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Defense Digest

Waiving the Right to Seek Arbitration: New Court Ruling Limits Parties’ Ability to Seek to Enforce Arbitration Clause

Defense Digest, Vol. 27, No. 1, January 2021

January 29, 2021

by Elizabeth A. Underwood

Key Points:

  • A recent ruling in the Pennsylvania Superior Court limits the time for a party to seek to enforce an arbitration provision.
  • A party must seek to enforce an arbitration provision before it seeks to obtain other favorable rulings from the court to prevent waiver of the right to seek arbitration.
  • Waiver can occur even if the pleadings remain open if the parties have sought other rulings from the court prior to requesting arbitration.

As a matter of public policy, the Courts of the Commonwealth of Pennsylvania continue to strongly favor the settlement of disputes by arbitration. However, a party wishing to enforce an arbitration provision can waive its right to elect arbitration if it does not promptly seek to enforce such a contractual provision. In the recent case DiDonato v. Ski Shawnee, Inc., 2020 WL 6280080 (Pa. Super. Oct. 27, 2020), the Pennsylvania Superior Court further clarified and limited the circumstances under which a party may seek to enforce an agreement to arbitrate. Specifically, the Superior Court found that two defendants who sought to enforce an arbitration agreement contained within an enrollment contract for the defendant, Blair Academy, signed by the decedent’s mother, waived their right to assert arbitration because they participated in the judicial process, particularly by attempting to obtain favorable rulings from the court prior to seeking to enforce the arbitration agreement.

Specifically, in DiDonato, the plaintiff, Ruth DiDonato, administratrix of the estate of J.D., a minor, initiated a lawsuit in the Court of Common Pleas of Philadelphia County against the defendant, Ski Shawnee, and defendants Blair Academy and John Padden (the Academy defendants), arising from a skiing accident that resulted in the death of a student at Blair Academy. In response to the complaint, the Academy defendants and Ski Shawnee filed preliminary objections as to venue, alleging that venue in Philadelphia County was improper and that the case should be transferred to the Monroe County Court of Common Pleas. The Academy defendants did not raise the existence of a contract requiring the arbitration of the plaintiffs’ claims in their preliminary objections. Thereafter, both the Academy defendants and Ski Shawnee entered into a stipulation with the plaintiff to strike certain paragraphs and claims from the complaint.

Further, while the preliminary objections were pending, the Academy defendants filed a petition for removal to the United States District Court for the Eastern District of Pennsylvania. Ultimately, the District Court ruled that removal was improper and remanded the case to state court. Upon remand, the parties engaged in discovery limited to the issue of venue raised in both defendants’ preliminary objections. During this discovery period, the Academy defendants did not produce the enrollment contract in response to a request for “any document which refers, relates to or evidences any communication between you and [Decedent].” Approximately nine months after the complaint was filed, the Philadelphia Court of Common Pleas granted the preliminary objections as to venue and transferred the case to the Court of Common Pleas of Monroe County.

Upon transfer to Monroe County, prior to filing an answer to the complaint, the Academy defendants filed a motion to sever and to compel arbitration. In their motion, for the first time, the Academy defendants produced and sought to enforce the enrollment contract which contained a clause requiring any and all claims against the Academy defendants to be resolved in arbitration. The Academy defendants also filed an answer, raising the arbitration clause in its new matter. The plaintiff opposed the motion to compel arbitration, arguing, among on other grounds, that the defendant waived the right to arbitration by waiting nearly a year to raise the issue. The trial court granted the motion, in part, compelling the estate’s survival claim and the mother’s wrongful death claim against the Academy defendants to arbitration.

On appeal, the Pennsylvania Superior Court reversed, holding that the Academy defendants waived their right to assert the arbitration clause because of their delay in seeking arbitration. Despite the public policy in favor of arbitration, the court noted that when “a party avails itself of the judicial process,” including by attempting to win favorable rulings through the courts, that party waives the right to assert and enforce an arbitration provision. The court set forth the following factors to assess whether a party has availed itself of the judicial process such that the right to arbitration is waived, specifically, whether the party:

(1) failed to raise the issue of arbitration promptly;

(2) engaged in discovery;

(3) filed pretrial motions that do not raise the issue of arbitration;

(4) waited for adverse rulings on pre-trial motions before asserting arbitration; or

(5) waited until the case is ready for trial before asserting arbitration.

