Arbitration & Mediation

Shareholder Agreement Disputes Must Be Arbitrated Under Contract

By Christopher B. Hopkins, Esq.

We are a full four business days into the new year and it is the Third DCA which wins the race to issue the first arbitration decision of 2009. Unfortunately, this case is fact intensive but light on law so it may not hold much precedent.

In Noah Breakstone v. Breakstone Homes, Inc. and BHI Developers, LLC., the Third District (Cope, Cortinas and Salter) address shareholder disputes and the question of whether they are to be arbitrated since the "Shareholders' Agreement" has an "any controversy or claim arising out of or relating to this Agreement"-type arbitration provision.

The Panel appropriately turned to Seifert v. U.S. Home Corp. to determine if the parties needed to rely on the Agreement in any substantive way to resolve the dispute. The Court found that contractual rights (remedy for engaging in a competing enterprise), obligations (buy/sell provision), and damages were all at play. Thus, the claims and the Agreement were "significantly related." Arbitration was compelled.

Full post as published by Florida Arbitration Law on January 07, 2009 (boomark / email).