TOTAL LANDSCAPING CARE, LLC v. TOWER CLEANING SYSTEMS, INC.
MEMORANDUM AND/OR OPINION RE: PLAINTIFF'S MOTION FOR JUDGMENT ON THE PLEADINGS (DOC. NO.10) AND DEFENDANT'S RESPONSE AND CROSS MOTION FOR JUDGMENT ON THE PLEADINGS AND/OR SUMMARY JUDGMENT (DOC. NO.11). SIGNED BY HONORABLE PETRESE B. TUCKER ON 2/29/2012. 3/1/2012 ENTERED AND COPIES E-MAILED.(kk, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
TOTAL LANDSCAPING CARE, LLC,
TOWER CLEANING SYSTEMS, INC.,
d/b/a US MAINTENANCE OR USM
February ___, 2012
Presently before the Court are Plaintiff’s Motion for Judgment on the Pleadings (Doc. 10),
Defendant’s Response and Cross Motion for Judgment on the Pleadings and/or Summary
Judgment (Doc. 11), and Plaintiff’s Response (Doc. 13). Upon consideration of the parties’
motions with exhibits and declarations, the Court will: (1) deny Plaintiff’s Motion for Judgment
on the Pleadings in part, and (2) grant Defendant’s Cross Motion for Judgment on the Pleadings
and/or Summary Judgment.
This case arises out of an alleged unlawful arbitration finding. Plaintiff, Total
Landscaping, LLC (“Total Landscaping”), a Connecticut limited liability company, brings this
action against Defendant, Tower Cleaning Systems, Inc., doing business as US Maintenance or
USM (“Tower Cleaning”, or “USM”), a Pennsylvania corporation.
On November 12, 2006, Plaintiff Total Landscaping entered into a Subcontractor
Agreement with Defendant USM. Under the Subcontractor Agreement, Total Landscaping, the
subcontractor, was to provide snow and ice removal services at locations designated by USM. As
the general contractor, USM entered into agreements with its retail store customers, including but
not limited to Home Depot, for the provision of snow and ice removal services.
In an underlying lawsuit filed in the Superior Court of Connecticut, both USM and Home
Depot were named defendants in an action brought by Karen Salva, a patron who claims she was
injured on January 1, 2008 in a slip-and-fall incident caused by ice at a Home Depot location in
Darby, Connecticut (the “Salva lawsuit”). This Home Depot location, at the time of the slip-andfall incident, was being serviced for snow and ice removal by Total Landscaping under its
Subcontractor Agreement with USM. Under its customer contract with Home Depot, USM
agreed to indemnify Home Depot and assumed Home Depot’s defense costs in the Salva lawsuit.
Subsequently, USM tendered defense of itself and Home Depot to Total Landscaping, which
Total Landscaping declined to accept under the Subcontractor Agreement. To date, the Salva
lawsuit is pending in the Superior Court of Connecticut, and is scheduled to proceed to trial in a
few weeks from the date of the present opinion.
As a result of Total Landscaping’s refusal to indemnify and accept tender of defense for
USM and Home Depot in the Salva lawsuit, on or about May 17, 2010, USM submitted a demand
for arbitration to the AAA, seeking defense and indemnification costs from Total Landscaping for
USM and Home Depot in connection with the Salva lawsuit. Total Landscaping objected to the
demand for arbitration via letter to the AAA, Tower Cleaning submitted a response dated
September 17, 2010, and Total Landscaping submitted an Answering Statement to the AAA
thereafter. Despite the written objections of Total Landscaping, the arbitration proceeded and
USM and Total Landscaping submitted Arbitration Briefs and exhibits, along with a Reply and
On October 18, 2010, upon conclusion of the arbitration process, arbitrator Walter R.
Milbourne issued an award (the “Award”) which is the subject of the present matter. In the
Award, Mr. Milbourne entered judgment in favor of USM, and granted declaratory relief to both
USM and Home Depot. The Award order set forth that Total Landscaping: (1) “shall
immediately assume the defense of ; and (2) “shall reimburse USM all costs consisting of
attorneys fees and AAA fees incurred in bringing this action with the [AAA]. The Administrative
fees of the [AAA] totaling $975.00, and the compensation of the arbitrator totaling $900.00 shall
be borne Respondent (sic.). Therefore, [Total Landscaping] shall reimburse [USM] the sum of
$1,425.00, representing that portion of said fees in excess of the apportioned costs previously
incurred by [USM].”
