Arbitration: For Whom the Statute of Limitations Does Not Toll in Pennsylvania

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Gus Sara analyzes the case Morse v. Fisher Asset Management, LLC.

June 3, 2019
Gus Sara - The Subrogation Strategist

In Morse v. Fisher Asset Management, LLC, 2019 Pa. Super. 78, the Superior Court of Pennsylvania considered whether the plaintiff’s action was stayed when the trial court dismissed the plaintiff’s complaint after sustaining the defendants’ preliminary objections seeking enforcement of an arbitration clause in the contract at issue. The Superior Court—distinguishing between a defendant who files a motion to compel arbitration and a defendant who files preliminary objections based on an arbitration clause—held that, in the latter scenario, if the defendant’s preliminary objections are sustained, the statute of limitations is not tolled. This case establishes that, in Pennsylvania, plaintiffs seeking to defeat a challenge to a lawsuit based on a purported agreement to arbitrate need to pay close attention to the type of motion the defendant files to defeat the plaintiff’s lawsuit.

In Morse, the plaintiff entered into a contract with Fisher Asset Management (Fisher) in 2008 for investment-advisor services. The contract included a provision stating that any dispute, claim or controversy arising out of the agreement between the parties shall be determined by arbitration. In June 2009, the plaintiff filed a complaint against Fisher and two of its employees in the Court of Common Pleas of Allegheny County, alleging breach of fiduciary duty, breach of contract, negligence, and other claims. The defendants filed preliminary objections to the complaint seeking dismissal on grounds that the contract between the plaintiff and Fisher required that the dispute be determined by arbitration. The court sustained the preliminary objections and dismissed the complaint. The plaintiff did not appeal the court’s ruling.

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