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Fellerman v. Peco Energy Co.

Superior Court of Pennsylvania

March 30, 2017

STANLEY FELLERMAN AND CAROL FELLERMAN Appellees
v.
PECO ENERGY CO., COMCAST OF SOUTHEAST PENNSYLVANIA, LLC, HISTORIC HOME INSPECTION, LP, D/B/A WIN HOME INSPECTION, ADDISON WOLFE REAL ESTATE AND LISA JAMES OTTO PROPERTIES APPEAL OF: HISTORIC HOME INSPECTION, LP, D/B/A WIN HOME INSPECTION

         Appeal from the Order Dated October 21, 2015 In the Court of Common Pleas of Philadelphia County Civil Division at No(s): July Term, 2014, No. 2640

          BEFORE: PANELLA, J., LAZARUS, J., and FITZGERALD, J. [*]

          OPINION

          LAZARUS, J.

         Historic Home Inspection, LP, d/b/a WIN Home Inspection ("Historic"), appeals from the order entered in the Court of Common Pleas of Philadelphia County overruling its preliminary objections, which sought to enforce an agreement for alternative dispute resolution. Upon review, we reverse and remand for proceedings consistent with the dictates of this opinion.

         Appellees, Stanley and Carol Fellerman ("Fellermans"), retained Historic to perform a home inspection in connection with their purchase of 6858 Upper York Road in New Hope, Bucks County ("Property"). In conjunction therewith, Stanley Fellerman executed an "Inspection Agreement" ("Agreement"), outlining, inter alia, the scope of the inspection, exclusions, and limitations of liability. The Agreement also contained an arbitration clause, which provided as follows:

DISPUTE RESOLUTION AND REMEDY LIMITATION
. . .
Binding Arbitration - The undersigned parties below agree that any dispute between the parties, except those for nonpayment of fees, that in any way, directly or indirectly, arising out of, connected with, or relating to the interpretation of this Agreement, the inspection service provided, the report or any other matter involving our service, shall be submitted to binding arbitration conducted by and according to the Accelerated Arbitration Rules and Procedures of Constructive Dispute Resolution Services, LLC. You may recommend an alternative arbitration provider for our consideration. The arbitration decision shall be final and binding on all parties, and judgment upon the award rendered may be entered into any court having jurisdiction. In any dispute arising under this Agreement, Our Inspection or the Inspection Report, the costs of the arbitration shall be the sole responsibility of the client up to and including the arbitration hearing. As part of the arbitration award, the arbitrator shall award to the prevailing party any or all costs of the arbitration process as he or she deems to be appropriate. Expenses related to personal attorneys, experts, engineers, witnesses, engineering reports or other inspection reports or similar individuals or documents shall be the direct responsibility of the parties and shall not be considered as part of the arbitration award. The arbitration award shall be limited in scope to the issues and terms as specified in the Inspection Agreement. No legal action or proceeding of any kind, including those sounding in tort or contract, can be commenced against us, or our officers, agents or employees more than one year after the date of the subject inspection. Time is expressly of the essence herein. THIS TIME PERIOD IS SHORTER THAN OTHERWISE PROVIDED BY LAW.
LIMITATION OF LIABILITY - IF WE, OUR EMPLOYEES, INSPECTORS, OR ANY OTHER PERSON YOU CLAIM TO BE OUR AGENT, ARE CARELESS OR NEGLIGENT IN PERFORMING THE INSPECTION AND/OR PREPARING THE REPORT AND/OR PROVIDING ANY SERVICES UNDER THIS AGREEMENT, OUR LIABILITY IS LIMITED TO THE FEE YOU PAID FOR THE INSPECTION SERVICE. AND YOU RELEASE U.S. FROM ANY ADDITIONAL LIABILITY. WE HAVE NO RESPONSIBILITY FOR THE POSSIBILITY YOU LOST AN OPPORTUNITY TO RENEGOTIATE WITH THE SELLER. THERE WILL BE NO RECOVERY FOR SECONDARY OR CONSEQUENTIAL DAMAGES BY ANY PERSON.

Inspection Agreement, 1/21/13, at 1-2.

         The Property contained four utility poles, which supported, inter alia, PECO power lines, Comcast cable lines and a PECO transformer. On December 2, 2013, the Fellermans discovered that the pole closest to their residence, supporting the PECO transformer, had fallen to the ground in their "heavily wooded and leaf-covered front yard" near their home. Brief of Appellees, at 6. The Fellermans assert that the pole fell due to "severe rot, decay and deterioration." Id. at 6. The Fellermans notified PECO of the incident; however, prior to PECO's arrival, Stanley Fellerman noticed that the fallen transformer, power and cable lines had started a fire. Stanley attempted to extinguish the fire and, in doing so, was shocked, burned and severely injured, allegedly by the PECO power line.

         The Fellermans filed suit by writ of summons on July 23, 2014. In their second amended complaint, they named as defendants PECO, Comcast, Historic, Addison Wolfe Real Estate and Lisa James Otto Country Properties. The Fellermans asserted that Historic failed to discover or disclose the deteriorated condition of the utility pole, in breach of the Agreement, and asserted causes of action for negligent misrepresentation, fraud, violations of the Uniform Trade Practices and Consumer Protection Law, 73 P.S. §§ 201-1-201-9.3 (UTPCPL), and breach of contract.

         On September 22, 2015, Historic filed preliminary objections, asserting, inter alia, that the Fettermans' suit was barred by the terms of the arbitration clause contained in the Agreement. The trial court overruled Historic's preliminary objections by order dated October 20, 2015 and ordered it to file an answer to the Fettermans' complaint within twenty days. Historic filed a timely notice of appeal, followed by a court-ordered statement of errors complained of on appeal pursuant to Pa.R.A.P. 1925(b). In its Rule 1925(a) opinion, the trial court found that its order was neither an appealable "final order" within the meaning of Pa.R.A.P. 341(b), nor was it an interlocutory order appealable as of right under Pa.R.A.P. 311. Accordingly, the court recommended quashal.

         Historic raises the following issue for our review:

Is it error to overrule preliminary objections raising an agreement for alternative dispute resolution when the parties signed and executed an agreement to arbitrate all disputes arising out of breach of the [A]greement and that [A]greement is the gist of the action?

Brief of Appellant, at 5.

         Prior to considering the merits of Historic's claim, we address the trial court's assertion that its order denying Historic's preliminary objection in the nature of a motion to compel arbitration is interlocutory and not immediately appealable. In short, the trial court is incorrect. Pennsylvania Rule of Appellate Procedure 311(a)(8) provides, in relevant part:

(a) General rule.--An appeal may be taken as of right and without reference to Pa.R.A.P. 341(c) from:
. . .
(8) Other cases.--An order that is made final or appealable by statute or general rule, even though the order does not dispose ...

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