Arbitration Not Time Barred by Statute of Limitations Unless Contract Says So

In the case of RAYMOND JAMES FINANCIAL SERVICES, INC. v. PHILLIPS, 36 Fla. L. Weekly D2479a (Fla. 2d DCA Nov. 16, 2011), the Second District Court of Appeals held that arbitration claims are not civil actions or proceedings for purposes of section 95.011, Florida Statutes (2005), and that as a result, Florida statutes of limitations are not applicable to arbitration where the arbitration agreement does not expressly provide for their application.

Facts of Case

Account Holders executed client agreements with Raymond James for investment purposes. Pursuant to the provisions of the client agreements, the Account Holders were required to submit any disputes with Raymond James to the National Association of Securities Dealers, Inc. ("NASD"), for arbitration. Section 10304, the applicable NASD Code of Arbitration Procedure, provides a time limit upon submissions for arbitration. It states in pertinent part:

"(a) No dispute, claim, or controversy shall be eligible for submission to arbitration under this Code where six (6) years have elapsed from the occurrence or event giving rise to the . . . claim.

. . . .

(b) This Rule shall not extend applicable statutes of limitations; nor shall the six-year time limit . . . apply to any claim that is directed to arbitration by the court."

The client agreement also provided:

"(d) Nothing in this agreement shall be deemed to limit or waive the application of any relevant state or federal statute of limitation, repose or other time bar. Any claim made by either party to this agreement which is time barred for any reason shall not be eligible for arbitration. The determination of whether any such claim was timely filed shall be by a court having jurisdiction, upon application by either party."

In November 2005, the Account Holders filed arbitration claims with NASD. The Account Holders' grievances were for claims of negligence; misconduct, including breaches of fiduciary duty; and state and federal securities violations. In response to the Account Holders' claims, Raymond James filed a motion to dismiss, asserting that the Account Holders' claims were barred by the limitations periods in chapter 95, Florida Statutes (2005). The Account Holders then invoked the provision in the arbitration agreement which stated that timeliness issues would be decided by the court, and they filed an action in the circuit court of Collier County seeking a declaratory judgment. The Account Holders argued that Florida's statutes of limitations do not apply to arbitration proceedings. The circuit court agreed and issued a final declaratory judgment stating that Florida's statutes of limitations were not applicable to the Account Holders' arbitration claims as a matter of law.

Reasoning

The court reasoned that the provision of agreement that it will not “limit or waive the application of any relevant state or federal statute of limitations,” does not affirmatively incorporate Florida statutes of limitations into the agreement.  The court noted that because neither the actual language of the statute nor the dictionary definition include the term "arbitration", the meaning of the words “civil action” or “proceeding” do not convey a clear and definite meaning, and we must resort to the principles of statutory construction.

The court proceeded to review the statute in question and held that if the legislature had intended for the term “proceeding” to apply to arbitration, it could have defined “proceeding” to include an arbitration or it could have expressly included the word arbitration within section 95.011. The court noted that the Florida Arbitration Code was enacted in 1957, which is prior to the enactment of section 95.011. Thus, the legislature was aware of arbitration and could have expressly included the term if it intended for Florida's statutes of limitation to apply to arbitration. The court then found that absent a more specific reference to arbitrations in section 95.011, and without a clear indication of legislative intent otherwise or case law which interprets this issue, it is too much of a stretch to conclude that the legislature was motivated by a desire to extend our state's limitations periods to such “proceedings.”

Conclusion

In summary, the court found that Raymond James did not expressly include the Florida statutes of limitations in the contract in question. Since the contract is construed against the drafter and since the language of the statute does not state that it applies to arbitration, the court held that Florida's statutes of limitations do not apply to arbitrations where the arbitration agreement does not expressly provide for their application.

Nevertheless, the court certified the following question, citing "great public importance":

"DOES SECTION 95.011, FLORIDA STATUTES, APPLY TO ARBITRATION WHEN THE PARTIES HAVE NOT EXPRESSLY INCLUDED A PROVISION IN THEIR ARBITRATION AGREEMENT STATING THAT IT IS APPLICABLE?"

Thus, watch this space to see how the Florida Supreme Court chooses to rule on this issue.

If you are interested in receiving a complete copy of this decision or are interested in reaching me, please contact me at miamipandi@comcast.net.

Does Judge Lenard Do an About Face on Arbitrability? Not So Fast...

