Beware of Boilerplate ADR Provisions - Leech Tishman: Legal Services

Parties must carefully draft alternative dispute resolution provisions, or they may find subsequent disputes are not resolved according to the process they intended.

In a recent Pennsylvania case, Rivas v. CBK Lodge General Partner, LLC (3:19-CV-01948) (M. D. Pa), the Court addressed a third-party complaint for indemnity and contribution arising out of a personal injury case. Plaintiff sued defendant waterpark for injuries suffered on a waterslide at the defendant’s waterpark. Defendant waterpark filed a third-party complaint against the waterslide manufacturer for indemnity and contribution. The manufacturer filed a motion to dismiss, arguing that the construction contract between the waterpark and manufacturer required mediation of “any dispute … between the parties.” Since the waterpark did not first initiate mediation, the manufacturer argued that it could not maintain the lawsuit against the manufacturer. The waterpark countered that the mediation clause only applied to commercial disputes between the parties and did not extend to third-party indemnity and contribution claims. The Court rejected the waterpark’s argument, holding that the “any dispute” language in the mediation clause was clear and unqualified, and thus applied to all claims between the parties.

As a result, the waterpark was left to litigate the personal injury case in court while mediating the third-party indemnity claim against the manufacturer. Moreover, based on the contract’s forum selection clause, any litigation between the waterpark and manufacturer must be brought in New York, not Pennsylvania.

Thus, to ensure efficient dispute resolution, parties should not simply rely on boilerplate clauses. Instead, parties should carefully consider how they want to handle various types of disputes (e. g., contract disputes, personal injury) and draft dispute resolution language that clearly reflects their intentions for how these cases will be resolved.

For more information about boilerplate clauses and what to watch out for, please contact Leech Tishman Partner, Sally Griffith Cimini.

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Leech Tishman Fuscaldo & Lampl is a full-service law firm dedicated to assisting individuals, businesses, and institutions. Leech Tishman offers legal services in business restructuring & insolvency, construction, corporate matters, employment & labor, estates & trusts, intellectual property, litigation & alternative dispute resolution, and real estate. In addition, the firm offers a wide range of legal services to clients in the aviation & aerospace, cannabis, emerging cyber technologies, energy & natural resources, healthcare, and hospitality industries. Headquartered in Pittsburgh, PA, Leech Tishman also has offices in Chicago, Los Angeles, New York, Philadelphia, Sarasota, and Washington, D.C.