Osprey Health Care Center, LLC, Enrique De La Piedra, and Randy Lee Sloan v. Doris H. Pascazi
CourtDistrict Court of Appeal of Florida
Date FiledOctober 13, 2021
Docket2D19-4787
StatusPublished
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Full Opinion
DISTRICT COURT OF APPEAL OF FLORIDA
SECOND DISTRICT
OSPREY HEALTH CARE CENTER, LLC;
a Florida limited liability company;
ENRIQUE DE LA PIEDRA;
and RANDY LEE SLOAN,
Appellants,
v.
DORIS H. PASCAZI,
by and through SHARON ANN OUTWATER, Attorney-in-Fact,
Appellee.
No. 2D19-4787
October 13, 2021
Appeal pursuant to Fla. R. App. P. 9.130 from the Circuit Court for
Pinellas County; Thomas H. Minkoff, Judge.
Thomas A. Valdez and Vilma Martinez of Quintairos, Prieto, Wood &
Boyer, P.A., Tampa; and Robin N. Khanal and Vanessa A. Braga of
Quintairos, Prieto, Wood & Boyer, P.A., Orlando, for Appellants.
Megan M. Hunter, Megan Gisclar Colter, Lisa M. Tanaka, and
Donna K. Hanes of Wilkes & Associates, P.A., Tampa, for Appellee.
LABRIT, Judge.
Appellants Osprey Health Care Center, LLC, Enrique de la
Piedra, and Randy Lee Sloan (collectively, Osprey) appeal an order
denying their motion to compel arbitration of claims that Appellee
Doris H. Pascazi, by and through Sharon Outwater as attorney-in-
fact, asserted against Osprey.1 We reverse because the trial court
erroneously concluded that the arbitration agreement is
unconscionable.
Background
On March 20, 2015, Mrs. Pascazi was admitted to Osprey
Health Care Center, a licensed assisted living facility. Sharon
Outwater was authorized to act as Mrs. Pascazi's attorney-in-fact
and signed several documents for Mrs. Pascazi's admission to
Osprey Health Care Center, including a document entitled
"Mediation and Arbitration Agreement," which this opinion refers to
as the "arbitration agreement" or the "agreement."
1 Enrique de la Piedra is the owner and managing member of
Osprey Health Care Center, LLC; Randy Lee Sloan was an
administrator at the assisted living facility during Mrs. Pascazi's
residency.
2
Mrs. Pascazi left Osprey Health Care Center in January 2017;
a year later, she sued Osprey and alleged claims for negligence,
breach of fiduciary duty, and violations of section 415.1111, Florida
Statutes (2016). Osprey moved to compel arbitration. Mrs. Pascazi
opposed Osprey's motion, maintaining that the arbitration
agreement was (1) invalid because it lacked specific terms regarding
arbitration rules and procedures; (2) void as against public policy
principally because it contained a provision impermissibly
shortening the applicable statute of limitations; and (3) procedurally
and substantively unconscionable for myriad reasons, including
those underlying Mrs. Pascazi's "missing terms" and voidness
arguments. In the vernacular, Mrs. Pascazi took a "spaghetti bowl"
approach to argue that numerous issues rendered the agreement
invalid, unconscionable, and void.
After holding two hearings on Osprey's motion, the trial court
orally ruled that the agreement was unconscionable and denied
Osprey's motion to compel arbitration in an unelaborated order.
Rather than make any specific findings, the court announced that it
simply would "adopt" Mrs. Pascazi's "argument on all the points
that were argued" as to substantive unconscionability. The court
3
stated that—as part of its substantive unconscionability
determination—it "adopted" Mrs. Pascazi's position that the
shortened statute of limitations provision rendered the agreement
void as against public policy. In response to Osprey's argument
that findings of both procedural and substantive unconscionability
were required, the court stated:
I don't know to what degree I'm going to find there was
procedural unconscionability, but I think that there is
enough here for me to do the sliding scale[2] and to tack
on substantive unconscionability of this contract. So in
the totality of the circumstances, I'm going to also rule
that there was procedural unconscionability in this case.
This appeal ensued.
Analysis
Courts consider three elements in determining whether to
compel arbitration of a dispute: "(1) whether a valid written
agreement to arbitrate exists; (2) whether an arbitrable issue exists;
and (3) whether the right to arbitration was waived." Seifert v. U.S.
