SERINE v. MARSHALL, DENNEHEY, WARNER, COLEMAN & GOGGIN et al

Filing 16

MEMORANDUM. SIGNED BY HONORABLE BERLE M. SCHILLER ON 8/5/2015. 8/5/2015 ENTERED AND COPIES E-MAILED.(amas)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
ERICA A. SERINE,
Plaintiff,
v.
MARSHALL, DENNEHEY, WARNER,
COLEMAN & GOGGIN, and
CHRISTOPHER E. DOUGHERTY, ESQ.,
Defendants.

:
:
:
:
:
:
:
:
:
:

CIVIL ACTION

No. 14-4868

MEMORANDUM
Schiller, J.

August 5, 2015

Erica Serine sued her former employer, alleging a failure to reasonably accommodate her
disability in violation of the Americans with Disabilities Act (“ADA”) (Count I) and the
Pennsylvania Human Rights Act (“PHRA”) (Count II), unlawful termination in violation of the
ADA (Count III) and the PHRA (Count IV), and intentional infliction of emotional distress
(Count V). Defendants previously moved to dismiss all counts. This Court dismissed only Count
V, which was brought against both Defendants. The remaining counts are only against Defendant
law firm Marshall, Dennehey, Warner, Coleman & Goggin (“Marshall Dennehey”).
Marshall Dennehey now moves to compel arbitration, pursuant to an arbitration clause in
Serine’s employment contract. Serine opposes the motion and argues that Marshall Dennehey
has waived its right to compel, in large part due to its active participation in this case so far. For
the following reasons, the Court grants the motion to compel arbitration and stays proceedings in
this case.

I.

BACKGROUND AND PROCEDURAL HISTORY
The facts of the case, stated briefly below, are set out in detail in this Court’s previous

opinion, Serine v. Marshall, Dennehey, Warner, Coleman & Goggin (Serine I), 2015 WL
803108 (E.D. Pa. Feb. 25, 2015). Serine is an attorney licensed in Pennsylvania. (Compl. ¶ 1.)
From July 2010 to January 2013, she was an employee of Marshall Dennehey. (Id. ¶¶ 19, 107.)
Serine transferred, at her own request, to Marshall Dennehey’s Philadelphia office in the fall of
2012. (Id. ¶¶ 39-44.) She subsequently developed symptoms of a debilitating mental condition,
which she terms claustrophobia—in part triggered by heights and elevators—such that she was
unable to work at her assigned office on the twenty-fourth floor. (Id. ¶¶ 46-48.) Serine asked to
move to one of Marshall Dennehey’s several other locations, with an office on a lower floor, but
her request was denied. (Id. ¶¶ 71-79.) She and Marshall Dennehey engaged in some negotiation
about her condition and working arrangements over the course of several months, while Serine
largely worked from her own home. (Id. ¶¶ 61-80.) Eventually, Marshall Dennehey fired Serine,
giving rise to the claims in this lawsuit. (Id. ¶¶ 93-106.)
Serine filed her Complaint on August 15, 2014. Marshall Dennehey responded with a
Motion to Dismiss on October 14, 2014. This Court decided that motion on February 25, 2015,
dismissing Count V and thereby dismissing individual Defendant Christopher Dougherty. Serine
I, 2015 WL 803108. Marshall Dennehey then contacted Serine’s attorney to discuss the
arbitration clause within days of this Court’s decision. (Reply Br. of Def. Marshall Dennehey
Warner Coleman & Goggin in Supp. of Its Mot. to Compel [Reply Br.] at 3-4; Pl.’s Mem. of
Law in Opp. to Def.’s Mot. to Compel Arbitration [Pl.’s Mem.], Cert. of Ellen McDowell, Esq.
[McDowell Cert.] ¶¶ 8-9.) Plaintiff’s counsel responded to request a copy of the arbitration
agreement, which Marshall Dennehey sent. (Reply Br. at 4; McDowell Cert. ¶ 9.) Marshall

2

Dennehey apparently followed up via email every few weeks to ask about arbitration, but did not
receive a reply. (Reply Br. at 4.) Serine does not contest this claim. Serine changed counsel
during that time, but her new counsel likewise did not reply to repeated inquiries about
arbitration. (Id. at 4-5; McDowell Cert. ¶ 9.) Marshall Dennehey filed the instant motion to
compel arbitration on May 29, 2015.

