The opinion
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
KOVA COMMERCIAL OF NAPLES,
LLC,
Plaintiff,
v. Case No: 2:23-cv-614-JES-KCD
TODD SABIN,
Defendant.
OPINION AND ORDER
This matter comes before the Court on Todd Sabin’s (Sabin or
Defendant) Motion to Dissolve Amended Preliminary Injunction (Doc.
#77) filed on March 13, 2024. KOVA Commercial of Naples, LLC (KOVA
or Plaintiff) filed a Response in Opposition (Doc. #80) on March
27, 2024. For the reasons set forth below, the motion is denied.
I.
To summarize the previously recounted background (Doc. #76,
pp. 1-3): KOVA is a commercial real estate brokerage firm. Sabin
became KOVA’s Managing/Qualifying Broker in 2016 after executing
an Operating Agreement (OA) and a Non-Competition and Non-
Solicitation Agreement (NCNSA) with KOVA. By 2023, the
relationship had deteriorated and Sabin resigned. KOVA then filed
this lawsuit, asserting eight counts against Sabin: (1) breach of
contract; (2) violation of the Defend Trade Secrets Act (DTSA);
(3) violation of Florida’s Uniform Trade Secrets Act (FUTSA); (4)
misappropriation of confidential information; (5) breach of
fiduciary duty; (6) tortious interference with advantageous
business relationships; (7) declaratory judgment; and (8)
injunctive relief. (See Doc. #30.) KOVA made clear that it brought
the claims exclusively under the OA, not the NCNSA. (See id. at p.
5 n. 1.)
KOVA moved for a Temporary Restraining Order (TRO) and a
Preliminary Injunction (PI), (Doc. #31), and the Court
“consider[ed] KOVA’s motion by evaluating its breach-of-contract
claim.” (Doc. #42, p. 9.) Finding that KOVA met the requisites
for a preliminary injunction, the Court issued a preliminary
injunction (Doc. #43) and later an Amended Preliminary Injunction.
(Doc. #66.)
Sabin thereafter filed a motion to dismiss the Complaint (Doc.
#50), arguing in pertinent part that, pursuant to the NCNSA’s
arbitration provision, the breach-of-contract claim should be
resolved by arbitration. After finding the OA and the NCNSA
constituted one contract under Florida’s contemporaneous
instrument rule and incorporation by reference doctrine, the Court
held that the breach-of-contract claim was indeed subject to
arbitration and stayed that claim under § 3 of the Federal
Arbitration Act (FAA).1 (Doc. #76, pp. 10-11.)
1 KOVA has since filed a Second Amended Complaint (Doc. #78),
for which another motion to dismiss (Doc. #81) is currently
Sabin now argues that the amended preliminary injunction must
be dissolved “because the parties did not agree nor contemplate
that interim injunctive relief pending arbitration could be
entered by a court. This Court found an enforceable arbitration
agreement and therefore all of Plaintiff’s claims related to Count
I, including those for injunctive relief, must be addressed by the
arbitrator and not by this Court.” (Doc. #77, p. 1.) KOVA
disagrees, but alternatively moves for the Court to reconsider and
expand the basis for the amended preliminary injunction to include
other claims. (Doc. #80.)
II.
As this Court has previously recognized, “[c]ourts may ‘grant
interim injunctive relief pending arbitration in order to preserve
the status quo, but only if the parties' agreements contemplate
such relief.’” Glob. Tel*Link Corp. v. Scott, 652 F. Supp. 2d 1240,
1247 (M.D. Fla. 2009)(quoting Sprint Corp. v. Telimagine, Inc.,
923 So.2d 525, 527 (Fla. 2d DCA 2005)). The Eleventh Circuit has
also said as much: “In American Express Financial Advisors, Inc.
