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A Florida appellate court held that Florida’s arbitration code requires a trial court to determine whether a contract was a forgery because this raises a substantial question as to the making of the arbitration agreement.
In Operis Group, Corp. v. E.I. at Doral, LLC, No.3D07-298, 2007 WL 3085429 (Fla. Dist. Ct. App. Oct. 24, 2007), Doral hired Operis to perform work on a hotel construction project. A dispute arose between the parties over the scope of the work. Operis claimed Doral hired it as the primary contractor while Doral claimed it hired Operis only to clear the land before construction.
Operis sued for breach of contract and unjust enrichment, and later amended its complaint and attached a written contract. Doral opposed the contract’s introduction, claiming it was a forgery but nonetheless moved to enforce the contract’s arbitration provision. The trial court ordered arbitration because Doral sought to enforce the provision despite claiming the contract containing the arbitration provision was a forgery. Operis appealed, arguing the trial court failed to resolve the issue of whether an agreement to arbitrate existed between the parties.
The Court held the trial court erred in compelling arbitration, as it failed to establish whether the parties entered into a valid contract containing an arbitration provision. Section 682.03(1), Florida Statutes (2006), states “If the court shall find that a substantial issue is raised as to the making of the agreement or provision [to arbitrate], it shall summarily hear and determine the issue and, according to its determination, shall grant or deny the application [for arbitration].” Doral’s contention that the alleged contract was a forgery raised a substantial question about the agreement’s formation. Consequently, the trial court erred by failing to address the issue.
The Court also rejected Doral’s assertion that its claim the parties’ contract was allegedly forged goes to the validity of the entire contract and thus an issue for the arbitrator’s determination. Although the Supreme Court held in Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (2006) that the arbitrator must decide challenges to the entire contract’s validity, the facts at hand are distinguishable from those in Buckeye. Here, the issue is not whether the parties’ agreement was valid, but whether the parties ever made an agreement. In Buckeye, the Supreme Court acknowledged that these types of challenges exist, but declined to answer whether a judge or arbitrator should decide them. The Court, therefore, remanded the case to the trial court, as Florida’s arbitration code requires the trial court to resolve substantial issues as to the making of the arbitration agreement.
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