Home Corp., 750 So. 2d 633, 636 (Fla. 1999). This case concerns
2 See Basulto v. Hialeah Auto., 141 So. 3d 1145, 1159 (Fla.
2014) (discussing "sliding scale" approach to procedural and
substantive unconscionability).
4
only the first question because the parties agreed that an arbitrable
issue exists and the right to arbitration had not been waived.
I. Standard of Review and Applicable Principles of
Construction
A trial court's decision on the validity of an arbitration
agreement is a matter of contract interpretation that is reviewed de
novo. Premier Real Est. Holdings, LLC v. Butch, 24 So. 3d 708, 709–
10 (Fla. 4th DCA 2009).
A party seeking to avoid enforcement of an arbitration
agreement is burdened to demonstrate its invalidity. Spring Lake
NC, LLC v. Figueroa, 104 So. 3d 1211, 1214 (Fla. 2d DCA 2012).
Because arbitration is "a favored means of dispute resolution,"
courts are "required to indulge every reasonable presumption in
favor of arbitration." K.P. Meiring Constr., Inc. v. Northbay I & E,
Inc., 761 So. 2d 1221, 1223 (Fla. 2d DCA 2000).
"The intent of the parties . . . as manifested in the plain
language of the arbitration provision and contract itself, determines
whether a dispute is subject to arbitration." Jackson v.
Shakespeare Found., Inc., 108 So. 3d 587, 593 (Fla. 2013). Like
any other contract, an arbitration provision should be read "in the
5
context of the entire agreement . . . in a way that gives effect to all
of the contract's provisions." Retreat at Port of the Islands, LLC v.
Port of the Islands Resort Hotel Condo. Ass'n, 181 So. 3d 531, 533
(Fla. 2d DCA 2015) (citation omitted). Ambiguities in arbitration
agreements generally should be resolved in favor of arbitration.
Jackson, 108 So. 3d at 593.
II. Unconscionability
Osprey argues that the trial court erred reversibly by denying
its motion to compel arbitration on the ground that the agreement
is unconscionable. We agree.
Unconscionability is a defense to enforcement of an arbitration
agreement and is based on the common law concept that a court
may refuse to enforce a contract where it would be inequitable to do
so. See Basulto v. Hialeah Auto., 141 So. 3d 1145, 1157 (Fla.
2014). Because Mrs. Pascazi sought to avoid arbitration on
unconscionability grounds, she was burdened to "establish that the
arbitration agreement is both procedurally and substantively
unconscionable." Id. at 1158; see Zephyr Haven Health & Rehab
Ctr., Inc. v. Hardin ex rel. Hardin, 122 So. 3d 916, 920 (Fla. 2d DCA
6
2013) ("Where the party alleging unconscionability establishes only
one of the two prongs, the claim fails.").
Procedural unconscionability "relates to the manner in which
the contract was entered" and is described as "[t]he absence of
meaningful choice when entering into the contract." Basulto, 141
So. 3d at 1157; accord Fla. Holdings III, LLC v. Duerst, 198 So. 3d
834, 838 (Fla. 2d DCA 2016) ("Procedural unconscionability . . .
asks 'whether the complaining party had a meaningful choice at the
time the contract was signed.' " (quoting Brea Sarasota, LLC v.
Bickel, 95 So. 3d 1015, 1017 (Fla. 2d DCA 2012))). Substantive
unconscionability "requires assessment of the contract's terms to
'determine whether they are so outrageously unfair as to shock the
judicial conscience.' " Zephyr Haven, 122 So. 3d at 920 (quoting
Gainesville Health Care Ctr., Inc. v. Weston, 857 So. 2d 278, 284–85
(Fla. 1st DCA 2003)).
The trial court made no specific findings on procedural
unconscionability. Although it initially questioned Mrs. Pascazi's
7
procedural unconscionability theories,3 the court ultimately found
procedural unconscionability based on the "totality of the
circumstances"—which circumstances the court wholly failed to
identify.4 The court apparently accepted Mrs. Pascazi's suggestion
that her substantive unconscionability challenges were within the
"totality of the circumstances" and could buttress a finding of
procedural unconscionability.
This approach was plainly erroneous. A party seeking to avoid
arbitration on unconscionability grounds must demonstrate both
3 To the extent she specifically addressed procedural
unconscionability in the trial court, Mrs. Pascazi argued that (1) all
nursing home admissions involve procedural unconscionability and
(2) Ms. Outwater felt "rushed" during the admissions process and
didn't fully appreciate the import of the agreement she signed. As
the trial court correctly recognized, the first contention is legally
unsupported. And as we explain in the body of this opinion, the
second contention—which the trial court never specifically
addressed in its unconscionability ruling—is legally insufficient to
establish procedural unconscionability.
