Avoiding Mandatory Arbitration: An Important Pleading Tip for Attorneys

Avoiding Mandatory Arbitration: Be Careful in Drafting Your Complaint

By Dale G. Larrimore, Esquire

Larrimore & Farnish, LLP

Two recent federal court decisions highlight the importance of careful drafting of your pleadings in any case where a mandatory arbitration provision may be controlling. In Sanford v. Bracewell & Guiliani, LLP[i], the plaintiffs filed a claim against the defendant law firm, asserting claims for professional malpractice and breach of contract. Defendant filed a motion to stay the action, pending arbitration. Judge Slomsky, in the US District Court for the Eastern District of Pennsylvania, granted the motion with respect to the husband, but denied it with respect to the wife plaintiff. On appeal, the Third Circuit, in a non-precedential opinion, reversed and held that the wife was equitably stopped from asserting that she was not bound by the engagement agreement’s arbitration provision.

Although the Engagement Agreement identified only the husband as the client, the complaint filed by both plaintiffs alleged that “the Sanfords entered into an attorney-client relationship by way of the Engagement Agreement.” The Third Circuit opinion recognizes that arbitration is strictly a matter of contract and in deciding whether a party may be compelled to arbitrate under the Federal Arbitration Act (“FAA”)[ii] the court must consider whether there is a valid agreement to arbitrate between the parties and whether the dispute in question falls within the scope of this agreement. Here, the wife plaintiff sued for breach of the written Engagement Agreement, which included an arbitration clause. Even though she did not sign the Engagement Agreement, she is bound by the clause under equitable estoppels principles.  Under Pennsylvania law, a non-signatory may be bound by an arbitration clause when “the non-signatory knowingly exploits the agreement despite having never signed the agreement.”[iii] Such exploitation occurs when a non-signatory embraces a contract by seeking to enforce the terms of the contract or asserts claims based on the contract’s other provisions.  Principles of equitable estoppels mandate the arbitration of her claims.

Earlier this year, in Noye v. Johnson & Johnson, et al.,[iv] Judge Kane, in the US District Court for the Middle District of Pennsylvania, the plaintiff (who had applied for employment with Johnson & Johnson) asserted claims that the defendants violated the Fair Credit Reporting Act, on behalf of himself and putative class members. Defendant Kelly filed a motion to compel arbitration, arguing that plaintiff had signed a binding agreement to arbitrate all disputes relating to his employment.

Judge Kane denied the defendant’s motion to compel arbitration in an opinion that pointed out that plaintiff’s complaint makes no explicit reference to an arbitration agreement and that plaintiff attached no exhibits to the complaint.  Defendant attached the agreement to its motion to compel, but plaintiff argued that the complaint does not reference any agreement containing a mandatory arbitration provision. Plaintiff submitted an affidavit in support of his opposition to arbitration, declaring that while he signed numerous documents provided by defendant Kelly with his handwritten signature, the Arbitration Agreement contained only a “typewritten version” of his name. Plaintiff also submitted a copy of an employment agreement providing for non-binding ADR methods.” Upon consideration of the motion and response, and relying on Guidotti v. Legal Helpers Debt Resolution[v], Judge Kane denied the defendant’s motion to compel arbitration, holding that the parties are entitled to discovery on the question of arbitrability before the court would entertain further briefing on the question.

Note that the key difference between these two results was the complaints that were drafted by the plaintiffs. 

©Copyright 2016, Dale G. Larrimore, Esquire

First published October 2016 in The Verdict, Vol. 2016-2017, Issue 2, published by the Philadelphia Trial Lawyers Association, Philadelphia, PA.

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[i] Sanford v. Bracewell & Guiliani, LLP, 618 Fed.Appx. 114 (3^rd Cir. 2015).

[ii] 9 U.S.C.A. § 1, et seq.

[iii] Sanford, supra, 618 Fed.Appx. at 118.

[iv] Noye v. Johnson & Johnson and Kelly Services, Inc., 2016 WL 4678999 (2016).

