OWENS & MINOR MEDICAL, INC., APPELLANT,
v.
INNOVATIVE MARKETING AND DISTRIBUTION SERVICES, INC. A/K/A HAINES HEALTHCARE, HAINES & BROWN, INC., F/K/A BHR ENTERPRISES, INC., A FLORIDA CORPORATION, AND SUPERIOR SURGICAL, INC., APPELLEES
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Owens & Minor Medical, Inc., appealed from the trial court's denial of its motion to compel arbitration and stay proceedings on appellee's counterclaim. The court affirmed, holding that the appellant had waived its right to arbitration through active participation in litigation, and the counterclaim's issues were intertwined with the original complaint, making arbitration inappropriate.
The court held that appellant waived its right to arbitrate because of its active participation in litigation. Although appellant argued it did not participate in litigation regarding the counterclaim, the counterclaim's issues were intertwined with those raised in appellant's amended complaint, making arbitration inappropriate.
[1] A party may waive its right to arbitrate by actively participating in litigation.
[2] A counterclaim is subject to arbitration, even if the party seeking arbitration waived arbitration on other claims, if the counterclaim raises issues separate and distinc…
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Join FLexlaw to unlock all legal intelligence“Appellant waived its right to arbitrate because of its active participation in litigation.”
Establishes the primary holding regarding waiver of arbitration rights through litigation participation
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Join FLexlaw to unlock all legal intelligenceThe parties entered into a contract under which appellee would solicit orders for medical items from health care entities and appellant would supply t…
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GROSS, Judge.
This is an appeal from an order denying a motion to stay a counterclaim and compel arbitration. We affirm.
The parties entered into a contract under which appellee would solicit orders for medi cal items from health care entities. Appellant was to supply the products to fill the orders. The contract provided that either party “may submit any dispute arising from [the] Agreement to arbitration by sending notice to the other of its election to do so.”
. In February, 1996, appellant filed suit against appellee for breach of contract, foreclosure of a security agreement, and account stated. A short time later, appellant obtained a prejudgment writ of garnishment, which resulted in funds being placed in an escrow account under the names of the parties’ attorneys.
Appellant served a request for admissions in March, 1996, and filed a second amended complaint, adding counts for breach of an oral agreement and for recovery of garnished funds, and splitting the original breach of contract claim into three counts. In July, 1996, appellant served a request for admissions, a request for production, and two sets of interrogatories.
In December, 1996, the trial court granted appellee’s motion to consolidate this case with another one filed by a different plaintiff against appellee, involving claims similar to the ones made in this case.
In January, 1997, after its motion to dismiss was denied, appellee filed its answer, affirmative defenses, counterclaim, and third party complaint. Both an affirmative defense and the counterclaim contended that the contract had been fraudulently induced. A second count of the counterclaim claimed breach of contract for appellant’s failure to provide a specified annual sales volume.
On February 14, 1997, appellant filed a motion to stay and to compel arbitration. After a hearing, the trial court denied the motion.
Appellant waived its right to arbitrate because of its active participation in litigation. See Breckenridge v. Farber, 640 So. 2d 208, 212 (Fla. 4th DCA 1994). Appellant argues that it did not participate in the litigation in relation to the counterclaim, so that claim should be subject to arbitration. However, the counterclaim does not involve issues separate and distinct from those raised in appellant’s amended complaint; appellant sues for breach of contract, while appellee says that that contract was fraudulently induced and, if-enforceable, breached by appellant. The matters raised in the counterclaim are intertwined with issues raised in the amended complaint, since to decide each claim a fact finder would necessarily have to resolve fact issues common to both.
This close relationship between the claims of the parties distinguishes this case from those cited by appellant, where claims subject to arbitration were “separate and distinct” from claims for which arbitration had arguably been waived. See Design Benefit Plans, Inc. v. Enright, 940 F.Supp. 200 (N.D.Ill.1996); Gingiss Int’l, Inc. v. Bormet, 58 F. 3d 328 (7th Cir.1995). Similarly, the counterclaim did not significantly alter the' scope and nature of the litigation, such that it revived a previously waived right to demand arbitration. Cf. Gilmore v. Shearson/American Express Inc., 811 F. 2d 108 (2d Cir.1987); Cabinetree of Wisconsin, Inc. v. Kraftmaid Cabinetry, Inc., 50 F. 3d 388 (7th Cir.1995). Finally, a waiver of arbitration may be demonstrated absent a showing of prejudice to the party opposing arbitration. See Breckenridge, 640 So. 2d at 211.
AFFIRMED.
KLEIN, J., and OWEN, WILLIAM C., Jr., Senior Judge, concur.
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Raymond James Fin. Servs., Inc. v. Saldukas, 896 So. 2d 707 (Fla. 2005)…a waiver of a right to arbitrate sufficient to deny arbitration. The Second District’s decision is consistent with decisions of the Fourth District Court of Appeal in Owens & Minor Medical, Inc. v. Innovative Marketing & Distribution Services, Inc., 711 So. 2d 176 (Fla. 4th DCA 1998), and the Fifth District Court of Appeal in Morrell v. Wayne Frier Manufactured Home Center, 834 So. 2d 395 (Fla. 5th DCA 2003). ANALYSIS We granted jurisdiction in this case to resolve the conflict among the district courts in…
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Fla. Ins. Guar. Ass'n v. Branco, 148 So. 3d 488 (Fla. 5th DCA 2014)…aged in “aggressive” litigation for nine months with pleadings, interrogatories, requests for productions, sought hearings, and contested other party’s motions and pleadings); Owens & Minor Med., Inc. v. Innovative Mktg. & Distribution Servs., Inc., 711 So. 2d 176, 176 (Fla. 4th DCA 1998) (finding waiver when party litigated for thirteen months, secured prejudgment writ of garnishment, made multiple requests for admissions, filed pleadings and motions, and contested other party’s pleadings and motions); Gray…
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Marine Env't P'rs, Inc. v. Johnson, 863 So. 2d 423 (Fla. 4th DCA 2003)…. 1st DCA 2003); Shoma Dev. Corp. v. Rodriguez, 730 So. 2d 838 (Fla. 3d DCA 1999). This court, the second, and fifth districts hold that no prejudice need be shown. See [*428] Owens & Minor Med., Inc. v. Innovative Mktg. & Distribution Servs., Inc., 711 So. 2d 176, 177 (Fla. 4th DCA 1998); Raymond James, 851 So. 2d at 857-58; Morrell, 834 So. 2d at 395. The appellee has not asked this court to recede from its position. In any event, we would adhere to the view that no prejudice is required, as we agree with t…
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Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Breckenridge v. Farber, 640 So. 2d 208 (Fla. 4th DCA 1994)
- Gilmore v. Shearson/American Express Inc., 811 F.2d 108 (2d Cir. 1987)