Professional Documents
Culture Documents
Basulto v. Hialeah Automotive
Basulto v. Hialeah Automotive
SC09-2358
Supreme Court of Florida
1
Basulto v. Hialeah Automotive No. SC09-2358 (Fla. Mar. 20, 2014)
from Cuba in December 1997, and (2) were only 3. It is undisputed that at least two of the
able to communicate in Spanish. All of the documents which [the buyers] were called
documents pertaining to the civil action between upon to sign contained arbitration clauses.
the buyers and the dealership were drafted in . . . [E]ven if the documents had been
3 English. *3 printed in Spanish, a reasonable person
reading these documents would not have a
The trial court heard testimony from multiple
clear understanding of the precise terms
witnesses, including the dealership's employees
and conditions to which they were called
who were directly involved in the automobile
upon to agree.
purchase deal with the buyers. After the
4. Although [the dealership]'s sales
evidentiary hearing, the trial court entered an
representative and finance and insurance
"Order Denying [the dealership's] Amended
manager both testified that at the time the
Motion to Dismiss and/or to Compel Arbitration."
[buyers] signed the subject documents,
See Basulto v. Hialeah Auto., LLC (Order), No.
these employees explained "arbitration" to
05-05556 CA09 (Fla. 11th Cir. Ct. Mar. 8, 2007).
the [buyers], further testimony by these
The trial court made the following pertinent
employees clearly established that (a) the
findings of fact:
sales representative had no basic
understanding of the concept of arbitration
. . . and (b) the finance and insurance
manager did not convey to the [buyers]
that arbitration deprived [buyers] of their
rights to seek punitive damages or class
action status.
5. [The buyers], on the other hand, testified
that they had never been informed
concerning arbitration and . . . were never
put on notice that they were being called
on to waive valuable rights, much less to
ask important questions regarding what
rights they were waiving. Any waiver was
a blind and unknowing waiver.
6. . . . [The dealership's] finance manager
also testified that if the [buyers] had
refused to sign, they would not have had a
deal. [The buyers] also testified that they
were hurried/rushed when signing the
many documents that they could not read
and were told to sign, sign, sign in rapid
succession.
4 Order at 2-3. *4
2
Basulto v. Hialeah Automotive No. SC09-2358 (Fla. Mar. 20, 2014)
The parties in this case have stipulated that court's judgment. Basulto, 22 So. 3d at 592. The
no waiver of the right to arbitrate has 5 Third District noted: *5
occurred.
Although by no means an exclusive list,
The Court concludes as a matter of law
the Fourth District has identified two
that no valid agreement to arbitrate exists
analytical frameworks that have been used
in this case. This conclusion is based on
by courts "when confronted with this issue
the Court's finding of fact that the various
[a challenge to the validity of an
jury waiver and arbitration clauses which
arbitration agreement]: (1) whether the
[the buyers] were required to sign were
arbitration clause is void as a matter of law
conflicting in their essential provisions
because it defeats the remedial purpose of
and, taken together, provided for three
the applicable statute, or (2) whether the
separate and distinct means of dispute
arbitration clause is unconscionable." By
resolution. One of the clauses at issue
the phrase "defeats the remedial purpose of
provided for jury waiver and (presumably)
the applicable statute," the Fonte [v. AT&T
trial in a court of law. Another provision
Wireless Servs., Inc., 903 So. 2d 1019,
required arbitration by a single arbitrator.
1023 (Fla. 4th DCA 2005)] court referred
Another provision required arbitration by a
to an arbitration clause that eliminates
panel of three arbitrators. In addition the
substantive rights guaranteed by a
methods for selecting arbitrators were
remedial statute. The trial court applied
conflicting as well as what law or
both approaches in this case.
procedure would govern the arbitration
proceeding. Each of the competing dispute Id. at 589 (citations omitted). The Third District
resolution provisions at issue contemplates further noted:
the enforcement of a different remedy Under either analysis, procedural
whose terms and conditions are unconscionability was established. . . . The
irreconcilable with the terms and trial court found that the Agreement was
conditions of each of the other conflicting substantively unconscionable because it
provisions. This Court accordingly contained a waiver of the right to seek
concludes as a matter of law that there was punitive damages. . . . We agree with the
no meeting of the minds with respect to the trial court that it is unconscionable to
terms by which the [the dealership] employ an arbitration agreement to obtain
intended the parties to be bound. There is a waiver of rights to which the signatory
accordingly no valid agreement for this would otherwise be entitled under
Court to enforce. common law or statutory law.
