Santiago, J. v. Philly Trampoline Park, LLC ( 2023 )

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2023 PA SUPER 47
JENNIFER SANTIAGO AND SAMUEL : IN THE SUPERIOR COURT OF
SANTIAGO : PENNSYLVANIA
:
v. :
:
PHILLY TRAMPOLINE PARK, LLC I/P/A :
SKY ZONE, D/B/A SKY ZONE :
TRAMPOLINE PARK D/B/A SKY ZONE :
PHILADELPHIA, SKY ZONE :
PHILADELPHIA, INC., SKY ZONE :
TRAMPOLINE PARK A/K/A SKY ZONE :
PHILADELPHIA :
:
Appellants : No. 2615 EDA 2021
Appeal from the Order Entered August 23, 2021
In the Court of Common Pleas of Philadelphia County Civil Division at
No(s): February Term, 2021, No. 021
ALESSANDRA SHULTZ, : IN THE SUPERIOR COURT OF
INDIVIDUALLY AND AS P.N.G. FOR : PENNSYLVANIA
ROCCO SHULTZ, A MINOR :
:
v. :
:
SKY ZONE, LLC :
:
Appellant : No. 664 EDA 2022
Appeal from the Order Entered January 25, 2022
In the Court of Common Pleas of Philadelphia County Civil Division at
No(s): 200701660
BEFORE: BOWES, J., KING, J., and PELLEGRINI, J.*
OPINION BY BOWES, J.: FILED MARCH 21, 2023
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* Retired Senior Judge assigned to the Superior Court.
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In these separate appeals, we are tasked with deciding an issue of first
impression in Pennsylvania: whether a parent’s role as natural guardian
entitles the parent to bind a minor child to an arbitration agreement and waive
that child’s right to seek redress for injuries in a court of law. Answering that
question in the negative and concluding that the respective trial courts
likewise properly resolved whether the parents’ claims were subject to
arbitration, we affirm both of the appealed-from orders that ruled upon
motions to compel arbitration filed by Appellant, Sky Zone.1
I. Facts and Procedural History2
A. The Shultz Plaintiffs
In August 2018, Ryan Shultz took two minors, including his son Rocco,
to Sky Zone, a Philadelphia trampoline park. In order for the children to use
the facilities, Mr. Shultz was required to execute a six-page document entitled
“Participant Agreement, Release and Assumption of Risk (The Agreement).”
Petition to Compel Arbitration, 1/21/21, Exhibit B at 1. In addition to, among
other things, recognizing a voluntary assumption of risk, allowing Sky Zone to
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1 In one case, the plaintiffs brought their claims against Philly Trampoline
Park, LLC I/P/A Sky Zone, D/B/A Sky Zone Trampoline Park D/B/A Sky Zone
Philadelphia, Sky Zone Philadelphia, Inc., and Sky Zone Trampoline Park
A/K/A Sky Zone Philadelphia, while in the other, Sky Zone, LLC is the named
defendant. For ease of discussion, we refer to the appellants in both cases,
who are all represented by the same counsel, as “Sky Zone.”
2 We derive the underlying facts by accepting as true the allegations of the
plaintiffs’ complaints and from the record created for adjudication of the
motions to compel arbitration.
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use the children’s’ images on social media, agreeing to receive e-mail
promotions, and broadly acknowledging “that if I or any of my children are
injured in any way, this waiver prevents and prohibits any recovery of money
from any Sky Zone related entity,” id. at 6 (emphasis omitted), the
Agreement contained the following arbitration provision:
ARBITRATION OF DISPUTES; TIME LIMIT TO BRING CLAIM
 I understand that by agreeing to arbitrate any dispute as set
forth in this section, I am waiving my right, and the right(s) of
the minor child(ren) above, to maintain a lawsuit against SZ
and the other Releasees for any and all claims covered by this
Agreement. By agreeing to arbitrate, I understand that I will
NOT have the right to have my claim determined by a jury,
and the minor child(ren) above will NOT have the right to have
claim(s) determined by a jury. Reciprocally, SZ and the other
Releasees waive their right to maintain a lawsuit against me
and the minor child(ren) above for any and all claims covered
by this Agreement, and they will not have the right to have
their claim(s) determined by a jury. ANY DISPUTE, CLAIM
OR CONTROVERSY ARISING OUT OF OR RELATING TO
MY OR THE CHILD’S ACCESS TO AND/OR USE OF THE SKY
ZONE PREMISES AND/OR ITS EQUIPMENT, INCLUDING
THE DETERMINATION OF THE SCOPE OR APPLICABILITY
OF THIS AGREEMENT TO ARBITRATE, SHALL BE
BROUGHT WITHIN ONE YEAR OF ITS ACCRUAL (i.e., the
date of the alleged injury) AND BE DETERMINED BY
ARBITRATION IN THE COUNTY OF THE SKY ZONE
FACILITY, PENNSYLVANIA, BEFORE ONE ARBITRATOR.
THE ARBITRATION SHALL BE ADMINISTERED BY JAMS
PURSUANT TO ITS RULE 16.1 EXPEDITED ARBITRATION
RULES AND PROCEDURES. JUDGMENT ON THE AWARD
MAY BE ENTERED IN ANY COURT HAVING
JURISDICTION. THIS CLAUSE SHALL NOT PRECLUDE
PARTIES FROM SEEKING PROVISIONAL REMEDIES IN
AID OF ARBITRATION FROM A COURT OF APPROPRIATE
JURISDICTION. This Agreement shall be governed by,
construed and interpreted in accordance with the laws of the
Commonwealth of Pennsylvania, without regard to choice of
law principles. Notwithstanding the provision with respect to
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the applicable substantive law, any arbitration conducted
pursuant to the terms of this Agreement shall be governed by
the Federal Arbitration Act (9 U.S.C., Sec. 1-16). I understand
and acknowledge that the JAMS Arbitration Rules to which I
agree are available online for my review at jamsadr.com, and
include JAMS Comprehensive Arbitration Rules & Procedures;
Rule 16.1 Expedited Procedures; and, Policy On Consumer
Minimum Standards Of Procedural Fairness.
