Florida Supreme Court Decision: Arbitration and the Statute of Limitations

Recently, the Florida Supreme Court concluded that the Legislature intended to subject arbitration proceedings to the statute of limitations. An arbitration proceeding is an “action” broadly defined in § 95.011 to encompass any “civil action or proceeding,” including arbitration proceedings. Raymond James Financial Services, Inc. v. Barbara J. Phillips, SC11-2513 (Fla. May 16, 2013). The case came to the Florida Supreme Court for review in the form of a certified question by the Second District Court of Appeal. The Florida Supreme Court restated the question as follows:

DOES SECTION 95.011, FLORIDA STATUTES, APPLY TO ARBITRATION?

Answering the certified question in the affirmative, it was held that Florida’s statute of limitations applies to arbitration proceedings because an arbitration proceeding is within the statutory term “civil action or proceedings” found in section 95.011.

The case arose when client assets were allegedly invested into non-diversified, high risk equities, which caused the investments to lose significant value. When the investors opened their accounts, the parties all agreed to arbitrate any disputes. The investors filed a joint claim for arbitration and alleged federal securities violations, violations of chapter 517, and negligence. Raymond James moved to dismiss the causes of action because all claims were barred by the relevant statute of limitations.

The trial court ruled in favor of the investors finding that Florida’s statute of limitations was inapplicable to arbitration. The Second District Court of Appeal affirmed the trial court’s order concluding that the arbitration agreement did not expressly provide for the application of Florida’s statute of limitations, and that section 95.011 was not relevant because it did not apply to arbitration.  On appeal, the Florida Supreme Court reversed.

The Florida Supreme Court began its analysis by reviewing the actual language used in the statute to determine legislative intent.  In this case, the statute of limitations that applied to the investors’ causes of action was contained within section 95.11.  The actual language of section 95.11 limits the statute of limitations to “[a]ctions.” “Action” is defined by section 95.011 as a “civil action or proceeding.”  

The next step in the Florida Supreme Court’s analysis was whether an arbitration proceeding is a “civil action or proceeding.”  Since Chapter 95 does not expressly define a “civil action or proceeding”, the Florida Supreme Court looked to the following ordinary, dictionary definitions set forth in Black’s Law Dictionary: (1) Civil Action: “[a]n action brought to enforce, redress, or protect a private or civil right; a noncriminal litigation”; (2) Proceeding: “[a]ny procedural means for seeking redress from a tribunal or agency.” Additionally, a “tribunal” is “[a] court or other adjudicatory body”; and (3) Adjudicatory: “[t]he legal process of resolving a dispute.” Based on the foregoing, the Florida Supreme Court ultimately determined that the common usage of the statute’s terms supports the conclusion that the term “proceeding,” as used in section 95.011 is a broad term that includes arbitration.

The attorneys at Schecter Law have the knowledge and experience to tackle complex arbitration disputes and can assist you or your business with all of your business arbitration needs.