Court Opinion

ID: 4522834
Source: CourtListenerOpinion
Date Created: 2020-04-06 18:10:45.777465+00
Date Added: 2024-06-11T09:25:54.899031
License: Public Domain

J-A17007-19

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

    MACKIN MEDICAL, INC.                       :   IN THE SUPERIOR COURT OF
                                               :        PENNSYLVANIA
                                               :
                v.                             :
                                               :
                                               :
    LINDQUIST & VENNUM LLP D/B/A               :
    LINDQUIST & VENNUM D/B/A                   :
    LINDQUIST & VENNUM P.L.L.P.;               :   No. 1817 EDA 2018
    MARK A. JACOBSON, ESQUIRE;                 :
    MARK PRIVRATSKY, ESQUIRE;                  :
    CHRISTOPHER SMITH, ESQUIRE;                :
    BALLARD SPAHR ANDREWS &                    :
    INGERSOLL LLP D/B/A BALLARD                :
    SPAHR                                      :
                                               :
                       Appellants              :

                 Appeal from the Order Entered June 4, 2018
     In the Court of Common Pleas of Philadelphia County Civil Division at
                      No(s): February Term, 2018 No. 4

BEFORE: PANELLA, P.J., OLSON, J., and FORD ELLIOTT, P.J.E.

MEMORANDUM BY OLSON, J.:                                 FILED APRIL 06, 2020

       Lindquist & Vennum, LLP, et al. (hereinafter “Appellant”),1 appeals from

the order entered on June 4, 2018, which overruled its preliminary objection

to compel arbitration. We vacate and remand.

       Mackin Medical, Inc. (“Mackin Medical”) retained Appellant as legal

counsel to represent it on certain matters. As the trial court explained:

____________________________________________

1Although there are multiple named appellants, for ease of understanding we
will refer to the appellants as a singular “Appellant” throughout this
memorandum.
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       On December 11, 2013, [Appellant] sent a letter to Mackin
       Medical setting the scope and terms of its engagement . . .
       as follows:

          Scope of Our Engagement. You have retained the Firm
          to represent Mackin Medical in connection with antitrust
          and competition issues. While the Firm is available to
          work with you on a wide range of other matters, this will
          confirm that our engagement at this point is limited to the
          performance of services solely in the matter described
          above.

       [Appellant] attached and incorporated to its retainer letter a
       document titled “Engagement Terms and Policies.” This
       [document] includes the following dispute resolution
       provision:

          [Dispute Resolution. Although we look forward to a
          mutually rewarding relationship, in the unlikely event of
          a dispute, including a dispute regarding the amount or
          payment of fees and expenses we may have a duty or the
          right to withdraw from representation as provided by the
          applicable rules of professional conduct.] In the event of
          a dispute, controversy or claim arising out of or relating
          to our fees, costs, billing practices or this engagement,
          we mutually agree that any such dispute, controversy or
          claim will be submitted to mandatory binding arbitration
          before a single arbitrator in Minneapolis, Minnesota, in an
          arbitration administered by the American Arbitration
          Association [(“AAA”)] under its Commercial Arbitration
          Rules. The decision of the arbitrator will be final and
          binding on the parties. Judgment on the award rendered
          by the arbitrator may be entered in any court having
          jurisdiction thereof. Arbitration has the advantage of
          generally being faster, less expensive and more informal
          than traditional litigation and any decision is final and
          binding. It does not provide, however, for the assurance
          of as much pre-hearing discovery, public trial by jury, or
          appeal.     Arbitration filing fees are typically more
          expensive, and the parties are responsible for paying the
          arbitrator.     Your signature on the accompanying
          engagement letter acknowledges your informed consent
          to use of arbitration to resolve disputes with us.

                                   -2-
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                                     ...

        On December 12, 2013, Mackin Medical executed the retainer
        letter with its incorporated engagement terms without
        independent counsel review.

Trial Court Opinion, 12/26/18, at 2-3 (footnote omitted).

     On February 2, 2018, Mackin Medical filed a complaint against Appellant

in the Court of Common Pleas of Philadelphia County, alleging that Appellant

was professionally negligent in advising and representing Mackin Medical.