4 Mrs. Pascazi's scattershot presentation of multiple
arguments that conflated various legal concepts yielded a record
that is, putting it generously, difficult to review within the
applicable legal framework. The trial court's wholesale "adoption" of
Mrs. Pascazi's arguments (in lieu of making specific findings)
exacerbates this difficulty and could alone support reversal. See,
e.g., Tropical Ford, Inc. v. Major, 882 So. 2d 476, 479 (Fla. 5th DCA
2004) (stating that an order denying a motion to compel arbitration
8
procedural and substantive unconscionability, and the two types of
unconscionability are distinct.5 The "totality of the circumstances"
on which the trial court properly could rely to find procedural
unconscionability encompassed only matters pertinent to execution
of the arbitration agreement, not challenges to its substance. See
Duerst, 198 So. 3d at 839–42 (collecting cases and discussing
examples of procedural unconscionability); see also Brea Sarasota,
LLC, 95 So. 3d at 1017–18; Hobby Lobby Stores, Inc. v. Cole, 287
So. 3d 1272, 1275–76 (Fla. 5th DCA 2020).
As Osprey correctly argues, this record doesn't support a
finding of procedural unconscionability. Confined to its proper
"must be reversed" because trial court failed to "set forth any
findings of substantive unconscionability"). We include this
footnote to emphasize the utility of making specific findings (as
opposed to a generalized, wholesale adoption of a party's several
arguments) in disposing of motions to compel arbitration.
5 We are mindful that procedural and substantive
unconscionability are "evaluated interdependently rather than as
independent elements." Basulto, 141 So. 3d at 1161. But that
"interdependent" evaluation is a function of the "sliding scale"
analysis mandated by Basulto, which recognizes that both forms of
unconscionability "must be present, although not necessarily to the
same degree." Id. Nothing in Basulto suggests that substantive
unconscionability can suffice to establish procedural
unconscionability, and the analytic framework for each form of
unconscionability remains distinct.
9
boundaries, Mrs. Pascazi's procedural unconscionability claim is
based on the facts that Ms. Outwater felt rushed during the
admission meeting with Osprey because she had a "plane to catch,"
she didn't ask any questions of Osprey Health Care Center's
admissions personnel, and she merely skimmed the documents
before signing them, so she didn't fully understand the import of
the agreement. Ms. Outwater received full copies of all documents,
there was no evidence that she was either prevented or discouraged
from reading them before she signed them, and there is no evidence
that she was coerced or otherwise pressured to sign the documents.
These facts are legally insufficient to establish procedural
unconscionability. See Duerst, 198 So. 3d at 839–40 (reversing
finding of procedural unconscionability where party opposing
arbitration admitted she had not read agreement and contended
that (1) she had no legal background, (2) the documents had not
been explained to her, (3) she was asked to sign them in a "hurried"
process that lasted only ten minutes, and (4) she believed she had
to sign the documents in order for her mother to receive treatment);
Bickel, 95 So. 3d at 1017 ("A party to a contract is not 'permitted to
avoid the consequences of a contract freely entered into simply
10
because he or she elected not to read and understand its terms
before executing it, or because, in retrospect, the bargain turns out
to be disadvantageous.' " (quoting Gainesville Health Care Ctr., 857
So. 2d at 288)); Cole, 287 So. 3d at 1276 (finding procedural
unconscionability lacking where there was no evidence that
proponent of arbitration coerced execution of arbitration agreement
or made false representations to induce its execution and opponent
didn't claim he couldn't read agreement or ask questions or express
confusion about its terms). Because we hold that Mrs. Pascazi
failed to establish procedural unconscionability, we "need not
address substantive unconscionability." See Bickel, 95 So. 3d at
1018; see also Zephyr Haven, 122 So. 3d at 920 ("Where the party
alleging unconscionability establishes only one of the two prongs,
the claim fails.").
III. Missing Terms
In the trial court, Mrs. Pascazi maintained that the agreement
is impermissibly vague and lacks "essential terms." Osprey
countered by arguing that any vagueness or missing terms could be
11
resolved by reference to the Revised Florida Arbitration Code (FAC).6
Although the trial court never expressly ruled on the "missing
terms" issue, at oral argument and in her brief Mrs. Pascazi
maintained that Osprey's motion to compel arbitration was properly
denied because Osprey "failed to establish the essential terms of the
arbitration agreement." We address this issue because we must
consider any record basis that would support affirmance. See Dade
Cnty. Sch. Bd. v. Radio Station WQBA, 731 So. 2d 638, 644 (Fla.
