Flying Panda Fla., LLC v. Rutherford

Plaintiff Rutherford sued Flying Panda, a trampoline park, for injuries she sustained at the park. Plaintiff Rutherford, like all customers of the trampoline park, had to sign a document titled “Plant 3 Palm Bay Waiver” on an electronic device in order to enter the trampoline park. The Waiver contained a provision requiring the parties to submit any dispute to mediation and non-binding arbitration.

Rutherford sued, alleging that she suffered a serious and permanent injury at the trampoline park. Flying Panda moved to dismiss the complaint and/or compel mediation and arbitration, arguing that Rutherford specifically agreed to such alternative dispute resolution of her tort claim pursuant to the Waiver. Rutherford then filed a Motion to Deem Exculpatory Waiver Void and Unenforceable and a Response in Opposition to Flying Panda's Motion to Compel Mediation and Arbitration. Flying Panda in turn filed a response to Rutherford's motion, arguing that it did not seek to enforce the exculpatory clause, but rather sought to enforce the arbitration clause and therefore, Rutherford's motion was premature. Flying Panda argued that because Rutherford admitted to completing the Waiver and raised no legal argument against the enforceability of the alternative dispute resolution clause, the court should enforce that portion of the agreement.

Following a hearing on the motions, the court concluded that the waiver/exculpatory clause was ambiguous and therefore unenforceable. The court further found that because the Waiver is deemed unenforceable, then the severability clause cannot serve to keep the mediation and arbitration clauses enforceable. Thus, the court denied Flying Panda's motion to compel mediation/arbitration. Flying Panda appealed.

The DCA agreed with Flying Panda that caselaw requires that where the parties have entered into an agreement that requires arbitration, unless the challenge is to the arbitration clause itself, any challenge of a contract's validity or interpretation of the contract must considered by the arbitrator in the first instance, not the trial court. The trial court should have limited its determination to whether Rutherford had raised any contractual defenses to the arbitration clause. Since she did not, the trial court should have compelled arbitration.

Under both Florida and federal law, an arbitration provision is severable from the remainder of the contract. Under Florida's arbitration code, before ruling on a motion to compel arbitration, the trial court is to consider only three things: (1) whether a valid written agreement to arbitrate exists; (2) whether an arbitrable issue exists; and (3) whether the right to arbitration was waived. Here, Rutherford did not dispute that she signed the Waiver or that the Waiver contains a provision to arbitrate. She challenged the validity of the exculpatory clause and argued that because the clause was invalid, the contract as a whole (including the arbitration clause) was invalid as well. She did not specifically challenge the arbitration provision. Thus, the claim of invalidity of the exculpatory clause or the Waiver as a whole must be considered in the first instance by the arbitrator rather than the court. REVERSED AND REMANDED with instructions to grant Flying Panda's motion to compel mediation/arbitration. (NOTE: But even if the arbitrator finds for Flying Panda, it’s not looking good for Flying Panda once the trial court gets to review the arbitrator’s findings).

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