Waiver of Arbitration Rights Under Florida Law

Arbitration is a form of alternative dispute resolution used to handle disputes between parties outside the court system. In this process, the parties have the chance to present evidence to an arbitrator or sometimes a panel of arbitrators if more than one arbitrator is used; an arbitrator is a neutral third-party who serves a similar role as a judge in a court proceeding. Thus, during an arbitration proceeding—which is less formal than a traditional court proceeding—the arbitrator has the authority to determine the issues presented by the parties and, typically, make a binding decision on them to resolve their dispute. Many parties choose arbitration because it is a quicker and more cost-effective option than proceeding through the court system. Notably, as relevant here, many parties include an arbitration provision in their contracts which requires the parties to go through the arbitration process if a dispute ever arises out of the contract between them. This right to arbitration, however, can be waived by the parties.

Under Florida law, a party’s arbitration rights may be waived by participating in a lawsuit or taking action inconsistent with that right.[1] In considering whether a party waived their arbitration right, the essential question courts ask is whether, under the totality of the circumstances, the defaulting party—i.e., the party who allegedly waived their arbitration right—has acted inconsistently with the arbitration right.[2] Actions that constitute acting inconsistently with the arbitration right include: (1) filing a motion to dismiss without claiming the action should be referred to arbitration,[3] (2) filing an answer to a pleading without claiming the action should be referred to arbitration,[4] and (3) participating in discovery related to the merits of the case.[5] Once a party has waived the right to arbitration by active participation in a lawsuit, the party may not reclaim the arbitration right without the consent of its adversary.[6] In addition, even if the plaintiff files an amended complaint, it does nothing to revive a defendant’s right to arbitration.[7]

 Thus, when sued by a party with whom you have an arbitration agreement, it is important to invoke your right to arbitration immediately as failing to do so risks waiving that right—whether you intentionally wanted to do so or not. If you have questions regarding your arbitration rights and whether you have waived that right, contact the attorneys at Rabin Kammerer Johnson at (561) 659-7878.

[1] Raymond James Fin. Servs., Inc. v. Saldukas, 896 So. 2d 707, 711 (Fla. 2005) (citing Klosters Rederi A/S v. Arison Shipping Co., 280 So. 2d 678, 680 (Fla. 1973)).

[2] Green Tree Servicing, LLC v. McLeod, 15 So. 3d 682, 687 (Fla. 2d DCA 2009) (quoting Nat’l Found. for Cancer Rsch. v. A.G. Edwards & Sons, Inc., 821 F.2d 772, 774 (D.C. Cir. 1987)).

[3] Falcone v. Laquer, 132 So. 3d 1171, 1173 (Fla. 3d DCA 2014).

[4] Green Tree, 15 So. 3d at 687.

[5] Id. at 688.

[6] Mirro v. Freedom Boat Club, LLC, 328 So. 3d 1108, 1110–11 (Fla. 2d DCA 2021) (quoting Green Tree, 15 So. 3d at 687); see also Thomas N. Carlton Est. v. Keller, 52 So. 2d 131, 133 (Fla. 1951) (“When a party waives a right under a contract he cannot, without the consent of his adversary, reclaim it.”).

[7] Morrell v. Wayne Frier Manufactured Home Ctr., 834 So. 2d 395, 398 (Fla. 5th DCA 2003); see also Stankos v. Amateur Athletic Union of the United States, Inc., 255 So. 3d 377, 379 (Fla. 4th DCA 2018) (“[N]o Florida case holds that the right to compel arbitration is revived by the filing of an amended complaint.”).