The trial court further concluded that even if the We observe that the district court designated the
arbitration provisions could be construed as agreed "Agreement to Arbitrate Disputes," a single-page
upon by the parties, the provisions are document, as "the Agreement." Second, the
unenforceable because they are procedurally and district court designated the arbitration provision
substantively unconscionable. on the reverse side of the "Retail Installment
Contract," as "the Clause."1 Regarding the
The dealership appealed the trial court's nonfinal
disputed arbitration provisions, the Third District
order. The Third District rendered a decision that
6 noted: *6
affirmed in part, and reversed in part, the trial
3
Basulto v. Hialeah Automotive No. SC09-2358 (Fla. Mar. 20, 2014)
1 We also observe that the trial court With regard to the Clause, we affirm the
considered and ruled that none of three trial court's order insofar as it declined to
purported arbitration agreements were enforce arbitration of the claims for
valid: (1) the Agreement, (2) the Clause,
declaratory and injunctive relief. We
and (3) an untitled provision within the
reverse the trial court's order insofar as it
dealership's order form. The third
declined to enforce the Clause with respect
purported arbitration provision appears at
to the buyers' claims for monetary relief.
the bottom of the dealership's order form,
7 and it does not include the term Id. at 592 (emphasis added). *7
"arbitrate(ion)." It contains certain
boilerplate language that is associable with In the analysis that follows, we explain why we
agreements to arbitrate—e.g., "Florida disagree with the Third District's Basulto decision.
shall have exclusive jurisdiction," "venue The decision on review is quashed and remanded
shall lie exclusively in Miami-Dade with instructions to reinstate the trial court's
County, Florida," and "trial by jury is judgment. First, we determine that the Third
irrevocably waived." District neglected to employ the standard we
established in Seifert to evaluate a motion to
The trial court found that the Agreement
compel arbitration according to a purported
was substantively unconscionable because
agreement. Next, we determine that although the
it contained a waiver of the right to seek
Federal Arbitration Act (FAA) was implicated by
punitive damages. The complaint contains
the parties' agreement for the automobile
a claim for fraud, and punitive damages
purchase, the trial court's finding that no
are available in judicial proceedings where
arbitration agreements existed negates any
there is a fraud claim. We agree with the
conclusion that the FAA requires that motion to
trial court that it is unconscionable to
compel arbitration should have been granted.
employ an arbitration agreement to obtain
Next, we explain that, under Florida law, both the
a waiver of rights to which the signatory
procedural and substantive prongs of
would otherwise be entitled under
unconscionability must be established as an
common law or statutory law.
affirmative defense to prevent the enforcement of
Id. (citations omitted). The dealership asserted in an arbitration agreement. However, these prongs
its appeal below that the severability clauses need not be present to the same degree. Finally,
should enable the purported arbitration agreements we determine that the buyers are entitled to
to survive after severing any unenforceable terms. reasonable appellate attorney's fees.
The Third District disagreed as to one of the
arbitration provisions, determining that "the II. ANALYSIS
severability clause does not apply here, and the
Agreement operates in a substantively
unconscionable way. We therefore affirm the order
A. Jurisdiction
denying enforcement of the Agreement." Id. at We have granted discretionary review under our
591. jurisdiction to consider express and direct conflict
of decisions, see art V, § 3(b)(3), Fla. Const.,
However, the Third District had a different view because the Third District's decision in Basulto
regarding another arbitration provision: has created misapplication conflict with our
decision in Seifert. See generally Ascensio v.