Last week, I blogged on the decision of Pavon v. Carnival Corporation, 23 Fla. L. Weekly Fed. D96a (S.D. Fla. Jan. 20, 2010), wherein Judge Lenard granted Plaintiff's Motion to Remand and Attorneys Fees, after the plaintiff requested the Court to remand the case back down to state court and award attorney's fees and costs for Carnival improperly removing the case to federal court.

This decision, of course, spurred lots of debate. Many in the defense bar quickly argued that Pavon was necessarily overruled by Lindo v. NCL (Bahamas), Ltd., 652 F.3d 1257 (11th Cir. 2011), wherein the Eleventh Circuit Court of Appeals found that the seaman's single count claim for Jones Act negligence had to be arbitrated "at the initial arbitration-enforcement stage." Thus, it would appear that at first blush, Lindo arguably overturned Pavon.

However, it is interesting to note that Pavon involved a claim for failure to pay wages under the Seaman's Wage Act, among other claims. Judge Lenard found in Pavon (relying on an earlier decision of the Eleventh Circuit, Thomas v. Carnival Corp., 573 F.3d 1113 (11th Cir. 2009)) that the arbitration clause in the employment contract was null and void as to his Seaman's Wage Act claim. On the other hand, Lindo involved only a single claim for Jones Act negligence and made no claim under the Seaman's Wage Act. Thus, the facts of the two cases are easily distinguished.

We now come to Judge Lenard's latest ruling on the subject in Kote v. Princess Cruise Lines, Ltd., 2011 WL 4434858 (S.D. Fla. Sept. 23, 2011). This action involved injuries sustained by a crewmember, alleging two counts: 1) Jones Act negligence; and 2) maintenance and cure. Kote did not seek damages under the Seaman's Wage Act. In addition, the defendant in Kote waived the exclusive application of Bermudan law (which was the choice of law provision in the employment contract) and stipulated to the application of United States law to Kote's Jones Act claim. Judge Lenard, detailing Lindo and relying on this latest pronouncement of the Eleventh Circuit, found that Kote's case must be compelled to arbitration under either a Thomas or Lindo analysis. The court reasoned that the plaintiff must show how the laws of the country where arbitration would be conducted did not recognize Jones Act claims or comparable remedies. This is particularly relevant where the defendant has agreed to apply U.S. law in the foreign jurisdiction. Thus, the court found that the plaintiff failed to do so in this instance and compelled arbitration.

Thus, the question remains whether with a Seaman's Wage Act claim and a plaintiff being able to show how the laws of the country where arbitration would be conducted would not recognize a claim similar to the Seaman's Wage Act. One would expect that all jurisdictions have some sort of penalty against an employer for failing to pay their seamen employed by the ships. One would also expect defendants to agree to the application of U.S. law in the foreign jurisdiction to avoid any argument that the case should remain in the U.S. Nevertheless, to make the quantum leap that Lindo essentially takes all seaman's contracts involving arbitration out of the United States does not fully take into account the reasoning of both Thomas and Lindo, the Eleventh Circuit pronouncements on these issues.

If you are interested in reading a full copy of Judge Lenard's latest decision in Kote or wish to reach me, you may do so by contacting me at miamipandi@comcast.net.

Miami River Hosts Mega Yachts

At least once every four to five years, yachts must find a boatyard with sufficient lifting capacity and quality workmanship to tweak the running gear, repaint the hull, and add the latest in electronics and navigation equipment. As reported in the Caribbean Magazine in their October-December 2011 edition, this may also include adding a few meters in length to such a vessel to accommodate some new interior design concepts.

Golden Odyssey, a 264 foot/80.50 meter vessel was built at the Blohm & Voss yard in Hamburg, Germany and delivered in 1990. In 1995, Golden Odyssey had a refit at the Campbell shipyard. There her hull was lengthened from 76m to 80.5m after a modification of her stern. She also got a fully repaint. From time to time she underwent several small refits at different (undisclosed) yards.

Golden Odyssey is the flagship of the Golden Fleet and is sailing seas all over the world with her support yacht Golden Shadow (219 ft/66.75m) and the sport fishermen Golden Osprey (96 ft/27.45m). Beside many tenders and oceanographic equipment, from May 1999 onwards, a Cessna 208 Caravan Sea Plane for two pilots and eight guests was added to the Golden Fleet and is stowed aboard the Golden Shadow. The owner, His Royal Highness Price Khaled bin Sultan of Saudi Arabia, has considerable interest in oceanography and often makes scientific research voyages with his fleet. The Crown Price is the founder and chief sponsor of the Khaled bin Sultan Living Oceans Foundation. Hence, the Golden Odyssey has a coral reef aquarium distributed over two decks and a window in the bow for Dolphin-watching.