Id. at 3-4 (emphases in original). Mr. Shultz identified Rocco as one of the
minor participants in the Sky Zone activities, and electronically executed the
Agreement below the following provision:
By signing below, I represent and warrant that I am the parent,
legal guardian, or power-of-attorney of the above listed Child(ren)
and have the authority to execute this Agreement on his/her or
their behalf and to act on his/her or their behalf. I have read each
paragraph in this document and I and they agree to be bound by
the terms stated therein, including the release of liability
contained therein. I further agree to indemnify and hold harmless
the Releasees from any and all claims which are brought by or on
behalf of this or these minor Child or Children, or any of them,
which are in any way connected with, arise out of, or result from
their use of the Sky Zone Facility. I am 18 years of age or older.
I am entering this agreement on behalf of myself, my spouse or
domestic partner, the Child, and our respective and/or collective
issue, parents, siblings, heirs, assigns, personal representatives,
estate(s), and anyone else who can claim by or through such
person or persons (collectively, the "Releasing Parties").
Id. at 5-6. While utilizing the facilities, five-year-old Rocco was injured when
an older, larger child jumped on the same trampoline as Rocco. See
Complaint, 7/24/20, at ¶ 8.
On July 24, 2020, Alessandra Shultz, who is Rocco’s mother, filed a
complaint in her own right and on behalf of Rocco in the Court of Common
Pleas of Philadelphia County, seeking personal injury damages related to
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Rocco’s injury and for Ms. Shultz to recover the costs of his medical treatment.
Sky Zone filed a petition to compel arbitration and stay the litigation.
Following discovery on the matters raised in Sky Zone’s petition, the trial court
denied it by order of January 25, 2022. The Honorable Stella M. Tsai ruled
that Ms. Shultz was not bound by Mr. Shultz’s execution of the agreement
because he was not acting as her agent when he signed it, and that parents
lack the authority to waive their children’s rights to file a lawsuit for their
injuries. See Order, 1/25/22, at 2, 5.
On February 24, 2022, Sky Zone filed a notice of appeal, and both Sky
Zone and the trial court complied with Pa.R.A.P. 1925. Sky Zone states the
following questions in the Shultz appeal:
1. Whether the trial court erred in finding that the arbitration
provision set forth in the waiver signed by [Mr. Shultz] has
no binding effect on the claims of [Ms. Shultz] who was his
wife—and therefore, acting as her agent—at the time he
signed the waiver.
2. Whether the trial court erred in finding that the claims made
by [Rocco] are not subject to the arbitration provision set
forth in the waiver signed by [Mr. Shultz], such that minor
[Rocco] may now disavow this waiver and bring his claims
—which fall squarely within the scope of the arbitration
provision—before a court of law.
Sky Zone’s brief (Shultz) at 12 (cleaned up).
B. The Santiago Plaintiffs
In February 2019, Jennifer Santiago took her two minor daughters to a
different Sky Zone location. Prior to their admittance to the play area,
Ms. Santiago executed the same six-page digital Agreement as did Mr. Shultz,
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acknowledging that she was waiving her rights, as well as those of her spouse
and children, to seek redress in a jury trial for any injuries sustained or to
recover any damages for such an injury, and agreeing to arbitrate any
disputes.
Isabella Santiago, then three years old, proceeded to play on a
trampoline during designated “toddler time” in a “toddler zone.” Complaint,
2/23/21, at ¶ 23. In the absence of any Sky Zone employee monitoring the
area, an adult male elected to use the same trampoline as the child. Id. at
¶¶ 23-24. The man’s jumping threw Isabella toward another trampoline,
causing her to fracture her knee on the seam in between and to require
immediate and future medical care. Id. at ¶¶ 23, 27, 29.
Ms. Santiago and her husband, Samuel Santiago, individually and on
Isabella’s behalf, filed a complaint in the Court of Common Pleas of
Philadelphia County seeking to recover money damages related to Isabella’s
injury. Sky Zone moved to stay the court proceedings and to compel
arbitration, contending that the Agreement was a valid arbitration agreement
and that all three plaintiffs’ claims were within its scope. The Santiagos
responded, acknowledging that Ms. Santiago executed the Agreement, but
denying its validity to compel arbitration of the claims of Mr. Santiago or
Isabella. Specifically, they contended that Ms. Santiago’s unilateral execution
of the Agreement was ineffective to bind her spouse or her child.
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The trial court ordered discovery limited to Sky Zone’s petition, after
which the parties filed supplemental briefs. On August 23, 2021, the
Honorable Angelo J. Foglietta denied Sky Zone’s petition. Sky Zone filed a
motion for the trial court to amend its order to certify it as immediately
appealable pursuant to 42 Pa.C.S. § 702(b) and to stay the action pending
appeal. The trial court denied the motion to amend by order of October 12,
2021.
On November 4, 2021, Sky Zone filed in this Court a petition for
permission to appeal, which we denied as moot because an order denying an
application to compel arbitration is immediately appealable as of right
pursuant to 42 Pa.C.S. § 7320(a)(1). Instead, we treated Sky Zone’s petition
as a notice of appeal in accordance with Pa.R.A.P. 1316(a) (“The appellate
court shall treat a request for discretionary review of an order that is
immediately appealable as a notice of appeal if a party has filed a timely
petition for permission to appeal[.]”). Thereafter, both Sky Zone and the trial
court complied with Pa.R.A.P. 1925.