v. Makarewicz, 122 F.3d 936, 939–40 (11th Cir. 1997), for example,
we held that a district court, after granting a stay under § 3 [of
the FAA], erred in refusing to grant injunctive relief where the
parties intended for a court of competent jurisdiction to grant
pending.
injunctive relief pending the arbitration.” Variable Annuity Life
Ins. Co. v. Laferrera, 680 F. App'x 880, 886 (11th Cir. 2017).2
The Makarewicz court had reasoned that:
Under the FAA, upon motion of a party, district
courts must compel arbitration of all claims subject to
arbitration. See Dean Witter Reynolds, Inc. v. Byrd, 470
U.S. 213, 218–19, 105 S.Ct. 1238, 1241–42, 84 L.Ed.2d
158 (1985). On the other hand, “the FAA does not require
parties to arbitrate when they have not agreed to do so,
. . . nor does it prevent parties who do agree to
arbitrate from excluding certain claims from the scope
of their arbitration agreement.” Volt Info. Sciences,
Inc. v. Board of Trustees of Leland Stanford Junior
Univ., 489 U.S. 468, 478, 109 S.Ct. 1248, 1255, 103
L.Ed.2d 488 (1989) (citations omitted). Because parties
are free to structure their arbitration agreements as
they see fit, “they may limit by contract the issues
which they will arbitrate.” Id. at 479, 109 S.Ct. at
1256. “When deciding whether the parties agreed to
arbitrate a certain matter . . ., courts generally . .
. should apply ordinary state-law principles that govern
the formation of contracts.” First Options of Chicago,
Inc., v. Kaplan, 514 U.S. 938, 944, 115 S.Ct. 1920, 1924,
131 L.Ed.2d 985 (1995).
Makarewicz, 122 F.3d at 940.
The parties agree that their agreement controls whether the
Court can issue injunctive relief. The question presented by Sabin
is “whether the parties’ agreement to arbitrate provides for
interim injunctions from the courts.” (Doc. #77, p. 2.) Sabin says
no, while KOVA says yes. After applying the state-law principles
of contract interpretation, the Court agrees with KOVA.
2 “Unpublished opinions are not controlling authority and are
persuasive only insofar as their legal analysis warrants.” Bonilla
v. Baker Concrete Const., Inc., 487 F.3d 1340, 1345 n.7 (11th Cir.
2007).
III.
The relevant contract provisions at issue here are as follows:
Default/Specific Performance. Each Member agrees
with the other Members that the other Members would be
irreparably damaged if any of the provisions of this
Operating Agreement are not performed in accordance with
the specific terms and that monetary damages would not
provide an adequate remedy in such event. Accordingly,
it is agreed that, in addition to any other remedy to
which the non-defaulting Member and/or the Company may
be entitled, at law or in equity, the non-defaulting
Members and/or the Company shall be entitled to
injunctive relief to prevent breaches of this Operating
Agreement and specifically enforce the terms and
provisions of this Operating Agreement in any action
instituted in any court of the United States or Florida
having subject matter jurisdiction. Therefore, if party
hereto, or the executors, administrators or personal
representatives of a decedent, shall institute any
equitable action or proceeding to enforce the provisions
hereof, any person (including the Company) against whom
such action or proceeding is brought hereby waives the
claim or defense therein that such party or such
executors, administrators or personal representatives
has or have an adequate remedy at law, and such person
shall not urge in any such action or proceeding the claim
or defense that such remedy at law exists.
. . .
Enforcement of Agreement. The Company shall be
entitled to all rights and remedies available under
Florida law to prevent, prohibit or otherwise cease
Sabin's violation of the terms of this Agreement
including, without limitation, the right to enforce the
terms hereof by specific performance and injunction, and
the right to seek any and all resulting damages. Sabin
acknowledges and agrees that a claim for damages for
breach of the provisions herein contained shall not
preclude the Company from seeking injunctive or such
other forms of relief as may be obtained in a court of
law or equity, and that the Company, in lieu of or in
addition to the remedy of damages, may seek injunctive
relief prohibiting Sabin from breaching or continuing to
breach the provisions of this Agreement. Sabin hereby
acknowledges and warrants her experience and
capabilities are such that she will be fully able to
earn an adequate livelihood for himself or herself and
his or her family if this Section should be specifically
enforced by the Company.
