Waters, J. v. Express Container

2022 Pa. Super. 182, 284 A.3d 1217

• Court: Superior Court of Pennsylvania
• Decided: October 18, 2022
• Docket: 94 WDA 2022
• Status: Published

Opinion

J-A22036-22

2022 PA Super 182

JAMES 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. J-A22036-22

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:

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

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

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

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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