Dempsey Uniform & Linen v. R & F Intn'l. & Brake

J-S66034-16
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
DEMPSEY UNIFORM & LINEN SUPPLY, IN THE SUPERIOR COURT OF
INC. PENNSYLVANIA
Appellee
v.
R & F INTERNATIONAL MUFFLER &
BRAKE, LLC D/B/A R & F
INTERNATIONAL MUFFLER & BRAKE
Appellant No. 338 MDA 2016
Appeal from the Order Entered February 10, 2016
in the Court of Common Pleas of Lackawanna County
Civil Division at No(s): 15-CV-4162
BEFORE: BOWES, J., PANELLA, J., and JENKINS, J.
MEMORANDUM BY JENKINS, J.: FILED OCTOBER 28, 2016
R & F International Muffler & Brake, LLC d/b/a R & F International
Muffler and Brake (“Appellant”) appeals from the order entered in the
Lackawanna County Court of Common Pleas, which denied its petition to
vacate an arbitrator’s award pursuant to 42 Pa.C.S. § 7314.1 After careful
review, we affirm.
____________________________________________
1
An order denying a petition to vacate or modify an arbitration award is
generally not an appealable award. See 42 Pa.C.S. § 7320 (regarding
appealable orders in arbitration matters); Synder v. Cress, 791 A.2d 1198
(Pa.Super.2002); Kemether v. Aetna Life & Casualty Co., 656 A.2d 125
(Pa.Super.1995). The proper procedure following entry of such an order is
for the trial court to enter an order confirming the arbitration award. The
appeal properly lies from the entry of judgment following the confirmation.
Sherman v. Amica Mutual Ins. Co., 782 A.2d 1006, 1007 n.1
(Footnote Continued Next Page)
J-S66034-16
The trial court summarized the relevant facts and procedural history of
this appeal as follows:
On July 1, 2015, Dempsey Uniform and Linen Supply, Inc.
(hereinafter [“Appellee”]) commenced the instant litigation via
the filing of a [c]omplaint. The [c]omplaint alleges that on or
about August 2, 2013, Tee Feinberg, on behalf of [Appellant’s
predecessor in interest, International Muffler & Brake, LLC],
entered a Rental Service Agreement with [Appellee] for a term
of 260 weeks, or from August 1, 2013 through August 1, 2018.
On or about January 2, 2015, [Appellant] paid [Appellee] with a
check that was later returned for insufficient funds, and
[Appellee] advised [Appellant] that it would have to pay by
either certified check or cash. The [c]omplaint alleges that
[Appellant] has failed to reimburse [Appellee], and has also
failed to pay invoices totaling $437.45. The [c]omplaint further
alleges that by January 30, 2015, [Appellant] began accepting
commercial textile and linen services from a competitor of
[Appellee]. The [c]omplaint alleged that [Appellant] had
breached the terms of the agreement, and requested that the
parties submit to binding arbitration as required by paragraph 11
of the contract.
On August 17, 2015, [Appellant] filed [p]reliminary
[o]bjections and a [b]rief in [s]upport thereof, arguing that
[Appellee] did not fulfill the conditions precedent to seeking
judicial intervention in an arbitration clause. Following
discussion between the parties, on August 18, 2015, the parties
agreed to submit to Thomas Helbig, Esq. (hereinafter “Arbitrator
Helbig”) for arbitration. On October 27, 2015, Arbitrator Helbig
found that a contract existed between the parties [and] entered
an award in favor of [Appellee] in the amount of $9,266.37. On
November 30, 2015, [Appellant] filed a [p]etition to [v]acate the
_______________________
(Footnote Continued)
(Pa.Super.2001), appeal denied, 798 A.2d 1291 (Pa.2002). The record in
this matter indicates the trial court failed to confirm the underlying
arbitration award, but did enter judgment below. We decline to quash this
appeal, however, because it was the trial court’s responsibility, and not
Appellant’s, to enter a confirming order. See Kemether, 656 A.2d at 127.
-2-
J-S66034-16
October 27, 2015 [a]rbitration [a]ward. On December 4, 2015,
[Appellee] filed its [a]nswer and [b]rief in [o]pposition to
[Appellant’s] [p]etition to [v]acate. On January 12, 2016,
[Appellant] filed its [b]rief in [s]upport of its [p]etition to
[v]acate the October 27, 2015 [a]rbitration [a]ward.
On February 10, 2016, following oral argument, [the trial
court] entered an [o]rder denying [Appellant’s] [p]etition to
[v]acate the October 27, 2015 [a]ward of the Arbitrator. On
February 22, 2016, [Appellant] filed a [n]otice of [a]ppeal to the
Superior Court of Pennsylvania of the February [10], 2016
[o]rder.
Trial Court Pa.R.A.P. 1925(a) Opinion, filed March 7, 2016 (“1925(a)
Opinion”), pp. 1-2 (internal citations omitted).
