IN THE DISTRICT COURT OF APPEALOF FLORIDA THIRD DISTRICT

CASE NO.: 3D14-1805L.T. No.: 13-031634 CA 01

EVERLAST DRYWALL CONSTRUCTION, INC. andCAESAR BACARELLA

Appellants,

V.

VICTORIA MANAGEMENT, LLC,SAFECO INSURANCE COMPANY OF AMERICA,

DOOLEYMACK CONSTRUCTORS OF SOUTH FLORIDA, LLCand FLOORING WORLD OF FLORIDA, LLC

Appellees.

INITIAL BRIEF OF APPELLANT, EVERLAST DRYWALLCONSTRUCTION, INC.

On Appeal from a non-final Order of the Eleventh Judicial Circuit in and forMiami-Dade County, Florida

Respectfully submitted.

PAXTON & SMITH, P.A.MARK C. CHARTERMICHAEL B. DAVISBarristers Building, Suite 5001615 Forum PlaceWest Palm Beach, FL 33401Phone: (561) 684-2121Fax: (561) 684-6855Email: mcc a axsmith.comCounsel for Appellants

E-Copy Received Aug 15, 2014 11:25 AM

TABLE OF CONTENTS

TABLE OF CONTENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i

TABLE OF CITATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i i i

STATEMENT OF THE CASE AND OF THE FACTS .. ... .. ... .. .. ... .. ... .. I

SUMMARY OF ARGUMENT .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10

A. THE TRIAL JUDGE ERRED AS A MATTER OF LAWIN DENYING THE DEMAND OF EVERLAST FORARBITRATION OF COUNTS III (COMMON LAWINDEMNITY) AND COUNT IV (EQUITABLE SUBRO-GATION) OF SAFECO'S AMENDED THIRD PARTYCOMPLAINT SINCE BOTH OF THESE CLAIMSAROSE OUT OF THE ALLEGED BREACH BYEVERLAST OF ITS SUBCONTRACT WITHDOOLEYMACK, SINCE THE SUBCONTRACTPROVIDED FOR ARBITRATION OF ALL CLAIMSARISING OUT OF THE SUBCONTRACT OR ITSBREACH AND SINCE SAFECO'S CLAIMDERIVES FROM OBLIGATIONS OWED TODOOLEYMACK UNDER THE SUBCONTRACT .. ... .. ... .. ... ..10

B. THE TRIAL JUDGE ABUSED HIS DISCRETIONIN DENYING THAT PORTION OF THE MOTIONOF EVERLAST WHICH SOUGHT TO STAY THEARBITRATION PROCEEDINGS ON THETHIRD PARTY CLAIMS UNTIL RESOLUTION OFTHE MAIN CLAIM SINCE RESOLUTION OF THEMAIN CLAIM MAY OBVIATE AND RENDERMOOT THE THIRD PARTY CLAIMS AND SINCEA CONTEMPORANEOUS PROCEEDING INDIFFERENT FORA RISKS CONFLICTINGDETERMINATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

CERTIFICATE OF SERVICE .. . .. . . . . . . . .. . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . . . . .. . . . . .21

CERTIFICATE OF COMPLIANCE .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23

TABLE OF CITATIONS

CASES PAGES

BKD Twenty-One Management Company, Inc. v. Delsordo,127 So.3d 527 (Fla. 4" ' DCA 2012) . . .. . .. . .. . .. .. . .. . .. . .. . .. . .. .. . .. . .. . .. . .. . 10

Canal Ins. Co. v. Reed, 666 So.2d 888 (Fla. 1996) ........................... 18

Jackson v. The Shakespeare Foundation, Inc.,108 So.2d 587 (Fla. 2013) . . . . .. . . . .. . . . .. . . . .. . . . .. . . . .. . . . .. . . . .. . . . .. . . . .. . . . .. .11,11 ,12

Ramon Pacheco & Assoc., Inc. v. Betancourt Castellon Assoc., Inc.,820 So.2d 948 (Fla. 3d DCA 2002) . .. . .. . .. . .. . .. . .. . .. .. . .. . .. . .. . .. . .. . .. . .. . .19

Roe v. Amica Mitt. Ins. Co., 533 So.2d 279 (Fla. 1988) .... ....... ....... .....10

