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J. A19025/02
2002 PA Super 227
PITTSBURGH LOGISTICS SYSTEMS, :
IN THE SUPERIOR COURT OF
INC.,
:
PENNSYLVANIA
:
Appellee
:
:
v.
:
:
PROFESSIONAL TRANSPORTATION AND :
LOGISTICS, INC.,
:
:
Appellant
:
No. 41 WDA 2002
Appeal from the Order dated December
5, 2001, in the Court of Common Pleas of Beaver
County, Civil Division, at No. 11079-2001.
BEFORE: FORD ELLIOTT, LALLY-GREEN, and HESTER, JJ.
OPINION BY LALLY-GREEN, J.:
Filed: July 11, 2002
¶1
Appellant, Professional Transportation and Logistics, Inc., appeals the
trial court order dated December 5, 2001, overruling, in part, its preliminary
objections in the nature of a petition to compel arbitration. We reverse.
¶2
The facts as found by the trial court are as follows:
In 1999, the parties entered into an agreement
under which [Appellant] was to provide services to
[Pittsburgh Logistics Systems, Inc., (PLS)] relating to
transportation services to [PLS'] customers. The
agreement spelled out specific responsibilities of the
parties and contained the following language
pertinent to the issue before the court[.]
"All claims, disputes and other matters
and questions arising out of or relating to
this agreement, or the breach thereof,
shall be resolved by means of arbitration
in accordance with the commercial rules
of the American Arbitration Association
...."

J. A19025/02
Exhibit A to the Complaint,
Paragraph 12.
On July 5, 2001, [PLS] initiated this action by filing a
Complaint against [Appellant]. The Complaint sets
forth four separate causes of action in four counts.
Count 1 is for intentional interference with a
prospective contractual relationship; Count 2 is for
breach of contract; Count 3 is for breach of fiduciary
and common law duties; and Count 4 is for
misappropriation of trade secrets.
The gravamen of each cause of action is [that
Appellant], while it [was] contractually obligated to
assist [PLS] in securing new customers, used
confidential and proprietary information of [PLS] to
assist a competitor in securing Niagra LaSalle, Inc.
as a customer instead of [PLS]. In Count 1, [PLS]
alleges that the foregoing conduct of [Appellant]
caused it to lose a financial opportunity and profits.
In Count 2, [PLS] alleges that the foregoing conduct
of [Appellant] constituted a breach of their contract
resulting in unspecified damages. In Count 3, [PLS]
alleges that [Appellant] had fiduciary duties to
protect and hold confidential the trade secrets and
proprietary information of [PLS] as a result of the
contract between the parties and the foregoing
conduct constituted a breach of those fiduciary
duties. In Count 4, [PLS] alleges that the defendant
wrongfully used [PLS'] trade secrets or disclosed
them to others as a result of which [PLS] lost
business and future potential business as well as
other unknown damages.
Trial Court Opinion, 12/5/01, at 1-2.
¶3
Appellant filed preliminary objections to PLS' complaint, claiming that
all counts contained therein are to be resolved by arbitration pursuant to the
agreement to arbitrate contained in the parties' contract. The trial court
overruled the preliminary objections as to Counts I, III, and IV, but
2

J. A19025/02
sustained them as to Count II, dismissing that Count. This timely appeal
followed.1
¶4
Appellant presents one issue for our review:
I.
Whether the Honorable Trial Judge abused his
discretion and/or committed an error of law by
failing to follow case precedent set forth by the
Pennsylvania Supreme Court in Ambridge
Borough Water Authority v. Columbia , 458
Pa. 546, 328 A.2d 498 (1974) and the
Pennsylvania Superior Court in Shadduck v.
Christopher J. Kaclik, Inc., 713 A.2d 635
(Pa. Super. 1998) and thus, abused his
discretion and/or erred by not holding that all
claims filed in [PLS'] Complaint be submitted to
compulsory arbitration as required in
accordance with the agreement between the
parties or by not dismissing the entire action.
Appellant's Brief at 4.
¶5
Our standard of review of a denial of 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 denying the petition." Midomo Co.,
Inc. v. Presbyterian Hous. Dev. Co., 739 A.2d 180, 186 (Pa. Super.
1999).
¶6
Where a party to a civil action seeks to compel arbitration of that
action, a two-part test is employed to determine if arbitration is required.

