Waters, J. v. Express Container

J-A22036-22
2022 PA Super 182JAMES EDDIE WATERS : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
:
v. :
:
:
EXPRESS CONTAINER SERVICES OF :
PITTSBURGH, LLC, EXPRESS :
CONTAINER SERVICE LIMITED : No. 94 WDA 2022
LIABILITY COMPANY, MILLER :
TRANSPORTERS, INC., MILLER :
TRANSPORTATION SERVICES, INC., :
MILLER INTERMODAL LOGISTIC :
SERVICES, INC., HENIFF :
TRANSPORTATION SYSTEMS, LLC., :
HENIFF TRANSPORTATION :
HOLDINGS, LLC., HENIFF HOLDCO, :
LLC, AND PRE-HTS, INC. :
:
:
APPEAL OF: MILLER TRANSPORTERS, :
INC., MILLER TRANSPORTATION :
SERVICES, INC., MILLER :
INTERMODAL LOGISTIC SERVICES, :
INC., HENIFF TRANSPORTATION :
SYSTEMS, LLC., HENIFF :
TRANSPORTATION HOLDINGS, LLC., :
HENIFF HOLDCO, LLC, AND PRE-HTS, :
INC. :
Appeal from the Order Entered December 21, 2021
In the Court of Common Pleas of Allegheny County Civil Division at
No(s): GD 20-010701
BEFORE: OLSON, J., DUBOW, J., and COLINS, J.*
OPINION BY COLINS, J.: FILED: OCTOBER 18, 2022
Appellant Miller Transporters, Inc. (Miller) appeals from an order of the
Court of Common Pleas of Allegheny County (trial court) overruling its
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* Retired Senior Judge assigned to the Superior Court.
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preliminary objection seeking arbitration of claims brought against it by James
Eddie Waters (Plaintiff). For the reasons set forth below, we reverse and
remand with instructions to order arbitration of Plaintiff’s claims against Miller.
This case is an action for personal injuries that Plaintiff, a truck driver
who lives in Georgia, suffered on October 15, 2018, when he fell from the
catwalk on the top of a tanker-trailer that he was inspecting at a trucking
terminal in Pittsburgh. Second Amended Complaint ¶¶1, 31, 35-45. The
trucking terminal was owned by Express Container Services of Pittsburgh, LLC
(Express). Id. ¶22; Express Answer to Second Amended Complaint ¶22. At
the time of the accident, Plaintiff was working on an assignment to transport
the tanker-trailer for Miller under an Equipment Lease and Transportation
Agreement that Plaintiff and Miller entered into on October 2, 2017. Second
Amended Complaint ¶¶31, 35-37; Preliminary Objections to Second Amended
Complaint ¶¶28-29; Plaintiff’s Response to Preliminary Objections to Second
Amended Complaint ¶¶16-17. Plaintiff alleges that he was required by Miller
and its customer to perform the inspection of the tanker-trailer before
transporting it. Second Amended Complaint ¶¶36-37.
Under the Equipment Lease and Transportation Agreement, Plaintiff
leased a truck tractor that he owned to Miller for a three-year period and used
it to transport loads for Miller, for which he received 63% or 67% of the base-
line haul revenue from each shipment, 63% or 67% of certain other charges
paid by Miller’s customers, and some other items of compensation. Equipment
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Lease and Transportation Agreement ¶¶1-3, Schedules A & B. This agreement
contains the following dispute resolution provisions:
A. If a controversy or claim arises out of or relates to this
Agreement or operations pursuant to this Agreement, the
parties agree to negotiate the controversy or claim in good
faith for a period of thirty (30) days after the controversy or
claim is presented before legal proceedings or arbitration is
instituted.
