Roth v. Cohen

• Decision Date: 08 November 2006
• Docket Number: No. 3D06-116.,3D06-116.
• Citation: 941 So.2d 496
• Parties: Peter ROTH and Marilyn Roth, Appellants, v. Alan COHEN, Appellee.
• Court: Florida District Court of Appeals

941 So.2d 496

Peter ROTH and Marilyn Roth, Appellants, v. Alan COHEN, Appellee.

No. 3D06-116.

District Court of Appeal of Florida, Third District.

November 8, 2006.

COPYRIGHT MATERIAL OMITTED

Jorden Burt, and Richard J. Ovelmen and Andres F. Chagui and Landon K. Clayman, Miami, for appellants.

Lee Milich, Ft. Lauderdale, for appellee.

Before RAMIREZ, ROTHENBERG, and LAGOA, JJ.

LAGOA, J.

Appellants Peter and Marilyn Roth (hereinafter "the Roths") appeal a non-final order compelling arbitration of their Counterclaim and Third Party Complaint. At issue on appeal is whether Appellee Alan Cohen ("Cohen") waived his right to compel arbitration when he filed suit in circuit court. Because we find that, by filing his otherwise arbitrable defamation claims in circuit court, Cohen waived his right to compel arbitration, we reverse the trial court's order compelling arbitration of the Counterclaim.¹

I. FACTUAL AND PROCEDURAL HISTORY

Cohen is the sole officer and director of Alan David, Inc. ("ADI"), an interior design company. In 2003, Cohen and ADI decorated a model home at Cloisters on the Bay ("Cloisters"), a luxury development in Miami, Florida.

After purchasing a residence at the Cloisters, Peter Roth received a recommendation from the Cloisters that he use Cohen's and ADI's services. Peter Roth and ADI subsequently entered into an interior design services agreement. The signatories to that contract were Peter Roth and Cohen.²

The design contract provides that Roth would purchase items through or from the designer at cost. The contract also contains an arbitration clause that states, in relevant part: "Any controversy or claim arising out of or relating to this Agreement or the breach thereof shall be settled by arbitration in Broward County. . . ." (emphasis added).

According to the Roths, Cohen and ADI breached the contract by charging and collecting more than cost for design items and by inappropriately charging sham Florida sales taxes. The Roths met with Leonard Albanese ("Albanese"), the Cloisters' developer, in November of 2004 to discuss Cohen and ADI's breach and Albanese's continued recommendation of Cohen and ADI to Cloisters' residents. On February 1, 2005, the Roths sent a letter to Albanese questioning why he continued to refer Cohen's services to Cloisters' residents, and enclosing invoices which the Roths claimed showed the improper cost overcharges and sham sales taxes.

On June 23, 2005, Cohen filed suit in circuit court against the Roths asserting claims for libel, defamation, slander, and tortious interference with his relationship with Albanese³ and the Cloisters. In his Complaint, Cohen alleged that he is the president of ADI and was employed by Peter Roth to provide interior design services to Roth's residence at the Cloisters.

The Roths filed their Answer and Affirmative Defenses, as well as a Counterclaim and Third Party Complaint (naming ADI as a third party defendant) seeking joint and several damages from Cohen and ADI for fraud, fraud in the inducement, unjust enrichment, conversion, civil theft, constructive fraud, breach of contract, and an equitable accounting. In all but the constructive fraud and equitable accounting counts, the Roths allege that Cohen is the alter ego of ADI.

On October 10, 2005, Cohen and ADI filed a Motion to Stay Proceedings and Compel Arbitration of the Counterclaim and the Third Party Complaint. At the hearing before the trial court, the parties' arguments centered on the issue of whether there was a nexus between Cohen's claims and the design agreement and whether Cohen waived his right to arbitrate. The trial court granted the motion, and ordered arbitration of both the Counterclaim against Cohen and the Third Party Complaint against ADI.

II. STANDARD OF REVIEW AND FACTORS TO BE CONSIDERED IN GRANTING MOTION TO COMPEL ARBITRATION

We review an order granting or denying a motion to compel arbitration de novo. Vacation Beach, Inc. v. Charles Boyd Construction, Inc., 906 So.2d 374, 376 (Fla. 5th DCA 2005); Orkin Exterminating Co. v. Petsch, 872 So.2d 259 (Fla. 2d DCA 2004). When considering a motion to compel arbitration, three factors need to be considered: (1) whether a valid agreement to arbitrate exists, (2) whether an arbitrable issue exists, and (3) whether the right to arbitration was waived. See Seifert v. U.S. Home Corp., 750 So.2d 633, 636 (Fla. 1999).

In Seifert, the Florida Supreme Court stated that "even in contracts containing broad arbitration provisions, the determination of whether a particular claim must be submitted to arbitration necessarily depends on the existence of some nexus between the dispute and the contract containing the arbitration clause." Id. at 638. Thus, not every dispute that arises between contracting parties will be subject to arbitration, nor is the mere fact that a dispute would not have arisen but for the contract sufficient to compel arbitration of the dispute. Id. In establishing this standard, the Florida Supreme Court relied upon cases holding that for a tort claim to be considered "arising out of or relating to" a contract, "it must, at a minimum, raise some issue the resolution of which requires reference to or construction of some portion of the contract itself." Id.

III. ARGUMENTS ON APPEAL

On appeal, the Roths argue that the trial court erred in compelling arbitration of their Counterclaim because the arbitration clause contained in the design contract applied to Cohen's defamation claims and, therefore, Cohen waived his right to compel arbitration when he filed suit in circuit court. In response to the Roths' arguments, Cohen advances two arguments on appeal. First, he argues that, because the design contract is between ADI and Peter Roth, he did not have the right to demand arbitration under the contract in the first place and, therefore, could not have waived any such right. Cohen, however, failed to preserve this issue for appellate review. "For an issue to be preserved for appeal, . . . it `must be presented to the lower court and the specific legal argument or ground to be argued on appeal must be part of that presentation if it is to be considered preserved.'" Archer v. State, 613 So.2d 446, 448 (Fla. 1993); Vacation Beach, Inc. v. Charles Boyd Const., Inc., 906 So.2d 374 (Fla. 5th DCA 2005); Parlier v. Eagle-Picher Indus., Inc., 622 So.2d 479 (Fla. 5th DCA 1993). Because Cohen did not raise this argument before the trial court, the issue was not preserved and is, therefore, not properly before this Court.

Even if Cohen had preserved this issue, however, it would not avoid reversal, as Cohen proceeded before the trial court in a manner inconsistent with this argument. By moving to compel arbitration of the Counterclaim against him, Cohen affirmatively took advantage of the very arbitration clause he now claims he did not have a right to demand. Following Cohen's argument, his motion to compel arbitration of the Counterclaim would have been without factual or legal basis.

Cohen also argues that the arbitration clause does not apply to the defamation claims he filed before the circuit court because, following Seifert, an insufficient nexus exists between his claims and the arbitration clause. We disagree.

In support of his position, Cohen relies on King Motor Co. v. Jones, 901 So.2d 1017 (Fla. 4th DCA 2005). In King, the plaintiff purchased a car pursuant to a purchase and sales contract containing a broad arbitration clause. After learning that the financial information she provided to...