Etzler, T. v. Etzler, G. ( 2015 )

J-A09028-15
NON-PRECEDENTIAL DECISION – SEE SUPERIOR COURT I.O.P 65.37
THOMAS S. ETZLER, INDIVIDUALLY AND : IN THE SUPERIOR COURT OF
DERIVATIVELY ON BEHALF OF : PENNSYLVANIA
RECYCLING EQUIPMENT CORPORATION, :
:
Appellant :
:
v. :
:
GUNTHER “BUD” ETZLER, STEPHEN P. :
ETZLER, WILMA D. ETZLER, RECYCLING :
EQUIPMENT CORP., INC., :
:
Appellees : No. 2288 EDA 2014
Appeal from the Judgment entered October 9, 2014,
Court of Common Pleas, Montgomery County,
Civil Division at No. 09-25465 and 09-26544
BEFORE: BOWES, DONOHUE and STABILE, JJ.
MEMORANDUM BY DONOHUE, J.: FILED NOVEMBER 17, 2015
Appellant, Thomas S. Etzler (“Thomas”), appeals from the judgment
entered on October 9, 2014 following the issuance of an arbitrator’s award in
favor of Appellees, Gunther Etzler (“Gunther”), Stephen P. Etzler
(“Stephen”), Wilma D. Etzler (“Wilma”), and Recycling Equipment Corp., Inc.
(“REC”). For the reasons that follow, we affirm in part, reverse in part, and
remand to the trial court for further proceedings in accordance with this
Memorandum.
This case arises from a family dispute between a father (Gunther) and
his two sons (Thomas and Stephen), each of whom were equal one-third
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owners of the stock of REC. All three were employees of REC, with Thomas
serving as its president. According to the trial court,
The dispute between the shareholders originated
with a failed attempt by [Thomas] to fire his father,
[Gunther,] and force him to sell his shares. Thomas
claims he became aware of a plan by his brother
Stephen and Gunther to freeze him out as a minority
shareholder. Thomas’ plan failed because Gunther
and his wife [Wilma],1 who believed themselves to
be the sole directors of REC, convened a special
meeting of the board of directors on August 12,
2009, and passed a resolution that removed Thomas
as president, rescinded the termination of Gunther’s
employment, appointed Gunther as president of REC,
appointed new corporate counsel, and revoked
Thomas’ check-signing authority for the corporation.2
1
Wilma was a purported director of the corporation
but never a shareholder.
2
In mid-November, 2009, additional corporate
documents were located that revealed Stephen
alone, rather than Gunther and Wilma, constituted
the REC board in August 2009. Accordingly,
pursuant to a board resolution dated November 17,
2009, Stephen promptly ratified and confirmed the
actions taken by Gunther and Wilma, acting as the
ostensible board three months earlier.
Trial Court Opinion, 8/28/2012, at 1-2.
On August 17, 2009, Thomas commenced suit by a writ of summons
at civil action number 2009-25465 against REC, Gunther, Stephen and
Wilma (collectively, the “Appellees”). On August 26, 2009, REC filed a
complaint against Thomas at civil action number 2009-26554), seeking to
enjoin Thomas from, inter alia, disclosing or transmitting REC’s confidential
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information or communicating with REC’s customers. The parties agreed to
an injunction and standstill agreement, at which time the parties attempted
to negotiate the purchase of Thomas’ stock in REC pursuant to the terms of
a shareholder’s agreement executed by the three shareholders and REC in
1998 (hereinafter, the “Buy Sell Agreement”).
As explained therein, the purpose of the Buy Sell Agreement is to keep
“all of the common stock of [REC] [] owned by those who are actually
engaged in the conduct of the business.” Motion to Stay Operation of
Shareholder Agreement and Dissolve the September 2, 2009 Stipulated
Injunction and Standstill Agreement (hereinafter, the “Motion to Stay”),
2/24/2010, Exhibit F. Pursuant to the terms of the Buy Sell Agreement, the
termination of a shareholder’s employment, “whether voluntary or
involuntary,” constitutes an offer to sell all of his stock at book value to (1)
REC, for thirty days, (2) the remaining shareholders, for thirty days, or (3)
to REC, which must purchase the shares. Motion to Stay, 2/24/2010, Exhibit
F ¶¶ 2, 4-6.