Sky Zone presents this Court with the following questions in the
Santiago appeal:
1. Whether the trial court erred in denying [Sky Zone’s] motion
to amend order and stay litigation, where amending and
certifying the order denying [Sky Zone’s] motion to compel
arbitration and stay litigation for immediate appeal would
materially advance the ultimate termination of this matter
and involves a controlling question of law as to which there
is substantial ground for difference of opinion?
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2. Whether the trial court erred in denying [Sky Zone’s] motion
to compel arbitration and stay litigation thereby allowing
Plaintiffs to continue to litigate their respective claims before
the trial court, where the participant agreement, release and
assumption signed by [Ms. Santiago] included a provision
that clearly and unambiguously required that any and all
disputes, claims, or controversies arising out of or relating
to [Isabella’s] use of [Sky Zone’s] premises and equipment
be submitted to and settled by binding arbitration?
Sky Zone’s brief (Santiago) at 7-8 (re-ordered and cleaned up).
II. Applicable Legal Principles
We begin our examination of Sky Zone’s issues with a review of the
governing legal principles. “An order denying a petition to compel arbitration
is an interlocutory order appealable as of right.”3 Fineman, Krekstein &
Harris, P.C. v. Perr, 278 A.3d 385, 389 (Pa.Super. 2022) (cleaned up).
“[W]e employ a two-part test to determine whether the trial court should have
compelled arbitration. First, we examine whether a valid agreement to
arbitrate exists. Second, we must determine whether the dispute is within
the scope of the agreement.” Id. (cleaned up).
Our standard of review “is limited to determining whether the trial
court’s findings are supported by substantial evidence and whether the trial
court abused its discretion in denying the petition.” Id. (cleaned up).
However, “[w]hether a claim is within the scope of an arbitration provision is
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3 This resolves Sky Zone’s first question in the Santiago appeal: because Sky
Zone had a statutory right to immediately appeal from the order denying its
petition to compel arbitration, there was no need for the trial court to certify
it for immediate appeal pursuant to 42 Pa.C.S. § 702(b).
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a matter of contract, and as with all questions of law, our review of the trial
court’s conclusion is plenary.” Id. (cleaned up).
When addressing the issue of whether there is a valid agreement
to arbitrate, courts generally should apply ordinary state-law
principles that govern the formation of contracts, but in doing so,
must give due regard to the federal policy favoring arbitration.
However, the mere existence of an arbitration provision and a
liberal policy favoring arbitration does not require the rubber
stamping of all disputes as subject to arbitration.
Adams v. Mt. Lebanon Operations, LLC, 276 A.3d 1203, 1206 (Pa.Super.
2022) (cleaned up).
As a general rule of contract law, only the parties to an arbitration
agreement may be compelled to arbitrate. See, e.g., Humphrey v.
GlaxoSmithKline PLC, 263 A.3d 8, 14 (Pa.Super. 2021) (“[A] party cannot
be required to submit to arbitration any dispute which he has not agreed so
to submit.” (cleaned up)). “Nevertheless, a party can be compelled to
arbitrate under an agreement, even if he or she did not sign that agreement,
if common law principles of agency and contract support such an obligation
on his or her part.”4 Id. at 15 (cleaned up).
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4 We observe that a third-party beneficiary to a contract may also be bound
by an arbitration agreement contained therein. See, e.g., Pisano v.
Extendicare Homes, Inc., 77 A.3d 651, 661 (Pa.Super. 2013) (“[A]
nonparty, such as a third-party beneficiary, may fall within the scope of an
arbitration agreement if that is the parties’ intent.”). Sky Zone does not
contend that the minors are bound as third-party beneficiaries to the
Agreement. Accordingly, we do not consider third-party-beneficiary status as
a basis for deciding whether the minors are bound by the arbitration provision
of the Agreement.
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The existence of an agency relationship is a factual question for which
the party asserting an agency relationship has the burden of proof. See, e.g.,
McIlwain v. Saber Healthcare Grp., Inc., LLC, 208 A.3d 478, 485
(Pa.Super. 2019). There are four ways to create an agency relationship: “(1)
express authority, (2) implied authority, (3) apparent authority, and/or (4)
authority by estoppel.” Id. (cleaned up). As this Court has summarized:
Express authority exists where the principal deliberately and
specifically grants authority to the agent as to certain matters.
Implied authority exists in situations where the agent’s actions are
proper, usual and necessary to carry out express agency.
Apparent authority exists where the principal, by word or
conduct, causes people with whom the alleged agent deals to
believe that the principal has granted the agent authority to act.
Authority by estoppel occurs when the principal fails to take
reasonable steps to disavow the third party of their belief that the
purported agent was authorized to act on behalf of the principal.
Id. (cleaned up, emphases added). Hence, in determining whether a person
is the agent of another, the focus is on the conduct of the principal, not on
that of the purported agent. See, e.g., id. at 486 (“[A]n agent cannot simply,
by her own words, invest herself with apparent authority.”).
Critically, “[a]gency cannot be inferred from mere relationships or family
ties, and we do not assume agency merely because one person acts on behalf
of another.” Wisler v. Manor Care of Lancaster PA, LLC, 124 A.3d 317,
323 (Pa.Super. 2015). See also US Coal Corp. v. Dinning, 222 A.3d 431,
441 (Pa.Super. 2019) (“The relationship of agency cannot be inferred from
mere relationship or family ties unattended by conditions, acts or conduct
clearly implying an agency.” (cleaned up)). Specifically, “[i]t is well settled
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that neither a husband nor wife has the power to act as agent for the other
merely due to the marriage relationship.” Washburn v. N. Health Facilities,
Inc., 121 A.3d 1008, 1014 (Pa.Super. 2015). “Rather, we look to facts to
determine whether the principal expressly or impliedly intended to create an
agency relationship. To that end, family ties may be relevant when considered
with other factors evincing agency.” Wisler, supra at 323 (emphasis added).