1999).
In the trial court and on appeal, Mrs. Pascazi not only argued
that the agreement was missing "essential terms," she also
conflated her "missing terms" argument with her public policy and
unconscionability arguments. Public policy violations and
unconscionability are distinct concepts, see Hochbaum ex rel.
Hochbaum v. Palm Garden of Winter Haven, LLC, 201 So. 3d 218,
220 (Fla. 2d DCA 2016), but both constitute defenses to
enforcement of an arbitration agreement. See Shotts v. OP Winter
Haven, Inc., 86 So. 3d 456, 464-65 (Fla. 2011).
6 Ch. 682, Fla. Stat. (2016).
12
At bottom, Mrs. Pascazi's "missing terms" argument is not a
defense to enforcement of the arbitration agreement; it questions
whether the parties reached an agreement to arbitrate in the first
instance. Accordingly, and consistent with section 682.02(2),
Florida Statutes (2016), we evaluate this argument as part of the
first prong of the Seifert analysis: whether an agreement to arbitrate
exists. Seifert, 750 So. 2d at 636.
As she did in the trial court, Mrs. Pascazi argues that the
order denying Osprey's motion to compel arbitration should be
affirmed because the agreement is impermissibly vague regarding
governing law and doesn't sufficiently specify procedures and rules
for initiating and conducting arbitration. Mrs. Pascazi is incorrect
for the reasons discussed below.
A. Applicability of the FAC and the Governing Law
Provision
Osprey argued below and in this court that the FAC governs
the instant agreement. Osprey is right. Section 682.013(1)
establishes that the FAC "governs an agreement to arbitrate made
on or after July 1, 2013." The arbitration agreement was executed
on March 20, 2015. Parties to an arbitration agreement "may not
13
waive[] or . . . vary the effect of" the applicability of the FAC.
§ 682.014(3)(a).
In Florida, an arbitration agreement that doesn't involve
interstate commerce is subject to the FAC; if an agreement involves
interstate commerce, it is subject to the FAC to the extent the FAC
doesn't conflict with the Federal Arbitration Act (FAA). See Visiting
Nurse Ass'n of Fla. v. Jupiter Med. Ctr., Inc., 154 So. 3d 1115, 1124
(Fla. 2014). Neither party has argued that this agreement
implicates interstate commerce or that the FAC conflicts with the
FAA as relevant to this dispute.
At oral argument, Mrs. Pascazi's counsel steadfastly refused to
acknowledge that the FAC applies, essentially maintaining that it
doesn't apply because the agreement is invalid and unenforceable.
We reject this circuitous argument. Mrs. Pascazi's "missing terms"
argument rests exclusively on Florida law. Mrs. Pascazi can't have
her cake and eat it too. Just as Florida law applies to determine
whether the agreement is invalid, it applies to determine whether
the agreement is valid. See S. Crane Rentals, Inc. v. City of
Gainesville, 429 So. 2d 771, 773 (Fla. 1st DCA 1983) ("The laws
which exist at the time and place of the making of a contract enter
14
into and become a part of the contract made, as if they were
expressly referred to and incorporated in its terms, including those
laws which affect its construction, validity, enforcement or
discharge." (citing Humphreys v. State, 145 So. 858, 861 (Fla.
1933))). In short, Florida law—specifically including the FAC—
governs this agreement.
This conclusion disposes of Mrs. Pascazi's argument that the
"governing law" provision (section IV of the arbitration agreement) is
impermissibly vague or otherwise renders the agreement invalid.
Section IV states that "[a]ll arbitrations covered by this agreement
shall be adjudicated in accordance with the state or federal law
which would be applied by a United States District Court sitting at
[the place of the hearing]." While this provision doesn't specify what
jurisdiction's law will apply to adjudication of arbitrable claims, it is
undisputed that all relevant acts and events occurred in Florida,
the nursing home is located in Florida, and the agreement was
signed in Florida. And Mrs. Pascazi's complaint seeks relief
pursuant to Florida's Adult Protective Services Act. There simply is
no jurisdiction other than Florida whose law could apply to
adjudication of the instant claims. See, e.g., Tune v. Philip Morris
15
Inc., 766 So. 2d 350, 353 (Fla. 2d DCA 2000) (discussing choice of
law principles applicable to tort cases).