Ronbeck Construction Co., Inc. v. Savanna Club Corp.,592 So.2d 344 (Fla. 4th DCA 1992) .. .. .. .. .. .. .. .. .. .. ... .. .. .. .. .. .. .. .. .. .. .. .12,12,14

Seifert v. U.S. Home Corp., 750 So.2d 633 (Fla. 1999) .. ...................... 11,14

RULES

Fla. R. App. P. 9.130(a)(3)(iv) .. . . .. . . .. . . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . . .. . .1

Fla. R. App. P. 9.210(a)(2) . . . . .. . . . . . . . . . .. . . . . . . . . . .. . . . . . . . . . .. . . . . . . . . . .. . . . . . . .23

STATUTES

§682.02, Florida Statutes (2009) ................................................... 10

III

I.

STATEMENT OF THE CASE AND OF THE FACTS

A. Course of Proceedings

This is a consolidated appeal from a non-final order which determined the

entitlement to arbitration. Review is appropriate under Fla. R. App. P.

9.1.30(a)(3)(iv).

The underlying claim was brought in a civil action filed in the Circuit Court

of the Eleventh Judicial Circuit by Victoria Management, L.L.C. (hereinafter,

Victoria) against Safeco Insurance Company of America (hereinafter, Safeco),

Dooleymack Constructors of South Florida, L.L.C (hereinafter, Dooleymack), and

Flooring World of Florida, L.L.C. (hereinafter Flooring World). Victoria's

Amended Complaint, which set forth all of its claims, was filed on May 20, 2014

(A-6). Safeco asserted third party claims against Everlast Drywall Construction,

Inc. (hereinafter, Everlast) and Caesar Bacarella (hereinafter, Bacarella); its

Amended Third Party Complaint, setting forth these claims, was filed on May 22,

2014 (A-18).

Everlast responded by filing its Motion to Stay Action and to Compel

Arbitration on May 30, 2014 (A-65). Bacarella filed his Motion to Stay Action

and to Compel Arbitration on June 17, 2014 (A-69). Safeco filed responses in

opposition on June 20, 2014 (A-73, A-89). A hearing on the Motion to Stay

1

Action and Compel Arbitration was held before the Honorable Jerald Bagley on

July 1, 2014 (A-101). No evidence was adduced, and the issues were determined

upon the pleadings.

On July 3, 2014, Judge Bagley entered his Order Granting in Part, and

Denying in Part Third Party Defendant, Everlast Drywall Construction, Inc. 's

Mot ion to Stay Act ion and Compel Arbitra tion, and Denying Third Party

Defenda nt Caesa r Ba carel la 's Mot ion to Stay Act ion and Compel Arbit ra tion in

which he granted the motion for Ever last to compel arb itra tion on two of the four

cla ims asserted against it in the Amended Third Party Complaint; denied the

motion to compel a rbitra tion on two of the cla ims aga inst Everla st and the single

cla im against Bacarella, and denied the mot ions to stay the proceeding on the

arbitration until the determination of the main cla im (A-1).

On July 23, 2014, Bacarella filed notice of non-final appeal from the Order

of Judge Bagley (A-123); on July 24, 2014 Everlast filed its notice of non-final

appeal from the same order (A-125) and Safeco filed its notice of cross-appeal

from that order on July 25, 2014 (A-127).

Upon motion of Bacarella, the appeals were consolidated by this Court on

August 12, 2014.

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B. Facts

Victoria, the owner of a parcel of real estate in Coral Gables, Florida,

entered into a contract with Dooleymack on November 13, 2008 for the

construction of a facility designated as "New Riviera Nursing Home and

Rehabilitation Center (A-6). Pursuant to the contract terms, Dooleymack secured a

payment and performance bond from Safeco to cover its work on the project;

Victoria was named as an obligee and beneficiary under the bond, and

Dooleymack was the named Principal (A-7). Dooleymack subcontracted with

various subcontractors to perform work on the project, including Flooring World,

whose work encompassed various aspects of the flooring, including waterproof

shower pans in the bathrooms, and Everlast, whose work encompassed installation

of drywall and other components of the wall system (A-13, A-57).

Victoria terminated Dooleymack as prime contractor on the project on

November 22, 2011 , for, among other things, alleged defective work (A-7).

Victoria notified Safeco, as Surety, of the termination of the Principal and

demanded that Safeco complete the work as required in the bond (A-8). Safeco

proceeded to undertake the necessary work correcting the alleged defects and

completing the project; it apparently utilized Dooleymack to oversee this work (A-

8).

