UniFirst Corporation v. Stronger Collision Center, LLC

• Decision Date: 20 April 2022
• Docket Number: 3D21-0281
• Parties: UNIFIRST CORPORATION, Appellant, v. STRONGER COLLISION CENTER, LLC, Appellee.
• Court: Florida District Court of Appeals

336 So.3d 1283

UNIFIRST CORPORATION, Appellant,

v.STRONGER COLLISION CENTER, LLC, Appellee.

No. 3D21-0281

District Court of Appeal of Florida, Third District.

Opinion filed April 20, 2022

Rehearing Denied May 11, 2022

The Gardner Law Firm, and John W. Gardner and Sara K. Grover (Brandon), for appellant.

Law Office of Keith Chasin, and Keith Chasin, for appellee.

Before HENDON, MILLER and BOKOR, JJ.

BOKOR, J.

UniFirst Corporation appeals the trial court's grant of Stronger Collision's motion to dismiss UniFirst's claim seeking enforcement of an arbitral award.¹ The issue turns on whether the applicable law and the terms of the parties’ contract permitted UniFirst to proceed with an ex parte arbitration after Stronger Collision elected not to participate or whether UniFirst should have first sought a court order to compel arbitration before proceeding.² As explained below, under the contract's choice of New York law, we conclude that UniFirst appropriately proceeded to arbitration.

UniFirst and Stronger Collision entered into a contract with an arbitration provision and a selection of New York law.³

Subsequently, UniFirst demanded arbitration, which Stronger Collision refused. UniFirst did not seek to compel arbitration. Instead, UniFirst proceeded to arbitration in Tallahassee, Florida, under the expedited procedures of the commercial arbitration rules of the American Arbitration Association (AAA), in accordance with the contract. Stronger Collision timely received notice of this proceeding, but did not participate.

After an ex parte arbitration under the expedited AAA procedures, the arbitrator issued an award in UniFirst's favor. UniFirst sought enforcement of that award in a court of competent jurisdiction in Miami-Dade County. Stronger Collision contested the award, arguing, among other grounds, that UniFirst's ex parte award cannot be enforced because of the failure to first seek an order compelling arbitration. The trial court agreed, applying Florida law to conclude that the arbitration provision required UniFirst to first seek a court order compelling arbitration prior to arbitrating its dispute, ex parte, under the agreed-to arbitration rules.

This was error, as UniFirst complied with the applicable New York law and the expedited procedures under the commercial arbitration rules of the AAA as elected in the parties’ contract. The parties do not dispute that the arbitration provision is "governed by New York Law" as the exclusive choice of law. Choice-of-law provisions in Florida are presumptively valid and must be enforced unless strong public policy considerations warrant invalidating a contracting party's choice to be bound by the laws of another state. See, e.g., Se. Floating Docks, Inc. v. Auto-Owners Ins. Co., 82 So. 3d 73, 80 (Fla. 2012). Further, "[w]here the language of the contract clearly indicates that AAA rules govern, they are expressly incorporated into the contract." Younessi v. Recovery Racing, LLC, 88 So. 3d 364, 365 (Fla. 4th DCA 2012). Thus, we apply New York law and the AAA rules to determine UniFirst's entitlement to ex parte arbitration under the contract.⁴

The relevant AAA rule permits ex parte arbitration if the respondent does not reply to arbitration notices, as was the case here.⁵ New York law also provides that "[a] party aggrieved by the failure of another to arbitrate may apply for an order compelling arbitration." N.Y. C.P.L.R. 7503(a) (emphasis added). "May" is a permissive term. Nothing in the use of the language "may apply for an order compelling arbitration" mandates that a party must apply for such an order before seeking arbitration under the procedures agreed to by the parties. See, e.g., In re Cnty. of Suffolk v. Suffolk Chapter, Civ. Serv. Emps. Ass'n, Inc., Loc. No. 852, 86 A.D.2d 892, 892, 447 N.Y.S.2d 523 (N.Y. App. Div. 1982) (reversing the trial court's vacation of an arbitration award and explaining that "filing of the notice of intent, while advisable, is not mandatory in light of the use of the permissive ‘may’ ").

Here, Stronger Collision elected not to participate in the arbitration after receiving UniFirst's demand. UniFirst was, therefore, within its rights under New York law to file a demand for arbitration with the AAA without first exercising its permissive option to seek a court order compelling arbitration. The rules agreed to by the parties do not require a court order to compel arbitration and explicitly permit ex parte arbitration where not prohibited by law. Accordingly, UniFirst complied with New York law and the contractual language (incorporating AAA expedited procedures) before seeking and obtaining an arbitral award. The trial court erred in dismissing the petition to enforce the arbitral award on that basis.

Reversed and remanded.

1 As the order on appeal not only grants a motion to dismiss but also denies the substantive relief sought by UniFirst, the plaintiff below, we have jurisdiction as an appeal of a final order. Fla. R. App. P. 9.030(b)(1)(A) ; see also Hoffman v. Hall, 817 So. 2d 1057, 1058 (Fla. 1st DCA 2002) ("The traditional test for finality is whether the decree disposes of the cause on its merits leaving no questions open for judicial determination except for execution and...