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Universal Plumbing v. John C. Grimberg Co., Inc.
Citations: 596 F. Supp. 1383; 39 U.C.C. Rep. Serv. (West) 1610; 1984 U.S. Dist. LEXIS 22398Docket: Civ. A. No. 84-1534
Court: District Court, W.D. Pennsylvania; October 29, 1984; Federal District Court
The case involves Universal Plumbing and Piping Supply, Inc. (plaintiff) suing John C. Grimberg Company, Inc. (defendant) over a contract dispute, with jurisdiction based on diversity of citizenship. Grimberg, a Maryland corporation, solicited bids for pipe for a construction project in Virginia, to which Universal submitted a bid of $92,505.00, including specific terms in "Appendix A." Grimberg responded with a purchase order for $93,373.00, which included a "Disputes" clause mandating arbitration for claims and disputes. Grimberg's motion to dismiss argues that Universal's claims should be arbitrated according to this clause. Conversely, Universal contends that the terms in Appendix A require its written consent for the arbitration clause to be effective, which has not been provided. Both parties recognize that the resolution of the dispute must consider Pennsylvania's Uniform Commercial Code, specifically 13 Pa. C.S. 2207, which states that an acceptance can include additional or differing terms unless the offer restricts acceptance to its own terms or those additional terms materially alter the contract. The court ultimately denies Grimberg's motion to dismiss, indicating the need for further examination of the contractual terms. Universal's argument relies on 13 Pa. C.S. 2207(b)(1), asserting that the language in Appendix A effectively restricts acceptance to its terms, similar to the express limitation found in Reliance Steel Products Co. v. Kentucky Electric Steel Co. Despite Grimberg's claims of insufficient clarity, the court finds the language in Appendix A clear and effective. Additionally, under 13 Pa. C.S. 2207(b)(2), an arbitration clause introduced by one party constitutes a material alteration to the contract. Citing Just Born, Inc. v. Stein Hall Co. Inc., the court notes that an arbitration clause included in the defendant’s acknowledgment, which was not present in the plaintiff's purchase order, does not automatically form part of the contract without mutual assent. Pennsylvania law, as highlighted in Scholler Bros. Inc. v. Hagen Corp., requires clear intent for arbitration agreements; hence, the arbitration clause must be expressly agreed upon by both parties. The court concludes that, as most jurisdictions treat arbitration clauses as material alterations, such a clause likely does not become part of the contract without agreement. Grimberg's reference to 9 U.S.C. § 2 regarding the enforcement of arbitration clauses is deemed irrelevant until the clause is established as part of the contract, which is subject to state law governing contract formation.