Fineman, Krekstein, & Harris, P.C. v. Perr, R. ( 2022 )


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  • J-A26023-21
    
    2022 PA Super 117
    FINEMAN, KREKSTEIN & HARRIS, P.C.                 IN THE SUPERIOR COURT
    OF PENNSYLVANIA
    Appellee
    v.
    RICHARD J. PERR, ESQ.
    Appellant                   No. 666 EDA 2021
    Appeal from the Order Entered December 23, 2020
    In the Court of Common Pleas of Philadelphia County
    Civil Division at No: 200302862
    BEFORE: BOWES, J., STABILE, J., and McCAFFERY, J.
    OPINION BY STABILE, J.:                                   FILED JUNE 30, 2022
    Appellant, Richard J. Perr, Esq. (“Perr”), appeals from the December 23,
    2020 order sustaining in part and overruling in part his preliminary objections
    to the complaint of Appellee, Fineman, Krekstein & Harris, P.C. (“FKH”).1 We
    affirm in part, reverse in part, and remand.
    The trial court set forth the pertinent facts and procedural history in its
    Pa.R.A.P. 1925(a) opinion:
    FKH is a professional corporation engaged in the practice of
    law. Perr is an attorney and was a former shareholder and
    employee of FKH. On June 25, 2015, Perr entered into a written
    [E]mployment [A]greement [(the “Employment Agreement”)]
    with FKH pursuant to which Perr was a “full-time attorney” in the
    private practice of law for FKH. Pursuant to the Employment
    Agreement, Perr agreed to devote sufficient time, energy, skill and
    ____________________________________________
    1 FKH abandoned its cross appeal from the trial court’s order, conceding that
    an order compelling arbitration is not immediately appealable. Appellee’s Brief
    at 9 n.2.
    J-A26023-21
    best efforts to the performance of his duties to further the
    business interests of FKH. The Employment Agreement does not
    contain an arbitration provision.
    Perr became a shareholder and director of FKH in 2015 and
    entered into a Shareholder Agreement [(the “Shareholder
    Agreement”)] with FKH and FKH shareholders S. David Fineman,
    Esquire and Gary A. Krimstock, Esquire which was amended and
    restated on November 1, 2017. The amended and restated
    Shareholder Agreement contained the following provisions:
    8.2.    Deadlock.     In the event of a material
    disagreement among the Shareholders and/or the
    Corporation with respect to this Agreement or the
    conduct of the affairs of the Corporation (the
    “Deadlock”), the Shareholders hereby agree to submit
    the   Deadlock    to    mediation  in   Philadelphia,
    Pennsylvania, either through a mutually acceptable
    mediator or through an established mediation service,
    within fifteen business days from the date [of] the
    Deadlock (the “Mediation”).
    8.3. Arbitration. In the case that the mediation has
    been unsuccessful, the Shareholders and the
    Corporation agree to settle the Deadlock by binding
    arbitration in accordance with this Agreement. Any
    claim or controversy arising out of or relating to this
    Agreement or any breach thereof shall be settled by
    such arbitration ….
    [Shareholder Agreement, at §§ 8.2 and 8.3 (hereinafter “the
    Arbitration Clause”) (the November 1, 2017 Shareholder
    Agreement appears in the certified record at Exhibit A to
    Appellant’s petition to compel arbitration; the language of §§ 8.2
    and 8.3 remained unchanged through various amendments of the
    Shareholder Agreement).]
    On December 4, 2019, Perr gave notice orally that he was
    leaving FKH on December 31, 2019.           A meeting of the
    compensation committee of FKH was then convened but Perr
    decided not to participate. The compensation committee of FKH
    decided that Perr’s compensation would end on December 14,
    2019. On February 12, 2020, Perr made demand for return of his
    capital of $25,000. FKH rejected Perr’s demand and insisted that
    Perr surrender his stock interest in FKH and submit a written
    -2-
    J-A26023-21
    resignation. On February 14, 2020, Perr submitted a written
    resignation, withdrawal and transfer of stock ownership interest
    to FKH.
