11th Circuit Upholds Arbitration in Construction Contract Dispute, Rejects Jurisdiction Challenge by Subcontractor

John Bell Construction (JBC) served as a subcontractor for Tutor Perini Corp. on the Miami-Dade County courthouse construction project for which Tutor Perini was the design-builder and Plenary Justice Miami, LLC (Plenary) was the developer.

JBC sought to increase compensation for cement masons and tile setters from $13.76–$18.01 per hour to $32.09 per hour. Section E of the subcontract required JBC to present such claims to Tutor Perini, and Tutor Perini and Plenary would then present it to the county on JBC’s behalf. Tutor Perini and Plenary Justice presented the claim to the alternative-dispute hearing examiner designated by the parties, who rejected JBC’s claim.

JBC then appealed the arbitration result, arguing the hearing examiner selected by the parties lacked jurisdiction to arbitrate the dispute. However, on appeal, the 11th Circuit held that jurisdiction was “explicitly conferred” by the subcontract on whomever the County and the development team chose to resolve disputes. It further noted that there was no support at all for the idea that Florida law requires the use of a government hearing examiner rather than a private arbitration company.

JBC also argued that “substitution of a private tribunal” required some sort of governmental act of approval. The 11th Circuit rejected this argument, both because there is no such requirement under Florida law and because the subcontract agreement itself was, in fact, signed by the mayor of Miami-Dade County and approved by its Board of Commissioners. As such, the 11th Circuit affirmed the arbitration ruling.