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Dowton v. Equity LifeStyle Properties, Inc.

United States District Court, M.D. Pennsylvania

June 28, 2017

DONNA SUE DOWTON, Plaintiff
v.
EQUITY LIFESTYLE PROPERTIES, INC., et al., Defendants

          MEMORANDUM OPINION

          KAROLINE MEHALCHICK UNITED STATES MAGISTRATE JUDGE

         Before the Court is the motion of Defendant, Equity LifeStyle Properties, Inc., to stay proceedings and to compel arbitration of the contractual defense and indemnity provisions that arise under the contractual agreements between the parties, pursuant to 9 U.S.C. § 1, et seq. (Doc. 36). This matter having been fully briefed, it is ripe for disposition. For the following reasons, the Court will GRANT IN PART and DENY IN PART Defendant's motion.

         I. Background and Procedural History

         This diversity action was initiated on or about February 8, 2016 by Plaintiff, Donna Sue Dowton (“Dowton”), for injuries she allegedly suffered when she was involved in a physical altercation with another camper, Defendant, Yeandy Acevedo (“Acevedo”), at a campground (“Timothy Lake Resort”) located at 2043 Allegheny Lane, East Stroudsburg, PA. (Doc. 1). Defendant Equity LifeStyle Properties, Inc. (“ELP”) is a holding company that does not directly own or manage property. ELP owns a majority interest in MHC Operating Limited Partnership that manages the Timothy Lake Resort and is the sole member of MHC Timothy Lake North GP, L.L.C., the general partner of MHC Timothy Lake North Limited Partnership that owns the Timothy Lake Resort. Timothy Lake Resort is a mountain resort and campground that provides members the right to use campsites on its property pursuant to a written contractual agreement and membership rules.

         On or about March 29, 2014, Scott and Donna Dowton executed an Agreement for Use of RV Site, specifically site no. 247, at the Timothy Lake resort for $1, 979.00 for a term from May 1, 2014 to April 30, 2015. (Doc. 36-4). In accordance with the 2014 Contract, on or about March 29, 2014 the Dowtons paid the $1, 979.00 annual fee. (Doc. 36-5). After the 2014-2015 season, ELP purports that the Dowtons elected to renew their annual membership, but has only produced a copy of a contract unsigned by the Dowtons. (Doc. 36-6). However, ELP has produced evidence of payment for the 2014-2015 season. (Doc. 36-7).

         The 2014 and 2015 Agreements for Use of RV Site contain identical provisions regarding arbitration and indemnification. Specifically, those provisions are as follows:

Arbitration. Any dispute or claim arising out of this Agreement shall be settled by binding arbitration in accordance with the provisions of the Federal Arbitration Act (99 U.S.C. Section 1 et seq.) and the rules of the American Arbitration Association. Arbitration proceedings shall be commenced by the delivery by either party to the other of written notice demanding arbitration ... Any award rendered by arbitration shall be shall be final and binding on the parties and judgment thereon may be entered by any court of competent jurisdiction.
(Doc. 36-4, at 10; 36-6, at 10).
Indemnification. The Company is not liable for injury to any person, or for loss or damage to any property (including Members' property) occurring in or about the Site from any cause whatsoever. Members agree to jointly and severally indemnity the Company against and hold the Company harmless for any and all loss, damage, liability and expense (including reasonable attorney fees and other costs incurred in connection with defending any claim) resulting from any actual or alleged injury to any person ... arising out of the use of the Site by Members, or caused by or resulting from any act or omission of any third party (including criminal acts) or any act or omission of the Company occurring in or about the Site, unless due to the Company' gross negligence or willful misconduct. The indemnification provided for in this Section 19 shall survive the expiration or sooner termination of this Agreement.
(Doc. 36-4, at 9; 36-6, at 9).

         Dowton does not dispute the existence of these clauses, and admits that the Indemnification clause pertains to “injury to any person, or for loss or damage to any property ... occurring in or about the Site from any cause whatsoever.” (Doc. 38-2, at 2). Members are to indemnify Defendant and hold it harmless for “any and all loss, damage, liability and expense.” (Doc. 38-2, at 2). The Indemnification clause is stated to even extend to acts and omissions by third parties, criminal acts, and even acts of Defendant occurring in or about the Site. (Doc. 38-2, at 2). The Arbitration clause pertains to “[a]ny dispute or claim arising out of this Agreement.” (Doc. 38-2, at 2).

         In accordance with the Arbitration clauses, on June 29, 2016, written demand was made upon Dowton and Acevedo for defense and indemnification pursuant to the contract language, and in the alternative, if the contractual dispute could not be resolved, for arbitration of the dispute with the American Arbitration Association. (Doc. 36-9; Doc. 36-10). Nothing before the Court indicates that either Dowton or Acevedo ever responded to the demand for indemnification and arbitration.

         On September 15, 2016, ELP filed a Motion to Stay and to Compel Arbitration (Doc. 36), and filed its brief in support on September 16, 2016. (Doc. 37). Dowton filed a brief in opposition to the motion on September 29, 2016. (Doc. 38).[1] ELP filed a reply brief on October 6, 2016. (Doc. 39). In opposing the motion to compel arbitration, Dowton submits that the motion should be denied because (1) the arbitration clause pertains to contractual disputes and not claims pertain to personal injuries resulting from ELP's negligence and carelessness, and the indemnification clause discussing such injuries violates public policy and is an unconscionable and unenforceable exculpatory clause; and (2) ...


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