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Don’t Like An Award From Compulsory Arbitration? You Must Appeal

Can a party to a case where a judgment has been entered in compulsory arbitration have that judgment modified without appealing? This is the underlying question in the recent matter heard by the Pennsylvania Superior Court, captioned as Blucas v. Agiovlasitis, 2018 Pa.Super. 25.

In Blucas, tenants brought suit against their former landlord for the return of their security deposit. The landlord, of course, claimed the leasehold had damages for which he incurred expenses and he needed compensation/reimbursement from the tenants.

The case was tracked into compulsory arbitration pursuant to 42 Pa.C.S.A. Section 7361. After a hearing before a panel of arbitrators, a judgment was entered awarding the tenants $10,000 and the landlord $1,450, for a net award to the tenants of $8,550.

Pursuant to Pa.R.C.P. 1307 and established case law, the entry of an award following compulsory arbitration has the force and effect of a final judgment. The court contrasted an award flowing from compulsory arbitration with one following statutory or common law arbitration. Unlike an award from compulsory arbitration, a party must petition the trial court to confirm an award from statutory or common law arbitration 30 days or more following the date of the award. For an award from compulsory arbitration neither party must file a præcipe to enter judgment on the award.

In July 2016, an award and notice of the same was entered on the docket in this matter, and was final (unless appealed). A judgment on the award was entered in November 2016. Within less than two weeks following the entry of the judgment in Blucas, the landlord remitted a check to the tenants for the full amount of the judgment ($8,550). Pursuant to Pa.R.C.P. 1307, a party must file an appeal within 30 days from when the award and notice are entered on the docket in order to further litigate the matter. No appeal was ever filed. Instead of appealing, the tenants, in April 2017, filed a motion for costs and prejudgment interest (motion) requesting a recalculation of the award.

The court reviewed the various case, statutory, and procedural laws applicable to the instant matter, and unequivocally concluded that the sole remedy for an adverse or unsatisfactory compulsory arbitration award is an appeal within 30 days from the award and notice. The only exception to the above the court could discern is Pa.R.C.P. 1307(d), which provides for a means to “mold” a previously entered award for obvious errors, in either arithmetic or language, that do not go to the substance and/or merits of the award.

The tenants’ motion did not address basic errors in arithmetic and language but, rather, asked the trial court to award them additional damages in prejudgment interest and costs. Inexplicably, and without citing support, the trial court granted the tenants’ motion, which led to the landlord’s appeal to Pennsylvania Superior Court, resulting in the decision, cited above, that is the subject of this article.

Superior Court noted that the motion did not comply with the law and procedure cited above.  The motion clearly is not an example of “molding.” More importantly, it was not filed within 30 days of the award.  The trial court was unclear as to precisely how it calculated the award and what the figures in the award exactly represented (e.g., interest and costs? security deposit? pet deposit? etc.). As a result, there is no way for Superior Court to even attempt to “mold” the award regarding prejudgment interest, even if it could. Consequently, as the tenants did not file an appeal of the compulsory arbitration award, the trial court was without authority to attempt to revisit the award with regard to prejudgment interest.

As always, it is absolutely critical for practitioners to be totally cognizant of the applicable deadlines and time periods mandated by law or procedure and act accordingly to ensure compliance with the same and opportunity to litigate a matter as fully as possible.

Originally published in The Legal Intelligencer on March 19, 2018 and can be found here.

A Collection of Personal Injury Writings by James W. Cushing, Esquire

Over the course of my career, I have written extensively on a wide variety of personal injury legal principles.  These writings have been published in The Legal IntelligencerUpon Further Review, and The Pennsylvania Family Lawyer as well as posted onto my blog.  I have collected these articles and blog posts and have listed them below.  Thanks for reading!

Musings:

My Articles:

Court’s Stern Order Ships Philadelphia’s Fire Boat Case Back to Port

In the recent matter of City of Philadelphia v. Borough of Westville, 93 A.3d 530 (Pa.Cmwlth. 2014) the Commonwealth Court of Pennsylvania weighed in on the application of jurisdictional standards and the Pennsylvania Long Arm Statute on a government entity like the City of Philadelphia.

In 2010 the City’s Fire Department responded to a fire at an oil refinery on the New Jersey side of the Delaware River. In order to fight the fire, the Fire Department deployed a fire boat which, while travelling to the fire, caused an especially large wake in the water which damaged another fire boat that was deployed by the Fire Department of the Borough of Westfield, New Jersey.

