Watson v. Prestige Delivery Sys., Inc.

27 Pa. D. & C.5th 449
CourtPennsylvania Court of Common Pleas, Alleghany County
DecidedFebruary 7, 2013
DocketNo. GD-09-015746
StatusPublished

This text of 27 Pa. D. & C.5th 449 (Watson v. Prestige Delivery Sys., Inc.) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Alleghany County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Watson v. Prestige Delivery Sys., Inc., 27 Pa. D. & C.5th 449 (Pa. Super. Ct. 2013).

Opinion

WETTICK, J.,

This is a class action brought by two truck drivers (Richard Watson and David Clary) who delivered packages to customers of Prestige Delivery Systems, Inc. (“Prestige”). Each driver performed his services pursuant to an agreement between Prestige and the driver titled Independent Contractor Operating Agreement (“Agreement”). See Plaintiffs’ fourth amended complaint, Ex. A. This Agreement refers to the driver as an independent contractor and not an employee of Prestige.

The Agreement provides that the contractor must [451]*451be an affiliate of the National Independent Contractor Association, NICA, Inc. (“NICA”). The Agreement describes NICA as a primary provider of third-party administrative services to independent contractors, which manages and administers settlement, tax, and other related services for independent contractors who are affiliates of its organization. This agreement provides that payments to the truck driver for services rendered to Prestige will be made by NICA (Agreement, ¶6). It provides for NICA to make deductions-described in an Agreement between NICA and the driver-from compensation Prestige owes the driver for delivering packages to customers of Prestige.1

The gravamen of Plaintiffs’ F ourth Amended Complaint is that defendants have misclassified plaintiffs and other similarly situated drivers as independent contractors rather than as Prestige’s employees, thereby depriving these drivers of the rights, privileges, and benefits owed to them as employees.

Prestige, NICA, and Thomas McGrath have filed preliminary objections to Plaintiffs’ Fourth Amended [452]*452Complaint.2

PRELIMINARY OBJECTIONS BASED ON FORUM SELECTION CLAUSE

The initial issue that I must address is whether plaintiffs ’ claims against Prestige must be brought in Ohio.

The Agreement

Prestige relies on ¶22 of the independent contractor operating agreement:

22. Entire Agreement. This Agreement constitutes the entire agreement and understanding between the parties and supersedes all prior independent Contractor Operating Agreements and shall not be modified, altered, changed or amended in any respect unless in writing and signed by both parties. In the event any provision of this Agreement shall be held invalid or unenforceable for any reason whatsoever, the invalidity or unenforceability shall not affect any other provision of this Agreement, and the remaining provisions shall remain in full force and effect. This Agreement shall be deemed to have been written in accordance with the statutes and laws of the State of Ohio, and, in the event of any disagreement or litigation, the laws of this state shall apply and suit must be brought in this state. In addition, Contractor and Carrier agree that this Agreement is being entered into in the State of Ohio.

Pennsylvania Case Law

[453]*453The law governing the enforceability of a forum selection clause is set forth in the recent opinion of the Pennsylvania Superior Court in Autochoice Unlimited, Inc. v. Avangard Auto Finance, Inc., 9 A.3d 1207, 1215 (Pa. Super. 2010). This opinion looked to a 1965 opinion of the Pennsylvania Supreme Court:

In Central Contracting Co. v. C.E. Youngdahl & Co.,418 Pa. 122, 209 A.2d 810, 816 (1965), our Supreme Court addressed the effect and enforceability of contractual forum selection clauses in Pennsylvania.
The modem and correct mle is that, while private parties may not by contract prevent a court from asserting its jurisdiction or change the rules of venue, nevertheless, a court in which venue is proper and which has jurisdiction should decline to proceed with the cause when the parties have freely agreed that litigation shall be conducted in another forum and where such agreement is not unreasonable at the time of litigation. Such an agreement is unreasonable only where its enforcement would, under all circumstances existing at the time of litigation, seriously impair plaintiff’s ability to pursue his cause of action. Mere inconvenience or additional expense is not the test of unreasonableness since it may be assumed that the plaintiff received under the contract consideration for these things. If the agreed upon forum is available to plaintiff and said fomm can do substantial justice to the cause of action then plaintiff should be bound by his agreement. Moreover, the party seeking to obviate the agreement has the burden of proving its unreasonableness.

[454]*454Id. at 816.

Autochoice also discussed more recent case law:

Recently, this court has clarified the circumstances under which such provisions would be deemed unenforceable.
In light of these controlling principles from Central Contracting and prevailing case law, a forum selection clause in a commercial contract between business entities is presumptively valid and will be deemed unenforceable only when: 1) the clause itself was induced by fraud or overreaching; 2) the forum selected in the clause is so unfair or inconvenient that a party, for all practical purposes, will be deprived of an opportunity to be heard; or 3) the clause is found to violate public policy.
Patriot Commercial, supra at 651. See also O’Hara v. First Liberty Insurance Corp., 984 A.2d 938 (Pa. Super.2009), appeal denied, 995 A.2d 354 (Pa.2010).

Id. (Footnote omitted).

Not a Bargained-for Clause

The Pennsylvania case law described above does not provide for Pennsylvania courts to enforce a forum selection clause buried in a take-it-or-leave-it form agreement drafted by the party seeking to enforce the clause.3

[455]*455In Central Contracting Co., 209 A.2d at 816, quoted at length by the Autochoice Court, the Court referred to the “modem and correct rule” that the fomm selection clause should be recognized “when the parties have freely agreed that the litigation shall be conducted in another fomm and where such agreement is not unreasonable at the time of litigation.”

A court, applying this criteria, should not enforce this fomm selection clause because plaintiffs did not freely agree for litigation to be conducted in Ohio. The fomm selection clause was buried in ¶22 of the Agreement under the unrelated heading, Entire Agreement, in all likelihood, the drivers were not aware of the fomm selection clause. Also, even if aware of the clause and what it means, the drivers would not believe that they had any choice over whether their Agreement with Prestige would ultimately include a forum selection clause.

This application of Central Contracting Co. is consistent with the language in Patriot Commercial, also quoted by the Autochoice Court, that the fomm selection clause is presumptively valid “in a commercial contract between business entities.” Autochoice, 9 A.3d at 1215 (quoting Patriot Commercial Leasing Co. v.

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Cite This Page — Counsel Stack

Bluebook (online)
27 Pa. D. & C.5th 449, Counsel Stack Legal Research, https://law.counselstack.com/opinion/watson-v-prestige-delivery-sys-inc-pactcomplallegh-2013.