CT Miami, LLC v. Samsung Elecs. Latinoamerica Miami, Inc.

• Decision Date: 09 September 2015
• Docket Number: No. 3D15–641.,3D15–641.
• Citation: 201 So.3d 85
• Parties: CT Miami, LLC, Appellant, v. SAMSUNG ELECTRONICS LATINOAMERICA MIAMI, INC., Appellee.
• Court: Florida District Court of Appeals

201 So.3d 85

CT Miami, LLC, Appellant,

v.SAMSUNG ELECTRONICS LATINOAMERICA MIAMI, INC., Appellee.

No. 3D15–641.

District Court of Appeal of Florida, Third District.

Sept. 9, 2015.

Bilzin Sumberg Baena Price & Axelrod LLP, and David Gersten, Jeffrey Gutchess, Daniel Tropin, and Brandon Rose, Miami, for appellant.

Holland & Knight LLP, and Rodolfo Sorondo, Jr., Alex M. Gonzalez, Israel J. Encinosa, and Rebecca M. Plasencia, Miami, for appellee.

Before WELLS, ROTHENBERG, and SCALES, JJ.

ROTHENBERG

, J.

CT Miami, LLC (“CT Miami”) appeals the trial court's order denying its motion to stay arbitration without an evidentiary hearing. Because we agree with the trial court that CT Miami did not raise a substantial issue regarding the agreement to arbitrate, we affirm the trial court's ruling.

FACTUAL BACKGROUND

Samsung Electronics Latinoamerica Miami, Inc. (“SELA”) is a Miami-based subsidiary of the multi-national electronics and cell phone manufacturer, Samsung Electronics, Ltd. (“Samsung”). CT Miami is an open-market distributor of smart phones, meaning that CT Miami sells phones to wholesale and retail establishments rather than cellular service providers like AT & T or T–Mobile.

In 2009, CT Miami approached SELA to discuss wholesale open-market distribution plans for many of SELA's phones. After some preliminary discussions, SELA's vice president and sales manager at the time, Ernesto Piedra, sent CT Miami an email stating: “[Prior] to any business deal we make, it is now required we have an agreement in place.” Piedra attached a document titled “DISTRIBUTOR AGREEMENT” to that email and requested that CT Miami finalize and sign the agreement.

The Distributor Agreement is a form contract that establishes the general terms of the relationship between the parties and sets expectations for future dealings. The Distributor Agreement expressly defines the “Effective Date” of the contract as “the date on which all parties have signed and dated this Agreement,” and it states that the contract will automatically renew yearly unless one party gives the other thirty days' written notice of its intent to cancel the agreement or immediate written notice of termination upon the occurrence of certain conditions. Finally, and most relevant to this case, the Distributor Agreement also contains an arbitration clause stating that “any controversy or claim arising out of or relating to this Agreement, or the breach thereof,” is to be resolved by arbitration administered under the rules of the American Arbitration Association (“AAA”) in Miami, Florida.

As requested in Piedra's email, CT Miami's CFO, Randy Williams, filled in the blanks in the Distributor Agreement with the appropriate information and then signed, dated, and returned the Distributor Agreement to SELA via email on June 23, 2009. CT Miami's CEO, Samuel Ohev–Zion, sent an email to SELA in September 2009 stating that CT Miami had never received a countersigned copy of the Distributor Agreement from SELA, and he requested a copy for CT Miami's records. Apparently, SELA never signed the Distributor Agreement and never provided CT Miami with a copy of the same. Nonetheless, the companies began doing business together shortly after Williams signed the Distributor Agreement.

The parties' business agreement proved to be mutually beneficial or, more accurately, wildly successful in the short term. Between June 2009 and summer 2014, SELA and CT Miami transacted nearly $1 billion in open-market cell phone sales together, with CT Miami dramatically increasing SELA's open-market sales in the region. However, in 2014, the public demand for the Galaxy S5 was significantly less than either SELA or CT Miami had anticipated; the market retail value of the Galaxy S5 fell to approximately $420 per unit; and CT Miami was forced to sell the phones at a loss, resulting in a substantial hit to its overall business. Meanwhile, competing open-market distributors began selling the phones at a lower price than CT Miami, which further reduced CT Miami's profits. Following this setback, CT Miami failed to pay SELA on several of the outstanding invoices totaling, according to SELA, approximately $21 million.