. . .
Arbitration. Any dispute or controversy arising
under or in connection with this Agreement that cannot
be mutually resolved by the parties hereto shall be
settled exclusively by arbitration in Naples, Florida
before one arbitrator of exemplary qualifications and
stature who shall be selected jointly by Company and
Individual, or, if Company and Individual cannot agree
on a selection, the arbitrator shall be selected by the
American Arbitration Association (provided that any
arbitrator selected by the American Arbitration
Association shall not, without the consent of the
parties hereto, be affiliated with Company, Individual
or any of their respected affiliates). Judgment may be
entered on the arbitrator's award in any court having
jurisdiction. The parties hereby agree that the
arbitrators shall be empowered to enter an equitable
decree mandating specific enforcement of the terms of
this Agreement. The expense incurred as a result of such
arbitration, including legal fees and out-of-pocket
expenses, shall be borne by the non-prevailing party.
(Doc. #78-1, pp. 35, 41, 42.)3
The Eleventh Circuit has summarized the relevant Florida
legal principles for contract interpretation:
In construing the [parties’ agreement] here, we are
Erie-bound to apply Florida contract-interpretation
principles. See In re Chira, 567 F.3d 1307, 1311 (11th
Cir. 2009). Accordingly, we will interpret the
[agreement] “in accordance with its plain meaning, and,
unless an ambiguity exists, [will] not resort to outside
evidence or the complex rules of construction to
3 KOVA labeled this exhibit as “Exhibit A.” However, the
exhibit appears on the Court’s CM/ECF system as Exhibit 1. The
Court will cite each exhibit herein by the numerical number
assigned to it by the Court's CM/ECF system.
construe the contract.” Key v. Allstate Ins. Co., 90
F.3d 1546, 1549 (11th Cir. 1996) (citations omitted). In
doing so, we must take care not to create confusion “by
adding hidden meanings, terms, conditions, or
unexpressed intentions.” Id. (citations omitted). And we
will construe the [agreement] as a whole and will avoid
treating terms “as redundant or mere surplusage” if “any
meaning, reasonable and consistent with other parts, can
be given to it.” Equity Lifestyle Props., Inc. v. Fla.
Mowing & Landscape Serv., Inc., 556 F.3d 1232, 1242 (11th
Cir. 2009)
Dear v. Q Club Hotel, LLC, 933 F.3d 1286, 1293–94 (11th Cir. 2019).
Taken together, the relevant contract provisions are
reasonably understood to mean that KOVA’s breach-of-contract claim
is subject to arbitration, and that “Sabin acknowledges and agrees
that a claim for damages for breach of the provisions herein
contained shall not preclude [KOVA] from seeking injunctive or
such other forms of relief as may be obtained in a court of law or
equity, and that [KOVA], in lieu of or in addition to the remedy
of damages, may seek injunctive relief prohibiting Sabin from
breaching or continuing to breach the provisions of this
Agreement.” (Doc. #78-1, p. 41.)
Sabin’s arguments to the contrary are unpersuasive. First,
the arbitration provision cannot be read in isolation. In Florida,
“[a] key principle of contract interpretation is that ‘courts must
not read a single term or group of words in isolation.’” Fla. Inv.
Grp. 100, LLC v. Lafont, 271 So. 3d 1, 4–5 (Fla. 4th DCA
2019)(quoting Am. K-9 Detection Servs., Inc. v. Cicero, 100 So.3d
236, 238 (Fla. 5th DCA 2012)). “[T]he language being interpreted
must be read in conjunction with the other provisions in the
contract.” Waverly 1 & 2, LLC v. Waverly at Las Olas Condo. Ass'n,
Inc., 242 So. 3d 425, 428 (Fla. 4th DCA 2018)(citing Royal Oak
Landing Homeowner's Ass'n v. Pelletier, 620 So.2d 786, 788 (Fla.