B. If there is no resolution of the claim or controversy
through the procedure set forth in Section 20(A), the
controversy or claim shall at the request of any party, made
before or after institution of legal proceedings, be
determined by binding arbitration. This transaction involves
interstate commerce, and the arbitration is subject to and shall be
conducted in accordance with the United States Arbitration Act
notwithstanding any choice of law or other provision in the
Agreement, and under the Commercial Arbitration Rules of the
American Arbitration Association (“AAA”). The arbitrator shall
have authority to award damages and grant such other relief he
deems appropriate. The arbitrator shall give effect to the laws of
the State of Mississippi, including statutes of limitation, in
determining any claim. Pursuant to Mississippi Code Annotated §
75-2A-506, any action for default under this lease contract,
including breach of warranty or indemnity, must be commenced
within one (1) year after the cause of action accrued. For any and
all actions to which Section 75-2A-506 does not apply, the three
year statute of limitations prescribed by Mississippi Code
Annotated § 15-1-49 shall apply. Any controversy concerning
whether an issue is arbitrable shall be determined by the
arbitrator. Judgment upon the arbitration award may be entered
in any Court having jurisdiction. The arbitrator shall be chosen no
later than 30 days after filing the claim with AAA. The arbitration
procedure shall be concluded and the arbitrator's award issued no
later than 180 days after selection of the arbitrator. Any claim
arising under this Agreement shall be determined separate from
the claims of others allegedly similarly situated, and shall not be
the subject of a class, consolidated or collective action involving
multiple contractors.
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Equipment Lease and Transportation Agreement ¶20(A)-(B) (emphasis
added). The Equipment Lease and Transportation Agreement also contains
the following notice in bold face letters:
THIS AGREEMENT CONTAINS DISPUTE RESOLUTION
PROVISIONS WHICH INCLUDE PROVISIONS FOR BINDING
ARBITRATION, BY THEIR EXECUTION OF THIS AGREEMENT, THE
PARTIES ACKNOWLEDGE THEIR AWARENESS AND AGREEMENT
TO THOSE PROVISIONS.
Id. at 14.
On October 9, 2020, Plaintiff filed this action against Express, Miller and
seven other entities. Plaintiff filed a complaint on February 24, 2021, and
subsequently filed an amended complaint and second amended complaint in
response to preliminary objections. In his second amended complaint, Plaintiff
alleged that Express was negligent in its duties as a landowner and was
negligent in failing to remove the chemical residue on which he slipped and in
failing to provide safety equipment for his inspection. Second Amended
Complaint ¶¶34, 39-41, 44, 54. Plaintiff alleged that Miller was negligent in
subjecting Plaintiff to unsafe working conditions, in failing to properly train
him, and in failing to provide safety equipment for his inspection. Id. ¶56.
Miller and six of the other defendants that were not affiliated with
Express filed a joint set of preliminary objections to Plaintiff’s second amended
complaint seeking dismissal of Plaintiff’s claims against them on various
grounds. In these preliminary objections, Miller asserted, inter alia, that
Plaintiff’s claims against it were subject to mandatory arbitration under the
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Equipment Lease and Transportation Agreement and sought dismissal of
Plaintiff’s claims against it on that basis. Preliminary Objections to Second
Amended Complaint ¶¶28-29, 47-52. On December 21, 2021, the trial court
overruled all of the preliminary objections. Trial Court Order, 12/21/21.
On January 14, 2022, Miller and the six other defendants who had filed
preliminary objections with it appealed the order overruling the preliminary
objection that Plaintiff was required to arbitrate his claims against Miller. On
February 16, 2022, the parties stipulated to the dismissal of all defendants
other than Express and Miller and the trial court on February 22, 2022
dismissed those seven other defendants from the case. Stipulation to Dismiss
Less Than All Defendants; Trial Court Order, 2/22/22. The only parties
remaining in this action are therefore Plaintiff, Express, and Miller.
In this appeal,1 Miller presents the following single issue for our review:
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1 While an order overruling preliminary objections is an interlocutory order,
Chase Manhattan Mortgage Corp. v. Hodes, 784 A.2d 144, 145 (Pa.
Super. 2001), this appeal is properly before us. The law is clear that an order
overruling a preliminary objection that asserts that the claims cannot be
litigated in court because they are subject to an arbitration agreement is an
interlocutory order appealable as of right pursuant to 42 Pa.C.S. § 7320(a)(1)
and Pa.R.A.P. 311(a)(8). In re Estate of Atkinson, 231 A.3d 891, 896-97
(Pa. Super. 2020); Saltzman v. Thomas Jefferson University Hospitals,
Inc., 166 A.3d 465, 468 n.1 (Pa. Super. 2017); Provenzano v. Ohio Valley
General Hospital, 121 A.3d 1085, 1089 n.1 (Pa. Super. 2015). This rule,
moreover, applies even where the preliminary objection that asserted that the
claim was subject to arbitration did not specifically request an order
compelling arbitration. Estate of Atkinson, 231 A.3d at 896-97;
Provenzano, 121 A.3d at 1089 n.1, 1093; Gaffer Insurance Co., Ltd. v.