8 State, 497 So. 2d 640, 641 (Fla. *8 1986) ("Based
on the conflict created by [the] misapplication of
4
Basulto v. Hialeah Automotive No. SC09-2358 (Fla. Mar. 20, 2014)
law, we have jurisdiction under article V, section The trial court, relying on the Seifert standard,
3(b)(3), Florida Constitution."); State v. Stacey, denied the dealership's motion to compel
482 So. 2d 1350, 1351 (Fla. 1985) (exercising arbitration. Nevertheless, the Third District
jurisdiction because the district court "misapplied reversed the trial court's order, in part; requiring
controlling case law to the facts of the case"). the buyers and the dealership to proceed to
arbitration under the Clause. The Third District
In its decision below, the Third District misapplied
failed to perform a Seifert analysis in making its
the unconscionability standard in spite of the trial
decision, and did not provide any explanatory
court's explicit ruling denying the dealership's
reasoning. In general, if there is no showing for
motion to dismiss and/or compel arbitration. The
each of the elements set forth in Seifert, the
cause on appeal before the Third District required
motion to compel arbitration must be denied. In
an application of the Seifert standard. In Seifert,
this case, the record shows that the trial court had
we previously provided guidance for evaluating
legally sufficient grounds under the first prong of
motions to compel arbitration agreements. See
the Seifert standard to deny the dealership's
Seifert, 750 So. 2d at 636 ("Under both federal
motion to compel arbitration when it found that no
statutory provisions and Florida's arbitration code,
arbitration agreements between these parties
there are three elements for courts to consider in
existed. See Seifert, 750 So. 2d at 636. The trial
ruling on a motion to compel arbitration of a given
court further concluded that even if any arbitration
dispute: (1) whether a valid written agreement to
agreement existed between the buyers and the
arbitrate exists; (2) whether an arbitrable issue
dealership, it was unenforceable due to procedural
exists; and (3) whether the right to arbitration was
and substantive unconscionability. The trial court
waived."). In denying the dealership's motion to
specifically found that the buyers were unable to
compel arbitration, the trial court concluded "as a
understand any of the purported arbitration
matter of law that no valid agreement to arbitrate
agreement documents. Furthermore, none of the
exists in this case," which relates to the first prong
10 dealership's employees involved *10 in the deal
of the Seifert standard. However, the Third
with the buyers could explain arbitration as an
District neglected to perform a Seifert analysis in
alternative dispute remedy in an understandable
making its decision on review. Accordingly, we
way.
determine that the Third District's Basulto
decision misapplied the Seifert standard, which The buyers argue that under the circumstances of
governs the evaluation of motions to compel the case presented on appeal, the Third District's
9 arbitration agreements in Florida courts. *9 analysis should have addressed the Seifert
standard. We agree.
B. Standard of Review
The Third District's decision reversing, in part, the
Because both the trial court and the Third District
trial court's judgment pertaining to the Clause does
decided the present issues as a matter of law, our
not conform to our controlling precedent
review of the Basulto decision is de novo.
governing disputed motions to compel arbitration
Aravena v. Miami-Dade County, 928 So. 2d 1163,
set forth in Seifert. Contrary to the trial court's
1166 (Fla. 2006).
finding, the Third District determined that the
C. The Purported Agreements Clause was a valid arbitration agreement entered
into under the FAA, and was enforceable on a
limited basis. The Clause states in pertinent part:
1. The District Court's Decision to "This contract evidences a transaction involving
Reverse interstate commerce. Any arbitration under this
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Basulto v. Hialeah Automotive No. SC09-2358 (Fla. Mar. 20, 2014)
6
Basulto v. Hialeah Automotive No. SC09-2358 (Fla. Mar. 20, 2014)
The key statutory provisions are [sections] The trial court's findings that no arbitration
2, 3, and 4 of the United States Arbitration agreement exists between the buyers and the
Act of 1925. Section 2 provides that a dealership negate any conclusion that the Third
written provision for arbitration 'in any District properly applied the proposition set forth
maritime transaction or a contract in Prima Paint Corp. The Third District's decision
evidencing a transaction involving that the Clause is enforceable to compel
commerce . . . shall be valid, irrevocable, arbitration of the buyers' claims for monetary
and enforceable, save upon such grounds relief is contrary to section 4 of the FAA. The
as exist at law or in equity for the federal statute requires that the trial court be
revocation of any contract.' Section 3 "satisfied that the making of the agreement for
requires a federal court in which suit has 14 arbitration or *14 the failure to comply therewith
been brought 'upon any issue referable to is not in issue" to grant a petition (motion) for an
arbitration under an agreement in writing order directing the parties to proceed with
for such arbitration' to stay the court action 15 arbitration.2 9 U.S.C. § 4. *15
pending arbitration once it is satisfied that
2 The applicable provision of the federal
the issue is arbitrable under the agreement.