3

Prior to the completion of the work, a dispute arose between Victoria and

Safeco regarding the quality of the work and Safeco's subrogation rights; Safeco

filed a declaratory action against Victoria in the United States District Court,

Southern District of Florida, and Victoria filed a counterclaim against Safeco and

Dooleymack (A-8). The parties resolved their differences, entered into a

settlement agreement, and dismissed the action on or about October 4, 2012; as

part of the settlement agreement, Victoria reserved certain claims for correction of

defects and warranty work (A-8). Victoria subsequently accused Safeco,

Dooleymack and Flooring World with failing to correct certain alleged defects and

failed to perform warranty work; among the defects alleged were leaking

ductwork, leaking windows, defective Forbo Floor System, and leaking shower

pans in a number of the bathrooms (A-9).

Victoria filed suit in the Eleventh Circuit alleging breach of contract by

Dooleymack, breach of its duties under the performance bond by Safeco, and

breach of contract and breach of warranties by Flooring World (A-5). Safeco filed

a third party action against Everlast and against Caesar Bacarella, President of

Everlast. In its Amended Third Party Complaint, Safeco alleged that, as part of its

undertaking as Surety for Dooleymack, the latter executed a General Agreement of

Indemnity (GAI) in favor of Safeco under which Dooleymack assigned to Safeco:

Any actions, causes of action, claims or demandswhatsoever which Contractor may have or acquire

4

against any party to the Contract, or arising out of or inconnection with any Contract including but not limited tothose against obliges (sic) and design profressionals andany surety or sureties of any oblige (sic), and Surety shallhave the full and exclusive rights, in its name or in thename of the Contractor, but not the obligation, toprosecute, compromise, release or otherwise resolve suchactions, causes of action, claims or demands... (A-20)

Safeco further alleged that, among the claimed defects asserted by Victoria was

that the shower pans in a number of bathrooms were not watertight as a result of

the fabric having been sliced or punctured (A-21). Safeco alleged that Everlast

was responsible for having compromised the pans (A-21,22). Safeco then

proceeded to sue Everlast for alleged breach of its subcontract with Dooleymack

by performing defective workmanship; for contractual indemnity under the terms

of its subcontract which provided that Everlast would indemnify Dooleymack for

liability as a result of any acts or omissions of Everlast; for common law

indemnity, and for equitable subrogation (A-23-28). Each of these claims sought

recovery from Everlast for liability due to the leaking shower pans. In addition,

Safeco asserted a claim against Bacarella for liability under a personal guarantee

which was part of the subcontract between Everlast and Dooleymack (A-29).

Both Everlast and Bacarella filed motions to stay the civil action and to

compel arbitration (A-65, A-69). The predicate for the demand for arbitration was

the following provisions in the subcontract between Dooleymack and Everlast:

5

Article 18 Mediation/Arbitration

(b) Any dispute or claim or other matter in questionarising out of this Subcontract, or breach thereof,shall be decided by Arbitraation, to the extend (sic)said claims or disputes have not been resolved theArchitect or Engineer in accordance with otherprovision of this Contract. Such arbitration shallbe conducted in accordance with the ConstructionIndustry Arbitration Rules of the AmericanArbitration Association with the right of 3arbitrators unless the parties mutually agreeotherwise. Any Arbitration arising out of thisSubcontract shall not include, by consolidation,any other person or entity not a party to thisAgreement, unless such person or entity issubstantially and necessarily involved in a questionof law or fact. Arbitration shall be commenced bythe initiating party filing a written Claim andDemand for Arbitration. (A-47)

Following a hearing before The Honorable Jerald Bagley on July 1, 2014,

the said judge entered the order presently on appeal which granted the

demand for arbitration by Everlast upon the claims for breach of contract

and contractual indemnity, denied the demand of Everlast for arbitration

upon the claims for common law indemnity and equitable subrogation,

denied the demand for arbitration by Bacarella and denied the request by

Everlast to stay the arbitration proceeding until the determination of the

claims in the main action (A-1). Timely notices of appeal of this non-final

6

order were filed by Bacarella on July 23, 2014 (A123), and Everlast on July

24, 2014 (A-125); Safeco filed its cross-appeal on July 25, 2014 (A-127).

7

II.

