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A Florida District Court of Appeals held that a party waives the right to demand arbitration of the opposing party’s counterclaims where the party sued for defamation, where defamation itself was an arbitrable issue.
In Roth v. Cohen, No. 3D06-116, 2006 WL 3208502 (Fla. Dist. Ct. App. Nov 08, 2006), Alan Cohen, an interior designer and sole officer of Alan David, Inc. (“ADI”) entered into a service agreement containing an arbitration provision with Marilyn and Peter Roth to decorate their home.
Cohen filed suit against the Roths for libel, slander and defamation arising out their service agreement. The Roths asserted several counterclaims including fraud and unjust enrichment. Cohen then filed a motion to compel arbitration of the counterclaims.
Cohen’s argued that he had not personally entered into an arbitration agreement with the Roths because the service agreement was with ADI. The Court refused to consider this issue because Cohen had not presented it prior to appellate review. Even if the issue were to be considered, Cohen sought to compel arbitration, a right he was claiming not to have as an individual.
The Court also rejected Cohen’s argument that the defamation claims were not arbitrable because a “sufficient nexus exists” between the defamation claims and the service agreement. All of the alleged defamatory comments made by the Roths about Cohen and ADI arose as a result of the service agreement between the parties.
The Court concluded that Cohen waived his right to arbitrate by filing suit for defamation because defamation claims fell within the scope of the arbitration agreement. Thus, the Court refused to compel arbitration.
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