O’Donnell v. Hovanian Enterprises, Inc., 29 A.3d 1183, 1187 (Pa. Super. 2011). 

Of significance for the court was the Academy defendants’ use of court proceedings in an apparent attempt to gain a strategic advantage in the case, specifically by: (1) filing preliminary objections as to venue; (2) seeking to remove the case to federal court; and (3) entering stipulations to dismiss various counts within the complaint prior to raising the issuing of arbitration. Further, the court was troubled by the fact that the Academy defendants had not produced, cited to, or in any way referenced the enrollment contract containing the arbitration provision for nearly a year, until they attached it to their motion to compel arbitration. Although the court rejected the plaintiff’s argument that the failure to raise the arbitration provision in preliminary objection, as a matter of law, waives the defendants’ right to assert arbitration, the Superior Court stressed that, in this case, the totality of the defendants’ actions as described above—requiring the plaintiff to extensively litigate the removal and venue issues prior to the defendant raising the claim for arbitration, prejudiced the plaintiff such that a waiver was warranted.

Given the ruling in DiDonato, it is imperative to assess at the very beginning of the litigation whether an applicable arbitration provision exists and to make the strategic assessment whether to raise the provision or to proceed in court. The decision to assert an arbitration provision cannot be considered a “back-up” strategy prior to other legal maneuverings, as courts are likely to rule that the party has waived the right to assert the arbitration provision if it is not raised as the primary defense to a complaint.

*Beth is a shareholder in our Philadelphia, Pennsylvania office. She can be reached at (215) 575-2599 or eapope@mdwcg.com.

Defense Digest, Vol. 27, No. 1, January 2021 is prepared by Marshall Dennehey Warner Coleman & Goggin to provide information on recent legal developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. ATTORNEY ADVERTISING pursuant to New York RPC 7.1. © 2021 Marshall Dennehey Warner Coleman & Goggin. All Rights Reserved. This article may not be reprinted without the express written permission of our firm. For reprints, contact tamontemuro@mdwcg.com.

Firm Highlights

Thought Leadership

Appeals Court Reverses Trial Court Order Striking Complaint as Sanction for Violating Discovery Order

All Dry USA v. Savell, 2026 WL 816093 (Fla. 1st DCA 2026) The First District Court of Appeal reversed the trial court’s order denying All Dry USA’s complaint as a sanction for violating a discovery order. The appellate court found that All Dry USA’s failure to comply with the trial court’s case management order did not give the trial court the authority to strike All Dry USA’s pleadings. All Dry USA provided water mitigation, mold remediation, and a restorative tarp at the property owned by the Savells. The property had been damaged by Hurricane Sally. All Dry USA provided invoices for the three services it performed in the amount of $90,130.61. The Savells refused to pay the invoices, stating that while they had retained All Dry USA, there was no agreement reached regarding the cost of the services. All Dry USA proceeded to file a lawsuit against the Savells, alleging breach of contract and unjust enrichment. The Savells answered the lawsuit and served discovery upon All Dry USA. All Dry USA failed to respond to the discovery requests and the Savells moved for an order compelling discovery. The trial court issued an order compelling All Dry USA to respond to Savells discovery requests and comply with all outstanding discovery deadlines per the case management order. On the day its responses were due, All Dry USA filed a motion to extend the deadline to comply with the court’s order. Before the motion was ruled upon, the Savells filed a motion to have All Dry USA’s complaint stricken for violating the trial court’s order compelling All Dry USA’s responses. The trial court granted the motion to strike, and then granted the Savell’s request for entry of default final judgment, based upon there no longer being an operative complaint. The First District Court of Appeal reversed, ruling that an order striking pleadings is justified if it is found that a party has violated numerous discovery orders, or has shown a “deliberate and contumacious disregard of the court's authority.” Mercer v. Raine, 443 So. 2d 944, 946 (Fla. 1983). The appellate court stated that a trial court’s authority to strike pleadings is not unbridled and that the situation before the court did not justify the striking of All Dry USA’s pleadings. In reaching its decision, the First District focused on the fact that the trial court only addressed the potential prejudice to Savell by All Dry USA failing to respond to discovery and seeking an extension of the deadline. The appellate court stated that prejudice is not the only factor to be considered and that the trial court needed to address if All Dry USA’s behavior in failing to comply with the discovery order was willful and deliberate.  The First District also stated that nothing in rule 1.200 or 1.380 grants a trial court the authority to strike a pleading because certain case management deadlines are not met. The appellate court held that the Florida Rules of Civil Procedure allow trial courts to bring the parties in, order them to comply with the case management discovery deadlines, and then strike pleadings if the subsequent discovery orders are disobeyed. This ruling shows the importance of understanding the authority that is binding on the trial court a party is appearing in front of. The First District’s view on a trial court’s ability to strike pleadings is in contrast with other appellate court’s throughout Florida.

