{"id":899395,"date":"2021-12-08T14:20:11","date_gmt":"2021-12-08T21:20:11","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=899395"},"modified":"2021-12-08T14:20:37","modified_gmt":"2021-12-08T21:20:37","slug":"arbitration-provision-significant-relationship","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/arbitration-provision-significant-relationship\/","title":{"rendered":"Disputes will not be Subject to Arbitration Provision if there is no &#8220;Significant Relationship&#8221;"},"content":{"rendered":"\n<p>David Adelstein | <a href=\"https:\/\/www.floridaconstructionlegalupdates.com\/disputes-will-not-be-subject-to-arbitration-provision-if-there-is-no-significant-relationship\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Florida Construction Legal Updates<\/a><\/p>\n\n\n\n<p>As you know from prior articles,\u00a0<strong>arbitration<\/strong>\u00a0is a creature of contract.\u00a0 This means if you want your disputes to be resolved by binding arbitration, as opposed to litigation, you want to make sure there is an arbitration provision in your contract. \u00a0If there are certain types of disputes you do not want subject to arbitration, you want to specify those types of disputes\/claims in your arbitration provision. \u00a0If you are not sure, make sure to discuss the pros and cons of arbitration with your counsel when drafting and negotiating the contract.\u00a0 However, even with a\u00a0<strong>broad arbitration provision<\/strong>, there are times where a dispute may still fall out of the scope of the arbitration provision,\u00a0<em>i.e<\/em>., the dispute is not arbitrable. If this occurs, such dispute will be resolved by litigation.\u00a0 Parties that have buyer\u2019s remove and do not want to arbitrate their dispute may try to make this argument that the dispute is not subject to the scope of the arbitration provision.\u00a0 There are times this argument carries weight because the dispute has no significant relationship to the agreement with the <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/arbitration-provision-incorporated\/\" target=\"_blank\" rel=\"noreferrer noopener\">arbitration provision<\/a>, as shown below.<\/p>\n\n\n\n<p>In&nbsp;<em>Deweees v. Johnson<\/em>, 46 Fla. L. Weekly D2356b (Fla. 4<sup>th<\/sup>&nbsp;DCA 2021), a plaintiff purchased a home in a private residential community.&nbsp; The purchase contract with the developer contained a broad arbitration provision that materially provided that, \u201call post-closing claims, disputes, and controversies\u2026between purchaser and seller will be resolved by binding arbitration except those arising under section G.5 and G.6 above.\u201d&nbsp;&nbsp;<em>Dewees, supra<\/em>.&nbsp; Sections G.5 and G.6 provided that the purchaser will not interfere in the sales process with other purchasers and will not interfere with workmen during the construction process. &nbsp;&nbsp;There was also a workmanship and structural defect warranty for the dwelling that also contained an arbitration provision.<\/p>\n\n\n\n<p>A year-and-a-half after the plaintiff entered into the purchase contract, she injured herself while riding her bicycle in the community.&nbsp; The roads were still under construction and were uneven, which caused the bicycle accident.<\/p>\n\n\n\n<p>The plaintiff sued the developer, the contractor hired to construct the road, and the general contractor.&nbsp; The claims against the developer sounded in negligence for the developer\u2019s failure to ensure the roads were safe for bicyclists, failing to warn bicyclists using the road of known hazards, and breach of the nondelegable duty to maintain the premises in a safe and reasonable manner. &nbsp;&nbsp;The developer moved to compel the dispute to arbitration, which the trial court granted.<\/p>\n\n\n\n<p><strong>Deciding whether a particular claim is covered by a&nbsp;<u>broad arbitration<\/u>&nbsp;provision requires a determination whether a&nbsp;<u>significant relationship<\/u>&nbsp;exists between the claim and the agreement containing the arbitration clause, regardless of the legal label attached to the dispute. [A] significant relationship is described to exist between an arbitration provision and a claim if there is a \u2018<u>contractual nexus<\/u>\u2019 between the claim and the contract.<\/strong><\/p>\n\n\n\n<p><strong>A contractual nexus exists between a claim and a contract if the claim presents circumstances in which the resolution of the disputed issue requires either reference to, or construction of, a portion of the contract. More specifically, a claim has a nexus to a contract and&nbsp;<u>arises from the terms of the contract if it emanates from an imitable duty created by the parties\u2019 unique contractual relationship<\/u>.&nbsp; In contrast, a claim does not have a nexus to a contract if it pertains to the breach of a duty otherwise imposed by law or in recognition of public policy, such as a duty under the general common law owed not only to the contracting parties, but also to third parties and the public.<\/strong><\/p>\n\n\n\n<p><em>Dewees, supra<\/em>&nbsp;(quotations and citations omitted).<\/p>\n\n\n\n<p>For plaintiff\u2019s claims to be subject to the arbitration provision in the purchase contract, they must not only arise from the purchase contract, but also have a&nbsp;<strong>significant relationship<\/strong>&nbsp;to the purchase contract.&nbsp; But here, plaintiff\u2019s claims against the developer do NOT have a significant relationship to the purchase contract. &nbsp;For this reason, the appellate court reversed the trial court\u2019s order compelling the dispute to binding arbitration. &nbsp;Plaintiff\u2019s claims \u201c<strong>do not refer to or implicate contractual duties created or governed by the Purchase Contract or Dwelling Warranty but concern duties generally owed to the public, including all invitees using the roadways in [the community].&nbsp; None of the allegations in the complaint require reference to or construction of any portion of the Purchase Contract or Dwelling Warranty.&nbsp; The allegations instead rely on obligations that would extend to anyone who might be injured by the developer\u2019s tortious conduct<\/strong>.\u201d&nbsp;&nbsp;<em>Dewees, supra<\/em>.&nbsp;&nbsp;&nbsp;&nbsp; There was no contractual nexus between the purchase contract and the plaintiff\u2019s dispute against the developer.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>David Adelstein | Florida Construction Legal Updates As you know from prior articles,\u00a0arbitration\u00a0is a creature of contract.\u00a0 This means if you want your disputes to be resolved by binding arbitration, as opposed to litigation, you want to make sure there is an arbitration provision in your contract. \u00a0If there are certain types of disputes you&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/arbitration-provision-significant-relationship\/\">Continue reading <span class=\"screen-reader-text\">Disputes will not be Subject to Arbitration Provision if there is no &#8220;Significant Relationship&#8221;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[41],"tags":[9895,9310],"class_list":["post-899395","post","type-post","status-publish","format-standard","hentry","category-arbitration","tag-advise-consult","tag-arbitration-provision","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Disputes will not be Subject to Arbitration Provision if there is no &quot;Significant Relationship&quot; 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