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									                 IN THE SUPREME COURT OF FLORIDA

PETER FAYERMAN

                  Petitioner,
                                          Case No. SC06 ___________
v.

ALAN Z. APPELBAUM,

                 Respondent.



      PETITIONER PETER FAYERMAN’S JURISDICTIONAL BRIEF

                     On Review from the District Court
                        of Appeal, Fourth District
                             State of Florida




                                        QUARLES & BRADY LLP
                                        Benjamin B. Brown
                                        Florida Bar No.: 13290
                                        Mark H. Muller
                                        Florida Bar No.: 899275
                                        1395 Panther Lane, Suite 300
                                        Naples, Florida 34109
                                        Telephone: (239) 262-5959
                                        Facsimile: (239) 434-4999
                                        Attorneys for Petitioner




QBNAP\519208.1
                             TABLE OF CONTENTS

                                                                                  Page
TABLE OF CITATIONS ...........................................……………………….. iii
STATEMENT OF THE CASE AND FACTS …………………………….…                                         1
SUMMARY OF THE ARGUMENT ………………………………………...                                            3
JURISDICTIONAL STATEMENT ………………………………………….                                            4
ARGUMENT ………………………………………………………………....                                                 4
       The decision of the Fourth District Court of Appeals in this
       case expressly and directly conflicts with the First Circuit’s
       decision in Cassedy v. Merrill Lynch, Pierce, Fenner &
       Smith, 751 So. 2d 143 (Fla. 1st DCA2000) ………................................   4
CONCLUSION …………………………………………………………….… 10
CERTIFICATE OF SERVICE …………………………………………….… 11
CERTIFICATE OF COMPLIANCE …………………………………….…... 11




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                            TABLE OF CITATIONS

Cases                                                                      Page(s)
Cassedy v. Merrill Lynch, Pierce, Fenner & Smith,
751 So. 2d 143 (Fla. 1st DCA 2000). .......………………………. 3, 4, 6, 8, 9, 10


D.H. Blair & Co., Inc. v. Johnson,
697 So. 2d 912 (Fla. 4th DCA 1997) ……………………………………….                            9


Orkin Exterminating Co. v. Petsch,
972 So. 2d 259 (Fla. 2d DCA 2004) ……………………..............................       5


Turnberry Associates v. Serv. Station Aid, Inc.,
651 So. 2d 1173 (Fla. 1995) ……………………………………………..…                             5,8



Constitutional Provisions
Art. V, § 3(b)(3) Fla. Const. ………………………………………..........…                       4



Court Rules
Fla. R. App. P. 9.030(a)(2)(A)(iv) ……………………………………...…..                        4




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QBNAP\519208.1
                  STATEMENT OF THE CASE AND FACTS

       This case arises out of an arbitration decision and a final judgment by the

circuit court denying respondent Alan Appelbaum’s application for attorneys’ fees.

The Fourth District Court of Appeal reversed the circuit court.

       In September of 2003, Petitioner Peter Fayerman and his father-in-law

Donald Raab filed an arbitration Statement of Claim against Appelbaum based on

his handling of Fayerman and Raab’s bond investments and including allegations

that Appelbaum had violated Florida securities law and NASD and other rules

regarding fiduciary duties. As relief, Fayerman and Raab asked for compensatory

damages, a return of all commissions paid to Appelbaum, and, pursuant to

§ 517.211(b), Fla. Stat., reasonable attorneys’ fees and other costs incurred,

including but not limited to all arbitration costs.

       Appelbaum filed a Statement of Answer and Motion to Dismiss asking the

arbitration panel to (i) dismiss the claims against him; (ii) award him his costs,

including reasonable attorneys’ fees; and (iii) assess all forum fees against the

claimants. Appelbaum also counterclaimed against Fayerman and Raab, alleging

abuse of process and seeking “an award for damages, including costs, attorneys’

fees, pre-award interest and such other further relief” as the arbitration panel




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deemed just and proper.

       In addition to asking for attorneys’ fees in his Statement of Answer and in

his Counterclaim, Appelbaum also asked the arbitration panel for attorneys’ fees in

his pre-arbitration brief and, after six days of evidentiary hearings, Appelbaum’s

attorney stated in his closing argument to the arbitrators that “with regard to the

claim for attorneys’ fees, Mr. Appelbaum is entitled to attorneys’ fees on 517 . . . .