In order to be compensated for the damage to its fire boat, Westfield submitted an insurance claim against the Philadelphia Fire Department’s insurance carrier. In turn, the insurance carrier pursued the City via subrogation for the insurance funds outlaid to Westfield. In response to the subrogation attempt, the City filed for a declaratory judgment in the Philadelphia Court of Common Pleas against Westfield, seeking to absolve it of any liability for the damage to the boat and seeking to enjoin Westfield from seeking property damages from the City on the basis of government immunity. Westfield filed preliminary objections to the City’s efforts in the Philadelphia Court of Common Pleas on the basis that a court in Pennsylvania lacks personal jurisdiction over Westfield, which the Court promptly overruled. Subsequently the City filed a motion for judgment on the pleadings against Westfield which was granted by the Court on the basis that the City was immune from such a subrogation matter. Westfield filed an appeal to the Commonwealth Court of Pennsylvania from the Court of Common Pleas’ overruling of its preliminary objections, and it is that appeal that is the subject of this article.

In considering the appeal, the Commonwealth Court reviewed the criteria for meeting Pennsylvania jurisdictional standards. The first criterion for jurisdiction is for a party (namely Westfield) to have minimum contacts with the forum in which the court where the action was filed is located. The court may exercise jurisdiction over a non-resident, such as a corporate entity like Westfield, if it engages in continuous and systematic business in the forum. In addition, Pennsylvania’s Long Arm statute permits jurisdiction over a non-resident if the non-resident party acts directly, or through an agent, to conduct business in the forum.

The Commonwealth Court ruled that the City, in this matter, failed to establish that Pennsylvania has jurisdiction over Westfield. No evidence was presented to the Court indicating that Westfield’s fire boat ever crossed into Pennsylvania waters. The City argued that Westfield assisted with a Pennsylvania fire in 2010, attended a handful of meetings between 2008 and 2010, and could have had a boat wander into Pennsylvania waters from time to time. The Court, upon review, did not view these “contacts” remotely sufficient to trigger Pennsylvania’s jurisdiction over Westfield.

Similarly, the Court ruled that Westfield’s insurance company’s contacts with Pennsylvania were neither continuous nor substantial. Indeed, the Court noted that the insurance company’s principal place of business is in New Jersey, conducts all of its business there, and owns no real estate or uses any office space in Pennsylvania. As a result, the Court did not think jurisdiction could be extended through the insurance company’s contacts either. In response, the City pointed out that the insurance company has communicated with people in Pennsylvania through telephone calls and letters and its claim administrator has Pennsylvania offices. Despite these contacts presented by the City, the Court remained unmoved in its determination that jurisdiction does not apply.

Based on the above, the Court reversed the lower court’s overruling of Westfield’s preliminary objections, vacated the Order granting the City’s motion for judgment on the pleadings, and dismissed the City’s matter in its entirety for lack of jurisdiction.

As this matter explicitly highlights, no matter who the parties are or whether the underlying matter is simple or complex, practitioners must be sure not to overlook the most basic of legal issues, like jurisdiction, when bringing a case.

Originally published in Upon Further Review on February 18, 2015 and can be found here.

Local Ice Rink Tries to Put Law Suits on Ice

My nephew recently had a birthday and, because he is an avid ice hockey player, he chose to celebrate it at a local ice rink.  Before I get to the meat of this post let me say that I had not ice skated in at least ten years before that party and I was seriously out of practice!  By the end of the party I felt I was back to some semblance of respectability, but my back, ankles, and knees are clearly not as young as they once were.

Anyway, the ice rink facility the party was held at is very large and well equipped for such a party.  The facility is so large that there are two ice rinks separated by a common area for eating and lacing up one’s skates.  Next to one of the rinks are a series of smaller rooms where people gather for the parties that are held.  As one may expect from a kid’s party, much pizza, cake, and Coca-Cola are consumed in these rooms.

Part of the party process requires anyone intending to participate in ice skating to receive a sticker which identifies him/her as a guest of a party.  The sticker is a white paper with the name of the party on a piece of wax paper.  The person who receives the sticker peels off the sticker from the wax paper and puts the sticker on his or her shirt as identification on the ice rink.