4th DCA 1993)). This is highlighted by the agreement, which states
that “[t]he provisions of this [agreement] shall be applied and
interpreted in a manner consistent with each other so as to carry
out the purpose and intent of the parties hereto . . . .” (Doc.
#78-1, pp. 34-35.) By including the arbitration provision
alongside the other two provisions, it is clear the parties
intended to preserve their ability to seek injunctive relief in
court even if the claim was subject to arbitration.
Second, Sabin’s interpretation would essentially require the
other two provisions to be ignored and discarded. This cannot be
done. “We must read the contract to give meaning to each and every
word it contains, and we avoid treating a word as redundant or
mere surplusage ‘if any meaning, reasonable and consistent with
other parts, can be given to it.’” Equity Lifestyle Properties,
Inc. v. Fla. Mowing And Landscape Serv., Inc., 556 F.3d 1232, 1242
(11th Cir. 2009) (quoting Roberts v. Sarros, 920 So.2d 193, 196
(Fla. 2d DCA 2006)). “When we interpret a contract, we cannot do
so in a way that renders a provision meaningless so long as there
is a reasonable interpretation of the contract that avoids that
result.” Kozel v. Kozel, 302 So. 3d 939, 950 (Fla. 2d DCA 2019).
Interpreting the contract to require arbitration of the breach-
of-contract claim but allowing KOVA to seek interim injunctive
relief in the courts gives meaning to all three contractual
provisions.
This interpretation of the contract is not inconsistent with
the policy favoring arbitration. The First, Second, Third, Fourth,
Sixth, and Seventh Circuits have concluded “that the entry of a
preliminary injunction actually fosters the FAA's liberal policy
toward arbitration by ensuring that the status quo is maintained
so that the arbitration proceedings remain meaningful.” Wine Not,
Int'l v. 2atec, LLC, No. 8:06-CV-117-T-23, 2006 WL 1766508, at *12
(M.D. Fla. June 26, 2006)(collecting cases). Additionally, the
parties’ arbitration clause explicitly mentions the American
Arbitration Association and “Rule [38(c)] of the American
Arbitration Association's Commercial Arbitration Rules provides
that a ‘request for interim measures addressed by a party to a
judicial authority shall not be deemed incompatible with the
agreement to arbitrate or a waiver of the right to arbitrate.’”
Ford of Kendall, LLC v. Lemus, No. 23-23978-CIV, 2024 WL 262739,
at *2 (S.D. Fla. Jan. 24, 2024).
Finally, KOVA’s current position is not contradictory to a
prior position. KOVA previously conceded there was an agreement to
arbitrate, but argued that it did not apply: “As KOVA asserts
claims under the OA and not the NCNSA, KOVA’s claim for breach of
the OA is not subject to the arbitration provisions in the NCNSA.”
(Doc. #63, p. 7.) The Court disagreed, concluding that “[s]ince
the NCNSA is part of the contract, its arbitration clause is
applicable.” (Doc. #76, p. 10.) Sabin “offer[s] no persuasive
reason to conclude that §$ 3 [of the Federal Arbitration Act]
affects the issue of temporary injunctive relief.” Variable
Annuity Life Ins. Co., 680 F. App'x at 886.
Accordingly, it is hereby
ORDERED :
Defendant’s Motion to Dissolve Amended Preliminary Injunction
(Doc. #77) is DENIED.
DONE and ORDERED at Fort Myers, Florida, this 23rd ss □□□
of April, 2024.
f —— G ~ 9
JGHN E. STEELE
SHNIOR UNITED STATES DISTRICT JUDGE
Copies:
Counsel of Record