CAM Financial Services v. Broadview Networks, Inc.

J-S77042-14
NON-PRECEDENTIAL DECISION – SEE SUPERIOR COURT I.O.P. 65.37
CAM FINANCIAL SERVICES D/B/A : IN THE SUPERIOR COURT OF
COUNTY MORTGAGE SERVICES, : PENNSYLVANIA
:
Appellee :
:
v. :
:
BROADVIEW NETWORKS, INC., :
:
Appellant : No. 2030 EDA 2014
Appeal from the Order Entered July 2, 2014,
in the Court of Common Pleas of Delaware County,
Civil Division, at No(s): No. 14-2279
BEFORE: STABILE, JENKINS, and STRASSBURGER, JJ.*
MEMORANDUM BY STRASSBURGER, J.: FILED FEBRUARY 06, 2015
Broadview Networks, Inc. (Broadview) appeals from the order
overruling its preliminary objection in the nature of a motion to compel
arbitration against CAM Financial Services d/b/a County Mortgage Services
(CAM). We vacate the order of the trial court and remand for proceedings
consistent with this memorandum.
This case arises from a dispute between CAM, a corporation providing
low interest mortgages, and Broadview, a local, regional and long distance
telephone carrier. CAM instituted this breach of contract action against
Broadview before a magisterial district judge. CAM asserted that “[b]etween
June 2009 and the present, [Broadview] overcharged [CAM] $26,568.00 for
services which it did not provide to [CAM] and for which [CAM] paid
*Retired Senior Judge assigned to the Superior Court.
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[Broadview].” Complaint, 4/16/2014, at ¶ 14. Thus, CAM requested
judgment in its favor for that amount plus pre-judgment interest.
On February 26, 2014, the district judge found in CAM’s favor;
Broadview appealed to the Court of Common Pleas of Delaware County; and,
Broadview ruled CAM to file a complaint. CAM complied and filed its
complaint on April 16, 2014. Attached as Exhibit B to the complaint is a
“New Customer Enrollment Form and Letter of Agency” (Service Agreement)
dated June 1, 2009. The primary contact on behalf of CAM was Joseph
Stonelake, who signed the forms. Included in that form is a section entitled
Dispute Resolution, which provided the following.
The parties shall attempt to resolve all disputes in the spirit of
cooperation without formal proceedings. Any dispute which
cannot be so resolved (other than the collection of amounts due
for the Services and requests for injunctive relief) shall be the
subject of mandatory arbitration. Such arbitration shall be
conducted in accordance with the U.S. Arbitration Act (Title 9,
U.S. Code), and under the Commercial Arbitration Rules of the
American Arbitration Association. The arbitration shall be
conducted in New York, New York. The decision of the arbitrator
shall be final and binding upon the parties. Judgment upon the
arbitration award may be entered in any court of competent
jurisdiction.
Service Agreement, 6/1/2009, at 2.
Also attached to the complaint is a Broadspeed Dynamic IP GR Order
Form dated June 2, 2009. That order form was also signed by Joseph
Stonelake on behalf of CAM and provided for pricing of the services. In its
complaint, CAM averred that Joseph Stonelake was employed by CAM as a
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loan processor between 2006 and January 2012, and that David V. Gilbert
(Gilbert) was and is the Secretary for CAM. CAM stated that in “February,
June, and November 2009, Gilbert advised [Broadview’s] representative,
Daniel DiOrio (“DiOrio”), both orally and in writing that only Gilbert and
Victoria Stonelake, the Manager, were authorized by [CAM] to discuss,
negotiate, execute, agree to and enter into contracts on behalf of [CAM].”
Complaint, 4/16/2014, at ¶ 8. Furthermore, CAM averred that “[Broadview]
likewise knew this fact based upon previous contracts negotiated between
DiOrio on behalf of [Broadview] and [CAM].” Id. Attached to the Complaint
as Exhibit A were copies of e-mails between Gilbert and DiOrio, with a copy
to Joseph Stonelake, dated November 16, 2009, providing that “NOTHING IS
TO BE CHANGED WITHOUT Vick’s [] or my specific authorization[.]” On the
same day, DiOrio confirmed that “Nothing has been and nothing will[.]”
On May 5, 2014, Broadview filed a preliminary objection to the
complaint pursuant to Pa.R.C.P. 1028(a)(6), which provides that a
preliminary objection may be filed where there is an agreement for
alternative dispute resolution. It requested the parties be compelled to
arbitrate this matter pursuant to the aforementioned clause in the Service
Agreement in light of the fact that CAM “utilized the services provided by
Broadview under the Service Agreement, including the services in dispute
here, as well as other services, and, with certain lapses, [CAM] paid
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Broadview for the services so provided.” Memorandum in Support of
Preliminary Objection, 5/5/2014, at ¶ 4.
In response, CAM asserted that it should not be forced to arbitration
where the employee of CAM, Joseph Stonelake, who signed the Service
Agreement was not authorized to do so, and Broadview knew this
information at the time the Service Agreement was signed. Alternatively,
CAM suggested that the instant dispute falls outside the language of the
arbitration provision in the Service Agreement, because it is a collection
action.
