Ibis Lakes Homeowners Ass'n, Inc. v. Ibis Isle Homeowners Ass'n, Inc.

• Decision Date: 12 December 2012
• Docket Number: No. 4D12–1273.,4D12–1273.
• Parties: IBIS LAKES HOMEOWNERS ASSOCIATION, INC., Appellant, v. IBIS ISLE HOMEOWNERS ASSOCIATION, INC., Appellee.
• Court: Florida District Court of Appeals

102 So.3d 722

IBIS LAKES HOMEOWNERS ASSOCIATION, INC., Appellant,

v.IBIS ISLE HOMEOWNERS ASSOCIATION, INC., Appellee.

No. 4D12–1273.

District Court of Appeal of Florida, Fourth District.

Dec. 12, 2012.

Timothy W. Schulz of Timothy W. Schulz, P.A., West Palm Beach, for appellant.

David W. Craft of David W. Craft, P.A., West Palm Beach, for appellee.

GROSS, J.

Appellant Ibis Lakes (“Lakes”), a homeowner's association, appeals the non-final order of the trial court granting Appellee Ibis Isle's (“Isle”) motion to compel arbitration. We affirm, holding that an arbitrable issue existed and that the circuit court did not err in finding that Isle had not waived arbitration.

Lakes and Isle are adjoining homeowner's associations (“HOAs”) located within the residential community Ibis Golf & Country Club (“Ibis Golf”). Ibis Golf was constructed in two distinct residential phases. Although originally designed as one residential subdivision, each phase's members chose to become a separate homeowners association for its respective parcel, resulting in Lakes becoming the HOA for Phase I and Isle becoming the HOA for Phase II.

Both sub-communities share a common entranceway and Isle residents must use a common roadway located on Lakes' property to reach their residences. Since Isle derives a benefit from the use of the entryway and common roadway, Lakes and Isle agreed on June 3, 1997, to enter into a Shared Common Expense Agreement (“Agreement”) to “memorialize their desire to share the use of, access through and upon Lake Boulevard, to share the use and benefits of the Shared Common Areas and to allocate the costs for maintenance and repair of both the commonly shared portion” of the roadway and common areas.

Agreement Requirements

Under the Agreement, Lakes was to be responsible for “maintenance of and repair of the Shared Common Areas.” In performing this duty, Lakes was to follow certain budgetary procedures, such as creating an annual budget with “specific line item allocations for expenses to be shared ... by Lakes and Isles for the Shared Common Areas.” Additionally, pursuant to a later amendment to the Agreement, both HOAs assigned specific percentages of expenses to be shared:

a) 73% of Reserve for Lakes Boulevard Road Repaving;

b) 100% of Entry Landscape Maintenance

c) 93% of Street and Accent Electrical Lighting

d) 6% of Irrigation Electric;

e) 100% of Annual Flowers;

f) 100% of Entry Wall Painting;

g) 73% of General Liability Insurance; and

h) 5% of Annual Management Fee

Furthermore, within ninety days of the end of each calendar year, Lakes was to provide Isle “with a reconciliation of the actual costs of the Shared Expenses and the amount paid by” Isle.

Arbitration Clauses within the Agreement

Within the Agreement, three paragraphs define the circumstances under which either party could refer disputes arising under the Agreement to arbitration. Paragraph 9, which is inapplicable to this case, allowed arbitration “[i]n the event that Ibis Isle HOA fails in its performance... regarding the payment of the Shared Expenses.”

Paragraph 10 concerned situations where Lakes defaulted in its maintenance obligations:

In the event that Ibis Lakes HOA fails in its performance of this Agreement regarding its maintenance obligations as set forth in paragraph 5 above, Ibis Isle may declare a default (“Maintenance Default”) by providing notice of same to Ibis Lakes HOA (“Notice of Maintenance Default”). Upon receipt of a Notice of Maintenance Default, Ibis Lakes HOA shall have the option to cure the default within thirty (30) calendar days or provide Ibis Isle HOA with a notice of dispute of default (“Dispute Notice”). In the event that Ibis Lakes HOA issues a Dispute Notice to Ibis Isle, in that event, the matter of the alleged Maintenance Default shall be submitted by the Parties to binding arbitration in accordance with the rules and regulations of the American Arbitration Association.

Paragraph 20 of the Agreement generally provided for binding arbitration for all disputes arising from the Agreement:

The parties hereby agree that concerning any dispute from this Agreement or the obligations of the parties to this Agreement, including but not limited to, the failure of the parties to agree pursuant to Section 7.5 hereof, shall be resolved by binding arbitration in accordance with the rules and regulations of the American Arbitration Association.

(Emphasis added).

Nature of the Dispute

On October 18, 2011, Isle filed a demand for arbitration with the American Arbitration Association to obtain a refund of $7,122.68 for overcharges made by Lakes between 2002 and 2008. Specifically, Isle alleged that Lakes breached the Agreement by improperly charging Isle for insurance coverage outside of the Shared Expenses agreement, and therefore in addition to General Liability Insurance as defined by the Agreement.