On November 15, 2010, Plaintiff Total Landscaping initiated the present action against
Defendant USM, claiming that the Award was improperly issued. Accordingly, Plaintiff Total
Landscaping seeks that the Court vacate the Award, and enjoin Defendant USM from further
attempting to pursue its claims through the AAA. (Compl. ¶ 12.)
STANDARD OF REVIEW
Under Federal Rule of Civil Procedure 12(c), a party may move for judgment on the
pleadings after the pleadings are closed, as long as the party does so "early enough not to delay
trial."Fed. R. Civ. P. 12(c). A motion for judgment on the pleadings is subject to the same
standard of review applicable to a motion to dismiss under Rule 12(b)(6). See Turbe v. Gov't of
V.I., 938 F.2d 427, 428 (3d Cir. 1991). "The only notable difference between these two standards
is that the court in a motion on the pleadings reviews not only the complaint but also the answer
and written instruments attached to the pleadings." Sprague v. Neil, 2007 U.S. Dist. LEXIS
77767, 2007 WL 3085604, at *2 (M.D. Pa. Oct. 19, 2007) (citing 2 Moore's Fed. Practice Civil §
12.38 (2004)). Like a motion to dismiss, in considering a motion for judgment on the pleadings,
the Court must accept as true all allegations in the complaint and all reasonable inferences that can
be drawn therefrom, viewing them in the light most favorable to the plaintiff. See Taliaferro v.
Darby Twp. Zoning Bd., 458 F.3d 181, 188 (3d Cir. 2005); Allah v. Al-Hafeez, 226 F.3d 247, 249
(3d Cir. 2000).
A motion for judgment on the pleadings should be granted only if it appears to a certainty
that no relief could be granted under any set of facts that could be proved. See id. It must be
shown that there remains no material issue of fact to be resolved and that he is entitled to
judgment as a matter of law.” Rosenau v. Unifund Corp., 539 F.3d 218, 221 (3d Cir. 2008);
Sikirica v. Nationwide Ins. Co., 416 F.3d 214, 220 (3d Cir. 2005). The Court, under Federal Rule
of Civil Procedure 56, may convert the 12(c) motions in the present matter to motions for
summary judgment. Fed R. Civ P. 56. Thus, the motions presently before the Court will be
evaluated under the standard set forth below.
Summary judgment is appropriate where the moving party establishes that “there is no
genuine issue as to any material fact and that [it] is entitled to a judgment as a matter of law.” Fed
R. Civ P. 56(c). See Levy v. Sterling Holding Co., LLC, 544 F.3d 493, 501 (3d Cir. 2008). A
factual dispute between the parties will not defeat a motion for summary judgment unless it is
both genuine and material. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct.
2505, 91 L.Ed.2d 202 (1986); Dee v. Borough of Dunmore, 549 F.3d 225, 229 (3d Cir. 2008). A
factual dispute is genuine if a reasonable jury could return a verdict for the non-movant, and it is
material if, under the substantive law, it would affect the outcome of the suit. See Anderson, 477
U.S. at 248; Fakete v. Aetna, Inc., 308 F.3d 335, 337 (3d Cir. 2002).
The moving party must show that if the evidentiary material of record were reduced to
admissible evidence in court, it would be insufficient to permit the non-moving party to carry its
burden of proof. See Celotex v. Catrett, 477 U.S. 317, 327, 106 S.Ct. 2548, 91 L.Ed.2d 265
(1986). Once the moving party has carried its burden under Rule 56, “its opponent must do more
than simply show that there is some metaphysical doubt as to the material facts.” Scott v. Harris,
550 U.S. 372, 380, 127 S.Ct. 1769, 167 L.Ed.2d 686 (2007). Under Fed. R. Civ. P. 56(e), the
opposing party must set forth specific facts showing a genuine issue for trial and may not rest
upon the mere allegations or denials of its pleadings. See Martin v. Godwin, 499 F.3d 290, 295
(3d Cir. 2007).
At the summary judgment stage the court's function is not to weigh the evidence and
determine the truth of the matter, but rather to determine whether there is a genuine issue for trial.