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Result

Summary Judgment Secured, Preserving $750,000 in Coverage for Insured in Major Trucking Liability Dispute

Ray Freudiger and Michael A. Roberts (both of Cincinnati) successfully obtained summary judgment on behalf of their client in a coverage dispute arising from a May 19, 2022, motor vehicle accident. A permissive driver operated a box truck for an interstate trucking company and caused severe injuries to two tort victims. Prior to the accident, the insured had procured a commercial auto policy for the trucking company with stated limits of $1,000,000. Following the accident, the insurer initiated a declaratory judgment action asserting that only reduced bodily injury limits of $25,000/$50,000 applied and later counterclaimed, alleging it would not have insured the driver had he been properly submitted for approval under the policy. After extensive discovery, briefing, and oral argument, the court rejected the insurer’s attempt to shift responsibility for the $750,000 in coverage it was legally required to provide for permissive drivers under Ohio law, granting summary judgment in favor of the insured and preserving $750,000 in liability exposure.

Thought Leadership

Unanimous New Jersey Supreme Court Holds That Personal Emails of Public Employees and Officials are Subject to OPRA

In Rosetti v. Ramapo-Indian Hills Regional High School Board of Education, the New Jersey Supreme Court unanimously held that government-related emails, which are contained within personal email accounts, are government records under the Open Public Records Act (OPRA), and a log of those emails must be produced when requested. In reaching this decision, the court conducted an analysis of the OPRA and cited previous cases that held that emails do in fact fall within OPRA’s definition of a record and must be produced when requested pursuant to the Act. The court in Rosetti then had to answer the question as to whether public officials’ personal email accounts that are used for government purposes are subject to OPRA, and found that they are. Rosetti made an OPRA request to the Board of Education seeking email logs from Board members’ personal email accounts. The Board refused to produce the logs and indicated that it was not under any obligation to produce personal email account logs, only from government-related email accounts. The issue was whether a log had to be produced for Board members’ personal email accounts, which they used to conduct Board business. The Board argued that while it was possible to create a log for government-related email accounts through its IT Department, it was not possible to do so for personal email accounts. The court rejected this argument and ruled that Board members are required to search their personal email accounts and create a log of government-related emails housed in those accounts. Once completed, each Board member then must submit a certification detailing the searches that were conducted. The court went one step further with a suggestion to government employees and officials, stating, “[g]overnment agencies should strongly advise their employees, elected officials, and others engaged in government-related business to refrain from using their personal email accounts when conducting government-related business.”  Please do not hesitate to contact me with any questions regarding this case and others pertaining to the OPRA. 

