Central Florida Roofing, LLC et al v. Stevens Roofing Systems et al

Filing 50

ORDER granting 47 --motion to compel arbitration; staying the action pending the conclusion of arbitration; directing the Clerk to ADMINISTRTAIVELY CLOSE the case. Signed by Judge Steven D. Merryday on 10/17/2013. (BK)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
CENTRAL FLORIDA ROOFING, LLC,
and 5150 SO FLA (A&C), LLC,
Plaintiffs,
v.

CASE NO. 8:12-cv-1170-T-23MAP

STEVENS ROOFING SYSTEMS and
DOW ROOFING SYSTEMS, LLC,
Defendants.
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ORDER
Central Florida Roofing and 5150 So Fla allege (Doc. 1) claims (negligence,
breach of express and implied warranty, and violation of Florida’s Unfair and
Deceptive Trade Practices Act) against Stevens Roofing Systems and Dow Roofing
Systems (together “Dow Roofing,” because Dow Roofing acquired Stevens Roofing)
based on Dow Roofing’s manufacture and sale of thermoplastic polyolefin roofing
membranes and accessories. Dow Roofing claims a contractual right to arbitration
and consequently moves under 9 U.S.C. § 3 to dismiss or stay this action pending
arbitration. After an initial exchange of papers (Docs. 11, 14, 22, 29, 34, 35)
discussing a stay of pending arbitration, the parties engaged in court-ordered
discovery limited (Doc. 41) to “(1) whether an arbitration agreement exists between
the parties, (2) whether an arbitrable issue exists, and (3) whether the right to

arbitrate is waived.” After the limited discovery, the parties submitted additional
papers (Docs. 47, 48, and 49) pertinent to the stay.
The parties agree that Central Florida was a certified installer for Dow
Roofing and a party to Stevens’s standard “applicator agreement,” which states:
Any controversy or claim arising out of or relating to this Agreement
or the breach thereof (including any modifications thereto) shall be
settled by arbitration before three (3) arbitrators in the City of Boston
in accordance with the Construction Industry Arbitration Rules of the
American Arbitration Association, and judgment [sic] upon the award
rendered may be entered in any court having jurisdiction thereof; it
being agreed that the arbitrators sitting in any controversy relating
hereto shall not have the power to modify any provision of the
Agreement or to render any award that, by its terms, effects or creates
a modification.

Despite some aggressive and tactical obscurity by 5150, the record establishes clearly
that a sale of Dow Roofing’s thermoplastic polyolefin roofing membranes and
accessories was accompanied by a standard written “Limited Material Warranty for
Commercial Building” that stated:
Any controversy or claim arising out of or relating to this document, or
the breach thereof, shall be settled by arbitration in accordance with
the Construction Industry Rules of the American Arbitration at the
Boston, Mass., Regional Office and judgment upon the award
rendered by the Arbitrators may be entered in any court having
jurisdiction thereof.

5150’s initial effort to avoid the effect of this arbitration clause was to decline to
produce a copy of the express warranty on which the complaint is based and to
decline to identify the property for which the roofing membranes and accessories
were purchased and on which the purchased material, allegedly defective, was

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installed. Because Dow Roofing organizes warranty records by the identity of the
property and not by the identity of the customer, 5150’s refusal to identify the
affected property precluded Dow Roofing from locating the documents that include
the standard written warranty to 5150. Even after the court-ordered discovery, 5150
has produced no standard written warranty (or any other written warranty) from
Dow Roofing.
However, Central Florida Roofing and 5150’s complaint alleges in paragraph
nine, in conjunction with alleging the failure of the materials within “four to five
years from their respective installations,” that “each [installation] was warranted for
a period of 15 years.” Further, the complaint alleges in paragraphs forty-two and
forty-three that “because the warranties limit Plaintiff, 5150, and its respective subclass members’ recovery to replacement of the failed [thermoplastic polyolefin]
material, with replacement labor not included,” the warranties “do not provide a
minimum adequate remedy” and are “unconscionable and unenforceable.” 5150
pleads explicitly the terms of Dow Roofing’s standard written warranty and attacks
as unconscionable the enforcement of the warranty. On the other hand, 5150
purports to simultaneously deny the existence of the standard written warranty.
Dow Roofing encapsulates the result of the court-ordered discovery:
[D]iscovery has confirmed that 5150 seeks relief under Dow’s
standard fifteen-year limited warranty contract, which 5150
maintains Dow allegedly issued to 5150. Compl. ¶ 9; Barr
Decl. Ex. B, 5150 Dep. 18:22 – 19:2 (admitting that 5150
understood from Central Florida that it would receive the

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“Stevens’ standard 15-year warranty for the product that was
installed on [its] properties”); Barr Decl. Ex. A, Central Florida
Dep. 15:1-21 (admitting that the complaint describes “standard
warranties that Dow offered”); id. 15:23 – 16:22 (admitting that
paragraph 9 of complaint alleges that “Stevens issued a 15-year
standard warranty for [5150’s] material”); id. 18:5-12 (admitting
that Central Florida’s invoice for the project references a
“standard 15-year warranty for the material that was installed
on this project”); id. 34:6-16 (admitting that Central Florida told
5150 it was getting “the current standard form of Stevens
membrane roofing systems warranty for commercial building”);
Moskowitz Decl. Ex. B ¶ 2(d) (obligating Central Florida to
inform 5150 and all other building owners that “the most
current standard form of Stevens membrane roofing systems
warranty for commercial buildings” was available for purchase
from Stevens).

