Hialeah Automotive, LLC v. Basulto, 3D07-855.

• Decision Date: 28 January 2009
• Docket Number: No. 3D07-855.,3D07-855.
• Citation: 22 So.3d 586
• Parties: HIALEAH AUTOMOTIVE, LLC, d/b/a Potamkin Dodge, Appellant, v. Roberto BASULTO and Raquel Gonzalez, Appellees.
• Court: Florida District Court of Appeals

22 So.3d 586 HIALEAH AUTOMOTIVE, LLC, d/b/a Potamkin Dodge, Appellant,
v.
Roberto BASULTO and Raquel Gonzalez, Appellees. No. 3D07-855. District Court of Appeal of Florida, Third District. January 28, 2009. Opinion Denying Rehearing and Granting Clarification December 2, 2009.

[22 So.3d 587]

Wolfe & Goldstein and Mark Goldstein, for appellant.

[22 So.3d 588]

Timothy Carl Blake, Miami, for appellees.

Before GERSTEN, C.J., and COPE and SUAREZ, JJ.

Revised Opinion

COPE, J.

On consideration of the appellant's motion for rehearing, the court withdraws its previous opinion and substitutes the following opinion.

This is an appeal of an order denying a motion to compel arbitration of claims brought against an automobile dealer. We affirm in part and reverse in part.

I.

In 2004, Roberto Basulto and Raquel Gonzalez, who are husband and wife ("the buyers"), purchased a new 2005 Dodge Caravan from Hialeah Automotive, LLC, which does business as Potamkin Dodge ("the dealer"). The buyers alleged that while at the dealership, the dealer had the buyers sign the contract in blank, with the representation that the agreed-upon numbers would be filled in. The buyers alleged that when the dealership completed the sales contract, it allowed them a lower trade-in allowance than the amount agreed upon. The dealer refused to correct the situation. After negotiations proved unsuccessful, the buyers returned the van to the dealership (having driven a total of seven miles) and demanded the return of their trade-in. The trade-in had been sold.

The buyers brought suit alleging fraud in the inducement and violation of the Florida Deceptive and Unfair Trade Practices Act ("FDUTPA"). See Ch. 501, pt. II, Fla. Stat. (2004). The buyers also sought rescission of the arbitration agreements they had signed, and rescission of the loan agreement.

The dealer moved to compel arbitration. The trial court held an evidentiary hearing at which the buyers and representatives of the dealer testified. The trial court ruled that: (a) the arbitration agreements were unconscionable; (b) the agreements were written so as to defeat the remedial purpose of the FDUTPA; and (c) the request for public injunctive relief under the FDUTPA was not a remedy an arbitrator could enforce and oversee. The dealer has appealed.

II.

An arbitration agreement is, very simply, one in which the parties have agreed to submit their dispute to an arbitrator (or panel of arbitrators) instead of a judge. 1 Larry E. Edmonson, Domke on Commercial Arbitration, § 1:1, at 1-1, 1-2 (2007) [(hereinafter Domke)]. It is the substitution of one decision-maker in place of another.

By agreeing to arbitrate, a party does not give up substantive rights afforded by statute or common law. The party only agrees to submit the dispute to "resolution in an arbitral, rather than a judicial, forum." Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985) (statutory claim); 1 Domke, supra, § 23:10, at 23-23.

A.

We turn first to the parties' "Agreement to Arbitrate Disputes" (the "Agreement"). This one-page, stand-alone Agreement called for the arbitration of any dispute concerning the sale of the vehicle, regardless of the theory of liability asserted. It contained a Florida choice of law provision.¹

22 So.3d 589

Where, as here, the parties execute an arbitration agreement in a transaction involving interstate commerce, the Federal Arbitration Act ("FAA"), 9 U.S.C. § 1, is implicated. See Volt Info. Scis., Inc. v. Bd. of Trs., 489 U.S. 468, 474-79, 109 S.Ct. 1248, 103 L.Ed.2d 488 (1989); see also Preston v. Ferrer, 552 U.S. 346, 128 S.Ct. 978, 169 L.Ed.2d 917 (2008); Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 126 S.Ct. 1204, 163 L.Ed.2d 1038 (2006); Powertel, Inc. v. Bexley, 743 So.2d 570, 573 (Fla. 1st DCA 1999).

Parties are allowed to choose state law for "the rules under which . . . arbitration will be conducted." Volt, 489 U.S. at 479, 109 S.Ct. 1248. By their Florida choice of law, the parties have specified the procedures of the Florida Arbitration Code as being applicable to this transaction. See Ch. 682, Fla. Stat. (2004). While this is permissible, the arbitration agreements in this case must still be enforced in a way which is consistent with the substantive provisions of the FAA.

Under the FAA, an arbitration agreement in a transaction involving interstate commerce "shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. "Section 2 prohibits the states from placing greater restrictions on arbitration clauses than those that apply to other contract provisions." Powertel, 743 So.2d at 573. "A court must enforce an arbitration agreement according to its terms, absent an established ground for setting aside the contractual provision, such as fraud, duress, coercion, or unconscionability." 1 Domke, supra, § 1:2, at 1-6.

The First District has explained:

Although the states may not impose special limitations on the use of arbitration clauses, the validity of an arbitration clause is nevertheless an issue of state contract law. Section 2 states that an arbitration clause can be invalidated on such grounds as exist "at law or in equity for the...