Arbitration & Mediation

Another Florida Court Agrees That AAA Declining Case Does Not Void Arbitration Agreement

By Christopher B. Hopkins, Esq.

Two of Florida intermediate appellate courts have now ruled that pre-dispute arbitration clauses which refers health care disputes to the American Arbitration Association (AAA) are nonetheless valid -- even though the AAA will decline the case -- because referral to the AAA is not typically an integral term. Instead, the parites can petition the trial court for another arbitrator.

The Second District issued the first case from August 2009 (New Port Richey Medical Investors and Life Care Centers v. Stern).

The Fifth District echoed that opinion in Estate of Rafaela Miranda Perez v. Life Care Centers of America, Inc. (Orfinger, Sawaya and Jacobus).

We note that the same law firms are in both cases and that the subject matter appears to be the same nursing home form agreement.

It is anticipated that parties seeking to avoid arbitration will now seek to develop evidence suggesting that the AAA was an integral part of agreeing to arbitration.

If the plaintiff had succeeded in up-ending every arbitration clause referring pre-dispute cases to the AAA, it would have been a major victory for arbitration opponents given the broad reach of the AAA. By upholding the concept of arbitration over a specific selection of a panel, at least in these specific cases, the two Florida courts have empowered a number of arbitration clauses out there -- and handed a fair amount of business to AAA competitors.

Does this solve the question in Florida? It should however we note that the Second and Fifth Districts often uphold arbitration clauses and squarely place the burden on parties who object while the Third and (moreso) the Fourth Districts are tougher on those pushing arbitration. A split among the intermediate courts on these issues generally develop along those lines; whether this specific issue will follow that pattern remains to be seen. If the Fourth agrees with this thinking, the question will be pretty well-settled.

Full post as published by Florida Arbitration Law on November 08, 2009 (boomark / email).