LABELLE v. BERENSON LLP (2023)

Fernand Labelle appeals the trial court's order granting Berenson LLP, D.S. Berenson, and Allan Wainwright's (collectively, “Berenson”) motion to compel arbitration in a legal malpractice action. Because the arbitration agreement is unenforceable on its face, we reverse the trial court's order granting the motion to compel arbitration and remand for further proceedings.

After Labelle brought a legal malpractice action against Berenson, Berenson moved to compel arbitration pursuant to the arbitration provision in the parties’ attorneys’ fees agreement that was signed by Labelle midway through Berenson's representation of Labelle in a commercial lawsuit. The arbitration provision subjected all disputes arising out of the agreement and Berenson's legal services to binding arbitration. The arbitration provision failed to advise Labelle to seek independent counsel in deciding whether to agree to arbitration in violation of Rule Regulating the Florida Bar 4-1.5(i). After a hearing on the motion, the trial court granted the motion to compel arbitration. This appeal followed.

The standard of review for an order compelling arbitration is de novo. See Briceno v. Sprint Spectrum, L.P., 911 So. 2d 176, 179 (Fla. 3d DCA 2005). This appeal concerns whether a valid written agreement to arbitrate exists. See Seifert v. U.S. Home Corp., 750 So. 2d 633, 636 (Fla. 1999).

Rule Regulating the Florida Bar 4-1.5(i) prohibits a lawyer from making an agreement with a “client prospectively providing for mandatory arbitration of fee disputes without first advising that person in writing that the potential client should consider obtaining independent legal advice as to the advisability of entering into an agreement containing such mandatory arbitration provisions.” The rule requires “the following language in bold print:”

NOTICE: This agreement contains provisions requiring arbitration of fee disputes. Before you sign this agreement you should consider consulting with another lawyer about the advisability of making an agreement with mandatory arbitration requirements. Arbitration proceedings are ways to resolve disputes without use of the court system. By entering into agreements that require arbitration as the way to resolve fee disputes, you give up (waive) your right to go to court to resolve those disputes by a judge or jury. These are important rights that should not be given up without careful consideration.

Id.

When an arbitration provision fails to include the requisite notice to seek independent counsel, the arbitration clause is in violation of Florida Bar Rule 4–1.5(i) and is unenforceable on its face regardless of the type of dispute that is brought. See Owens v. Corrigan, 252 So. 3d 747, 750-51 (Fla. 4th DCA 2018). Additionally, “because the mandatory arbitration of fee disputes went to the essence of the arbitration agreement, we decline to sever the invalid portion of the arbitration clause, which would require us to rewrite the agreement.” Id. at 751. The facts of this case are identical to the Fourth District's decision in Owens, in that the requisite notice is completely absent from the arbitration provision making the arbitration provision unenforceable on its face in violation of the rule.

In Ramkelawan v. Morgan & Morgan, P.A., 336 So. 3d 71 (Fla. 3d DCA 2021), we found it necessary to distinguish the facts in Owens from those in Ramkelawan, as the issue in that case was whether the existing requisite notice in the arbitration provision was sufficiently compliant with the rule. We determined that “the instant agreement reveal[ed] minor differences that [did] not invalidate the arbitration provision,” while in Owens, “the arbitration provision was held unenforceable because it did not contain any portion of the bold print notice required by rule 4-1.5(i).” Id. at 74-75. Therefore, because the requisite notice is completely absent from the arbitration provision, the provision is unenforceable on its face and cannot to be severed without rewriting the agreement.¹

Because the arbitration agreement is unenforceable on its face, we reverse the trial court's order granting the motion to compel arbitration and remand for further proceedings.

Reversed and remanded.

FOOTNOTES

1.   Even if severability could be accomplished without rewriting the agreement, the arbitration agreement does not contain a severability clause.

FERNANDEZ, J.