_ The Second District Court of Appeal recently certified to the Florida Supreme Court the following question to be of great public importance:

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?

Raymond James Fin. Services, Inc. v. Phillips, 36 Fla. L. Weekly D2479 (Fla. 2d DCA Nov. 16, 2011).  In answering this question in the negative as a matter of first impression, the second district held that Florida's statutes of limitations do not apply to arbitrations where the arbitration agreement does not expressly provide for their application. 

In Phillips, the client agreements (“Agreements”) between the claimant Account Holders and Raymond James required any disputes to be submitted to the National Association of Securities Dealers, Inc. (NASD) for arbitration.  The NASD Code of Arbitration Procedure (Code) includes a 6-year time limit on submissions for arbitration.  The Code states that this rule “shall not extend applicable statutes of limitations; nor shall the six-year time limit . . . apply to any claim that is directed to arbitration by the court.”  The Agreements provided:

Nothing in this agreement shall be deemed to limit or waive the application of any relevant state or federal statute of limitation, repose or other time bar.  Any claim made by either party to this agreement which is time barred for any reason shall not be eligible for arbitration. The determination of whether any such claim was timely filed shall be by a court having jurisdiction, upon application by either party.

After the Account Holders filed arbitration claims with NASD, Raymond James filed a motion to dismiss based upon the limitations periods in Chapter 95, Fla. Stat.  In response, the Account Holders filed a declaratory judgment action in circuit court, seeking a declaration that Florida’s statutes of limitations do not apply to arbitration proceedings.  The circuit court entered judgment in favor of the Account Holders, and Raymond James appealed.

On appeal, the second district first found that the Agreements did not expressly state that Florida's statutes of limitations would apply to arbitration claims.  The court found that the language stating that the Agreements would not “limit or waive the application of any relevant state or federal statute of limitation” did not affirmatively incorporate Florida's statutes of limitations into the Agreements.

The court then analyzed whether Florida's statutes of limitations are relevant to arbitration claims.  The court noted that section 95.011 provides: “A civil action or proceeding . . . shall be barred unless begun within the time prescribed in this chapter. . . .”  The court found such phrase to mean a court proceeding and not arbitration, which is an “alternative to the court system.”  Absent a more specific reference to arbitration in section 95.011, and without a clear indication of legislative intent otherwise or case law interpreting the issue, the appellate court found it “too much of a stretch” to extend the statutes of limitations to arbitration proceedings.  For the full case, click here.

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