TERMINIX INTERNATIONAL COMPANY v. PALMER RANCH LTD. P'SHIP

SUSAN BUCKLEW, District Judge

This cause comes before the Court for consideration of Plaintiff's Petition to Compel Arbitration and to Stay State Court Proceedings Pursuant to the Federal Arbitration Act (No. 1). The Court considered the Defendant's Amended Answer/Response (Doc. No. 15, Exhibit A) in response to Plaintiff's Petition.

Defendant initiated a civil lawsuit against Plaintiff in the Circuit Court of the Thirteenth Judicial Circuit in and for Hillsborough County on March 4, 2004. In response, Plaintiff filed a Petition to Compel Arbitration pursuant to the Federal Arbitration Act ("FAA"), 9 U.S.C. §§ 2 and 4 with this Court.

Section 4 of the FAA specifically contemplates that parties aggrieved by another party's failure to arbitrate under a written agreement, may file an original petition in a United States District Court to compel arbitration "upon being satisfied that the making of the agreement for arbitration or the failure to comply therewith is not in issue, the court shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement." Id.

At issue in this case is the evolving case law in this circuit regarding arbitration agreements that contain remedial restrictions. Specifically, whether or not an arbitration agreement that contains a remedial restriction is enforceable. The current state of the law in this circuit is that an arbitration agreement that contains remedial restrictions and a severability clause is enforceable, but an arbitration agreement that contains remedial restrictions and no severability clause is unenforceable. See Paladino v. Avenet Computer Technologies, Inc., 134 F.3d 1054 (11th Cir. 1998) and Anders v. Hometown Mortgage Services, Inc., 346 F.3d 1024 (11th Cir. 2003). The Court notes that the Supreme Court recently declined to decide if the question of whether remedial limitations renders an agreement unenforceable is a question for the court to decide or for the arbitrator to decide. Pacificare Health Systems, Inc. v. Book, 123 S. Ct. 1531 (2003). Although this Court believes that this circuit is headed towards alignment with the circuits cited by it in Musnick v. King Motor Co., 325 F.3d 1255 (11th Cir. 2003), this Court is bound by the current law of this Circuit.

The arbitration agreements involved in this case do not contain severability clauses. Accordingly, the question becomes whether or not the remedial restrictions would deprive the Defendant of statutory remedies, and it is clear that the language of the arbitration agreements deprive Defendant of statutory remedies being sought in its complaint. Therefore, because the arbitration agreements involved in this case contain remedial restrictions and no severability clauses, they are rendered unenforceable. See Paladino, 134 F.3d 1054 and Anders, 346 F.3d 1024.

Accordingly, it is ORDERED AND ADJUDGED that:

(1) Plaintiff's Petition to Compel Arbitration and to Stay State Court Proceedings Pursuant to the Federal Arbitration Act (No. 1) is DENIED.

(2) Defendant's Motion to Dismiss, or in the Alternative, Stay Proceedings (Doc. No. 5) is DENIED AS MOOT.

(3) Defendant's Motion to Strike Plaintiff's Request for Entry of Final Judgment (Doc. No. 9) is DENIED.

(4) Defendant's Motion for Leave to Serve Amended Answer/Response (Doc. No. 15) is GRANTED.

(5) Defendant's Motion for Summary Judgment on Second Affirmative Defense (Doc. No. 18) is DENIED AS MOOT.

(6) The Clerk is directed to CLOSE this case.