Fastfunding v. Betts
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IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FIFTH DISTRICT
JULY TERM 2003
FASTFUNDING THE COMPANY, INC.
Appellant,
v.
Case No. 5D02-1482
WENDY BETTS,
Appellee.
_______________________________/
Opinion filed August 15, 2003
Non-Final Appeal from the Circuit Court
for Orange County,
James C. Hauser, Judge.
John A. Boudet and Lisa Harris of Greenberg Traurig,
P.A., Orlando and Susan Verbonitz (Pro Hac Vice) of
Weir & Partners, LLP, Philadelphia, PA, for Appellant.
E. Clayton Yates of Law Office of E. Clayton Yates,
P.A., Fort Pierce and Christopher C. Casper of
James, Hoyer, Newcomer, & Smiljanich, P.A., Tampa,
for Appellee.
PETERSON, J.
FastFunding The Company, Inc., appeals an order of the trial court finding that its sales
of payment instruments pursuant to Part II of Chapter 560, Florida Statutes, were loans that
incurred usurious interest rates in violation of Florida's usury laws.
This is the parties' second appearance before this court. In their first appearance,
FastFunding appealed the trial court's order denying its motion to compel arbitration or,
alternatively, to dismiss the complaint filed by Wendy Betts. FastFunding The Company, Inc.
v. Betts, 758 So. 2d 1143 (Fla. 5th DCA 2000) (FastFunding I). The FastFunding I court
found the trial court's analysis to be consistent with this court's opinion in Party Yards, Inc. v.
Templeton, 751 So. 2d 121 (Fla. 5th DCA 2000). In Party Yards, Inc., this court held that
where a party alleges and offers colorable evidence that a contract violates Florida's usury
laws, the trial court must determine the usury question before ordering the parties to arbitration
because only trial courts can determine a contract's legality. The FastFunding I court then
opined that "[i]f Ms. Betts is correct in her complaint that the contract violates the usury laws,
then the contract is illegal and an arbitrator could not require Ms. Betts to perform under the
contract." FastFunding interpreted this to mean that on remand the trial court should hold a
hearing for the purpose of determining whether the deferred presentment transactions in
question constituted loans, and if the transactions did constitute loans, whether they violated
Florida's usury laws. On remand, the lower court found that the transactions in question
constituted loans, and that FastFunding's charges were usurious. Accordingly, the lower court
once again denied FastFunding's motion to compel arbitration.
While this case was on remand, Betts was involved in another case which also came
before this court.1 Betts v. Ace Cash Express, Inc., 827 So. 2d 294 (Fla. 5th DCA 2002)
(hereinafter "Ace Cash Express"). In Ace Cash Express, Betts appealed an order dismissing
with prejudice her amended class action complaint against Ace Cash Express, Inc., et. al.
Betts contended that the trial court erred by finding that the deferred presentment transactions
were legally permitted as a check cashing activity authorized by section 560.309(4)(c), Florida
1
Betts also has yet another case pending in this court styled Betts v. Ace Cash
Express, Inc., 5D03-825.
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Statutes, and that the transactions did not violate Florida's usury laws. The Ace Cash Express
court determined that the deferred presentment transactions allowed by Florida Statute
Chapter 560 constituted transactions and were not loans that violated Florida's usury laws. Id.
at 297.
The trial court in the instant case did not have the benefit of this court's opinion in Ace
Cash Express when it rendered its order. FastFunding contends that the trial court should
be reversed in light of the Ace Cash Express decision. Betts agrees that FastFunding's
transactions complied with the requirements of Chapter 560,
but contends that the
transactions are still violative of Florida's usury laws.
The transactions in this case differed slightly from those in Ace Cash Express. After
the initial transaction in which three $125 checks were exchanged for three FastFunding
checks in the amount of $100.00 each, Betts' checks were actually deposited before the new
transaction (characterized by Betts as rollovers) were entered. The relationship between the
parties began May 27, 1998 and ended November 16, 1998 when Betts stopped payment
on her checks and paid only $75 on the $375 debt. During the relationship, she alleges to
have paid $900 in fees, but the $300 remaining unpaid and unpursued by FastFunding would
have placed her net cash outlay at $600.
The rationale in the Ace Cash Express opinion is equally applicable and dispositive
of the usury issue raised by Betts in the instant case. We also note that before FastFunding
engaged in business in Florida, it directed a written inquiry to the Florida Department of
Banking and Finance in which it described in detail its method of operations and asked
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whether the transactions would be permissible under Florida law. The Department responded
by indicating that the activity would require a payment instrument seller registration as detailed
in Chapter 560 and, after obtaining more details about the transactions, issued a certificate
allowing FastFunding to operate in this state. A few months later, the Department examined
FastFunding's records for compliance with Chapter 560 and found no violations.
The transactions may be found to be usurious if only the usury statutes are considered
during the examination of the transactions. But, the scope of examination cannot be limited
to the usury statutes. Chapter 560 must also be applied to determine whether the legislature
carved the transactions described in Chapter 560 out of the usury statutes. The usury statutes
were in existence at the time Chapter 560 was created and the legislature must be presumed
to have been aware of them when it enacted legislation allowing the transactions to take
place. Because Fast Funding's transactions comply with Chapter 560, Florida Statutes, it
must follow that they should not be deemed to be in violation of Florida's usury laws.
We next consider whether the arbitration clause of the contracts between FastFunding
and Betts are enforceable. FastFunding I indicated that if the contracts were illegal because
the transactions were usurious loans, the matter could not be determined by an arbitrator. No
determination was made in that opinion about arbitration if the contract was found to be legal.
In Buckeye Check Cashing, Inc. v. Cordegna, 824 So. 2d 228 (Fla. 4th DCA 2002)
rev. granted, the Fourth District Court of Appeal considered an identical arbitration clause to
the one used in the contracts in the instant case. The Fourth District found the arbitration
clause to be enforceable, but the Florida Supreme Court has granted review, Cordegna v.
Buckeye Check Cashing, Inc., (Fla. April 25, 2003)(table No. SC02-2161). We agree with
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the reasoning of the Fourth District that the arbitration agreement is enforceable, but certify
the following question as one of great public importance pursuant to Florida Rule of Appellate
Procedure 9.030(a)(2)(A)(2):
Is an arbitration agreement enforceable when it is included as a requirement of
a payment instrument sale executed pursuant to Florida Statute Chapter 560,
Part II, and the arbitration is to be governed by the Federal Arbitration Act, 9
U.S.C. Sections 1-16?
The trial court's order is reversed and we remand with instructions to grant
FastFunding's motion to compel arbitration.
REVERSED and REMANDED.
THOMPSON and TORPY, JJ., concur.
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