IN THE SUPREME COURT OF FLORIDA CASE NO. SC06-74 ALEXANDER L. KAPLAN et ) Ano, ) Plaintiffs/Petitioners, ) ) vs. ) ) KIMBALL HILL HOMES ) FLORIDA, INC. ) Defendant/Respondent. ) Case No. 2D05-575 And CONSOLIDATED KIMBALL HILL HOMES ) FLORIDA, INC. ) Defendant/Appellant ) ) Vs. ) ) ALEXANDER L. KAPLAN, ) Et. Ano., ) Plaintiffs/Petitioners ) Case No. 2D05-696 ON DISCRETIONARY REVIEW FROM THE DISTRICT COURT OF APPEAL, SECOND DISTRICT, STATE OF FLORIDA PETITIONERS JURISDICTIONAL BRIEF
Pro-Se Counsel Alexander L. Kaplan, Esq. Florida Bar No. 612774 Alexander L. Kaplan, P.A. 9853 North Tamiami Trail, #220 Naples, Florida 34108 Telephone (239) 566-8675 ii ii
TABLE OF CONTENTS PAGE Table of Citations... iv Statement of the Case and Facts... 1 Summary of the Argument... 5 Jurisdictional Statement... 6 Argument: THE DISTRICT COURT S DECISION IN THIS CASE EXPRESSLY AND DIRECTLY CONFLICTS WITH CARDEGNA V. BUCKEYE CHECK CASHING, INC., 894 SO. 2D 860 (FLA. 2005, CERT. GRANTED U.S. (2005).... 7 Conclusion... 9 Certificate of Service... 10 Certificate of Compliance... 10 iii
CASES TABLE OF CITATIONS PAGE(S) Kaplan v. Kimball Hill Homes Florida, Inc. Case No. 2D05-575/05-696 Consolidated... 5 Cardegna v. Buckeye Check Cashing, Inc. 894 So.2d 860 (Fla. 2005)... 5, 7 Rosenthal v. Great Western Fin. Sec. Corp. 926 P.2d 1061, 1074 (Cal. 1996)...... 8 Spahr v. Secco, 330 F.3d 1266, 1272 (10 th Circ. 2003)...... 8 Sphere Drake Ins. Ltd. V. All Am. Ins. Co. 256 F.3d 587, 591 (7 th Circ. 2001)... 8 Chastain v. Robinson-Humphrey Co., 957 F.2d 851, 855 (11 th Circ. 1992)... 8 OTHER AUTHORITIES Art. V, 3(B)(3) Fla. Const.... 6 FLA. R. APP. P. 9.030(A)(2)(A)(IV)... 6 iv
STATEMENT OF THE CASE AND FACTS In February, 2004, Alexander L. Kaplan and Denise A. Kaplan met several times with salespeople, the purchasing manager and the project Chief Engineer of Kimball Hill Homes Florida, Inc., to discuss the purchase of a new home. At these meetings, it was explained to them of the Kaplans time restraints and personal situation regarding care of their parents who suffer from Alzheimers. Repeatedly, Kimball Hill s representatives stated emphatically they could complete the house within the Kaplans time parameters. They also averred that the homesite was a golf course view, and would charge the Kaplans approximately $26,000 for the lot premium because of this view. Based on these promises and other statements, the Kaplans were induced to enter into a contract with Kimball Hill for the purchase of the home. On or about February 19, 2004, the Kaplans signed a contract prepared by Kimball Hill s agents, servants and/or employees, but made certain changes to the contract. The Kaplans then waited for weeks to receive a signed and executed contract to be returned to them. The Kaplans kept calling for this and were told to come in on March 8, 2004, when they would receive a signed contract. When Appellants appeared, they met with Tom Bruno, a man they thought was an authorized corporate officer. He said he wanted to settle some questions that had arisen concerning options the Kaplans had selected. They met with him, the salesperson and other staff. At that time, at Mr. Bruno s request, the 1
Kaplans resigned the entire contract with so many changes, deletions, errors, change orders, corrections, incorrect prices, options that were never asked for or ordered, etc., that the Kaplans were not quite sure what they had signed. At their demand, they were then given a copy of everything prepared that day. The copy was signed by the Kaplans and only the salesperson and Mr. Bruno signed for Kimball Hill. No authorized corporate officer signed the contract. The Kaplans were also told that the final price was the price listed on Change Order #6, but neither party signed this change order. The Kaplans never received a contract from Kimball Hill signed by a corporate officer as authorized representative. Notwithstanding this, construction was ultimately started on the house. During the summer months of 2004, it was noted that water was running off the adjacent golf course into the Kaplans future back yard and pooling there for extended periods of time. When questioned about this Kimball Hill promised that this would be rectified prior to closing by appropriate grading. The house was not completed at the end of August as per the promises and inducements made prior to signing the contract, due to Kimball Hill moving other houses ahead of the Kaplans on their construction schedule (in fact, the home was not completed and did not receive a Certificate of Occupancy until late November, 2004). 2
