author: FRIEDMAN, J,

text:
    Sean’s Real Estate Service, LLC v. Shawnell Glenn

      C.P. of Allegheny County,
    no. LT10-401.

      Jeffrey D. Goldman, for plaintiff.

      Barbara Kern, for defendants.
    October 6, 2010
   FRIEDMAN, J,

— This decision is filed pursuant to Pa. R.C.P. 1038. See also Pa. R.C.P. 227.1(c)(2).

The captioned dispute was tried before the undersigned sitting without a jury. Plaintiff, a residential landlord, seeks to evict defendants from a single-family dwelling they rented from it. Plaintiff bases its claims on a written document purporting to be a one-year lease between the parties. The grounds for eviction are said to be the violation of several terms of that lease. Defendants admit withholding some rent, but say they were justified, given plaintiff’s failures to honor its obligations to them in a timely fashion. Defendants also contend that the written lease is unenforceable by plaintiff because it is a contract of adhesion replete with unconscionable terms.

Defendants have been paying the monthly rent into court pending the outcome of this trial, and, in their counterclaim, demand that a portion of that escrow fund be returned to them. Defendants also contest the eviction, saying they have not materially breached any of the enforceable provisions of the lease and are entitled to reside in the house until the lease expires, at the end of this year.

After consideration of all the evidence, we conclude that defendants are entitled to possession and plaintiff is not. We also conclude that defendants are entitled to retain the unpaid rent that is not part of the rents escrowed, as compensation for the deficiencies, many of which remain uncorrected. However, we conclude, in the circumstances, that plaintiff should be given the rent that has been held in escrow by the Department of Court Records, Civil Division.

A threshold legal issue was whether the written lease itself is an unconscionable contract of adhesion which is not deserving of strict enforcement by this court. Another important legal issue that the court noticed during its review of the evidence is whether the written lease is unenforceable because it lacks consideration. Our findings of fact, listed below, set forth the scenario we find credible. We have tried to group the findings according'to the areas of dispute. They are not listed in any particular order of importance. Based on those facts we conclude that there was no additional consideration furnished by plaintiff at the time the written lease was executed and that the tenancy began based on oral agreements only. The oral agreements were made first in November of2009 and then in December and very early January, no later than January 3, 2010, the date defendants took possession. We also conclude that, even if the written lease is regarded as the operable contract between the parties, it is unconscionable and unenforceable in the circumstances, under the well-settled law of Pennsylvania.

FINDINGS OF FACT

AGREEMENTS OF THE PARTIES AND GENERAL BACKGROUND

1. Plaintiff and defendants first began discussions of a rental in November 2009.

2. Plaintiff told defendants that a suitable house would become available and ready for occupancy by December 15,2009. (We expressly reject plaintiff’s evidence that the occupancy date was to have been much later, in the Spring of 2010.)

3. As a result of this representation, defendants gave plaintiff $1,500 to secure the premises for them; at this time (November 2009) no lease was entered into and no copy of plaintiff’s form lease was given to defendants.

4.The expected house was not ready as promised on December 15, and plaintiff offered defendants a different house, the one now at issue.

5. Since defendants had already given notice to their then-landlord that they would be vacating as of the end of December, they agreed to accept the house at issue, subject to conditions to which plaintiff had agreed, as they had no other place to live.

6. Plaintiff was also required by law to obtain an occupancy permit, which would only be issued if many of those same conditions were met.

7. Defendant Trotman is handicapped from a stroke and has little use of her right arm and needs a walker to help her ambulate; defendant Glenn, her daughter, has three school-age children, so their housing requirements are not easily met, especially given the rent they are able to pay.

8. The alternate house, the subject premises, was not brought into compliance by January, although an occupancy permit was eventually issued a few months after defendants and the children moved in.

9. The written lease was not given to defendants for review or signature until January 6,2010, three days after they had moved into the premises on Sunday, January 3, 2010, based on the oral agreements made before then.

10. Both defendants signed the lease, based on a rapid oral summary of each page which Heather Wise, an agent of plaintiff, went over with them.

11. The court believes that Ms. Wise, in her haste to limit the harm to defendants caused by plaintiff’s failure to meet the December 15 readiness date for the original house, had forgotten to follow the normal administrative practices for formalizing a lease agreement.

12. Although we are unable to say that she intentionally deceived defendants regarding the terms of the lease, she did mislead them at least inadvertently.

13. Ms. Wise knew at the time of the signing of plaintiff’s Exhibit 1 (on January 6, 2010) that Ms. Glenn was extremely tired, having just gotten home from working a nighttime assignment.

14. Ms. Glenn had asked if she could come in the next day to sign, but Ms. Wise refused to accommodate her, apparently in the erroneous belief that one day more would make a difference legally.

15. Ms. Wise did not give defendants a fair opportunity to review the lease and did not offer them the ability to consult an attorney about its terms.

16. Ms. Wise marked an “X” in the box on the lease at paragraph 81 (regarding having an attorney review the lease) either after defendants signed it or without bringing it to their attention at the time.

17. If read strictly, the terms of the written lease applicable to the Tenant’s obligations are among the harshest and most detailed that this member of the court has ever seen, while the obligations of the landlord are almost non-existent.

18. The written lease has an attachment titled “Rules and Regulations” which goes so far as to say how long a tenant may leave unwashed dishes in the kitchen sink (no more than one hour).

19. One of the supposedly material violations with which defendants are charged is leaving their dishes in the sink for a longer period, allegedly overnight, on September 16-17,2010, an allegation we find unsupported by the credible evidence, even if we assume for purposes of argument that such conduct can be a material violation of the lease.

20. Plaintiff did not repair the many items needed to fulfill its promises to defendants.

21. Plaintiff did not deliver to defendants a house that met the borough’s requirements for occupancy at the time plaintiff gave defendants possession of the premises.

22. Although most of the repairs promised prior to the January move-in were cosmetic in nature, they were important to defendants.

23. Other defects were found by defendants shortly after they moved in that affected their ability to fully use the premises.

24. Despite having been repeatedly notified of the various problems, plaintiff failed to correct most of them.

25. A malfunctioning water heater was the only item that the credible evidence shows was repaired in a timely fashion.

DEFECTS DISCOVERED AFTER TENANCY BEGAN

26. One of the most serious defects was a leak from an upstairs bathroom through the living room ceiling that was small but was the type that can get larger and cause sudden harm to people or possessions in the living room.

27. There was also a small leak near or through a light fixture, which plaintiff’s principal, Sean Kerrigan, said must not have been much of a leak because the ceiling tile was still in place.

28. Although that small leak may not have been serious even though it appeared to be coming from a light fixture, plaintiff had no way of knowing this at the time or since.

29. Plaintiff ignored defendants’ requests to repair the leak near or through the light fixture and has refused even to examine the leak to find its source.

30. It is undisputed that the previously undamaged ceiling tile from which the light fixture was suspended later sustained water damage from some source; the appearance was one of danger, not merely unsightliness. The evidence remains unclear and we find that the risk of a dangerous condition had not been eliminated as of the time of trial.

31. Another serious defect involved some of the radiators in the house which blew out water from the steam heat, most probably as the steam cooled.

32. This problem could only be avoided by the defendants turning off the radiators that did this, to avoid damage to their possessions.

33. Asa result, defendants did not have enough heat in the affected rooms and could not use them.

34. The court expressly rejects plaintiff’s suggestion that the damage to the walls and floors caused by the radiators (see, for example, defendants’ Exhibit E-l and E-2) was caused by an air conditioning unit leaking from a window above the damaged area.

DOG ISSUES

35. The court expressly rejects plaintiff’s contention that there are large amounts of dog excrement shown in the photos Mr. Kerrigan took of the basement on September 17, 2010. See plaintiff’s Exhibit 20. We note that those photos had been mistakenly dated September 16, 2010 by plaintiff’s counsel.

36. It is undisputed that a dog, stipulated to have been owned by a friend of Ms. Glenn, Latina Luster, was sometimes on the premises and was sometimes in the basement and at other times in the yard, when Ms. Luster would come to help Ms. Trotman while Ms. Glenn was at work.

37. We reject the plaintiff’s contention that large quantities of dog feces remained in the basement for long periods of time.

38. We take judicial notice of the fact that a dog that poops often pees at the same time, so we find Mr. Kerrigan’s testimony credible that there was a urine smell in the basement.

39. However, since the emphasis of plaintiff’s evidence related to the dog was on the supposed presence of a large quantity old dried feces rather than on the smell, we find that any urine smell was not a significant problem even from plaintiff’s point of view, especially in a basement that the credible evidence showed had long-term leaks from the kitchen sink and a substantial leak in the boiler room and clearly could not have been otherwise odor-free. See defendants’ Exhibits D-l, D-2, D-3 and defendants’ Exhibits P-1, P-2 and P-3.

40. We further find that there are both some dried feces and some fresh feces shown in some of the photos contained in plaintiff’s Exhibit 20.

41. However, we do not find that there are large amounts of feces, dried or otherwise, as plaintiff claims, nor do we find that the dried feces had accumulated over a long period, as plaintiff would have us believe.

42. Rather, we find that Ms. Glenn’s 14-year-old son was not as diligent as Ms. Luster said about picking up all the feces after each visit.