On October 27, 2011, Lakes filed a complaint to enjoin arbitration, alleging that the “[c]harge[s] for insurance coverage and/or concealing such charges [ ] are not issues that Lakes and Isle agreed to submit to arbitration.” Lakes argued that, under paragraph 10 of the Agreement, “only Lakes' failure to maintain and/or repair entranceway landscaping and/or the common roadway could be submitted to arbitration.”

In response, Isle filed a Motion to Abate and Compel Arbitration, for which the trial court conducted a hearing on December 6, 2011; the court did not rule at that time, but eventually specially set a hearing for March 2012.

On December 8, 2011, Isle served a Request to Produce seeking all of the quarterly shared expense statements or invoices prepared by Lakes with regard to the General Liability Insurance policies. Lakes objected to this request. The trial court sustained Lakes' objection and stayed the request to produce “pending the ruling on the motion to abate and compel arbitration.”

On March 26, 2012, the trial court granted Isle's motion to abate and compel arbitration, finding that “a valid agreement to arbitrate, an arbitrable issue and no waiver.”

I

In its first issue on appeal, Lakes argues that the trial court erred in determining that an arbitrable issue exists between the parties. Lakes contends that the drafters of the Agreement “specifically drafted paragraphs 9 and 10” to delineate what matters were to be arbitrated. Since paragraph 20 contains only a general arbitration provision, Lakes contends that the ejusdem generis doctrine should be employed to limit paragraph 20's general arbitration provision to the specific situations identified in paragraphs 9 and 10.

Standard of Review

“An order granting or denying a motion to compel arbitration is reviewed de novo.” Best v. Ed. Affiliates, Inc., 82 So.3d 143, 145 (Fla. 4th DCA 2012) (quoting DFC Homes of Fla. v. Lawrence, 8 So.3d 1281, 1282–83 (Fla. 4th DCA 2009)). However, “the trial court's factual findings are reviewed under a competent, substantial evidence standard.” Id. at 146 (quoting BDO Seidman, LLP v. Bee, 970 So.2d 869, 873–74 (Fla. 4th DCA 2007)).

The Agreement's Paragraph 20 is Enforceable

Chapter 682, Florida Statutes (2011), governs arbitration in commercial contract cases. Section 682.02 permits parties to “include in a written contract a provision for the settlement by arbitration of any controversy ... arising between them relating to such contract.” § 682.02, Fla. Stat. (2011). Such arbitration provisions “shall be valid, enforceable, and irrevocable without regard to the justiciable character of the controversy.” Id.

“Where there is a dispute between the parties to a contract concerning the propriety of arbitration, the proper remedy is for a party to apply to the court for an order compelling or staying arbitration pursuant to section 682.03, Florida Statutes (1999).” Hospitality Ventures of Coral Springs, L.C. v. Am. Arbitration Ass'n, 755 So.2d 159, 160 (Fla. 4th DCA 2000). Once a party has filed a motion to compel arbitration:

[i]f the court is satisfied that no substantial issue exists as to the making of the agreement or provision, it shall grant the application. If the court shall find that a substantial issue is raised as to the making of the agreement or provision, it shall summarily hear and determine the issue and, according to its determination, shall grant or deny the application.

§ 682.03(1), Fla. Stat. (2011). As such, it is for the court, not the arbitrator, to determine “whether a valid written agreement to arbitrate exists.” Shotts v. OP Winter Haven, Inc., 86 So.3d 456, 471 (Fla.2011) (quoting Seifert v. U.S. Home Corp., 750 So.2d 633, 636 (Fla.1999)).

To this, Florida courts have recognized that “there are three elements for courts to consider in ruling on a motion to compel arbitration of a given dispute: (1) whether a valid written agreement to arbitrate exists; (2) whether an arbitrable issue exists; and (3) whether the right to arbitration was waived.” Seifert, 750 So.2d at 636. In the case at hand, Lakes contests the latter two elements.

Whether an Arbitrable Issue Exists

Florida courts have recognized “arbitration [a]s a favored means of dispute resolution,” and, as so, this Court “should resolve all doubts about the scope of an arbitration agreement as well as any questions about waivers thereof in favor of arbitration, rather than against it.” EMSA Ltd. P'ship v. Mason, 677 So.2d 105, 107 (Fla. 4th DCA 1996) (quoting Roe v. Amica Mut. Ins. Co., 533 So.2d 279, 281 (Fla.1988)). However, arbitration “may be required only as to those disputes concerning which the parties have expressly agreed.” Vargas v. Schweitzer–Ramras, 878 So.2d 415, 417 (Fla. 3d DCA 2004) (quoting Atencio v. U.S. Sec. Ins. Co., 676 So.2d 489, 490 (Fla. 3d DCA 1996)). Thus, “[t]he general rule is that where an arbitrationagreement exists between the parties, arbitration is required only of those controversies or disputes which the parties have agreed to submit to arbitration.” Royal Prof'l Builders, Inc. v. Roggin, 853 So.2d...