After CT Miami refused to pay its past-due invoices, SELA filed a Statement of Claim and Demand for Arbitration with the AAA, citing the Distributor Agreement as the operative contract between the parties and the arbitration clause therein as a basis for the AAA's jurisdiction over the dispute. SELA claims that the Distributor Agreement was the sole contract governing the parties' long-term relationship. There do not appear to be any alternative documents governing the parties' relationship,¹ and several emails between officers in both companies, along with CT Miami's yearly financial statements, all reference the Distributor Agreement.²

Thereafter, CT Miami filed an action in Miami–Dade County Circuit Court alleging that it had not paid the past-due invoices because SELA had first breached its agreement to provide price protection and make CT Miami whole in the event of a soft market on any of SELA's phones. CT Miami claims that the parties never intended the Distributor Agreement to control the relationship and that they had opted instead to reach short-term oral and email agreements on a per-deal basis. CT Miami alleges that among these many oral agreements was one guaranteeing that SELA would provide its products to CT Miami at the lowest prices and would also provide price protection—meaning that SELA would partially or fully offset any loss CT Miami took on the products it obtained from SELA—so that CT Miami could continue to move a large volume of SELA's cell phones at a very small profit margin.

CT Miami filed a motion to stay arbitration concurrently with its complaint, alleging that the parties had never agreed to the terms of the Distributor Agreement due to SELA's failure to sign the document as required for execution, and thus, that there was no enforceable arbitration clause to make the disputes arbitrable. In support of its motion to stay arbitration, CT Miami attached several documents and emails between the parties discussing the mutually beneficial partnership between the companies—which CT Miami cites as evidence of the oral agreements to provide price protection and the lowest prices—along with two affidavits from former SELA employees (employees that had left SELA to work at CT Miami) averring that SELA officers had a practice of intentionally refusing to countersign contracts such as the Distributor Agreement because they did not want to be bound by a written contract.

SELA filed a competing motion in the circuit court to stay the action and compel arbitration, arguing that the Distributor Agreement was in fact the operative contract and that, even without a countersignature, the parties' subsequent communications and course of conduct proved that they both intended to be bound by the Distributor Agreement. SELA's motion specifically referenced all the emails and financial statements that mentioned a “distributor agreement” or quoted language from the 2009 Distributor Agreement CT Miami had signed.

The trial court conducted a non-evidentiary hearing on the competing motions to compel/stay arbitration. At the hearing, SELA continued to argue that the Distributor Agreement was valid and that both parties' claims had to be submitted to arbitration. CT Miami argued that it had raised a substantial issue regarding whether the Distributor Agreement was ever formed and that, at the very least, it was entitled to an evidentiary hearing. After the hearing, the trial court ruled that the parties were bound by the Distributor Agreement, and thus, that the parties had to submit their disputes to arbitration. The trial court finalized its findings and conclusions in a written order that states:

THIS CAUSE comes before the Court on Defendant Samsung Electronics Latinoamerica Miami, Inc.'s (“SELA”) Motion to Compel Arbitration and Stay Litigation and on Plaintiff CT Miami, LLC's (“CT”) Motion to Stay Arbitration. The Court has reviewed the motions and all corresponding briefs, exhibits, and supporting affidavits. An expedited hearing was held on March 9, 2015.

For the reasons set forth in the record, the Court makes the following determinations:

1. It is undisputed that SELA sent the distributor agreement containing the arbitration provision at issue (the “Distributor Agreement”) to CT and that CT signed the Distributor Agreement and sent it back to SELA.

2. The claims at issue fall within the scope of the arbitration provision in the Distributor Agreement and SELA has not waived its right to arbitrate pursuant to the arbitration provision.

3. CT has not overcome the presumption that the contract that CT signed is a valid and binding agreement to arbitrate. See Thompkins v. Lil' Joe Records, Inc., 476 F.3d 1294, 1305 n. 12 (11th Cir.2007)

(quoting Dodge of Winter Park, Inc. v. Morley, 756 So.2d 1085, 1085–86 : “Generally, it is enough that the party against whom the contract is sought to be enforced signs it.”); Dodge of Winter Park, Inc. v. Morley, 756 So.2d 1085, 1085–86 (Fla. 5th DCA 2000) (holding that an arbitration agreement enforceable against party who signed the agreement even where the other party did not sign it because “[g]enerally, it is enough that the party against whom the contract is sought to be enforced signs it.”).

4. Furthermore, the Court finds based on the record before it, including, but not limited to, the Distributor Agreement signed by CT, email communications,

and CT's audited financial statements for 2010, 2011, 2012 and 2013, that the parties performed in accordance with the Distributor Agreement and in a manner consistent with the Distributor Agreement being a valid and binding agreement.

5. The Court finds, under the Federal Arbitration Act and the ICDR rules, that the arbitrator has the jurisdiction to make the determination on whether a valid arbitration clause exists.

6.

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