43. Paragraph 45 of the lease, “Pets of Any Kind,” bars defendants from having any pets and also from “causing” any pet to be on the premises.

44. The clause does not refer to “permitting” anyone else from bringing their own pets to the premises while otherwise lawfully on the premises, as here. (Since other clauses do refer to the concept of permission, we must strictly construe the omission of that concept with regards to pets against the plaintiff.)

45. Pursuant to the stipulation as to ownership, defendants did not have any pets nor did defendants “cause” Ms. Luster to bring her dog with her; at worst they did not throw her out or ask her not to bring her dog with her.

46. Ms. Luster continued to bring her dog to the premises, based on photos which show it was there on September 17, 2010. Plaintiff’s Exhibit 20.

47. There is no material breach of the lease based on the mere fact that there was a dog who occasionally came to the subject premises with its owner.

48. Any odor of urine in the basement is not necessarily attributable just to the dog at issue and would not be significant given the other obvious sources of unpleasant odor and dampness in the area.

49. Furthermore, there is no evidence that the basement had no such urine smell prior to the defendants moving into the house, evidence that would have been helpful since it is undisputed that the place was a mess when the previous tenants left.

CARPET

50. Regarding the carpet that plaintiff had promised to replace because paint had been spilled on it prior to defendants’ occupancy, we find that it was not replaced, but was simply covered over with another scrap of carpet. See defendants’ Exhibit A-l, a photo taken on April 10, 2010, and defendants’ Exhibit A-2, a photo taken on September 19, 2010, shortly before the trial began.

51. The “scrap of carpet” repair was not an adequate or acceptable performance of plaintiff’s promise to replace the carpet.

WEEDS AND MAINTENANCE OF BUSHES/ HEDGES AND LAWN

52. We reject plaintiff’s contention that defendants have not fulfilled their duties regarding maintenance of the yard and the cutting of weeds.

53. The credible evidence shows that Ms. Glenn or her son mowed the lawn sufficiently and that the “lawn” supplied by plaintiff was already mostly weeds when defendants moved in.

54. Similarly, we reject plaintiff’s contention that defendants did not trim the bushes sufficiently.

55. The credible evidence (mostly photographic) shows some hedges with a few weed “trees” well-ensconced within the hedges and ivy trailing down a wall in front of the house, at the foot of a very steep slope and beside a very steep set of stairs.

56. The ivy itself is not unattractive.

57. The taller weed “trees” clearly have been growing for some time and more likely than not were present prior to defendants’ tenancy.

58. They are too tall and too well established to be easily removed by anyone.

59. Any duty to remove those is on plaintiff, not defendants, who cannot be held responsible for letting them grow in the first place.

60. As for the weeds in the rear of the house, on the far edge of the brick-paved alley and beneath a slope down from an upper roadway, we find that there is nothing in the lease that points out to defendants that this area is also part of the leasehold and that they were therefore obligated to maintain it. If plaintiff owns the underlying fee, as Mr. Kerrigan testified, it has not shifted responsibility for its maintenance to defendants. See defendants’ Exhibit M-5 and plaintiff’s Exhibit 23, and plaintiff’s Exhibit 1, paragraph 8, “Rental Address.”

61. The slope and lower wall appear to be part of an easement for the upper roadway and the slope also appears to have been mowed by someone else, not defendants as far as the evidence shows. Ms. Glenn testified, credibly, that she was unaware that the premises included anything on the other side of what she believed (reasonably) was a public alleyway.

62. We make these findings despite a citation from the borough against Ms. Glenn for a violation of a section of the borough code, since the language of the section is not in evidence in any form. We note that even the borough officer who was called by plaintiff, to testify mainly about the occupancy permit and related violations committed (and supposedly later corrected) by plaintiff, could not say what the terms of the code section were nor how defendants may have violated it.

63. We also must disregard the pure hearsay statement that a bench warrant has been issued for one or both defendants based on their supposed non-appearance at a hearing on the citation. The record is bereft of any reliable evidence to support this statement. Even if there was no objection to the statement (we do not recall there being one) so that it was admitted by waiver, we, in our role as factfinder, cannot accept that it is true that a bench warrant has been issued. We also note that the issuance of a bench warrant for non-appearance is not the legal equivalent of a conviction on the merits.

BROKEN STAIR TREADS ON EXTERIOR FRONT STEPS

64. Regarding defendants’ contention that plaintiff had recently failed to repair two broken or missing treads on the front exterior stairway, we reject that because the credible evidence shows that Ms. Trotman erroneously believed the interior cellar steps were where the damaged treads were and directed Mr. Kerrigan there on September 17th when he came to see the problem. (We note that this was also why he had access to the house on that day and why he was able to take the photos shown in plaintiff’s Exhibit 20 of the basement and the dog feces, as well as the dog itself with Ms. Trotman.)

65. The exterior front steps leading up to the front of the house do have at least two broken or missing treads that should be repaired by plaintiff forthwith. Defendants’ Exhibit L is a photo marked by Ms. Glenn to show which steps those are. We assume that plaintiff will fix these now that it is clear which steps defendants were talking about. Since children play in that area, according to the credible evidence, the defective treads do constitute a safety hazard to them. They are also a hazard to anyone who is unaware that the back entrance is the preferred one.

WATER BILL ISSUES

66.Plaintiff has asserted that defendants breached the lease by not getting the water bill put in their name. We find that defendants’ position is credible, that the water company would not agree to put the water in a non-owner’s name, since it wants to be able to place a lien on the property for non-payment. Paragraph 10 of the lease deals with this issue as do paragraphs 11 and 12.

67. Plaintiff did not require any deposit from defendants “as guarantee for any unpaid Water/Sewage” (inter alia) as contemplated by paragraph 10 of the lease.

68. Plaintiff did require defendants to pay for water and sewage along with most other utilities and services.

69. Defendants paid the water company in what was believed to be a timely manner, based on what was legible in the photocopies of the bills that plaintiff sent to defendants.

70. The most recent bill may have been due by September 8, 2010, according to the testimony of Ms. Wise, the only witness who appears to have actually seen the original bills. (The original bills were not offered into evidence.)

71. Ms. Glenn reasonably believed that September 8th was not the due date but rather referred to something else (such as the date of any meter reading or the date the bill was issued) and we believe her testimony that she had intended to pay it by the end of September.

72. Any delay in prompt payments of water bills has resulted in no harm to plaintiff, as there is no evidence that the subject real estate has been liened or is likely to be liened as a result of such a short delay (3-4 weeks at most).

REMOVAL OF A KITCHEN CABINET/ BREAKFAST COUNTER

73.Defendants removed the cabinet/counter at issue with the oral permission of Ms. Wise when they first inspected the premises prior to moving in and saw that the cabinet was titled and not usable. The cabinet is still on the premises and will be available to plaintiff to repair and reinstall after defendants’ tenancy expired.

PAINTING DONE BY DEFENDANTS

74. The beige paint put on one of the walls by defendants was put there with the oral permission of Ms. Wise, given prior to the defendants moving in.

75. The beige color is a “neutral” color as specified by Ms. Wise when she gave her permission.

DAMAGE TO EXTERIOR DOOR LOCK CAUSED BY PLAINTIFF

76. Plaintiff was successful at the magistrate level in obtaining an order of eviction.

77. Defendants filed a timely appeal, thereby staying the eviction order.

78. Before plaintiff learned of the timely appeal, Mr. Kerrigan had gone on the premises and had begun to remove a deadbolt lock to change the key and prevent defendants from entering the premises.

79. He then replaced the same lock but neglected to line it up correctly, so the bolt in the edge of the door does not fit into the hole on the doorjamb; as a result, the deadbolt no longer functions and defendants have to rely on the flimsier doorknob lock to keep the door secure.

80.Plaintiff’s failure to restore the erroneously removed deadbolt lock to working condition is a material breach of the lease.

SMOKE DETECTOR

81. Defendants did not remove any smoke detector, plaintiff Exhibit 21, page 1, top photo, which is a photo of a place where a smoke detector may have been in the past, is not sufficient proof that defendants removed one or that one needed to be there at all. We believe defendants’ evidence on this point. See also testimony of David Miller, who is the borough’s code enforcement officer and is also a fire marshal, where he stated that he told plaintiff to remove one of the smoke detectors.

METAL LOUVERS AND POSTS

82. Plaintiff’s contention that defendants damaged the metal louvers on the porch is not supported by sufficient credible evidence.

83. We also reject plaintiff’s contention that the louvers provided a safety function, as they appear to be quite flimsy.

84. Plaintiff appears also to suggest that their vertical pieces were some kind of substantial support, and if that is its position, we reject that as well.

85. The louvers appear to be fairly old, maybe even from the 1950’s when that sort of aluminum trim was in fashion. In any case, they seem to have originally been designed to fit in a large opening on the side of the open porch and to provide shade as needed to that portion of the porch. See plaintiff’s Exhibits 13 and 14.

86. Ms. Glenn testified that the horizontal panel was just leaning on the vertical pieces when they moved in and was completely blown off during a severe windstorm earlier this year. We find her testimony credible and consistent with the photographic evidence. As previously indicated, we find plaintiff’s evidence is not credible on this point, the contention about the louvers serving a safety function is a self-serving exaggeration, and there is no material breach of the lease by defendants related to the louvers.