[v] Guidotti v. Legal Helpers Debt Resolution, 716 F.3d 764 (3^rd Cir. 2013).

School Buses

School buses

Dale G. Larrimore, Esquire

            Passing a school bus — do you know the rules? Another school year has started. Perhaps it is a good time for a refresher.

The rule that every driver should know is that you must stop whenever a school bus is stopped to allow children to board or leave the bus. That is the easy part. It becomes more difficult deciding exactly when stops are required and how far back you need to stop. When a school bus is stopped on the road with its red signal lights flashing and the side stop signal arms activated, the operator of any vehicle overtaking the bus or meeting it when coming in the opposite direction must stop at least ten feet before reaching the school bus and must remain stopped until the school children who have gotten off the bus have reached a place of safety.[1]  A motorist is not required to stop until the red flashers on the school bus have been activated, since a motorist cannot know whether it is stopped to discharge or receive school children without such notice.[2]  The concern, of course, is that a child may cut across all traffic lanes to board, or after leaving, the bus. The driver cannot proceed until the red lights quit flashing and every child going to or from the bus has reached a point of safety.

What if you are on a motorcycle or a bicycle? That counts. The key word here is vehicle. Both are considered to be vehicles under the Pennsylvania Vehicle Code.

            Now here is the question that probably creates the most confusion for drivers. What do you do when the bus is approaching you from the opposite direction on a multi-lane roadway? When do you have to stop and when don’t you? It is important to recognize that the above rule does not apply to divided highways. So what is a divided highway?

Where there are “separate roadways,” a driver is not required to stop on meeting or passing a school bus with active red signals that is on a different roadway.[3] A “separate roadway” is defined in the Pennsylvania Code to be a highway that is divided into two or more roadways, with a physical barrier or clearly indicated dividing section between the roadways.[4] To qualify as a separate roadway, there must be a physical barrier or a clearly indicated dividing section separating the two halves. Physical barriers include a concrete median barrier, metal median barrier and non-mountable curbing. Clearly indicated dividing sections include concrete mountable curbs, trees, shrubs, rocks, boulders, a stream or grass. But mere pavement markings or “singing divisors” do not create separate roadways. (Yes, those rumble strips on the road are called singing divisors). Two painted double yellow lines separating the northbound lanes from the southbound lanes are not a physical barrier and the driver of a northbound vehicle can be convicted of passing a stop school bus that is in the southbound lane with the lights and stop signal arm activated.[5]

One might think that if you are not sure, you should just stop. However, where a school bus heading east on a four lane divided highway stopped to discharge children, a motorist who was driving in the westbound lanes was found to be negligent in stopping after his vehicle was then hit in the rear.[6]

What about school buses stopped at an intersection? The driver of a vehicle approaching an intersection at which a school bus is stopped must stop his vehicle at that intersection until the flashing red signal lights are no longer actuated.

School buses, or actually their passengers, have special protection provided through the Vehicle Code, and violating the rules with regard to passing a school bus is considered a “serious traffic offense.”[7] A violation can mean a fine of $100, a 60-day suspension of driving privileges and five points on the driver's record.

The statute mandating that motorists stop no less than ten feet before reaching a stopped school bus with its red signal lights flashing and the side signal arm extended, has been very strictly interpreted to favor the children of our Commonwealth. Although a motorist is not required to stop unless the red flashers on the school bus are in operation, a driver cannot excuse a failure to stop by arguing that she could not see the flashing lights due to their angle of view or other obstruction.[8]

The operator of a school bus is empowered by the Vehicle Code to report to the police any motorist who passes a stopped school bus, and the police may then issue a citation based on such a report.[9] When a school bus driver initiates legal action against a motorist for passing a stopped school bus, the bus driver must do so by filing a signed, written report including information pertaining to the identity of the alleged violator, the license number, color and body type of the vehicle, and the time and location of the violation.[10] The report of the school bus operator must be filed with the citation issued by the police.[11]

