Dodds v. Pulte Home Corp.

909 A.2d 348, 2006 Pa. Super. 268, 2006 Pa. Super. LEXIS 3050, 2006 WL 2788670
CourtSuperior Court of Pennsylvania
DecidedSeptember 28, 2006
DocketNos. 3262 EDA 2005 and 3263 EDA 2005
StatusPublished
Cited by36 cases

This text of 909 A.2d 348 (Dodds v. Pulte Home Corp.) is published on Counsel Stack Legal Research, covering Superior Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dodds v. Pulte Home Corp., 909 A.2d 348, 2006 Pa. Super. 268, 2006 Pa. Super. LEXIS 3050, 2006 WL 2788670 (Pa. Ct. App. 2006).

Opinion

OPINION BY

KLEIN, J.:

¶ 1 This consolidated appeal arises out of two separate actions instituted by home-buyers against the builders and sellers of their homes. John F. and Patricia Dodds and Joseph and Amy Pórtale (collectively “Plaintiffs”) filed suit against Pulte Home Corporation of the Delaware Valley (“PHCDV’), and its alleged parent corporation, Pulte Home Corporation (“PHC”) (collectively “Defendants”). PHC appeals from the trial court order denying Defendants’ Motion for Summary Judgment that requested the matter be remanded to arbitration. Defendants claim the trial court erred in holding that the addition of fraud charges and the addition of the parent corporation, PHC, takes the matter out of the ambit of arbitration. We agree with Defendants and reverse and remand for the matter to be sent to arbitration.

¶ 2 The arbitration agreements between the parties are at issue in each case. In addition to breach of contract claims against PHCDV, Plaintiffs alleged claims of common law fraud, fraudulent inducement to enter the original purchase agreement, and violations of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (“UTPCPL”), 73 P.S. §§ 201-1 et seq. Plaintiffs do not allege fraud in the 'procurement of the arbitration agreement; rather, they assert that Defendants made fraudulent representations about the quality of the homes that were to be built. They also assert that Defendants falsely represented that they exceed normal customer satisfaction when, in fact, they have a pattern of faffing to correct defects pursuant to the agreement of sale.1

[350]*350¶ 3 Defendants filed preliminary objections, claiming that Plaintiffs’ addition of the fraud and UTPCPL claims and the joinder of PHCDV’s alleged “principal” were merely attempts to remove this case from the parameters of the arbitration clauses. The trial court agreed with Plaintiffs and denied Defendants’ requests to compel arbitration.

¶ 4 The matter is controlled by this Court’s decision in Shadduck v. Christopher J. Kaclik, Inc., 713 A.2d 635 (Pa.Super.1998). Therefore, we reverse and remand for arbitration.2 The parties to an agreement cannot attempt to defeat an arbitration clause simply by adding fraud allegations to what is essentially a contract claim or by adding a principal as a defendant who was not a party to the agreement. The gist of these actions is in contract, and, therefore, we conclude that the parties are bound by their arbitration agreements.

1. Plaintiffs’ claims of fraud and unfair trade practices do not take these matters out of the ambit of the arbitration agreements.

¶ 5 The facts of this case are strikingly similar to those in Shadduck, supra, which controls our disposition. In Shad-duck, the parties seeking to avoid arbitration argued that their claims of fraudulent misrepresentation and violations of the UTPCPL were distinct from their contract claims, and therefore were not subject to arbitration. 713 A.2d at 637. This argument was rejected as unsupported by the facts pled, and the same situation prevails here. Plaintiffs’ underlying complaint is that the homes were not built well and proper repairs were not made. They also alleged that the builder knew it would not build the homes as promised and would not make the necessary repairs when asked.

¶ 6 The arbitration clause in this case is very broad, perhaps even broader than the clause in Shadduck. The clause in the instant case reads:

Any controversy, claim or dispute arising out of or relating to this Agreement or purchase of the Home (except for claims subject to the Limited Home Warranty) shall be settled by arbitration.

(Purchase Agmt. at ¶20 (emphasis added).) In Shadduck, the arbitration clause provided:

All claims or disputes between the Contractor and the Owner arising out of, or relating to, this Contract or the breach thereof shall be decided by arbitration.

713 A.2d at 637. Here, Plaintiffs’ fraud claims relate to the purchase itself, not merely to the contract, so even if not controlled by Shadduck, it would be covered by the contract language in this case. This Court found that the Shadduck language was an “unlimited arbitration clause.” Id. at 638.

¶ 7 Just as the Shadduck Court held that there is no separate time period involved, there is no separate time period or facts in this case. All of the claims in[351]*351volved here “relat[e] to [the] Agreement or purchase of the Home.” (Purchase Agmt. at ¶20.) Thus, they are all subject to arbitration.

¶ 8 Moreover, Plaintiffs’ reliance on Nealy v. State Farm Mutual Auto. Insurance Co., 695 A.2d 790 (Pa.Super.1997), is misplaced. The Nealy Court held that due to the unique nature of bad faith claims under 42 Pa.C.S.A. § 8371, original jurisdiction over such claims lies exclusively in the courts of common pleas. The Court noted that the plaintiffs’ bad faith claims were temporally and factually distinct from the underlying contract claims that were subject to arbitration. Id. at 792. Nealy was also relied upon by the parties seeking to avoid arbitration in Shadduck. The Shadduck Court distinguished Nealy on its facts, and we can do the same here. As noted, the “bad faith” clause of section 8371 is unique. The obligation to pay under an insurance contract is distinct in time and facts from the actions of the insurance company after the incident giving rise to the claim. Here, all of Defendants’ representations to obtain the contracts to sell the homes happened before the signing of the contracts that were allegedly breached.

¶ 9 The ruling in Shadduck also comports with logic and common sense. It is hornbook law that Pennsylvania favors the enforceability of agreements to arbitrate. See Quiles v. Financial Exch. Co., 879 A.2d 281, 285 (Pa.Super.2005). If a party dissatisfied with the result of a contract could avoid arbitration merely by claiming that the other party intended to breach the contract before signing it, then any arbitration clause could easily be avoided. We agree with the reasoning of Shadduck and are bound by it. See also Pittsburgh Logistics Sys., Inc. v. Prof'l Transp. & Logistics, Inc., 803 A.2d 776 (Pa.Super.2002) (applying Shadduck and holding that plaintiffs tort claims arose from underlying contract and were therefore encompassed by arbitration clause).

2. Plaintiffs’ joinder of PHC as a defendant does not take this case out of the ambit of the arbitration agreement.

¶ 10 Plaintiffs argue that because they also asserted a fraud claim against PHC, the alleged parent of PHCDY, Plaintiffs are not bound by the terms of the arbitration agreement. Defendants argue that non-signatories to an arbitration agreement can enforce such an agreement when there is an obvious and close nexus between the non-signatories and the contract or the contracting parties.

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Cite This Page — Counsel Stack

Bluebook (online)
909 A.2d 348, 2006 Pa. Super. 268, 2006 Pa. Super. LEXIS 3050, 2006 WL 2788670, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dodds-v-pulte-home-corp-pasuperct-2006.