Beaver Coaches, Inc. v. Revels Nationwide R.V. Sales, Inc.

• Decision Date: 12 May 1989
• Docket Number: No. 88-3075,88-3075
• Citation: 543 So.2d 359,14 Fla. L. Weekly 1162
• Parties: 14 Fla. L. Weekly 1162 BEAVER COACHES, INC., Appellant, v. REVELS NATIONWIDE R.V. SALES, INC., Appellee.
• Court: Florida District Court of Appeals

Page 359

543 So.2d 359

14 Fla. L. Weekly 1162

BEAVER COACHES, INC., Appellant, v. REVELS NATIONWIDE R.V. SALES, INC., Appellee.

No. 88-3075.

District Court of Appeal of Florida First District.

May 12, 1989.

James L. Simon, Steven L. Brannock and Stacy D. Blank of Holland & Knight, Tampa, for appellant.

Dana G. Bradford of Gallagher, Baumer, Mikals, Bradford, Cannon & Walters, P.A., Jacksonville, for appellee.

JOANOS, Judge.

Pursuant to Rule 9.130(a)(3)(C)(v), Florida Rules Appellate Procedure, Beaver Coaches, Inc. has appealed from a non-final order denying the arbitrability of certain claims filed against it by Revels Nationwide R.V. Sales, Inc. We reverse.

The parties entered into a Dealer and Service Agreement (Agreement) wherein Revels was appointed an authorized dealer of Beaver's recreational vehicles. A specific territory was designated in the contract, and Beaver agreed "that as long as [Revels] is not in default under this agreement, during the term of this agreement, Beaver will not appoint any other dealer in the Territory."

Revels subsequently filed a complaint against Beaver alleging, in Count I, that Beaver had breached the exclusivity provision by authorizing other dealers to market their vehicles in Revels' territory. Consequential damages were alleged and sought in the form of lost profits and sales, floor plan and financing costs, and funds invested into the dealership. Count II of the complaint alleged violation of Section 817.416, Florida Statutes (the Florida Franchise Fraud Act), in that Beaver knowingly misrepresented that the contractually designated territory would be exclusive to Revels in order to induce Revels' execution of the contract, and further failed to disclose its intention to establish additional dealerships beyond the ability of the market area to sustain them; the same consequential damages were alleged and sought.

Paragraph 21(a) of the Agreement provides that:

Disputes and other matters in question between Beaver and [Revels] arising out of, or relating to this agreement, shall be decided by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association then in effect unless the parties mutually agree otherwise.

Pursuant to this provision, Beaver filed a "Demand for Arbitration and Motion to Dismiss or to Stay or Abate Proceedings Pending Arbitration." The motion alleged that the Federal Arbitration Act, 9 U.S.C. § 1, et seq., was applicable to the contract (which Revels does not dispute) and that, given the strong federal policy favoring arbitration and the broad language of the contract's arbitration clause, the court was obliged to move the parties to arbitration.

At the hearing on the motion, Revels pointed out that the damages sought in both counts of its complaint exceeded the limitation of remedies found in Paragraph 8 of the Agreement, which provided that "except as otherwise expressly provided in this agreement, no consequential damages, incidental damages or other indirect or special damages or loss" would be recoverable by either party for a breach of the Agreement. Revels then noted that Paragraph 14 of the Agreement appeared to permit Beaver, upon any breach by Revels, to pursue the very remedies from which Revels was barred by Paragraph 8. It maintained that, whereas a court was free to declare the limitation of remedies therefore unenforceable for lack of mutuality and award the damages sought, an arbitrator could not award a remedy which was excluded by the contract, citing Alco Standard Corp. v. Benelal, 345 F.Supp. 14 (E.D.Pa.1972).

With regard to Count II of the complaint, Revels further argued that, because it alleged violation of a statutory duty, imposed by Section 817.416, not to fradulently induce franchise contracts, the acts complained of did not "arise from or relate to" the Agreement so as to place the allegations within the Agreement's arbitration clause.

The trial judge adopted Revels' arguments as to both counts of the complaint. With regard to Count I, the court found, as a matter of law, that, when read in conjunction with Paragraph 14, the Agreement's limitation of remedies clause was void for lack of mutuality. The court relied on Alco, supra, to hold that, while a court of law was free to make such a finding and refuse to enforce the contractual limitations clause, thus enabling it to award the damages sought by Revels in Count I, an arbitrator could not go beyond that clause to award those damages. Arbitrability was therefore denied as to Count I.

The court further found that, because Revels sought the same damages in Count II as in Count I, the foregoing conclusion served to bar arbitrability as to that count as well. The court went on to note that the statutory duty of a franchisor not to make misrepresentations with regard to the franchise were provided by law and were independent of any agreement between the franchisor and franchisee. The violations of that duty alleged in Count II, therefore, did not "arise out of or relate to" the Agreement herein, putting the alleged violations outside the scope of the arbitration clause. Arbitrability was thereupon denied as to Count II as well.

First of all, we find that the trial court herein incorrectly expanded the holding in Alco, supra, to mean that, whenever the contract as a whole, as opposed to the arbitration agreement within that contract, contains a limitation of remedies clause, an arbritrator is limited by the provisions of that clause in the remedies he can afford.

The contract at issue in Alco was an agreement to indemnify from damages of "loss, cost or expense deemed to have been incurred as the result of a determination of a Primary Claim", which was defined in terms of money damages. The contract's arbitration clause provided only for "the right to submit any disputed Primary Claim for final determination by the arbitrator." Hence, the arbitration clause itself, by its limitation to "Primary Claims" with their own contractually defined remedy, and not the contract as a whole, limited the remedy that could be granted by the arbitrator. The Alco court held no more than that: "The powers of arbitrators arise out of the agreement ... submitting the dispute to them [i.e., the arbitration agreement], and they are limited to act only on those issues and to fashion...