The petitioner, James E. Knight, plaintiff below, seeks to review by certiorari an order of the trial court granting the motion of respondent, defendant below, to compel arbitration. In essence, the question presented is whether the trial court departed from the essential requirements of law by compelling the parties to arbitrate in accordance with a provision in a written agreement between the parties.
The controversy giving rise to the order under review commenced when petitioner filed a complaint for damages against the respondents. Petitioner alleged that he was a resident of the State of Florida and a customer of the respondent, a foreign corporation in the stock brokerage business in the State of Florida. Petitioner contends that an agent for the respondent made certain unauthorized purchases and sales of stock on behalf of the petitioner resulting in an alleged loss to petitioner in the amount of some $85,000.00. In response to the complaint respondent filed a notion to compel arbitration asserting that in accordance with a "customer's agreement", which was executed by and between the parties, "all controversies arising out of or relating to said agreement" were required to be arbitrated. The arbitration provision in question provides:
It is the basic contention of petitioner that the agreement to arbitrate is not binding since it is an attempt to oust the court's jurisdiction over security transactions, citing in support Shearson, Hammill & Co. v. Vouis, Fla.App. 1971, 247 So.2d 733, cert. den. 253 So.2d 444 (Fla. 1971). The respondent takes the position that the agreement to arbitrate being valid under New York law is enforceable and not in conflict with the decision in Shearson, supra.
The theories advanced by the respective parties in support of their contentions are not in our view relevant to the disposition of the issue before this court. In the first place the decision in Shearson, supra, is distinguishable and, secondly, the fact that the New York courts have upheld agreements to arbitrate while informative is nonetheless immaterial as hereinafter discussed.
At the outset it is well to observe that prior to the adoption of the Florida Arbitration Code, agreements to arbitrate were generally held to be unenforceable. In Frank J. Rooney, Inc. v. Charles W. Ackerman of Fla., Fla.App. 1969, 219 So.2d 110, 113, it is stated:
See also Pacific Mills v. Hillman Garment, Fla. 1956, 87 So.2d 599; Glens Falls Ins. Co. v. Gulf Breeze Cottages, Fla. 1949, 38 So.2d 828; Vol. 6 U. of Fla.L.Rev. pp. 157-193.
In Shearson, supra, the Third District concluded that the Circuit Court did not depart from the essential requirements of law by refusing to stay court proceedings and refusing to compel arbitration under the parties' contract. In so holding the court concluded:
A review of petitioner's complaint fails to allege any allegation of fraud arising from a contractual relationship under the Florida Securities Law. The complaint merely seeks damages for "these and other unauthorized stocks purchased in plaintiff's name". Reliance on Shearson is therefore misplaced. Cf. Mills v. Gottfried, Fla. App. 1973, 272 So.2d 837.
It is recognized that agreements to arbitrate disputes are generally looked upon with approval by the courts and every reasonable presumption will be indulged to uphold arbitration proceedings which have resulted in an award. However, the jurisdiction of the courts cannot be invoked to specifically enforce or compel arbitration unless an agreement to arbitrate complies with the Florida Arbitration Code. This conclusion is reinforced by the judicial decisions heretofore cited and the language contained in Sections 682.02 and 682.18(1), set forth as follows:
As was heretofore noted, the customer's agreement contained a specific stipulation that the laws of the State of New York shall govern the enforcement of the agreement. Such a proviso, we feel, falls within the emphasized language appearing in Section 682.02, supra, rendering arbitration provisions unenforceable in Florida. Where it is stipulated that an agreement to arbitrate and its enforcement are governed by the laws of another state, such agreement does not comply with Chapter 682 and is not specifically enforceable in this state.
Accordingly, the provision for arbitration, as set forth in the customer's agreement, is unenforceable; certiorari is hereby granted and the order compelling arbitration and staying further proceedings is quashed.
REED, C.J., and WALDEN, J., concur.