SUMMARY OF THE ARGUMENT

Argument A

The Trial Judge erred as a matter of law in denying the demand of Everlast

for Arbitration upon the claims asserted by Safeco in the third and fourth counts of

its Amended Third Party Complaint which sought recovery under remedial

theories of common law indemnity and equitable subrogation. The claims for both

common law indemnity and equitable subrogation were predicated upon the

alleged breach by Everlast of its duties under the subcontract with Dooleymack

which Safeco alleged that it was entitled to enforce under the terms of an

assignment by Dooleymack. The subcontract between Dooleymack and Everlast

contained an arbitration clause which provided that any claims arising out of the

subcontract or its breach were subject to arbitration. Since the claims for common

law indemnity and equitable subrogation were predicated upon the alleged breach

of the subcontract by Everlast, these claims, as well as the claims for breach of

contract and for contractual indemnity were encompassed within the terms of the

arbitration provision.

Argument B

The Trial Judge abused his discretion in denying that part of Everlast 's

motion which sought to have the arbitration proceeding upon the third party claims

8

stayed pending the determination of the main claim since the latter might obviate

and render moot the former and since contemporaneous proceedings in different

fora raises the risk of conflicting results.

9

III

ARGUMENT

A

THE TRIAL J UDGE ERRED AS A MATTER OF LAW IN DENYING THEDEMAND OF EVERLAST FOR ARBITRATION OF COUNT III (COMMONLAW INDEMNITY) AND COUNT IV (EQUITABLE SUBROGATION) OFSAFECO'S AMENDED THIRD PARTY COMPLAINT SINCE BOTH OFTHESE CLAIMS AROSE OUT OF THE ALLEGED BREACH BY EVERLASTOF ITS SUBCONTRACT WITH DOOLEYMACK, SINCE THESUBCONTRACT PROVIDED FOR ARBITRATION OF ALL CLAIMSARISING OUT OF THE SUBCONTRACT OR ITS BREACH AND SINCESAFECO'S CLAIM DERIVES FROM OBLIGATIONS OWED TODOOLEYMACK UNDER THE SUBCONTRACT

The standard of review of a trial court's conclusions regarding the

construction and validity of an arbitration agreement is that of a de novo review.

BKD Twenty-One Management Company, Inc. v. Delsordo, 127 So.3d 527, 530

(Fla. 4th DCA 2012).

Provisions in contracts for the resolution of disputes between the parties to

the contract are authorized by §682.02, Florida Statutes (2009). Arbitration has

been held to be a favored means of dispute resolution, and the Supreme Court has

admonished that all doubts about the scope of an arbitration agreement are to be

resolved in favor of arbitration, rather than against it. Roe v. Arnica Mut. Ins. Co.,

533 So.2d 279, 281 (Fla. 1988). Since the arbitration provisions are contractual in

10

nature, their construction is a matter of ordinary contract interpretation. Seifert v.

U.S. Home Corp., 750 So.2d 633, 636 (Fla.1999).

In respect to their scope of application, arbitration clauses fall into one of

two general categories: those whose scope of application is narrow and those

whose scope of application is broad. id. In the first category are included those

clauses which provide for arbitration of all claims or controversies "arising out of

the subject contract. These are interpreted as having a scope of application limited

to claims "having some direct relation to the terms and provisions of the contract".

id. The second category includes those which provide for arbitration of disputes

"arising out of or relating to" the subject contract. These are interpreted broadly,

encompassing any disputes between the contracting parties so long as some

significant relation or nexus exists between the dispute and the contract containing

the arbitration clause. Seifert, 750 So.2d at 638. As explained by the Supreme

Court in Jackson v. The Shakespeare Foundation, Inc., 108 So.2d 587, 593 (Fla.

2013):

A `significant relationship' between a claim and anarbitration provision does not necessarily exist merelybecause the parties in the dispute have a contractualrelationship. See id. Rather, a significant relationship isdescribed to exist between an arbitration provision and aclaim if there is a `contractual nexus' between the claimand the contract. See id. at 638. A contractual nexusexists between a claim and a contract if the claimpresents circumstances in which the resolution of thedisputed issue requires either reference to, or

11

construction of, a portion of the contract. See id. Morespecifically, a claim has a nexus to a contract and arisesfrom the terms of the contract if it emanates from aninimitable duty created by the parties' unique contractualrelationship.