LIGHT FIXTURES ON FRONT PORCH

87. Defendants contend that these three fixtures do not work and that plaintiff’s repair person tried, unsuccessfully, to discover why they did not work, and that plaintiff then did nothing more. Plaintiff’s only evidence on this subject was to point out that defendants’ Exhibit L, a photo of the front steps, also showed that there were three fixtures in place. This was not sufficient to contradict defendants’ testimony that the fixtures did not work. We find that the front porch lights do not work and further find that plaintiff’s inability to determine why they do not work or how they are supposedly connected raises a safety concern that should be addressed or ruled out.

TRASH VS. CLOTHING FOR DONATION/DEBRIS LEFT BY PLAINTIFF

88. Plaintiff contends that defendants violated one of the rules and regulations by having a bag of trash and a cardboard box on a porch, next to a wastebasket/ garbage can. See plaintiff’s Exhibit 14, page 1, top photo. Defendants say the bag and box contained clothing that Ms. Trotman was donating to her church and that Ms. Glenn’s son had not yet taken there. Even if we assume it is garbage, and we do not find that it is, there is no evidence of where garbage generated by the household is to be put nor is there any evidence to suggest that this municipality, unlike most others, permits trash to be put out on the curb for collection every day as the lease’s “Rules and Regulations” seem to require. We find no violation based on Exhibit 14.

89. The cushion shown in the yard in the bottom photo on page 1 of plaintiff’s Exhibit 14 is not trash or debris, but is rather an abandoned object that plaintiff failed to remove and that Ms. Glenn’s children play with on occasion.

90. The chair shown in plaintiff’s Exhibit 14 in the top photo is property left by the prior tenant that plaintiff failed to remove, as promised.

91. We find there is no material breach of the lease by defendants based on trash or debris.

PORCH LATTICE PANEL/DEBRIS UNDER PORCH/BRICKS BY HOUSE

92. The porch lattice panel was not removed or damaged by defendants. It was down when defendants began their tenancy and has not been repaired by plaintiff.

93. The debris under the porch was left by some other tenant or party and should have been removed by plaintiff, as promised.

94. The bricks by the side of the house were left by some other tenant or party and should have been removed by plaintiff, as promised.

95. There is no material breach of the lease by defendants related to the lattice or the bricks.

DIRTY DISHES IN KITCHEN

96. Plaintiff contends that the few items left beside the stove and the sink on September 17, 2010 (when Mr. Kerrigan came to look at broken steps and ended up taking pictures) demonstrate a material breach of the lease. We reject that contention - the kitchen appears otherwise neat and fairly clean, and the dishes look like they were recently used, not like they were sitting there overnight or longer, as plaintiff suggests.

97. There is no material breach of the lease by defendants based on the condition of the kitchen.

DAMAGED FLOOR TILES IN KITCHEN

98. Plaintiff contends that a maximum of four stick-on tiles would be needed to replace tiles that it claims defendants caused to come loose. We find that the tiles became unstuck because they were placed on a dirty or wet surface prior to defendants’ tenancy. The fault is plaintiff’s, not defendants’. However, we do not find that this minor damage constitutes a material breach, regardless of who was at fault.

DAMAGE TO CELLAR DOOR AND STEPS

99. Defendants have admitted they caused some damage to the top step, by the cellar door, when they dragged up the lawnmower. The damage is shown in plaintiff’s Exhibit 20, page 4, bottom photo. It is slight given the overall condition of the “undamaged” portion of the floor and would not constitute a material breach of the lease.

100. Defendants deny causing any damage to the door itself, and we find their denial credible given what the evidence shows regarding the general condition of the house prior to defendants’ occupancy, even taken in the light most favorable to plaintiff. In the absence of “before” pictures of the door at issue and doors throughout the house and any other evidence, we cannot make a finding one way or the other. Plaintiff has not met its burden on this point, so we find that defendants did not damage the kitchen door.

ATTORNEYS FEES AND EXPENSES OF SUIT

101. The clause dealing with attorneys fees is one-sided, giving only the landlord the right to such an award. It is also open-ended, permitting the award of unspecified “other expenses.”

102. There are no guidelines or boundaries by which defendants, or any other tenant, could foresee the possible amount due for attorneys fees if there were a dispute in the future.

103. Plaintiff’s agent, Ms. Wise, did not point out or explain the attorneys fees clause to the defendants and there was no bargaining on that issue.

104. It would be unconscionable in the circumstances to enforce that clause even if there had been adequate consideration for the written lease.

OBLIGATIONS OF EACH PARTY UNDER THE WRITTEN LEASE

105. The exceptionally detailed obligations upon the defendants result in the landlord being able to terminate the lease for trivial reasons, if the landlord decides, as here, that the tenant is too demanding regarding the landlord’s unfulfilled promises.

106. The micromanaging of a tenant’s daily life is not something that one would ordinarily expect in a lease, and these terms should have been pointed out to defendants in November before plaintiff took $1,500 from them to secure their tenancy of the original house that had been promised.

107. Had those terms been pointed out on January 6, 2010, it would also have been too late in the circumstances, as defendants had already moved in by then.

ENFORCEABLE TERMS OF THE ORAL AGREEMENTS BETWEEN THE PARTIES

108. The only terms that were orally agreed to or which flow naturally from the oral agreements regarding the subject premises are as follows:

a) Plaintiff was to give defendants possession of the subject premises as of January 1, 2010.
b) Defendantsweretopayamonthlyrentof$750,ata reasonable time near the beginning of the month.
c) A reasonable date for the rent to still be timely would be by the 5th of each month.
d) Time would not be “of the essence” for any provision of the lease.
e) The lease would expire after one year, i.e. by December 31, 2010, unless the parties agreed to renew it.
f) The house would be in a habitable condition and would be clean and safe.
g) Promises regarding cosmetic issues would be fulfilled, in this case the promises involved removing the prior tenant’s abandoned possessions, meeting the Borough’s occupancy code requirements, replacing the carpeting in one room that had been damaged by spilled paint, the defendants’ right to paint certain walls with neutral colors, or, if other colors were used, the original antique white color or something similar would be used by defendants to cover such non-neutral colors.
h) Any walls that were not newly painted by plaintiff would not have to be painted by defendants at the expiration of the lease if they did not change the paint on those walls.
i) Defendants would keep the house reasonably clean and would not disable any safety protections.
j) Plaintiff would promptly repair any problem that affected health or safety, such as hot water, furnace/ boiler issues, electrical problems, plumbing leaks, and broken stairs.
k) Any cosmetic problems would be negotiated as they arose during the tenancy (for example, the kitchen floor tiles that came unstuck).

DISCUSSION

The credible evidence shows that plaintiff had put defendants in an exceptionally difficult position with regard to relative bargaining power when it took defendants’ money in November and then failed to have the house that had been promised in November ready by December 15, as promised. As a result, defendants orally agreed to rent a substitute house for a certain amount of rent per month. The written lease is really no more than an attempt to vary the terms of the oral agreement the parties had reached no later than January 3, 2010, the day defendants took possession of the subject premises. We conclude that there was no additional consideration provided by plaintiff in return for defendants’ having executed the writing.

Even if we' consider the written lease to be the final agreement between the parties, it is unconscionable and unenforceable.

The written lease at issue here is a form lease and is apparently known as the “Kostelac” lease. The last time Pennsylvania dealt with a form lease of this type, flush with oppressive terms and one-sided obligations, was in 1974 in the case of Commonwealth v. Monumental Properties, Inc. et al., 459 Pa. 450, 329 A.2d 812 (1974). The lease at issue there was a form lease used in the Philadelphia area. The Pennsylvania Attorney General brought an action against Monumental Properties and others, all residential landlord, for various violations of the Consumer Protection Law (CPL). A lower court dismissed the entire case on the defendant’s preliminary objections. An appeal was heard by the Commonwealth Court and then by the Pennsylvania Supreme Court. The Supreme Court held that residential leases and landlords were subject to the CPL under what had been pled as to the count based on deceptive practices and also held that sanctions under the CPL could properly be imposed on those defendants under the facts pled.

The Supreme Court’s analysis is well worth re-reading, although we will not repeat it here. The important point for us is found in the dicta that the Supreme Court included when if overruled the landlords’ preliminary objections.

Because we have found the “Kostelac” form lease here unenforceable because it was without adequate consideration, we will not discuss at this time the extraordinary extent to which it violates the precepts set forth in Monumental Properties. We place the court costs on plaintiff, who we regard as the losing party despite our decision to award them the rents that were paid into court.

Pursuant to the rules of court cited above, this decision constitutes the verdict of this court; there will be no separate verdict slip filed.


source: Caselaw Access Project

author: PANEPINTO, J.,

license: Public Domain

text:
    SEPTA v. Transport Workers Union of America, Local 234

      Daniel V. Johns, for plaintiff.

      Bruce Bodner, for defendant.
    October 22, 2010
   PANEPINTO, J.,

— Petitioner, Southeastern Pennsylvania Transportation Authority (“SEPTA”), appeals this court’s order dated July 22, 2010, denying petitioner’s motion to Vacate an arbitration award.