Discover Reinsurance Co., 936 A.2d 1109, 1110 n.2, 1111 & n.5 (Pa. Super.
2007).
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Whether the Lease Agreement entered into between Plaintiff-
Appellee, James Waters (“Plaintiff”) and Defendant Miller
mandates the arbitration of disputes between the parties, and
whether the personal injury claim[s] asserted in this matter are
within the scope of that arbitration provision, and must, therefore,
be arbitrated pursuant to that Lease Agreement?
Appellant’s Brief at 5.
Both Pennsylvania and federal law impose a strong public policy in favor
of enforcing arbitration agreements. Marmet Health Care Center, Inc. v.
Brown, 565 U.S. 530, 532-33 (2012); Moses H. Cone Memorial Hospital
v. Mercury Construction Corp., 460 U.S. 1, 24 (1983); In re Estate of
Atkinson, 231 A.3d 891, 898 (Pa. Super. 2020); Saltzman v. Thomas
Jefferson University Hospitals, Inc., 166 A.3d 465, 471 (Pa. Super. 2017).
Pennsylvania applies the following two-part test to determine whether a claim
must be arbitrated: 1) the court must first determine whether a valid
agreement to arbitrate exists; and 2) if a valid agreement to arbitrate exists,
the court must determine whether the dispute falls within the scope of the
arbitration agreement. TTSP Corp. v. Rose Corp., 217 A.3d 1269, 1280 (Pa.
Super. 2019); Saltzman, 166 A.3d at 472; Provenzano v. Ohio Valley
General Hospital, 121 A.3d 1085, 1094 (Pa. Super. 2015).2
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2 The Equipment Lease and Transportation Agreement and its arbitration
clause provide that the agreement and any arbitration under it shall be
governed by Mississippi law. Equipment Lease and Transportation Agreement
¶¶17, 20(B). The parties, however, have argued Pennsylvania law, do not
contend that Mississippi law governs the determination of whether Plaintiff’s
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There is no dispute here that there is a valid agreement to arbitrate.
Plaintiff admits that he and Miller entered into the Equipment Lease and
Transportation Agreement and that the Equipment Lease and Transportation
Agreement contains provisions that require that any claim that “arises out of
or relates to this Agreement or operations pursuant to this Agreement … shall
at the request of any party, made before or after institution of legal
proceedings, be determined by binding arbitration.” Preliminary Objections to
Second Amended Complaint ¶¶29, 47-48; Plaintiff’s Response to Preliminary
Objections to Second Amended Complaint ¶¶17, 35-36; Equipment Lease and
Transportation Agreement ¶20(A)-(B). Plaintiff does not argue that the
Equipment Lease and Transportation Agreement or its arbitration clause is
unconscionable or invalid for any reason. Neither the fact that Plaintiff’s claims
are personal injury claims nor the fact that arbitration would bifurcate
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claim must be arbitrated, and do not cite to any Mississippi law on
interpretation and application of arbitration clauses or contend that it is
different from Pennsylvania law. Moreover, it appears that Mississippi law,
like Pennsylvania law, favors arbitration and applies the same two-part test
that is at issue here, whether there is a valid arbitration agreement and
whether the dispute falls within the scope of the arbitration agreement, to
determine whether a claim must be arbitrated. Harrison County
Commercial Lot, LLC v. H. Gordon Myrick Inc., 107 So.3d 943, 949 (Miss.
2013); South Central Heating Inc. v. Clark Construction Inc. of
Mississippi, 342 So.3d 160, 165 (Miss. App. 2022). Because there is no
claim or showing that Mississippi and Pennsylvania law differ in any way that
is material to the issue before us, we apply Pennsylvania law. Highmark Inc.
v. Hospital Service Association of Northeastern Pennsylvania, 785 A.2d
93, 97 (Pa. Super. 2001).
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Plaintiff’s claims and require piecemeal litigation of the same claims in
separate fora3 is a permissible ground for denying arbitration if Plaintiff’s
claims are within the scope of the Equipment Lease and Transportation
Agreement’s arbitration clause. Marmet Health Care Center, Inc., 565 U.S.
at 533-34; Taylor v. Extendicare Health Facilities, Inc., 147 A.3d 490,
507-10 (Pa. 2016).