When negotiations to determine the book value of REC’s stock failed,
on February 24, 2010 Thomas filed his Motion to Stay, in which he alleged
generally that the Appellees had “frustrated the buyout process” by refusing
to provide Thomas and his accountant with the necessary information and
documentation to assess the value of his stock. Thomas also attached to the
Motion to Stay a draft complaint in which he set forth numerous personal
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causes of action against the Appellees. Gunther and Stephen responded to
the Motion to Stay by asking the trial court to order the parties to arbitrate
their disputes as required by the arbitration provision in the Buy Sell
Agreement.1
On December 30, 2011, the Honorable Kent H. Albright granted
Thomas’ motion to dissolve the stipulated injunction, but denied the request
to stay the operation of the arbitration provision of the Buy Sell Agreement.
Instead, Judge Albright ordered the parties to arbitrate. On January 17,
2012, Thomas filed a complaint at civil action number 2009-25465
(hereinafter, the “Complaint”). Unlike the draft complaint attached to the
Motion to Stay, the Complaint asserted both personal claims against
Gunther, Stephen and Wilma as well as derivative claims on behalf of REC
against them. In particular, Counts I and II of the Complaint sets forth
derivative claims by REC for declaratory relief and breach of fiduciary duties.
1
Paragraph 18 of the Buy Sell Agreement provides:
18. Arbitration. Any party to this Agreement shall
have the right to demand that a controversy or claim
arising out of or related to this Agreement, or the
breach thereof, shall be settled by arbitration in
accordance with the then current rules of the
American Arbitration Association of Philadelphia, and
judgment upon the award rendered by the arbitrator
or arbitrators may be entered in any court having
jurisdiction thereof. The costs of such arbitration
shall be borne by the losing party.
Motion to Stay, 2/24/2010, Exhibit F ¶ 18.
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Counts III and IV set forth Thomas’ personal claims for the appointment of a
custodian and for wrongful discharge. Counts V and VI set forth both
personal and derivative claims for civil conspiracy and aiding and abetting
liability.
In response to preliminary objections to the Complaint, by order and
opinion dated August 28, 2012, the Honorable Stanley R. Ott 2 ordered all of
the claims in Thomas’ complaint to be arbitrated in accordance with the Buy
Sell Agreement, including the derivative claims. On November 7, 2013, the
arbitrator, William Ewing (“Ewing”), issued a decision in favor of the
Appellees, finding against Thomas on all six claims. On December 9, 2013,
Thomas filed a petition to vacate the arbitration award, which the trial court
(per Judge Ott) denied pursuant to an opinion and order dated June 30,
2014.
Following the entry of judgment, on appeal Thomas presents the
following four issues for our consideration and determination:
1. Did the trial court commit an error of law in
compelling arbitration where the claims in [Thomas’]
Complaint were outside the scope of the arbitration
clause?
2. Did the trial court commit an error of law in
determining that the derivative claims on behalf of
the corporation for breach of fiduciary duty were
actually direct claims and thus subject to the
2
Judge Albright reached mandatory retirement status at the end of 2011
and became a Senior Judge in January 2012.
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arbitration claim contained in a contract governing
only the transfer of shares?
3. Did the trial court abuse its discretion when it
refused to grant [Thomas’] motion for
reconsideration based on an intervening change in
the applicable law?
4. Did the trial court commit an error of law or abuse
its discretion when it refused to vacate the
arbitrator’s award based on the denial to [Thomas]
of a full and fair hearing?
Thomas’ Brief at 4-5.
Thomas’ first three issues on appeal challenge the trial court’s decision
to refer all of the claims in Thomas’ Complaint to arbitration. In determining
whether a claim is subject to arbitration, judicial inquiry is limited to the
questions of whether a valid agreement to arbitrate was entered into and
whether the dispute involved falls within the scope of the arbitration
provision. McNulty v. H & R Block, Inc., 843 A.2d 1267, 1269 (Pa. Super.
2004). As an appellate court, in determining the propriety of a trial court’s
order on preliminary objections in the nature of a petition to compel
arbitration, we examine the trial court's ruling for abuse of discretion or
error of law. Pittsburgh Logistics Systems, Inc. v. Professional
Transportation and Logistics, Inc., 803 A.2d 776 (Pa. Super. 2002). Our
scope of review is plenary. McNulty, 843 A.2d at 1269 (citing Huegel v.
Mufflin Const. Co., Inc., 796 A.2d 350, 354 (Pa. Super. 2002)).