PROCEDURAL AND FACTUAL BACKGROUND

This matter stems from an April 9, 2010 arbitration award by Arbitrator Walter De Treux in a labor arbitration between SEPTA and Transport Workers Union of America, Local 234 (“Union”). SEPTA sought to discharge Gilbert Stringfield (“Stringfield”), a SEPTA bus operator since October 2001, after an encounter with Shanique Scott (“Scott”), a SEPTA maintenance custodian. Stringfield and Scott were in a romantic relationship at the time of the incident. On July 21, 2007, Scott was at Stringfield’s residence. Stringfield wanted to have sexual relations with Scott. Scott, however, declined Stringfield’s requests. Stringfield then became physically violent with Scott and forced himself on her. Scott called her mother to report what had happened after Scott had left the room. Scott’s mother called the police, who arrived at Stringfield’s residence and arrested him (See Arbitrator’s Award p.l). Scott obtained a restraining order against Stringfield, barring him from having any contact with Scott whatsoever. Scott does not contend that Stringfield violated the order (See Ar. Award p. 10).

Stringfield was formally charged with multiple crimes including: sexual assault (F2), indecent assault forcible compulsion (Ml), simple assault (M2), rape forcible compulsion (FI), recklessly endangering another person (M2), and aggravated assault (F2) (See formal charges, Ex. C, motion to vacate).

In addition to these charges, SEPTA also brought Bus Operations Rules and Regulations Manuals charges against Stringfield for personal conduct, assaulting an employee, and violation of law. The union requested the charges for personal conduct and assaulting an employee be dismissed, and the charge for violation of law held in abeyance pending the outcome of the criminal matter. SEPTA honored this request, dropped two of the charges and removed them from Stringfield’s performance record (See October 10, 2007 letter to President of Local 234, Ex. E, motion to vacate). Stringfield was placed in a maintenance custodian position during this time, pending resolution of the criminal charges against Stringfield.

Stringfield agreed to a plea deal in which the felony charges for sexual assault, rape forcible compulsion, and aggravated assault were nolle prossed and he pleaded guilty to indecent assault forceible compulsion, simple assault, and recklessly endangering another person (See disposition and dismissal, Ex. C, motion to vacate). Stringfield pleaded guilty to the misdemeanors only and the felony charges were nolle prossed. (See June 23, 2009 order, Ex. C, motion to vacate). Defendant was sentenced to three (3) years probation, restitution, and counseling. (See September 4, 2009 order, Ex. C, motion to vacate).

On June 26, 2009, SEPTA made known its intention to discharge Stringfield under section 20 ID of the collective bargaining agreement (“CBA”). A formal hearing occurred on September 24, 2009, after which Stringfield was discharged. SEPTA made this determination because of this provision; “a. An employee who is convicted of any criminal offense which was committed when the employee was not in an employment status, i.e. not committed while on duty...may be discharged when: (2) the employee’s conviction relates to the employee’s suitability for continued employment in the position then held” (See SEPTA Policy Instruction, Ex. J, motion to vacate). This requires a showing that there is a nexus between the continued employment and his duties and responsibilities as a bus driver. SEPTA admitted that a violation of law does not require an automatic discharge but rather is determined under the facts of the case. (See Arb. Award p.5). SEPTA determined that Stringfield’s criminal convictions related to his suitability for continued employment as a SEPTA bus driver because of the nature of his crimes and that Stringfield works unsupervised with the public as a bus driver.

The union filed a grievance on October 2, 2009. There was a labor relations step hearing on October 15, 2009. SEPTA upheld the discharge as it found that the crimes committed were directly related to Stringfield’s position as a bus operator and raised concern for the safety and well being of the riding public (See Labor Relations Step Hearing Report, Ex. I, motion to vacate).

Arbitration soon followed. Scott testified that reinstatement of Stringfield would make her feel uncomfortable and unsafe. The arbitration award was issued on April 9,2010. The arbitrator did find Stringfield’s actions against Scott to be egregious and offensive. However, he ordered that Stringfield be reinstated with back pay for reasons more fully discussed in the discussion section below. In short, the arbitrator did not find a nexus between the crimes committed and Stringfield’s suitability for work (See Arb. Award p. 10).

ALLEGATIONS OF ERROR

On August 25, 2010, this court entered an order directing defendant to file a Rule 1925(b) statement no later than twenty (20) days after the entry of the order. Defendant filed a rule 1925(b) statement pursuant to this court’s order on September 14,2010. Defendant has raised the following issues on appeal:

1. The court erred in refusing to vacate the arbitration award on the basis that the award violates Pennsylvania’s well-defined, dominant public policy in favor of protecting the interests of victims of crime and ensuring that such victims are treated with dignity and respect.
2. The court erred in refusing to vacate the arbitration award on the basis that the award violates Pennsylvania’s well-defined, dominant public policy requiring public transportation systems to provide for the safe transportation of the riding public.
3. The court erred in refusing to vacate the arbitration award on the basis that the award violates Pennsylvania’s well-defined, dominant public policy promoting workplace safety and imposing a duty on employers to provide a safe workplace.
4. The court erred in refusing to vacate the arbitration award on the basis that the award violates Pennsylvania’s well-defined, dominant public policies against sexual harassment in the workplace and in favor of voluntary employer prevention and remediation of workplace sexual harassment.
5. The court erred in refusing to vacate the arbitration award on the grounds that the award is not rationally derived from nor does it have a foundation in the collective bargaining agreement (“CBA”) and, therefore, does not draw its essence from the CBA.

DISCUSSION

Where, as here, a labor arbitration award is challenged on the basis that the award exceeds the power of the arbitrator, the Pennsylvania Supreme Court has adopted the “essence test” as the standard of judicial review which states that an arbitration award is legitimate “so long as it draws its essence from the collective bargaining agreement.” See State Sys. Of Higher Educ. (Cheyney Univ.) v. State Coll. Univ. Prof 1 Ass’n (PSEA/NEA), 560 Pa. 135, 743 A.2d 405 (Pa. 1999). The prongs of the “essence test” have been stated by the Supreme Court as follows:

First, the court shall determine if the issue as properly defined is within the terms of the collective bargaining agreement. Second, if the issue is embraced by the agreement, and thus, appropriately before the arbitrator, the arbitrator’s award will be upheld if the arbitrator’s interpretation can rationally be derived from the collective bargaining agreement. That is to say, a court will only vacate an arbitrator’s award where the award indisputably and genuinely is without foundation in, or fails to logically flow from, the collective bargaining agreement./^, at 150, 743 A. 2d. at 413.

An arbitration award may also be vacated if it violates a strong public policy. The public policy must be well defined and dominant and must reference laws and precedent. The award’s violation must be clearly shown for the award to be vacated.

Petitioner’s first point is the arbitrator’s award is not upholding Pennsylvania public policy by treating victims of crimes with dignity or respect. This is not true in the present circumstances. The award bars Stringfield from working in the same area as Scott. Scott admitted that since she obtained a restraining order against Stringfield, Stringfield has not violated its terms by contacting Scott. Scott has not encountered Stringfield inside or outside of work since the incident. Scott and Stringfield live in the same neighborhood in Philadelphia. As the award points out, there is a better chance of them encountering each other in their neighborhood than at work. Adequate precautions have been put in place to ensure that Stringfield is not positioned to work near Scott. This has been successful as the two have not come into contact for over three (3) years already. This shows respect for the victim as it makes sure Scott does not have to encounter her attacker in the work place and she can work freely and effectively in her position with SEPTA.

The second point raised by petitioner alleges the award violates the public policy of requiring public transportation systems to provide for the safe transportation of the riding public. This also has not been violated. As the award adequately addresses, Stringfield has worked for SEPTA for nine (9) years. There have been no reported on the job problems with Stringfield and the public or fellow SEPTA employees during that time. His record is clear of such physical or violent activity. Therefore, there is no issue related to the public having safe transportation. His driving record has not been shown to be a concern for the safety or well being of SEPTA riders or SEPTA employees. The incident with Scott was a private and unfortunately egregious act between two people formerly involved in a romantic relationship. It was not committed on the job, but rather in the confines of Springfield’s home.

The third issued raised by petitioner alleges the award violates the public policy of providing a safe workplace. This public policy has been upheld in the award. Stringfield is not allowed to work near Scott. For over three (3) years, the two have not encountered each other on the job. Also, Stringfield was not found to have a history of this type of violent and offensive behavior. His actions were an isolated incident done in a private setting, not on the job. The psychological evaluation Stringfield underwent attests to this fact. He was found to have no prior arrests and did not pose a threat to the public, was not a sexual predator, and would only need average supervision and counseling (See Mental Health Evaluation, Ex. H).

