Orkin Exterminating Co., Inc. v. Petsch

• Citation: 872 So.2d 259
• Decision Date: 06 February 2004
• Docket Number: No. 2D02-5494.,2D02-5494.
• Parties: ORKIN EXTERMINATING COMPANY, INC., Rollins, Inc., David Bernstein, individually, and Rick Prothero, individually, Appellants, v. Francis D. PETSCH, individually and on behalf of all others similarly situated, Appellee.
• Court: Florida District Court of Appeals

872 So.2d 259

ORKIN EXTERMINATING COMPANY, INC., Rollins, Inc., David Bernstein, individually, and Rick Prothero, individually, Appellants, v. Francis D. PETSCH, individually and on behalf of all others similarly situated, Appellee.

No. 2D02-5494.

District Court of Appeal of Florida, Second District.

February 6, 2004.

Rehearing Denied April 22, 2004.

Michael W. Davis, William J. Nissen, and Theodore R. Scarborough of Sidley Austin Brown & Wood, Chicago, IL, and Douglas B. Brown of Rumberger, Kirk & Caldwell, Orlando, for Appellants.

Keith E. Hope of the Hope Law Firm, P.A., Key Biscayne, Daniel Clark of Clark, Charlton & Martino, P.A., Tampa, and George A. Vaka of Vaka, Larson & Johnson, P.A., Tampa, for Appellee.

NORTHCUTT, Judge.

Francis Petsch contracted with Orkin Exterminating Company to inspect his home for termites and treat any infestation. Petsch was unhappy with Orkin's services and initiated a class action against Orkin, Rollins, Inc., David Bernstein, and Rick Prothero (collectively Orkin). Petsch sought, in count I, money damages and attorney's fees under Florida's Deceptive and Unfair Trade Practices Act (FDUTPA), § 501.201-.213, Fla. Stat. (2001); in count II, restitution of all money he paid Orkin; and in count III, injunctive relief under FDUTPA and a declaration that the contract's limitation of liability provision was unenforceable.

Pursuant to a contract provision requiring the parties to arbitrate any disputes, Orkin moved to dismiss or stay the proceedings in favor of arbitration. The circuit court denied Orkin's motion, finding the agreement invalid on two grounds: first, the court found that arbitration did not provide a forum in which Petsch could exercise his statutory rights; and second, the court held that the arbitration provision was unconscionable. We agree with Orkin that both of the circuit court's reasons for denying arbitration were erroneous. We reverse and remand with directions to submit Petsch's claims to arbitration.

We review an order denying a motion to compel arbitration de novo. Stacy David, Inc. v. Consuegra, 845 So.2d 303, 306 (Fla. 2d DCA 2003). In determining whether a dispute is subject to arbitration, courts consider: "(1) whether a valid written agreement to arbitrate exists; (2) whether an arbitrable issue exists; and (3) whether the right to arbitration was waived." Id.; see also Flyer Printing Co. v. Hill, 805 So.2d 829, 831 (Fla. 2d DCA 2001)

. The only issue presented in this case is the validity of the arbitration provision.

We begin our analysis by noting that FDUTPA claims properly may be submitted to arbitration. Aztec Med. Servs., Inc. v. Burger, 792 So.2d 617, 624 (Fla. 4th DCA 2001); Value Car Sales, Inc. v. Bouton, 608 So.2d 860, 861 (Fla. 5th DCA 1992). When considering whether the legislature intended to preclude the submission of FDUTPA claims to arbitration, the Aztec court declared that to do so, "the legislature would have to state such a requirement in unambiguous text." 792 So.2d at 621 (quoting Sharpe v. Lytal & Reiter, Clark, Sharpe, Roca, Fountain, Williams, 702 So.2d 622, 624 (Fla. 4th DCA 1997)). We agree with Aztec that FDUTPA contains no such statement of legislative intent. As such, FDUTPA claims may be heard in an arbitral forum.¹

But Petsch claims that the specific language of the provision in his contract prohibits him from raising his FDUTPA claim in arbitration. The pertinent part of the arbitration clause states:

[A]ny dispute arising out of or relating to this agreement ... shall be finally resolved by arbitration administered under the commercial arbitration rules of the American Arbitration Association. Furthermore, the parties expressly agree that their mutual rights and obligations and the conduct of any arbitration proceeding shall be controlled by the Federal Arbitration Act. The arbitrator shall give effect to any and all waivers, releases, disclaimers, limitations and other terms and conditions of this agreement. The arbitrator shall consider the legal defenses raised in the arbitration....

Directly following the arbitration clause is a provision entitled "Limitation of Liability." The contested section of that provision states:

Customer expressly waives any claims in any lawsuit, arbitration or legal proceeding against Orkin for breach of contract, negligence, other tort, or violation of any statute, rule or regulation, for loss of use, diminution of value, economic, compensatory, or incidental or consequential damages of any kind, or any exemplary, treble, liquidated, or any type of punitive damages. Customer agrees that under no circumstances shall Orkin be liable for any amount greater than the amount paid by the Customer to Orkin for the termite service to be performed.