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Judge Ott’s written opinions are not helpful in addressing the
arbitrability issues. With respect to Thomas’ direct claims, Judge Ott relied
upon Judge Albright’s prior order on the Motion to Stay directing the parties
to arbitration. Trial Court Opinion, 8/28/2012, at 5. Judge Ott credited the
Appellees’ contention that the direct claims in Thomas’ Complaint were also
set forth in the draft complaint attached to the Motion to Stay. According to
this reasoning, because Judge Albright denied the Motion to Stay, he must
have determined that the direct claims in the attached draft complaint were
within the scope of the arbitration provision of the Buy Sell Agreement. Id.Unfortunately, Judge Albright’s December 30, 2011 order merely denies the
request to stay arbitration and does not explain the basis for doing so. Trial
Court Order, 12/30/2011, at 2. We note that Thomas’ allegations in the
Motion to Stay itself (rather than in the attached draft complaint) related
solely to the Appellees’ efforts to disrupt the valuation process, thus clearly
raising issues within the scope of that contract’s arbitrability provision.
Moreover, and more importantly, Judge Albright’s order does not indicate
that he even considered the arbitrability of the claims in the (then unfiled)
draft complaint. And Judge Ott, like Judge Albright, offered no explanation
or rationale regarding the arbitrability of the direct claims in Thomas’
Complaint. Trial Court Opinion, 8/28/2012, at 6 (“Because the complaints in
these actions raise virtually identical claims [as in the draft complaint], we
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are constrained to make the same analysis as did Judge Albright … that
these claims are subject to the mandatory ADR provision.”).
Instead, Judge Ott observed that Thomas’ Complaint, as opposed to
his prior draft complaint, included shareholder derivative claims asserted on
behalf of REC, and that as a result the sole issue before him was whether
Thomas, by “recasting” his claims as derivative rather than direct, could
“avoid Senior Judge Albright’s directive to submit the claims to ADR?” Id. at
3. To answer this question, Judge Ott cited to Section 7.01(d) of the
American Law Institute’s Principles of Corporate Governance (“ALI
Principles”). Section 7.01(d) provides that in closely held corporations,
when certain conditions obtain, derivative claims against other shareholders
may be treated as direct claims.3 Id. at 6-7. While Pennsylvania appellate
courts had never adopted Section 7.01(d), Judge Ott noted that in Cuker v.
Mikalauskas, 692 A.2d 1042 (Pa. 1997), our Supreme Court adopted
3
Section 7.01(d) of the ALI Principles of Corporate Governance provides:
(d) In the case of a closely held corporation [§ 1.06],
the court in its discretion may treat an action raising
derivative claims as a direct action, exempt it from
those restrictions and defenses applicable only to
derivative actions, and order an individual recovery,
if it finds that to do so will not (i) unfairly expose the
corporation or the defendants to a multiplicity of
actions, (ii) materially prejudice the interests of
creditors of the corporation, or (iii) interfere with a
fair distribution of the recovery among all interested
persons.
ALI Principles of Corporate Governance § 7.01(d) (1994).
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Sections 7.02 through 7.10 and 7.13 of the ALI Principles, and indicated that
“[o]our adoption of the [specified] sections is not a rejection of other
sections not cited. … Courts of this Commonwealth are free to consider other
parts of the [ALI Principles] and utilize them if they are helpful and appear to
be consistent with Pennsylvania law.” Id. at 604 n.5.
In Hill v. Ofalt, 85 A.3d 540 (Pa. Super. 2013), this Court
subsequently determined that our Supreme Court would not adopt Section
7.01(d) of the ALI Principles to the extent that it would permit “courts to
ignore the corporate form and treat derivative claims as direct claims and
allow an individual recovery on a derivative claim.” Id. at 553-556. We
concluded that Section 7.01(d) is inconsistent with Pennsylvania law,
including in particular Section 1717 of the Business Corporation Law, which
limits the standing to sue to enforce a director’s duty to “the corporation” or
to “a shareholder … by an action in the right of the corporation.” Id. at 556
(citing 15 Pa. C.S.A. § 1717). As such, in Hill we held that since appellant
“willingly chose to incorporate and willingly chose to create the separate
entity, ... [r]edress for any injury” to the corporation belongs exclusively to
the corporation and not to individual shareholders.4 Id.
4
Given our disposition of this appeal, including the application of our
decision in Hill, Thomas’ third issue on appeal (contending that the trial
court erred in not reconsidering its August 28, 2012 order and opinion) is
moot.