In early September 2004, when questioned about a lack of golf course view due to growth of trees and bushes blocking the view, Kimball Hill s advised that the golf course was responsible for maintaining the golf course view and that Kimball Hill would do nothing regarding the water runoff from the golf course. When contacted by the Kaplans, the golf course advised that there was no golf course view ; that they had intentionally planted the trees and bushes blocking the Kaplans view as a buffer years prior, and would not provide a view for the property. They also advised that Kimball Hill knew these facts long before the Kaplans ever went to contract with them and paid Kimball Hill for the golf course view. Further, Collier County Engineering has advised that the water runoff from the golf course was engineered that way by Kimball Hill some 2-3 years previously and could not be changed. Kimball Hill knew all these facts in advance, and failed to disclose them to the Kaplans at any time prior to or subsequent to the signing of the contract, and in fact lied repeatedly to the Kaplans concerning these matters. Thereafter, the Kaplans demanded a refund of their deposit, which Kimball Hill practically tripped over itself in refunding immediately. About 4 weeks later, Kimball Hill sold the house to another buyer for $56,000 more than the Kaplans had contracted to pay for the house. While the Kaplans received their deposit back, they were not made whole for substantial storage costs, the loss of the sale of 3
their existing home, conscious pain and suffering, stress, the forced placement of their parents into nursing home situations due to their inability to care for them in their existing environment, the loss of value of the new home, and other substantial damages. This litigation then commenced reciting counts of Fraud in the Inducement, Fraud and Infliction of Emotional Distress. Kimball Hill then filed a motion to compel Arbitration of the three counts and a hearing was held; the Trial Court ordered the Counts for Fraud and Fraud in the Inducement to proceed to Arbitration, while retaining the Count for Infliction of Emotional Distress. The Kaplans moved for rehearing, reciting the uncontested facts as stated herein, appending a true copy of the contract as it exists in their possession, and arguing to the Court that the causes of action for Fraud in the Inducement and Fraud stood alone as independent torts; did not rely upon the contract for their interpretation or decision; that these torts were never intended to be subject to an arbitration agreement; and questioned the very validity and mutuality of the contract, and requested a factual hearing to determine validity and mutuality issues. The Court denied this motion in its entirety by Order dated February 1, 2005. The Notice of Appeal was timely filed from both orders on February 2, 2005. On December 9, 2005, the Second District affirmed the Trial Court on 4
counts 1 and 2; reversed on count 3 and ordered all counts to proceed to arbitration. Kaplan v. Kimball Hill Homes Florida, Inc., Case No. 2d05-575/05-696 Consolidated. Notice to Invoke Discretionary Jurisidiction was filed with the Clerk of the Second District on January 6, 2006. SUMMARY OF THE ARGUMENT The Second District s decision directly conflicts with Cardegna v. Buckeye Check Cashing, Inc., 894 So.2d 860 (Fla. 2005), cert. Granted U.S. (2005) and cases cited therein. The Second District s decision states that because the Kaplans claimed there was no contract due to lack of mutuality, errors, omissions, ambiguities, and lack of an authorized signature, rather than just attacking the arbitration provision, this was an issue for the arbitrator and not the court. It also stated that the trial court was not required to conduct an evidentiary hearing on this issue which should be resolved in arbitration. In Cardegna, the Florida Supreme Court held that Florida public policy and contract law prohibit breathing life into a potentially illegal contract by enforcing the included arbitration clause of the void contract. The Court also approved of decisions wherein it was held that the question of the very existence of a contract with an arbitration clause was an issue for the courts and not the arbitrators. In other words, where there is no contract there can be no arbitration clause to be enforced. 5
