
⁵³Fla. Stat. §766.107(2)(a).
⁵⁴Fla. Stat. §766.107(2)(c).
⁵⁵ Id.

Daniel Morman is employed with The Barthet Firm in Miami. Mr. Morman received a B.B.A. from the University of Pennsylvania, a J.D. from Temple University, and an LL.M. in taxation from New York University. His practice includes commercial litigation and bankruptcy law.

Jonathan Whitcomb is employed with The Barthet Firm in Miami. Mr. Whitcomb received a B.A. from Davidson College, a J.D. from the University of Miami, and an LL.M. in taxation from New York University. His practice includes construction and commercial litigation.

Florida Bar Journal

Navigating the Nonbinding Arbitration Minefield in Florida

Latest Digital Edition

Book Reviews

Columns