    After Perr’s employment and shareholder interest in FKH
    terminated, FKH discovered that Perr had been serving as Chief
    Compliance Officer of LucentPay at the same time as his
    employment with FKH and that LucentPay was holding Perr out as
    its Chief Compliance Officer, co-founder, and employee.
    LucentPay, a client of FKH, provided Perr with a 16% ownership
    equity interest in its company.       In exchange for the 16%
    ownership interest, Perr, along with an associate attorney at FKH
    at Perr’s request, provided LucentPay legal guidance and legal
    services all unbilled while employed at FKH. At no time did
    LucentPay pay for the legal services rendered by Perr and FKH’s
    associate attorney. Perr never disclosed to FKH that he had a
    16% interest in LucentPay or that in exchange for his 16% interest
    he undertook to provide free legal guidance to LucentPay while
    employed at FKH. On March 30, 2020, FKH made demand that
    Perr produce documentation to account for and reveal his interest
    and compensation from LucentPay. Perr refused to comply. On
    April 2, 2020, FKH initiated this action by writ of summon[s]
    against Perr and on July 23, 2020, FKH filed a complaint alleging
    claims of breach of fiduciary duty (count I), fraud and fraudulent
    misrepresentation (count II), conversion (count III), theft of
    corporate opportunity (count IV), unjust enrichment (count V), for
    an accounting (count VI), for imposition of a constructive trust
    (count VII), and breach of employment agreement (count VIII).
    On July 13, 2020, Perr filed a petition to compel arbitration.
    On August 12, 2020, Perr filed preliminary objections pursuant to
    Pa.R.C.P. [No.] 1028(a)(6) agreement for alternative dispute
    resolution.    FKH filed responses to the petition to compel
    arbitration and preliminary objections and on December 3, 2020,
    this court sustained in part and overruled in part the preliminary
    objections and granted in part and denied in part the petition to
    compel arbitration. The court held that any and all claims under
    the Shareholder Agreement were remanded to arbitration and that
    all claims under the Employment Agreement were not subject to
    arbitration. Additionally, the court stayed the claims subject to
    arbitration pending resolution of the non-arbitral claims. On
    January 12, 2021, Perr filed a notice of appeal of this court’s order.
    Trial Court Opinion, 4/26/21, at 1-4 (footnotes omitted).
    -3-
    J-A26023-21
    Perr claims the trial court erred in concluding that FKH’s claim against
    him for breach of the Employment Agreement was not covered under the
    Arbitration Clause. He also claims the trial court erred in staying the arbitrable
    claims rather than the claims proceeding in court. We consider these issues
    in turn.
    An order denying a petition to compel arbitration is an interlocutory
    order appealable as of right.2
    Our standard of review of a claim that the trial court
    improperly overruled preliminary objections in the nature of a
    petition to compel arbitration is clear. Our review 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.
    In doing so, we employ a two-part test to determine
    whether the trial court should have compelled arbitration. First,
    we examine whether a valid agreement to arbitrate exists.
    Second, we must determine whether the dispute is within the
    scope of the agreement.
    Whether a claim is within the scope of an arbitration
    provision is a matter of contract, and as with all questions of law,
    our review of the trial court’s conclusion is plenary.
    MacPherson v. Magee Mem'l Hosp. for Convalescence, 
    128 A.3d 1209
    ,
    1218–19 (Pa. Super. 2015) (en banc) (internal citations and quotation marks
    omitted).
    Further, we are guided by the following principles:
    ____________________________________________
    2  Rule 311(a)(8) permits an interlocutory appeal as of right where the order
    is made appealable by statute. Pa.R.A.P. 311(a)(8). Section 7320(a)(1)
    provides that an appeal may be taken from an order denying an application
    to appeal arbitration. 42 Pa.C.S.A. § 7320(a)(1).