The only issue here is therefore whether Plaintiff’s claims are within the
scope of the Equipment Lease and Transportation Agreement’s arbitration
clause. This is a question of law subject to this Court’s plenary review. Estate
of Atkinson, 231 A.3d at 898; Saltzman, 166 A.3d at 471; Provenzano,
121 A.3d at 1095. Two somewhat contradictory principles govern this
decision: 1) arbitration agreements must be strictly construed and not
extended by implication, and 2) where there is a clear agreement to arbitrate,
the arbitration provision should be enforced unless the arbitration clause is
not susceptible to an interpretation that covers the claim. Saltzman, 166
A.3d at 471; Provenzano, 121 A.3d at 1095; Callan v. Oxford Land
Development, Inc., 858 A.2d 1229, 1233 (Pa. Super. 2004).
Where the parties’ contract contains an arbitration clause requiring
arbitration of any claims arising out of or relating to the contract, a claim that
arises out of the parties’ contractual relationship must be arbitrated, even if it
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3 Plaintiff’s claims against the other defendant, Express, are not subject to
arbitration.
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is a tort or other non-contract cause of action and is not based on any breach
of the contract’s terms. Saltzman, 166 A.3d at 469, 476-79 (Whistleblower
claim and tort claim for wrongful discharge were within scope of arbitration
agreement in employment contract, “because the arbitration provision in this
case states that it applies to ‘any’ dispute ‘arising under or related to’ the
Agreement, we conclude that it encompasses all disputes relating to the
parties’ contractual relationship”); see also Pittsburgh Logistics Systems,
Inc. v. Professional Transportation and Logistics, Inc., 803 A.2d 776,
779-82 (Pa. Super. 2002) (claims of interference with prospective contract
with a third party, breach of fiduciary duty, and misappropriation of trade
secrets were within arbitration clause because they arose out of the parties’
contractual relationship). The arbitration clause in the Equipment Lease and
Transportation Agreement not only contains that language, as it requires
arbitration of any claim that “arises out of or relates to this Agreement,” but
is even broader, as it also requires arbitration of any claim that “arises out
of or relates to … operations pursuant to this Agreement.” Equipment
Lease and Transportation Agreement ¶20(A)-(B) (emphasis added). “[W]here
the arbitration provision is a broad one, and ‘[i]n the absence of any express
provision excluding a particular grievance from arbitration, ... only the most
forceful evidence of a purpose to exclude the claim from arbitration can
prevail.’” Provenzano, 121 A.3d at 1096 (ellipses in original) (quoting E.M.
Diagnostic Systems, Inc. v. Local 169, International Brotherhood of
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Teamsters, Chauffeurs, Warehousemen & Helpers of America, 812 F.2d
91 (3rd Cir.1987)); see also Saltzman, 166 A.3d at 479 (tort claims were
subject to arbitration where the arbitration clause was “broadly worded, and
there is no evidence demonstrating the parties’ intent to exclude tort claims
arising from or related to the Agreement”).
As Plaintiff correctly asserts, the Equipment Lease and Transportation
Agreement governs the lease of a truck tractor and is not a lease of the tanker-
trailer that was involved in Plaintiff’s fall. Equipment Lease and Transportation
Agreement ¶1 & Schedule A. In addition, it does not specifically reference
inspections of trailers or any inspection of any equipment by Plaintiff. It also
provides that Plaintiff’s compensation is primarily from revenues for over-the
road transportation and specifically excludes tank cleaning from Plaintiff’s
compensation. Id. ¶3(B), Schedule B ¶¶II, III, & Contractor Statement ¶II.
It is clear, however, from both the provisions of the Equipment Lease
and Transportation Agreement and Plaintiff’s allegations and admissions in
this action that Plaintiff’s personal injury claims against Miller arise out
“operations pursuant to” the Equipment Lease and Transportation Agreement.
The Equipment Lease and Transportation Agreement provides for Plaintiff to
use his truck tractor to transport trailers. Equipment Lease and Transportation
Agreement ¶¶1, 5(D), 19, Schedule B ¶¶II(A) & (E). While it does not set
forth what Plaintiff is required to do in performing these transportation
services, the Equipment Lease and Transportation Agreement provides that
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“[i]n the event Contractor [Plaintiff] accepts a trip or load offered by Carrier
[Miller] for transportation and other necessary services, Contractor agrees to
transport and deliver such commodities in conformity with any terms and
conditions of any agreement which may have been entered into by Carrier
with a customer of Carrier for which Contractor is performing the
transportation service.” Id. ¶1. Plaintiff admits that he was working on a job
for Miller at the time of the accident and that Miller and the customer required
him to perform the inspection of the tanker-trailer. Second Amended
Complaint ¶¶31, 36-37.