See Anderson, 477 U.S. at 249; Jiminez v. All American Rathskeller, Inc., 503 F.3d 247, 253 (3d
Cir. 2007). In doing so, the court must construe the facts and inferences in the light most
favorable to the non-moving party. See Horsehead Indus., Inc. v. Paramount Communications,
Inc., 258 F.3d 132 (3d Cir. 2001). The court must award summary judgment on all claims unless
the non-moving party shows through affidavits or admissible evidence that an issue of material
fact remains. See, e.g., Love v. Rancocas Hosp., 270 F.Supp.2d 576, 579 (D.N.J. 2003); Koch
Materials Co. v. Shore Slurry Seal, Inc., 205 F.Supp.2d 324, 330 (D.N.J. 2002).
The facts of this case are undisputed. Accordingly, pursuant to Federal Rule of Civil
Procedure 56, the Court must determine whether either party is entitled to judgment as a matter of
law based on the record.
The Award will be examined pursuant to controlling law, the Federal Arbitration Act
(“FAA”), 9 U.S.C. § 10, which grants federal courts the authority to vacate arbitration awards
under the following limited circumstances:
(1) where the award was procured by corruption, fraud, or undue
(2) where there was evident partiality or corruption in the
arbitrators, or either of them;
(3) where the arbitrators were guilty of misconduct in refusing to
postpone the hearing, upon sufficient cause shown, or in refusing
to hear evidence pertinent and material to the controversy; or of
any other misbehavior by which the rights of any party have been
(4) where the arbitrators exceeded their powers, or so imperfectly
executed them that a mutual, final, and definite award upon the
subject matter submitted was not made.”
9 U.S.C. § 10(a).
Because federal policy favors the enforcement of arbitration agreements, the party
attempting to prove that an arbitrator has exceeded his authority is faced with a great burden to
overcome, and must prove that vacatur is appropriate. AAMCO Transmissions, Inc. v. Sally,
2008 U.S. Dist. LEXIS 102502, 2008 WL 5272449, at *3 (E.D. Pa. Dec. 17, 2008) (citation
omitted); Ogden Allied Services Corp. v. Local 36, Service Employees Int'l Union, 1990 U.S.
Dist. LEXIS 15976, at *14 (E.D. Pa. Nov. 27, 1990) (citations omitted).
The Third Circuit recognizes that claims brought under 9 U.S.C. § 10(a)(4), claiming that
an arbitrator exceeding his powers, shall be subjected to a test of whether the arbitrator’s award
was irrational.1 Additionally, the Court may consider, pursuant to 9 U.S.C. §§ 10(a)(3) and
10(a)(4), whether an arbitration award constitutes a “manifest disregard of law”, justifying vacatur
by the Court.2 The court’s review of arbitration awards pursuant to the FAA should give great
deference to the award, as there is a strong presumption favoring their enforcement. Metromedia
Energy, Inc. v. Enserch Energy Servs., 409 F.3d 574, 578 (3d Cir. 2005); Brentwood Med.
Assocs. v. UMW, 396 F.3d 237, 241 (3d Cir. 2005). Thus, the allegations of Plaintiff Total
Landscaping concerning the arbitrator’s award will be examined according these narrow
allowances for vacatur under 9 U.S.C. § 10.
Total Landscaping requests that the Court vacate the Award entered against it on the
following bases: (1) the arbitrator lacks the authority, because it is not a court of law, to enter
See Franko v. Ameriprise Fin. Servs., 2009 U.S. Dist. Lexis 48907,at *9 (E.D. Pa. 2009); Southco, Inc. v. Reell
Precision Mfg. Corp., 556 F. Supp. 2d 505, 511 (E.D. Pa. 2008); Sherrock Bros. v. Daimler Chrysler Motors Co., LLC, 260 F.
App’x. 497 501 (3d Cir. 1993) (stating that “[w]hen determining whether an arbitrator exceeded his authority, this Court
examines the form of relief awarded and the terms of that relief. We must be able to derive rationally the form the award either
from the parties' agreement or from their submissions to the arbitrators, and the terms of the award must not be completely
irrational.” (Citations omitted)).
In Hall Street Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576 (2008), the United States Supreme Court found that 9
U.S.C. § 10 of the FAA provides the exclusive grounds for vacatur of an arbitration decision. Id. at 1404-06. In Hall Street, the
Supreme Court recognized a circuit split, and commented that several Circuit Courts, including the Third Circuit, concluded that
"manifest disregard of the law was a further ground for vacatur on top of those listed in § 10." Id. at 1403. The Supreme Court in
Hall Street declined to opine on the validity of the common law construct of “manifest disregard of the law” as a separate
grounds for vacatur. The Supreme Court, however, in its dicta, stated that to the extent that the “manifest disregard of the law”
standard continued to be used, it should be construed as shorthand for the exclusive parameters of 9 U.S.C. § 10 of the FAA. Id.