1 We note that this appeal is an interlocutory appeal as of right from the denial of a petition
to compel arbitration. Pa.R.A.P. 311(a)(8); 42 Pa.C.S.A. § 7320(a); Cooke v. Equitable
Life Assurance Soc'y of the United States, 723 A.2d 723, 726 (Pa. Super. 1999) (the
dismissal of preliminary objections in the nature of a motion to compel arbitration is
immediately appealable).
3

J. A19025/02
First, the trial court must determine if a valid agreement to arbitrate exists
between the parties. Id. Second, if the trial court determines that such an
agreement does exist, it must then determine if the dispute involved is
within the scope of the arbitration provision. Id. "The scope of arbitration is
determined by the intention of the parties as ascertained in accordance with
the rules governing contracts generally." Henning v. State Farm Mut.
Automobile Ins. Co., 795 a.2D 994, 996 (Pa. Super. 2002), citing, State
Farm Mut. Automobile Ins. Co. v. Coviello, 233 F.3d 710, 716 (3rd Cir.
2000).
¶7
Appellant argues that Ambridge, supra, and Shadduck, supra,
require PLS to litigate all of its claims against Appellant in arbitration
pursuant to the contract between the parties. The clause providing for
arbitration of disputes states in pertinent part:
All claims, disputes and other matters and questions
arising out of or relating to this Agreement, or the
breach thereof, shall be resolved by means of
arbitration in accordance with the commercial rules
of the American Arbitration Association, unless the
parties mutually agree otherwise.
Exhibit "A" to PLS' Complaint at 5.
¶8
Since neither party contests the existence or validity of the agreement
to arbitrate, our review focuses on whether the claims are within the scope
of the agreement to arbitrate. Thus, we first address Ambridge and
Shadduck.
4

J. A19025/02
¶9
In Ambridge, our Supreme Court held that where a dispute arises
between parties to a contract concerning the contract and the contract
contains an unlimited arbitration clause, the parties must resolve their
dispute through arbitration. Ambridge, 328 A.2d at 501-502. There, an
employee claimed a right to payment under the contract and compensation
for accrued vacation time. Id. at 499-500. The employer sought to have its
employment contract with an employee declared null and void and sought to
enjoin the employee from seeking arbitration. Id. at 499.
¶10 The Court first looked to the language of the arbitration clause which
provided: "any controversy or claim arising out of or relating to this
Agreement or the breach thereof shall be settled by arbitration in accordance
with the rules or the American Arbitration Association...." Id. at 499. The
Court held that a valid contract to arbitrate existed and that the dispute fell
within the scope of the arbitration clause because the employee's claim went
directly to obligations created under the contract. Id. at 501-502.
¶11 In Shadduck, this Court held that an agreement to arbitrate disputes
arising from the contract encompasses tort claims where the facts which
support a tort action also support a breach of contract action. Shadduck,
713 A.2d at 638-639. There, the homeowners contracted with the builder to
construct a home. Id. at 636. The contract included a clause providing for
arbitration of "[a]ll claims or disputes between the Contractor and the Owner
arising out of, or relating to, this Contract or the breach thereof shall be
5

J. A19025/02
decided by arbitration. . . ." Id. at 637. After completion of the home, the
homeowners sued the builder claiming that the builder did not construct the
home in accordance with his oral promises and the contract specifications.
Id. at 636 and 638. The Shadduck Court noted that "a claim's substance,
not its styling, is to control whether the complaining party must proceed to
arbitration or may file in the court of common pleas." Id. at 637. The Court
held that because the factual averments of the tort claims underlie the
breach of contract claims, the claims were not temporally or factually distinct
and all claims were covered by the arbitration agreement. Id. at 638-639.
¶12 The instant case is governed by both Ambridge and Shadduck.
Here, the language of the arbitration clause is substantially similar to that
found in Ambridge and Shadduck. Thus, we examine whether the
disputes involved are within the scope of the arbitration provision. PLS
alleges the following in its complaint:
...
3.
[PLS] is a transportation logistics company
possessing certain proprietary and confidential
information, including, but not limited [to]
technological information, performance data,
financial information, procedures, customer lists,
information and prospects, marketing studies and
sales plans, proposals, costs and pricing information,
and analysis of competitors, all of which have
substantial value to [PLS] and which information
[PLS] takes great care to maintain as confidential
and proprietary information.
4.
Sometime in 1995 or 1996, [PLS] and [Appellant]
began a business relationship whereby [Appellant]
6

J. A19025/02
would provide services to [PLS] for non-flatbed, less-
than-truck-load transportation services which [PLS]
provided and was to provide to its current and future
customers.
5.
On April 28, 1999, the parties entered into a formal
relationship which inter alia detailed the services
which [Appellant] was to provide to [PLS] and
further defined the terms of the parties relationship.
A true and correct copy of this contract is attached
hereto, incorporated herewith and is marked Exhibit
"A".
...
7. During the course of the parties['] contractual
relationship, [Appellant] learned of, was exposed to
and had access to proprietary and confidential
information of [PLS] as described in paragraph 3,....
8. The Agreement between the parties, which is
referenced as Exhibit "A" to this Complaint, contains
a provision whereby the parties acknowledge the
confidential nature of their relationship.
9. One of the agreed upon services [Appellant] was to
provide to [PLS] was to assist [PLS] in the
acquisition of additional customers.
10. During the past 18 months, [PLS] had been in the
process of attempting to acquire as a customer, a
certain company known as Niagra La Salle, Inc. This
information was known by [Appellant].
11. It is believed and therefore averred that despite the
fact that [Appellant] was contractually obligated to
[PLS], [Appellant] aided and assisted a competitor of
[PLS], in attracting and retaining Niagra La Salle,
Inc. as a client, causing Niagra La Salle, Inc. not to
become a customer of [PLS].
...
PLS' Complaint at 2-4.
7