Moreover, Plaintiff bases his claims against Miller on breach of its duties
to him as a contractor working for Miller and admits that his relationship with
Miller was governed by the Equipment Lease and Transportation Agreement.
Second Amended Complaint ¶56; Preliminary Objections to Second Amended
Complaint ¶29; Plaintiff’s Response to Preliminary Objections to Second
Amended Complaint ¶17. In addition, the Equipment Lease and
Transportation Agreement references and requires compliance with Federal
Motor Carrier Safety Administration regulations, Equipment Lease and
Transportation Agreement at 1, 15 & ¶¶1, 5(A), 11, 12(A) & (C), 14, and the
Federal Motor Carrier Safety Administration regulations governing carrier
compliance review include “inspection” as an item that is part of the carrier’s
“operations.” 49 C.F.R. § 385.3.
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Nothing in the Equipment Lease and Transportation Agreement indicates
that the parties intended to limit the arbitration clause to contract claims. The
statutes of limitations referenced in the arbitration clause are not solely
contract statutes of limitations. While the Equipment Lease and
Transportation Agreement states that Miss. Code § 75-2A-506, the statute of
limitations action for default under a lease contract, applies to actions for
default, it also lists another statute of limitations that it states applies to all
other actions. Equipment Lease and Transportation Agreement ¶20(B). That
statute, Miss. Code § 15-1-49, is the catch-all statute of limitations for “[a]ll
actions for which no other period of limitation is prescribed” and applies to
personal injury actions for which no other limitation period is prescribed. Miss.
Code § 15-1-49(1), (2). The inclusion in the arbitration clause of claims that
arise out of “operations pursuant to this Agreement” shows a clear intent to
encompass all claims arising out of Plaintiff’s work under the Equipment Lease
and Transportation Agreement, not just disputes concerning the terms of the
contract. Indeed, the Equipment Lease and Transportation Agreement
contains a provision concerning assertion of claims for “injury” against Miller.
Equipment Lease and Transportation Agreement ¶7(E).
Setlock v. Pinebrook Personal Care & Retirement Center, 56 A.3d
904 (Pa. Super. 2012) and Midomo Co. v. Presbyterian Housing
Development Co., 739 A.2d 180 (Pa. Super. 1999), relied upon by Plaintiff,
do not support the conclusion that personal injury claims are outside the scope
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of this arbitration clause. In Setlock, this Court held that a survival and
wrongful death action against a personal care facility that arose from
negligence in transporting the decedent to a medical appointment was not
within the scope of an agreement to arbitrate any dispute or controversy
“arising out of or in connection with under or pursuant to” the decedent’s
Resident Agreement with the facility. 56 A.3d at 906, 910-12. The Court
based its conclusion that the wrongful death and survival claims were outside
the scope of that arbitration clause on the ground that the Resident Agreement
did not state that claims arising out of such transportation or claims arising
out of the facility’s actions or care were subject to arbitration. Id. at 912.
Here, in contrast, the language of the Equipment Lease and Transportation
Agreement requiring arbitration of any claim that “arises out of or relates to
… operations pursuant to” the agreement is far broader than the arbitration
clause in Setlock and not only requires arbitration of claims involving the
terms of the agreement, but also encompasses claims arising out of the
parties’ actions in performing under the Equipment Lease and Transportation
Agreement.
Midomo Co. is even less relevant. In Midomo Co., the arbitration
clause did not even cover all claims arising under the parties’ agreement and
the Court held that the arbitration clause did not apply to tort claims because
it expressly limited arbitration to disputes regarding specific aspects of the
parties’ agreement. 739 A.2d at 187-90.
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Because the Equipment Lease and Transportation Agreement requires
that the parties arbitrate any “controversy or claim [that] arises out of or
relates to this Agreement or operations pursuant to this Agreement” and
Plaintiff alleges that his personal injury claims against Miller arose out work
that he was performing under the Equipment Lease and Transportation
Agreement, Plaintiff’s claims against Miller in this action are within the scope
of the arbitration clause and must be resolved by arbitration. Accordingly, we
reverse the trial court’s order overruling Miller’s preliminary objection that
sought arbitration and remand this matter to the trial court with instructions
to order arbitration of Plaintiff’s claims against Miller.
Order reversed. Case remanded. Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 10/18/2022
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