We’ve previously discussed arbitration agreements in a number of contexts, including who should sign them and when courts have enforced them. While whether to include an arbitration clause in your standard account agreement is a business decision (and you will find people with very strong opinions on both sides of this debate), if you decide to include one you better make sure that your boilerplate is up-to-date. Especially in Florida and especially as it relates to statutes of limitation.
A Florida court of appeals just decided in Raymond James Financial Services, Inc. v. Phillips that Florida statutes of limitation do not apply to arbitration claims unless the parties have expressly included a provision stating that they are applicable.
Several Raymond James account holders filed arbitration claims against Raymond James for negligence, breach of fiduciary duty, and state and federal securities violations. These account holders had executed client agreements with Raymond James for investment purposes. Raymond James filed a motion to dismiss asserting that the account holders’ claims were barred by various Florida statutes of limitation. The account holders argued that Florida’s statutes of limitation do not apply to arbitration proceedings.
The client agreements included a standard arbitration provision that specifically stated that the contract will not “limit or waive the application of any relevant state or federal statute of limitations.” The Florida court of appeals determined that this phrase did not affirmatively incorporate Florida’s statutes of limitation into the agreement because arbitrations are not “actions” or “proceedings” for the purposes of Florida’s statutes of limitation. Therefore, in order to have the relevant statutes of limitation apply to arbitrations, the parties must explicitly state that the statutes of limitation apply to the arbitration contemplated by the agreement.
Stay tuned because we haven’t heard the last on this. The Florida appellate court issuing this decision has certified to the Florida Supreme Court the following question: “Does Section 95.011, Florida Statutes, apply to arbitration when the parties have not expressly included a provision in their arbitration agreement stating that it is applicable?”