                                    IN THE DISTRICT COURT OF APPEAL
                                    FIRST DISTRICT, STATE OF FLORIDA

HHH MOTORS, LLP, D/B/A
HYUNDAI OF ORANGE PARK,             CASE NO. 1D13-4397
F/K/A HHH MOTORS, LTD.,
D/B/A HYUNDAI OF ORANGE
PARK,

      Appellant,

v.

JENNY LEE HOLT AND
KRISTOPHER P. HOLT, ON
BEHALF OF THEMSELVES
AND ALL OTHERS
SIMILARLY SITUATED, HA
MOTORS, LLP, D/B/A ACURA
OF ORANGE PARK; HANANIA
OAJ, LLP, D/B/A AUDI OF
JACKSONVILLE AND/OR
AUDI JACKSONVILLE;
HANANIA FOP, LLP, D/B/A
FIAT OF ORANGE PARK;
HANANIA OPM, LLC, D/B/A
ORANGE PARK MITSUBISHI;
HANANIA VOP, LLP, D/B/A
VOLKSWAGEN OF ORANGE
PARK; AND HHH MOTORS 2,
LLP, D/B/A WESTSIDE
HYUNDAI,

      Appellee.

_____________________________/

Opinion filed December 3, 2014.
An appeal from the Circuit Court for Duval County.
Waddell A. Wallace, Judge.

Jon Michael Lindell of Lindell & Farson, P.A.; and Michael J. Korn of Korn &
Zehmer, P.A., Jacksonville, for Appellant.

William C. Bielecky of William C. Bielecky, P.A., Tallahassee; Deanna L. Blair of
Jacksonville Area Legal Aid, Green Cove Springs; and Brian W. Warwick of
Varnell & Warwick, P.A., The Villages, for Appellee.


         ON MOTION FOR REHEARING, WRITTEN OPINION, AND
                         CERTIFICATION

PER CURIAM.

      The crux of this dispute is whether the parties agreed in the purchase and

financing agreements at issue that this class action lawsuit must be submitted to

arbitration or whether it may proceed in court. For the following reasons, we affirm

the trial court’s determination that the parties did not agree to arbitration. In doing

so, we grant the motion for written opinion of HHH Motors, LLP, but deny its

motions for rehearing and certification.

      On July 28, 2010, HHH Motors, LLP, and two of its customers, Jenny and

Kristopher Holt, executed a Retail Purchase Agreement (RPA) for the purchase of

a 2007 Dodge Ram. The RPA contained an arbitration clause which stated, in

pertinent part:

      Except as specifically excluded in this agreement, purchaser and
      dealer agree to submit any and all controversies, claims, or disputes
      arising out of or relating to this agreement and all other agreements
      executed by purchaser and dealer related to the vehicle purchase
      transaction, or related to any aspect of the transaction contemplated by
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      this agreement, to binding arbitration. It is the express intent of
      purchaser and dealer that this arbitration provision applies to all
      disputes, including contract disputes, tort claims, fraud claims and
      fraud-in-the-inducement claims, statutory claims, and regulatory
      claims that would not have arisen but for the vehicle purchase
      transaction and resulting relationship between purchaser and dealer.

The RPA also contained a clause referring to additional documents, which stated:

      You agree to execute additional forms, contracts or other documents
      prepared in connection with the purchase, those required by the
      various purchase documents, any retail installment or consumer credit
      sale contract or those required by federal and/or state law, rule or
      requirement.

After executing the RPA, the Holts executed a Retail Installment Sales Contract

(RISC) to finance the purchase of the vehicle. The RISC, however, did not contain

an arbitration clause, but included the following merger clause: “This contract

contains the entire agreement between you and us relating to this contract. Any

change to this contract must be in writing and we must sign it.”

      The Holts filed a class action lawsuit against HHH Motors in circuit court

alleging violations of Florida’s Deceptive and Unfair Trade Practices Act

(FDUTPA) relating to electronic titling/registration filing fees that HHH Motors

charges its customers.     In response, HHH Motors filed a motion to compel

arbitration pursuant to the arbitration clause in the RPA. In a detailed written order,

the trial court denied the motion, concluding that when the Holts signed the RISC,

which contained the merger clause, a new contract was formed. This meant that the

RISC, which did not have an arbitration clause, superseded the RPA, which did.
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And because the RISC appeared facially complete, no parol evidence could be

considered to address alleged ambiguities. The denial prompted this appeal.

      The issue presented is whether a valid written agreement to arbitrate exists, a

question we review de novo. Duval Motors Co. v. Rogers, 73 So. 3d 261, 264 (Fla.

1st DCA 2011). Under federal and Florida law, a court considers three elements

when ruling on a motion to compel arbitration: (1) whether a valid written

agreement to arbitrate exists; (2) whether an arbitral issue exists; and (3) whether

the right to arbitration was waived. Seifert v. U.S. Home Corp., 750 So. 2d 633,

636 (Fla. 1999). Absent a valid written agreement to arbitrate, no party may be

forced to submit to arbitration. Id. (citing Seaboard Coast Line R.R. v. Trailer

Train Co., 690 F.2d 1343, 1352 (11th Cir. 1982) (holding that the federal policy

favoring arbitration cannot “stretch a contract beyond the scope originally intended

by the parties”)). Furthermore, the applicability of the Federal Arbitration Act

(FAA), which preempts state law and state public policy concerns, hinges on

whether such an agreement exists. McKenzie Check Advance of Florida, LLC v.

Betts, 112 So. 3d 1176, 1183 (Fla. 2013) (stating that “to the extent that Florida

law would invalidate the class action waiver on this basis, the FAA preempts

Florida law under the facts presented here.”); Seifert, 750 So. 2d at 636.