III. Analysis
With the above principles in mind, we turn to Sky Zone’s appellate
issues, beginning with its claims that the trial courts improperly ruled that the
parent signing each Agreement was not the agent for his or her absent spouse
for purposes of agreeing to arbitrate any claims arising from the children’s use
of the facilities.
A. Mr. Santiago
Sky Zone asserts that the evidence demonstrated that Ms. Santiago had
apparent and implied authority to sign the Agreement as Mr. Santiago’s agent.
Sky Zone’s brief (Santiago) at 24. Sky Zone observes that it is undisputed
that the Santiagos were married at the time Ms. Santiago signed the
Agreement purporting to bind herself and spouse. Id. at 22. Sky Zone argues
that, “by nature of their marital relationship and her role as [Isabella’s]
mother, [Ms.] Santiago had apparent authority to bind [Mr.] Santiago to the
terms of the Agreement,” and “caused [Sky Zone] to believe that she had
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authority to sign the Agreement on both her own and [Mr.] Santiago’s behalf.”
Id. at 23.
Sky Zone further posits that it “cannot possibly be expected to ask each
and every patron, in signing the agreement, if they have actual authority to
sign on behalf of their spouse.” Id. at 24. It maintains that, “[i]nstead, it
was reasonable for [Sky Zone] to rely upon the representations of the signing
spouse as to her authority to sign on behalf of her husband.” Id.
We find Sky Zone’s arguments wholly unavailing. Sky Zone improperly
focuses on the actions of the purported agent, not that of the non-signing
principal, in asserting implied and apparent authority in this case. As noted
above, implied authority only pertains where the agent’s actions are necessary
to carry out express agency. See McIlwain, supra at 485. Here, the
certified record contains no evidence that Mr. Santiago deliberately and
specifically granted his wife authority to sign as his agent, defeating any claim
of either express or implied agency.
Similarly, apparent authority is present “where the principal, by word
or conduct, causes people with whom the alleged agent deals to believe that
the principal has granted the agent authority to act.” Id. (emphasis added).
Sky Zone cites no evidence that Mr. Santiago had any interaction at all with
Sky Zone, let alone that he caused it by his word or deed to believe that Ms.
Santiago was his agent. Rather, it relies solely upon the familial relationship
and the conduct of the purported agent to support its assertion of agency,
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which is a meritless argument. See, e.g., US Coal Corp., supra at 441 (“The
relationship of agency cannot be inferred from mere relationship or family ties
unattended by conditions, acts or conduct clearly implying an agency.”
(cleaned up)). Absent verbal or nonverbal communication
from Mr. Santiago that caused Sky Zone to believe that he authorized
Ms. Santiago to agree on his behalf to arbitrate any claims, Sky Zone has
failed to establish that Ms. Santiago had apparent authority to act as her
husband’s agent.
We further reject Sky Zone’s lament that it “cannot possibly be
expected” to make sure that a person executing its digital Agreement had the
authority to agree on her own behalf as well as that of her “spouse or domestic
partner, the Child, and our respective and/or collective issue, parents,
siblings, heirs, assigns, personal representatives, estate(s), and anyone else
who can claim by or through such person or persons.” Petition to Compel
Arbitration, 1/21/21, Exhibit B at 6. It is well-settled that a third party must
exercise reasonable diligence to determine the authority of an apparent agent,
and “can rely on the apparent authority of an agent when this is a reasonable
interpretation of the manifestations of the principal.” Bolus v. United
Penn Bank, 525 A.2d 1215, 1222 (Pa.Super. 1987). Sky Zone has presented
no evidence of any diligence in learning whether Mr. Santiago authorized his
wife to bind him to arbitration and no indication that Mr. Santiago otherwise
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manifested such an intent to Sky Zone prior to her execution of the
Agreement.
It is axiomatic in the law of contracts that only parties to the agreement
are bound thereby. See, e.g., Humphrey, supra at 14 (“[A] party cannot
be required to submit to arbitration any dispute which he has not agreed so
to submit.” (cleaned up)). If Sky Zone wishes to create enforceable
agreements to arbitrate from the laundry list of people it seeks to preclude
from filing claims against it in a court of law, then obtaining the assent of each
of those persons, directly or through the recognized principles of agency, is
precisely what it must do.
B. Ms. Shultz
Sky Zone’s arguments as to Ms. Shultz are nearly identical to those it
proffered as to Mr. Santiago. Sky Zone maintains that, given their marital
relationship and his role as Rocco’s father, and Mr. Shultz’s representation
that he had authority to sign for his spouse and anyone else associated with
Rocco, Mr. Shultz had the apparent authority to bind Ms. Shultz to the
arbitration agreement. See Sky Zone’s brief (Shultz) at 29.
Sky Zone offers two additional facts in the Shultz case to support its
agency contentions. First, it asserts that Ms. Shultz offered testimony
indicating that her husband had authority to sign the Agreement on her behalf.
Id. at 28. Specifically, Sky Zone represents that Ms. Shultz testified that
Mr. Shultz “would have been the parent to sign any contracts for the both of
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them on behalf of their children,” and that, while she recalled no specific
instances of that happening, “it would not have been surprising to her if he
had done so.” Id. at 28-29. Sky Zone suggests that this evinces that
Mr. Shultz “had implied and apparent authority to sign the Agreement on
[Ms.] Shultz’s behalf and bind her to the terms of this Agreement.” Id. at 29.