Appellant raises the following issue for our review:
Whether the trial court erred when it denied the motion of R & F
International Muffler & Brake, LLC, to vacate an award of
arbitrators dated October 27, 2015, when R & F International
Muffler & Brake, LLC was not a signatory to the underlying
contract?
Appellant’s Brief, p. 1 (all capitals omitted).
Our standard of review of denial of a motion to vacate an arbitrator’s
award is well-settled: “we will reverse a trial court’s decision regarding
whether to vacate an arbitration award only for an abuse of discretion or
error of law.” Joseph v. Advest, Inc., 906 A.2d 1205, 1208
(Pa.Super.2006) (quoting Conner v. DaimlerChrysler Corp., 820 A.2d
1266, 1269 (Pa.Super.2003)).
The Uniform Arbitration Act provides, in relevant part:
§ 7314. Vacating award by court
(a) General rule.--
-3-
J-S66034-16
(1) On application of a party, the court shall vacate an award
where:
(i) the court would vacate the award under section 7341
(relating to common law arbitration) if this subchapter
were not applicable;
(ii) there was evident partiality by an arbitrator appointed
as a neutral or corruption or misconduct in any of the
arbitrators prejudicing the rights of any party;
(iii) the arbitrators exceeded their powers;
(iv) the arbitrators refused to postpone the hearing upon
good cause being shown therefor or refused to hear
evidence material to the controversy or otherwise so
conducted the hearing, contrary to the provisions of
section 7307 (relating to hearing before arbitrators), as to
prejudice substantially the rights of a party; or
(v) there was no agreement to arbitrate and the issue of
the existence of an agreement to arbitrate was not
adversely determined in proceedings under section 7304
(relating to court proceedings to compel or stay
arbitration) and the applicant-party raised the issue of the
existence of an agreement to arbitrate at the hearing.
42 Pa.C.S. § 7314.
Here, Appellant claims it is not bound by the arbitration clause of the
underlying contract because it was not an actual signatory to the contract.
The gist of Appellant’s argument is that International Muffler & Brake, LLC,
not R & F International Muffler & Brake, LLC (“International”) entered the
contract with Appellee. See Appellant’s Brief, pp. 2-4. However, Appellant,
which itself describes International as its “predecessor”, abided by the terms
of the contract up until the payment dispute. See Brief In Support of the
[Appellant’s] Motion to Vacate Award of Arbitrator, filed January 12, 2016, p.
1 (unnumbered). Additionally, when its dishonored check began this
-4-
J-S66034-16
dispute, Appellant did not disavow the contract, but instead simply argued
that the contract did not require it to provide secured payment. The record
further belies Appellant’s claim that it did not intend to be bound by the
arbitration clause in that (1) Appellant’s preliminary objections to Appellee’s
complaint sought the enforcement of the contract’s arbitration provision that
required the parties to submit to arbitration prior to seeking judicial
intervention, and (2) the parties actually agreed to, and participated in,
arbitration pursuant to the contract.2 Further, the trial court convincingly
explained its denial of Appellant’s motion to vacate the arbitrator’s award
thusly:
We find that [Appellant] was not denied a hearing, nor that
fraud, misconduct, corruption, or other irregularity caused an
inequitable award. The record reflects that the parties agreed to
submit to Arbitrator Helbig on August 18, 2015. Not only did
[Appellee’s] [c]omplaint include a demand for [a]rbitration based
upon the underlying contract, but [Appellant] subsequently filed
[p]reliminary [o]bjections alleging that [Appellee] failed to
submit to arbitration as required by the purported agreement.
Arbitration was conducted in the office of Arbitrator Helbig on
October 26, 2015. On October 27, 2015, following the
arbitration, Arbitrator Helbig issued his decision in favor of
[Appellee] in the amount of $9,266.37. In reviewing the record,
there is not fraud, misconduct, corruption or apparent
irregularity that occurred in the arbitration process which would
allow this [c]ourt to vacate the award. Accordingly, [Appellant]
____________________________________________
2
The federal case Appellant cites for the proposition that a party is not
bound by an arbitration agreement which it did not sign – Fiat v. S.P.A. v.
Minister of Finance and Planning of the Republic of Suriname, 1989
U.S. Dist. LEXIS 11995 (S.D.N.Y.1989) – is distinguishable in that it deals
with a third party non-signatory, not a successor who abided by the contract
and sought enforcement of its arbitration clause in the course of litigation.
-5-
J-S66034-16
failed to meet its burden of proof establishing its entitlement to
relief by clear, precise and indubitable evidence.
1925(a) Opinion, pp. 4-5 (internal citations omitted).
The record supports the trial court’s assessment of the facts and
determination of the petition to vacate the arbitrator’s award in this matter.
Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 10/28/2016
-6-