Metalonis v. Boies Schiller Flexner LLP

• Decision Date: 10 November 2022
• Docket Number: 3D21-2249
• Citation: 350 So.3d 458
• Parties: David C. METALONIS, Appellant, v. BOIES SCHILLER FLEXNER LLP, Appellee.
• Court: Florida District Court of Appeals

350 So.3d 458

David C. METALONIS, Appellant,

v.BOIES SCHILLER FLEXNER LLP, Appellee.

No. 3D21-2249

District Court of Appeal of Florida, Third District.

Opinion Filed November 10, 2022

Leto Law Firm, and Matthew P. Leto, and Charles P. Gourlis, Miami, for appellant.

Boies Schiller Flexner LLP, and Andrew S. Brenner, Miami, James W. Lee, Samantha Licata, and Michael C. Mikulic, Miami, for appellee.

Before EMAS, LINDSEY, and GORDO, JJ.

LINDSEY, J.

Appellant David Metalonis appeals from a final judgment confirming an Arbitration Award in favor of Appellee Boies Schiller Flexner, LLP (the "Law Firm"). The underlying Award found in favor of the Law Firm on its claim for contingency fees against Metalonis, a former client. On appeal, Metalonis argues the Arbitrator exceeded his authority. He did not. Because the Arbitrator only addressed issues covered by the broad arbitration provision and put squarely before him by the parties, and because he did not impermissibly modify the parties’ Engagement Agreement, we affirm.

I. BACKGROUND

In February 2018, Metalonis hired the Law Firm to represent him in an action alleging frustration of a business opportunity involving undeveloped land near the Hard Rock Stadium. The parties signed an Engagement Agreement in which Metalonis agreed to pay a contingency fee for any cash or non-cash sum recovered. The parties also agreed that any dispute "arising from or relating to the Engagement ... shall be finally settled by binding, confidential arbitration ...."¹

The Law Firm represented Metalonis in an action against Eastgroup Properties, Inc. After over a year of litigation, Metalonis and Eastgroup attended mediation and entered into a Settlement Agreement in which Eastgroup agreed to pay Metalonis $2.45 million and transfer a two-acre parcel of land to Metalonis, subject to certain conditions precedent. After signing the Settlement Agreement, Metalonis instructed the Law Firm to argue—in response to Eastgroup's Motion to Enforce—that the Settlement Agreement was unenforceable. The trial court ruled against Metalonis, and the case was dismissed. Metalonis, through new counsel, appealed, and this Court dismissed the appeal. See Metalonis v. Eastgroup Props., Inc., 298 So. 3d 1215, 1216 (Fla. 3d DCA 2020) (holding that Metalonis's voluntary dismissal divested this Court of appellate jurisdiction).

Metalonis hired new counsel to assist with the transfer of the two-acre parcel. Meanwhile, the Law Firm initiated arbitration to collect its contingency fee, which Metalonis refused to pay.² Metalonis responded with a legal malpractice Counterclaim (for approximately $30 million). Several months after the Law Firm initiated arbitration, and nearly 18 months after the Settlement Agreement, Metalonis complied with the necessary conditions precedent, and Eastgroup transferred the two-acre parcel. At the time of settlement, Metalonis admitted the property was worth at least $2 million,³ but Metalonis claims the property was only worth $50,000 when it was finally transferred.

In March 2021, the Arbitrator presided over a five-day evidentiary hearing. The parties collectively called eleven live witnesses, submitted 6 witness depositions, and introduced over 225 documents into evidence (totaling over 6,500 pages). The Arbitrator ultimately issued a detailed 120-page Arbitration Award, with hundreds of citations to the record.

In arbitration, the Law Firm sought a contingency fee based on both the cash and non-cash sums Metalonis recovered (the $2.45 million and the value of the two-acre parcel). With respect to the cash amount, Metalonis argued the Law Firm could not recover because it engaged in legal malpractice. In essence, Metalonis argued he was tricked into signing the Settlement Agreement. The Arbitrator rejected this argument and dismissed Metalonis's malpractice Counterclaim with prejudice, concluding "that the central tenets of Metalonis's story, the very foundation for his malpractice case, are not true. Metalonis appears to be the ultimate salesman, willing to tell whatever puffery he thinks will serve his immediate financial interests." Metalonis does not challenge the dismissal of his Counterclaim.

With respect to the contingency fee for the parcel of land, Metalonis raised two arguments that are relevant here. First, Metalonis argued he did not have to pay the Law Firm a contingency fee based on the value of the two-acre parcel because the Engagement Agreement gave him the option of giving the Law Firm an undivided interest in the property equal to the applicable contingency percentage.⁴ Second, Metalonis argued the parcel should be valued at $50,000, which is the value he claimed the parcel had when it was transferred to him.

Importantly, these arguments were put squarely before the Arbitrator, and neither party argued the Arbitrator lacked authority to resolve these issues. The Arbitrator ultimately rejected Metalonis's arguments and awarded a contingency fee to the Law Firm based on the value of the parcel at the time of settlement, which it was undisputed was at least $2 million.

