By: David M. Garten, Esq.

ARTICLE: Don’t Waive The Arbitration Clause In Your Will Or Trust

A provision in a will or trust requiring the arbitration of disputes, other than disputes of the validity of all or a part of a will or trust, between or among the beneficiaries and a fiduciary under the will or trust, or any combination of such persons or entities, is enforceable. Unless otherwise specified in the will or trust, a will or trust provision requiring arbitration shall be presumed to require binding arbitration under Ch. 682, F.S. See, §731.401, F.S.

In deciding a motion to compel arbitration, a trial court is restricted to three issues: (1) whether a valid written agreement to arbitrate exists; (2) whether an arbitrable issue exists; and (3) whether the right to arbitration was waived. See, §682.03, F.S.; Gren v. Gren, 2014 Fla. App. LEXIS 175 (Fla. 4th DCA 1/8/14) citing, Seifert v. U.S. Home Corp., 750 So. 2d 633, 636 (Fla. 1999) and §682.03, F.S.

Although §682.032(1), F.S., states that a person initiates an arbitration proceeding by giving notice in a record to the other parties to the agreement to arbitrate, notice alone may not be sufficient, and you may inadvertently waive your client’s right to arbitrate the will/trust dispute if you don’t immediately obtain a court order compelling arbitration.

A waiver occurs when a party actively participates in a lawsuit or otherwise takes action inconsistent with the right to arbitrate. For example, a waiver may occur when:

  • a plaintiff initiates a lawsuit without simultaneously requesting an order compelling arbitration. See,Pearson v. Peoples National Bank, 116 So. 3d 1283 (Fla. 1st DCA 2013); Waterhouse Constr. Group, Inc. v. 5891 SW 64th St., LLC, 949 So. 2d 1095 (Fla. 3rd DCA 2007).
  • a defendant answers the complaint without simultaneously requesting an order compelling arbitration. See, Marine Envtl. Partners, Inc. v. Johnson, 863 So. 2d 423, 427 (Fla. 4th DCA 2003); Pearson v. Peoples National Bank, 116 So. 3d 1283 (Fla. 1st DCA 2013).
  • a party propounds discovery prior to a ruling on his motion to compel arbitration. See, Glenn B. Wright Construction v. Cohara, 87 So. 3d 1276 (Fla. 4th DCA 2012); Green Tree Servicing, LLC v. Mcleod, 15 So. 3d 682 (Fla. 2nd DCA 2009).

There is no requirement for proof of prejudice in order for there to be an effective waiver of the right to arbitrate. See,Raymond James v. Saldukas, 896 So. 2d 707 (Fla. 2005). Once a party has waived the right to arbitration by active participation in a lawsuit, the party may not reclaim the arbitration right without the consent of the opposing parties. See, Glenn B. Wright Construction And Development, Inc. v. Cohara, 87 So. 3d 1276 (Fla. 4th DCA 2012).