      HHH Motors argues that all three Seifert elements are met, that its right to

arbitrate vested when the RPA was executed regardless of any subsequent

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agreement entered by the parties; it thereby claims that the FAA governs the

parties’ dispute arising from the sales agreement. On the other hand, the Holts

contend that the trial court had a legally sufficient basis to determine, as a matter of

fact, that the first element of the Seifert analysis was not met, i.e., that the parties

lacked a valid written agreement to arbitrate. The Holts argue that the facts of this

case are similar to those in Duval Motors, in which this Court held that a RISC

containing a merger clause was a fully integrated document, such that parol

evidence of a retail buyer’s order (which contained an arbitration clause) was not

admissible to show disputes under contract were subject to arbitration. See Duval

Motors, 73 So. 3d at 267. It also held that the retail buyer’s order was not a valid

change to the RISC. See id. at 269. The Holts also argue that the FAA is not

triggered unless the parties first have a valid written agreement to arbitrate, a

threshold determination that should be decided by a court, not an arbitrator. They

conclude that because the trial court found that no agreement to arbitrate existed,

the FAA is inapplicable.

      We agree with the well-reasoned analysis of the trial court, which followed a

two-step process in its consideration of the applicability of the arbitration clause in

the RPA. First, there must be the threshold determination of whether an agreement

to arbitrate was formed pursuant to Granite Rock Co. v. International Brotherhood

of Teamsters, 561 U.S. 287 (2010). A difference exists, however, between the

                                           5
validity of a contract and the formation of a contract. Solymar Investments, Ltd. v.

Banco Santander S.A., 672 F.3d 981, 992 (11th Cir. 2012)          (“The issue of the

contract’s validity is different from the issue whether any agreement . . . was ever

concluded.”) (quoting Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440,

444 (2006)). Challenges to the validity of a contract are resolved by the arbitrator,

but challenges to formation or existence of a contract are resolved by the court.

Granite Rock, 561 U.S. at 296; cf. Dasher v. RBC Bank, 745 F.3d 1111 (11th Cir.

2014) (holding that whether a subsequent agreement entirely supersedes a prior

agreement is made under state law, without applying the FAA’s presumption). The

determination of whether a contract exists is governed by state law, and Florida

law permits a court to admit parol evidence to discern the parties’ intent if there is

an ambiguity in the contract language. Solymar, 672 F.3d at 991. Second, there

must be a determination of whether any subsequent challenges are to the whole

contract, or just the arbitration clause, pursuant to Prima Paint Corp. v. Flood &

Conklin Manufacturing Co., 338 U.S. 395 (1967).

      In this case, the inquiry ended upon the threshold determination by the trial

court that no agreement to arbitrate existed pursuant to Granite Rock. No dispute

exists that the Holts signed the RPA first. HHH Motors argues that its right to

arbitrate vested at that point, regardless of the validity of the RPA or subsequent

action by the parties. Indeed, the trial court acknowledged that it would have been

                                          6
binding but for the execution of the RISC, which was entered concurrently. After

executing the RPA, the Holts immediately signed the RISC which stated, in part,

that “[b]y signing this contract, you choose to buy the vehicle on credit under the

agreements on the front and back of this contract.” Under the circumstances, the

trial court concluded that the RISC and its merger clause was sufficiently

unequivocal to render the RPA’s arbitration clause nugatory. Our holding in Duval

Motors is persuasive on this point and supports the conclusion that no agreement to

arbitrate was formed. While HHH Motors correctly notes that the fact pattern is

somewhat different, the issue was very similar: whether the merger clause of the

RISC precluded consideration of the retail buyer’s order. In Duval Motors, this

Court determined that the plain language of the RISC was clear and unambiguous,

so parol evidence of the arbitration clause contained in the retail buyer’s order

could not be considered. The same holds true here. HHH Motors is being held to

the language of its own concurrently-signed documents. See also Basulto v.

Hialeah Automotive, 141 So. 3d 1145 (Fla. 2014) (affirming trial court’s finding

that there were issues regarding the making of the agreement, so it was proper to

deny the motion to compel). If it intended for credit buyers to be subject to the

arbitration clause, then it could have said so in the RISC, but did not.

      HHH Motors argues that when two or more documents are executed by the

same parties “contemporaneously” in the course of the same transaction

                                          7
concerning the same subject, they should be read and construed together. See, e.g.,

Quix Snaxx, Inc. v. Sorensen, 710 So. 2d 152, 153 (Fla. 3d DCA 1998)

(“Documents executed by the same parties, on or near the same time, and

concerning the same transaction or subject matter are generally construed together

as a single contract. Where a writing expressly refers to and sufficiently describes

another document, the other document, or so much of it as is referred to, is to be

interpreted as part of the writing.”). While this is true, we find no legal error in the

trial court’s conclusion that the RISC and its merger clause operated to negate the

arbitration clause in the RPA. The FAA thereby does not apply because no valid

agreement to arbitrate exists.

      In its motion for rehearing and written opinion, HHH Motors claims that our

disposition of this case conflicts with the Fourth District’s decision in Morse

Operations, Inc. v. Sonar Radio Corp., 449 So. 2d 1002 (Fla. 4th DCA 1984). That

case, however, is factually different because—unlike the present case—the

financing agreement at issue in Morse Operations did not have a merger clause.

The absence of a merger clause justified a different result, there being “no support

in the record for the trial court’s conclusion that the financing agreement

superseded the underlying contract for this transaction.” Id. at 1003. Though we

find no conflict and do not certify a question of great public importance, we




                                           8
provide this opinion to explain our reasoning, which may be beneficial in the

development of this area of the law.

      In conclusion, the trial court properly denied the motion to compel

arbitration.

      AFFIRMED.

THOMAS, MARSTILLER, and MAKAR, JJ., CONCUR.




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