Indeed, Sky Zone goes so far as to say that Ms. Shultz “affirmatively testified”
that Mr. Shultz had her “approval to execute a contract on her behalf as it
relates to their children” and that he “exercised this authority on a regular
basis.” Id. at 29-30.
These assertions are not supported by the certified record. The two
pages of Ms. Shultz’s deposition transcript upon which Sky Zone relies neither
contains any such testimony nor supports the representations made by Sky
Zone.5 One begins mid-question with “to is, would it have surprised you if
[Mr. Shultz] had signed that?” to which Ms. Shultz answered, “No. I guess
not, no.” and contains no other pertinent testimony. Supplemental Brief in
Support of Response to Motion to Compel Arbitration, 6/29/21, at Exhibit B
(Deposition of Ms. Shultz, 5/19/21, at 28). The other contains the following,
abruptly-ending excerpt:
Q Do you know if [Mr.] Shultz has ever signed any contracts
or agreements on behalf of you as a couple?
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5 Sky Zone did not include the entirety of the transcript of Ms. Shultz’s
deposition, but rather excerpts of a page here and a page there lacking
context.
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A No, I don’t believe so.
Q Does Rocco go to school?
A Yeah.
Q Does Rocco play any sports?
A No.
Q I think you mentioned soccer at some point before this.
A He has been unable to since this happened.
Q But prior to this, he did play soccer?
A Yeah.
Q Did you ever have to sign anything in connection with that?
A I’m sure Ryan did. I don’t think I did.
Q So Ryan Shultz signed something, you think, on behalf of
Rocco in order to allow him to play soccer?
[Counsel for Ms. Shultz]: If you know. I’m fine with [. . . .]
Supplemental Brief in Support of Motion to Compel Arbitration, 6/29/21, at
Exhibit 1 (Deposition of Ms. Shultz, 5/19/21, at 45).
This evidence suggests that Mr. Shultz might have signed some
undisclosed paperwork at some indefinite time for Rocco to play soccer. It
comes woefully short of indicating that Ms. Shultz gave her husband blanket
authority to bind her to contracts and that he exercised that authority
frequently. Moreover, nothing Ms. Shultz stated in her May 2021 deposition
suggests that she caused Sky Zone to believe that Mr. Shultz was authorized
to sign the Agreement on her behalf in August 2018.
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The second fact cited by Sky Zone that distinguishes this case from the
Santiago case is that Rocco had been to Sky Zone prior to the date he was
injured there. See Sky Zone’s brief (Shultz) at 20 (indicating that Rocco “had
been to [Sky Zone’s] trampoline park prior to the date of the alleged
accident.”); id. at 30 (stating that Rocco had been to Sky Zone “multiple times
without any objection” from Ms. Shultz). It is unclear when these visits
occurred or whether Ms. Shultz or someone else accompanied Rocco on the
prior occasions, as Sky Zone does not cite where this fact is documented in
the certified record. Presumably, if Ms. Shultz had herself signed an
arbitration agreement on a prior visit, Sky Zone would assert that as a basis
to compel her to arbitrate her claims. Likewise, if a witness had seen
Ms. Shultz engage in conduct at a prior visit indicating that her husband was
authorized to act as her agent in the future, we would expect Sky Zone to
have produced testimony from that person. Instead, we have no information
whether Ms. Shultz was even aware that Rocco had visited Sky Zone before,
let alone that she caused Sky Zone to believe, prior to Mr. Shultz’s execution
of the Agreement on the day in question, that Mr. Shultz was her authorized
agent for purposes of agreeing to arbitration.
Accordingly, Sky Zone’s arguments in support of compelling Ms. Shultz
to arbitrate her claims fail for the same reasons we discussed in connection
with Mr. Santiago: without any conduct by Ms. Shultz that suggested to Sky
Zone that she had authorized Mr. Shultz to agree on her behalf to arbitrate
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any of her potential claims, Sky Zone failed to establish that Mr. Shultz had
apparent authority to act as her agent.
C. Rocco and Isabella
Finally, we reach the novel question of Pennsylvania law common to
both of these appeals: whether a parent, in the role of natural guardian, as
opposed to a court-appointed guardian, is the equivalent of being the child’s
agent for purposes of making a minor child a party to an arbitration
agreement, thereby waiving the child’s right to a jury trial. In resolving this
issue, we begin with a discussion of some principles pertinent to a child’s legal
status.
We observe at the outset that Rocco and Isabella could not have
themselves agreed to arbitrate any potential claims against Sky Zone. Minors
lack the capacity to agree to an arbitration agreement or any other contract
in their own right. Rather, it has long been the law that minors lack capacity
to contract. See, e.g., In re O’Leary’s Estate, 42 A.2d 624, 625 (Pa. 1945)
(“An infant is not competent to contract.”). A contract executed by a minor is
not void ab initio, but is voidable such that the minor may, upon reaching
majority, avoid any contract other than for necessaries. See, e.g., Wharen
v. Funk, 31 A.2d 450, 452 (Pa.Super. 1943) (“[I]nfants may avoid their
contracts on reaching majority.”).
As such, minors lack the capacity to grant express authority to an agent
to contract on their behalves, rendering any such resulting contracts voidable.
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See Rest. (2d) Agency § 20 cmt. c (1958) (“The contract of an infant to
employ an agent is voidable by him, as is any contract made for him by such
agent, except a contract for necessaries.”). Rather, minors act through their
guardians.
