Arbitration Clause Enforced in Legal Malpractice Case, Even with Fee-Shifting Discovery Clause

Arbitration Mediation

Florida’s Third District Court of Appeal enforced an arbitration clause in a law firm’s engagement letter even though the clause also included a shifting of fees for discovery. See Annie-Sophie Gonthiez Mavroleon v. Fernando Orrego and OC Estate and Elder Law, P.A.

Here is the arbitration clause which the Court accepted:

event we cannot, in good faith, arrive at a resolution
of any dispute, then any controversy or claim
arising out of or relating to this agreement or
your representation by OC Estate & Elder Law,
PA shall be settled by arbitration
in accordance
with the Commercial Arbitration Rules of the
American Arbitration Association, and judgment
upon the award rendered by the Arbitrator(s) may be
entered of record in any court having proper
jurisdiction. The locale of the arbitration shall be
Plantation, Florida. If OC Estate & Elder Law, PA is
required to give testimony through its attorneys
and/or other employees, or if OC Estate & Elder Law,
PA is required to produce documents or provide
other discovery or testimony concerning our
representation of you, you agree to pay the time and
expenses incurred by this firm in responding to such
requests for testimony or other discovery. This
agreement shall be governed by the laws of the State
of Florida.
(emphasis added).

The Plaintiff alleged that the Defendant committed malpractice “arising from the Trust’s purchase of financial products…” However, the Defendant’s retainer explicitly stated that the “law firm and its attorneys make no representations or warranties as to the financial products or services which may be purchased by you…”

The Court held:

“While the retainer agreement does state the Firm makes no warranties
regarding financial products, Mavroleon’s malpractice claim outright arises
from Orrego and the Firm’s representation of her. Thus, the arbitration
clause is applicable to Mavroleon’s claim.”

The Plaintiff also complained that the arbitration clause violated public policy because of the fee-shifting of some discovery costs. The Court was unimpressed, stating:

“While an arbitration agreement may not preemptively limit a client’s liability by
requiring them to pay all costs associated with the arbitration—here, the
language in the arbitration clause merely requires Mavroleon to bear all
discovery costs associated with her own discovery requests. See Lemos,
319 So. 3d at 141–42. This imposition does not de facto limit liability or
create a barrier to Mavroleon seeking recourse.”

Arbitration Mediation
Is Your Arbitration Clause “Broad” or “Narrow”? And Do You Understand Buckeye v. Cardegna? (BREA 3-2 LLC v. Hagshama)

Most clients include arbitration clauses in their contracts with the intent that any and all disputes between the parties should be resolved by arbitration. Lawyers, however, don’t always write the contract that way… even though the rules have been crystalized for about a decade. Here’s the first test whether your …

Arbitration Mediation
Can Florida Lawyers Require Arbitration In Engagement Letters? (Lemos v. Sessa)

In a divorce case, the wife’s lawyer negotiated a marital settlement agreement requiring the former husband to make lump payments that were sent to the law firm. Someone hacked into either the wife’s or the lawyer’s email account, resulting in the lawyer receiving fraudulent wiring instructions. Money was lost and …

Arbitration Mediation
Before Delegating Arbitrability to Arbitrator, Supreme Court Must Decide FAA Exclusions (New Prime, Inc. v. Oliveira)

The case of New Prime, Inc. v. Oliveira is the second arbitration / delegable / arbitrability question which the U.S. Supreme Court decided in a week. This case may have limited application to disputes involving transportation workers however it is worth discussing to ensure a clear understanding the delegation of …