Litigation

By: Nancy J. Glidden

Pennsylvania businesses seeking to minimize class action exposure and generally seeking to enforce arbitration provisions should be aware of a recent decision issued by the Federal District Court for the Eastern District of Pennsylvania, Clerk v. Ace Cash Express, Inc..  Historically, Pennsylvania courts have enforced arbitration provisions in contracts. Recently, the Court (applying Pennsylvania law) added to the body of law which favors enforcing arbitration provisions.

At issue in Clerk was the enforceability of an Arbitration Agreement that was part of a loan transaction, and which mandated submitting all disputes to arbitration on an individual (ie. non-class action) basis.   The Court found the Arbitration Agreement was neither procedurally nor substantively unconscionable, and enforced the Agreement according to its terms – which eliminated all class claims and required Clerk to arbitrate her individual claims.

Significant to the outcome was the fact that the Arbitration Agreement gave Clerk thirty (30) days to opt-out without any adverse effect on the terms of the underlying loan transaction, but Clerk failed to exercise the opt-out.

Clerk is a good read because the analysis it provides concerning the elements necessary for arbitration provisions to survive challenge is useful background when drafting.

Please contact Nancy J. Glidden for more information.

By: Stephen P. Lagoy

Baseball arbitrations (see previous blog posts here and here) have become increasingly rare as the owners and players opt to negotiate a contract rather than place their fate in the hands of an arbitration panel. The only exception thus far this year has been the case of Milwaukee Brewers outfielder Corey Hart. In the first Major League Baseball salary arbitration this year, Hart won his case against the Brewers. The three-member panel of arbitrators awarded Hart the $4.8 million salary he was seeking for 2010. The Brewers had proposed $4.15 million. Under the rules of baseball arbitration, the arbitrators had to pick one proposal or the other — splitting the difference isn’t permitted.

For a very interesting account of the arbitration procedure in Hart’s case, see:

http://mlb.mlb.com

Contact Steve Lagoy for more information on how the arbitration process can help you and your business.

By: James C. Dalton

Your right to sue, and the legal remedies available to you, depend not only on the particular facts of your case, but also on the legal basis or theory of your claim. As noted in an earlier blog regarding the Discovery Rule, statutes of limitation require that claims be brought within specific time periods, depending on the type of claim. Failure to do so will lead to dismissal of your claim. A claim for breach of contract, for example, must be brought within four years of when the breach occurred, while a claim for personal injuries due to negligence is subject to a shorter, two year limitation period. Determining how to categorize a particular claim is not always a simple matter – is your claim for faulty construction/repair work a contract claim, or, a negligence claim? Or both? The legal category of your claim will also impact the nature and amount of damages recoverable in court.

Courts often address the distinction between contract and tort (negligence) claims in cases involving the performance of contract obligations, applying the Gist of the Action Doctrine, which the Pennsylvania Superior Court, in Reardon v. Allegheny College, explained as follows:

The gist of the action doctrine acts to foreclose tort claims: 1) arising solely from the contractual relationship between the parties; 2) when the alleged duties breached were grounded in the contract itself; 3) where any liability stems from the contract; and 4) when the tort claim essentially duplicates the breach of contract claim or where the success of the tort claim is dependent on the success of the breach of contract claim.

Proper analysis of the facts and available legal theories of your case is essential to protecting your rights and maximizing your recovery. Please contact James C. Dalton, Esq. for further information.

By: Stephen P. Lagoy

The President has signed into law a program giving closed auto dealerships access to neutral arbitration if they want to be reinstated. The process begins immediately and is expected to take six and one half months. For more information on how the auto dealer arbitration process will work see:

http://www.autonews.com/article/

For more information on how the arbitration process can work for you and your business, please contact our office.

In a recent post, we discussed the impact of Kvaerner Metals v. Commercial Union Ins. Co., 908 A.2d 888 (Pa. 2006), upon general contractors and others vis-à-vis the coverage afforded by commercial general liability policies for claims involving damage caused by faulty workmanship. In light of that decision, insurance coverage for such claims no longer exists. However, in response to the obvious gap in coverage that presently exists under standard CGL policies, insurers are beginning to offer endorsements that may bridge that gap and restore the protection that previously existed before Kvaerner and its progeny. Caution should be exercised, however, when evaluating whether or not to purchase an endorsement as certain endorsements may only offer limited protection and may be very costly. For more information on this topic, please contact our office.

By: Christopher L. Turner

It cannot be denied that the struggling economy has adversely affected the real estate market. As a result, some sellers of residential real property who are desperate to sell their property are failing to disclose known defects with their home. These defects cover a broad range and include, but are not limited to defects with the Seller’s roof, basement, water/sewage systems, plumbing, electric, heating and air conditioning as well as damage to the structural integrity of the home caused by termite infestation. Buyers damaged by such defects are naturally wondering “what can I do?”