J. A19025/02
¶13 The confidentiality clause of the agreement between PLS and Appellant
provides:
The parties agree that the terms and conditions of
this Agreement constitute confidential information
and that the parties shall not disclose the terms and
conditions of this Agreement to a third party, either
directly or indirectly, provided that disclosure of the
terms and conditions of this Agreement shall not
constitute a breach of this confidentiality provision if
the disclosure is pursuant to a Court Order,
subpoena or other legal process, or if the disclosure
is necessary for tax purposes or necessary to comply
with the requests of a federal state, or local
regulatory agency.
Exhibit "A" to PLS' Complaint at 5.
¶14 The trial court determined that the contract between the parties
served only as a vehicle to place Appellant in a position to gain the
confidential information of PLS. Trial Court Opinion, 12/5/01, at 3.
Therefore, the trial court concluded the tort allegations in Counts I, III, and
IV do not arise out of the parties' contract. Id. Thus, the trial court
overruled Appellant's preliminary objections as to those counts. Trial Court
Order, 12/5/01.
¶15 Our review of the record reflects that PLS' tort claims do arise out of
the contract between the parties. In Count I, PLS asserts a cause of action
for interference with a prospective contractual relationship. Specifically, PLS
averred the following:
COUNT I
INTERFERENCE WITH PROPSECTIVE
CONTRACTUAL RELATIONSHIP
8

J. A19025/02
. . .
16. [Appellant] knew of [PLS'] prospective
business relationship with Niagra La Salle, Inc.
and intentionally and improperly acted in
concert with a known competitor of [PLS],
aiding and assisting the known competitor to
obtain a contract with the prospective
customer of [PLS].
17. It is believed and therefore averred that
[Appellant] aided and assisted [PLS']
competitor in obtaining a contract with [PLS']
prospective customer by using improperly and
illegally obtained proprietary and trade secret
information of [PLS].
Complaint, 7/5/01, at 3-5.
¶16 Count I is based on the assertion that Appellant was to assist PLS in
acquiring new customers and was contractually obligated to keep
confidential the information it acquired through its relationship with PLS.
PLS claims that Appellant acted contrary to these duties by preventing PLS
from acquiring a certain customer and by inappropriately using the
confidential information Appellant acquired through its relationship with PLS.
Therefore, this cause of action arises from the contract. Thus, this claim is
encompassed by the arbitration agreement.
¶17 The third cause of action alleged in PLS's complaint also arises from
the contract. In Count III, PLS alleges a cause of action for breach of
fiduciary and common law duties owed to PLS. Specifically, PLS averred the
following:
9

J. A19025/02
COUNT III
BREACH OF FIDUCIARY AND COMMON LAW DUTIES OWED TO THE
PLAINTIFF
. . .
23. As a result of the contractual relationship
between the parties, [Appellant] had a
fiduciary obligation to protect and hold
confidential the trade secrets and proprietary
information belonging to [PLS].
24. By engaging in the conduct described above,
[Appellant] has breached the fiduciary and
common law duties owed by [Appellant] to
[PLS].
Complaint, 7/5/01, at 6 (emphasis added).
¶18 PLS alleges that Appellant acted in a manner contrary to the parties'
contractual relationship. Therefore, this claim arises from the contract.
Thus, this claim is encompassed by the arbitration agreement.
¶19 The final cause of action arises from the contract. In Count IV, PLS
alleges that Appellant misappropriated trade secrets. Specifically, PLS
averred the following:
COUNT IV
MISAPPROPRIATION OF TRADE SECRETS (CONVERSION)
. . .
27. [Appellant], without right or privilege, has
wrongfully and intentionally misappropriated the
trade secrets of [PLS] and used them for its own
benefit and/or has improperly disclosed them to
10

J. A19025/02
third parties in such a way that has caused
damage to [PLS].
Complaint, 7/5/01, at 7.
¶20 PLS asserts that Appellant disclosed confidential information without
right or privilege. The confidentiality clause of the contract relates to
whether Appellant had any right or privilege over the confidential
information it acquired pursuant to its employment with PLS. Therefore, this
claim arises from the contract. Thus, this claim is encompassed by the
arbitration agreement.
¶21 The obligations underlying the confidentiality provision of the contract
between PLS and Appellant relate to an obligation under the contract that
Appellant allegedly failed to satisfy. Also, like Shadduck, the facts averred
in PLS' tort claims also support a breach of contract claim; neither are
temporarily or factually distinct. Shadduck. Therefore, Ambridge and
Shadduck control, and the highly respected trial court abused its discretion
by not applying them to the instant case.
¶22 Order reversed.
11