(Doc. 47 at 6-7) In other words, 5150 pleads with particularity and attacks with zeal
the exact terms of the standard written warranty but simultaneously denies the
existence of the standard written warranty. In the post-discovery papers, 5150
continues to attack as unconscionable the enforcement of the standard written
warranty, but 5150 claims that the arbitration provision of the standard written
warranty fails because Dow Roofing fails to produce a written arbitration agreement
with 5150.
Although Dow Roofing is unable (owing at least in part to 5150) to produce a
signed arbitration agreement, the statute requires proof of the existence of a written
agreement – not a signed written agreement. As one treatise states:
The “in writing” requirement has a further ramification,
namely that the arbitration clause itself does not have to be
signed. This conforms to the widespread practice in many
fields of trade and commerce that commercial transactions are
concluded by the exchange of letters or telegrams, by the

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intermediary of brokers who exchange bought and sold notes,
and by the conduct of the parties after receipt of contract forms
which are not signed and returned. Numerous decisions show
a tendency by the courts to accept any manifestation of the
intent of the parties to be bound by an arbitration clause
without signing it.

Martin Domke, Gabriel Wilner & Larry Edmonson, Domke on Commercial Arbitration
Part III, § 9.1 (Thomson Reuters 2013). 5150 was aware of the standard written
warranty offered by Dow Roofing; 5150 expected the standard written warranty with
respect to the product purchased and installed; Dow Roofing’s invoice for the

thermoplastic polyolefin roofing product purchased by 5150 mentions the standard
written warranty; Central Florida Roofing, Dow Roofing’s “certified applicator,” in
accord with Central Florida Roofing’s obligation to Dow Roofing, informed 5150
that the product included “the current standard form of [Dow Roofing’s] membrane
roofing systems warranty for commercial building;” and 5150’s complaint
affirmatively seeks relief based on terms characteristic of the standard written
warranty (and no other source for the terms is identified in the record). The record
establishes that Dow Roofing conducted business by use of the standard written
warranty. No reason exists to conclude that 5150 manifested anything other than
objective acceptance of the standard written warranty, and no evidence exists of a
warranty on the pertinent product other than the standard written warranty that
includes the arbitration clause.

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5150 alludes to “other ways,” including advertising and the statement of a
corporate representative, that an express warranty might arise. But 5150 fails to
produce evidence of any “other way” that created an express warranty in this
instance, especially an extraordinary and serendipitous express warranty that is just
enough like Dow Roofing’s standard written warranty to permit 5150 to sue Dow
Roofing but that is just different enough from Dow Roofing’s standard written
warranty to omit and preclude Dow Roofing’s defenses to the suit, including Dow
Roofing’s resort to the arbitration clause. 5150 proposes neither too much warranty
nor too little warranty but just enough warranty – and just the right warranty. 5150’s
convenient incongruity presses even credulity beyond the limit.
And, needless to say, although the statute requires proof of a written
agreement to arbitrate, the statute does not require a party to produce either the
original or a tangible copy of the writing. Proof of the written agreement suffices.
Certainly the question in the instance of a demand for arbitration is whether
the parties entered into an arbitration agreement. As 5150 states (Doc. 48 at 5), “So a
party that has not agreed to arbitration, explicitly or implicitly, cannot be compelled
to do so.” Yes, but the necessary corollary of that proposition is that a party that has
agreed to arbitration, explicitly or implicitly, can be compelled to do so. The record
establishes the existence of a written agreement to arbitrate within the meaning of
9 U.S.C. § 2 and warrants a stay of this action under 9 U.S.C. § 3 pending the
completion of the contractually required arbitration. The plaintiff raises certain

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defenses to the standard warranty, the merits of which defenses the arbitrators will
consider first in arbitration.
Conclusion
Dow Roofing’s (and Stevens’s) renewed motion (Doc. 47) to compel
arbitration is GRANTED. This action is STAYED pending the outcome of
arbitration before the American Arbitration Association in Boston, Massachusetts, in
accord with the parties’ written arbitration agreement. The Clerk will
ADMINISTRATIVELY CLOSE the case.

ORDERED in Tampa, Florida, on October 17, 2013.

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