Within the complaint, Mackin Medical averred:

        20. At all relevant times, Mackin Medical was in the business
        of renting medical equipment and devices including
        GreenLight™ Lasers to hospitals, doctors and trained medical
        professionals.

        21. Before December 2013, Mackin Medical purchased
        GreenLight™ lasers to rent to medical providers and did so
        pursuant to a “Mobile Provider Distribution Agreement” (“the
        Agreement”) with the GreenLight™ Laser patent owner, AMS.

        22. Though the physical GreenLight™ lasers were owned
        outright by Mackin Medical, each instance of operation of the
        lasers required a one-time-use GreenLight™ Fiber Units and
        one-time-use software cards.

        23. The terms of the Agreement provided that both the Fiber
        Units and software cards were not owned outright by Mackin
        Medical, but rather were subject to a limited license from AMS
        and subject to certain conditions.

        24. In December 2013, following a request by AMS to amend
        [] the terms of the Agreement, Mackin Medical retained
        [Appellant] to provide legal counsel regarding the Agreement
        to represent its interest in any contract negotiations with
        AMS.

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        25. Though [Appellant] attempted to re-negotiate the terms
        of the Agreement, they were ultimately unsuccessful and the
        contract was terminated with AMS.

        26. [Appellant] advised Mackin Medical it was free to continue
        to rent out the GreenLight™ laser technology owned by
        Mackin Medical without any contractual Agreement with AMS,
        provided that no GreenLight™ or AMS trademarks were used
        or referenced.

        27. Relying on this advice, Mackin Medical continued to rent
        out the GreenLight™ lasers to its customers in 2014 through
        August [] 2016 without any contractual Agreement with
        [AMS] rather than selling the GreenLight™ lasers outright.

Mackin Medical’s Complaint, 2/2/18, at ¶¶ 20-27.

      As Mackin Medical alleged, Appellant’s advice – that Mackin Medical may

continue renting the GreenLight lasers – was professionally negligent and

caused it harm. Id. at ¶¶ 41-48.

      Appellant filed preliminary objections to the complaint and sought to

compel arbitration, in accordance with the arbitration provision contained in

the retainer agreement. See Appellant’s Preliminary Objections, 4/5/18, at

1-8. Mackin Medical answered Appellant’s preliminary objections and claimed:

the arbitration provision is invalid and unenforceable because Mackin Medical

was not “fully informed of the scope and effect of the agreement;” the

arbitration provision is invalid and unenforceable because a confidential

relationship exists between Mackin Medical and Appellant and there is no

evidence that Mackin Medical agreed to the provision “with an understanding

and knowledge of its nature, terms and consequences;” the arbitration

provision is invalid and unenforceable because it violates Pennsylvania Rule of

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Professional Conduct 1.8; and, even if the provision were enforceable, the

provision is ambiguous as to whether it encompasses legal malpractice claims

and, under our canons of construction, the current matter must be viewed as

falling outside the scope of the provision. See Mackin Medical’s Answer to

Preliminary Objections, 4/20/18, 1-7; Mackin Medical’s Memorandum of Law

in Opposition to Appellant’s Preliminary Objections, 4/20/18, at 1-17.

         Neither Appellant nor Mackin Medical sought discovery or a hearing on

the issues and no discovery or hearing on the preliminary objections took

place.

         On June 4, 2018, the trial court overruled Appellant’s preliminary

objections. Within its order, the trial court ruled that there was an ambiguity

as to whether the arbitration provision applied to a legal malpractice claim;

and, since Appellant drafted the agreement, the trial court held that the

ambiguity must be construed against Appellant.         See Trial Court Order,

6/4/18, at 1; but see Provenzano v. Ohio Valley Gen. Hosp., 121 A.3d
1085, 1096-1097 (Pa. Super. 2015) (“any doubts concerning the scope of

arbitrable issues should be resolved in favor of arbitration”) (quotations and

citations omitted).