    -4-
    J-A26023-21
    (1) arbitration agreements are to be strictly construed and
    not extended by implication; and (2) when parties have agreed to
    arbitrate in a clear and unmistakable manner, every reasonable
    effort should be made to favor the agreement unless it may be
    said with positive assurance that the arbitration clause involved is
    not susceptible to an interpretation that covers the asserted
    dispute.
    Smay v. E.R. Stuebner, Inc., 
    864 A.2d 1266
    , 1273 (Pa. Super. 2004).
    The parties do not dispute the validity of the Arbitration Clause. The
    question is whether it is broad enough in scope to encompass disputes under
    the Employment Agreement as well as the Shareholder Agreement.                Our
    review of the two agreements reveals that they are expressly interrelated in
    some respects. The Employment Agreement provided for Perr to serve FKH
    as a “full-time attorney” and “shareholder.”          Employment Agreement,
    6/24/2015, at ¶ 2(a), (b).3 Likewise, the Employment Agreement provided
    for its termination upon, among other contingencies, “attaining the age set
    forth in § 5.2 of the Shareholders Agreement.” Id. at ¶ 3(d). Discharge for
    cause under the Employment Agreement occurs upon a vote of shareholders
    “as defined in the Shareholders Agreement.” Id. at ¶ 8. The Employment
    Agreement contains an integration clause providing that it constitutes the
    entire agreement among the parties. Id. at ¶ 11(g). The integration clause
    does not reference the Shareholder Agreement. Id.
    ____________________________________________
    3 The Employment Agreement appears in the record as Exhibit C to FKH’s
    complaint.
    -5-
    J-A26023-21
    The Shareholder Agreement, for its part, refers to the Employment
    Agreement as “separate.” For example, the Shareholder Agreement provides
    that “each Shareholder shall enter into and execute a separate Employment
    Agreement which shall be consistent with this Agreement.”           Shareholder
    Agreement, 11/1/17, at ¶ 5.1.            The Shareholder Agreement’s integration
    clause references the Employment Agreement:             “This Agreement and the
    separate Employment Agreements referenced herein constitute the entire
    understanding and agreement of the parties with respect to the subject matter
    hereof […].” Id. at ¶ 8.5. The record contains several amended versions of
    the Shareholder Agreement, but it appears that Perr became a Shareholder
    and Employee of FKH on the same day, June 24, 2015.                 Shareholder
    Agreement, 6/24/15.4 Thus, Perr was both a shareholder and an employee
    for the entirety of his tenure at FKH.
    We now turn to the complaint, in which one of FKH’s causes of action is
    titled “Breach of Employment Agreement.” We are mindful that “a complaint’s
    substance, not its styling, is to control whether the complainant party must
    proceed to arbitration or may file in the court of common pleas.” Warwick
    Twp. Water and Sewer Auth. v. Boucher & James, Inc., 
    851 A.2d 953
    ,
    957 (Pa. Super. 2004) (quoting Shadduck v. Christopher J. Kaclik, Inc.,
    
    713 A.2d 635
     (Pa. Super. 1998)), appeal denied, 
    879 A.2d 783
     (Pa. 2005).
    ____________________________________________
    4This version of the Shareholder Agreement appears in the record as Exhibit
    E to FKH’s complaint.
    -6-
    J-A26023-21
    The complaint occasionally references Perr as an “employee and shareholder”
    and/or a “shareholder-employee.” Complaint, 7/23/20, at ¶¶ 2, 3, 12, 14,
    31, 112-117. In several instances, however, the Complaint references Perr
    only as an employee:
    15. Under the LucentPay Operating Agreement, section 2.7,
    and at a time when Perr was an employee of FKH devoted to the
    full-time practice of law for FKH, Perr obligated himself to (a)
    utilize reasonable efforts to increase the client base of LucentPay,
    and (b) assist with the operations of LucentPay where necessary.
