Last week I presented to the Great Plains Chapter of the American Society of Professional Estimators on arbitration and litigation. Some of the questions related to the difficulty of appealing an arbitrator’s decision. A Florida appellate court recently confirmed this difficulty.
In Village at Dolphin Commerce Center, LLC v. Construction Service Solutions, LLC, a contractor filed an arbitration claim against the owner to get paid for its work. The owner claimed that the contractor could not maintain the claim to get paid because the contractor was not licensed. Apparently, there is a law in Florida that a contractor unlicensed at the time of the contract cannot maintain an action in Florida for unpaid work.
The arbitrator appears to have ignored the Florida law that an unlicensed contractor could not maintain an action to get paid for its work and ruled in favor of the contractor.
The owner appealed to the state court, arguing that the arbitrator misapplied Florida law. The court refused to hear the case, finding the parties had willingly submitted their claim to the arbitrator and they were bound by the results. In essence, the parties to the arbitration could not appeal the arbitrator’s decision.
Why You Should Care: Arbitration can be effective to resolve a claim, but you will likely be stuck with the arbitrator’s decision without a chance for an appeal.