Mr. Appelbaum is entitled to attorneys’ fees under that claim.” Thus, on four

separate occasions Appelbaum asked the arbitration panel for an award of

attorneys’ fees: (1) in his Answer; (2) in his Counterclaim; (3) in his pre-arbitration

brief; and (4) in his closing argument.

       After hearing the evidence and the parties’ arguments, the arbitration panel

rendered an award on February 11, 2005. Claimant Raab was awarded

compensatory damages, his portion of attorneys’ fees, and certain costs. The panel

dismissed Appelbaum’s counterclaims. Finally, the panel stated that all claims not

specifically addressed, including Fayerman’s claims, were denied.

       Appelbaum then filed a motion with the circuit court asking the court, in

relevant part, (1) to confirm the portion of the arbitration award denying

Fayerman’s claims for relief and (2) to award him (Appelbaum) attorneys’ fees as




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the prevailing party on Fayerman’s claims.

       In a “Partial Final Judgment” dated September 19, 2005, the circuit court

confirmed the portion of the arbitration award denying Fayerman’s claims for

relief. In addition, the circuit court denied Appelbaum’s request for attorneys’

fees, stating in relevant part:

                 [T]he Court finds that based on the pleadings and
                 transcripts of the closing argument submitted, the right of
                 the parties to have the issue of attorneys’ fees determined
                 by the Court was submitted to the arbitration panel by
                 agreement and if not, that right was expressly waived by
                 the parties, who submitted the issue to the arbitration
                 panel. The arbitration decision did not reserve the issue
                 of attorneys’ fees for determination by the Court, but
                 rather denied Appelbaum’s claim for such fees.

       Appelbaum appealed the circuit court’s judgment and in a decision dated

September 13, 2006, the Fourth District Court of Appeals reversed and remanded.

For the reasons explained below, the Fourth District’s decision expressly and

directly conflicts with the First District’s decision in Cassedy v. Merrill Lynch,

Pierce, Fenner & Smith, 751 So. 2d 143 (Fla. 1st DCA 2000).

                          SUMMARY OF THE ARGUMENT

       In this case, the Fourth District held that, in order for parties to an arbitration

to waive their right to have the issue of attorneys’ fees decided by the circuit court,




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their waiver must be “express” as that term is used in the field of contracts.

According to the Fourth Circuit, there can be no waiver implied in fact and a court

may not examine and interpret the parties’ conduct to give definition to their

unspoken agreement. This decision cannot be reconciled with the First District’s

decision in Cassedy v. Merrill Lynch, Pierce, Fenner & Smith, 751 So. 2d 143

(DCA 4th 2000).

                           JURISDICTIONAL STATEMENT

       The Florida Supreme Court has discretionary jurisdiction to review a

decision of a district court of appeal that expressly conflicts with a decision of the

supreme court or another district court on the same point of law. Art. V, § 3(b)(3)

FLA. CONST.; Fla. R. App. P. 9.030(a)(2)(A)(iv).

                                       ARGUMENT

       The decision of the Fourth District Court of Appeals in this case
       expressly and directly conflicts with the First District’s decision
       in Cassedy v. Merrill Lynch, Pierce, Fenner & Smith, 751 So. 2d
       143 (Fla. 1st DCA 2000).

       Section 682.11, Fla. Stat., provides in its entirety:
                 Unless otherwise provided in the agreement or provisions
                 for arbitration, the arbitrators’ and umpires’ expenses and
                 fees, together with other expenses, not including counsel
                 fees, incurred in the conduct of the arbitration, shall be
                 paid as provided in the award.



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       Florida courts have interpreted this statue to mean that the attorneys’ fees

incurred by a party in an arbitration are recoverable only in the circuit court on a

motion for confirmation or enforcement of the award. See, e.g., Orkin

Exterminating Co. v. Petsch, 872 So. 2d 259, 263 (Fla. 2d DCA 2004). However,

the Florida Supreme Court has held that the parties to an arbitration may waive

their statutory right to have the circuit court determine entitlement to attorneys’

fees and by doing so may confer subject matter jurisdiction on the arbitrators to

decide the issue. See Turnberry Associates v. Serv. Station Aid, Inc., 651 So. 2d

1173, 1175 (Fla. 1995). The court in Turnberry grounded its holding in a public

policy that strongly favors arbitration as a means of dispute resolution and

therefore requires courts to adhere to “broad construction in favor of arbitration.”