statute (Failure to arbitrate under
Section 4 provides a federal remedy for a
agreement; petition to United States court
party 'aggrieved by the alleged failure, having jurisdiction for order to compel
neglect, or refusal of another to arbitrate arbitration; notice and service thereof;
under a written hearing and determination) states:
13 *13 agreement for arbitration,' and directs
the federal court to order arbitration once it
is satisfied that an agreement for
arbitration has been made and has not been
honored.
7
Basulto v. Hialeah Automotive No. SC09-2358 (Fla. Mar. 20, 2014)
A party aggrieved by the alleged before the return day of the notice
failure, neglect, or refusal of of application, demand a jury trial
another to arbitrate under a of such issue, and upon such
written agreement for arbitration demand the court shall make an
may petition any United States order referring the issue or issues
district court which, save for such to a jury in the manner provided
agreement, would have by the Federal Rules of Civil
jurisdiction under Title 28, in a Procedure, or may specially call a
civil action or in admiralty of the jury for that purpose. If the jury
subject matter of a suit arising out find that no agreement in writing
of the controversy between the for arbitration was made or that
parties, for an order directing that there is no default in proceeding
such arbitration proceed in the thereunder, the proceeding shall
manner provided for in such be dismissed. If the jury find that
agreement. Five days' notice in an agreement for arbitration was
writing of such application shall made in writing and that there is a
be served upon the party in default in proceeding thereunder,
default. Service thereof shall be the court shall make an order
made in the manner provided by summarily directing the parties to
the Federal Rules of Civil proceed with the arbitration in
Procedure. The court shall hear accordance with the terms
the parties, and upon being thereof.
satisfied that the making of the
agreement for arbitration or the The Third District never evaluated the threshold
failure to comply therewith is not requirement that the trial court be "satisfied with
in issue, the court shall make an the making of the agreement for arbitration" under
order directing the parties to the terms of the Clause. The trial court's finding
proceed to arbitration in that the Clause stands as a nonexistent agreement
accordance with the terms of the with respect to these parties should have been
agreement. The hearing and
addressed on appeal below. The FAA empowered
proceedings, under such
the trial court to decide whether any agreement
agreement, shall be within the
existed if, as the record in this case reflects, the
district in which the petition for
buyers did not demand a jury trial. See 9 U.S.C. §
an order directing such arbitration
4 (2000) ("If the making of the arbitration
is filed. If the making of the
arbitration agreement or the
agreement or the failure, neglect, or refusal to
failure, neglect, or refusal to perform the same be in issue, the court shall
perform the same be in issue, the proceed summarily to the trial thereof. If no jury
court shall proceed summarily to trial be demanded by the party alleged to be in
the trial thereof. If no jury trial be default, or if the matter in dispute is within
demanded by the party alleged to admiralty jurisdiction, the court shall hear and
be in default, or if the matter in determine such issue."). The trial court's judgment
dispute is within admiralty that no arbitration agreements, governed by the
jurisdiction, the court shall hear FAA, existed is dispositive as to whether we
and determine such issue. Where
should quash the Basulto decision on review as
such an issue is raised, the party
misapplying the Seifert standard.
alleged to be in default may,
except in cases of admiralty, on or
8
Basulto v. Hialeah Automotive No. SC09-2358 (Fla. Mar. 20, 2014)
9
Basulto v. Hialeah Automotive No. SC09-2358 (Fla. Mar. 20, 2014)
We disagree with the Third District's conclusion Inc. v. Shipman, 138 So. 44, 46 (Fla. 1931)).
