FACTOR BROKERS INC v. ENTERPRISES INC (2023)

Factor Brokers, Inc. appeals an order compelling arbitration of its claims against J&C Enterprises, Inc. The trial court concluded that despite the lack of any express written agreement to arbitrate between the parties, Factor Brokers was bound as an assignee of nonparty Ecuamall Trade, S.A., because the agreement between J&C Enterprises and Ecuamall contained an arbitration clause. However, the parties presented the trial court with dueling affidavits and differing accounts as to the existence of an assignment of the agreement from Ecuamall to Factor Brokers. Because the trial court did not resolve disputed factual issues necessary to determine the applicability of the agreement to Factor Brokers, we reverse and remand for an evidentiary hearing.

The arbitration clause at issue, which is contained within an agreement for a mango importation deal between J&C Enterprises and Ecuamall, requires “[a]ny controversy or claim arising out of, relating to, or in any way connected with this Agreement” to be resolved by arbitration in Miami, Florida, in accordance with the International Chamber of Commerce (ICC) rules. Factor Brokers didn't sign this agreement, but later purchased the rights to Ecuamall's accounts receivable under the agreement after Ecuamall formed a new entity, Kaso Group, Inc., and purportedly transferred its obligations under the agreement with J&C Enterprises to Kaso Group. Factor Brokers then brought the underlying suit for breach of contract and fraudulent inducement after J&C Enterprises allegedly failed to pay the full amount of the accounts due. J&C Enterprises moved to compel arbitration, alleging that Factor Brokers assented to assignment of the entire agreement, including the arbitration clause, in various e-mail messages recognizing the assignment of the import deal from Ecuamall to Kaso Group. After a non-evidentiary hearing, the trial court found that the agreement was valid and reserved the issue of arbitrability to the arbitrator, and thus ordered the case to arbitration.

Our review is de novo. See CT Miami, LLC v. Samsung Elecs. Latinoamerica Miami, Inc., 201 So. 3d 85, 90 (Fla. 3d DCA 2015) (citation omitted). In ruling on a motion to compel arbitration, the trial court must consider “(1) whether a valid written agreement to arbitrate exists; (2) whether an arbitrable issue exists; and (3) whether the right to arbitration was waived.” Seifert v. U.S. Home Corp., 750 So. 2d 633, 636 (Fla. 1999) (citation omitted). “The first of these three issues necessarily involves a determination of whether a valid agreement exists between the parties.” Lion Gables Realty Ltd. v. Randall Mech., Inc., 65 So. 3d 1098, 1099–1100 (Fla. 5th DCA 2011).¹ “[N]o party may be forced to submit a dispute to arbitration that the party did not intend and agree to arbitrate.” Seifert, 750 So. 2d at 636.

The parties don't dispute that a valid arbitration agreement exists, that an arbitrable issue exists, and that J&C Enterprises hasn't waived its right to arbitrate. The sole issue becomes whether an agreement exists between these parties, i.e., whether a valid assignment of the agreement binds Factor Brokers to arbitration.

A nonsignatory to an arbitration agreement can be bound to it via assignment. See, e.g., Massa v. Michael Ridard Hosp. LLC, 306 So. 3d 1106, 1109 (Fla. 3d DCA 2020). However, the record contains no express writing purporting to bind Factor Brokers to the entire agreement. Instead, the record contains competing affidavits, inferences, and allegations. Accordingly, we reverse and remand for the trial court to conduct an evidentiary hearing on the existence and validity of a written assignment of the agreement to arbitrate between the parties. See id.; Tandem Health Care of St. Petersburg, Inc. v. Whitney, 897 So. 2d 531, 532–33 (Fla. 2d DCA 2005) (“There are cases in which the trial court can determine the existence of an agreement to arbitrate without conducting an evidentiary hearing․ On the other hand, where the facts relating to the elements the trial court is required to consider in determining a motion to compel arbitration are disputed, the trial court is required to hold an evidentiary hearing to resolve the matter.”).

Reversed and remanded with instructions.

FOOTNOTES

1.   For this reason, the trial court wasn't precluded from ruling on the threshold question of the existence of a written agreement between the parties, despite the agreement's incorporation of the ICC rules reserving questions of the validity of the agreement to the arbitrator. See International Chamber of Commerce, 2021 Arbitration Rules, Article 6, Rule 3 (Jan. 1, 2021), https://iccwbo.org/dispute-resolution/dispute-resolutionservices/arbitration/rules-procedure/2021-arbitration-rules/#block-accordion-6 (“[I]f any party raises one or more pleas concerning the existence, validity or scope of the arbitration agreement or concerning whether all of the claims made in the arbitration may be determined together in a single arbitration, the arbitration shall proceed and any question of jurisdiction or of whether the claims may be determined together in that arbitration shall be decided directly by the arbitral tribunal ․”); Operis Grp., Co. v. E.I. at Doral, LLC, 973 So. 2d 485, 488 (Fla. 3d DCA 2007) (“In the instant case, Doral steadfastly contends that it did not sign the alleged contract. Thus, the alleged contract is not presumptively valid, and therefore, the alleged contract's very existence as an agreement between the parties, and not its validity as a presumptive agreement, is in dispute. A challenge to the very existence of any agreement between the parties is thus distinguishable from a challenge to the validity of a presumptively existing, signed document.”).

BOKOR, J.