Mrs. Pascazi's contention that the bracketed language "[the
place of the hearing]" in Section IV created ambiguity about whether
arbitration "was supposed to be in Florida" is likewise meritless.
And having filed the underlying lawsuit in Florida, Mrs. Pascazi
can't "capriciously refus[e] to agree on Florida as a forum for
arbitration, for the sole purpose of invalidating the arbitration
[agreement]." See K.P. Meiring Constr., Inc., 761 So. 2d at 1223.
B. Rules for Arbitration
We turn next to Mrs. Pascazi's argument that the trial court
properly declined to enforce the agreement because it lacks
"essential terms" concerning procedures and rules for arbitration.
More specifically, Mrs. Pascazi contends that no agreement to
arbitrate was reached because two successive provisions of the
agreement are unclear about procedures and rules for arbitration.
The subject provisions are as follows:
VIII. Initiation of the Arbitration Process – To initiate the
arbitration process, the aggrieved party must file a
written claim. Claims can be filed with the office of
Osprey Health Care Center, Inc. Service of the claim
upon responding party shall be made in accordance with
16
[the rules]. Copies of [the rules] are available upon
request from the human resources department in each of
the company's major facilities and from each of the
regional offices, as well as from the office.
IX. Arbitration Procedures – Arbitrations pursuant to this
agreement shall be conducted in accordance with the
procedures set forth in [the rules], except where the rules
conflict with this agreement, in which case the terms of
this agreement shall govern.
According to Mrs. Pascazi, the bracketed text "[the rules]"
lacks "essential terms" and renders the agreement invalid because
the "parties and the trial court had no idea as to how an arbitration
was to proceed." Mrs. Pascazi is incorrect. We start by recognizing
that the
essential terms of an arbitration agreement include "the
form and procedure for arbitration, the number of
arbitrators, how the arbitrators were to be selected, or
. . . the issues to be decided by arbitration." . . . The
terms must be definite enough so that the parties have
some idea as to what matters are to be arbitrated and
provide some procedure by which arbitration is to be
effected.
Greenbrook NH, LLC v. Est. of Sayre, ex rel. Raymond, 150 So. 3d
878, 881 (Fla. 2d DCA 2014) (first alteration in original) (quoting
Malone & Hyde, Inc. v. RTC Transp., Inc., 515 So. 2d 365, 366 (Fla.
4th DCA 1987)).
17
It is beyond debate that these parties agreed to what matters
are to be arbitrated. The agreement sets forth a comprehensive list
of claims that are subject to arbitration, and the claims alleged in
Mrs. Pascazi's complaint are undisputedly included within that list.
The agreement also provides extensive guidance as to arbitration
procedures: it specifies that there will be one arbitrator, it
addresses the parties' right to counsel, it authorizes the arbitrator
to award prevailing party attorneys' fees, and it contains detailed
provisions concerning the arbitrator's authority with respect to
discovery, disposition of motions, and issuance of a final award.
And as Section IX plainly states, in the event of a conflict between
"the rules" and the agreement, the agreement "shall govern."
Osprey never provided (and Mrs. Pascazi never requested) a copy of
"the rules" (and "the rules" are not in our record) so it is appropriate
to default to the agreement, the provisions of which adequately set
forth the rules and procedures for arbitration.
Even if there were a gap or lack of clarity concerning
arbitration procedures, the FAC would supply those terms. See
Premier Real Est., 24 So. 3d at 710–12; see also Greenbrook, 150
So. 3d at 882. Mrs. Pascazi resists this conclusion by noting that
18
Premier, Greenbrook, and similar authorities featured arbitration
agreements that specifically invoked Florida law or the FAC. It is
true that the subject agreement doesn't specifically invoke Florida
law or the FAC, but this is of no moment for the reasons discussed
in section III(A) above.
Lastly, although this issue isn't well-developed in her brief,
Mrs. Pascazi maintained in the trial court and at oral argument that
section VIII of the agreement is invalid because no entity called
"Osprey Health Care Center, Inc." exists and the real party in
interest is Osprey Health Care Center, LLC. This argument is
unavailing for two reasons. First, section VIII says that claims "can
be filed" with the incorrectly described Osprey entity; it doesn't
mandate that claims are to be filed with that entity, and the FAC
prescribes a procedure for initiation of arbitration if the parties'
agreement fails in that regard. See § 682.032(1). Second, Mrs.
