Burns, J. v. Philly Trampoline Parks

Citation: Not availableDocket: 3544 EDA 2016

Court: Superior Court of Pennsylvania; October 31, 2017; Pennsylvania; State Appellate Court

Original Court Document: View Document

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Philly Trampoline Parks, Delco, LLC, operating as Sky Zone Indoor Trampoline Park, appeals a court order from October 18, 2016, that overruled its preliminary objections to a complaint filed by Joseph and Dawn Burns. The Burns allege that Joseph sustained a fractured ankle due to Sky Zone's negligence during a visit on May 11, 2014. Their claims cite insufficient safety measures, defective equipment, lack of proper instructions, and inadequate warnings about trampoline use. Joseph seeks damages for his injury, while Dawn asserts a derivative loss of consortium claim.

Sky Zone contends that the case should be submitted to arbitration based on a Participant Agreement signed by Joseph, which waives the right to a jury trial and mandates arbitration for disputes within one year of signing. Since the lawsuit was filed on April 6, 2016, nearly two years after the Agreement was executed, Sky Zone argues that the claims are time-barred and that an exculpatory clause within the Agreement releases them from liability.

In response, the Burns assert that Joseph did not sign the Agreement; rather, Dawn completed forms on a computer. They also argue that even if Joseph had signed, the Agreement is unenforceable due to being a contract of adhesion and unconscionable. The court allowed 60 days for discovery regarding the Agreement's validity. Following depositions of both Appellees and the facility manager, Sky Zone submitted further legal arguments on September 12, 2016, in support of its objections. The appellate court ultimately affirmed the lower court's decision.

Sky Zone contends that the Agreement mandates arbitration for Appellees' claims, establishes a one-year limitation for bringing claims, and denies liability for any alleged negligence. Appellees counter that Joseph Burns did not authorize Dawn Burns to sign the Agreement on his behalf. The trial court, on October 18, 2016, overruled Sky Zone's preliminary objections and ordered them to respond to Appellees' complaint. Sky Zone subsequently filed an answer and a notice of appeal, raising several questions regarding the trial court's decisions. These include whether the trial court erred in not compelling arbitration, allowing Joseph Burns to contest the validity of the Agreement based on alleged forgery, and whether Joseph Burns should be estopped from denying the Agreement's burdens given he received benefits from it. Additionally, Sky Zone's motion for reconsideration was deemed moot due to the pending appeal. They further question whether the trial court prematurely ruled on the Agreement's validity, which should have been determined by a jury. The standard of review centers on whether the trial court's findings are supported by substantial evidence and whether it abused its discretion in denying arbitration.

Contract interpretation is a legal issue reviewed de novo with a plenary scope. The court applies a two-part test to evaluate whether arbitration should be compelled: first, whether a valid arbitration agreement exists, and second, whether the dispute falls within the agreement's scope. Sky Zone claims the arbitration agreement is valid and binding, arguing that the trial court erred by not compelling arbitration despite the Appellees' claims being within the agreement's scope. The primary issue on appeal is the existence of a valid arbitration agreement. 

Appellees contend that Joseph Burns did not personally sign the agreement; rather, Dawn Burns signed it on his behalf. Sky Zone has not provided evidence to dispute this claim. To validate the agreement for Joseph Burns, Sky Zone must demonstrate an agency relationship between him and Dawn Burns at the time of execution. Such a relationship cannot be assumed solely based on familial ties. The court recognizes four types of agency: express, implied, apparent, and authority by estoppel. 

Express authority arises when a principal explicitly grants authority. Implied authority refers to actions necessary to execute express authority. Apparent authority occurs when a principal leads others to believe an agent has authority. Authority by estoppel applies when a principal fails to correct a third party's belief in an agent’s authority. The burden of proof for establishing an agency relationship lies with the party asserting it. 

Sky Zone has not shown that Joseph Burns expressly authorized Dawn Burns to sign the agreement. It claims implied authority based on her role in registrations and apparent authority because she handled the enrollment process while Joseph Burns used the restroom. Additionally, Sky Zone argues that the doctrine of agency by estoppel applies, asserting that the Appellees were careless in allowing the Sky Zone employee to believe that Joseph Burns had signed the agreement. The doctrine necessitates that the principal either intentionally or negligently creates a belief in an agency relationship, combined with third-party reliance on that belief.

The trial court analyzed Sky Zone's claims about an agency relationship and found no basis for implied or apparent authority regarding Dawn Burns' ability to sign an Agreement on behalf of Joseph Burns. Joseph Burns testified that he did not authorize Dawn to complete paperwork or sign on his behalf, nor did he know of the Agreement until after his injury. The court noted that there were no prior interactions between Sky Zone's employees and Dawn Burns that would suggest she had apparent authority. Additionally, Sky Zone could not demonstrate that Joseph Burns was aware of or should have known about the Agreement. Consequently, the trial court determined that Dawn Burns lacked authority to execute the Agreement, rendering Joseph Burns not legally bound by it. The court emphasized that a valid agreement to arbitrate is necessary for enforcement, and since no such agreement existed, the validity of the Agreement was appropriately determined by the court, not a jury. The trial court's decision regarding the Agreement's invalidity was supported by substantial evidence, and the appellate review confirmed the court's jurisdictional authority to assess the existence of an arbitration agreement.

Where no factual issues are present, courts resolve preliminary objections based solely on the pleadings. However, when such objections raise factual disputes, the Rules of Civil Procedure mandate that courts consider evidence through depositions or other means. If a factual issue arises, the trial court cannot make determinations based solely on its interpretation of the facts but must resolve the matter by considering evidence through interrogatories, depositions, or evidentiary hearings. In this case, Sky Zone's preliminary objections raised factual questions regarding the signatory of the Agreement and the existence of an agency relationship between Joseph and Dawn Burns. The trial court allowed sixty days for discovery to address these issues, leading to depositions of the involved parties and subsequent supplemental legal memoranda. The court appropriately utilized this evidence to determine that the Agreement was neither valid nor binding on Joseph Burns. The order was affirmed, the case was remanded, and jurisdiction was relinquished, with Judge Shogan concurring and Judge Bowes dissenting. Judgment entered on 10/31/2017.