The Florida Supreme Court concluded that the state’s statute of limitations governing civil actions or proceedings applies not just to judicial actions, but to arbitrations as well. See Raymond James Financial Services Inc. v. Phillips, Fla., No. SC-2513, 5/16/13.
The court said that the investors commenced arbitration proceedings in 2005, contending the broker-dealer’s branch office manager invested their assets into non-diversified, high-risk entities, causing a significant loss in value between 1999 and 2005. The investors alleged federal and state securities law violations, and claimed that the broker-dealer negligently failed to supervise the branch office manager. The broker-dealer moved to dismiss the allegations as untimely under the relevant limitations periods. The NASD — now FINRA — appointed an arbitration panel and scheduled a hearing on the dismissal motion. However, before the hearing, the investors filed a declaratory judgment action in Florida state court, alleging, among other matters, that Florida’s statute of limitations did not apply to arbitration proceedings. Although the lower courts agreed with the investor, the supreme court concluded that it applied to arbitrations, pointing out that arbitration is utilized in various contexts—not just arbitrations governed by FINRA.
In sum, investors will no longer be able to extend the filing of their actions in Florida.