Holt v. O'Brien Imports of Fort Myers Inc.
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NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
MOTION AND, IF FILED, DETERMINED
IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
SECOND DISTRICT
CHRISTOPHER HOLT and MATTHEW
and DANIELLE BROLLINI, individually
and on behalf of all others similarly
situated,
)
)
)
)
)
Appellants,
)
)
v.
)
)
O'BRIEN IMPORTS OF FORT MYERS, )
INC. d/b/a FORT MYERS MITSUBISHI, )
FORT MYERS DAEWOO, FORT
)
MYERS SUBARU, FORT MYERS
)
HYUNDAI, NAPLES HYUNDAI,
)
NAPLES MITSUBISHI and
)
BEST USED CARS,
)
)
Appellees.
)
________________________________ )
Opinion filed July 2, 2003.
Appeal from the Circuit Court for Lee County;
James H. Seals and Jay B. Rosman, Judges.
William C. Bielecky of William C. Bielecky,
P.A., Tallahassee, William L. Sundberg, of
Sundberg & Hessman, P.A., Tallahassee,
and
Jerome A. Sico of Goldberg, Racila, Sico
& Noone, P.A., Fort Myers, co-counsel
for Appellants.
Mark R. Kapusta of the Law Office of
Bohdan Neswiacheny, Sarasota, for
Appellees.
Case Nos.
2D02-3994
2D02-4038
CONSOLIDATED
FULMER, Judge.
In these consolidated cases, Christopher Holt, Matthew Brollini, and
Danielle Brollini, individually and on behalf of all others similarly situated, appeal orders
that compel them to arbitrate their claims against O'Brien Imports of Fort Myers, Inc.
We affirm in part and reverse in part.
Holt and the Brollinis (referred to here as the Buyers) purchased cars from
O'Brien Imports. In the course of these transactions, the Buyers signed agreements to
arbitrate "all disputes not barred by applicable statues [sic] of limitations, resulting from
or arising out of the transaction entered into[.]" The arbitration agreements provided for
attorney's fees and costs as follows:
Any party to this agreement who fails or refuses to arbitrate
in accordance with the terms of this predispute binding
arbitration agreement shall, in addition to any other relief
awarded through arbitration, be taxed by the arbitrator or
arbitrators with all of the costs, including reasonable
attorney's fees, of any other party who had to resort to
judicial or other relief in compelling arbitration in accordance
with the terms herein contained.
Notwithstanding the arbitration agreements, the Buyers filed multi-count complaints
against O'Brien Imports seeking damages, injunctive relief, costs, and attorney's fees.
Holt filed an individual action, and he was also a named plaintiff in the class action
brought with the Brollinis.
The first three counts in both complaints alleged violations of chapter 520,
Florida Statutes (2000). Count one alleged that O'Brien Imports violated section
520.07(1) by failing to provide the Buyers with a copy of the retail installment sales
contract that included the essential provisions and financing disclosures before the
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Buyers signed for and accepted credit. Count two alleged that O'Brien Imports violated
section 520.07(3)(d) by failing to itemize the amount it charged for gap insurance.
Count three alleged that O'Brien Imports violated section 520.13 by requiring execution
of an "ON THE SPOT DELIVERY AGREEMENT."
The remaining counts did not allege violations of chapter 520. Count four
in both complaints alleged that certain actions by O'Brien Imports were deceptive and
unfair trade practices in violation of chapter 501, part II, Florida Statutes (2000). And
count five in both complaints alleged that O'Brien Imports violated the Truth in Lending
Act, 15 U.S.C. ยงยง 1632, 1638 (TILA). Holt's individual complaint included two additional
counts alleging fraud and deceptive trade practices.