that the buyers' claims for monetary relief are "Unconscionability has generally been recognized
enforceable under the Clause. Because the buyers to include an absence of meaningful choice on the
have not agreed to the arbitration terms within the part of one of the parties together with contract
Clause, they cannot be compelled to arbitrate their terms which are unreasonably favorable to the
claims for monetary relief. See Seifert, 750 So. 2d other party." Williams v. Walker-Thomas
at 636 ("[N]o party may be forced to submit a Furniture Co., 350 F. 2d 445, 449 (D.C. Cir. 1965)
dispute to arbitration that the party did not intend (emphasis added). The absence of meaningful
and agree to arbitrate."). We, therefore, conclude choice when entering into the contract is often
that the Third District's decision concerning referred to as procedural unconscionability, which
enforcement of the Clause is erroneous. 20 "relates to the manner in which the contract *20
was entered,"3 and the unreasonableness of the
Because there was no basis for reversing the trial
terms is often referred to as substantive
court's nonfinal order, we also determine that the
unconscionability, which "focuses on the
buyers are the prevailing parties in this cause.
agreement itself."4 Powertel, 743 So. 2d at 574.
And, for the reasons addressed, we quash the
decision on review. 3 "The procedural component of
unconscionability relates to the manner in
D. Procedural and Substantive which the contract was entered and it
Unconscionability involves consideration of such issues as the
Even though the issue of whether the purported relative bargaining power of the parties and
arbitration agreements are unconscionable is their ability to know and understand the
disputed contract terms." Powertel, 743 So.
beyond the scope of whether the decision on
2d at 574. The central question in the
review conflicts with Seifert, such discussion is
procedural unconscionability analysis is
nevertheless addressable under our discretionary
whether the complaining party lacked a
authority. See generally Savona v. Prudential Ins.
meaningful choice when entering into the
19 Co. of Am., 648 So. 2d 705, 707 *19 (Fla. 1995)
contract. Kohl v. Bay Colony Club Condo.,
("We have held that we have the authority to Inc., 398 So. 2d 865, 868-69 (Fla. 4th DCA
consider issues other than those upon which 1981). When determining whether a
jurisdiction is based, but this authority is contract is procedurally unconscionable,
discretionary and should be exercised only when Florida courts consider the following:
these other issues have been properly briefed and
(1) the manner in which the
argued, and are dispositive of the case."); Savoie
contract was entered into; (2) the
v. State, 422 So. 2d 308, 310 (Fla. 1982) ("[O]nce
relative bargaining power of the
we accept jurisdiction over a cause in order to
parties and whether the
resolve a legal issue in conflict, we may, in our complaining party had a
discretion, consider other issues properly raised meaningful choice at the time the
and argued before this Court."). contract was entered into; (3)
whether the terms were merely
Unconscionability is a common law doctrine that
presented on a "take-it-or-leave-
courts have used to prevent the enforcement of
it" basis; and (4) the complaining
contractual provisions that are overreaches by one
party's ability and opportunity to
party to gain "an unjust and undeserved advantage understand the disputed terms of
which it would be inequitable to permit him to the contract.