Id. On that basis, the Turnberry court saw “no reason why the parties may not also

voluntarily agree to allow the collateral issue of attorney fees to be decided in the

same forum as the main dispute.” Id. The court further explained that, while

parties to an arbitration could ask the arbitrators to decide entitlement to attorneys’

fees, “we will continue to permit trial courts, in the event a dispute arises, to enjoy

exclusive jurisdiction to resolve the factual issue of whether the parties have

waived their statutory right to have the court decide the fee issue.” Id.




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       Under what set of circumstances can the parties to an arbitration be said to

have submitted the fee issue to the arbitrators? The standard established in

Turnberry was that waiver had to be “express.” The First District Court of Appeal

addressed the issue of what constitutes “express” waiver in Cassedy v. Merrill

Lynch, Pierce, Fenner & Smith, 751 So. 2d 143 (Fla. 1st DCA 2000).

When Merrill Lynch terminated Cassedy’s employment, the parties agreed to

arbitration. In his Statement of Claim, Cassedy sought compensatory and

consequential damages, payment of compensation benefits, and punitive damages

and included a separate claim for attorneys’ fees under Florida law. In its

Statement of Answer, Merrill Lynch did not specifically address Cassedy’s claim

for attorneys’ fees, but it did deny “each and every allegation of the Statement of

Claim.” During the arbitration, Merrill Lynch repeatedly argued that the panel

should deny Cassedy’s claim for attorneys’ fees because there was no statutory

basis for such an award. Merrill Lynch also asked the arbitrators to award it its

own attorneys’ fees. The arbitration panel found Merrill Lynch liable and awarded

Cassedy over $300,000 in compensatory damages and over $160,000 in attorneys’

fees. The arbitrators denied Cassedy’s request for punitive and consequential

damages and they denied Merrill Lynch’s request for attorneys’ fees.




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       Merrill Lynch asked the circuit court to vacate the arbitration award,

arguing, among other things, that under § 682.11 an award of attorneys’ fees in an

arbitration is a matter for judicial determination, unless waived. The circuit court

set aside the award of attorneys’ fees, stating that “[i]n reviewing the Pleadings

filed by the Plaintiff and the transcript of the arbitration proceeding, this Court can

only find there may have been an implied waiver as to the attorneys’ fee issue and

not an express waiver.” Id. at 146.

       On appeal, the First District reversed, holding “that the parties in this case,

by their words and actions, expressly waived their right to have a court decide the

issue of attorneys’ fees.” The First District further held that “no ‘express

agreement’ devoted exclusively to the question of attorneys’ fees is necessary, and

the parties may, by their actions, filings and submissions, expressly waive their

right to insist that only a court decide the issue of attorneys’ fees.” Id. at 149.

Applying that holding to the facts, the First District held that an express waiver had

occurred. In particular, “both parties agreed to submit to arbitration all the claims

raised in the Statement of Claim, which included the claim for attorneys’ fees.” Id.

Further, while Merrill Lynch argued that there was no statutory basis for awarding

attorneys’ fees to Cassedy, the First District noted that Merrill Lynch had litigated




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before the arbitration panel the issue of entitlement to attorneys’ fees and had made

a fee request of its own in the arbitration proceeding. Id. at 149-50. On that basis,

the First District concluded that “the parties expressly waived their right to insist

that a court decide the attorneys’ fee issue.” Id. at 150.

       The Fourth District’s decision in the case at bar is directly and expressly

inconsistent with the First District’s decision in Cassedy. According to the Fourth

Circuit, there can be no waiver implied in fact and a court cannot examine and

interpret the parties’ conduct to give definition to their unspoken agreement.

Opinion at 2. In his opinion concurring in the result, Judge Klein stated that the

majority opinion “appears to require more for a waiver than I believe is necessary

under Turnberry Associates v. Serv. Station Aid, Inc., 650 So. 2d 1173 (Fla.

