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ProveMyFloridaCase.com > Trial Perspectives  > Equitable Estoppel SOMETIMES Allows a Non-Signatory the Right to Compel Arbitration

Equitable Estoppel SOMETIMES Allows a Non-Signatory the Right to Compel Arbitration

Where a contract subjects to arbitration claims between certain enumerated parties, that limiting language matters. Under appropriate circumstances, a non-signatory might invoke equitable estoppel to access an arbitration clause, but not to excavate it and fill it with new terms.” Florida Roads Trucking, LLC v. Zion Jacksonville, LLC, 49 Fla.L.Weekly D819a (Fla. 5th DCA 2024).

Arbitration is a creature of contract. In Florida Roads Trucking, a non-signatory to a contract tried to compel arbitration of a dispute arguing that the arbitration provision in the plaintiff’s contract with another party should apply. This argument is based on a theory of equitable estoppel:

Florida and federal courts have recognized that principles of equitable estoppel sometimes allow a non-signatory to compel arbitration against someone who had signed an arbitration agreement.”  Courts have done so in two situations: first, “when the signatory’s claims allege ‘substantially interdependent and concerted misconduct’ by [another] signatory and the non-signatory,” and, second, “when the claims relate directly to the contract and the signatory is relying on the contract to assert its claims against the non-signatory.”

Florida Roads Trucking, supra (internal citations omitted).

In this dispute, the appellate court held that equitable estoppel, and thus, arbitration, did not apply. The arbitration provision was for claims between “of Buyer against Seller or Seller against Buyer or its surety.”  The non-signatory to the contract with the arbitration provision was neither the buyer, the seller, or the seller, “so the claims they seek to arbitrate plainly fall outside the scope of the arbitration provision.”  Florida Roads Trucking, supra.

The appellate court explained that while equitable estoppel has been found to apply to compel arbitration by a non-signatory, “in those cases the non-signatory defendants were officers and agents of a signatory, and they had themselves received rights and taken on obligation under the agreement.” Florida Roads Trucking, supra (quotation omitted). Here, the non-signatory was not an officer or directors of a signatory to the contract “and had not received any rights, or incurred any obligations, under the contract.” Id.  Accordingly, the non-signatory had no basis to compel arbitration and the plaintiff was entitled to litigate claims against the non-signatory.

Please contact David Adelstein at [email protected] or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.


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