The fourth issue raised alleges the public policy of preventing workplace sexual harassment was violated by the award. This argument fails as do the previous ones. The crimes committed by Stringfield did not occur in the workplace. It was a private occurrence in Stringfield’s residence. There has been no showing that Stringfield ever engaged in any sexually or physically inappropriate actions in the workplace. The mental health evaluation stated that Stringfield can be in public. While he does have some issues with female symbols as is stated in the report, there is no reason to think that will cause any harm during his working hours for SEPTA. His work record is free and clear of these allegations. Stringfield has been a very good employee on the job. This allegation is simply unfounded and unsubstantiated speculation by SEPTA. The psychological evaluation and any counseling can certainly help Stringfield with his minor problems with female symbols. He is not a sexual predator according to this evaluation so this argument must also fail. The last issue raised by petitioner alleges the award does not draw its essence from the CBA. The CBA includes grievance and discharge procedures for misconduct and violations of the law. The first part of the test is satisfied. The second prong is also met. The CBA states an employee may be discharged for violations of the law. However, as SEPTA admits, there is not an automatic discharge for violations of the law. The crime needs to have a nexus to the work performed by the violator. This was not shown here by SEPTA. The arbitrator found that the crimes, however offensive, occurred during a private relationship not during the work day. Stringfield has never been found to have a problem during his nine (9) years of service to SEPTA as a bus operator. The award takes into consideration the wording of the CBA, the “just cause” standard for termination of employment, the mental health evaluation of Stringfield, the testimony of Scott, Stringfield’s performance record, and the severity and nature of the crimes committed. After weighing all of those factors, the award states that SEPTA did not meet its burden in showing the nexus between the crimes committed and the ability of Stringfield to continue his employment. This decision was not arbitrary or capricious. The arbitrator noted the severity of the crimes but again asserted that one isolated incident does not instantly undue the nine (9) years of faithful, safe, and responsible employment of Stringfield. Therefore, the award logically flows from the CBA and was made after careful consideration of all the relevant factors in this case. The fifth issue raised fails to show how the award violates the CBA.

Accordingly, for the reasons stated above, this appeal should be denied.


text:
    Winter v. City of Pittsburgh
    C.P. of Allegheny County,
    no. GD 07-27552.

      Thomas D. Hall, for plaintiff.

      Craig Dietz, John Deasy, and John Benty, for defendants.
    October 27, 2010
   FRIEDMAN, J,

— Plaintiffs have appealed from two of this court’s orders which granted the motions for summary judgment of all three defendants and which dismissed plaintiffs’ complaint as to all of them.

Oral argument on the motions for summary judgment was heard by the undersigned on June 15,2010. We orally granted summary judgment in favor of the Commonwealth of Pennsylvania and we memorialized that in a written order dated June 21, 2010. We took the motions of defendants City of Pittsburgh and Forest City Enterprises, Inc. under advisement. On July 20, 2010, we filed a memorandum and order granting both of those defendants’ motions. On August 18, 2010, plaintiffs filed their notice of appeal.

Before we reach the merits of the appeal, we must first note that there is a question as to whether plaintiffs’ statement of matters complained of in accordance with Pa. R.A.P. 1925 has been properly filed of record.

On August 31, 2010, we entered an order directing plaintiffs to file a “statement of matters complained of on appeal and serve it on the undersigned and the parties pursuant to Pa. R.A.P. 1925(b)(1), no later than 21 days from the date of this order. Any issue not properly included in a timely filed and served statement shall be deemed waived.”

We received copies of plaintiff’s amended notice of appeal and “statement of matters complained of in accordance with Pa. R. A.P. 1925. ” The two documents were accompanied by a cover letter dated September 15, 2010, addressed to the Chief Clerk’s Office of the Commonwealth Court of Pennsylvania, at what appears to be its correct current address, with the undersigned and other counsel on the case cc’d. The cover letter indicates that the statement is in response to the trial court’s August 31, 2010 order, and requests that the clerk of the commonwealth court file the originals. However, plaintiffs’ statement of matters does not seem to be noted on the commonwealth court’s docket as viewed on its website, so it is unclear whether the statement was docketed or not.

In addition, plaintiffs’ statement of matters is not shown on the trial court’s docket. Pa. R.A.P. 1925(b) provides in pertinent part:

(b) Direction to file statement of errors complained of on appeal; instructions to the appellant and the trial court. - If the judge entering the order giving rise to the notice of appeal (“judge”) desires clarification of the errors complained of on appeal, the judge may enter an order directing the appellant to file of record in the trial court and serve on the judge a concise statement of the errors complained of on appeal (“statement”).
(1) Filing and service. - Appellant shall file of record the statement and concurrently shall serve the judge. Filing of record and service on the judge shall be in person or by mail as provided in Pa. R.A.P. 121(a) and shall be complete on mailing if appellant obtains a United States Postal Service Form 3817, certificate of mailing, or other similar United States Postal Service form from which the date of deposit can be verified, in compliance with the requirements set forth in Pa. R. A.P. 1112(c). Service on parties shall be concurrent with filing and shall be by any means of service specified under Pa. R.A.P. 121(c).

The undersigned did receive a properly served copy of plaintiffs’ statement, so we will leave it to the commonwealth court to determine whether there is any problem posed by the non-docketing of the statement in either the trial court or the commonwealth court.

We now turn to the substantive issues in the case. This is a personal injury case in which plaintiff Harriet Winter, a minor who was 16 years old at the time of the incident, alleges that she slipped and fell on the Station Square River Front Trail located in the City of Pittsburgh. Plaintiff was a resident of Chesterfield, Mo., and had come to Pittsburgh with her family to visit friends. On the date of the incident, plaintiff and her family parked in a parking lot adjacent to Station Square to ride the inclines up to Mount Washington. The group used the Monongahela Incline to travel up the slope. After sightseeing, the group walked to the top of the Duquesne Incline and used it to travel down the slope. They then crossed Carson Street and walked to a walkway known as the River Front Trail.

As they walked on the River Front Trail, they observed that there was snow and ice on the trail. Plaintiff’s mother, co-plaintiff Fiona Winter, cautioned the children to be careful because it was slippery. Plaintiff-minor was aware that she was walking on a snow and ice covered walkway. The group continued on the trail toward the parking lot where their vehicle was parked. Plaintiff slipped on the ice fell, injuring her left wrist.

In their statement of matters, plaintiffs assert that the following rulings were erroneous:

(a) The ruling that defendants did not owe plaintiffs a duty as a matter of law pursuant to Carrender v. Fitterrer, 503 Pa. 178, 469 A.2d 120 (1983);
(b) The ruling that issues of material fact do not exist as to whether the danger was open and obvious “by plaintiffs’ own admission”;
(c) The ruling that, as a matter of law, reasonable minds could not differ regarding defendants’ having no legal duty under the circumstances to eliminate, prevent or otherwise warn plaintiffs of the hazard;
(d) The ruling granting defendants’ summary judgment despite Pa. R.C.P. 1035.2(1) when discovery was still open and active and defendant Forest City had been delinquent and deficient in answering plaintiffs’ written discovery concerning the tent adjacent to the area where minor plaintiff fell;
(e) The finding that “both the injured minor and her parent observed ice on the path yet chose to continue despite the recognized hazard”; and
(f) All other subsidiary issues related to those mentioned above that led the Honorable Judith L.A. Friedman to grant the underlying motions for summary judgment on the basis of defendants lack of a legal duty argument.

The above statements boil down to one issue, whether or not there were disputed material facts involving the defendants’ duty to the minor plaintiff that would require the case to be submitted to a jury. The material facts on this issue were not disputed, so we properly granted summary judgment in favor of the defendants.

We note that the issue of whether or not “discovery was still open and active” is of no legal significance here, given plaintiffs’ own version of what they saw (snow and ice, slippery conditions) and what they did (proceed anyway). Forest City’s inadequate responses to any discovery questions would be irrelevant to plaintiffs’ admitted awareness of the hazard they willingly attempted to navigate.

The appeal is without merit and should be denied.


author: KEOGH, J,

text:
    McKissock & Hoffman v. Polymer Dynamics, Inc.

      Jeffrey B. McCarron, for plaintiff.

      Jeffrey W. Ogren, for defendant.
    November 4, 2010
   KEOGH, J,

— The petitioners filed appeals of the court’s September 28, 2010 orders denying their respective motions for reconsideration of the court’s early orders, dated August 26, 2010 and September 20, 2010, which denied their petitions to compel arbitration. The appeals are ripe for decision pursuant to 42 Pa.C.S. §7320. As they are related cases, this opinion addresses both appeals.

I.PROCEDURAL/FACTUAL HISTORY

1. The respondent in the petitions to compel arbitration, Polymer Dynamics, Inc, (hereinafter “polymer”), filed a legal malpractice action against the petitioners in August of 2009, which is docketed as Polymer Dynamics, Inc. v. McKissock and Hoffman, P. C., et. al, Philadelphia County Civil Docket 0908-00607.

2. In July of this year, petitioner, McKissock & Hoffman, P.C., filed a petition to compel arbitration on the basis of an amended and restated fee agreement executed on August 28, 2008 which provided that “any dispute regarding payment of fees or reimbursement of costs on this matter shall be resolved by binding arbitration between the parties.” Polymer challenged the petition. This court denied the petition to compel arbitration in an order dated August 26, 2010.

3. Polymer challenged the petition, in part, on the basis that McKissock & Hoffman, P.C (hereinafter “the firm”), did not conduct business after September 30, 2007 and that the fee agreement was entered into after the dissolution of the firm. Thus, Polymer argued that since the firm was not a party to the agreement it did not have standing to petition for arbitration.

4. In response, petitioner J. Bruce McKissock filed a petition to compel arbitration, essentially identical to the petition filed by the firm. This court, in an order dated September 21, 2010, denied the petition to compel Arbitration.

5. On September 27, 2010, petitioners filed a notice of appeal to both the August 26, 2010 and September 21, 2010 orders.

6. Additionally, petitioners filed a motion for reconsideration of the court’s order denying their respective petitions to compel arbitration. The motions for reconsideration where denied in separate orders dated September 28, 2010.

