Raymond James Fin. Servs., Inc. v. Phillips

• Citation: 110 So.3d 908
• Decision Date: 16 November 2011
• Docket Number: No. 2D10–2144.,2D10–2144.
• Parties: RAYMOND JAMES FINANCIAL SERVICES, INC., Appellant, v. Barbara J. PHILLIPS, as Trustee of the Barbara J. Phillips Trust, and as Guardian to Walter R. Phillips, Jennifer L. Phillips, Individually, and as Trustee of the Barbara J. Phillips Flite Trust; and Margaret K. Camp, Appellees.
• Court: Court of Appeal of Florida (US)

110 So.3d 908

RAYMOND JAMES FINANCIAL SERVICES, INC., Appellant,

v.Barbara J. PHILLIPS, as Trustee of the Barbara J. Phillips Trust, and as Guardian to Walter R. Phillips, Jennifer L. Phillips, Individually, and as Trustee of the Barbara J. Phillips Flite Trust; and Margaret K. Camp, Appellees.

No. 2D10–2144.

District Court of Appeal of Florida, Second District.

Nov. 16, 2011.

George L. Guerra and Dominique H. Pearlman of Wiand Guerra King, P.L., Tampa, for Appellant.

Robert J. Pearl of The Pearl Law Firm, P.A., Naples, for Appellees.

Scott C. Ilgenfritz of Johnson, Pope, Bokor, Ruppel & Burns, LLP, Tampa; and Carl J. Carlson of Carlson & Dennett, P.S., Seattle, Washington, for Amicus Curiae The Public Investors Arbitration Bar Association.

PER CURIAM.

Raymond James Financial Services, Inc. (Raymond James), appeals the trial court's final declaratory judgment which found that the arbitration claims of Barbara J. Phillips, as trustee of the Barbara J. Phillips Trust and as a guardian to Walter R. Phillips; Jennifer L. Phillips, individually and as trustee of the Barbara J. Phillips Flite Trust; and Margaret K. Camp (collectively, Account Holders) were not barred by Florida's statutes of limitations. Because the circuit court correctly determined that arbitrations are not “actions” or “proceedings” for purposes of section 95.011, Florida Statutes (2005), we affirm. In doing so, we choose to discuss only one of the issues raised by Raymond James.

I. Facts and Procedural History

The Account Holders executed client agreements with Raymond James for investment purposes. Pursuant to the provisions of the client agreements, the Account Holders were required to submit any disputes with Raymond James to the National Association of Securities Dealers, Inc. (NASD), for arbitration. ¹ Section 10304, the applicable NASD Code of Arbitration Procedure, provides a time limit upon submissions for arbitration. It states in pertinent part:

(a) No dispute, claim, or controversy shall be eligible for submission to arbitration under this Code where six (6) years have elapsed from the occurrence or event giving rise to the ... claim.

....

(b) This Rule shall not extend applicable statutes of limitations; nor shall the six-year time limit ... apply to any claim that is directed to arbitration by the court.

The client agreement also provided:

(d) Nothing in this agreement shall be deemed to limit or waive the application of any relevant state or federal statute of limitation, repose or other time bar. Any claim made by either party to this agreement which is time barred for any reason shall not be eligible for arbitration. The determination of whether any such claim was timely filed shall be by a court having jurisdiction, upon application by either party.

In November 2005 the Account Holders filed arbitration claims with NASD. The Account Holders' grievances may briefly be summarized as claims of negligence; misconduct, including breaches of fiduciary duty; and state and federal securities violations. In response to the Account Holders' claims, Raymond James filed a motion to dismiss, asserting that the Account Holders' claims were barred by the limitations periods in chapter 95, Florida Statutes (2005). The Account Holders then invoked the provision in the arbitration agreement which stated that timeliness issues would be decided by the court, and they filed an action in the circuit court of Collier County seeking a declaratory judgment. The Account Holders argued that Florida's statutes of limitations do not apply to arbitration proceedings. The circuit court agreed and issued a final declaratory judgment stating that Florida's statutes of limitations were not applicable to the Account Holders' arbitration claims as a matter of law. The court reasoned that the Florida Supreme Court's decision in Miele v. Prudential–Bache Securities, Inc., 656 So.2d 470, 472 (Fla.1995), determined that arbitrations are not “actions” or “proceedings.” This appeal followed. We believe the issue before us is one of first impression in Florida.

II. Analysis

“A legal issue surrounding a statute of limitations question is an issue of law subject to de novo review.” Hamilton v. Tanner, 962 So.2d 997, 1000 (Fla. 2d DCA 2007). Likewise, a trial court's ruling on a motion for declaratory relief is subject to de novo review. Schneberger v. Schneberger, 979 So.2d 981, 982 (Fla. 4th DCA 2008). The issue in this case is a legal issue concerning statutory interpretation. The question is narrow: whether Florida's statutes of limitations are applicable to arbitration claims when the parties have not expressly included a provision in their arbitration agreement stating that they are applicable.