    16. Under the LucentPay Operating Agreement, section 2.7,
    and at a time when Perr was an employee of FKH devoted to the
    full-time practice of law for FKH, Perr further obligated himself to
    ‘provide legal guidance for the Company [LucentPay] in
    connection with compliance and related issues, and provide a legal
    opinion as to the initial business of the Company.’
    […]
    36. On or about June 24, 2015, Perr entered into a written
    Employment Agreement with FKH (the “Employment Agreement””
    pursuant to which Perr was employed as a “full-time attorney” of
    FKH. […]
    37. Pursuant to the Employment Agreement, Perr was
    engaged as a “full-time attorney in the private practice of law,”
    and Perr agreed that he “shall devote sufficient working time,
    energy, skill and best efforts to the performance of the Employee’s
    [Perr’s] duties hereunder in order to diligently further the business
    and interests of the Company [FKH].”
    38. As a full-time employee of FKH devoted to use his best
    efforts in order to diligently further the business and interests of
    FKH, Perr was not permitted to work in a separate position
    providing legal guidance to LucentPay.
    39.    The Employment Agreement contains no clause
    mandating or requiring that the parties participate in any
    mediation of disputes under the Employment Agreement.
    -7-
    J-A26023-21
    40.    The Employment Agreement contains no clause
    mandating or requiring that the parties participate in any
    arbitration of disputes under the Employment Agreement.
    Id. at ¶¶ 15-16, 36-40. Similarly, the Complaint alleges that the Shareholder
    Agreement does not mandate arbitration of disputes arising under the
    Employment Agreement. Id. at ¶¶ 46-48.
    The count for breach of the Employment Agreement includes a demand
    for Perr to return all salary and compensation he received from FKH while he
    was also an officer and employee of LucentPay. Id. at ¶¶ 150-51. This item
    of damages is not included in any other count. 5 In summary, the complaint
    alleges that Perr’s employment with LucentPay violated his obligation under
    the Employment Agreement to “devote sufficient working time, energy, skill
    and best efforts to the performance of the Employee’s duties hereunder in
    order to diligently further the business and interests of the Company.” Id. at
    ¶ 37 (quoting Employment Agreement at ¶ 2(b)).              The Shareholder
    Agreement contains no analogous provision to ¶ 2(b) of the Employment
    Agreement.
    The trial court found that the Arbitration Agreement was not broad
    enough in scope to encompass the breach of Employment Agreement claims:
    ____________________________________________
    5 We observe that paragraph four of the Employment Agreement governed
    Perr’s compensation as an employee of FKH, and ¶ 5 governed his benefits.
    Employment Agreement, 6/24/2015, at ¶¶ 4-5. Similarly, paragraph 6 of the
    Shareholder Agreement governs compensation of FKH shareholders.
    Shareholder Agreement at ¶ 6. The Shareholder Agreement contains no
    provision governing benefits.
    -8-
    J-A26023-21
    The complaint also alleges a claim for breach of the
    Employment Agreement. The Employment Agreement does not
    contain an arbitration provision. The question then became
    whether the arbitration provision set forth in § 8.3 of the
    Shareholder Agreement applies to the Employment Agreement.
    The court found that it did not apply. The Employment Agreement
    is a separate agreement which constitutes the entire agreement
    between the parties. While the Employment Agreement does
    reference the Shareholder Agreement, the references are limited
    and specific to the term of employment and discharge, not
    arbitration. Since the Employment Agreement did not reference
    § 8.3 of the Shareholder Agreement, as it did with respect to term
    of employment and discharge, and since agreements to arbitrate
    are to be strictly construed and not extended by implication, the
    court found that § 8.3 did not apply to the claim for breach of the
    Employment Agreement or any related tort claims alleged in the
    complaint. As such, the court severed the arbitral claims from the
    non-arbitral claims and stayed the arbitral claims pending
    resolution of the non-arbitral claims.