enforce." Steinhardt v. Rudolph, 422 So. 2d 884,
889 (Fla. 3d DCA 1982) (quoting Peacock Hotel,
10
Basulto v. Hialeah Automotive No. SC09-2358 (Fla. Mar. 20, 2014)
11
Basulto v. Hialeah Automotive No. SC09-2358 (Fla. Mar. 20, 2014)
So. 2d 252, 256 (Fla. 2d DCA 2006)); Murphy, The prevailing view is that [procedural and
944 So. 2d at 1134 (Third District) ("To invalidate substantive unconscionability] must both
23 a contract under *23 Florida law, a court must find be present in order for a court to exercise
that the contract is both procedurally and its discretion to refuse to enforce a contract
substantively unconscionable.") (citing Powertel, or clause under the doctrine of
743 So. 2d at 574); Fonte v. AT&T Wireless unconscionability. But they need not be
Servs., Inc., 903 So. 2d 1019, 1025 (Fla. 4th DCA present in the same degree. Essentially a
2005) (citing Powertel, and Kohl, 398 So. 2d at sliding scale is invoked which disregards
867); Gainesville Health Care Ctr., Inc. v. Weston, the regularity of the procedural process of
857 So. 2d 278, 284 (Fla. 1st DCA 2003) (citing the contract formation, that creates the
Powertel, et seq.).6 terms, in proportion to the greater
harshness or unreasonableness of the
6 We note that the Eleventh Circuit Court of
substantive terms themselves. In other
Appeals, interpreting Florida law of
words, the more substantively oppressive
contracts, has drawn the same conclusion
about the unconscionability defense to
the contract term, the less evidence of
contract enforcement as have our state procedural unconscionability is required to
appellate courts. See, e.g., Pendergast, 592 come to the conclusion that the term is
F.3d at 1134 (citations omitted). unenforceable, and vice versa.
24 We agree with our district courts of appeal that *24 Romano ex rel. Romano v. Manor Care, Inc.,
procedural and substantive unconscionability must 861 So. 2d 59, 62 (Fla. 4th DCA 2003) (internal
be established to avoid enforcement of the terms quotation marks and citations omitted) (quoting
within an arbitration agreement. However, we Armendariz v. Found. Health Psychcare Servs.,
conclude that while both elements must be Inc., 6 P.3d 669, 690 (Cal. 2000)); see also
present, they need not be present to the same Steinhardt, 422 So. 2d at 889 ("[M]ost courts take
degree. This balancing, or sliding scale, approach, a 'balancing approach' to the unconscionability
which we adopt, is considered to be the prevailing question, and to tip the scales in favor of
view in Florida: unconscionability, most courts seem to require a
certain quantum of procedural plus a certain
quantum of substantive unconscionability."
(quoting Kohl, 398 So. 2d at 868)).
12
Basulto v. Hialeah Automotive No. SC09-2358 (Fla. Mar. 20, 2014)
procedural malady, we do not reach the question Unconscionability has generally been
of substantive unconscionability.") abrogated on recognized to include an absence of
other grounds by Shotts v. Op Winter Haven, Inc., meaningful choice on the part of one of the
86 So. 3d 456 (Fla. 2011); Bland, 927 So. 2d at parties together
257 ("This court, however, eschews the 'sliding 26 *26 with contract terms which are
scale' approach. Rather we assess procedural unreasonably favorable to the other party.
unconscionability and substantive Whether a meaningful choice is present in
25 unconscionability independently."). *25 a particular case can only be determined
by consideration of all the circumstances
We conclude that the better approach—more in
surrounding the transaction. In many cases
keeping with the pronouncement of this Court on
the meaningfulness of the choice is
unconscionability over eighty years ago in
negated by a gross inequality of bargaining
Peacock Hotel—is the balancing, or sliding scale,
power. The manner in which the contract
approach. This approach recognizes that although
was entered is also relevant to this
the concept of unconscionability is made up of
consideration. Did each party to the
both a procedural component and a substantive
contract, considering his obvious
component, it often involves an evaluation in
education or lack of it, have a reasonable
which the two principles are intertwined.
opportunity to understand the terms of the
The 1931 Peacock Hotel decision, one of the contract, or were the important terms
original pronouncements on the subject in Florida, hidden in a maze of fine print and
demonstrates that this Court has never viewed minimized by deceptive sales practices?
unconscionability as being comprised of two Ordinarily, one who signs an agreement
separate and independent components: without full knowledge of its terms might
be held to assume the risk that he has
It seems to be established by the
entered a one-sided bargain. But when a
authorities that where it is perfectly plain
party of little bargaining power, and hence
to the court that one party [to a contract]
little real choice, signs a commercially
has overreached the other and has gained
unreasonable contract with little or no
an unjust and undeserved advantage which
knowledge of its terms, it is hardly likely
it would be inequitable to permit him to
that his consent, or even an objective
enforce, that a court of equity will not
manifestation of his consent, was ever
hesitate to interfere, even though the
given to all the terms. In such a case the
victimized parties owe their predicament
usual rule that the terms of the agreement
largely to their own stupidity and
are not to be questioned should be
carelessness.