After issuance of the Final Arbitration Award, Metalonis still refused to pay. Consequently, the Law Firm filed a Petition in the circuit court to confirm the award. In response, Metalonis argued the Arbitrator exceeded his authority. The circuit court granted the Law Firm's Petition and entered final judgment. Metalonis timely appealed.

II. ANALYSIS

On appeal, Metalonis maintains that the Arbitrator exceeded his authority. The standard of review is de novo. See Nash v. Fla. Atl. Univ. Bd. of Trustees, 213 So. 3d 363, 366 (Fla. 4th DCA 2017) ("Whether an arbitrator exceeded his authority within the meaning of [the Florida Arbitration Code] is an issue of law subject to de novo review."); Gherardi v. Citigroup Glob. Mkts. Inc., 975 F.3d 1232, 1236 (11th Cir. 2020).

Though our standard of review is de novo, the scope of our review is "very limited, with a high degree of conclusiveness attaching to [the] arbitration award." Regalado v. Cabezas, 959 So. 2d 282, 284 (Fla. 3d DCA 2007), as modified on denial of reh'g (July 10, 2007) (quoting Marr v. Webb, 930 So.2d 734, 737 (Fla. 3d DCA 2006) ); see also Gherardi, 975 F.3d at 1237 ("Judicial review of arbitration decisions is ‘among the narrowest known to the law.’ " (quoting Bamberger Rosenheim, Ltd. v. OA Dev., Inc., 862 F.3d 1284, 1286 (11th Cir. 2017) )).

In support of his position, Metalonis advances three arguments. First, he argues that the Federal Arbitration Act applies, not the Florida Arbitration Code. Second, he argues the Arbitrator exceeded his authority by denying Metalonis the option to provide the Law Firm with an undivided interest in the property instead of a cash payment based on value. Third, Metalonis argues the Arbitrator exceeded his authority by assigning the two-acre parcel its value at the time of settlement as opposed to when it was transferred. We are not persuaded by these arguments. Cf. Wiregrass Metal Trades Council AFL-CIO v. Shaw Envtl. & Infrastructure, Inc., 837 F.3d 1083, 1085–86 (11th Cir. 2016) ("A dispute involving the interpretation of a collective bargaining agreement was submitted to an arbitrator, as both parties had agreed their disputes would be. As usually happens, the losing party was not happy with the loss. As too often happens, instead of accepting it and moving on, the loser moved the [trial court] to set aside the arbitration award ...." (citation omitted)).

A. The Florida Arbitration Code and the Federal Arbitration Act

The Arbitrator applied the Revised Florida Arbitration Code (the "FAC"). Metalonis argues the Federal Arbitration Act (the "FAA") should apply instead. "In Florida, an arbitration clause in a contract involving interstate commerce is subject to the Florida Arbitration Code (FAC), to the extent the FAC is not in conflict with the FAA." Shotts v. OP Winter Haven, Inc., 86 So. 3d 456, 463–64 (Fla. 2011). Here, the underlying transaction has to do with undeveloped land in Florida and does not, on its face, involve interstate commerce. See Visiting Nurse Ass'n of Fla., Inc. v. Jupiter Med. Ctr., Inc., 154 So. 3d 1115, 1125 (Fla. 2014) ("To determine if a transaction involved interstate commerce, courts look to whether the transaction in fact involved interstate commerce, even if the parties did not contemplate an interstate commerce connection."). Regardless, Metalonis has failed to satisfy the heavy burden of showing that the Arbitration Award should be vacated under either the FAC or the FAA.

Under the FAC, one of the specified grounds for vacating an arbitration award is if "[a]n arbitrator exceeded the arbitrator's powers[.]" § 682.13(1)(d), Fla. Stat. (2022). Florida courts interpret this ground to be "jurisdictional in nature and ... in reference to the scope of authority given to an arbitrator in the arbitration agreement." See, e.g., Visiting Nurse, 154 So. 3d at 1137.⁵ In other words, an arbitrator exceeds his or her power only when he or she goes beyond the authority granted by the parties. Id.; Metro Dade Firefighters, Int'l Ass'n of Fire Fighters, Local 1403 v. Miami-Dade County, 347 So.3d 1278 (Fla. 3d DCA Sept. 30, 2022) ; Soler v. Secondary Holdings, Inc., 832 So. 2d 893 (Fla. 3d DCA 2002). Moreover, "[w]hether the arbitrator's decision was legally correct is irrelevant because ‘[a]n award of arbitration may not be reversed on the ground that the arbitrator made an error of law.’ " Metro Dade Firefighters, 347 So.3d at 1283 (quoting Schnurmacher Holding, Inc. v. Noriega, 542 So. 2d 1327, 1329 (Fla. 1989) ).

Here, the Arbitrator clearly did not exceed his authority under the FAC because the issues resolved in arbitration were covered by the broad arbitration provision, which encompasses any dispute "arising from or relating to the Engagement[.]" Further, the parties placed these issues squarely before the Arbitrator. Indeed, neither party objected to the Arbitrator's authority to resolve the...