The opinion of the court was delivered by: JOYNER
This case is before the Court on Defendant's Motion to Stay Plaintiff's Suit Pending Arbitration. For the reasons set forth below, the Motion will be denied.
Plaintiff is a Pennsylvania nonprofit corporation which operates a retirement community in Lancaster, Pennsylvania. In November, 1994, plaintiff entered into an agreement with Defendant, a Massachusetts corporation in the business of supplying interior furnishings for residential and commercial use, for 435 chairs to be used in Manor's dining room. By this suit (which was originally commenced in state court) plaintiff contends that the chairs were not properly constructed, were not merchantable and were not fit for ordinary purposes or the purposes for which they were intended. Defendant thereafter removed the case to this court based on diversity jurisdiction and moved to stay this action pending arbitration.
Specifically, it is defendant's position that under its agreement with plaintiff, "any dispute, controversy or claim arising out of or relating to this contract or the breach thereof, shall be settled in accordance with the rules of the American Arbitration Association..." This provision (among others) is contained in the form acknowledging the order which defendant sent almost immediately after receipt of plaintiff's purchase order and payment for one-half of the order. The provision also appears in the "pro forma" invoice which defendant sent to plaintiff on February 10, 1995 and the seven invoices which it sent plaintiff between March 21 and June 22, 1995. (Affidavit of David Israel, Ps 4-5, 7-8, attached as Exhibit "A" to Defendant's Motion for Stay. Also see, Exhibits "B"-"E").
As plaintiff never objected to the arbitration provision in any of these documents, defendant argues that the provision became a part of the parties' contract by operation of U.C.C. § 2-207. In response, plaintiff asserts that since the contract was formed when it accepted defendant's detailed price quote by sending its purchase order and the required deposit for 50% of the contract price, defendant's acknowledgment form did not constitute an acceptance of an offer made by plaintiff and the provisions included in the form fell outside the parameters of the parties' agreement. Alternatively, plaintiff argues that even if the court finds that the acknowledgment form constituted an acceptance, the inclusion of the arbitration clause is an additional term which materially altered the original contract and thus cannot be found to have become a part of the parties' agreement.
Under the Federal Arbitration Act, 9 U.S.C. § 1, et. seq.,
9 U.S.C. § 3. Arbitration, of course, is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit. AT & T Technologies, Inc. v. Communications Workers of America, 475 U.S. 643, 648, 106 S. Ct. 1415, 1418, 89 L. Ed. 2d 648 (1986), citing inter alia, United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582, 80 S. Ct. 1347, 1353, 4 L. Ed. 2d 1409 (1960); 589 F.2d 1214, 1217 (3rd Cir. 1978).
Thus, the first task of a court asked to compel arbitration of a dispute is to determine whether the parties agreed to arbitrate that dispute. The court is to make this determination by applying the federal substantive law of arbitrability applicable to any arbitration agreement within the coverage of the Act. Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626, 105 S. Ct. 3346, 3353, 87 L. Ed. 2d 444 (1985). The scope of an arbitration agreement is a question of federal law but state law governs whether the parties entered into an arbitration agreement. ATD American Co. v. Imptex International, Inc., 1994 U.S. Dist. LEXIS 6426, 1994 WL 193924, *4 (E.D.Pa. 1994) citing Perry v. Thomas, 482 U.S. 483, 492 n.9, 96 L. Ed. 2d 426, 107 S. Ct. 2520 (1987) and Progressive Casualty Ins. Co. v. C.A. Reaseguradora Nacional de Venezuela, 991 F.2d 42, 45-46 (2d Cir. 1993). In diversity cases, which state law applies depends on the choice of law rules of the state in which the federal court sits. National Iranian Oil Co. v. Mapco International, Inc., 983 F.2d 485, 493 (3rd Cir. 1991) citing Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 85 L. Ed. 1477, 61 S. Ct. 1020 (1941).
In this action, the parties do not dispute that there was a contract between them whereby plaintiff would purchase from defendant 435 "Shelley B" armchairs at the unit price of $ 320 per chair for the total amount of $ 139,200. (Exhibits "A" - "B" to Defendant's Motion for Stay Pending Arbitration). It is further clear that plaintiff tendered the sum of $ 69,600 to defendant when it formally placed its order. (Exhibits "A" - "D"; Exhibit "A" to Plaintiff's Brief in Response to Defendant's Motion to Stay). As the parties' performance demonstrates the existence of a contract, We thus see no need to review the parties' various actions to decide exactly when the parties formed a ...