abandoned and the court should consider
Peacock Hotel, 138 So. at 46. whether the terms of the contract are so
unfair that enforcement should be
Certainly, the original pronouncement of this withheld.
doctrine from our Court and the modern
enunciation from Walker-Thomas Furniture, 350 Id. at 449 (emphasis added) (footnotes omitted).
F.2d at 449, do not view unconscionability as a
When analyzing unconscionability, courts must
rigid construct composed of two separate,
bear in mind the bargaining power of the parties
unrelated elements. Rather, as explained in
involved and the interplay between procedural and
Walker-Thomas:
substantive unconscionability. In the typical case
of consumer adhesion contracts, where there is
13
Basulto v. Hialeah Automotive No. SC09-2358 (Fla. Mar. 20, 2014)
virtually no bargaining between the parties, the exhaustion of all appeals, if any, may receive his
commercial enterprise or business responsible for or her reasonable attorney's fees and costs from
drafting the contract is in a position to unilaterally the nonprevailing party.").
create one-sided terms that are oppressive to the
We disagree with the buyers, in part, and
consumer, the party lacking bargaining power. On
determine that section 501.2105 of the FDUTPA,
the other hand, if two sophisticated commercial
is not a valid statutory basis for an award for
enterprises or businesses negotiate a contract
reasonable appellate attorney's fees in this case.
where both sides are on equal footing, absent
Conversely, we agree with the buyers, in part,
some high degree of procedural unconscionability
determining that section 57.105, Florida Statutes,
27 (such as a party "hiding the ball"), the *27 chance
is applicable in this case for an award of
that the terms of the contract are unduly
reasonable appellate attorney's fees. Our latter
oppressive is lessened given the circumstances of
determination is based on the buyer's reference to
the contract formation.
a provision in the Retail Installment Contract—
Given that the doctrine of unconscionability is not that is not within the Clause.7 See § 57.105(7),
a rigid construct where the procedural aspects are Fla. Stat. (2009) ("If a contract contains a
separate from the substantive aspects, we conclude provision allowing attorney's fees to a party when
that both the procedural and substantive aspects of he or she is required to take any action to enforce
unconscionability must be present, although not the contract, the court may also allow reasonable
necessarily to the same degree, and both should be attorney's fees to the other party when that party
evaluated interdependently rather than as prevails in any action, whether as plaintiff or
independent elements. defendant, with respect to the contract. This
subsection applies to any contract entered into on
E. Attorney's Fees or after October 1, 1988.") (Emphasis added.)
The buyers have moved for an award of
7 Neither party has challenged the validity of
reasonable attorney's fees in accordance with
the Retail Installment Contract.
section 501.2105(1) of the FDUTPA. In addition,
--------
the buyers assert that they are entitled to
reasonable attorney's fees because the Retail We have stated above that the buyers are the
Installment Sales Contract contains a provision prevailing party in the cause before us. Therefore,
entitling the dealership to recover attorney's fees, pursuant to section 57.105(7), the buyers are
and section 57.105(7), Florida Statutes (2009) entitled to an award of reasonable appellate
applies to permit the court to allow reasonable attorney's fees. Accordingly, we direct that this
attorney's fees to the buyers, if they prevail in this issue should be remanded to the trial court for a
action. 29 determination of the proper *29 attorney's fees to
In this case, the buyers have timely filed a motion be awarded. See generally Fla. R. App. P. 9.400(b)
pursuant to Florida Rule of Appellate Procedure ("The assessment of attorneys' fees may be
9.400(b), and they assert FDUTPA as one remanded to the lower tribunal. If attorneys' fees
statutory basis for an award of attorney's fees. See are assessed by the court, the lower tribunal may
§ 501.2105(1), Fla. Stat. (2004) ("In any civil enforce the payment.").
