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3rd DCAMay 22, 2019Reversed and Remanded⭐ Notable

Sea Vault Partners, LLC v. Bermello, Ajamil & Partners, Inc.

Case No. 17-2443

The trial court sanctioned Sea Vault $302,848.03 for bad-faith failure to arbitrate based on its nonpayment of a $5,000 arbitrator deposit, after the arbitrator had already denied BAP's sanctions motion. The Third District reversed, holding the trial court never ordered the parties to arbitrate (its order merely said 'Denied' to an injunction motion), that no party had moved to compel payment of the deposit, and that a court's inherent authority does not reach a party's conduct in a pending arbitration.

Key facts

  • Sea Vault Partners, LLC and Bermello, Ajamil & Partners, Inc. were parties to an arbitration agreement; Sea Vault failed to pay a $5,000 arbitrator deposit required during the arbitration proceeding.
  • The trial court sanctioned Sea Vault $302,848.03 for bad-faith failure to arbitrate based on the nonpayment, after the arbitrator had already denied a sanctions motion on the same issue.
  • +2 more key facts with a free trial

Why it matters

A substantial reversal of a $300,000+ sanctions award that gives arbitration practitioners a clear rule: trial courts cannot police a party's conduct inside a pending arbitration, and nonpayment of arbitrator fees is a… — full analysis with a trial

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