II. DISCUSSION

Arbitration agreements are governed by the Pennsylvania Uniform Arbitration Act, 42 Pa.C.S. § 7301, et. seq. An agreement to arbitrate can be asserted by preliminary objections or by petition. Such agreements are favored as an effective method of dispute resolution. Pursuant to section 7304 of the act, entitled “court proceedings to compel or stay arbitration,” if a challenge to the agreement is raised the "Court shall proceed summarily to determine the issue so raised and shall order the parties to proceed with arbitration if it finds for the moving party. ”

If the validity of the agreement is not at issue, a court may be asked to determine if the party seeking arbitration has waived the right to enforce the agreement. Waiver was held to have occurred in Stanley-Laman Group, et. al., v. Hyldahl, et. al., 939 A.2d 378 (2007 Pa. Super). The Superior Court affirmed the trial court’s denial of preliminary objections which sought to arbitrate counterclaims raised by the plaintiffs’ former employee. The employee had been hired as a portfolio manager and part of his employment documentation included an agreement to arbitrate any claims arising from a dispute with his former employer. The employee was terminated and the employer filed suit against him for breach of the employment agreement, including the use of confidential information in violation of Pennsylvania’s Uniform Trade Secret Act.

There was a contentious pleadings battle, which included the employee filing an amended counterclaim raising claims that were subject to the parties’ arbitration agreement. The employer filed preliminary objections in response and asserted that the claims were governed by the parties’ arbitration agreement and should be arbitrated separately. In response, the employee asserted that the employer had waived the right to arbitrate these claims. On the issue of waiver, the Superior Court noted that:

It is well-settled that [a]s a matter of public policy, our courts favor the settlement of disputes by arbitration.” Goral v. Fox Ridge, Inc., 453 Pa. Super. 316, 683 A.2d 931, 933 (Pa. Super. 1996). “Nevertheless, the right to enforce an arbitration clause can be waived.” Id. “Waiver may be established by a party’s express declaration or by a party’s undisputed acts or language so inconsistent with a purpose to stand on the contract provisions as to leave no opportunity for a reasonable inference to the contrary.” Samuel J. Marranca Gen. Contracting Co., Inc. v. Amerimar Cherryill Assocs. Ltd. P’ship, 416 Pa. Super. 45, 610 A.2d 499, 501 (Pa. Super. 1992). A party’s acceptance of the regular channels of the judicial process can demonstrate its waiver of arbitration. See Smay v. E.R. Stuebner, Inc., 864 A.2d 1266, 1278 (Pa. Super. 2004) (stating acceptance of judicial process includes a party’s failure to raise the arbitration issue promptly, a party’s engagement in discovery, and a party waiting until it receives adverse rulings on pretrial motions before raising arbitration). “However, a waiver of a right to proceed to arbitration pursuant to the term of a contract providing for binding arbitration should not be lightly inferred and unless one’s conduct has gained him an undue advantage or resulted in prejudice to another he should not be held to have relinquished the right.” Kwalick v. Bosacco, 478 A.2d 50, 52 (Pa. Super. 1984). 939 A.2d 378, 383-384.

The Superior Court concluded that the employer had waived arbitration by pursuing the judicial process before seeking arbitration, and held:

Here, the appellants did not promptly raise the issue of arbitration but instead waited until they had filed a petition for preliminary injunction and initial and amended complaints in the trial court. Hyldahl had filed multiple answers and counterclaims, and the parties had engaged in discovery. It is plain to see that SLG and by association the remaining parties, who are the officers of SLG and its sister entity, SLGS, accepted the judicial process when it sought and won injunctive relief from the trial court and by extension this court and continued to pursue their claims against Hyldahl in the trial court. To allow the appellants to take advantage of the judicial process and then take the case to arbitration would be exceedingly unfair to Hyldahl. Because the appellants sought relief from the judicial process and because the appellants could have compelled arbitration for any damages related to the alleged misappropriation of confidential information by Hyldahl after filing its initial complaint, we find that they have waived their right to arbitration, (citations omitted). Id. at 388.

Waiver was also held to have occurred in Goral v. Fox Ridge, Inc., 683 A.2d 931 (1996 Pa. Super). In reviewing the trial court’s denial of a motion to compel arbitration, the Superior Court noted that it was limited to making a determination of whether the lower court’s findings were supported by substantial evidence and whether the lower court abused its discretion in denying the motion. The homebuilder-defendant filed a motion to compel arbitration after the trial court had granted plaintiff’s motion to compel discovery in the lawsuit brought by the homeowners alleging breach of contract resulting in the faulty construction of their home.

Although the defendant had raised the parties’ arbitration agreement as an affirmative defense, the Superior Court upheld the trial court’s finding of waiver since it determined that the defendants “did so, however, only as an alternative to their preferred option of winning a favorable ruling from the trial court. If the trial court were to find that some or all of appellees’ claims were not barred by the applicable statutes of limitation, the doctrine of merger in the deed, or other defenses, then, according to appellants, such claims should be submitted to arbitration.” 683 A.2d 931, 933.

Additionally, the Superior Court held that the defendants’ “repeated references to the arbitration agreement are not sufficient to avoid a finding of waiver.” Id. The defendants’ timeliness argument was found to be disingenuous. The Superior Court concluded that had they truly wanted to, the defendants could have raised the issue of arbitration in preliminary objections rather than waiting nearly 19 months after the complaint was served before filing a motion to compel arbitration, which was prompted only after an unfavorable discovery ruling had been entered against the defendants. Id. at 934. See also G.E. Lancaster Investments, L.L. C., et. al. v. American Express Tax and Business Services, Inc., 920 A.2d 850 (Pa. Super. 2007) (Acceptance of the judicial process and waiver of arbitration was found as company filed a motion to compel arbitration ten months after the writ of summons was filed and more than six months after the investors filed a motion to compel pre-complaint discovery; it was noted that the defendant-company could have sought arbitration immediately upon learning of any dispute between the parties.); Samuel J Marranea Gen. Contracting Co., Inc. v. Amerimar Cherry Hill Assocs. Ltd. P’ship, 610 A.2d 499, 501 (Pa. Super. 1992). (Finding of waiver of defendant’s right to arbitration upheld; defendant was precluded from pursuing arbitration once it had taken the first steps in accepting the judicial process, which included choosing not to file a petition to compel arbitration, not asserting arbitration as an affirmative defense, and waiting until it received an adverse ruling on pretrial motions before seeking to enforce the arbitration clause.)

Petitioners’ assertion that they had petitioned for arbitration of the legal fees/costs owed to them by Polymer in atimely manner is likewise disingenuous. The arbitration agreement they seek to enforce is directly related to the legal malpractice action instituted by Polymer in August of 2009. Petitioners’ representation of Polymer began in February of 2004 when petitioners replaced Polymer’s trial counsel in the Bayer litigation instituted in federal court. Polymer was dissatisfied with the verdict that was returned in June of 2005 and an appeal to the third circuit was taken. Polymer retained special appellate counsel to assist in the appeal of the verdict.

The arbitration clause at issue is contained in the parties’ “Amended and Restated Fee Agreement,” which was executed on August 28, 20 08. It recognized the parties’ initial agreement for petitioners to take over the Bayer litigation in February of 2004, Polymer’s financial difficulties, which resulted in the execution of a revised fee agreement in March of 2005 and the dissolution of the firm in 2007. It also set forth the basis for payment of legal fees and reimbursement of costs to petitioners if a favorable resolution of the Bayer litigation resulted from either appellate relief or settlement. It further recognized that, at the very least, Polymer would be responsible for the reimbursement of petitioners’ costs associated with the Bayer litigation.

As noted, Polymer instituted a legal malpractice action against petitioners in August of 2009 by way of praecipe for writ of summons. A complaint was filed on December 8, 2009, which alleged that petitioners failed to properly challenge the application of a contract provision for limitation of damages and failed to advise Polymer to accept a settlement offer allegedly extended during post-trial mediation in the Bayer litigation.

Petitioners joined Polymer’s special appellate counsel from the Bayer litigation as additional defendants. Petitioners also filed preliminary objections to the complaint. The defenses of demurrer and lack of specificity to Polymer’s claims for breach of contract, fraud and negligent misrepresentation were raised. The parties’ agreement to arbitrate the legal fees and costs owed by Polymer from the Bayer litigation was not raised in either the preliminary objections or by way of a motion to compel arbitration at that time.

An amended complaint was filed. Petitioners again filed preliminary objections to the pleading and again did not raise the arbitration agreement regarding any fee/cost dispute between the parties.

In April of this year, petitioners requested that the Polymer action be transferred from the general trial division to a specialized program designed to exclusively handle commerce cases.

This court initially denied petitioner’s notice of program dispute, but after considering a motion for reconsideration, the request was granted and the matter was transferred to the commerce program on June 22, 2010.