litigation resulting from an act or practice
III. CONCLUSION
involving a violation of this part, except as
We quash the Third District's decision on review
provided in subsection (5), the prevailing party,
because it conflicts with our controlling precedent
28 after judgment in the trial court *28 and
set forth in Seifert. Accordingly, we remand this
14
Basulto v. Hialeah Automotive No. SC09-2358 (Fla. Mar. 20, 2014)
cause to the Third District with instructions to The majority finds conflict between the Third
order the full restoration of the circuit court's District's opinion and Seifert v. U.S. Home Corp.,
March 8, 2007, nonfinal order. Upon reinstatement 750 So. 2d 633 (Fla. 1999), explaining that the
of its order that was the subject of this review, the Third District did not apply the requirement
trial court should appropriately address our outlined in Seifert that courts must consider
decision that the buyers be awarded reasonable "whether a valid written agreement to arbitrate
appellate attorney's fees. exists" when ruling upon motions to compel
arbitration. See majority op. at 8. However, in
It is so ordered. PARIENTE, LEWIS, QUINCE,
Seifert, this Court addressed the scope of the
and LABARGA, JJ., concur.
arbitration agreement at issue, not whether an
POLSTON, C.J., dissents with an opinion in
agreement to arbitrate was ever concluded. In fact,
which CANADY, J., concurs.
31 Seifert was a wrongful death action, and *31 the
NOT FINAL UNTIL TIME EXPIRES TO FILE
question addressed by this Court was whether the
REHEARING MOTION, AND IF FILED,
arbitration provision in a contract for the sale and
DETERMINED. Polston, C.J., dissenting.
purchase of a house required that wrongful death
At the heart of this dispute is whether an action to be arbitrated. 750 So. 2d at 635. Further,
agreement to arbitrate was ever concluded, which unconscionability (which was a primary focus of
is a different issue from whether an agreement to the Third District's opinion) was not at issue in
arbitrate is valid. See Buckeye Check Cashing, any way in Seifert.
Inc. v. Cardegna, 546 U.S. 440, 444 n.1 (2006)
Accordingly, there is no conflict between the
(reversing this Court and explaining that "[t]he
Third District's opinion and Seifert, and the Court
30 issue of the contract's *30 validity is different from
should not be reviewing this case. Because there is
the issue whether any agreement between the
no jurisdiction, I do not reach the merits of the
alleged obligor and obligee was ever concluded").
case. I respectfully dissent. CANADY, J., concurs.
After conducting an evidentiary hearing, the trial Application for Review of the Decision of the
court ruled that there was not a meeting of minds District Court of Appeal - Direct Conflict of
on arbitration (i.e., no agreement to arbitrate was Decisions
ever concluded), and "accordingly no valid
Third District - Case No. 3D07-855
agreement for this Court to enforce." On appeal,
the Third District Court of Appeal did not address (Miami-Dade County) Timothy Carl Blake,
this ruling by the trial court and completely Miami, Florida,
sidestepped it. Instead, the Third District ruled that
for Petitioners Mark A. Goldstein, Miami, Florida,
the stand-alone "Agreement to Arbitrate Disputes"
is unenforceable because it is unconscionable. for Respondents
Hialeah Auto., LLC v. Basulto, 22 So. 3d 586, 591
9 U.S.C. § 4 (2000). The Florida Arbitration Code
(Fla. 3d DCA 2009). Then, on rehearing, the Third
has a comparable provision as was identified in
District remanded to the trial court on an issue
Prima Paint Corp. in section 4 of the Act. The
regarding the arbitration clause contained in the
statute—Proceedings to compel and stay
"Retail Installment Contract" and stated that "[t]he
arbitration— provides:
buyers are free on remand to request a ruling . . .
that there was no agreement to arbitrate." Id. at
593.
15
Basulto v. Hialeah Automotive No. SC09-2358 (Fla. Mar. 20, 2014)
16
Basulto v. Hialeah Automotive No. SC09-2358 (Fla. Mar. 20, 2014)
17