All seemed rather typical to me for such a party until I noticed something peculiar.  While I was enjoying a slice of pizza, one of the kids at the party peeled off his sticker from its wax paper backing and threw the wax paper onto the table in front of me.  I glanced down at the wax paper and noticed that it was covered with text.  Curiosity got the best of me, so I picked up the wax paper and read all of the text written on it, which read as follows:

WAIVER OF LIABILITY

ASSUMPTION OF RISK:

I am aware that ice skating, hockey and/or broomball activities involve inherent risks dangers and hazards which can result in serious personal injury or death.  I am also aware that the ice skating rinks and arenas contain dangers that can cause serious injury or death.  I hereby freely agree to assume and accept all known and unknown risks of injury arising out of ice skating, hockey and/or broomball activities.  I recognize and acknowledge that risks of ice skating, hockey and/or broomball can be greatly reduced by: taking lessons, abiding by the Responsibility Code and using common sense.

RELEASE AND WAIVER OF CLAIMS AGREEMENT:

For allowing m e to participate in public skating, hockey and/or broomball activites at the [ice rink], I agree to the fullest extent permitted by law, as follows: 1) TO WAIVE ALL CLAIMS that I have or may have against the [ice rink] and its owners and affiliates, arising out of public skating, hockey and/or broomball.  2) TO RELEASE the [ice rink] and its owners and affiliates from all liability for any loss, damage, injury or expense that I (o my next of kin, parent, guardian estate) may suffer, arising out of ice skating, hockey and/or broomball activities from any cause whatsoever including negligence or breach of contract on the part of the [ice rink] in the operation, supervision, design or maintenance of its facility.

So, basically, on the back of the wax paper for the identification sticker was a rather detailed waiver which protects the ice rink from all liability for injuries sustained there.  When I saw this, I instantly knew I had to write a blog on it because this waiver seemed so ridiculous to me.

I find this waiver to be of dubious enforceability.  Waivers must be accepted knowingly.  The identification stickers are merely provided by the ice rink to the person in charge of the party who then distributes them to the people at the party.  No one at the ice rink indicated that a waiver of liability is written on the back of the stickers.  Furthermore, the waiver is written on what is ostensibly trash.  The people there had no idea that the back of the stickers had text on them, let alone something as vitally important as a waiver of liability.  Instead, the people at the party – as one may expect – simply peeled off the stickers from the wax paper and threw out the wax paper.  I would have never noticed it myself had the kid at my table not, by chance, tossed his trash in front of me.  In addition, the waiver of liability is received after the contract was formed and payment was made for the use of the ice rink.  So, no consideration was exchanged for the waiver.  A waiver cannot simply be thrust onto someone after the contract was formed and payment made.  Even if it could be argued that there was consideration for the waiver between the ice rink and the person who paid for the party, there was certainly no consideration between the ice rink and a guest of the party.

A waiver of this sort is basically an exculpatory clause.  When it comes to exculpatory clauses, they are to “be strictly construed with every intendment against the party seeking their protection.” Phillips Home Furnishings v. Continental Bank, 231 Pa. Super. 174 (1974) citing Kotwasinksi v. Rasner, 436 Pa. 32 (1969). Furthermore, an exculpatory clause will not be valid if there is a disproportionate bargaining power between the parties to the contract at issue. Id. citing Hennigsen v. Bloomfield Motors, Inc., 161 A. 2d 69 (NJ, 1960).  In addition, an exculpatory clause that a Court is unwilling to enforce is where the terms of a contract are unwilling to be altered by its maker.  In other words, a contract where the other party (i.e.: not the drafter of the contract) “has no bargaining power and must accept [the] terms” presented to him and is “powerless to alter” them, with rejection of the contract as the only alternative to executing the contract.  There is no meeting of the minds in this sort of contract negotiation. Galligan v. Arovitch, 421 Pa. 301 (1966).  In addition to the relationship of the parties to a contract, the Court also analyzes whether a party to a contract were “aware of and understood the terms of the release before his agreement can be deemed a particularized expression of the intent to assume risk.” Wang v. Whitetail Mountain Resort, 933 A.2d 110 (Pa.Super., 2007) citing Chepkevich v. Hidden Valley Resort, 911 A.2d 946 (Pa.Super.2006).  Finally, “[i]n determining whether a releasing party had such awareness and understanding, we consider: 1) the release’s placement in the document; 2) the size of the release’s print; and, 3) whether the release is highlighted in some fashion.” Id.,citing Beck-Hummel v. Ski Shawnee, Inc., 902 A.2d 1266, 1269 (Pa.Super.2006)

