QUICK NOTE: YES, YOU CAN WAIVE THE RIGHT TO ARBITRATE

A party can waive the contractual right to arbitrate.  Waiver is the “voluntary and intentional relinquishment of a known right or conduct which implies the voluntary and intentional relinquishment of a known right.”  Ship IV Harbour Island, LLC v. Boylan, 44 Fla. L. Weekly D831a (Fla. 5th DCA 2019) (citation and internal quotation omitted).  Thus, a party can waive its right to arbitrate a dispute by engaging in conduct inconsistent with the right to arbitrate.  One way a party can act inconsistently with the right to compel a dispute to arbitration is by engaging in discovery in litigation, particularly discovery as to the merits of the case.  See Ship IV Harbour Island, supra (after court ordered limited discovery regarding arbitration, party thereafter waived right to arbitration by engaging in discovery as to the merits of the dispute).    For this reason, if your desire is to preserve the integrity of a contractual arbitration provision, do not do anything inconsistent with this right such that you give the other party the argument that you waived the contractual right to arbitration.  

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

EBOOK: DELAY! THE PROJECT IS LATE – WHAT DO YOU DO, WHO IS AT FAULT, AND HOW DO YOU ALLOCATE THE DELAY?

Over the years, I have put on presentations for project teams discussing the concept of delay — a late project — and related topics.  I discuss key terms relative to delay by using various hypotheticals. It is an interactive presentation that solicits the audience’s input so they are thinking about these issues that project teams deal with in real time on all of their projects (among all of the other issues they are navigating through on a daily basis). Although the actual presentation goes into much more detail that is oftentimes dictated by the audience’s input, I decided to turn a version of the presentation into a short ebook that can be found on Amazon of Apple, since it was easy to do so and, because, it is important for project teams to understand terms and application relative to delay so that they can best preserve rights in real time while they are dealing with a million other things on the project.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

QUICK NOTE: LIS PENDENS BOND WHEN LIS PENDENS NOT FOUNDED ON RECORDED INSTRUMENT OR STATUTE

If a lis pendens is recorded and the lis pendens is NOT founded on a duly recorded instrument (e.g., mortgage) or a statute (e.g., construction lien), a lis pendens bond should be recorded.  The lis pendens bond should cover prospective damages associated with the wrongful / unjustified recording of a lis pendens that were suffered by the property owner.  The reason being is that the lis pendens has an effect on the title to the property as long as the lis pendens is recorded.  Damages could stem from a decline in the market value of the property, continued upkeep and maintenance of the property, and there may also be (and, really, should be) consideration for loss of investment return associated with the equity in that property.  Finally, prospective attorney’s fees that could be incurred in discharging the lis pendens should also be included. For more information on this, please check out this article.   

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

ARBITRATION PROVISIONS ARE CHALLENGING TO CIRCUMVENT

Arbitration provisions are enforceable and they are becoming more challenging to circumvent, especially if one of the parties to the arbitration agreement wants to arbitrate a dispute versus litigate a dispute.  Remember this when agreeing to an arbitration provision as the forum for dispute resolution in your contract.  There is not a one-size-fits-all model when it comes to arbitration provisions and how they are drafted.  But, there is a very strong public policy in favor of honoring a contractual arbitration provision because this is what the parties agreed to as the forum to resolve their disputes.  

 

By way of example, in Austin Commercial, L.P. v. L.M.C.C. Specialty Contractors, Inc., 44 Fla.L.Weekly D925a (Fla. 2d DCA 2019), a subcontractor and prime contactor entered into a consultant agreement that contained the following arbitration provision:

 

Any controversy or claim arising out of or relating to this Agreement or the breach thereof shall be subject to the dispute resolution procedures, if any, set out in the Prime Contract between [Prime Contractor] and the [Owner]. Should the Prime Contract contain no specific requirement for the resolution of disputes or should the [Owner] not be involved in the dispute, any such controversy or claim shall be resolved by arbitration pursuant to the Construction Industry Rules of the American Arbitration Association then prevailing, and judgment upon the award by the Arbitrator(s) shall be entered in any Court having jurisdiction thereof.

 

The prime contract between the owner and prime contractor did not require arbitration.

 

The prime contractor initially hired the subcontractor during the design phase of the project as a consultant.  The consultant agreement contained the aforementioned arbitration provision. Then, during the construction phase, the prime contractor and subcontractor entered into a work order that incorporated the terms of the consultant agreement, meaning the arbitration provision was incorporated into the work order.  

 

A payment dispute arose during the construction phase and the subcontractor sued the prime contractor.  The prime contractor moved to compel the dispute to arbitration per the terms of the arbitration provision in the consultant agreement.  The trial court denied the prime contractor’s motion to compel.   This was reversed on appeal – and it was probably an easy reversal for three main reasons:

 

One:  Florida has a strong public policy in favor of enforcing arbitration provisions, as mentioned above.  Remember this. 

 

Two:  the work order between the prime contractor and subcontractor for the construction phase incorporated the terms of the consultant agreement that contained an arbitration provision.  Thus, the consultant agreement with the arbitration provision had to be interpreted together with the work order.  Remember that a document or contract can incorporate another document or contract. 

 

Three:  the dispute was between the subcontractor and prime contractor.   The owner was NOT “involved” in the dispute because it was not a party to the lawsuit and the payment dispute the subcontractor initiated against the prime contractor did not involve the owner considering the owner did not need to participate in the dispute.   “[O]ne would not ordinarily understand an entity to be ‘involved’ in a dispute where that entity is neither drawn into the dispute nor affected by the dispute. Only an impermissible, strained textual interpretation of ‘involved in the dispute’ would yield a conclusion that HCAA [Owner] would be affected by a financial dispute between Austin [Prime Contractor] and Mims [Subcontractor].”  Austin Commercial, supra.   Remember this that the word “involve,” as this word is used in the arbitration provision, is not going to be read so broadly to render inconsequential the prime contractor’s right to arbitrate disputes with its subcontractor. 

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.