    Trial Court Opinion, 4/26/21, at 5-6 (footnotes omitted).
    Despite the interrelatedness of the two agreements discussed above,
    we discern no error in the trial court’s decision as to the scope of the
    arbitration clause.   The breach of Employment Agreement cause of action
    alleges the breach of an obligation arising expressly under that agreement,
    and only under that agreement. Because arbitration clauses are to be strictly
    construed, the Employment Agreement contains no arbitration clause, and
    FKH’s claim for its breach relates to a clause that has no analogue in the
    Shareholder Agreement, we cannot conclude the parties have clearly and
    unmistakably agreed to submit this claim to arbitration. We therefore have
    no basis for disturbing this portion of the trial court’s order.
    -9-
    J-A26023-21
    Next, we must determine whether the trial court erred in denying Perr’s
    petition to compel arbitration insofar as the court permitted the breach of
    Employment Agreement action to proceed in court while ordering a stay of the
    arbitrable claims.6 To decide this question, we must construe § 7304 of the
    Judicial Code.7 Most pertinent instantly is subsection (d):8
    (d) Stay of judicial proceedings.--An action or
    proceeding, allegedly involving an issue subject to arbitration,
    shall be stayed if a court order to proceed with arbitration has
    been made or an application for such an order has been made
    under this section. If the issue allegedly subject to arbitration is
    severable, the stay of the court action or proceeding may be made
    with respect to the severable issue only. If the application for an
    ____________________________________________
    6  In Sew Clean Drycleaners and Launders, Inc. v. Dress For Success
    Cleaners, Inc., 
    903 A.3d 1254
    , 1257-58 (Pa. Super. 2006), this Court held
    that an order declining to stay a court action, thus permitting it to proceed
    concurrently with the arbitration, is an appealable collateral order pursuant to
    Pa.R.A.P. 313. Here, because the trial court found most of Perr’s claims to be
    arbitrable but did not compel immediate arbitration, we have concluded this
    matter is appealable pursuant to Appellate Rule 311(a)(8) and § 7320(a)(1)
    of the Judicial Code, as explained above.
    7  The Statutory Construction Act provides: “The object of all interpretation
    and construction of statutes is to ascertain and effectuate the intention of the
    General Assembly. Every statute shall be construed, if possible, to give effect
    to all its provisions.” 1 Pa.C.S.A. § 1921(a). Further, “[w]hen the words of a
    statute are clear and free from all ambiguity, the letter of it is not to be
    disregarded under the pretext of pursuing its spirit.” 1 Pa.C.S.A. § 1921(b).
    As explained in the main text, we find no ambiguity in § 7304(d).
    8 Subsection (a) provides for an order compelling arbitration if the arbitrability
    of the matter is in dispute and if the trial court finds in favor of the party
    moving to compel arbitration. 42 Pa.C.S.A. § 7304(a). Subsection (b)
    provides for a stay of arbitration where the opposing party can establish there
    is no agreement to arbitrate; otherwise “the court shall order the parties to
    proceed with arbitration.” 42 Pa.C.S.A. § 7304(b). Subsection (c) governs
    venue of motions to compel or stay arbitration, and subsection (e) provides
    that the court deciding arbitrability shall not base its decision on the perceived
    merits of the underlying controversy. 42 Pa.C.S.A. § 7304(c), (e).
    - 10 -
    J-A26023-21
    order to proceed with arbitration is made in such action or
    proceeding and is granted, the court order to proceed with
    arbitration shall include a stay of the action or proceeding.
    42 Pa.C.S.A. § 7304(d). The first sentence of § 7304(d) mandates a stay of
    a judicial action or proceeding where, as here, an order to proceed with
    arbitration has been applied for or entered.       Where the arbitrable issue is
    severable, the second sentence permits the stay of the court proceeding to
    be limited to the arbitrable issue. In other words, the court action on the non-
    arbitrable issues may proceed concurrently with the arbitration where the
    arbitrable and non-arbitrable issues are severable.          The third sentence
    requires an order granting an application to proceed with arbitration to include
    a stay of the judicial action on the arbitrable issues.