         Appellant filed a timely notice of appeal.2   Within the trial court’s

subsequent Rule 1925(a) opinion, the trial court seemingly abandoned its

____________________________________________

2 “An order overruling preliminary objections seeking to compel arbitration is
immediately appealable as an interlocutory appeal as of right pursuant to 42

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“ambiguity” justification and, instead, reasoned that it was required to

overrule Appellant’s preliminary objections because the arbitration provision

violated both Pennsylvania Rule of Professional Conduct 1.8(h)(1) and

1.8(a)(1). The trial court declared:

         [an o]bjective reading of [Appellant’s] retainer letter and its
         incorporated engagement terms compels a finding that the
         law firm failed to reasonably disclose the prospective
         limitations the firm was placing on its own liability for
         malpractice. This is because the retainer and its incorporated
         terms violate both [Pennsylvania Rule of Professional
         Conduct] 1.8(h)(1) and [] 1.8(a)(1), the latter providing: “A
         lawyer shall not enter into a business transaction with a client
         . . . unless . . . the transaction and terms on which the lawyer
         acquires the interest are fair and reasonable to the client and
         are fully disclosed in a manner that can reasonably be
         understood by the client.”

Trial Court Opinion, 12/26/18, at 6.

       Appellant raises three claims in its brief:

         1. Did the trial court err in holding that an arbitration
         provision in a lawyer’s engagement agreement with a client
         is a prospective limitation on the lawyer’s malpractice liability
         that is “substantively unconscionable” and in violation of
         Rules 1.8(h)(1) and 1.8(a)(1) of the Pennsylvania Rules of
         Professional Conduct?

         2. Does the Federal Arbitration Act [(“FAA”)], which requires
         enforcement of arbitration agreements on an equal footing
         with all other contracts, preempt the trial court’s holding that
         a lawyer’s engagement agreement with a client containing an
         arbitration clause cannot be enforced unless the lawyer
         advises the client to consult with independent counsel, where

____________________________________________

Pa.C.S.A. § 7320(a) and Pa.R.A.P. 311(a)(8).”       Cardinal v. Kindred
Healthcare, Inc., 155 A.3d 46, 49 n.1 (Pa. Super. 2017).

                                           -6-
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        no such requirement exists for the enforcement of an
        engagement agreement without an arbitration clause?

        3. Did the trial court err in holding that the parties’ broad
        arbitration agreement, which encompassed any “dispute,
        controversy or claim arising out of or relating to . . . this
        engagement,” was ambiguous because it did not explicitly
        mention “malpractice” or “legal negligence,” and did the
        [trial] court further err in then holding that such asserted
        ambiguity precluded enforcement of the arbitration
        agreement?

Appellant’s Brief at 4.

      We have explained:

        Our review of a claim that the trial court improperly
        [overruled] the appellant's preliminary objections in the
        nature of a petition to compel arbitration is limited to
        determining whether the trial court's findings are supported
        by substantial evidence and whether the trial court abused
        its discretion in [overruling the preliminary objections]. In
        doing so, we employ a two-part test to determine whether
        the trial court should have compelled arbitration. First, we
        examine whether a valid agreement to arbitrate exists.
        Second, we must determine whether the dispute is within the
        scope of the agreement. . . . If the two-part test results in
        affirmative answers, then the controversy must be submitted
        to arbitration. . . .

        Whether a claim is within the scope of an arbitration provision
        is a matter of contract, and as with all questions of law, our
        review of the trial court's conclusion is plenary. In making
        these determinations, courts must bear in mind: (1)
        arbitration agreements are to be strictly construed and not
        extended by implication; and (2) when parties have agreed
        to arbitrate in a clear and unmistakable manner, every
        reasonable effort should be made to favor the agreement
        unless it may be said with positive assurance that the
        arbitration clause involved is not susceptible to an
        interpretation that covers the asserted dispute. To resolve
        this tension, courts should apply the rules of contractual
        constructions, adopting an interpretation that gives
        paramount importance to the intent of the parties and

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        ascribes the most reasonable, probable, and natural conduct
        to the parties. In interpreting a contract, the ultimate goal is
        to ascertain and give effect to the intent of the parties as
        reasonably manifested by the language of their written
        agreement.