To date, the Third Circuit has yet to opine on the impact of Hall Street on this Circuit’s adherence to the manifest
disregard standard. For the reasons discussed herien, the Court finds that under this Circuit’s undisturbed manifest disregard
standard, Plaintiff Total Landscape’s arguments fail to fulfill its burden to prove that this standard has been violated by the
judgment against a party; (2) generally, in order for contractual indemnification claims to be ripe,
and for declaratory judgment to be appropriate, there must be a final resolution in the underlying
litigation; (3) the arbitration award was lacking in contractual basis, as certain terms in the
indemnification provision of the Subcontractor Agreement were ambiguous, and the pending
claim did not fall within the scope of the indemnification provision; (4) the arbitration award
violated the rules of the American Arbitration Association (“AAA”), which specify that arbitrators
may grant relief only on matters within the scope of the parties’ agreement; (5) the declaratory
relief issued by the arbitrator violated the Pennsylvania Declaratory Judgments Act, 42 Pa. Cons.
Stat. Ann. § 7540, as the arbitrator lacked subject matter jurisdiction due to the absence of
indispensable and necessary parties during the arbitration proceedings; and (6) USM failed to
prove the reasonableness and necessity of fees and costs incurred in the underlying litigation, and
the Award renders Total Landscaping responsible for fees and costs without consideration of their
reasonableness, necessity, or amount. (Compl. ¶¶ 1-8, 11-12.)
Many of the allegations of Plaintiff Total Landscaping are centered around the contention
that the arbitrator exceeded his authority in entering the Award, which requires Plaintiff to pay
defense costs incurred by Defendant USM for both its own defense and that of Home Depot’s.3
The arbitration award issued against Plaintiff Total Landscaping award specifically states, in relevant part, the
The Arbitrator hereby ENTERS JUDGMENT in favor of Plaintiff [USM] and against Defendant [Total Landscaping]
declaring the following:
1. Reimbursement of Defense Costs/Indemnification
Total Landscaping Care, LLC shall immediately assume the defense of USM and Home Depot in [the] Salva litigation
and reimburse USM all costs of defense, including attorneys fees, incurred to date and, further, shall indemnify USM
Plaintiff submits that the contractual interpretation of the indemnification and waiver provisions
of the Subcontractor Agreement between Total Landscaping and USM may only be read one way,
and that reading would preclude the arbitrator from requiring Plaintiff to pay for defense costs and
attorneys fees that were on behalf of a third party (Home Depot) with whom Plaintiff was not in
privity, and that were not yet ripe due to lack of finality in the underlying litigation between Home
Depot and Salva. The Court disagrees for the reasons set forth below.
The Subcontractor Agreement, entered into by Total Landscaping to provide snow and ice
removal services to customers of USM, contains the following relevant provisions:
Indemnification. To the fullest extent permitted by applicable law,
you shall defend and hold harmless us and our customer and our
and our customer’s respective officers, directors, employees, agents,
subcontractors, partners, joint ventures, affiliates, successors and
assigns (“Indemnified Parties”) from and against all liabilities,
obligation, claims, demands, causes of action, losses, expenses,
damages, fines, judgments, settlements, and penalties, including,
without limitation, costs, expenses and attorneys’ fees incident
thereto, arising out of, based upon, occasioned by or in connection
(1) Your performance of (or failure to perform) your duties
under this Agreement;
for any amounts paid or to be paid on its and/or Home Depot’s behalf via settlement/verdict of the underlying Salva
2. Costs of Arbitration
Total Landscaping Care, LLC shall reimburse USM all costs consisting of attorneys fees and AAA fees, incurred in
bringing this action with the American Arbitration Association.
The administrative fees of the American Arbitration Association totaling $975.00, and the compensation of the
arbitrator totaling $900.00 shall be borne by Respondent. Therefore, Respondent shall reimburse Claimant the sum of
$1,425.00, representing that portion of said fees in excess of the apportioned costs previously incurred by Claimant.
This Award is in full settlement of all claims and counterclaims submitted to this Arbitration. All claims not expressly
granted herein are hereby, denied.