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While it is now clear that Judge Ott should not have relied upon section
7.01(d) of the ALI Principles, we disagree with Thomas that the derivative
nature of some of his claims is dispositive of their arbitrability. As discussed
hereinabove, REC is a signatory to the Buy Sell Agreement and has rights
and obligations thereunder, including the first option to purchase the shares
of a departing shareholder and the obligation to purchase said shares if the
remaining shareholders decline to do so. Motion to Stay, 2/24/2010, Exhibit
F ¶¶ 2, 4-6. As such, any derivative claims brought on REC’s behalf are
arbitrable if they relate in any way to the execution of the procedures set
forth in the Buy Sell Agreement, including the determination of the book
value of shares to be purchased by REC.
Accordingly, this Court must review each of the claims in Thomas’
Complaint to determine if they arise under or relate to the Buy Sell
Agreement or the breach thereof. Motion to Stay, 2/24/2010, Exhibit F ¶
18. In Pennsylvania, the issue of whether a particular dispute falls within a
contractual arbitration provision is a matter of law for a court to decide.
Huegel, 796 A.2d at 354. To determine whether the claim is subject to
arbitration the court engages in a two-prong analysis: first, does a valid
agreement exist, and second, is the dispute within the scope of the
agreement. Keystone Technology Group, Inc. v. Kerr Group, Inc., 824
A.2d 1223, 1227 (Pa. Super. 2003). The merits of the claims to be
arbitrated should not be examined when performing this analysis.
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Strausser Enterprises, Inc. v. Segal & Morel, Inc., 89 A.3d 292, 296
(Pa. Super. 2014). Pennsylvania has a liberal policy of favoring arbitration,
but this policy “does not require the rubber stamping of all disputes as
subject to arbitration.” Pisano v. Extendicare Homes, Inc., 77 A.3d 651,
661 (Pa. Super. 2013) (quoting McNulty v. H & R Block, Inc., 843 A.2d
1267, 1271 (Pa. Super. 2004)), appeal denied, 86 A.3d 233 (Pa. 2014),
cert. denied, 134 S. Ct. 2890 (2014).
Count I of Thomas’ Complaint is a derivative claim seeking declaratory
relief “to determine the legal obligations under Pennsylvania law” of REC for
the period between August 12, 2009 until at least November 17, 2009.
Specifically, Thomas contends that
44. During that period, [Gunther] and [Wilma]
terminated [Thomas] as [REC’s] President; reversed
[Thomas’] decision to terminate [Gunther] as an
employee; promoted [Gunther] to President; and
hired [REC’s] counsel to bring claims against
[Thomas].
Complaint, 1/17/2012, ¶ 44. Thomas argues that these acts, including in
particular his termination, violated Pennsylvania law because Gunther and
Wilma were not REC’s board of directors and thus their acts were null and
void. Id. ¶¶ 46-47. Moreover, the later attempt by Stephen (the purported
sole member of REC’s board of directors) to ratify the actions of Gunther and
Wilma was ineffective because (1) Stephen was not properly elected to the
board of directors, and (2) even if Stephen was the sole member of the
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board of directors, it is not legally possible under Pennsylvania law to ratify
null and void acts. Id. ¶¶ 48-51. As a result, under Count I Thomas
requests a declaration that the acts of Gunther, Wilma, and Stephen in, inter
alia, terminating his employment, were illegal. The prayer for relief further
requests “such other and further relief as may be just and proper under the
circumstances.” Id.
We cannot agree with Thomas that the trial court erred in its
determination that Count I of the Complaint was arbitrable under the Buy
Sell Agreement. The Buy Sell Agreement governs the sale of shares of REC
upon an event of termination, whether voluntary or involuntary, setting forth
the procedure by which said sale is to be effectuated. A buy out of shares
cannot occur without a valid termination, and thus this claim “arises out of
or relates to” the Buy Sell Agreement.
We likewise conclude that the trial court did not err in deciding that
Counts II, IV, V, and VI of Thomas’ Complaint are arbitrable under the Buy
Sell Agreement. Count II asserts a derivative claim for breach of fiduciary
duties owed to REC. The allegations in Count II, including those
incorporated by reference, allege a variety of financial irregularities by the
Appellees, including failures (1) to “maximize the assets” of REC, (2) to
maintain accurate and complete financial records, including “egregious
lapses” in recordkeeping and accounting practices, (3) to avoid self-dealing
transactions, (4) to develop the business of REC and operate it in a manner
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beneficial to REC. Id. ¶¶ 31-35, 58-59. Thomas also incorporates specific
allegations against the Appellees directly related to efforts to value his stock
pursuant to the Buy Sell Agreement, including refusals to produce corporate
books and records in October 2009. Id. ¶¶ 27-28.