            We commonly recognize that school buses are painted yellow, but the Vehicle Code actually only mandates that they be painted with a “uniform color scheme,” with the label “School Bus” on both the front and rear.[12] Under the Vehicle Code of Pennsylvania, a school bus is any vehicle used to carry 11 passengers or more for the transportation of school students to or from schools or school-related activities.[13] When a school bus is being used for purposes other than the actual transportation of children to or from school or in connection with school activities, all markings indicating “school bus” must be covered and the driver may not use the flashing visual signals.[14]

            Every school bus must have its headlights on during the entire period that the school bus is in operation.[15] Every school bus operated in Pennsylvania must be equipped with a side stop signal arm, on the left side of the vehicle, with a flashing red light connected to the same circuits as the red visual signals on the bus and automatically activated whenever the bus is stopped with the red visual signals in use.[16] School buses must also be equipped with a crossing control arm on the front of the vehicle that is automatically activated whenever the bus is stopped with the red visual signals in use.[17] A mirror must be located on the front of the bus to permit the driver to see any pedestrian in front of the bus, along with rear view mirrors sufficient to provide the operator with a proper view of the sides and rear of the bus. Where a bus failed to have such equipment, and this failure was a proximate cause of an accident that resulted in the death of a child, the bus company may be guilty of homicide by vehicle.[18]

            The operator of a school bus on any trafficway is required to actuate the amber visual signals at a point not more than 300 feet nor less than 150 feet prior to making a stop to pick up or discharge school children. The amber signals may not be used by a bus driver unless the red visual signals are to be actuated immediately following, and the amber signals must remain in operation until the red visual signals are actuated.[19] The driver of any other vehicle meeting or overtaking a school bus on the same roadway with the amber visual signals actuated must proceed past the school bus with caution and be prepared to stop when the red signals are flashing.[20]

Because of the highly increased potential for tragedy should a school bus accident occur, the Department of Transportation has created special licensing requirements for operators and these are accepted as rational safety precautions.[21] School Bus drivers must complete a special course of instruction and pass an annual physical examination in order to remain qualified to operate these vehicles.[22]

For a more thorough and detailed analysis of Pennsylvania vehicle law concerning school buses, see Dale G. Larrimore, Pennsylvania Rules of the Road, Section 8:7, (West’s Pennsylvania Practice Series, Vol. 13) (2015-2016 edition).

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[1] 75 Pa.C.S. §3345(a).

[2] Com. v. Bream, 73 Pa. D. & C.2d 110, (C.P. 1975).

[3] 75 Pa.C.S. §3345(g).

[4] 67 Pa. Code §104.2.

[5] Com. v. Russell, 784 A.2d 165 (Pa. Super. Ct. 2001).

[6] Bradley's Guardian v. Ritchie, 57 Lanc. L.R. 129 (Pa. C.P. 1960).

[7] 75 Pa.C.S. §3101(b) and 75 Pa.C.S. §3345.

[8] Com. v. Zankowski, 546 A.2d 1254 (Pa. Super. Ct. 1988).

[9] 75 Pa.C.S. §3345(a.1).

[10] Com. v. Fulmer, 621 A.2d 146 (Pa. Super. Ct. 1993).

[11] Id.

[12] 75 Pa.C.S. §4552(a).

[13] 75 Pa.C.S. §102.

[14] 75 Pa.C.S. §3345(f).

[15] 75 Pa.C.S. §4308.

[16] 75 Pa.C.S. §4552(b.1).

[17] 75 Pa.C.S. §4552(b.2)

[18] Com. v. McIlwain School Bus Lines, Inc., 423 A.2d 413 (Pa. Super. Ct. 1980).

[19] 75 Pa.C.S. §3345(d).

[20] 75 Pa.C.S. §3345(b).

[21] See 67 Pa. Code §§71.1 et seq.

[22] 75 Pa.C.S. §1509; Com., Dept. of Transp., Bureau of Traffic Safety v. Johnson, 478 A.2d 521 (Pa. Commw. Ct. 1984).