Florida Supreme Court Rules Arbitration Clauses Apply to Fraud Claims

February 5, 2013

The Florida Supreme Court says contract clauses requiring arbitration to settle related disputes include fraud claims.

The justices unanimously reversed a three-judge panel of the 1st District Court of Appeal, which had ruled the opposite way.

They wrote that the panel erred by ruling an arbitration clause in a real estate contract did not cover fraud claims.

The decision upholds a Bay County trial judge’s dismissal of a lawsuit filed by the Shakespeare Foundation Inc. and the Herd Community Development Corp.

The judge ruled their claim, instead, had to be arbitrated.

The plaintiffs alleged the Jackson Realty Team Inc. fraudulently advertised property it sold them for a low-income house project as containing no wetlands. They alleged 25 percent of the land was in fact wetlands and, therefore, unbuildable.

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