In Jackson, the Court found that a clause in a contract for the sale of a parcel of

real estate which provided for arbitration of "all controversies, claims, and other

matters in question arising out of or relating to this transaction or this contract or

its breach...", was broad enough to encompass a claim alleging fraudulent

representations in the advertisement which induced the buyers to purchase the

property. Specifically, the Court held:

We hold that the action here based on fraud is within thescope of the arbitration provision because it has a clearcontractual nexus with, and thus a significant relationshipto, the contract. This relationship exists because: (1) thefraud claim is inextricably intertwined with both thecircumstances that surrounded the transaction fromwhich the contract emanated and the contract itself; and(2) resolution of the fraud claim requires the constructionand consideration of duties arising under the contract.

In the ca se of Ronbeck Construction Co., Inc . v. Savanna Club Corp., 592

So.2d 344 (Fla . 4 th DCA 1992) , the Fou rth D istri ct had occasion to construe an

arbitration clause which was virtually identical to the provision in the present case.

There, the parties had entered into a construction contract containing an arbitra tion

clause that provided that "(a)ll cla ims or disputes arising out of this contract or the

breach thereof shall be decided by arbitra tion.. .". The parties entered into a

12

subsequent oral agreement for some additions as well as change orders and a

subsequent written agreement to resolve certain outstanding issues. The owner

brought a civil action seeking rescission of the original contract and the subsequent

written agreement, alleging misrepresentations and concealment; it also sought

damages for breach of all agreements and damages for fraud, conversion, civil

theft and conspiracy. The Court gave a broad scope to the application of the

arbitration provision, holding:

In this case, the agreement was to arbitrate `all claims ordisputes arising out of this Contract or the breachthereof.' No interpretation is needed for `all claims ordisputes', as plainly the claim for damages under theoriginal contract fits within those words. And weconstrue the term `or the breach thereof to cover even adispute relating to the May 1988 agreement, for it arosefrom the original contract and it surely encompassed analleged `breach thereof. Moreover, all of the owner'sfraud, conversion, conspiracy and civil theft damagesclaims against Ronbeck arose from the original contract,because the basis for these alleged claims lies inobligations accruing or resulting from it. Hence, theseclaims come within the arbitration provision.

And even the owner's claim for rescission of the originalcontract is subject to the arbitration provision, becausethe alleged basis for rescission does not include anyallegation that the arbitration provision itself wasfraudulently induced. Indeed all of the grounds for thefraud claims are predicated on events dealing with

13

performance under the original contract, rather than itsmaking.'

Ronbeck, 592 so.2d at 346, 347.

In the present case, the essential wording which established the scope of

application of the arbitration provision was virtually identical to that in Ronbeck:

(b) Any dispute or claim or other matter in questionarising out of this subcontract, or breach thereof, shall bedecided by arbitration...

(A:47)

The Third Party Plaintiff, Safeco, has asserted four claims in its Amended Third

Party Complaint against Everl.ast.

Count I of this complaint asserted a claim against Everlast for breach of its

contract with Dooleymack. In support of this claim, Count I incorporated the

various general allegations in the Third Party Complaint which alleged that

Everlast breached its subcontract with Dooleymack by improperly performing its

work installing cement board in the bathrooms of the nursing home; that Victoria

had made claim against Dooleymack for defects arising from this workmanship;

that, as surety on the performance and payment bond which it had issued to

Victoria and several other named obligees and on which Dooleymack was the

principal, Safeco had become obligated to correct the alleged improper

i I t is noteworthy that Justice Anstead, who authored the Su preme Cour t decisionin Seifert, was on the panel and concurred in the opinion of J u dge Farmer inRonbeck.

14

workmanship on the project on behalf of Dooleymack, and, under the terms of its

agreement with Dooleymack, it had assigned to it any actions, causes of actions,

claims or demands arising out of, or in connection with, the original construction

contract and any other contract on the project. Count I then sought recovery from

Everlast for the expenses incurred providing remedial work on behalf of

Dooleymack.

Count lI asserted a claim for contractual indemnity against Everlast. It

contained all of the allegations set forth in and incorporated within Count I, and

further alleged that Everlast was obligated under the terms of its subcontract with

Dooleymack to indemnify the latter for any of its acts, omissions and defaults.