O'Brien Imports filed a motion to dismiss and compel arbitration. The trial
court granted the motion, and the Buyers now appeal. They argue that the arbitration
agreements are unenforceable because they defeat the remedial purposes of the
statutes under which they sue and because they are unconscionable. "When deciding
whether to compel arbitration, a court is limited to considering (1) whether the parties
have entered into a valid arbitration agreement, (2) whether an arbitrable issue exists,
and (3) whether the right to arbitration has been waived." Flyer Printing Co. v. Hill, 805
So. 2d 829, 831 (Fla. 2d DCA 2001).
As to the first three counts alleging violations of chapter 520, we conclude
that the arbitration agreement is not enforceable because its attorney's fees provision
conflicts with the prevailing party provision for attorney's fees in section 520.12, and this
statutory provision is nonwaivable under section 520.13. See Flyer Printing Co., 805
So. 2d 829 (holding arbitration agreement unenforceable because it required employee
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to pay half of the arbitration fees and costs, which was inconsistent with the applicable
statutes setting a prevailing party standard). In the absence of a severability clause, we
cannot simply strike the offending provision. Compare Healthcomp Evaluation Servs.
Corp. v. O'Donnell, 817 So. 2d 1095, 1098 (Fla. 2d DCA 2002) (holding that "trial court
erred when it failed to sever the unenforceable sentence from the arbitration clause"
when the agreement contained a severability clause), with Flyer Printing Co., 805 So.
2d at 833 (rejecting Flyer Printing's offer to pay all arbitration costs even though
agreement required parties to split the costs because court "not authorized to remake
the parties' contract"). Accordingly, we reverse the order insofar as it compels
arbitration on counts one, two, and three of both complaints.
The Buyers seek to invalidate the arbitration agreements in their entirety
because they seek injunctive relief and class action status that is not permitted under
the agreements. We conclude that the rights to seek this relief and to proceed as a
class are waivable in the absence of a nonwaiver statute like section 520.13. See
Randolph v. Green Tree Fin. Corp.-Ala., 244 F.3d 814 (11th Cir. 2001) (holding that
arbitration agreement was enforceable even though it precluded plaintiff from pursuing
class action under TILA). In this case, the Buyers can vindicate their personal claims
without injunctive relief or class actions, and nothing in chapter 501 indicates that the
right to injunctive relief is a nonwaivable right. Because the remaining counts did not
allege violations of chapter 520, they do not trigger the nonwaivable attorney's fee
provision in sections 520.12 and 520.13. Therefore, we affirm the order compelling
arbitration on counts four and five of both complaints and on counts six and seven of
Holt's individual complaint.
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We are not persuaded by the Buyers' claim that the arbitration agreement
is unconscionable. To invalidate a contract on this ground, the court must find that the
contract is both procedurally unconscionable and substantively unconscionable. Estate
of Blanchard ex rel. Blanchard v. Cent. Park Lodges (Tarpon Springs), Inc., 805 So. 2d
6, 9 (Fla. 2d DCA 2001). Procedural unconscionability relates to the way in which the
contract was entered. Powertel, Inc. v. Bexley, 743 So. 2d 570 (Fla. 1st DCA 1999)
(holding that contract modification adding arbitration clause was procedurally
unconscionable when cellular telephone customers had no choice if they wanted to
continue service in which they had invested and notice sent to customers failed to
indicate that it contained new terms). Procedural unconscionability is not shown by the
Buyers' failure to read the documents associated with their automobile purchases; there
is no allegation that they were prevented from reading the documents or induced not to
read them by O'Brien Imports. See Qubty v. Nagda, 817 So. 2d 952, 958 (Fla. 5th DCA
2002) (rejecting argument that party who sought to avoid arbitration did not know the
contract terms in the absence of allegations that party was prevented or induced from
reading it).
We likewise reject Holt's individual argument concerning whether the
arbitration agreement was terminated. "Whether the contract terminated due to events
subsequent to the making of the contract is an issue for arbitration, not for the trial
court." Estate of Blanchard, 805 So. 2d at 8.
Affirmed in part; reversed in part; remanded.
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ALTENBERND, C.J., and COVINGTON, J., Concur.
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