Based on the above, I think it is pretty clear that the language located on the back of the sticker is problematic. The contract relationship is obviously imbalanced.  A person seeking admission to the ice rink has no choice but to accept the exculpatory clause else he cannot gain access.  Further, the exculpatory clause is printed on what amounts to a piece of trash.  The guest cannot bargain and negotiate with the person at the ice rink’s office about the terms of the clause and try to change them.  In fact the person at the office likely has no authority at all to act on the ice rink’s behalf in order to change or alter the language on the sticker even if he wanted to do it.  So, obviously, there is a “take-it-or-leave-it” aspect to the sticker.  In terms of whether the recipient of the sticker was aware of and understood the terms of the exculpatory clause, I think even the average observer can see that there is likely no awareness of this clause, let along comprehension, at the time of entry into the rink.  Who reads what is basically trash?  No one gets the language mentioned or explained by the person at the ice rink’s office.  I would guess that the person at the office has likely never read it either or knows what it means.  What non-lawyer knows what an exculpatory clause is or how it works and how it could effect him?  Remember, this is all in the context of a busy kids’ party and being handed a sticker for one’s shirt amid the hustle and bustle at an ice rink.  Who is taking the time to read the wax paper on the back of a sticker, let alone understand the technical legal jargon on it?

I wrote a similar post to this one a couple of summers ago about my trip to the Philadelphia Zoo.  The Zoo tries to do similar things as this ice rink, which is to sneak in an exculpatory clause on the back of an admission ticket after the ticket is purchased which means, therefore, there is no opportunity to read it at the time of purchase.  You can read more about that clause here.

So, suffice it to say, I think the inclusion of the exculpatory clause on the back of the ice rink’s identification sticker is pretty sneaky.  I do not think the clause is particularly enforceable and is of questionable legitimacy in contractual terms.

Post-Trial Relief Post-Remand

Pursuant to Pennsylvania Rule of Civil Procedure 227.1, the parties to a case must file post-trial motions before filing an appeal after the trial or risk waiver of issues on appeal. Although the aforesaid rule reflects longstanding and standard procedure, evidently there has been some dispute as to what precisely triggers the application of the rule and that is the issue raised and ruled upon in the Pennsylvania Supreme Court case of Newman Development Group of Pottstown, LLC v. Genuardi’s Family Markets, Inc., 617 Pa. 265.

 

The underlying case involved a lease dispute which went to trial. At the conclusion of the trial, both parties filed the appropriate post-trial motions and appeals pursuant to PaR.C.P. 227.1(c). The Superior Court vacated the trial court’s judgment and remanded to recalculate damages. Accordingly, the parties filed memoranda with the trial court and presented oral argument, but presented no additional evidence or legal arguments regarding damages; thereafter, the trial court again entered a judgment, this time using recalculated numbers. An appeal from the trial court’s new calculation of judgment was filed, but no post-trial motions were filed, and, as a result, Superior Court quashed the appeal as non-compliant with Pa.R.C.P. 227.1(c). As a result, an appeal to the Pennsylvania Supreme Court from the Superior Court’s decision to quash the appeal from the trial court was filed and is the subject of this article.

 

The single issue to be decided by the Supreme Court on appeal was whether post-trial motions were required to be filed before the filing of an appeal from a trial court hearing which was not a trial.

 

The Court’s opinion focused on the language of Pa. Rule of Civil Procedure 227.1(c), which reads as follows: “[p]ost-trial motions shall be filed within ten days after (1) verdict, discharge of the jury because of inability to agree, or nonsuit in the case of a jury trial; or (2) notice of nonsuit or the filing of the decision in the case of a trial without jury.” The Court stated that one of its goals was to help ensure the appellate process is consistent and predicable. The Court first noted that the Rule does not, by its own terms, refer to anything but trials, but it does not define precisely what a “trial” is, nor does it address its applicability on a remand for a specific issue. Ultimately, the Court indicated that applying a rule which, on its face only applies to trials, to a non-trial hearing would be at odds with the reasonable expectations of attorneys reading the rule. Indeed, as the Court pointed out, a new rule addressing the procedures for non-trial hearings could be drafted and adopted.

 

The Court next looked at the available cases decided under Pa.R.C.P. 227.1(c), specifically looking at the cases of Lenhart v. Travelers Ins. Co., 408 Pa.Super. 1 (1991) and Cerniga v. Mon Valley Speed Boat Club, 862 A.2d 1271 (2004). The Court asserted that these cases stressed the application of Pa.R.C.P. 227.1(c) would only be triggered if a remand produced new or additional factual findings or conclusions of law. Per the Court’s reading of these cases, it believed an attorney could review them and reasonably conclude that no post-trial motions would be required absent additional factual findings or conclusions of law, as there would have been no “trial” as required by the Rule.