II.

LEGAL STANDARD
Generally, “any doubts concerning the scope of arbitrable issues should be resolved in

favor of arbitration, whether the problem at hand is the construction of the contract language
itself or any allegation of waiver, delay, or a like defense to arbitrability.” Gray Holdco, Inc. v.
Cassady, 654 F.3d 444, 451 (3d Cir. 2011) (quoting Moses H. Cone Mem. Hosp. v. Mercury
Const. Corp., 460 U.S. 1, 24-25 (1983)). The Court will only find that a party has waived its
right to arbitrate “where the demand for arbitration came long after the suit commenced and
when both parties had engaged in extensive discovery.” Id. (quotation omitted).
The touchstone for the Court to find waiver is prejudice to the party opposing the
arbitration. Ehleiter v. Grapetree Shores, Inc., 482 F.3d 207, 222-23 (3d Cir. 2007). The Third
Circuit has outlined six nonexclusive factors for the Court to consider in determining whether
such prejudice exists in Hoxworth v. Blinder, Robinson & Co., 980 F.2d 912 (3d Cir. 1992):
[1] the timeliness or lack thereof of a motion to arbitrate . . . [; 2]
the degree to which the party seeking to compel arbitration has
contested the merits of its opponent’s claims; [3] whether that
party has informed its adversary of the intention to seek arbitration
even if it has not yet filed a motion to stay the district court
proceedings; [4] the extent of its non-merits motion practice; [5] its
assent to the court’s pretrial orders; and [6] the extent to which
both parties have engaged in discovery.

3

Id. at 926-27. The inquiry is holistic and context-dependent, encompassing both substantive
prejudice and prejudice resulting from procedural delay or expense prior to the invocation of the
right to arbitrate. Nino v. Jewelry Exch., Inc., 609 F.3d 191, 209 (3d Cir. 2010).

III.

DISCUSSION
The Court finds that Serine has not suffered prejudice due to Defendant’s conduct thus

far and Defendant has therefore not waived its right to arbitrate. The Court analyzes the
Hoxworth factors as follows.
The first factor is the timeliness of the motion to arbitrate. Here, Defendant waited nine
and a half months from the filing of the Complaint to file this motion. This is only slightly less
than the ten-month delays weighing in favor of waiver in In re Pharmacy Benefit Managers
Antitrust Litigation (PBM), 700 F.3d 109, 118 (3d Cir. 2012) and Gray Holdco, 654 F.3d at 454.
See also Nino, 609 F.3d at 210 (finding waiver with a fifteen month delay); Hoxworth, 980 F.3d
at 925 (finding waiver with an eleven month delay). It is also more than the two- or fewer-month
delays that weighed against waiver in Palcko v. Airborne Express, Inc., 372 F.3d 588, 598 (3d
Cir. 2004), PaineWebber Inc. v. Faragalli, 61 F.3d 1063, 1069 (3d Cir. 1995), and Wood v.
Prudential Insurance Company of America, 207 F.3d 674, 680 (3d Cir. 2000). Serine argues
strenuously that nine and a half months is far too long in light of this precedent.
Unlike in PBM, Gray Holdco, Nino, and Hoxworth, however, Defendant here offers some
plausible explanation for its delay. Defendant claims that it waited until Dougherty was
dismissed from the case, because he was not subject to the mandatory arbitration clause.
Defendant claims that the Hoxworth “timeliness” factor should therefore be calculated from the
time Dougherty was dismissed and not from the filing of the Complaint. Shortly after this

