Jackson v. Shakespeare Foundation, Inc.

108 So.3d 587 (2013)

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Nature of the Case

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Facts

D decided to sell the real property that is the subject of the contract. D placed an ad for the property. When they posted the advertisement, they had in their possession a Property Report Land Use Planning Analysis, which established, contrary to the advertisement, that 25% of the subject property constituted wetlands. P and D entered into negotiations. P advised D that they intended to develop the property into a twenty-seven unit low-income housing development. After P tendered full payment, P held an onsite meeting with a builder and engineer. The builder reported that the property might contain wetlands. The Shakespeare Foundation hired an engineering firm to perform a wetlands delineation on the property. It was determined that 0.39 acres of the 1.5-acre property were wetlands rendering it unbuildable. The wetlands constituted 26% of the entire tract which was equal to nine of the twenty-seven units that P had intended to develop. P sued D for fraudulent misrepresentation. D moved to dismiss and asserted that the fraud claim arose out of, and was related to, the contract and, therefore, fell within the arbitration provision of the contract. D contends that the contractual provisions required P to submit the fraud claim to binding arbitration in that the contractual provision included all claims 'arising out of or relating to this transaction or this Contract.' The court granted D's motion to dismiss. P appealed. The court determined that the fraud claim did not come within the broad scope of the arbitration provision because the fraud claim arose from a general duty established under the common law; not from an obligation arising under the contract. The court concluded that the fraud claim did not significantly relate to the contract because the determination of this claim required neither reference to nor the construction of the contract. The court held that the express language of the contract only contemplates remedies for a breach of contract action, and prohibits an arbitrator from providing a remedy not specifically provided for in the provisions of the contract, such as a remedy in the event of a tort or fraud action. It reversed and certified the case.