Similarly, in connection with Count IV, a direct claim for wrongful
discharge, Thomas contends that the Appellees terminated him to, inter alia,
cover up fraudulent financial statements, and to this end he incorporates a
series of allegations related to efforts by Appellees to manipulate REC’s
financial books and records and to present false information to him as the
minority shareholder. Id. ¶¶ 74, 35. Counts V and VI are claims for civil
conspiracy and aiding and abetting liability for the actions set forth in Counts
II and IV.
In our view, the trial court did not err in deciding that these Counts
are arbitrable. The Buy Sell Agreement contains a detailed methodology for
determining the book value of the shares of stock to be purchased (either by
REC or the remaining shareholders), including the process of appointing
accountants and a detailed list of necessary and proper adjustments to book
value to be incorporated into the calculations. As a result, Thomas’ claims of
fraud, self-dealing, and financial irregularities all relate to the determination
of the purchase price of his shares pursuant to the Buy Sell Agreement. In
short, claims based upon allegations of financial improprieties relate to the
proper calculation of book value of the stock and are, therefore, arbitrable.
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Finally, Count III of Thomas’ Complaint sets forth a claim pursuant to
section 1767(a)(2) of Pennsylvania’s Business Corporation Law, which
permits a trial court to appoint a custodian for a closely-held corporation if
the directors or those in control have acted “illegally, oppressively, or
fraudulently” toward a shareholder owning 5% or more of the outstanding
shares of the corporation. 15 Pa. C.S.A. § 1767(a)(2). Thomas, as the
owner of more than 5% of the outstanding stock of REC, has standing to
seek the appointment of a custodian under this provision. Because the
appointment of a custodian does not arise from or relate to any provision of
the Buy Sell Agreement, this claim is not subject to its arbitration provision.
For these reasons, we affirm the trial court’s order dated August 28,
2012 with respect to Counts I, II, IV, V, and VI of Thomas’ Complaint, but
reverse with respect to Count III. On remand, the trial court must decide
Thomas’ claim in Count III, which we conclude should not have been
referred to arbitration.
Because we are remanding for further proceedings, we will also
address Thomas’ fourth issue on appeal, in which he contends that the trial
court erred in not vacating the arbitration award because the record reflects
that he was denied a full and fair hearing. The outcomes of non-judicial
arbitration proceedings are typically binding, and our review of a common
law arbitration award is narrowly circumscribed. Vogt v. Liberty Mut. Fire
Ins. Co., 900 A.2d 912, 921 (Pa. Super. 2006) (citing F.J. Busse Co., Inc.
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v. Sheila Zipporah, L.P., 879 A.2d 809, 811 (Pa. Super. 2005)). Courts
may not vacate or modify arbitration decision unless it is clearly shown that
a party was denied a hearing or that fraud, misconduct, corruption or other
irregularity caused the rendition of an unjust, inequitable or unconscionable
award. See, e.g., Richmond v. Prudential Prop. & Cas. Ins. Co., 856
A.2d 1260, 1264 (Pa. Super. 2004).
Here, Thomas contends that he was denied a hearing because the
arbitrator (1) refused to permit discovery or the introduction of evidence of
events after December 31, 2009; and (2) denied him access to documents
withheld pursuant to claims of attorney-client privilege even though the
allegedly privileged documents were placed at issue and/or because the
privilege had been waived.
On appeal, Thomas relies on three cases, Smaligo v. Fireman’s
Fund Ins. Co., 247 A.2d 577 (Pa. 1968), Zak v. Prudential Prop. & Cas.
Ins. Co., 713 A.2d 681 (Pa. Super. 1998), and Andrew v. CUNA
Brokerage Services, Inc., 976 A.2d 496 (Pa. Super. 2009). Thomas
contends that these cases stand for the proposition that an arbitration award
must be vacated if the arbitrator refuses to “admit relevant evidence of
great import.” Thomas’ Brief at 42. In Andrew, this Court vacated an
arbitration award entered after the arbitrator ruled that the losing party was
not entitled to an evidentiary hearing.
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“Arbitration, while not surrounded by the technical
procedural safeguards incident to litigation, is not a
wholly informal process and requires for its validity
the observance of certain minimum standards
indispensable to the securing of a fair and impartial
disposition of the merits of a controversy.” Scholler
Bros. v. Otto A.C. Hagen Corp., 158 Pa. Super.