TTSP Corp. v. Rose Corp., 217 A.3d 1269, 1280 (Pa. Super. 2019)

(quotations and citations omitted).

      First, Appellant claims that the trial court erred in concluding that the

arbitration   provision   violates   Rules   1.8(h)(1)   and   1.8(a)(1)   of   the

Pennsylvania Rules of Professional Conduct. We agree.

      Pennsylvania Rule of Professional Conduct 1.8(h)(1) provides:

        (h) A lawyer shall not

              (1) make an agreement prospectively limiting the
              lawyer’s liability to a client for malpractice unless the
              client is independently represented in making the
              agreement.

Pa.R.P.C. 1.8(h)(1).

      Here, the arbitration provision declares that any dispute “arising out of

or relating to . . . this engagement . . . will be submitted to mandatory binding

arbitration before a single arbitrator . . . in an arbitration administered by the

[AAA] under its Commercial Arbitration Rules.”             Retainer Agreement,

Engagement Terms and Policies, at 3. Neither Mackin Medical nor the trial

court has provided a cogent argument or claim as to how the AAA’s

Commercial Arbitration Rules would or could limit Appellant’s liability to

Mackin Medical for malpractice.

                                       -8-
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      To be sure, Rule 47(a) of the AAA’s Commercial Arbitration Rules

broadly states that the “arbitrator may grant any remedy or relief that the

arbitrator deems just and equitable and within the scope of the agreement

of the parties.”   AAA Commercial Arbitration Rules, Rule 47(a) (emphasis

added). Thus, the AAA’s Commercial Arbitration Rules do not limit Appellant’s

potential liability to Mackin Medical. Instead, the rules provide the arbitrator

with the authority to grant “any remedy or relief that the arbitrator deems

just and equitable.”   Further, nothing in the parties’ agreement limits the

broad grant of authority to the arbitrator to award “any remedy or relief that

the arbitrator deems just and equitable.”

      Within the trial court’s opinion, the trial court reasons that the

arbitration provision prospectively limits Appellant’s liability to Mackin Medical

because “procedural differences exist between courts and [AAA arbitration].”

Trial Court Opinion, 12/26/18, at 6 n.13. The trial court specifically cites the

limited pre-hearing discovery and the limitation on the right of a party to

appeal that exist in arbitration proceedings. Id. However, as the trial court

recognizes, these are procedural differences between courts and AAA

arbitration. The procedural differences do not, in any way, prospectively limit

the substantive scope of Mackin Medical’s potential claims against Appellant

or limit Appellant’s liability to Mackin Medical. Rather, Appellant’s potential

liability to Mackin Medical remains subject to the arbitrator’s broad power to

“grant any remedy or relief that the arbitrator deems just and equitable.” AAA

Commercial Arbitration Rules, Rule 47(a).

                                      -9-
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       Thus, we conclude that the trial court’s decision in this case directly

contravenes the plain language of Pennsylvania Rule of Professional Conduct

1.8(h)(1).

       Further, the trial court’s decision is contrary to Comment 14 of Rule 1.8.

Comment 14 to the rule declares:

         [14] Agreements prospectively limiting a lawyer's liability for
         malpractice are prohibited unless the client is independently
         represented in making the agreement because they are likely
         to undermine competent and diligent representation. Also,
         many clients are unable to evaluate the desirability of making
         such an agreement before a dispute has arisen, particularly
         if they are then represented by the lawyer seeking the
         agreement. This paragraph does not, however, prohibit
         a lawyer from entering into an agreement with the
         client to arbitrate legal malpractice claims, provided
         such agreements are enforceable and the client is fully
         informed of the scope and effect of the agreement.

Pa.R.P.C. 1.8 cmt. 14 (emphasis added).

       Thus, the comment to Rule 1.8 expressly states that the rule does not

“prohibit a lawyer from entering into an agreement with the client to arbitrate

legal malpractice claims, provided such agreements are enforceable and the

client is fully informed of the scope and effect of the agreement.” Id. Further,

to the extent Mackin Medical claims that it was not “fully informed of the scope

and effect of the agreement,” that issue implicates Pennsylvania Rule of

Professional Conduct 1.4(b) – not 1.8(h)(1).3       See Pa.R.P.C. 1.4(b) (“[a]

____________________________________________

3 Moreover, as will be explained below, any claim that Mackin Medical was not
“fully informed of the scope and effect of the [arbitration] agreement” fails.