Count III asseted a claim based upon a theory of common law

indemnification against Everlast. This count incorporated all general allegations

also incorporated in Count I, except for those contained in Paragraphs 11-13

(which set forth in some specificity the terms of Everlast 's subcontract with

Dooleymack). Significantly, this Count incorporated the general allegations of

Paragraphs 14, 15 and 16 of the Third Party Complaint which alleged that

complaint of defective work by Victoria arose out of the scope of work performed

by Everlast under its subcontract with Dooleymack. Safeco then asserted a right to

common law indemnity, predicated upon a special relationship between Safeco and

15

Everlast, arising out of the fact that Safeco stood in the shoes of Dooleymack under

the surety bond and the GAL

Finally, in Count IV, Safeco asserted a claim based upon a theory of

equitable subrogation. Again, this Count incorporated all of the general allegations

of the Amended Third Party Complaint including those which alleged that the

claims of Victoria arose out of work performed by Everlast under its subcontract

with Dooleymack and that Safeco, as surety of the bond issued to Victoria and

others in which Dooleymack was principal, had undertaken to remedy the

allegedly improper workmanship performed by Everlast under its subcontract.

Counts I and II in this Amended Third Party Complaint assert claims which

clearly arise out of the subcontract between Dooleymakc and Everlast, bearing a

direct relation to the terms and provisions of that subcontract. See Seifert, 750

So.2d at 636. They also assert claims which arise out of the alleged breach of that

contract. Count III, asserts a claim for common law indemnity which, by the very

allegations set forth in and incorporated within the Count, arise from the alleged

breach of the subcontract by Everlast. As noted above, Safeco has alleged that its

obligation to correct the claimed deficiencies in workmanship arose because

Everlast allegedly breached its subcontract with Dooleymack, which breach led to

the claim by Victoria. This claim clearly falls within the scope of the arbitration

clause in the Everland/Dooleymack subcontract which requires arbitration of any

16

dispute or claim arising out of the subcontract or breach thereof Similarly, in

Count IV, which asserts a claim for equitable subrogation, the explicit allegations

incorporated within said Count predicate the claim upon the workmanship of

Everlast which allegedly breached the subcontract with Dooleymack. This also

falls within the scope of the arbitration clause of the Everlast/Dooleymack

subcontract since it arises out of actions allegedly constituting the breach of that

subcontract.

Each of the four counts asserted against Everlast in the Amended Third

Party Complaint seeks the same basic recovery for the same alleged injury - the

expense of remediation work caused by the defective workmanship which

allegedly breached the subcontract. Each Count merely seeks recovery upon a

different remedial theory for the same claimed loss arising from the same

underlying action - an alleged breach of the subcontract by Everlast.

For this reason, the Trial Judge erred in denying Everlast's Motion to Stay

Action and Compel Arbitration as to Counts III and IV of the Amended Third

Party Complaint.

17

B

THE TRIAL JUDGE ABUSED HIS DISCRETION IN DENYING THATPORTION OF THE MOTION OF EVERLAST WHICH SOUGHT TO STAYTHE ARBITRATION PROCEEDINGS ON THE THIRD PARTY CLAIMSUNTIL RESOLUTION OF THE MAIN CLAIM SINCE RESOLUTION OF THEMAIN CLAIM MAY OBVIATE AND RENDER MOOT THE THIRD PARTYCLAIMS AND SINCE A CONTEMPORANEOUS PROCEEDING INDIFFERENT FORA RISKS CONFLICTING DETERMINATIONS

The standard of review of a trial court's denial of a motion to stay is whether

the trial judge abused his discretion. Canal Ins. Co. v. Reed, 666 So.2d 888, 892

(Fla. 1996).

In its order under review, the Trial Judge denied the motion of Everlast to

stay the adjudications of the third party claims of Safeco against it and against

Third Party Defendant, Bacarella (the claims subject to arbitration). In this case

the Plaintiff, Victoria, has alleged in its Amended Complaint that the defective

work encompassed "negative pressure" throughout the building, leaking ductwork,

a window leak, defective breakers, defective installation of the Forbo Flooring

System and the cutting of the shower pans in the bathrooms (Amended Complaint,

Par. 24). Of these items, the only one which may implicate the work performed by

Everlast is the cutting of the shower pans. Responsibility for the damage to the

shower pans in the bathrooms is alleged in the Amended Complaint to be the

18

responsibility of the Defendant, Flooring World (Amended Complaint, Count III).