We have explained that “Pennsylvania law defines a guardian as a
person lawfully invested with the power, and charged with the duty, of taking
care of the person and/or managing the property and rights of another person,
who, for defect of age, understanding or self-control is considered incapable
of administering his own affairs.” Rock v. Pyle, 720 A.2d 137, 141 (Pa.
Super. 1998). “Two classes of guardians have long been recognized at law:
(1) guardian of the person being invested with the care of the person of the
minor, and (2) guardian of the estate being entrusted with the control of the
property of the minor.” Id. “The spheres of authority of a guardian of the
person and of a guardian of the estate are distinct and mutually exclusive.”
Id.Statutory mechanisms exist for the court appointment and supervision
of guardians for minors. See 20 Pa.C.S. §§ 5101-5167. However, “parents
have intrinsic rights and responsibilities as the natural guardians of their minor
children.” Rehrer v. Youst, 91 A.3d 183, 192 (Pa.Super. 2014). Natural
guardianship grants a parent “primary physical responsibility for the care and
custody of the minor child.” Rock, supra at 141. Yet “natural guardianship
confers no inherent right to intermeddle with the property of the minor child,
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and the natural guardian has no inherent authority to demand or power to
receive, hold or manage the minor’s property unless the natural guardian has
also been appointed as guardian of the minor’s estate.” Id. See also Rehrer,
supra at 192 (“[N]atural guardianship confers no right to intermeddle with
the property of the infant . . .; a natural guardian has no authority whatever
to exercise any control over the estate of the minor.” (cleaned up)). Rather,
by statute, “[l]egal title to all real and personal property of a minor shall
remain in him, subject, however, to all the powers granted to his guardian by
this title and lawfully by a governing instrument and to all orders of the court.”
20 Pa.C.S. § 303.
Pennsylvania courts have observed that “[a] cause of action is
property[.]” Tri-State Asphalt Corp. v. Dep’t of Transp., 875 A.2d 1199,
1202 (Pa.Cmwlth. 2005) (citing Fejerdy v. Fejerdy, 437 A.2d 1244(Pa.Super. 1981)). In situations when a minor is injured, two distinct causes
of action arise, “one the parents’ claim for medical expenses and loss of the
minor’s services during minority, the other the minor’s claim for pain and
suffering and for losses after minority.” Hathi v. Krewstown Park
Apartments, 561 A.2d 1261, 1262 (Pa.Super. 1989) (cleaned up).
A parent obviously may pursue his or her own cause of action in tort in
connection with the child’s injury, subject to a two-year statute of limitations.
See 42 Pa.C.S. § 5524(2). However, “children have a distinct legal disability,
as they are prohibited from personally bringing a cause of action before
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reaching the age of majority.” Nicole B. v. Sch. Dist. of Philadelphia, 237
A.3d 986, 993 (Pa. 2020). Accordingly, “to safeguard certain minors’ rights
during their period of legal disability,” 42 Pa.C.S. § 5533 “exempt[s] children
from the operation of statutes of limitations during their period of legal
disability, and enabl[es] them to bring a civil action on their own behalf upon
reaching the age of majority.” Id.
Alternatively, a parent “has the natural and primary right to bring an
action, as guardian, on behalf of his or her child,” Dengler by Dengler v.
Crisman, 516 A.2d 1231, 1234 (Pa.Super. 1986). Nonetheless, “[a] minor’s
representation is subject to the trial court’s control and supervision, and it has
the right in each case to determine whether the litigation is in the minor’s best
interests.” Rehrer, supra at 193. Furthermore, “[n]o action to which a minor
is a party shall be compromised, settled or discontinued except after approval
by the court pursuant to a petition presented by the guardian of the minor.”
Pa.R.C.P. 2039(a).
With these principles in mind, we turn to the rulings at issue in these
cases. The Santiago trial court, citing the tolling of the statute of limitations
for Isabella’s personal injury claims, concluded that Ms. Santiago “could not
legally sign away [Isabella’s] future claim for any injuries sustained while in
[Sky Zone]’s facility.” Trial Court Opinion (Santiago), 7/1/22, at 4. The Shultz
trial court likewise ruled that Mr. Shultz lacked the authority to bind Rocco to
arbitration of his claim, but relied upon federal district court decisions
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purporting to apply Pennsylvania law. Specifically, the Shultz trial court cited
cases premised generally upon a child’s right to avoid contracts entered during
the child’s minority, and, particular to arbitration agreements, discussed the
ruling in Troshak v. Terminix Intern. Co., L.P., CIV. A. 98–1727, 1998 WL
401693 (E.D. Pa. July 2, 1998) (unpublished decision).
In Troshak, the father signed a “Termite Service Plan” agreement in
connection with Terminix’s provision of termite control services at the Troshak
home in Pennsylvania. Alleging that Terminix’s service caused personal injury
and property damage, the family brought a civil action that was removed to
federal court. There, Terminix sought to enforce an arbitration agreement
contained in the service plan contract. The trial court was thus tasked with
determining which family members were bound by the contract entered into
by the father. Regarding the personal injury claims of the minor child,
Terminix argued that the father had waived the child’s right to proceed in
court. Noting the lack of Pennsylvania authority on the issue, the court
examined two other district court decisions, which it summarized as follows:
In Apicella v. Valley Forge Military Academy and
Junior College, 630 F.Supp. 20, 23 (E.D.Pa.1985), the court
ruled that “under Pennsylvania law, Parents do not possess the
authority to release the claims or potential claims of a minor child
merely because of the parental relationship.” In Apicella, the
parents of Jerry Apicella enrolled their minor son as a student at
Valley Forge. At that time, Valerie and John Apicella informed
school officials that Jerry Apicella suffered from hemophilia. To
persuade the school to enroll their son, the Apicella[s] signed a
document releasing Valley Forge “from all claims and damages
arising from or related to or in any way connected with their son
Jerry’s hemophilic condition.” School officials permitted Jerry to
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attend the school. Subsequently, Valerie and John Apicella, as the
parents of Jerry Apicella, and Jerry Apicella on his own behalf,
brought suit against Valley Forge claiming that the school and its
employees were negligent in their care of Jerry Apicella. Valley
Forge asserted that Jerry was estopped from asserting his cause
of action because his parents signed a document releasing it from
claims and damages arising from Jerry’s hemophilic condition.
