Fellerman, S. v. PECO Energy Co.
159 A.3d 22
| Pa. Super. Ct. | 2017Background
- Stanley and Carol Fellerman hired Historic Home Inspection (doing business as WIN Home Inspection) to inspect a house; Stanley signed an Inspection Agreement containing a broad arbitration clause and a limitation of liability equal to the inspection fee.
- A utility pole supporting a PECO transformer fell on the property; Stanley was injured while trying to extinguish a fire started by the fallen transformer.
- The Fellermans sued PECO, Comcast, Historic, and others alleging breach of contract, negligent misrepresentation, fraud, and consumer-protection claims; they asserted Historic failed to disclose the pole’s deterioration.
- Historic filed preliminary objections seeking to compel arbitration under the Inspection Agreement; the trial court overruled those objections and ordered Historic to answer.
- Historic appealed the trial court’s denial of its petition to compel arbitration; the Superior Court considered whether the arbitration agreement was valid and whether the claims fell within its scope.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of arbitration clause (unconscionability, conspicuity) | Fellermans: clause was illegible, inconspicuous, and designed to hide waiver of rights | Historic: document was legible; signor had duty to read; clause mutual and not unduly favorable | Clause valid; conspicuity not required; failure to read is not a defense |
| Limitation of liability (public policy) | Fellermans: cap at inspection fee is unconscionable and void as against public policy (relies on Carll) | Historic: service not inherently dangerous; clause severable from arbitration provision; arbitration should decide validity | Court distinguished Carll, found limitation severable from arbitration clause and left validity to arbitrator |
| Scope of arbitration (tort claims) | Fellermans: bodily-injury/tort claims not covered; contract only contemplated replacement inspection remedies | Historic: broad-language clause covers disputes arising out of inspection and services, including torts tied to contractual duties | Tort and contract-based claims arise from the same facts and fall within the arbitration clause; arbitration compelled |
| Appealability of denial of petition to compel arbitration | Fellermans/trial court: order overruling preliminary objections not a final appealable order | Historic: statute/Rule allow immediate appeal from denial of application to compel arbitration | Superior Court: appealable under 42 Pa.C.S. § 7320(a)(1) and Pa.R.A.P. 311(a)(8) |
Key Cases Cited
- Hinkal v. Pardoe, 133 A.3d 738 (Pa. Super. 2016) (conspicuity is not an essential element of contract formation)
- Carll v. Terminix Int’l Co., L.P., 793 A.2d 921 (Pa. Super. 2002) (limitation of liability that negates recovery for personal injury can be unconscionable and unenforceable)
- Callan v. Oxford Land Dev., Inc., 858 A.2d 1229 (Pa. Super. 2004) (broad arbitration clauses encompass tort claims that arise from the same facts as contract claims)
- Elwyn v. DeLuca, 48 A.3d 457 (Pa. Super. 2012) (two-part test for arbitration: existence of agreement and whether dispute falls within its scope)
- MacPherson v. Magee Mem’l Hosp. for Convalescence, 128 A.3d 1209 (Pa. Super. 2015) (order refusing to compel arbitration is an appealable threshold jurisdictional question)