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lawyer shall explain a matter to the extent reasonably necessary to permit the

client to make informed decisions regarding the representation”).

       We thus conclude that the arbitration provision in this case does not

“prospectively limit[ Appellant’s] liability to [Mackin Medical] for malpractice.”

See Pa.R.P.C. 1.8(h)(1).            Moreover, since the agreement does not

prospectively limit Appellant’s liability to Mackin Medical, the provision is not

unenforceable simply because Mackin Medical was not “independently

represented in making the agreement.”              See id.   The trial court erred in

concluding otherwise.

       Appellant also contends that the trial court erred in concluding that the

arbitration provision violates Pennsylvania Rule of Professional Conduct

1.8(a)(1).4 We agree that the trial court erred in this regard.

       Rule 1.8(a)(1) declares:

         (a) A lawyer shall not enter into a business transaction with
         a client or knowingly acquire an ownership, possessory,
         security or other pecuniary interest adverse to a client
         unless:

              (1) the transaction and terms on which the lawyer
              acquires the interest are fair and reasonable to the client
              and are fully disclosed and transmitted in writing in a
              manner that can be reasonably understood by the client.

Pa.R.P.C. 1.8(a)(1).

____________________________________________

4 As explained above, within the trial court opinion, the trial court declared
that it overruled Appellant’s preliminary objections because the arbitration
provision violates both Pennsylvania Rule of Professional Conduct 1.8(h)(1)
and 1.8(a)(1).

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     The arbitration provision in this case is found within a retainer

agreement between a lawyer and a client.            Simply stated, the retainer

agreement does not constitute a “business transaction with a client” pursuant

to Rule 1.8(a)(1). See, e.g., Pa.R.P.C. 1.8 cmt. 1 (“[a] lawyer's legal skill

and training, together with the relationship of trust and confidence between

lawyer and client, create the possibility of overreaching when the lawyer

participates in a business, property or financial transaction with a

client, for example, a loan or sales transaction or a lawyer investment

on behalf of a client. . . . [Rule 1.8] does not apply to ordinary fee

arrangements between client and lawyer, which are governed by Rule

1.5”) (emphasis added).       Therefore, Rule 1.8(a)(1) does not apply to this

dispute.

     Next, Appellant contends that the trial court’s decision violates the FAA.

As the United States Supreme Court has explained:

           The FAA was designed to overrule the judiciary's
           long-standing refusal to enforce agreements to arbitrate and
           to place such agreements upon the same footing as other
           contracts. While Congress was no doubt aware that the
           [FAA] would encourage the expeditious resolution of
           disputes, its passage was motivated, first and foremost, by a
           congressional desire to enforce agreements into which
           parties had entered. . . . [The FAA] simply requires courts to
           enforce privately negotiated agreements to arbitrate, like
           other contracts, in accordance with their terms.

Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Junior Univ., 489
U.S. 468, 478 (1989) (quotations and citations omitted).

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      In keeping with this, the Supreme Court held that “generally applicable

contract defenses, such as fraud, duress, or unconscionability, may be applied

to invalidate arbitration agreements without contravening” the FAA. Doctor’s

Assocs., Inc. v. Casarotto, 517 U.S. 681, 687 (1996). However, “[c]ourts

may not . . . invalidate arbitration agreements under state laws applicable

only to arbitration provisions.” Id.

      Here, the trial court invalidated the arbitration provision based solely

upon procedural differences that exist between courts and arbitration. See

Trial Court Opinion, 12/26/18, at 6 n.13.       In doing so, the trial court has

“singl[ed] out [this] arbitration provision[]” – and, in effect, all arbitration

provisions – “for suspect status” based solely upon procedural differences that

exist between adjudication before courts and arbitration.          This rationale

thwarts the will of Congress and violates the FAA. See Doctor’s Assocs.,
517 U.S. at 687.