Pascazi obviously understood that her claim should be brought
against Osprey Health Care Center, LLC, because that is the entity
she named in her complaint.
In the end, Mrs. Pascazi did not and cannot establish in what
manner the procedures for arbitration are insufficiently delineated
19
in the agreement, which is unsurprising given the comprehensive
procedures that are spelled out in the agreement. To the extent any
question remains as to arbitration procedures, the FAC addresses
matters such as arbitrator appointment, conduct of the arbitration
hearing, the award and modification of it, remedies, and so on. See
§§ 682.04, .06, .08–.11. Stated bluntly, Mrs. Pascazi's "missing
terms" argument is all hat, no cattle, and does not provide an
alternate basis for affirmance of the order on review.
IV. Public Policy Violations and Severability Issues
In the trial court, Mrs. Pascazi argued that the arbitration
agreement violates public policy because it contains a provision
purporting to impose a one-year statute of limitations for claims by
Osprey residents. This provision is inconsistent with section
429.296, Florida Statutes (2016) (prescribing a two-year statute of
limitations for claims against assisted living facilities), so it is void.
See § 95.03, Fla. Stat. (2016). In the trial court, Osprey conceded
20
that the provision is void and argued—as it does here—that the
provision can and should be severed.7 We agree.
Generally speaking, an unenforceable provision is severable if
it "does not go to the heart of the [arbitration agreement]."
Hochbaum, 201 So. 3d at 223. Stated differently, if an arbitration
agreement is otherwise enforceable, a "court should sever the
offending provisions . . . so long as such severance does not
undermine the parties' intent." Lemos v. Sessa, 319 So. 3d 135,
142 (Fla. 3d DCA 2021) (citing Healthcomp Evaluation Servs. Corp.
7 The trial court engaged in extensive colloquy with counsel for
both parties on whether the provision was void and whether it was
severable, but it never directly ruled on either question. It appears
that the trial court mistakenly viewed the statute of limitations
issue as one of substantive unconscionability. "But the question of
whether an agreement is unconscionable is distinct from the
question of whether it is void as against public policy." See
Hochbaum, 201 So. 3d at 220. Notwithstanding the trial court's
failure to directly rule on the public policy issue, we must address it
and do so independently of the parties' unconscionability
arguments. See Bland ex. rel. Coker v. Health Care & Ret. Corp. of
Am., 927 So. 2d 252, 257–58 (Fla. 2d DCA 2006) (noting distinction
between public policy violations and unconscionability and stating
that despite the trial court's failure to make a specific ruling as to
public policy, "we are, nonetheless, compelled to address an issue
that is becoming a recurrent theme in cases brought before the
district courts of appeal"), abrogated in part on other grounds by
Basulto, 141 So. 3d at 1145, 1159-60, and Shotts, 86 So. 3d at 474.
21
v. O'Donnell, 817 So. 2d 1095, 1098 (Fla. 2d DCA 2002)). We begin
by observing that the parties' intent regarding severance of void
provisions is unambiguously expressed in Section XVIII of the
agreement:
XVIII. Severability - A court construing this
agreement may modify or interpret it in order to
render it enforceable. If this agreement is declared
unenforceable, the parties agree to waive any right to a
jury trial with respect to any dispute to which this
agreement applies. If any provision of this agreement
or the code is adjudged to be void or otherwise
unenforceable, in whole or in part, such adjudication
shall not affect the validity of the remainder of the
agreement or code.
(Emphasis added.)
While this provision supports Osprey's severance argument, it
is not dispositive. See Hochbaum, 201 So. 3d at 221–22. The
"controlling issue is whether an offending clause or clauses go to
'the very essence of the agreement.' " Id. at 222 (quoting Est. of
Yetta Novosett v. Arc Vills. II, LLC, 189 So. 3d 895, 896 (Fla. 5th
DCA 2016)); accord 4927 Voorhees Rd., LLC v. Tesoriero, 291 So. 3d
668, 671 (Fla. 2d DCA 2020). Severance of a void provision from an
arbitration agreement is impermissible if it requires a court "to
22
rewrite the agreement and to add an entirely new set of procedural
rules and burdens and standards." Shotts, 86 So. 3d at 478.