(Emphasis supplied).

Petsch reads the limitation of liability provision to preclude him from bringing a FDUTPA cause of action, i.e., "[c]ustomer... waives any claims ... for ... violation of any statute...." He contends that because the agreement requires that the arbitrator "shall give effect to any and all waivers, releases, disclaimers, [and] limitations" contained in the parties' contract, the limitation provision is incorporated into the arbitration clause. Under this interpretation, he cannot pursue his statutory rights in an arbitral forum and, because of that, the arbitration agreement is unenforceable. See, e.g., Flyer Printing, 805 So.2d at 831

. The circuit court agreed with Petsch's view.

Petsch's position is reasonable given the poorly worded limitation provision in Orkin's form contract. In the quote above, we have underlined the words that give rise to ambiguity. It is unclear whether the waiver extends to all claims based on causes of action for breach of contract, torts, and statutory violations, or only to claims for certain damages arising from those causes of action. But in this appeal Orkin has conceded that the clause

merely limits the remedies available in any proceeding against Orkin, whether in arbitration or a lawsuit. The provision does not even purport to prevent plaintiff from filing a claim against Orkin under the FDUTPA seeking declaratory and injunctive relief and a refund of the contract price. Put simply, nothing in the limitation of liability provision prevents [Petsch] from asking the arbitrator to hear his FDUTPA claim on the merits, just as a court would.

Reply br. at 4-5.

Both federal and Florida public policy favor resolving disputes through arbitration when the parties have agreed to do so. See Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 25, 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991)

; K.P. Meiring Constr., Inc. v. Northbay I & E, Inc., 761 So.2d 1221, 1225 (Fla. 2d DCA 2000). In keeping with this policy, we will construe the Orkin contract, including the arbitration and the limitation provisions, in a way that gives a reasonable meaning to all the terms, rather than in a way that will render part of the contract of no effect. See State Farm Fire & Cas. Co. v. Licea, 685 So.2d 1285, 1287 (Fla.1996). We accept Orkin's assertion that nothing in the arbitration clause or the limitation provision prevents Petsch from raising his FDUTPA claim, or any other claims he may have against Orkin, in the arbitration.

Nor does the limitation provision affect the remedies available for a violation of FDUTPA. Section 501.211(2) provides that anyone who has suffered a loss because of a violation of FDUTPA "may recover actual damages, plus attorney's fees and court costs." Although Petsch sought special, consequential, and incidental damages in count I, those damages are not available under FDUTPA. See Fort Lauderdale Lincoln Mercury, Inc. v. Corgnati, 715 So.2d 311, 314-15 (Fla. 4th DCA 1998)

. Section 501.211 permits a consumer to recover only the diminished value of the services received. Urling v. Helms Exterminators, Inc., 468 So.2d 451, 454 (Fla. 1st DCA 1985). Thus, in the context of an improper termite inspection, the Urling court noted that the plaintiff could only recover the cost of the erroneous certificate. Petsch's damages under FDUTPA would be recovery of the amount he paid under his contract with Orkin, plus his fees and costs. Such recovery is permitted under the limitation of liability provision in the contract.

As to attorney's fees, both the arbitration clause and limitation provision are silent. Petsch has sought attorney's fees which are authorized under section 501.211(2). While the limitation provision states that Orkin will not be "liable" for any amount greater than the amount Petsch paid it, we read this condition in conjunction with the sentence before it, which imposes a limitation on the damages awardable. Attorney's fees are not damages. Scottsdale Ins. Co. v. Haynes, 793 So.2d 1006, 1009 (Fla. 5th DCA 2001), review denied by Home Away From Home of Holly Hill, Inc. v. Scottsdale Ins. Co., 819 So.2d 135 (Fla.2002); see also Cheek v. McGowan Elec. Supply Co., 511 So.2d 977 (Fla.1987)

.

We note that even when the Federal Arbitration Act governs an arbitration agreement, Florida law controls the award of attorney's fees. Lee v. Smith Barney, Harris Upham & Co., 626 So.2d 969, 971 (Fla. 2d DCA 1993); see also Cassedy v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 751 So.2d 143, 146-47 (Fla. 1st DCA 2000)

. The Florida Arbitration Code, § 682.11, Fla. Stat. (2001), states that "[u]nless otherwise provided in the agreement or provision for arbitration, the arbitrators' and umpire's expenses and fees, together with other expenses, not including counsel's fees, incurred in the conduct of the arbitration, shall be paid as provided in the award." (Emphasis supplied). Attorney's fees for time spent in arbitration are recoverable only in the circuit court on a motion for confirmation or enforcement of the award. Lee, 626 So.2d at 970; see also Moser v. Barron Chase Sec., Inc., 783 So.2d 231, 232-233 (Fla.2001) (stating that section 682.11 "has been construed to vest jurisdiction...