    The statute does not authorize a stay of arbitration pending the outcome
    of a court action on severable, non-arbitrable issues.9 That is, nothing in the
    statute authorizes what the trial court did here. FKH relies on § 32310 of the
    ____________________________________________
    9 As noted above, § 7304(b) authorizes a stay of arbitration only where the
    opponent of arbitration establishes that no agreement to arbitrate exists. 42
    Pa.C.S.A. § 7304(b); see Vertical Res., Inc. v. Bramlett. 
    837 A.2d 1193
    ,
    1203 (Pa. Super. 2003) (explaining that a party is entitled to enjoin arbitration
    where there was no agreement to arbitrate or where the dispute falls outside
    the scope of the agreement).
    10   Section 323, titled “Powers,” provides:
    Every court shall have power to issue, under its judicial seal,
    every lawful writ and process necessary or suitable for the
    exercise of its jurisdiction and for the enforcement of any order
    which it may make and all legal and equitable powers required for
    (Footnote Continued Next Page)
    - 11 -
    J-A26023-21
    Judicial Code in support of the trial court’s broad authority to manage the
    cases before it. FKH cites In re Estate of Petro, 
    694 A.2d 627
    , 631-32 (Pa.
    Super. 1997), appeal denied, 
    706 A.2d 1213
     (Pa. 1997), wherein this Court
    wrote that the power of granting a stay is one of the powers necessary to the
    fair and efficient administration of justice.      While we do not dispute these
    general principles, FKH has cited no authority governing their application in a
    case involving § 7304. Section 7304(d) governs the efficient administration
    of justice in cases involving an agreement to arbitrate. In other words, § 7304
    is very specific, whereas § 323 is general, as is the holding in Petro. The
    Rules of Statutory Construction provide clear guidance in this situation:
    Whenever a general provision in a statute shall be in conflict
    with a special provision in the same or another statute, the two
    shall be construed, if possible, so that effect may be given to both.
    If the conflict between the two provisions is irreconcilable, the
    special provisions shall prevail and shall be construed as an
    exception to the general provision, unless the general provision
    shall be enacted later and it shall be the manifest intention of the
    General Assembly that such general provision shall prevail.
    1 Pa.C.S.A. § 1933. We find no direct conflict between § 323 and § 7304, the
    former of which does not expressly mention the power to grant a stay, much
    less a stay of a court action pending arbitration.        Section 7304(d) clearly
    ____________________________________________
    or incidental to the exercise of its jurisdiction, and, except as
    otherwise prescribed by general rules, every court shall have
    power to make such rules and orders of court as the interest of
    justice or the business of the court may require.
    42 Pa.C.S.A. § 323.
    - 12 -
    J-A26023-21
    governs the power to grant a stay in a case involving an agreement to
    arbitrate.
    Further, the Courts of this Commonwealth have cited § 7304(d) in
    support of a stay of the judicial proceeding. Taylor v. Extendicare Health
    Facilities, Inc., 
    147 A.3d 490
    , 510 n. 29 (Pa. 2016) (“[O]nce an issue has
    been referred to arbitration, any judicial proceeding involving that issue is
    stayed pending the outcome of arbitration.”). Sew Clean, 903 A.3d at 1258
    (“Clearly, Sew Clean’s claims against Giant Eagle relate to the issues that are
    subject to arbitration, and thus, the trial court should have issued a stay
    pursuant to 42 Pa.C.S. § 7304(d)”). Given the clear language of § 7304(d),
    and finding FKH’s arguments to the contrary unpersuasive, we find no
    precedential or statutory authority for the trial court’s decision to stay the
    arbitration claims.
    At most, as we explained above, the arbitrable claims and the breach of
    Employment Agreement claim can proceed concurrently if they are severable.