Portrait of Thomas Glassman. Text: Joining our Cincinnati Office as a Shareholder in the Casualty Department

News

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blue facade of a hospital sign against blue sky

Result

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Thought Leadership

Perlmutter Provides Predictability for Punitive Damages Claims in Florida

In a much anticipated decision, the Florida Supreme Court provided clarity for the standards of proof for punitive damages claims in Perlmutter v. Federal Insurance Company, SC2024-0058 (Fla. June 11, 2026). Litigants and trial judges must be mindful of the standards laid out by the Court. And, defense practitioners must be prepared to alter their strategies to defend against such claims. Perlmutter came to the Court from the Fourth District, based on conflict jurisdiction with decisions from the Second and Fifth District and on certification of a question of great public importance as to the standard of proof for punitive damages claims at the pleading stage. Fed. Ins. Co. v. Perlmutter, 376 So. 3d 24, 29 (Fla. 4th DCA 2023). In the underlying case, the Fourth District made two conclusions. First, it held that a “trial court must consider the evidentiary showing by all parties at the hearing on the motion to amend, that is, evidence ‘in the record’ and evidence ‘proffered by the claimant.’”  376 So. 3d at 33. Second, the Fourth held that it “interpreted section 768.72(1) and (2) to require the trial court to make a preliminary determination of whether a reasonable jury, viewing the totality of proffered evidence in the light most favorable to the movant, could find by clear and convincing evidence that punitive damages are warranted.  Id. at 34 (underscoring in the original). In making these conclusions, the court cautioned trial courts that the “preliminary determination” analysis did not entitle the trial court to decide whether the evidence is clear and convincing and noted that the trial court should not weigh evidence and should not determine witness credibility. Id. The Florida Supreme Court accepted jurisdiction and answered the certified question in the negative. 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The trial court must consider the record evidence and the proffered evidence in the light most favorable to the plaintiff, but the allegations in the proposed amended complaint are not themselves evidence. Perlmutter, SC2024-0058 at 13-15 (emphasis added). In explaining these standards, the Court interpreted the text of the statute and compared it to a related statute which governs punitive damages in the nursing home context. The nursing home statute expressly calls for evidentiary submissions by “the parties” and expressly tells the trial court to determine whether there is a reasonable basis to believe the claimant could satisfy the “clear and convincing evidence” standard at trial. Id. at 17-18 (comparing the text of section 768.72(1), Florida Statutes, with section 400.0237, Florida Statutes). Without that express language in section 768.72, the statute could not be applied in the same manner. With these standards specially delineated for the trial courts, the Court is “confident that its interpretation of section 768.72(1) will not frustrate the effectiveness of the statute in accomplishing the Legislature’s textually evident purposes.” Id.  at 22 (cleaned up). This remains to be seen. While Perlmutter provides predictability and clarity for trial courts when reviewing the evidentiary submissions in support of a punitive damages claim, the decision will not likely impact the numbers of punitive damages motions filed. Rather, these new parameters will change the way claims are defended, reminiscent of a time when rulings on punitive damages were only subject to certiorari review and appellate courts were limited in reviewing procedural errors. This decision will likely deflate the level-playing field that Florida Rule of Appellate Procedure 9.130(a)(3)(G) addressed by allowing appeals of orders granting and denying punitive damages amendments. Further, Perlmutter may have impliedly created a call to action for the Legislature to amend section 768.72(1) in the same manner it amended section 400.0237 to allow the courts to analyze “admissible evidence submitted by the parties” and determine at a hearing whether there is a reasonable basis to believe the claimant at trial would be able to demonstrate by “clear and convincing evidence” that the recovery of punitive damages is warranted. Until then, defendants must adjust their strategies. To adapt to these new standards, defense practitioners will need to tailor their strategy for defending punitive damages claims since they can no longer submit a counter-proffer or urge a court to apply the clear and convincing standard at the pleading phase. Instead, defendants will need to attack the deficiencies in the claimant’s pleadings and proffer. If the trial court fails to serve as a gatekeeper, and does not apply the above standards, then defendants can pursue an interlocutory appeal under Rule 9.130(a)(3)(G). If a nonfinal appeal is taken, then defendants should move to stay any intrusive financial discovery while the appellate court analyzes the issues on appeal. Finally, defendants should utilize Florida Rule of Civil Procedure 1.510 to serve as a screening device to allow the trial court to analyze all evidence and prevent nonmeritorious punitive damages claims from proceeding to a jury.

