Litigation

On September 13, 2023, the Superior Court of Pennsylvania held that an arbitration clause in a home improvement contract was invalid because it failed to comply with the requirements of the Pennsylvania Home Improvement Consumer Protection Act (“HICPA”). In Freeman v. Akidelphia Creative Contracting, LLC, --- A.3d ----, 2023 WL 5944622 (Pa. Super. 2023), a unanimous, precedential opinion, the Superior Court held that “the trial court did not abuse its discretion in refusing to compel arbitration” where the arbitration clause met only one of the six requirements of 73 P.S. § 517.7(d).

This case arose from a 2021 home improvement contract between Jill Freeman and Akidelphia Creative Contracting, LLC and Akil Bowler (“Appellants”) for the renovation of Ms. Freeman’s Philadelphia condominium. The contract contained a “Dispute Resolution” provision purporting to mandate arbitration. Seven months after the contract was executed, Ms. Freeman notified Appellants that they were in default for failing to complete the work in a timely and workmanlike manner.

Ms. Freeman filed a civil action in state court raising claims for negligence and violations of HICPA and the Pennsylvania Unfair Trade Practices and Consumer Protection Law (“UTPCPL”). Appellants filed preliminary objections seeking to dismiss the complaint and compel arbitration based on the arbitration clause. The trial court overruled Appellants’ preliminary objections, finding that the arbitration clause failed to include five of the six requirements of § 517.7(d), which allowed the clause to be deemed void.

On appeal, the Superior Court observed that Appellants did not dispute that the arbitration clause failed to meet multiple requirement, including that the text of the clause be in capital letters and 12-point boldface type. The Superior Court found “no error in the trial court following the plain language of the statute and deeming the arbitration clause void,” and held that, “[a]bsent a valid arbitration clause under Section 517.7(d),” the trial court properly overruled Appellant’s preliminary objections.”