170, 44 A.2d 321, 322 (1945). These minimum
standards require that both parties are provided with
notice, all the arbitrators must sit at the hearing,
each side is entitled to be heard and to be present
when the other party's evidence is being given and,
unless the submission allows a decision by a majority
of the arbitrators, all must join in the award. Id.See also Allstate Ins. Co. v. Fioravanti, 451 Pa.
108, 299 A.2d 585, 588 (1973) (once a dispute has
been submitted to arbitration, the parties are
entitled to a hearing with “the necessary essentials
of due process, i.e., notice and opportunity to be
heard and to defend in an orderly proceeding
adapted to the nature of the case before a tribunal
having jurisdiction of the cause.”); Reisman v.
Ranoel Realty Co., 224 Pa. Super. 220, 303 A.2d
511, 514 (1973) (arbitrations are not wholly informal
proceedings and the basic principles of hearing
conduct must be adhered to, with the arbitration
process requiring for its validity the observance of
certain minimum standards indispensable to the
securing of a fair and impartial disposition of the
merits of a controversy, i.e., a full hearing with the
opportunity to be heard and to present evidence.)
“[A]djudicatory action cannot validly be taken by any
tribunal, whether judicial or administrative, except
upon a hearing, wherein each party shall have the
opportunity to know of the claims of his opponent, to
hear the evidence introduced against him, to cross-
examine witnesses, to introduce evidence in his own
behalf and to make argument.” Fioravanti, 299
A.2d at 588. Therefore, where a matter is submitted
to arbitration, arbitrators are obliged to abide by the
minimal procedural requirements necessary for
common law arbitration which entails granting the
parties a full and fair hearing.
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Andrew, 976 A.2d at 501-02.
In Smaligo and Zak, the arbitrator conducted an evidentiary hearing,
but refused to permit the introduction of expert testimony before ruling
against the party proffering it. Smaligo, 247 A.2d at 580; Zak, 713 A.2d at
686. Thomas contends that as in Smaligo and Zak, in this case the
arbitrator refused to permit the introduction of any evidence after December
31, 2009 and further refused to permit him access to potentially relevant
documents withheld on privilege grounds. We cannot agree. In Smaligo
and Zak, the arbitrators refused to permit the introduction of an expert
witness’ testimony in its entirety, thus completely precluding the losing
parties from exercising their basic procedural right to an opportunity to be
heard and defend themselves. The denial of this minimum procedural
requirement deprived these litigants of fundamental due process, namely “a
full hearing with the opportunity to be heard and to present evidence.”
Andrew, 976 A.2d at 502.
In this case, by contrast, the arbitrator did not preclude the testimony
of any witness in its entirety. Instead, the arbitrator made evidentiary
rulings regarding the appropriate limits on evidence, including a time
limitation and the discovery of some (but not all) allegedly privileged
materials. While the arbitrator did not set forth the bases for his rulings in
his written opinion/decision, such information is not necessary in this
context. Thomas has not cited to any authority suggesting that it is the
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proper function or province of this Court to pass on the discretion of an
arbitrator’s evidentiary rulings. Rule R21 of the AAA Commercial Arbitration
Rules provides that discovery shall be conducted “at the discretion of the
arbitrator,” and Rule R31(a) states that evidence may be introduced at the
evidentiary hearing “as the arbitrator may deem necessary to an
understanding and determination of the dispute.” Rule 31(a) further
provides that formal rules of evidence need not be followed. Finally, R30(b)
gives the arbitrator the discretion to “conduct the proceedings with a view to
expediting the resolution of the dispute.”
Here, these rules appear to have provided the arbitrator with the
authority to make the rulings now questioned by Thomas on appeal. This
Court cannot and will not review the reasonableness or propriety of these
rulings. Rather, we need only conclude that the arbitrator’s evidentiary
decisions in this case did not deprive Thomas of any fundamental due
process rights.
As set forth hereinabove, the trial court’s rulings are affirmed in part
and reversed in part. In summary, we affirm the trial court’s order dated
August 28, 2012 with respect to Counts I, II, IV, V, and VI of Thomas’
Complaint, but reverse with respect to Count III. As to Count III, on
remand the trial court must decide Thomas’ claim requesting the
appointment of a custodian pursuant to § 1767(a)(2) of Pennsylvania’s
Business Corporation Law. The case is remanded to the trial court for
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further proceedings consistent with this Memorandum. Jurisdiction
relinquished.
Stabile, J. joins the Memorandum.
Bowes, J. files a Concurring and Dissenting Memorandum.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 11/17/2015
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