(2) a violation of any law or any negligence, gross
negligence, or willful misconduct by you or your affiliates,
subcontractors, agents or employees during either your
performance [of] your duties under this Agreement or
otherwise while you are on the property of one of out
(3) Damage to property and injuries, including without
limitation death, to all persons, arising from any occurrence
caused by any act or omission of you or your personnel
related to the performance of this Agreement. ....
The indemnification obligation specified in this paragraph shall be
construed so as to extend to all legal, defense and investigation
costs, as well as other costs, expenses, and liabilities incurred by the
Indemnified Parties, including but not limited to interest, penalties,
and fees of attorneys and accountants (including expenses), from
and after the time when any Indemnified Party receives notification
(whether verbal or written) that a claim or demand has been made
or is to be or may be made.
Pursuant to the indemnification obligation specified above, you
agree to indemnify and hold harmless the Indemnified Parties
regardless of whether the liability, obligation, claim, demand, cause
of action, loss, expense, damage, fine, judgment, settlement and
penalty was caused in whole or in part by a violation of any law or
any negligence (excluding gross negligence or willful misconduct),
including but not limited to business invitee premises liability, by
the Indemnified Parties.
Arbitration: Waiver of Jury Trial and Punitive Damages: Governing
Law and Jurisdiction:
A. Arbitration. All disputes
C. Waivers. ... No arbitration or action under this Agreement shall
include, by consolidation, joinder, or any other manner, any claims
by any person or entity in privity with or claiming through or on
behalf [of] either you or us. Neither you nor we shall arbitrate or
litigate as a representative on or behalf of any other person or
entity, any dispute, controversy, or claim of any kind arising out of
or relating to this Agreement, your or our respective rights and
obligations, or any other claims or causes of action relating to your
or our performance under this Agreement.
Subcontractor Agreement, Nov. 12, 2006. Emphasis added.
Plaintiff Total Landscaping submits the following assertions in support of its argument
that the arbitration award exceeded the limits of the arbitrator’s authority: (1) Total Landscaping
had no arbitration agreement with Home Depot, and thus it was improper for the arbitrator to
allow USM to arbitrate claims against Total Landscaping on behalf of this absent third party; (2)
legal precedent prescribes that claims for indemnification become ripe only upon the finality of
underlying claims, and not while such claims remain pending; (3) the award of attorneys fees and
costs to USM for pursuit of its indemnification claim against Total Landscaping was not
contemplated by the arbitration agreement provision of the Subcontractor Agreement; (4) legal
precedent establishes that the indemnification language of the Subcontractor Agreement did not
cover USM’s separate contractual obligation to indemnify its customer, Home Depot; and (5)
under common law, indemnitors are obliged to cover only those defense and settlement costs
First, Plaintiff Total Landscaping’s assertions that the arbitrator exceeded his power in
awarding judgment benefitting a third party are meritless. There exists rational support for these
portions of the Award. This Court, in determining whether an arbitrator exceeded authority under
9 U.S.C. §10, must review both the form and terms of the awarded remedy, to consider if such
remedy may be rationally derived from the agreement in question or the parties’ submissions to
the arbitrator. Sherrock Bros. v. Daimler Chrysler Motors Co., LLC, 260 F. App'x. 497 501 (3d
Indeed, there existed no privity between Plaintiff and Home Depot. It is not, however,
unreasonable to read the language of the indemnification and waiver provisions of the
Subcontractor Agreement between Plaintiff and Defendant USM, and conclude that Plaintiff can
and should be responsible for the defense costs for Home Depot, as assumed by Defendant USM.
More specifically, the waiver provision of the Subcontractor Agreement prohibits either party
from arbitrating on behalf of another party, or bringing forth a claim on behalf of another party.
The language of the waiver provision does not prohibit Tower Cleaning from submitting a
demand for arbitration to the AAA, as allowable under the Subcontractor Agreement, for its total
costs of defense in the Salva litigation, including its assumed defense costs of Home Depot.
Under these set of facts, Home Depot has no direct claim for indemnification against
USM, and thus the waiver provision did not prohibit USM’s claim for indemnification.
Additionally, the form of remedy set forth in the award is further supported by the indemnification
provision of the Subcontractor Agreement, which triggers Plaintiff’s indemnification obligation
“from and after the time when any Indemnified Party receives notification (whether verbal or
written) that a claim or demand has been made or is to be or may be made.” Thus, the Court
rejects Plaintiff’s contention that “claims for indemnification [do] not accrue until the underlying
claim has been paid by settlement or verdict, [and] cannot as a matter of law be pursued while the
underlying claim is still pending.”4
Pennsylvania law pronounces that the court shall decide upon the interpretation of
indemnity contracts, as a question of law. Invensys Inc. v. Am. Mfg. Corp., 2005 U.S. Dist.