The court rejected that argument. Based on analogous
Pennsylvania case law, the court held that “John and Valerie
Apicella released the defendants from potential claims which they
had the right to assert but did not release the defendants from
claims or potential claims which Jerry Apicella might assert upon
reaching the age of majority.” This ruling was adopted in
Simmons by Grinnel v. Parkette Nat’l Gymnastic Training
Ctr., 670 F.Supp. 140 (E.D.Pa.1987).
In Simmons, a minor and her parent sued a gymnastic
organization for personal injuries suffered by the minor while the
minor was participating as a gymnast at the defendant training
center. The defendant training center asserted the signing of a
release as an affirmative defense. The release was signed by the
minor and by the minor’s mother. The release was prospective in
nature and was intended to release the defendant from future
liability as opposed to an already existing claim for damages. The
court found that the minor’s parent was bound by the release.
The defendant asserted, inter alia, that the minor’s claim was
barred because the parent signed the release for the minor.
Relying on Apicella, the court found that the minor’s parent could
not release the defendant from the potential claims that
eventually accrued to the minor.
Id. at *4–*5 (some citations omitted). The Troshak trial court acknowledged
that Apicella and Simmons were not precisely on point, but concluded that,
“under the reasoning and holdings interpreting Pennsylvania law contained in”
those cases, “a parent cannot bind a minor child to an arbitration provision
that requires the minor to waive his or her right to file potential claims for
personal injury in a court of law.” Id. at *5. The court explained that, since
a parent could not prospectively release a minor’s potential claims, it follows
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that “a parent does not have authority to bind a minor child to an arbitration
provision that requires the minor to waive their right to have potential claims
for personal injury filed in a court of law.” Id.
Adopting this reasoning, the Shultz trial court concluded that Mr.
Shultz’s execution of the Agreement was not effective in waiving Rocco’s right
to file the instant action in court. Trial Court Opinion (Shultz), at 5. The court
further ruled that, to the extent that Rocco was required to disaffirm the
voidable contract made on his behalf by Mr. Shultz, Rocco’s action of bringing
this suit constituted such disaffirmance. Id. (citing Haines v. Fitzgerald,
165 A. 52, 55 (Pa.Super. 1933) (holding that bringing suit three months after
reaching majority constituted disaffirmance of contract made during plaintiff’s
minority). Accordingly, the Shultz court denied Sky Zone’s petition as to
Rocco’s claims.
Sky Zone proffers the same basic argument for reversal in both of these
cases. It argues that Troshak, which is not binding on this Court, improperly
conflates the release of a minor’s personal substantive claims with a mere
“agreement to litigate a dispute in a specific forum.” Sky Zone’s brief (Shultz)
at 34. Sky Zone asserts that the more persuasive non-binding authority is
found in the decisions of our sister states that recognized that distinction:
Hojnowski v. Vans Skate Park, 901 A.2d 381 (N.J. 2006), and Cross v.
Carnes, 724 N.E.2d 828 (Ohio Ct. App. 1998).
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In Hojnowski, a twelve-year-old boy was injured at a skate park
operated by defendant Vans. Before using the park, the boy’s mother had
executed a release and waiver that included an arbitration clause. When the
boy sued through his parents as guardians ad litem, Vans moved to compel
arbitration. The trial court granted Vans’s motion, declining to rule on the
validity of the release because it was an issue for the arbitrators to decide.
The appellate court unanimously affirmed a parent’s ability to “enter into an
enforceable contract, binding on the parent’s minor child, that waives the right
to trial by jury of the minor’s bodily injury claims and requires submission of
‘any dispute’ to arbitration.” Hojnowski, supra at 385 (cleaned up). The
panel also fully agreed that the court should have considered whether the
substantive waiver violated public policy, but divided on the answer to that
question.
The New Jersey Supreme Court held that the exculpatory provision was
invalid given “the protections that our State historically has afforded to a
minor’s claims and the need to discourage negligent activity on the part of
commercial enterprises attracting children,” noting that it was in that regard
consistent “with the overwhelming majority of other jurisdictions.” Id. at 388-
89 (citing, inter alia, Simmons and Apicella).
However, the Court found no such public-policy reason to invalidate the
waiver’s arbitration clause. The Court explained: “As opposed to a pre-injury
release of liability, a pre-injury agreement to arbitrate does not require a
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minor to forego any substantive rights. Rather, such an agreement specifies
only the forum in which those rights are vindicated.” Id. at 392. Further, the
Court held that a parent is “permitted to bind a minor child to arbitration,”
holding that, unless general contract defenses such as “fraud, duress, or
unconscionability in the signing of the contract or that the agreement to
arbitrate was not written in clear and unambiguous terms,” then “a parent’s
agreement to arbitrate is valid and enforceable against any tort claims
asserted on a minor’s behalf.” Id. at 393-94.