In May of this year, petitioners were directed to comply with Polymer’s discovery requests in an order dated May 12, 2010. Additionally, the preliminary objections to the amended complaint were overruled on May 27, 2010. An answer and new matter were filed by petitioners on June 30 and the statue of limitations was raised as a defense. Additionally, the new matter included the following allegations:

¶202 Plaintiff was obligated to pay defendants for legal services.
¶203 Plaintiff did [not] compensate defendants except for the payment in the amount of $25,000.00 which is substantially less than the amount due pursuant to the fee agreement.
¶204 Plaintiff was obligated to pay costs.
¶205 Plaintiff did not pay all costs expended by defendants.
¶206 Plaintiff breached the fee agreement and converted funds which belong to the defendants.
¶207 Any recovery in this action is offset by the amount of the fees and costs due from plaintiff.

Although alleging a breach of the fee agreement, the petitioners never raised their right to arbitrate any dispute over the fees/costs they incurred during the Bayer litigation.

Based upon the foregoing, this court properly determined that petitioners waived their right to arbitrate any dispute concerning the payment of fees or the reimbursement of costs by Polymer to petitioners in connection with the Bayer litigation. Since the institution of the legal malpractice suit, petitioners have availed themselves of the judicial process in the legal malpractice claim and did not seek to enforce the arbitration agreement until after several unfavorable rulings were received and nearly twelve months after Polymer instituted the underlying action.

Petitioners’ position would result in judicial inefficiency and would reward petitioners’ dilatory action.

III. CONCLUSION

The petitions to compel arbitration were properly denied. To arbitrate petitioners’ dispute over the payment of legal fees and reimbursement of costs by Polymer to petitioners in connection with the Bayer litigation while Polymer’s underlying legal malpractice action against petitioners stemming from the same litigation is pending would result in the bifurcation of related and connected disputes, thus resulting injudicial inefficiency. Moreover, petitioners waived their right to arbitrate the fee/cost dispute and availed themselves of the judicial process to the detriment of Polymer. Accordingly, appellate relief is not warranted.

      . (a) GENERAL RULE. - An appeal may be taken from: (1) A court order denying an application to compel arbitration made under section 7304 (relating to proceedings to compel or stay arbitration).

      . Petitioners are represented by the same counsel in both the underlying legal malpractice action and in their actions to enforce the arbitration agreement.

      . In the answer and new matter to Polymer’s complaint in the legal malpractice action it was asserted in paragraphs 209 and 210 that “defendant, McKissock & Hoffman, P.C., did not continue to conduct business after September 30,2007” and that “after September 30, 2007, the representation by Mr. McKissock and any affiliated associates was not as agents of McKissock & Hoffman, P.C.”

      . Zimmer v. CooperNeff Advisors, Inc., 523 F.3d 224, 231 (3d Cir. Pa. 2008) (the prevailing mood is to favor arbitration as an effective method of dispute resolution. Nonetheless, not every motion to compel arbitration must be granted. One of the accepted defenses to such a motion is that the party has waived its right to compel arbitration.)

      . The parties to the agreement are Polymer and petitioner, J. Bruce McKissock.

      . Jeffrey Lamken and Baker Botts, LLP, appellate counsel to Polymer during the Bayer litigation, were joined by way of praecipe on February 8, 2010.


author: ST. JOHN, J,

text:
    Commonwealth v. Mickel

      C.P. of Mercer County,
    no. 601 Criminal 2010.

      Ryan Bonner, assistant district attorney, for Commonwealth.

      Lyle L. Dresbold, for defendant.
    November 9, 2010
   ST. JOHN, J,

Syllabus

Traffic Stops - Seizure of a Passenger

The U.S. Supreme Court has held that the Fourth Amendment of the U.S. Constitution provides that any passenger in a private motor vehicle that has been stopped by the police is “seized” for the purposes of the Fourth Amendment and therefore has the automatic right to challenge the legality of the motor vehicle stop. As a result of the Supreme Court’s holding the U.S. Constitution is now more protective of individual rights than Article 1, Section 8 of the Pennsylvania Constitution and therefore overrides the Pennsylvania Constitution, which requires a passenger to prove standing to challenge a stop.

MEMORANDUM OPINION

It is axiomatic that the Supreme Court of Pennsylvania may provide more protection for the citizens of Pennsylvania under the Pennsylvania Constitution than the federal courts provide under the United States Constitution. Historically, Pennsylvania courts have provided more protections for citizens than the federal courts. That trend has now been reversed in a narrow context. This case illustrates the newly developed dichotomy between the application of the Fourth Amendment of the United States Constitution and Article 1, Section 8 of the Pennsylvania Constitution as it applies to passengers in private motor vehicles. Since 2007, passengers can challenge the stop of a private motor vehicle under the Fourth Amendment simply because of their status as a passenger, without overcoming the additional hurdle of proving standing. Under the Pennsylvania Constitution, however, a passenger while deemed to be “seized” still has the burden of establishing standing before challenging a stop. Thus, the Fourth Amendment now extends greater protections in this situation than its Pennsylvania counterpart. Notably, no appellate court in Pennsylvania has recognized or addressed this development.

Defendant filed a pre-trial omnibus motion for relief to suppress the gun seized from a private vehicle in which he was riding, and to suppress statements he and the driver gave to police at the scene and later at a police station. Defendant was a front-seat passenger in a motor vehicle that was stopped for speeding on State Route 58 in Jefferson Township, Mercer County, Pa. After police completed their investigation of the traffic stop, the driver was given a warning and was told he was free to leave. The officer walked away from the stopped vehicle a short distance, paused, then returned to the driver’s window and asked the driver if he minded answering some questions. The driver agreed and then denied that any guns or contraband were in the car. The driver then consented to a search of his SUV even though he was advised that he could refuse.

The three adults were told to exit the vehicle and one policeman began his search in the front passenger area where the defendant was sitting. The officer found a box of ammunition in a McDonald’s bag, then went to the rear of the vehicle, told the occupants what he found, and patted each down for a weapon. None of the occupants had a weapon, so he returned to the front passenger area and located a loaded 9mm Ruger handgun under the floor mat. All three occupants were then handcuffed.

The driver was advised of his Miranda warnings and eagerly waived his rights and told the police the gun was the defendant’s. The defendant, who was now in a separate cruiser, was then Mirandized and he too was eager to talk to police. He admitted possessing the gun without a license but wanted to work as a confidential informant to get out of trouble. Defendant now seeks to get out of trouble by challenging the seizure of his person, as well as the fruits of the subsequent search and his confession. Defendant also claims that he asserted his rights by asking to speak to an attorney but questioning continued nonetheless without being given that opportunity.

Defendant does not challenge the legality of the initial traffic stop or the validity of the driver’s consent to search the SUV. Instead, defendant asserts that he was seized de-facto and without justification when the police began the second encounter with the driver to answer questions and consent to a search. Defendant argues that he had no other realistic options but to remain at the scene while his ride was subjected to the second encounter. Defendant contends that the holding in a recent U.S. Supreme Court case should be extended to require the police to have reasonable suspicion or probable cause in these situations since the passenger in defendant’s opinion is by law “seized.” Defendant’s motion is based upon both the federal and state constitutions.

I. Fourth Amendment Argument

The defendant correctly points out that the United States Supreme Court recently declared that any passenger in a private motor vehicle that has been stopped by the police is “seized” for the purposes of the Fourth Amendment and therefore has the right to challenge the legality of the motor vehicle stop. Brendlin v. California, 551 U.S. 249 (2007). While Pennsylvania courts have long deemed occupants of motor vehicles as seized under the Fourth Amendment and Article I, Section 8 of the Pennsylvania Constitution, they have still required occupants to demonstrate standing under both constitutions. See, e.g., Com. v. Blouse, 531 Pa. 167, 611 A.2d 1177; Com v. Swanger, 453 Pa. 107, 307 A.2d 875; Com v. Campbell, 862 A.2d 659 (Pa. Super. 2004); and Com. v. Powell, 994 A.2d 1096, 1108. However, the defendant in the case at bar has stipulated that the initial stop was proper. Instead, defendant argues that since the initial traffic stop was concluded a second “seizure” of everyone occurred when the police returned to the driver and began another encounter, which required an independent basis. The commonwealth argues that defendant was not seized because this was a mere encounter.

Interestingly, the defendant does not challenge the driver’s consent to the search, nor to the driver answering the officer’s questions. Instead, defendant’s argument is. that this second encounter between the police and the driver is a vicarious “seizure” of the defendant even though he was a passenger. It is this second alleged seizure that the defendant challenges as constitutionally defective since it was not based upon reasonable suspicion and/or probable cause. While the commonwealth agrees that this second encounter was not based upon reasonable suspicion or probable cause, the government maintains that the defendant was not seized because this was a mere encounter between the police and the driver being conducted with the driver’s consent. Accordingly, the government argues that it does not need reasonable suspicion or probable cause, since it was not needed for the driver who was not “seized.”

Defendant claims that it is a logical extension of Brendlin to hold that this second encounter arises to the level of a seizure for Fourth Amendment purposes. The defendant’s reading of Brendlin is overly broad, however. This second interaction with the driver was a constitutionally permissible encounter since it was with the consent of the driver at all times. Hence, the driver was not “seized,” as in the initial traffic stop, so defendant as a passenger cannot realistically believe that he was seized either. Notably, it is uncontested that the driver was told that he was free to leave and that he did not have to consent to a search or to answer questions. Nonetheless, the driver elected voluntarily to continue with this police encounter. Accordingly, the government did not need either reasonable suspicion or probable cause for the vicarious detention of the occupants of the vehicle while a search, consented to by the driver, was conducted.