JURISDICTIONAL STATEMENT The Court has discretionary jurisdiction to review a decision of a district court of appeal that expressly and directly conflicts with a decision of the supreme court or another district court of appeal on the same point of law. ART. V, 3(b)(3) FLA. CONST.; Fla. R. App. P. 9.030(a)(2)(A)(iv). 6
ARGUMENT THE DISTRICT COURT S DECISION IN THIS CASE EXPRESSLY AND DIRECTLY CONFLICTS WITH CARDEGNA V. BUCKEYE CHECK CASHING, INC., 864 So.2d 860 (Fla. 2005), cert. Granted U.S. (2005). The decision below held that the issue of the very existence of an enforceable contract between the parties was one to be decided by an arbitrator pursuant to the arbitration clause. In Cardegna v. Buckeye Check Cashing, Inc., 864 So.2d 860 (Fla. 2005), cert. Granted U.S. (2005), the Florida Supreme Court held that Florida public policy and contract law prohibit breathing life into a potentially illegal contract by enforcing the included arbitration clause of the void contract. Concededly, Cardegna involved the question of a usurious contract and whether the arbitration clause could or should be enforced. In the case at bar, the Kaplans timely claimed that there was no contract ab initio in that there were errors, omissions, ambiguities, a lack of an authorized signature to bind Kimball Hill, failure to evidence agreement on a price of the contract, the options therein, etc. The Kaplans have also alleged that they were fraudulently induced into entering into the contract, as well as alleging substantial and different fraud which occurred after the contract was signed by them. 7
The Supreme Court also cited other cases which support the Kaplans position herein. In Rosenthal v. Great Western Fin. Sec. Corp., 926 P.2d 1061, 1074 (Cal. 1996) the court stated that contracts that render an agreement void ab initio are not arbitrable. In Spahr v. Secco, 330 F.3d 1266, 1272 (10 th Cir. 2003), arbitration clauses would not be enforced where a party challenged a contract on the basis that the party lacked the mental capacity to enter into a contract. In Sphere Drake Ins. Ltd. v. All Am. Ins. Co., 256 F.3d 587, 591 (7 th Cir. 2001), concluding that as arbitration depends on a valid contract, an argument that the contract does not exist can t logically be resolved by the arbitrator. {emphasis supplied}. In Chastain v. Robinson-Humphrey Co., 957 F.2d 851, 855 (11 th Cir. 1992), stating that Prima Paint has never been extended to require arbitrators to adjudicate a party s contention, supported by substantial evidence, that a contract never existed at all. The Florida Supreme Court agreed with the reasoning of these cases. In the instant case, it was timely alleged that the cumulative effect of the errors, omissions, confusion, lack of property signatories, etc., rendered the contract void ab initio. Where there is no contract, there can be no arbitration clause to be enforced. As in Sphere Drake and Chastain supra, an arbitrator cannot be called upon to rule on the very validity of the contract which contains the arbitration clause. This is clearly a question of law for the Courts and one which 8
should have been determined by the Trial Court in this case, instead of handing it over to the arbitrator to determine if he had the authority to hear the case or not. As is very clear, the Second District s decision is in substantial and direct conflict with this Court s decision in Cardegna. The Court should exercise its discretionary jurisdiction to consider the merits of the petitioners arguments that the decision was in error. CONCLUSION The petition for discretionary review should be granted. Respectfully submitted, Alexander L. Kaplan, Esq. Pro-Se Counsel for Petitioners Alexander L. Kaplan Florida Bar No. 612774 Alexander L. Kaplan, P.A. 9853 North Tamiami Trail Naples, Florida 34108 Telephone (941) 566-8675 9
CERTIFICATE OF SERVICE On January 9 th, 2006, I mailed a copy of this jurisdictional brief to Stacy D. Blank, Esq., Holland & Knight LLP, P.O. Box 1288, Tampa, FL. 33601 ALEXANDER L. KAPLAN, ESQ. CERTIFICATE OF COMPLIANCE This brief was prepared in Times New Roman 14-point font. ALEXANDER L. KAPLAN, ESQ. 10