A determination by the factfinder in the main claim that the damage to the shower

pans was the responsibility of Flooring World would obviate the third party claim

by Safeco against Everlast and Bacarella. If the entire third party claim is subject

to determination by arbitration, there exists the possibility that each forum might

return a conflicting adjudication if the matters proceed contemporaneously. Since

the determination of the main action could potentially obviate the third party claim

- but not vice versa - the latter should be stayed pending the outcome of the main

action. In the case of Ramon Pacheco & Assoc., Inc. v. Betancourt Castellon

Assoc., Inc., 820 So.2d 948, 952 (Fla. 3d DCA 2002), this Court reversed the order

of the trial judge who denied the motion to stay the arbitration proceedings where

the claim which was subject to arbitration was subject to being obviated depending

upon the determination of basis of the third party plaintiff's liability in the main

claim.

In denying the motion to stay the arbitration proceeding pending the

outcome in the main claim, the Trial Judge abused his discretion and his ruling

should be reversed.

19

CONCLUSION

Upon the arguments set forth above, the Appellant, Everlast, submits that the

Trial Judge erred as a matter of law in his determination that the arbitration

agreement did not extend to the claims for common law indemnity and equitable

subrogation. It further submits that he abused his discretion in refusing to stay the

arbitration proceedings upon the third party claims until the determination of the

issues in the main claim. Consequently, Everlast requests that this Court reverse

the order below under review to the extent that it failed to order arbitration on the

claims by Safeco for common law indemnity and equitable subrogation and

remand this cause to the Trial Judge for the entry of an order providing for

arbitration of such claims together with the claims for breach of contract and

contractual indemnity.

The Appellant, Everlast, further requests that this matter be remanded to the

Trial Judge for entry of an order staying the arbitration proceedings until the

determination of the issues in the main claim.

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CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy of the foregoing has been

furnished this 15TH day of August, 2014 by email to:

Alberta Adams Campbell, Esquireaadamscampbell(d(mpoleag l.comMatthew G. Davis, Esquiremdavis(L)mpolegal.comMILLS PASKERT DIVERS100 N. Tampa Street Ste 3700Tampa, FL 33602Counsel for Safeco Insurance Company

Charles B. Hernicz, EsquireCHernicz(a(,Herniczlegal.comHERNICZ LEGAL SERVICES P.L.15854 Bent Creek RoadWellington, Florida 33414Counsel for Caesar Bacarella

Oscar E. Soto, Esq.oscar(a sotolawgroup.comFelena R. Talbott, Esq.felena(&,sotolaw gro up. comThe Soto Law Group, P.A.2400 E. Commercial Blvd. Suite 400Ft. Lauderdale, FL 33308Counsel for Victoria Management, LLC

Jordana L. Goldstein, Esq.FERENCIK LIBANOFF BRANDTBUSTAMANTE & GOLDSTEIN, P.A.150 S. Pine Island Rd., Suite 400Fort Lauderdale, Florida 33324Counsel for Flooring World of Florida, LLCi oldstein a7flblawvers.comScott D. Rembold, EsquireJason G. Blilie, Esquire

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BOGERT & REMBOLD P.L.2121 Ponce de Leon Blvd Ste 500Coral Gables, FL 33134Counsel for Dooley Macksrembold(a),bogertrembol.d.combIiilie(ubogertrembold.comcourtdocs(a?ogertrembold.com.miainto �,bogertrerbold.com

Respectfully submitted,

PAXTON & SMITH, P.A.1615 Forum Place Suite 500The Barrister BuildingWest Palm Beach, FL 33401Telephone (561) 684-2121Facsimile (561) 684-6855mbd.(coaxsmith.commcc(aEIpaxsmith.comCounsel for Everlast DrywallConstruction, Inc

MICHAEL B. DAVIS, ESQUIREFlorida Bar 118140MARK C. CHARTERFlorida Bar 374776

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CERTIFICATE OF COMPLIANCE

I HEREBY CERTIFY that this computer-generated brief is in compliance

with the font requirements of Rule 9.210(a)(2), Fla. R. App. P. as submitted in

Times New Roman 14-point font.

Respectfully submitted,

PAXTON & SMITH, P.A.1615 Forum Place Suite 500The Barrister BuildingWest Palm Beach, FL 33401Telephone (561) 684-2121.Facsimile (561) 684-6855mbd(aipaxsmith.cornmcc(paxsmith.cornCounsel for Everlast DrywallConstruction, Inc.

MICHAEL B. DAVIS, ESQUIREFlorida Bar 118140MARK C. CHARTERFlorida Bar 374776

23