      Third, Appellant claims that the trial court erred in ruling that the

arbitration provision was ambiguous. We agree.

      Within the trial court’s initial order in this case, the trial court declared

that it was overruling the preliminary objections because there was an

ambiguity as to whether the arbitration provision encompassed a legal

malpractice claim. According to the trial court, since Appellant drafted the

agreement, the ambiguity must be construed against Appellant; the trial court

thus held that the provision did not apply to legal malpractice claims. See

Trial Court Order, 6/4/18, at 1.

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      Although the trial court later abandoned its “ambiguity” justification in

its subsequent Rule 1925(a) opinion, its initial ruling regarding ambiguity was

never expressly overruled and is, thus, still present in this case. Therefore,

we must address this issue.

      The Pennsylvania Supreme Court has explained:

        Contractual language is ambiguous if it is reasonably
        susceptible of different constructions and capable of being
        understood in more than one sense. This is not a question to
        be resolved in a vacuum. Rather, contractual terms are
        ambiguous if they are subject to more than one reasonable
        interpretation when applied to a particular set of facts. We
        will not, however, distort the meaning of the language or
        resort to a strained contrivance in order to find an ambiguity.

Madison Constr. Co. v. Harleysville Mut. Ins. Co., 735 A.2d 100, 106 (Pa.

1999) (quotations and citations omitted).

      “Where . . . the language of the contract is clear and unambiguous, a

court is required to give effect to that language.” Id. (quotations and citations

omitted); see also Provenzano, 121 A.3d at 1096-1097 (“any doubts

concerning the scope of arbitrable issues should be resolved in favor of

arbitration”) (quotations and citations omitted).

      We conclude that the trial court’s determination that the arbitration

provision is ambiguous is incorrect and that the arbitration provision

unambiguously applies to legal malpractice claims. The arbitration provision

plainly declares:

        In the event of a dispute, controversy or claim arising out of
        or relating to our fees, costs, billing practices or this
        engagement, we mutually agree that any such dispute,

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        controversy or claim will be submitted to mandatory binding
        arbitration.

Retainer Agreement, Engagement Terms and Policies, at 3.

      The parties’ contract defines the term “engagement” as encompassing

“antitrust and competition issues.” Retainer Agreement, at 1.

      This contractual language is clear and unambiguous.           Further, the

language obviously encompasses legal malpractice claims, as:              a legal

malpractice claim is a “claim arising out of or relating to . . . this engagement”

and, other than a fee or billing dispute (which are specified in the agreement),

a legal malpractice claim is the principal dispute that could “arise out of or

relate to” an attorney-client engagement.        Thus, the trial court erred in

concluding that the arbitration provision was ambiguous.

      It is true that “we have the ability to affirm a [trial court’s] decision on

any grounds that are supported by the record.” Shamis v. Moon, 81 A.3d
962, 970 (Pa. Super. 2013). However, none of the other arguments proffered

by Mackin Medical support the trial court’s order in this matter.

      First, to the extent Mackin Medical argues that the legal malpractice

claim falls outside the scope of the arbitration agreement, this claim fails.

      Within its complaint, Mackin Medical claimed that Appellant was

professionally negligent in advising that Mackin Medical may continue to rent

the GreenLightTM lasers, despite the fact that Mackin Medical did not have a

contractual agreement with the GreenLightTM Laser patent owner, AMS, and

despite the fact that “each instance of operation of the lasers required a

one-time-use GreenLightTM Fiber Units and one-time-use software cards . . .

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[, which] were subject to a limited license from AMS and subject to certain

conditions.” See Mackin Medical’s Complaint, 2/2/18, at ¶¶ 20-27.

      The plain language in Mackin Medical’s complaint demonstrates that

Mackin Medical’s current claim arises out of and relates to the “competition

issues” Mackin Medical had with the GreenLightTM Laser patent owner; hence,

the claim falls within the scope of the arbitration provision.      Retainer

Agreement, at 1; Retainer Agreement, Engagement Terms and Policies, at 3.