4

Court’s decision to dismiss Dougherty, Defendant filed its Answer. The Answer raised the
arbitration clause as an affirmative defense. Defendant also attempted to make arrangements
with Plaintiff’s counsel to attend arbitration at this point. Defendant further claims—and Serine
does not contest—that the delay between Dougherty’s dismissal and Defendant’s filing of this
motion to compel is largely due to Serine’s counsel’s failure to respond to Defendant’s informal
inquiries about arbitration.
The Court finds no support in the caselaw for measuring timeliness from anything other
than the filing of the Complaint. However, the Court concludes that Defendant has provided a
plausible explanation for most of the nine and a half months that elapsed between the Complaint
and this motion. That is sufficient to distinguish this case from the insufficiently-explained
delays in PBM, Gray Holdco, Nino, and Hoxworth. On balance, the Court finds that a nine and a
half month delay weighs slightly in favor of finding waiver, but much less so than it would if it
were unexplained.
The second Hoxworth factor is the extent to which the party seeking arbitration has
contested the merits of the case. Here, Defendant filed one motion to dismiss—and waited for
the Court to issue its ruling dismissing Dougherty—before filing this motion to compel.
Defendant’s motion to dismiss tested the sufficiency of Plaintiff’s entire Complaint. The motion
to dismiss was only fifteen pages, however, and stayed within the four corners of the Complaint,
not seeking to attach any further evidence or exhibits. The parties did not request, and the Court
did not hold, any oral argument or hearings on the matter.
For this factor, too, Defendant’s actions straddle the acceptable line of conduct for
finding waiver or no waiver. The Third Circuit has found in the past that a single merits-based
motion to dismiss did not waive a right to arbitration, reasoning: “[W]e do not understand how

5

[the plaintiff] could be prejudiced by the Court’s having decided [to dismiss one claim and keep
another]. For this decision to be prejudicial, we would have to presume that an arbitrator would
have decided the merits of the claim differently—a presumption we cannot make.” Wood, 207
F.3d at 680. Other cases in which the Third Circuit found waiver include one in which the parties
litigated a full motion for summary judgment, Ehleiter, 482 F.3d at 223; one with a motion to
dismiss for failure to state a claim as well as an opposition to a motion for class certification,
Hoxworth, 980 F.2d at 925-26; and one with a lengthy motion to dismiss followed by a motion
for reconsideration, with both motions raising significant issues outside the scope of the
pleadings, PBM, 700 F.3d at 118. On balance, the second Hoxworth factor weighs slightly
against finding waiver in this case, as Defendant’s single motion to dismiss was relatively
restrained in comparison to other cases finding waiver.
The third factor is whether Defendant informed Plaintiff of its intent to seek arbitration
prior to filing the motion to compel. In many cases in which a court has found waiver, the party
seeking arbitration communicated nothing about arbitration to its opponent prior to filing a
motion to compel. E.g., PBM, 700 F.3d at 118-19; Ehleiter, 482 F.3d at 210-11; Gray Holdco,
654 F.3d at 457. In those cases, the party seeking arbitration typically raised the issue of
arbitration in some manner—either formally, in a court filing such as an answer, or informally,
for instance in discussions with the opposing party—prior to filing a motion to compel. E.g.,
Palcko, 372 F.3d at 598; PaineWebber, 61 F.3d at 1065; Wood, 207 F.3d at 680.
Here, Defendant raised arbitration as one of its affirmative defenses in its Answer.
Defendant also contacted opposing counsel multiple times to discuss scheduling arbitration after
filing its Answer and, on request, sent opposing counsel a copy of the arbitration clause.
Defendant claims—and Plaintiff does not dispute—that Plaintiff’s counsel was essentially