We have no trouble concluding that the void statute of
limitations provision doesn't go to the essence of, and is severable
from, the instant arbitration agreement. This court's decisions in
Hochbaum and Tesoriero guide our analysis and inform our
conclusion. In Hochbaum, we examined a nursing home arbitration
agreement that required the parties to equally bear arbitration
attorneys' fees, in violation of section 415.1111, Florida Statutes
(2013) (providing for prevailing party attorneys' fees in actions
arising under the Adult Protective Services Act). Hochbaum, 201
So. 3d at 221. Although the Hochbaum agreement didn't include a
severability provision, we held that the offending attorneys' fee
clause was nonetheless severable "because it [did] not go to the
essence of the agreement." Id. at 223. As we explained,
[i]t is clear from the agreements in this case that the
parties agreed to bind themselves to arbitration for
any disputes arising out of Donald Hochbaum's
residency at the nursing home. The attorneys' fees
provision does not go to the heart of the contracts, and
severance of the attorneys' fees provision would not
require a drastic rewriting of the agreements and
would preserve the intent of the parties to adjudicate
their disputes in arbitration.
23
Id. (emphasis added).
More recently, in Tesoriero, the trial court denied a motion to
compel arbitration because two provisions in the agreement violated
public policy.8 291 So. 3d at 668. Similar to the instant
agreement, the Tesoriero agreement provided that "[i]f any term of
this Agreement is determined to be invalid or unenforceable for any
reason, then the parties' intent is that only such term be severed,
and this Agreement's remaining terms shall be enforced." Id. at
670. We reversed, holding that the offending provisions were
severable. Id. at 673. As we explained, "[t]he essence of an
arbitration agreement is the selection of a forum in which to resolve
disputes as an alternative to litigation in court." Id. at 671.
Like in Tesoriero, here the parties' selection of arbitration as
an alternative to litigation is "embodied" throughout the instant
agreement. See id. The preamble recites that the agreement's
"purpose" is to "avoid the time, expense and emotions of dragging
8 The Tesoriero agreement prescribed limitations on damages
that violated chapter 400, and—similar to the Hochbaum
agreement—it contained an attorneys' fee provision that
contravened Florida law. See Tesoriero, 291 So. 3d at 670.
24
our problems through the litigation system." To effectuate this
purpose, the parties "consent[ed] to the resolution by binding
arbitration of all claims or controversies for which federal or state
court[s] would be authorized to grant relief"; that same provision
confirms that the "purpose and effect of this agreement is to
substitute arbitration as the forum for resolution of" all claims
covered by the agreement, which undisputedly include the claims
Mrs. Pascazi here asserts. The agreement also provides for a single
arbitrator and reflects that the parties (1) "waive[d] any right to have
related disputes litigated in a court or by jury trial";
(2) acknowledged that "[f]or claims covered by this agreement,
arbitration is the parties' exclusive legal remedy"; and (3) defined
the arbitrator's authority with respect to discovery, disposition of
motions, and issuance of a written award.
As in Hochbaum and Tesoriero, these provisions establish that
the "essence" of the agreement is the parties' mutual intent to
resolve their disputes by arbitration, not litigation. In other words,
"the true essence" of the instant "Mediation & Arbitration
Agreement" is, "as its name suggests, arbitration, and its financial
heart was the reduced costs and time-saving benefits accompanying
25
arbitration." See Obolensky v. Chatsworth at Wellington Green, LLC,
240 So. 3d 6, 11 (Fla. 4th DCA 2018); see also Estate of Deresh v.
FS Tenant Pool III Tr., 95 So. 3d 296, 301 (Fla. 4th DCA 2012)
(holding that "invalid punitive damages limitation . . . did not go to
the heart of the arbitration agreement," the "primary thrust" of
which was "to avoid costly and time-consuming litigation").
Against this precedential backdrop, the shortened statute of
limitations provision—which is a free-standing clause in the
arbitration agreement9—doesn't "go to the heart of the contract[],"
and severing it would "not require a drastic rewriting of the
agreement[] and would preserve the intent of the parties to
adjudicate their disputes in arbitration." See Hochbaum, 201 So.
3d at 223. This conclusion is reinforced by the severability
provision, which unambiguously manifests "the parties'
commitment to arbitrate disputes even without the offending
provisions." See Tesoriero, 291 So. 3d at 672; see also Deresh, 95
9 In its entirety, the provision states that "[a]ny claim governed
by this agreement shall be filed no later than one year from the date
of discovery, or one year from the last date of residency, whichever
comes first."
26
So. 3d at 301 ("The severance clause declares the intent of the
[arbitration] agreement to preserve the agreement in the event 'any
provision' of the agreement is declared unlawful.").