    Trial courts have broad discretion to sever or combine cases or causes of
    action under Pa.R.C.P. No. 213. Pa.R.C.P. No. 213(b); Ball v. Bayard Pump
    & Tank Co., 
    67 A.3d 759
    , 767 (Pa. 2013). In this case, the second sentence
    of § 7304(d) would permit the breach of Employment Agreement cause of
    action to proceed in court while the court proceeding on the remaining causes
    of action is stayed pending their arbitration so long as the arbitrable claims
    are severable.    If the arbitrable claims and the breach of Employment
    - 13 -
    J-A26023-21
    Agreement claim are not severable, § 7304(d) requires a stay of the judicial
    proceeding.
    On remand, the trial court should consider the applicability to this case
    of Sew Clean and Taylor. In Sew Clean, the plaintiff (Sew Clean) sued
    Dress For Success (DFS) and Giant Eagle for damages arising out of an alleged
    breach of its agreement with DFS. DFS operated dry cleaning kiosks at Giant
    Eagle grocery stores and contracted with Sew Clean to launder the clothes
    DFS collected at the kiosks. DFS and Giant Eagle moved to compel arbitration
    and to stay the judicial proceeding against Giant Eagle, which was not a party
    to the agreement between Sew Clean and DFS.          The trial court compelled
    arbitration but did not stay the action against Giant Eagle.        This Court
    reversed, holding that Sew Clean’s claims against Giant Eagle “relate to the
    issues that are subject to arbitration, and thus, the trial court should have
    issued a stay pursuant to 42 Pa.C.S. § 7304(d).” Id. at 1258.
    Likewise, as noted above, our Supreme Court in Taylor wrote in a
    footnote that where an issue is referred to arbitration, any judicial proceeding
    involving that issue is stayed pending the outcome of arbitration. Taylor, 147
    A.3d at 510 n. 29. The Taylor Court explained that the arbitration of the
    survival action in that case would be resolved before the wrongful death action
    could proceed in court. Id. Thus, in a case involving distinct causes of action
    arising out of a common nucleus of facts, the Supreme Court wrote that the
    action pending in court would await the outcome of arbitration.
    - 14 -
    J-A26023-21
    Instantly, because the trial court misapplied § 7304(d), we must
    remand for a determination of severability under the proper statutory
    framework. The trial court, mindful that the arbitrable claims must proceed
    immediately, must determine whether the cause of action under the
    Employment Agreement are severable.11              If so, the court action on those
    causes of action may proceed concurrently with the arbitration of the claims
    under the Shareholder Agreement. If not, the court action on the Employment
    Agreement must await the outcome of the arbitration.
    In summary, we affirm the trial court’s order insofar as it denied Perr’s
    application to compel arbitration of the breach of Employment Agreement
    cause of action. We reverse the order insofar as it stayed the arbitrable claims
    pending the outcome of the court action on the breach of Employment
    Agreement claim. Rather, the court must compel immediate arbitration of the
    arbitrable claims, stay the judicial action as to the arbitrable claims, decide
    whether the cause of action on the breach of Employment Agreement claim is
    severable from the arbitration claims, and proceed as explained above upon
    making a severability determination.           We remand for further proceedings
    consistent with this Opinion.
    Order affirmed in part and reversed in part.               Case remanded.
    Jurisdiction relinquished.
    ____________________________________________
    11 As noted above, this decision rests within the discretion of the trial court
    under Pa.R.C.P. No. 213(b).
    - 15 -
    J-A26023-21
    Judge McCaffery joins the opinion.
    Judge Bowes files a concurring and dissenting opinion.
    Judgment Entered.
    Joseph D. Seletyn, Esq.
    Prothonotary
    Date: 6/30/2022
    - 16 -
    

Document Info

Docket Number: 666 EDA 2021

Judges: Stabile, J.

Filed Date: 6/30/2022

Precedential Status: Precedential

Modified Date: 6/30/2022