The Hojnowski Court cited as persuasive the decision of the Ohio Court
of Appeals in Cross. In that case, the minor’s mother executed, on her own
behalf and on behalf of her daughter, a consent and release that permitted
her daughter to appear on a television talk show. The document contained
an agreement to arbitrate any disputes arising from the minor’s appearance
on the show. Displeased with her portrayal on the program, the minor,
through her mother, sued the show for defamation. The show moved to
enforce the arbitration agreement, and the trial court granted the motion,
staying the court proceedings pending arbitration. The appellate court
affirmed. It first noted that the Ohio Supreme Court had recently ruled that
“public policy justifies giving parents authority to enter into . . . binding [pre-
injury exculpatory] agreements on behalf of their minor children” that further
the public policy of making non-profit recreational sporting activities
affordable. Zivich v. Mentor Soccer Club, Inc., 696 N.E.2d 201, 205 (Ohio
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1998). The Cross Court indicated that the Zivich “holding leads us to believe
that our conclusion, that a parent has the authority to bind his or her child to
a resolution of the child’s claims through arbitration, is correct under Ohio
law.” Cross, supra at 836. The Court continued:
In so holding, we note that the parent’s consent and release
to arbitration only specifies the forum for resolution of the child’s
claim; it does not extinguish the claim. Logically, if a parent has
the authority to bring and conduct a lawsuit on behalf of the child,
he or she has the same authority to choose arbitration as the
litigation forum.
Id.6
We are unpersuaded by Sky Zone’s arguments in general and its
reliance upon the Hojnowski and Cross decisions in particular. We reiterate
that the issue before us is whether there exists in each case an agreement to
arbitrate to which the minor child was a party or otherwise bound. See
Humphrey, supra at 14 (“[A] party cannot be required to submit to
arbitration any dispute which he has not agreed so to submit.” (cleaned up)).
It is only if “common law principles of agency and contract” render the
respective parents capable of contracting on behalf of their children that the
children are bound to arbitrate in these cases. Id. at 15 (cleaned up).
____________________________________________
6 As the Hojnowski Court relied upon Cross in reaching its conclusion, the
Cross Court in turn relied upon Leong by Leong v. Kaiser Found. Hosps.,
788 P.2d 164, 169 (Hawaii 1990), and Doyle v. Giuliucci, 401 P.2d 1, 3 (Cal.
1965). See Cross v. Carnes, 724 N.E.2d 828, 836 (Ohio Ct. App. 1998).
We observe that both of those cases affirmed a parent’s ability to bind a child
to an arbitration provision in a contract of which the child is a third-party
beneficiary. As noted above, Sky Zone has never posited that Rocco and
Isabella were bound by the Agreement as third-party beneficiaries.
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The foundation of the Cross ruling, which informed the Hojnowski
decision, is that, because parents can choose to sue in court on behalf of their
minor children, they are just as authorized to choose to arbitrate the claims
instead. However, as discussed above, a parent’s right to pursue litigation on
behalf of a minor child “is subject to the trial court’s control and supervision,
and it has the right in each case to determine whether the litigation is in the
minor’s best interests.” Rehrer, supra at 193. Concomitantly, a parent suing
on a child’s behalf as natural guardian nonetheless lacks authority to settle or
discontinue without court approval. See Pa.R.C.P. 2039(a). Moreover, no
Pennsylvania court has ruled that a parent has a right to enter a pre-injury
release of a child’s right to bring substantive claims as did the Ohio Supreme
Court, and the above-referenced law protecting minors’ substantive legal
claims suggests to us that the federal district courts accurately predicted that
Pennsylvania would reject that proposition as did the Hojnowski Court. See
Simmons, supra and Apicella, supra.
In our view, the court involvement in a parent’s litigation of a minor
child’s claims has the significant effect of transforming the parent’s role from
that of a natural guardian into, in essence, a court-approved guardian who
has authority to make decisions about the minor’s estate, not merely the
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child’s person.7 An agreement executed by natural guardian purportedly on
the minor’s behalf without any court involvement, however, has none of the
legal safeguards attendant to the appointment of a guardian of the minor’s
estate. Consequently, the parents in their pre-litigation state of natural
guardianship lacked any authority to manage the estate of their minor
children. See, e.g., Rock, supra at 141 (“[N]atural guardianship confers no
inherent right to intermeddle with the property of the minor child, and the
natural guardian has no inherent authority to demand or power to receive,
hold or manage the minor’s property unless the natural guardian has also
been appointed as guardian of the minor’s estate.” (emphasis added)).
Therefore, we conclude that, in the absence of any suggestion that
Rocco and Isabella were third-party beneficiaries of the Agreement, or that
their respective parents were authorized to sign the agreements on their
behalves, the statuses of Mr. Shultz and Ms. Santiago as natural guardians
did not ipso facto grant them the authority to bind their minor children to an
arbitration agreement. Consequently, we hold that the trial courts properly
denied Sky Zone’s petitions to compel arbitration of the claims of Rocco and
Isabella.
____________________________________________
7 See 20 Pa.C.S. §§ 5111-5116 (concerning appointment of guardians for
minors). See also 20 Pa.C.S. § 5101 (indicating certain circumstances when
a guardian of minor with small estates is unnecessary); 20 Pa.C.S. § 5102
(providing that a court may authorize a parent as natural guardian to execute
certain documents).
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IV. Conclusion
For the foregoing reasons, we conclude that the respective trial courts
properly ruled that no agreements bound the children or non-signing spouses
to resolve the alleged negligence claims in arbitration rather than in the
courts. Specifically, we agree with the trial courts that Sky Zone failed to
meet its burden to show that the signatory spouses were the agents of the
non-signing spouses. Further, we hold that the parent-child relationship did
not empower the signatory parents to waive their minor children’s rights to
have their claims resolved in a court of law. Therefore, we affirm.
Orders affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 3/21/2023
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