In opposition to Osprey's severance argument, Mrs. Pascazi
contends that the severability provision is eviscerated because
another provision of the agreement states that it "can be modified or
revoked only by writing signed by [both parties] that references this
agreement and specifically states an intent to modify or revoke this
agreement." Under Mrs. Pascazi's lights, this means judicial
severance can only occur if both parties agree to such severance in
writing. We reject this interpretation because it wholly fails to give
effect to the plain text of the severability provision (which explicitly
authorizes "a court construing this agreement" to "modify or
interpret it to render it enforceable," including by severing void
terms), and it leads to an obviously absurd result. This, of course,
is inconsistent with basic principles of contract interpretation. See,
e.g., Famiglio v. Famiglio, 279 So. 3d 736, 740 (Fla. 2d DCA 2019)
(holding that courts must endeavor to give effect to all provisions in
an agreement and avoid an interpretation "that would lead to an
absurd result").
27
In the trial court, Mrs. Pascazi also argued that the agreement
violates public policy because it (1) doesn't provide for "limited
appeal rights" and (2) authorizes the arbitrator rather than a court
to determine "enforceability of the arbitration agreement." The trial
court never ruled on these points, and Mrs. Pascazi's brief gives
them scant attention. Nonetheless, we address these issues
because we must consider any record basis that would support
affirmance. See Dade Cnty. Sch. Bd., 731 So. 2d at 644.
We reject Mrs. Pascazi's first contention out of hand because
the arbitration agreement nowhere mentions appellate rights.
Furthermore—as Mrs. Pascazi acknowledges—the FAC provides for
certain limited appeal rights, see § 682.20, and nothing in the
agreement can be fairly read to foreclose or circumscribe those
rights. Mrs. Pascazi's second contention doesn't support affirmance
either. The FAC provides that a court "shall decide whether an
agreement to arbitrate exists" and that an arbitrator "shall decide
. . . whether a contract containing a valid agreement to arbitrate is
28
enforceable." See § 682.02(2)–(3) (emphasis added).10 The
challenged provision is facially consistent with this statutory
provision, so it doesn't violate public policy.
In short, the only true public policy violation made out in this
case is the shortened statute of limitations provision. We hold that
it is severable. To the extent the trial court concluded otherwise in
its misguided substantive unconscionability analysis, it did so
erroneously. In this case, "[r]efusing to sever" the provision "would
cut out the heart of the agreement for a peripheral illegality." See
Deresh, 95 So. 3d at 301.
The parties spent much time in the trial court debating Shotts
and Gessa v. Manor Care of Florida, Inc., 86 So. 3d 484 (Fla. 2011).
In simple terms, those cases held that severance was inappropriate
where severing the "offending" provisions (which differed
10 In the 2013 amendments to the FAC, the legislature added
text mandating that courts "shall decide whether an agreement
to arbitrate exists" and that arbitrators "shall decide . . .
whether a contract containing a valid agreement to arbitrate is
enforceable." Ch. 2013-232, § 7, Laws of Fla. (emphasis added)
(corresponding to subsections 682.02(2) and (3)). Neither party has
raised the propriety of submitting the enforceability question to a
court rather than an arbitrator, and we express no opinion on this
issue.
29
significantly from the provisions Mrs. Pascazi here challenges)
would require a judicial rewrite of the arbitration agreements.
Although Osprey exhaustively briefed argument as to why Shotts
and Gessa do not preclude severance of the statute of limitations
provision, Mrs. Pascazi didn't respond directly to Osprey's
argument, instead relying on her conclusory assertion that the
challenged provisions "hinder a claimant's ability to vindicate their
rights" and therefore render the entire arbitration agreement
unenforceable "as void against Florida's public policy."
To reiterate, the only provision of the agreement that violates
public policy is the statute of limitations provision. And in
Tesoriero, we rejected an argument functionally identical to Mrs.
Pascazi's argument against severance; in so doing, we highlighted
several distinctions between Gessa and Shotts and the facts of
Tesoriero. See Tesoriero, 291 So. 3d at 671–72. Those distinctions
apply with equal force here. For the same reasons we explained in
Tesoriero, we agree with Osprey that neither Shotts nor Gessa
preclude severance of the statute of limitations provision.
30
Conclusion
These parties made a valid agreement in which they agreed to
arbitrate claims of the type alleged in Mrs. Pascazi's complaint.
Mrs. Pascazi failed to carry her burden of establishing that the
agreement i