Since February of 2011, the vessels of the Golden Fleet have made their mark on the entrance to the Miami River at their berth at the Epic Marina. The Golden Fleet are reportedly the largest and most unique single yacht ensemble in the world.

In addition, yacht builder David Marlow has purchased the world-famous Merrill Stevens boatyard on the Miami River. Malcolm Forbes' Highlander and Jacques Cousteau's Calypso reportedly call for service at the boatyard, now called the Marlow Merrill Stevens yard. There are plans to reportedly upgrade the yard's existing 500-ton Syncrolift to 750 tons, with a 100-ton Travelift being replaced by a 220-ton lift. With the extra lifting capacity, Marlow will be able to haul 115 foot vessels on the south side of the yard and 170-180 foot vessels on the north side of the yard. 

Thus, reports of Miami's demise as a shipyard destination appear to be mistaken. While it is true that the Miami River is dotted with huge high rise buildings on either side of this waterway, it remains the "logistics nexus of the Caribbean", as aptly named by the Miami River Marine Group.

If you are interested in received a complete copy of the Caribbean Maritime article or are interested in contact me, please feel free to do so at miamipandi@comcast.net.

Seaman's Removed Action Remanded by Southern District of Florida

In PAVON v. CARNIVAL CORPORATION, 23 Fla. L. Weekly Fed. D96a (S.D. Fla. Jan. 20, 2010), District Judge Joan A. Lenard granted Plaintiff's Motion for Remand and Attorneys Fees,  requesting the Court remand the case back to state court and award attorney's fees and costs after Carnival removed the case to federal court.

The Plaintiff, a seaman injured during his employment aboard the M/V Carnival Celebration, brought a lawsuit in state court in Miami-Dade County, Florida, alleging: (1) negligence under the Jones Act, 46 U.S.C. § 30104; (2) unseaworthiness; (3); failure to provide maintenance and cure; and (4) failure to pay wages under the Seaman's Wage Act, 46 U.S.C. § 10313. The cruise line subsequently removed the action to federal court, arguing that the Plaintiff's claims were governed by an arbitration provision in his employment agreement, which allegedly called for Panamanian law to apply.

In his Motion for Remand, the Plaintiff argued that his case must be remanded back to state court in light of the Eleventh Circuit's decision in Thomas v. Carnival Corporation, 573 F.3d 1113 (11th Cir. 2009) [21 Fla. L. Weekly Fed. C1989a]. In that case, the Eleventh Circuit held that the exact same arbitration provision as presented in this case was unenforceable as to the plaintiff's Seaman's Wage Act claim. Id. at 1124. Finding Panamanian law did not provide a reasonable equivalent to plaintiff's rights under the Seaman's Wage Act and there was no assurance of an opportunity for review of plaintiff's claim, the Thomas court held that the arbitration and choice of law provisions acted in tandem to strip the plaintiff of his statutorily-created rights. Id. at 1123. Thus, the Thomas court found the arbitration provision null and void, as contrary to public policy, with regard to the plaintiff's wage claim and reversed the district court's decision to compel arbitration. Id. at 1124. The Plaintiff argued that the arbitration provision is similarly void in this case.

The Plaintiff also argued that since the rest of his claims were not removable, the whole case must be remanded back to state court. Moreover, the Plaintiff sought an award of attorney's fees and costs pursuant to 28 U.S.C. § 1447 as the Defendant filed the notice of removal in this action well after the opinion in Thomas was issued, thus making removal unjustified. 

The Court agreed with the Plaintiff and found that the case should be remanded back to state court in its entirety. Judge Lenard found that as a result of Thomas, the arbitration clause in the Plaintiff's employment agreement is null and void as to his Seaman's Wage Act claim. In addition, the Court found persuasive another decision that found that “it would be against public policy to compel arbitration of Plaintiff's Jones Act claim according to Panamanian law because to do so would deprive her of important statutory rights provided by Congress to effectuate public policy.” Kovacs, 2009 WL 4980277 at *1.

