Florida Appeals Court: Car Dealership “Waived” Right To Compel Arbitration In FDUTPA Case
On August 18th, 2021, the Fourth District Court of Appeal for the State of Florida ruled that an auto dealership waived its right to compel arbitration in a Florida Deceptive and Unfair Trade Practices Act (FDUTPA) claim. In the case of Marino Performance Inc. v Jose Carlos Zuniga and Juan C. Zuniga Jr., the appeals court affirmed the decision of the trial court. In this blog post, our West Palm Beach deceptive and unfair trade practices attorneys provide an overview of the decision.
Case Analysis: Marino Performance Inc. v Jose Carlos Zuniga and Juan C. Zuniga Jr.
Alleged FDUTPA Violation
In December of 2018, the named plaintiffs filed a class action FDUTPA lawsuit against Marino Performance, a car dealership located in West Palm Beach, Florida. In the claim, they allege that Marino Performance engaged in deceptive and unfair commercial practices under Florida state law. The FDUTPA claim centered around certain fees charged by the West Palm Beach auto dealership. In January of 2020 Marino Performance moved to compel arbitration of the class action FDUTPA claim.
Legal Issue: An Arbitration Clause
The core issue at stake before the court was whether or not Marino Performance waived its right to compel arbitration. Notably, the company did not move to compel arbitration until a year after the initial deceptive and unfair trade practices lawsuit was filed by the plaintiffs. In the intervening period, Marino Performance raised a number of different affirmative defenses against the alleged FDUTPA violations. At the trial state, the court ruled against the West Palm Beach auto dealership. In doing so, the trial court emphasized two key points:
- The defendant failed to raise arbitration as an affirmative defense in its initial answer, despite raising several other affirmative defenses; and
- The defendant failed to otherwise reserve the right to compel arbitration.
Appeals Court Decision
In its review of the case, the Fourth District Court of Appeal for the State of Florida affirmed the decision of the trial court. The court noted that Florida law gives wide deference to mandatory arbitration provisions in valid contracts. However, the court also noted that a mandatory arbitration can be waived if:
- A party had knowledge of its right to invoke arbitrate; and
- That party actively participated in litigation.
In this case, the court focused on the fact that Marino Performance “engaged in extensive discovery” prior to invoking the compelled arbitration clause. Discovery is active participation in litigation and it is inconsistent with compelling arbitration. As such, the Florida appeals court found that Marino Performance waived its right to invoke arbitration by failing to raise the matter as an affirmative defense and engaging in discovery during the early stages of litigation.
Consult With an Experienced FDUTPA Lawyer in Southeastern Florida.
At Pike & Lustig, LLP, our West Palm Beach FDUTPA attorneys have the professional experience that you can rely on. If you have any questions about mandatory arbitration provisions and FDUTPA claims, we are here to help. Contact us today to schedule a confidential consultation with an experienced commercial lawyer in South Florida. We have offices in West Palm Beach and Miami and we look forward to hearing from you.