On July 1, 2014, the trial court overruled Broadview’s preliminary
objection. Broadview timely filed a notice of appeal. 1 The trial court did not
order Broadview to file a concise statement of errors complained of on
appeal pursuant to Pa.R.A.P. 1925, but the court did file an opinion pursuant
to Pa.R.A.P. 1925(a).
1
We recognize that the
[d]enial of preliminary objections is ordinarily an interlocutory
order not subject to immediate appeal. Nevertheless:
Pennsylvania Rule of Appellate Procedure 311 provides that an
interlocutory appeal may be taken as of right from any order
which is made appealable by statute. The Uniform Arbitration
Act, 42 Pa.C.S.A. §§ 7301 et seq., states that an appeal may be
taken from ‘[a] court order denying an application to compel
arbitration....’ 42 Pa.C.S.A. § 7320(a)(1).
Midomo Co. v. Presbyterian Hous. Dev. Co., 739 A.2d 180, 182-83 (Pa.
Super. 1999) (some quotations and citations omitted).
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Our standard of review for 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. Where a party to a
civil action seeks to compel arbitration, a two-part test is
employed. First, the trial court must establish if a valid
agreement to arbitrate exists between the parties. Second, if
the trial court determines such an agreement exists, it must
then ascertain if the dispute involved is within the scope of the
arbitration provision. If a valid arbitration agreement exists
between the parties, and the plaintiff’s claim is within the scope
of the agreement, the controversy must be submitted to
arbitration.
Callan v. Oxford Land Dev., Inc., 858 A.2d 1229, 1233 (Pa. Super. 2004)
(citations omitted).
Preliminary objections in the nature of a petition to compel arbitration
filed pursuant to Pa.R.C.P. 1028(a)(6) cannot be determined from facts of
record. See Pa.R.C.P. 1028(c)(2) (“Note: Preliminary objections raising an
issue under subdivision (a)(1), (5), (6), (7) or (8) cannot be determined
from facts of record.”). The Rule further provides that “[i]f an issue of fact is
raised, the court shall consider evidence by depositions or otherwise.”
Pa.R.C.P. 1028(c)(2).
Instantly, the trial court offered the following conclusion in its decision
to overrule the preliminary objection.
In the instant case, if the averments set forth in [CAM’s]
Complaint are accepted as being true, then the Service
Agreement upon which [Broadview] grounds its arbitration claim
is not binding upon [CAM] since no authorized representative of
[CAM] approved the [Enrollment Form]. Accordingly, while
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arbitration may be a favored method of resolving disputes in
Pennsylvania, a party may not be forced into such an
agreement, and on the well pleaded facts that exist of record, no
such agreement was in place.
Trial Court Opinion, 8/13/2014, at 2.
On appeal, Broadview asserts that this conclusion was error for the
following reasons.
CAM accepted and utilized for nearly five years the
telecommunications and related services provided by Broadview
under the Service Agreement and these services were by no
means limited to those in dispute here. During these five years,
CAM regularly interacted with Broadview regarding the Services
being provided by Broadview, raising multiple service and billing
issues; in other words, CAM repeatedly insisted upon the service
quality and billing accuracy rights afforded it under the Service
Agreement. Moreover, CAM, with some lapses, paid Broadview
for the Services provided under the Service Agreement at the
rates and pursuant to the terms and conditions set forth in the
Service Agreement, imploring Broadview, during one of these
aforesaid payments lapses, not to disconnect its services for
nonpayment. Indeed, the very documents submitted by [CAM]
with its Complaint confirm that CAM’s Secretary knew that
Broadview was installing the Services at CAM’s location before
such installation was complete and did not at that time disavow
[Joseph] Stonelake’s authority to execute the Service
Agreement, or seek rescission of the Service Agreement.
Broadview’s Brief at 19.
In other words, Broadview inartfully asserts that the trial court applied
the rules incorrectly by assuming the facts of CAM’s complaint to be true,
when Broadview was arguing those facts were false. There is no question
that, pursuant to the aforementioned rules, the trial court was required to
make a factual determination about the veracity of the allegations in the
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complaint by considering the averments in the preliminary objections as
well. Moreover, had the trial court required additional facts to make such a
determination, it should have considered “evidence by deposition or
otherwise.” Pa.R.C.P. 1028(c)(2).
Accordingly, the trial court erred as a matter of law, and we vacate the
order of the trial court. We remand for the trial court to consider the
preliminary objections filed by Broadview consistent with Pa.R.C.P.
1028(c)(2), and make the factual determinations as to whether “a valid
agreement to arbitrate exists between the parties… [and] if … such an
agreement exists, … ascertain if the dispute involved is within the scope of
the arbitration provision.” Callan, 858 A.2d at 1233.
Order vacated. Case remanded for proceedings consistent with this
memorandum. Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 2/6/2015
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