LEXIS 3961, at *12 (citing Jacobs Constructors, Inc. v. NPS Energy Services, Inc., 264 F.3d 365,
371 (3d Cir. 2001). Generally, indemnity clauses are to be construed against the party seeking
The cases cited by Plaintiff which support the proposition that indemnification claims may only be adjudicated upon
the finality of the underlying lawsuit are distinguishable from the case at hand. Here, the Subcontractor Agreement, unlike the
agreements at issue in the cases cited by Plaintiff, includes specific language showing that parties expressly intended that Plaintiff
Total Landscaping would be required to indemnify USM and its customers from the time that the indemnified party (USM or its
customer) received either verbal or written notice of a claim. This language is very different from the traditional, general
indemnification provisions at issue in the case law cited by Plaintiff, none of which expressed an intention for the indemnifying
party to assume costs of indemnification before the underlying claim is final. See McClure v. Deerland Corp., 585 A.2d 19
(Pa.Super. 1991) (finding against specific performance of indemnification obligation where the contract at issue contained a
general indemnification clause silent on the issue on when the indemnification obligation would be triggered); Kelly v. Thackray
Crane Rental, 874 A.2d 649 (Pa.Super. 2005) (concluding that a claim for indemnification was not yet ripe where the underlying
claims were still pending, where specific language of indemnification provision at issue was not provided); F.J. Schindler
Equipment Co. v. Raymond Co., 418 A.2d 533 (Pa.Super. 1980) (affirming lower court’s finding that indemnification claim was
premature where underlying suit was not yet final, without mention of the specific language of the indemnification clause at
issue); Martinique Shoes, Inc. v. New York Progressive Wood Heel Co., 217 A.2d 781 (Pa.Super. 1966) (finding that indemnitor
insurance company was not obliged to indemnify the indemnitee where liability was unestablished in the underlying suit, where
relevant indemnification language was not stated); Invensys, Inc. v. American Mfg. Co., 2005 U.S. Dist. LEXIS 3961 (E.D.Pa.
2005)(granting motion to dismiss against Plaintiff corporation seeking to enforce indemnification language of Asset Purchase
Agreement against manufacturing company indemnitor, where indemnification provision in question included general language
and was silent on when conditions triggering indemnitor’s obligation).
indemnification, "because the nature and purpose of any indemnity agreement involves the
shifting and voluntary assumption of legal obligations." In interpreting indemnity agreements,
courts should examine the parties’ intentions by reviewing the language of the indemnity
provision at issue. Id. (Citations omitted). In the present matter, Plaintiff and Defendants
expressly contracted to have Plaintiff’s indemnification obligations conditioned upon the mere
receipt of notification of a claim or demand by the indemnified parties. If the parties intended a
different result, more general or differing indemnification language would have been used,
showing an intention of the parties to have Plaintiff’s indemnification obligation triggered solely
by settlement or final judgment on the merits in the underlying claim. The indemnification clause
at issue contains no such language.
Accordingly, the form and term of the arbitrator’s award, ordering Plaintiff to “assume the
defense of USM and Home Depot in [the] Salva litigation and reimburse USM all costs of
defense, including attorneys fees, incurred to date and, [to] indemnify USM for any amounts paid
or to be paid on its and/or Home Depot's behalf via settlement/verdict of the underlying Salva
claim” was appropriate, and rationally supported by the Subcontractor Agreement between the
parties. For the same reasons as stated above, the Court also finds that the Award did not show
manifest disregard of the law.
Moreover, because neither Home Depot nor Salva have direct claims against USM under
the Subcontractor Agreement, they were not required parties for the arbitrator proceedings,
contrary to Plaintiff’s assertion. This provides rational support for the arbitrator allowing the
arbitration proceedings to proceed without Home Depot and Salva as parties.