6

unresponsive to Defendant’s repeated inquiries. Plaintiff’s argument centers on the fact that
Defendant did not raise the issue of arbitration until after this Court’s decision on the motion to
dismiss, when Defendant filed its Answer. However, this argument is actually a restatement of
Plaintiff’s argument as to timeliness under the second Hoxworth factor. It does not address the
third factor—communication between the parties—at all. The Court finds this factor to weigh
against finding waiver.
The fourth factor is the extent to which the party seeking arbitration engaged in nonmerits motion practice. There has been virtually no non-merits motion practice in this case.
Defendant has filed one notice of appearance for each of its two litigators and a single Praecipe
to Attach the exhibit that it initially forgot to attach to its Motion to Compel. None of these basic
procedures were contested, nor were they frivolous or unnecessary. They are certainly less than
the non-merits motion practice in certain cases in which courts have found waiver. See Nino, 609
F.3d at 212; Hoxworth, 980 F.2d at 925-26. At the “low end” of non-merits practice in cases
finding waiver is PBM, in which the party seeking arbitration filed a motion for certification of
an interlocutory appeal, seeking relief not available in to it in arbitration. 700 F.3d at 119.
Defendant’s non-merits practice certainly does not rise to this level. The Court finds this factor
weighs against waiver.
The fifth factor is Defendant’s acquiescence to the Court’s pretrial orders. The Court has
only entered one pretrial order so far in this case, setting the date for the Rule 16 scheduling
conference. Defendant filed its motion to compel after the Court’s order, but before the
conference itself. Defendant subsequently participated in the conference, at which the parties
discussed their dispute as to Defendant’s motion. Defendant’s conduct regarding the Rule 16
order and conference is substantially different from cases in which this factor was found to favor

7

waiver. In many cases finding waiver, for instance, the party seeking arbitration attended
between three and ten pretrial conferences without objection and without raising the issue of
arbitration. Gray Holdco, 654 F.3d at 459-60; Hoxworth, 980 F.2d at 925; Nino, 609 F.3d at 212.
On the other end of the spectrum, cases finding no waiver often involved no acquiescence to
pretrial orders, simply because they were not litigated long enough. PaineWebber, 61 F.3d at
1065; Gavlik, 526 F.2d at 783-84. In this case, Defendant filed its motion to compel in time to
discuss the issue at the conference with the Court, effectively objecting to any further
progression towards trial. The Court finds this factor to weigh against waiver.
The sixth factor is the extent to which the parties have engaged in discovery. Defendant
has not served any discovery requests. Plaintiff claims that she began to prepare discovery, but
“only held off in light of Marshall Dennehey’s belated advice of its intent to insist upon
arbitration.” (Pl.’s Mem. at 10.) According to Defendant, Plaintiff in fact did serve written
discovery requests on Defendant, but not until more than a week after Defendant filed its Motion
to Compel. (Reply Br. at 9.) Cases finding no waiver tend to have no discovery. Palcko, 372
F.3d at 598; PaineWebber, 61 F.3d at 1096; Wood, 207 F.3d at 680. But see PBM, 700 F.3d at
120 (finding waiver, where lack of discovery was the only factor weighing against waiver).
Cases finding waiver tend to have had significant exchanges of discovery from both sides—
including multiple depositions, interrogatories, document requests and exchanges, and/or
discovery-related motion practice—prior to the attempt to compel arbitration. Nino, 609 F.3d at
213; Ehleiter, 482 F.3d at 224; Hoxworth, 980 F.2d at 925-26; Gray Holdco, 654 F.3d at 460. In
this case, Plaintiff’s insistence that she began to prepare her discovery, and service of written
requests well after Defendant notified her of its intent to seek arbitration, rings hollow at best.
This factor weighs heavily against finding waiver.

8

In sum, Defendant has not waived its right to compel arbitration. Although it fully
litigated a single motion to dismiss prior to raising the issue of arbitration, Defendant gave a
plausible reason for pursuing that motion prior to raising the issue of arbitration and did not
waste excessive time or resources in doing so. Defendant’s conduct since the Court’s decision on
that motion has been fully consistent with an intent to arbitrate in a timely manner, including
informal attempts to discuss arbitration with Plaintiff prior to filing the motion to compel and an
abstention from the rest of the litigation and discovery process while pursuing its goal of
arbitration. Plaintiff has not been prejudiced by Defendant’s conduct.

IV.

CONCLUSION
For the foregoing reasons, the Court grants Defendant’s motion to compel arbitration and

stays proceedings in this case. An Order consistent with this Memorandum will be docketed
separately.

9