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Carll v. Terminix International Company2/21/2002
uit and the arbitration award shall so provide.
The front of the agreement included the following language beneath the signature line and under the cancellation notice: "The Terms and Conditions on the reverse side, including the arbitration agreement are part of this Agreement." The agreement also contained a limitation of liability provision which states that notwithstanding any claim of negligence by Terminix, its sole responsibility is to "re-treat" the property.
If a valid arbitration agreement exists between the parties and the claim is within the scope of the agreement, the matter must be submitted to arbitration. Messa v. State Farm Ins. Co., 641 A.2d 1167 (Pa. Super. 1994). Appellants are correct in noting that this is in accord with Pennsylvania's public policy, which is to favor the settlement of disputes by arbitration. Children's Hospital of Philadelphia v. American Arbitration Ass'n, 331 A.2d 848 (Pa. Super. 1974). The question here, however, is whether this agreement to arbitrate is itself against public policy due to the limitation of authority afforded the arbitrators under the terms of the contract. This limitation directs that the arbitrator shall be powerless to hold Terminix responsible for, among other things, "special, incidental, consequential, exemplary or punitive damages." Thus, the arbitrator would be without authority to award Appellees damages for physical injuries which occurred due to Appellants' negligence. The trial court found that "given the circumstances of this case where ultrahazardous pesticides have been applied in a residential setting, it would be unconscionable and against public policy to compel arbitration and preclude Plaintiffs, including their minor children, from pursuing this action to vindicate their rights." Trial Court Opinion, 1/17/01, at 3.
"The phrase 'public policy' has been used in a general sense to mean that in certain egregious circumstances a contract will be declared void if it is 'so obviously for or against the public health, safety, morals or welfare that there is virtual unanimity in regard to it, that a court may constitute itself the voice of the community.'" Jeffrey v. Erie Ins. Exch., 621 A.2d 635, 640 (quoting Mamlin v. Genoe, 17 A.2d 407, 409 (Pa. 1941)). In this instance we are faced with a contract which denies the arbitrator the authority to award damages for personal injury which is alleged to have been caused by the application of a pesticide product in and around Appellees' home. It is the absence of the authority to afford relief for personal injury in this consumer contract which we find contrary to public policy.
In some instances courts have upheld limitation of damages provisions, but the courts look to the parties involved to ensure that there is no disparity between the entities in either bargaining power or sophistication. Moscatiello v. Pittsburgh Contractors Equipment Co., 595 A.2d 1190 (Pa. Super. 1991). Thus, under Pennsylvania law in a commercial setting a contractual provision limiting warranties, establishing repair or replacement as the exclusive remedy and excluding liability for special, indirect and consequential damages is generally valid and enforceable. New York State Electric & Gas Corp. v. Westinghouse Electric Co., 564 A.2d 919 (Pa. Super. 1989). However, in a consumer contract there is most often disparity between the parties.
This Court, in Lobianco v. Property Protection, Inc., 437 A.2d 417 (Pa. Super. 1981), considered the parties' rights under a consumer contract where the appellant sought to recover the value of jewelry stolen from her home when a burglar alarm system installed by the appellee failed to work.
The parties
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