Additionally, the Court declines to accept Plaintiff’s contention that the award for attorneys
fees was in appropriate. It is well established that arbitrators possess wide latitude to issue flexible
remedies, including those outside of those contemplated under the agreement in question. Ogden
Allied Services Corp. v. Local 36, Service Employees Int'l Union, 1990 U.S. Dist. LEXIS 15976,
at *16 (E.D. Pa. Nov. 27, 1990) (citations omitted). Thus, the portion of the Award requiring
Plaintiff to cover USM’s arbitration costs was rational and appropriate given the latter’s expenses
to bring the arbitration claim, and the absences of a clause to the contrary in the Subcontractor
In this case, Plaintiff Total Landscaping has failed to overcome its burden of providing
sufficient evidence to prove that the arbitrator’s award should be vacated under the narrow
allowances of 9 U.S.C. §10. Accordingly, Plaintiff’s motion for judgment on the pleadings, or
judgment as a matter of law, also fail.
Plaintiff’s Additional Claims
Additionally, Plaintiff Total Landscaping challenges the legality of the arbitrator’s decision
under the Pennsylvania Declaratory Judgments Act, 42 Pa. Cons. Stat. Ann. § 7540, and questions
whether an arbitrator has the authority to enter declaratory judgment.
The Court, under the authority granted to it pursuant to 9 U.S.C. § 9,5 hereby upholds the
arbitrator’s award as a proper and appropriate judgment that is hereby deemed as entered by this
Court, based on the rationale discussed above. Thus, the Plaintiff’s challenges concerning the
The Federal Arbitration Act, 9 U.S.C. § 9, reads as follows:
If the parties in their agreement have agreed that a judgment of the court shall be entered upon the award made
pursuant to the arbitration, and shall specify the court, then at any time within one year after the award is made any party to the
arbitration may apply to the court so specified for an order confirming the award, and thereupon the court must grant such an
order unless the award is vacated, modified, or corrected as prescribed in sections 10 and 11 of this title [9 USCS §§ 10, 11]. If
no court is specified in the agreement of the parties, then such application may be made to the United States court in and for the
district within which such award was made. Notice of the application shall be served upon the adverse party, and thereupon the
court shall have jurisdiction of such party as though he had appeared generally in the proceeding. If the adverse party is a resident
of the district within which the award was made, such service shall be made upon the adverse party or his attorney as prescribed
by law for service of notice of motion in an action in the same court. If the adverse party shall be a nonresident, then the notice of
the application shall be served by the marshal of any district within which the adverse party may be found in like manner as other
process of the court.
The parties, in the Subcontractor Agreement, agreed to jurisdiction by this Court, pursuant to the following
Governing Law and Jurisdiction provision:
THE LAWS OF THE STATE OF PENNSYLVANIA SHALL GOVERN THE VALIDITY, PERFORMANCE,
INTERPRETATION, AND EFFECT OF THIS AGREEMENT. IF AN ARBITRATOR DOES NOT HAVE JURISDICTION, A
CLAIM CAN NOT BE ARBITRATED AS A MATTER OF LAW, OR IF THERE IS AN APPEAL FROM OR RELATING TO
AN ARBITRATION, THEN THE PARTIES AGREE TO THE JURISDICTION AND VENUE OF THE COURTS IN
MONTGOMERY COUNTY, PENNSYLVANIA OR THE UNITED STATES DISTRICT COURT FOR THE EASTERN
DISTRICT OF PENNSYLVANIA IN PHILADELPHIA.
legality of the arbitrator’s decision under the Pennsylvania Declaratory Judgments Act, and the
arbitrator’s authority to enter declaratory judgment are moot.
Lastly, Plaintiff alleges that the arbitrator’s award ran afoul of the Rules of the AAA, as the
award went beyond the scope of the Subcontractor Agreement. For the reasons discussed above,
the Court rejects this argument, and finds that the Award was rational, and within the bounds of a
reasonable interpretation of the Subcontractor Agreement.
For the foregoing reasons, this Court finds that as a matter of law, upon consideration of
evidence presented by the Plaintiff, that the arbitration award in this matter must be confirmed.6
Accordingly, Plaintiff Total Landscaping’s motion for judgment on the pleadings is denied, and
Defendant USM’s motion for summary judgment is granted. An appropriate order follows.
BY THE COURT:
/s/ Petrese B. Tucker
Hon. Petrese B. Tucker, U.S.D.J.
If there arises a question of reasonableness of the amounts required of Plaintiff to cover indemnification costs under
the Award, the parties shall, pursuant to the Arbitration clause of the Subcontractor Agreement, submit their dispute to the AAA,
and Defendant USM shall provide evidence of its defense costs for itself and Home Depot in the Salva litigation for review by
the arbitrator under Pennsylvania law.
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