News

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Marshall Dennehey took home top honors in three categories at the The Legal Intelligencer’s 2026 Pennsylvania Legal Awards, held June 11 in Philadelphia. The first place awards include: Attorney of the Year: John J. Hare, Chair of the firm’s Appellate Advocacy & Post-Trial Practice Group and Executive Committee member, together with Charles “Chip” Becker of Kline & Specter Litigation Department of the Year, Appellate – Third Win in a Row! Litigation Department of the Year, Product Liability/Mass Torts “There is no one more deserving of Attorney of the Year honors than John. This award is a testament to his exceptional skill, dedication, and leadership—qualities that truly exemplify the very best of our firm,” said G. Mark Thompson, Marshall Dennehey’s President & CEO. “These honors also reflect the strength and depth of our product liability, mass torts, and appellate practices across Pennsylvania and beyond, underscoring our ongoing commitment to delivering outstanding results for our clients.” Attorney of the Year – John J. Hare, Marshall Dennehey, together with Charles “Chip” Becker, Kline & Specter Over the past year, John and Charles were opposing counsel in many of the highest-profile civil appeals in Pennsylvania. John is renowned as a preeminent appellate lawyer on the defense side, and Chip on the plaintiff's side. They have opposed each other repeatedly, exhibiting peerless professionalism and exceptional civility, while zealously litigating under the unremitting pressure of high-profile litigation and record-setting verdicts totaling more than $3.5 billion. They have also collaborated, outside of litigation, on many commissions, committees, and projects of importance to the Pennsylvania judiciary and legal community. Litigation Department of the Year – Appellate Law, Winner (previous winner, 2025 and 2024) 2025 was another standout year for the firm’s Appellate Advocacy & Post‑Trial Practice Group, led by John J. Hare, which was retained to challenge many of Pennsylvania’s “nuclear” verdicts—awards exceeding $10 million. Notably, the department persuaded the Pennsylvania Superior Court to reverse a Philadelphia judgment of $1.09 billion, the largest judgment ever overturned by a Pennsylvania appellate court. The group’s 11 full‑time Pennsylvania‑based appellate lawyers are at the center of Pennsylvania’s most high-profile matters, bringing more than 150 years of combined appellate experience. They routinely handle post‑trial and appellate matters and are frequently engaged to participate in and monitor trials in high‑exposure cases to ensure that critical legal issues are properly raised and preserved for appeal. Litigation Department of the Year – Product Liability/Mass Torts, Winner This marks the first win for the firm’s Pennsylvania Product Liability and Mass Torts practices, which operate within our Casualty Department, managed by Matthew Schorr and Jeff Rapattoni. For almost five decades, Fortune 500 product manufacturers/distributors and their insurers have turned to these groups to defend their litigation. Led by Bradley D. Remick and Vlada Tasich, our Product Liability group’s success can be attributed to its commitment to keeping abreast of ever-changing legal theories, judicial viewpoints, and evolving technology impacting the product liability landscape. Our attorneys have successfully handled thousands of product liability matters in all jurisdictions across the state. Likewise, our mass tort litigation practice – divided into Asbestos & Mass Tort, and Environmental & Toxic Tort Litigation –  has defended manufacturers, distributors, contractors, and premises owners in thousands of personal injury and other claims. Led by Kevin E. Hexstall and Patrick T. Reilly, most attorneys in these groups have more than 20 years of experience, and our seasoned trial team has tried hundreds of cases to verdict, consistently achieving strong results through both trials and settlements. In addition to these awards, Marshall Dennehey was a Litigation Department of the Year finalist for Professional Liability.

Result

Unanimous Verdict Obtained in a Medical Malpractice Matter in Bergen County, New Jersey

Result

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