The language of the contract at issue in this case does not expressly state that Florida's statutes of limitations apply to the arbitration claims. Instead, the language states that the contract will not “limit or waive the application of any relevant state or federal statute of limitation.” The Account Holders argue, and we agree, that this phrase does not affirmatively incorporate Florida's statutes of limitations into the agreement. The phrase indicates that Raymond James did not intend to waive any relevant statute of limitations defenses. Thus, we must determine whether Florida's statutes of limitations are relevant to arbitration claims. We are not alone in making this determination. See Broom v. Morgan Stanley DW Inc., 169 Wash.2d 231, 236 P.3d 182, 187 (2010) (“We determine independently whether our state statutes of limitations may apply to arbitral proceedings.”).

“As with any case of statutory construction, we begin with the ‘actual language used in the statute.’ ” Heart of Adoptions, Inc. v. J.A., 963 So.2d 189, 198 (Fla.2007) (quoting Borden v. East–European Ins. Co., 921 So.2d 587, 595 (Fla.2006)). “This is because legislative intent is determined primarily from the statute's text.” Id. (citing Maggio v. Fla. Dep't of Labor & Employment Sec., 899 So.2d 1074, 1076–77 (Fla.2005)). “It is appropriate to refer to dictionary definitions when construing statutes or rules.” Barco v. Sch. Bd. of Pinellas Cnty., 975 So.2d 1116, 1122 (Fla.2008). If “ ‘the language of the statute is clear and unambiguous and conveys a clear and definite meaning, there is no occasion for resorting to the rules of statutory interpretation and construction; the statute must be given its plain and obvious meaning.’ ” Id. at 1121–22 (quoting Holly v. Auld, 450 So.2d 217, 219 (Fla.1984)). However, if the language is ambiguous and capable of differing meaning, then the court must use the rules of statutory construction to resolve the ambiguity. Id. at 1122. Thus, when the language is ambiguous and “ ‘[i]n the absence of a statutory definition, resort may be had to case law or related statutory provisions which define the term.’ ” Tarpon Springs Hosp. Found., Inc. v. Anderson, 34 So.3d 742, 748 (Fla. 2d DCA 2010) (quoting Jones v. Williams Pawn & Gun, Inc., 800 So.2d 267, 270 (Fla. 4th DCA 2001)).

A. Section 95.011, Florida Statutes (2005)

Section 95.011 provides, “A civil action or proceeding, called ‘action’ in this chapter, ... shall be barred unless begun within the time prescribed in this chapter....” (Emphasis added.) There is nothing within chapter 95 which defines the terms “civil action” or “proceeding.” Thus, we turn to the dictionary definition of these terms. Black's Law Dictionary defines “civil action” as “[a] civil suit stating a legal cause of action and seeking only a legal remedy.” Black's Law Dictionary, 31 (8th ed. 2004). It defines “proceeding” as “[a]ny procedural means for seeking redress from a tribunal or agency,” “[t]he business conducted by a court or other official body,” and “[t]he regular and orderly progression of a lawsuit, including all acts and events between the time of commencement and the entry of judgment.” Id. at 1241. Because neither the actual language of the statute nor the dictionary definition include the term arbitration, the meaning of the words “civil action” or “proceeding” do not convey a clear and definite meaning, and we must resort to the principles of statutory construction.

Section 95.011 was enacted in 1974 and included the terms “civil action” and “proceeding.” Ch. 74–382, § 1, Laws of Fla. With one exception, the limitations statutes in effect prior to that time did not contain the word “proceeding.” Even the sole exception—for “proceedings” involving children born out of wedlock—contemplated an action brought in court. § 742.011, Fla. Stat. (1973). Thus, it appears that the legislature's addition of the term “proceeding” to section 95.011 was done purposefully. However, there is nothing in the legislative history indicating that the words “civil action” or “proceeding” are applicable to arbitration, so we must resort to case law to interpret these terms.

B. Case Law

Because the phrase “civil action” appears prior to the word “proceeding,” we address “civil action” first. Here, the circuit court based its ruling on Miele. Although the Miele opinion is not a statute of limitations case, the language of the case supports the circuit court's finding that arbitrations are not “actions.” The Miele court considered whether section 768.73, Florida Statutes (1991), which addressed limitations on punitive damage awards, applied to arbitration proceedings. Section 768.73 provided, in pertinent part, that it applied to “any civil action” that fell within certain categories of tort actions. Finding “that the plain meaning of ‘civil action’ must be derived from the context in which the language lies,” the court held that the term “civil action,” as used in the statute, was limited to proceedings “filed in a court” and did not include arbitration. Id. at 472. The court concluded that arbitration is “an alternative to the court system.” Id.

Although the Florida Supreme Court has never expressly receded from Miele, at least one Florida court...