II. Pennsylvania Constitutional Analysis

Pennsylvania jurisprudence recognizes three levels of interaction between police and citizens:

(1) mere encounter, (2) investigative detention and (3) custodial detention. Com. v. Jones, 874 A.2d 108, 116 (Pa. Super. 2005). The mere encounter can be any formal or informal interaction between an officer and a citizen, but will normally be an inquiry by the officer of a citizen. The hallmark of this interaction is that it carries no official compulsion to stop or respond. In contrast, an investigative detention, by implication, carries an official compulsion to stop and respond, but the detention is temporary, unless it results in the formation of probable cause for arrest, and does not possess the coercive conditions consistent with a formal arrest. Since this interaction has elements of official compulsion it requires reasonable suspicion of unlawful activity. In further contrast, a custodial detention occurs when the nature, duration and conditions of an investigative detention become so coercive as to be, practically speaking, the functional equivalent of an arrest. Id. (citation omitted).
In these matters our initial inquiry focuses on whether the individual in question has been legally seized. To guide the crucial inquiry as to whether or not a seizure has been effected the United States Supreme Court has devised an objective test entailing a determination of whether, in the view of all surrounding circumstances, a reasonable person would believe that he was free to leave. In evaluating the circumstances, the focus is directed toward whether, by means of physical force or show of authority, the citizen-subject’s movement has in some way been restrained, in making this determination, courts must apply the totality-of-the-circumstances approach, with no single factor dictating the ultimate conclusion as to whether a seizure has occurred. Com. v. Strickler, 563 Pa. 47, 58-59, 757 A.2d 884, 889-90 (2000) (citations omitted).” Com. v. Krisko, 884 A.2d 296, 299 (Pa. Super. 2005).

Here, defendant does not contend that the break between the traffic stop and the second interaction with the driver was insufficient. Moreover, the driver was told that he was free to leave while he was in his SUV that had its engine running throughout the traffic stop when he was asked if he would answer some questions and consent to a vehicle search. There is also no evidence of any coercive conditions or police excesses that would elevate the interaction between the police and the driver to an arrest or investigative detention prior to the actual arrest of the defendant when the gun was found.

Moreover, in pre-Brendlin cases, the Pennsylvania Supreme Court has held that consent searches following legitimate traffic stops are not a “second or subsequent seizure under the Fourth Amendment.” Com. v. Stickler, 563 Pa. 47, 78, 757 A.2d 884, 901. The court in Strickler did not conduct a separate analysis under article I, section 8 since there was “nothing that would distinguish the pertinent protections available under the Pennsylvania Constitution from those available under the Fourth Amendment.” Id. at 80, 757 A.2d at 902. Thus, the only relevant inquiry, if the interaction was simply a mere encounter, is whether consent by the driver was valid, which is not contested here. Notably, the Superior Court continues to follow Strickler and its progeny without recognizing Brendlin.

The Brendlin court’s declaration that passengers are “seized” during traffic stops is in effect a rule of standing designed to combat police excesses and protect citizens’ rights. This declaration was based on the fact that the passenger was also de-facto “seized” by the traffic stop. Perhaps the result in Powell is illustrative of the odd outcome that cries out for justice, and troubled the U.S. Supreme Court, where prior standards failed to protect the Fourth Amendment rights of passengers. Powell, 994 A.2d 1096 (Pa. Super. 2010).

Moreover, the import of Brendlin is that passengers of private vehicles stand in the shoes of the driver. So if the driver was stopped illegally in the first instance, then passengers can assert the rights of the driver and suppress evidence without proving standing, unless there is another basis to uphold a subsequent search or questioning. Similarly, on the second interaction with police after the conclusion of the traffic stop, it follows from Brendlin that passengers still stand in the shoes of the driver to challenge the legality of this second interaction under the Fourth Amendment without proving standing. Any subsequent search passes constitutional muster in this case, in the absence of probable cause or reasonable suspicion, if the driver was only subjected to a mere encounter and consented to the search, which is not tantamount to a “seizure.”

Under Brendlin, police still do not need any other basis distinct from the nature of the driver’s interaction upon which a passenger can mount a constitutional challenge under this fact pattern because the U.S. Supreme Court also recognizes and approves of police - citizen encounters without reasonable suspicion and/or probable cause. U.S. v. Drayton, 536 U.S. 194 (2002); Florida v. Royer, 460 U.S. 491 (1983); U.S. v. Mendenhall, 446 U.S. 544 (1980); Terry v. Ohio, 392 U.S. 1, 34 (1968) (White, J., concurring) (noting nothing in the constitution prevents policemen from addressing questions to anyone on the streets). The U.S. Supreme Court does not refer to these interactions as “mere encounters” however. Instead, it uses the term “consensual encounter.” See Drayton, 536 U.S. at 201; Florida v. Bostick, 501 U.S. 429, 429 (1991); California v. Hodari D., 499 U.S. 621 (1991); Florida v. Royer, 460 U.S. at 506. Therefore, defendant’s omnibus motion must fail under both Pennsylvania law and federal law since the driver was not “seized” during the second interaction with police.

III. Suppression of Statements

Similarly, defendant’s request to suppress his statements under this same argument is equally flawed. Therefore, since the interaction with the driver was not unconstitutional, Defendant’s statements to the police at the scene and later at the police station will not be suppressed based upon the Brendlin argument.

Defendant argues alternatively, that his statements should be suppressed because his Miranda rights were violated when he allegedly asked to speak to a lawyer at the scene. The record clearly establishes that defendant was given his Miranda rights and waived those rights and eagerly spoke with police. Moreover, the credible evidence at the omnibus hearings supports the finding that the defendant did not ask for an attorney. Thus, his second challenge to his inculpatory statements will be also denied.

Finally, defendant challenges the statements made by the driver of the vehicle after the gun was discovered. The driver was given his Miranda warnings, clearly waived those rights, and quickly blamed the defendant. Defendant’s legal basis for this challenge is unclear. The Brendlin theory applies to passengers and is inapplicable to statements by third parties, and the Pennsylvania Supreme Court upheld such police-driver interactions after traffic stops are concluded, if they are mere encounters and the consent is voluntary. The purpose of Miranda is to protect individuals from self incrimination and is not meant to protect individuals from the voluntary statements of another party. See United States v. Patane, 542 U.S. 630 (2004). Thus, defendant’s challenge to a third party’s statement is without merit assuming arguendo that defendant even has the right to make that challenge.

Hence, this order:

ORDER

And now, on this November 9, 2010, the defendant’s Omnibus Pretrial Motion is denied.

      . See Com. v. White, 669 A.2d 896, 902 (Pa. 1995); Com. v. Pratt, 930 A.2d 561, 571-572 (Pa.Super. 2007) (Johnson, J., concurring).

      . The U.S. Constitution acts as a floor, not a ceiling, with each state having the ability to set broader standards than the federal constitution. See Jubelirer v. Rendell, 953 A.2d 514 (Pa. 2008). Currently, the Fourth Amendment of the U.S. Constitution affords more protections than Article 1, Section 8 of the Pennsylvania Constitution; therefore, the U.S. constitution overrides the Pennsylvania Constitution in this limited context.

      . In his concurring opinion in Pratt, Judge Johnson, notes the United States Supreme Court decision in Brandiin v. California, 551 U.S. 249 (2007), on the point that the Supreme Court of Washington does not consider a passenger to be seized when he/she is stopped as a result of a routine traffic violation. Com. v. Pratt, 930 A.2d at 573.

      . The Findings of Fact were issued following the suppression hearing on October 7,2010.

      . The defendant was recently prosecuted by this policeman who attended the sentence hearing a few months earlier for burglary, and who recognized the defendant during the stop.

      . The declaration by the Brendlin court that all passengers are “seized” during a traffic stop is amajor development in Fourth Amendment jurisprudence. 551 U.S. at 255; accord, Arizona v. Johnson, 555 U.S. 323, 129 S.Ct. 781, 784 (2009). Prior to Brendlin, passengers needed to establish standing before they could challenge the initial stop. Now, passengers have the right to challenge a traffic stop under the Fourth Amendment simply because they were in the vehicle. Thus, under federal law passengers have derivative standing to assert vicariously the driver’s constitutional rights. Interestingly, no Pennsylvania appellate courts have even cited the Brendlin decision, let alone discussed its holding, even though Brendlin was decided more than three years ago. In fact, a recent panel decision regarding the right of a passenger to challenge the search of a trunk pursuant to the alleged consent by the driver, opined that “under both our state and the federal constitutions, ‘a defendant cannot prevail upon a suppression motion unless he demonstrates that the challenged police conduct violated his own, personal privacy interests’ Millner, 888 A.2d 692 (emphasis added)” Com. v. Powell, 994 A2d 1096, 1108 (PaSuper. 2010). The Powell court upheld the driver’s suppression motion because his alleged consent was defective, but reversed the suppression of the evidence seized as to the passenger because he was unable to prove standing to challenge the search of the trunk since he had no privacy interest in the trunk.
      Standing in the case at bar is not an issue since the item seized was in the area in which defendant was seated and he was charged with a possessory offense. See, Com. v. Powell, 994 A.2d 1096, 1108 for a discussion of the test for standing that still applies to challenges under Article I, Section 8 of the Pennsylvania Constitution.