By Leslie King O’Neal
Arbitration is a creature of contract. Parties seeking to compel arbitration must show three things: (1) a valid written arbitration agreement; (2) an arbitrable issue; (3) no waiver of the right to arbitrate. But, just any a contract containing an arbitration clause won’t do the trick—the parties seeking arbitration must have a connection to the arbitration agreement. Non-signatories can compel arbitration in some circumstances, depending on state law principles. But, as this week’s post shows, a non-signatory cannot “borrow” an arbitration clause from a separate contract when the claims against it aren’t related to that contract.
In Andersen Service Corp. v. Old Republic Surety Co.[i] a subcontractor liened a project in Broward County, Florida. The general contractor, Marco Construction transferred the lien to Old Republic’s bond pursuant to Section 713.24, Florida Statutes. The lien transfer bond contained no arbitration agreement, nor did it incorporate or reference the subcontract between Andersen and the general contractor. The subcontract included a clause allowing only Marco to elect arbitration or litigation of disputes.
Andersen filed a complaint seeking damages from the bond in Broward County, Florida Circuit Court. Old Republic was the sole defendant. Old Republic moved to compel arbitration, citing the arbitration clause in the Andersen/Marco subcontract, which mandated the arbitration be held in Allegheny County, PA. Old Republic was not a party to nor was it named in the subcontract. Despite the fact that Old Republic was essentially “borrowing” the subcontract arbitration clause, the trial court granted the motion and compelled arbitration.
On appeal, the 4th DCA reversed, holding there was no valid arbitration agreement between Andersen and Old Republic. The subcontract bound only its parties. Old Republic was not a party to the subcontract, nor did its lien transfer bond incorporate the subcontract or the arbitration agreement.
The appellate court rejected Old Republic’s argument that equitable estoppel applied to permit arbitration. The court distinguished Henderson Investment Corp. v. International Fidelity Insurance Co.,[ii] and St. Paul Fire & Marine Insurance Co. v. Woolley/Sweeney Hotel No. 5,[iii] because in those cases, the surety bond incorporated the contract containing the arbitration clause. The court noted that Andersen’s lawsuit involved only the lien transfer bond, not the subcontract. Thus, there was no basis for equitable estoppel.[iv] Old Republic could not arbitrate its dispute.
Takeaways
- While non-signatories can compel arbitration (or be compelled to arbitrate), they must show a connection with the arbitration agreement.
- State law contract principles (assumption; agency; piercing the corporate veil/alter ego; incorporation by reference; third party beneficiary; waiver and estoppel) determine if non-parties can enforce arbitration agreements.
- Non-parties using equitable estoppel to enforce arbitration must show that their claims are dependent upon and intertwined with claims related to the contract with the arbitration clause.
- If the contract doesn’t provide for arbitration, parties can enter into a submission agreement if they want to arbitrate.
[i]427 So.3d 1002 (Fla. 4th DCA 2026
[ii]575 So. 2d 770 (Fla. 5th DCA 1991)
[iii]545 So. 2d 958 (Fla. 4th DCA 1989)
[iv]Equitable estoppel is used where the non-signatory’s claims are dependent upon and intertwined with claims related to the contract with the arbitration clause.
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