1995).” Opinion at 4. Recognizing the inconsistency between the majority’s

application of Turnberry and the First Circuit’s decision in Cassedy, Judge Klein

explained that Turnberry “allows a trial court to make a factual finding that, by

conduct, a party waived the statutory right to have the court decide the fee” and

stated that “I therefore agree with Cassedy v. Merrill Lynch, Pierce, Fenner &

Smith, 751 So. 2d 143 (Fla. 1st DCA 2000).” Judge Klein further explained how

the First Circuit in Cassedy had expressly disagreed with the Fourth Circuit’s




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QBNAP\519208.1
decision in D.H. Blair & Co., Inc., v. Johnson, 697 So. 2d 912 (Fla. 4th DCA

1997), “because Blair appears to require a separate written agreement waiving the

right to have a circuit court determine attorneys’ fees.” Opinion at 5. The Fourth

Circuit majority relied on Blair in reaching its decision in this case. Thus, the

inconsistency between the First Circuit’s Cassedy decision and the Fourth Circuit

majority decision in this case has its roots in the Fourth Circuit’s overly restrictive

reading of Turnberry in Blair.

       In addition to resolving the direct and express inconsistency described

above, this Court should exercise its discretion to review this case because of its

potentially far-reaching implications. It is well-known that public policy in Florida

strongly favors arbitration over litigation to resolve private disputes. And in a state

like Florida, which has a large population of investors, it is clearly of great public

importance that an economical, efficient mechanism such as arbitration be

available to resolve disputes that arise between investors and their brokers.

The inconsistency between the First Circuit’s approach, as articulated in Cassedy,

and the Fourth Circuit’s decision in this case greatly impedes the effective use of

arbitration by setting up two standards for deciding when the parties have indeed

agreed to allow the issue of attorneys’ fees to be decided by the same arbitration




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panel that decides the main dispute.

                                  CONCLUSION

       For the reasons stated above, this Court has discretionary jurisdiction to

consider the merits of Fayerman’s argument. In light of the express and direct

conflict between the Fourth Circuit’s decision and the decision reached by the

First Circuit in Cassedy, and in light of the broad adverse implications that the

conflict between the circuits has for using arbitration to resolve disputes, the Court

should accept jurisdiction.

       Dated this _____ day of October, 2006.

                                          Respectfully submitted,

                                          QUARLES & BRADY LLP


                                          By:__________________________
                                                Benjamin B. Brown
                                                Florida Bar No.: 13290
                                                Mark H. Muller
                                                Florida Bar No.: 899275
                                                1395 Panther Lane, Suite 300
                                                Naples, Florida 34109
                                                Telephone: (239) 262-5959
                                                Attorneys for Petitioner




                                         -10-
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                            CERTIFICATE OF SERVICE

       I HEREBY CERTIFY that on October _____, 2006, a true and correct copy

of this document was served by U.S. Mail on:

                 Cynthia Morales
                 Daniel S. Newman
                 BROAD and CASSEL
                 One Biscayne Tower, 21st Floor
                 2 South Biscayne Blvd.
                 Miami, FL 33131


                                                __________________________
                                                   Benjamin B. Brown




                         CERTIFICATE OF COMPLIANCE

       I HEREBY CERTIFY that this Jurisdictional Brief has been prepared using

Times New Roman 14-point font and thus complies with the font requirements of

Fla. R. App. P. 9.210(a)(2).



                                                __________________________
                                                   Benjamin B. Brown




                                         -11-
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             IN THE SUPREME COURT OF FLORIDA
PETER FAYERMAN

                        Petitioner,
                                   Case No. SC06 ___________
v.

ALAN Z. APPELBAUM,

                      Respondent.



         APPENDIX TO JURISDICTIONAL BRIEF OF PETITIONER,
                        PETER FAYERMAN




                                QUARLES & BRADY LLP
                                Benjamin B. Brown
                                Florida Bar No. 13290
                                Mark H. Muller
                                Florida Bar No. 899275
                                1395 Panther Lane, Suite 300
                                Naples, FL 34109-7874
                                Telephone: (239) 262-5959
                                Facsimile: (239) 434-4999
                                Attorneys for Petitioner




                                    -1-
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                 TABLE OF CONTENTS TO APPENDIX

                                                 Tab

Decision of District Court of Appeal, Fourth
District………………………………………………………………………1




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