      Second, within Mackin Medical’s response in opposition to Appellant’s

preliminary objections, Mackin Medical claimed that the arbitration provision

was invalid and unenforceable because Mackin Medical was not “fully informed

of the scope and effect of the agreement.” See Mackin Medical’s Answer to

Preliminary Objections, 4/20/18, 1-7. This claim fails.

      Mackin Medical’s claim stems from Comment 14 to Pennsylvania Rule of

Professional Responsibility 1.8. Comment 14 declares that Rule 1.8(h)(1):

        does not . . . prohibit a lawyer from entering into an
        agreement with the client to arbitrate legal malpractice
        claims, provided such agreements are enforceable and the
        client is fully informed of the scope and effect of the
        agreement.

Pa.R.P.C. 1.8 cmt. 14.

      However, in this case, Mackin Medical was “fully informed of the scope

and effect of the [arbitration] agreement.”     To be sure, the arbitration

provision in this case:   is written in plain, easily understood language; is

separately-paragraphed with the bolded title “Dispute Resolution;” is

contained in a short, seven-page retainer agreement that is type-written in a

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normal font and size; plainly declares that any “dispute, controversy or claim

. . . arising out of or relating to . . . this engagement . . . will be submitted to

mandatory binding arbitration;” (as explained above) plainly applies to legal

malpractice claims; and, sets forth and explains some of the costs and benefits

of arbitration.   With respect to this last point, the arbitration provision

specifically declares:

         The decision of the arbitrator will be final and binding on the
         parties. Judgment on the award rendered by the arbitrator
         may be entered in any court having jurisdiction thereof.
         Arbitration has the advantage of generally being faster, less
         expensive and more informal than traditional litigation and
         any decision is final and binding. It does not provide,
         however, for the assurance of as much pre-hearing
         discovery, public trial by jury, or appeal. Arbitration filing
         fees are typically more expensive, and the parties are
         responsible for paying the arbitrator.

Retainer Agreement, Engagement Terms and Policies, at 3.

      This arbitration provision fully informed Mackin Medical of the scope and

effect of the agreement.        Thus, this claim in opposition to Appellant’s

preliminary objections fails.

      Finally, within its response in opposition to Appellant’s preliminary

objections, Mackin Medical claimed the arbitration provision was invalid and

unenforceable because a confidential relationship existed between Mackin

Medical and Appellant and there was no evidence that Mackin Medical agreed

to the provision “with an understanding and knowledge of its nature, terms

and consequences.” See Mackin Medical’s Memorandum of Law in Opposition

to Appellant’s Preliminary Objections, 4/20/18, at 1-17. This claim also fails.

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      Mackin Medical’s claim relies upon Paone v. Dean Witter Reynolds,

Inc., where we held:

        A contract that is the product of a confidential relationship is
        presumptively voidable unless the party seeking to sustain
        the validity of the transaction affirmatively demonstrates that
        it was fair under all of the circumstances and beyond the
        reach of suspicion. More precisely, the proponent of the
        contract must prove by clear and convincing evidence that
        the contract was free, voluntary and an independent act of
        the other party, entered into with an understanding and
        knowledge of its nature, terms and consequences.

Paone v. Dean Witter Reynolds, Inc., 789 A.2d 221, 226 (Pa. Super. 2001)

(footnote, quotations, and citations omitted).

      Mackin Medical’s claim fails because the arbitration provision was

contained in the initial retainer agreement between Appellant and Mackin

Medical and Mackin Medical did not allege or produce any evidence that a

confidential relationship existed between the parties prior to the signing of the

agreement. Therefore, at the time the arbitration provision was agreed to, a

confidential relationship did not exist between the parties; the provision, thus,

was not “the product of a confidential relationship.”       See id. (emphasis

added). Hence, Mackin Medical’s claim fails.

      In conclusion, since the arbitration provision is enforceable and

encompasses the parties’ current dispute, we must vacate the trial court’s

order in this case.

      Order vacated. Case remanded. Jurisdiction relinquished.

      President Judge Emeritus Ford Elliott joins.

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     President Judge Panella files a Dissenting Statement.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 4/6/2020

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