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A party's right to compel arbitration of claims arising under an agreement is waived by failing to elect arbitration within a time period clearly and unambiguously expressed by the provisions of the agreement, according to the Florida District Court of Appeals.
In Abel Homes at Naranja Villas, LLC v. Hernandez, No. 3D07-728, 2007 WL 2043547 (Fla. Dist. Ct. App. July 18, 2007), Abel and Hernandez entered into a real estate purchase agreement for the construction of a condominium unit. The purchase agreement contained an arbitration provision allowing Abel to elect arbitration upon a claim within 20 days of notice of a claim arising out of the agreement. After a delay in the project, Hernandez notified Abel that he intended to pursue litigation to force Abel to return an escrow deposit. After 20 days had expired with no response from Abel, Hernandez filed a complaint against Abel. Abel then sought to compel arbitration of the claims, which the trial court denied. Abel appealed the denial of the motion to compel arbitration.
The Court held that Abel had waived its right to compel arbitration by not electing arbitration within 20 days of receiving notice of Hernandez's claim. The Court observed that the arbitration provision was drafted by Abel, and Abel had the sole power under the contract to elect arbitration of any claims. However, the Court found the language of the provision to unambiguously indicate that an arbitration election had to be made within 20 days of the notice of the claim.
The Court rejected Abel's contention that the option to elect arbitration was open-ended, finding that the twenty-day notice requirement within the provision would be rendered meaningless by interpreting the option to compel as open-ended. Furthermore, the Court declined to find error in the trial court's determination of the election's timeliness. Abel maintained that the issue of timeliness should have been determined by an arbitrator, but the Court found the trial court's determination to be within its power. The Court "distinguish[ed] an arbitration provision which specifies the time provided to make a demand for arbitration, and those which simply provide that the demand be made within a reasonable time," holding interpretation of the former to be within the power of the trial court when the term is clear and unambiguous.
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