If you have recently purchased residential real property and have been affected by defects to such property, you should be aware of the Pennsylvania Real Estate and Seller Disclosure Act (the “Act”) and its underlying rationale. Under the Act, a Seller who intends to transfer an interest in real property is required to disclose to the Buyer any material defects with the property which are known to the Seller by completing all applicable items in a property disclosure statement. The Act requires that such seller property disclosure statement be provided in all residential real estate transfers except for certain fiduciary transfers and transfers of new residential construction that have not been previously occupied and have been inspected for building code compliance and received a certificate of occupancy or code compliance.

A Seller of residential real property will be liable in the amount of actual damages suffered by the Buyer if such Seller willfully or negligently violates or fails to perform any duty prescribed by the Act. However, a Buyer’s action for damages against a Seller for violations of the Act must be commenced within a certain time period that begins to run from the date of final settlement on the affected property.

In addition to a cause of action under the Act, liability may also be imposed under alternative legal theories. There may also be causes of action against the Seller’s Agent and/or the Buyer’s Agent. Such options should be discussed with an attorney.

For more information, please contact Chris Turner in our litigation department.

By: Nancy J. Glidden 

Pennsylvania’s liberal rules concerning the amendment of pleadings aren’t so liberal in the context of complaints for confession of judgment. When filing a complaint in confession of judgment, if a mistake is made in calculating the amount of damages or the time period in which damages accrued, an attorney cannot rely upon Pa. R.C.P. 1033 to make corrections by amendment. So held the Pennsylvania Superior Court in TCPF Limited Partnership v. Skatell, 976 A. 2d 571 (Pa. Super. 2009). For a fuller discussion of the case click here.

By: Nancy J. Glidden

It is not unusual when registering for something on-line to “click” a box by which you agree to accept certain terms governing the transaction. Before you “click” the box, have you actually read what it is you are agreeing to?

Increasingly eBay users are surprised to learn that if a problem develops with an eBay transaction, any claims against eBay must be brought exclusively in Santa Clara, California. This is because eBay includes a forum selection clause in its User Agreement. If you agree to the terms, and a problem develops down the line for which you believe eBay is responsible, more likely than not your rights will be determined in a California courtroom.

A Pennsylvania litigant surprised by eBay’s forum selection clause recently waged an unsuccessful challenge to the validity of the clause. The litigant, Dominic Tricome, filed suit in Pennsylvania and tried to fend off eBay’s attempts to dismiss or transfer the case by arguing that eBay’s User Agreement was procedurally and/or substantively unconscionable, and that litigating in California would be unduly burdensome. Judge C. Darnell Jones II of the U.S. District Court for the Eastern District of Pennsylvania, however, disagreed and found eBay’s forum selection clause to be “presumptively valid.” See Tricome v. eBay Inc, 2009 WL 3365873 (E.D.Pa.)

So, whether you are completing a registration for eBay or some other on-line business, to avoid surprise be sure to read the User Agreement and understand what it provides before you “click” to accept its terms.

For more information, please contact our office.

By: Stephen P. Lagoy

If you are considering arbitration, here’s an article that may be of interest to you.
Please contact Stephen Lagoy to discuss whether arbitration might be beneficial to resolve disputes for you or your company.

By: Daniel Hanifin

What does an arbitration clause mean to me?

Most, if not all, customer account forms used by brokerage houses contain arbitration clauses.   An arbitration clause is a commonly used clause in a contract that requires the parties to resolve their disputes through an arbitration process. Although such a clause may or may not specify that arbitration occur within a specific jurisdiction, it always binds the parties to a type of resolution outside of the courts, and is therefore considered a kind of forum selection clause.  The vast majority of the clauses state that arbitration must take place before either the New York Stock Exchange (NYSE) or the National Association of Securities Dealers (NASD).  However, in 2007, the NASD and the NYSE combined their dispute resolution divisions into one body, known as the Financial Industry Regulatory Authority (FINRA).   (www.finra.org)

Arbitration before a FINRA panel is similar to going to court, but it is usually faster, cheaper and less complex.  FINRA has established discovery procedures that assist in simplifying the process.  In arbitration, the parties present their dispute through witness testimony and documentary evidence much as they would in court.   However, rather than a judge presiding over the proceedings, a panel of three arbitrators, two public and one industry, preside over the hearing.  The arbitrators study the evidence and render a decision just like a judge.  These decisions are binding upon the parties except in very limited circumstances where a court may overturn the decision; however, a reversal of an arbitration decision is rare.

This is part of an ongoing series of postings related to claims related to your investment accounts.  For more information on securities arbitration and claims against your investment professionals please contact Daniel M. Hanifin.