 

In sum, the Court simply did not believe that the Rule addressed a remand scenario as occurred in this case; therefore, any failure to file a post-trial motion in this matter would not result in a waiver of any issue or argument. Regardless, considering the vague wording of the Rule, and the strength of the two cases cited above, the Court believed a waiver would be too great a penalty for a reasonable interpretation of a vaguely worded Rule. Finally, the Court referred the Rule, and the issues in this case, to the Civil Procedural Rules Committee in order to better clarify these matters.

Originally published on February 13, 2015 in The Legal Intelligencer Blog and can be seen here.

Accepting Voluntary Layoff Is Now Involuntary Termination

Decades of Pennsylvania law concerning eligibility for unemployment compensation after accepting an early retirement package has been overturned in the recent landmark Pennsylvania Supreme Court case of Diehl v. Unemployment Compensation Board of Review, 57 A.3d 1209

In Diehl, the Plaintiff, a sixty-three (63) year old man with twenty-three (23) years’ seniority with his employer, was given a memorandum from his employer which included a list of twenty (20) employees who would be laid off pursuant to a reduction-in-force; but Plaintiff was not on the aforesaid list. The employer also offered employees over the age of sixty (60) an early retirement program, for which Plaintiff was eligible. Plaintiff accepted the early retirement program and effectively quit his position with employer as a result; he subsequently applied for unemployment compensation benefits.

Plaintiff was ruled to be ineligible for benefits at every level of the litigation of this matter, prior to the Supreme Court’s decision which is the subject of this article. The reasoning of the lower decision-makers’ was based on Plaintiff’s voluntarily accepting the early retirement program which effectively served as a voluntary termination of his employment without a necessitous and compelling reason to do so. Plaintiff was not on the above-mentioned list and he was not compelled to accept the early retirement package, and there was no threat of termination by his employer, if he didn’t accept it.

The Supreme Court’s legal analysis centered upon the Voluntary Layoff Option Provision portion of 43 P.S. Section 802(b) which states the following: “[p]rovided further, [t]hat no otherwise eligible claimant shall be denied benefits for any week in which his unemployment is due to exercising the option of accepting a layoff, from an available position pursuant to a labor-management contract agreement, or pursuant to an established employer plan, program or policy.”

As one would expect, the tribunals below the Supreme Court cited to multiple cases over the last three (3) decades which would lead to the necessary conclusion that Plaintiff is ineligible for benefits due to voluntarily terminating his employment without a necessitous and compelling reason. These cases tend to focus on a judicially created distinction between early retirement and a voluntary layoff, with only the former allowing eligibility for benefits. However, the Supreme Court pointed out that, despite the long history of reasonably consistent decisions, it was apparent that none of other courts and tribunals actually read the statute they were applying and upon which they ruled.

The Supreme Court began its analysis of the decisions below by identifying an underlying interpretive framework for unemployment compensation which requires viewing the unemployment compensation law as liberally as possible in order to provide the maximum benefits possible. Furthermore, the Supreme Court pointed out that when attempting to apply a statute, courts must abide by the letter of the law when the language of the statute is clear and free from ambiguity using the common and approved usage of the words. As a result, the Supreme Court concluded that benefits should only be denied if the statute has explicit language to that effect; indeed there is a presumption that an applicant for unemployment compensation is eligible for benefits and the burden to prove the contrary lies with the employer.

Using the guidelines described above, the Supreme Court indicated that the Plaintiff was denied benefits, and the many cases in support of his denial, was the result of chronic misinterpretation of the Voluntary Layoff Option Provision portion of 43 P.S. Section 802(b), apparently in an attempt to harmonize it with the law regarding ineligibility upon voluntary termination. Despite this, however, the Supreme Court ruled that the language quoted above, taken on its face, uses the term “layoff” without any other modifier, therefore the term layoff can refer to either temporary or permanent separations initiated by an employer. Indeed, the Supreme Court specifically indicated that the Voluntary Layoff Option Provision portion of 43 P.S. Section 802(b) specifically forbids the denial of unemployment compensation benefits due to accepting a voluntarily offered plan by an employer. The Supreme Court asserted that the language of the aforesaid statute is so unambiguous that the legislature’s intent to equate someone falling within the statute with an involuntarily unemployed claimant as opposed to someone who voluntarily terminated his own employment without a necessitous and compelling reason.

To put it simply, the Supreme Court found no language in the aforesaid statute to prevent interpreting it to allow claimants to be eligible for benefits upon accepting employer-initiated early retirement packages offered pursuant to a workforce reduction.

Originally published in The Legal Intelligencer Blog on January 27, 2014 and can be seen here.

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