Tuesday, September 10, 2013

Unconfirmed Arbitration Award is "Debt Due" Subject to Garnishment

The Florida Third District Court of Appeals issued its decision in Capital Factors, Inc. v. Alba Rent-a-Car, Inc., et al., 32 Fla.L.Weekly D21070 (Fla. 3rd. DCA 2007) and held that an unconfirmed arbitration award qualifies as a "debt due" by the garnishee subject to garnishment under Section, 77.01, Florida Statutes. The Court held that an arbitration award does not require judicial confirmation to be collectible by garnishment.

The Court noted that Florida looks favorably upon agreements to arbitrate and that ordinarily a decision by arbitrators are as binding and conclusive as a judgment of a court. Am. Renaissance Lines, Inc. v. Saxis Steamship Co., 502 F.2d674,678(C.A.N.Y.1974). The Court also noted that the arbitrator's award represents a liquidated amount due by the garnishee and that the award on its face was final. The contracts in this case did not state that confirmation was necessary for finality and that confirmation is not mandatory to validate an award's finality. It was pointed out that frequently confirmation of an arbitration award is not sought, but is often only sought when the prevailing party fears that the losing party will not honor the award. An unconfirmed award is a contract right that may be used as the basis for a cause of action. The Court further noted that even a disputed debt due is still subject to garnishment. Ala. Hotel Co. v. J.L.Mott Iron Works, 98 So. 825, 827 (Fla.1924).