The Court also relied on affidavits from Panamanian attorneys, detailing that under Panamanian law, a seaman must prove that the employer was itself actively negligent in order to establish liability for the negligence of another employee. In contrast, the Jones Act imposes strict liability on employers for the negligence of any of its employees. As such, compelling arbitration of the Plaintiff's Jones Act claim would contravene public policy and the arbitration provision must be declared null and void as it relates to the Jones Act claim. Finally, the Court found that compelling arbitration as to the Plaintiff's unseaworthiness and maintenance and cure claims, while remanding his Jones Act and Seaman's Wage Act claims, would be inefficient and a waste of judicial resources.

If you are interested in receiving a complete copy of the decision or simply wish to reach me, you may do so by contacting me at miamipandi@comcast.net. 

Cruise Crewmember Gets $1 Million for Surgery

A Miami state court jury has awarded $1 million to a seafaring pastry chef who lived with a disabling pacemaker for a year only to discover he never needed it. Shalesh Butto, an otherwise healthy, 31-year old second-degree black belt jiu-jitsu fighter, blamed his employer for the mistake. Celebrity Cruise Lines sent the crewmember from Europe to the Dominican Republic in 2009 to see less expensive doctors after he complained of headaches and facial pain in 2009.

Doctors first inserted a pacemaker and then performed sinus surgery for an infection the following week. Butto's symptoms disappeared. But for the next year, pain surged through Butto's chest and he ultimately had to use a walker to walk. After obtaining a visa, he saw Miami cardiologists who removed the pacemaker and after doing so, Butto recovered.

Butto sued for medical negligence under the U.S. Jones Act and won the award after a one-week jury trial before Miami-Dade Circuit Judge Ronald Dresnick. Celebrity is reportedly exploring their post-trial and appellate remedies.

If you are interested in contacting me, please feel free to do so at motero@houckanderson.com or miamipandi@comcast.net.

Cruising in Cuba

American citizens are allowed to visit Cuba, but U.S. law prohibits us form spending money there and the U.S. embargo prohibits cruise ships that visit Cuba to enter the United States for six months afterwards. In 2005, cruise shipping came to a near halt in 2005 when Fidel Castro said he no longer wanted cruise ships in Cuba. He cited the cost of day-visit tourists tramping through Havana outweighing the benefits. Fidel criticized cruising for being floating hotels, floating restaurants, floating theaters and floating diversions that try to leave their trash, their empty cans and papers for a few miserable cents. Fidel then cancelled an Italian firm's contract to run Cuba's cruise terminals, with the final nail in the "proverbial coffin" when a Spanish ship, the PULLMANTUR, bypassed the island after being bought by an American firm that was subject to the U.S. embargo.

As a result, only a few cruise ships visited Cuba from 2005 to 2010. However, the Caribbean Maritime magazine in its October-December 2011 issue is reporting that cruising is coming back to life in Cuba. Cuba is actively wooing back European and Canadian cruise lines welcoming in January 2011 its first large cruise ship in almost 6 years. Ships currently visiting Havana and other Cuban ports include the THOMSON DREAM, ADRIANA, EXPLORER and CUBA CRISTAL.

The THOMSON DREAM is a 42,092-ton British cruise ship. Measuring 798 feet in length, it can carry 1,500 passengers and 600 crew. From January to March, the ship's Caribbean tour includes a two-day stopover in Havana. The ADRIANA is a boutique cruise ship, departing Havana and including four other stops in Cuba--the Isle of Youth, Trinidad de Cuba, Santiago de Cuba and Cayo Saetia. The ADRIANA is operated by Tropicana Cruises, with a gross tonnage of 4,591 grt and a length of 340 feet, she can carry 300 passengers with 135 crew.

It is reported that Cuba Cruise will be launching Cuban cruises in December 2011 with its 480-stateroom ship LOUIS CRISTAL, operating as the CUBA CRISTAL. The ship departs Havana and calls at 6 other Cuban ports: Bahia de Nipe, Cayo Guillermo, Santiago de Cuba, Cayo Caguamas, Cienfuegos, Trinidad and Punta Frances, the larges of the islands of Cuba and featuring 6 Unesco World Heritage Sites and 4 national parks and preserves. The CUBA CRISTAL, which can carry 1,200 passengers, will be operating mainly in the Canadian market.

It has been reported that a U.S.-based ship, the 24,318 ton EXPLORER applied to visit Havana in December on its world cruise. If approved, it will be the first U.S. ship to enter Cuban waters for almost 50 years.

If you are interested in receiving a complete copy of the Caribbean Maritime article or wish to contact me, you may reach me at miamipandi@comcast.net or motero@houckanderson.com.