Opinion
No. 1D21-0882
02-16-2022
RUNNING CARS, LLC, Appellant, v. Shaun Christopher MILLER, Appellee.
Sam Y. Badawi of Badawi Law, Tampa, for Appellant. William Folsom, Jacksonville, for Appellee.
Sam Y. Badawi of Badawi Law, Tampa, for Appellant.
William Folsom, Jacksonville, for Appellee.
Long, J.
Running Cars, LLC, appeals an order denying its motion to compel arbitration. We reverse and remand for further proceedings.
Miller bought a used vehicle from Running Cars, and, as part of the sale, executed a bill of sale and arbitration agreement. Miller later had issues with the vehicle. Miller filed a complaint against Running Cars alleging various breaches of warranty. After Running Cars failed to respond to Miller's complaint, the clerk entered a default judgment against it. A few days later, the owner of Running Cars filed a pro se letter with the court expressing that he did not understand the proceedings. The letter did not address Miller's legal claims or set forth any cognizable legal defense or argument. On Miller's motion, the trial court struck the pro se letter from the record.
Running Cars then hired an attorney to properly represent it as an entity. Running Cars moved to set aside the default, and the motion was granted. Five days after the order vacating default was entered, Running Cars moved to compel arbitration. The trial court denied it without explanation. The basis of the denial is unclear from the record.
Running Cars now appeals the denial. It argues that the trial court erred because the arbitration agreement is valid and binding, Miller's claims fall within the agreement, and that Running Cars did not waive its right to arbitrate. Miller argues, among other things, that Running Cars waived its right to arbitration when its owner submitted the pro se letter to the court and then by moving to set aside the default judgment.
We reject Miller's other legal arguments defending the trial court order without further discussion.
A trial court's ruling on a motion to compel arbitration is reviewed de novo. Murphy v. Courtesy Ford, L.L.C. , 944 So. 2d 1131, 1134 (Fla. 3d DCA 2006). Matters of contract interpretation are questions of law subject to de novo review. Jackson v. Shakespeare Found., Inc. , 108 So. 3d 587, 593 (Fla. 2013). Waiver, however, is a question of fact reviewed for competent substantial evidence. Marine Env't Partners, Inc. v. Johnson , 863 So. 2d 423, 426 (Fla. 4th DCA 2003).
Running Cars did not waive its right to arbitrate. Waiver is "the voluntary and intentional relinquishment of a known right or conduct which implies the voluntary and intentional relinquishment of a known right." Raymond James Fin. Servs., Inc. v. Saldukas , 896 So. 2d 707, 711 (Fla. 2005). Courts resolve all doubts regarding waiver in favor of arbitration rather than against it. Black Knight Servicing Techs., LLC v. PennyMac Loan Servs., LLC , 310 So. 3d 1116, 1118 (Fla. 1st DCA 2021). "The party arguing waiver of arbitration bears a heavy burden of proof." Id . (quoting Eden Owners Ass'n, Inc. v. Eden III, Inc. , 840 So. 2d 419, 420 (Fla. 1st DCA 2003) ). "A party claiming waiver of arbitration must show: 1) knowledge of an existing right to arbitrate and 2) active participation in litigation or other acts inconsistent with the right." Marine Env't Partners, Inc. , 863 So. 2d at 426. "[I]n determining whether a party waived its right to arbitrate, the essential question is whether, under the totality of the circumstances, the defaulting party has acted inconsistently with the arbitration right." Ibis Lakes Homeowners Ass'n, Inc. v. Ibis Isle Homeowners Ass'n, Inc. , 102 So. 3d 722, 731 (Fla. 4th DCA 2012) (internal quotation marks omitted).
Miller correctly argued below that the pro se letter was a legal nullity. In Florida, a corporation cannot represent itself and "a pleading signed in the corporate name by one of its agents or officials is a nullity, and must be disregarded." Magnolias Nursing & Convalescent Ctr. v. Dep't of Health & Rehab. Servs., Off. of Licensure & Certification , 428 So. 2d 256, 257 (Fla. 1st DCA 1982). Miller cannot now argue a contrary position on appeal. Because the pro se filing is a nullity, the only actions taken by Running Cars were to file a notice of appearance, move for the default to be vacated, and move to compel arbitration.
Moving to set aside the default judgment was necessary to pursue the right to arbitrate. The default judgment impeded the arbitration right, and when that impediment was removed, the first action taken was to compel arbitration. This action, along with a notice of appearance to facilitate it, cannot reasonably be said to be inconsistent with Running Cars' arbitration right. De Groot v. Sheffield , 95 So. 2d 912, 916 (Fla. 1957) (defining competent substantial evidence as evidence that "will establish a substantial basis of fact from which the fact at issue can be reasonably inferred."). Considering both that all doubts regarding waiver should be resolved in favor of arbitration and that Miller carries the burden of proof, Running Cars' actions did not constitute the voluntary and intentional relinquishment of its right to arbitration. We therefore find that the trial court erred by denying Running Cars’ motion to compel arbitration.
REVERSED and REMANDED.
ROWE, C.J., and RAY, J., concur.