Torma, J. v. Parrot Construction Corp. ( 2017 )

J-A29024-16
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
JUDY TORMA IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellant
v.
PARROT CONSTRUCTION CORP.; PAUL
CHAMBERS
Appellees No. 363 WDA 2016
Appeal from the Judgment Entered March 28, 2016
In the Court of Common Pleas of Allegheny County
Civil Division at No(s): GD 15-017669
BEFORE: DUBOW, J., MOULTON, J., and MUSMANNO, J.
MEMORANDUM BY MOULTON, J.: FILED JANUARY 11, 2017
Judy Torma appeals from the March 28, 2016 order of the Allegheny
County Court of Common Pleas confirming the arbitration award entered in
favor of Parrot Construction Corporation (“Parrot”) and Paul Chambers and
entering judgment in favor of Parrot and Chambers and against Torma. We
affirm that part of the trial court’s order denying Torma’s petition to modify
or vacate the arbitration award with respect to Torma’s allegations of
procedural errors by the arbitrator. However, because the arbitrability of
one aspect of the dispute is not clear from the terms of the relevant
contracts, we remand for an appropriate evidentiary hearing.
On May 15, 2014, Torma and Parrot entered into a construction
contract (“Construction Contract”), wherein Parrot agreed to renovate the
front wall and middle of the roof of a building owned by Torma. The parties
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used a form contract produced by the Associated General Contractors of
America, which included an arbitration clause:
16.1 All claims, disputes, and other matters in question
arising out of, or relating to, this Agreement or the breach
thereof, Except [for certain artistic matters], and except
for claims which have been waived by the making or
acceptance of Final Payment shall be decided by arbitration
in accordance with the Construction Industry Arbitration
Rules of the American Arbitration Association then
obtaining unless the parties mutually Agree otherwise.
This Agreement to arbitrate shall be specifically
enforceable under the prevailing arbitration law.
Constr. Contract, 5/15/14 at 14.
On June 6, 2014, the parties executed an Agreement of Understanding
(“Moving Contract”), wherein Parrot agreed to photograph, inventory,
transport, store, and sell a number of arcade and coin-operated machines
owned by Torma, located on the first and second floors of the building.
Torma agreed to pay Parrot for transportation costs and other fees, as well
as a fee for consummating any sales of the machines. The Moving Contract
did not explicitly reference the Construction Contract, but stated that the
parties agreed that the Moving Contract was a “fair and equitable way to
protect and recover costs associated with handling and selling the machines
and equipment during the construction repairs to the property.” Moving
Contract, 6/6/14, at 1.
On March 27, 2015, Parrot filed an arbitration claim with the American
Arbitration Association (“AAA”), demanding payment for its work under both
the Construction and Moving Contracts. Parrot alleged that the Moving
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Contract was a change order and, thus, an integrated part of the
Construction Contract.1 Torma filed an answer and counterclaim, arguing
that: Parrot failed to comply with the terms of the Construction Contract;
Parrot overbilled Torma and added false charges; the minimal work Parrot
performed was of poor quality; Parrot used non-professional workers; and
the Moving Contract was separate and distinct from the Construction
Contract. Subsequently, the parties agreed on an arbitrator, and a hearing
was scheduled for August 22, 2015.
On July 28, 2015, Torma’s counsel contacted the AAA, requesting that
the arbitrator view the building and issue an order dismissing Parrot’s
counterclaim for failure to pay the arbitration fee when due. On August 17,
2015, the arbitrator issued an order stating that he would not rule on the
property viewing until the hearing and directing Parrot to pay its required
arbitration fee of $1,250.00 before August 19, 2015 or its arbitration claims
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1
“Change orders” are defined in Article 9.1.1 of the Construction
Contract as:
a written order to [Parrot] signed by [Torma] or his
authorized agent and issued after the execution of the
[Construction Contract], authorizing a Change in the
Project and/or an adjustment in the Guaranteed Maximum
Price, the Contractor’s Fee or the Contract Time Schedule.
Constr. Contract at 7. Article 9.1 gave Torma authority to order changes
“without invalidating the [Construction Contract]” so long as they were
“within the general scope of [the] [Construction Contract]” and consisted of
“additions, deletions, or other revisions.” Id.
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would be dismissed. Parrot paid the AAA $900.00 on August 20, 2015, and
the arbitrator confirmed that the hearing would proceed as scheduled.
The arbitration hearing occurred on August 22, 2015. No record was
kept. According to Torma’s petition to modify or vacate the arbitration
award, she objected to the arbitrator considering the Moving Contract,
arguing that the AAA lacked jurisdiction over this claim. The parties agree
that the arbitrator chose to hear all evidence related to the Construction and
Moving Contracts before issuing a decision on whether he had jurisdiction.
Torma’s petition also alleged that the arbitrator precluded her counsel from
cross-examining Chambers, Parrot’s president, about the terms of both
contracts, instead stating that he would interpret the contracts. Further, the
petition averred that the arbitrator agreed to view the property but declined
to examine the roof and parapet walls.
On August 26, 2015, the arbitrator issued a written order stating that
the AAA had jurisdiction to hear the Moving Contract claim. The arbitrator
explained that he had the authority to determine the AAA’s jurisdiction under
Rule 9(a)—“Jurisdiction” and sustained Parrot’s “claim . . . that moving and
storage and returning of the equipment was necessary to the performance of
the work [and] was essential to the contract at issue.” Arb.’s Order,
8/26/15. Despite the fact that the Moving Contract did not specify a change
in project or price, the arbitrator found that “this matter is a change order
under the existing contract between the parties.” Id.
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On September 3, 2015, the arbitrator issued a written decision,
awarding Parrot and Chambers damages for the balance due on the
Construction Contract, including the work performed on the rear parapet
wall and electric system, regular and penalty interest, and attorneys’ fees.
Arb. Award, 9/3/15. The arbitrator also awarded an equitable adjustment
based on Torma’s breach of the Moving Contract. Id.
On October 5, 2015, Torma filed a petition to modify or vacate the
arbitration award. Torma alleged irregularities in the arbitration process,
including: Parrot’s failure to pay the arbitration fee in full before the hearing;
the arbitrator’s determination that the AAA had jurisdiction over the Moving
Contract; the arbitrator’s decision to end cross-examination of Chambers;
and the arbitrator’s decision to not examine the roof and walls of the
building. After Parrot responded, the trial court held a hearing on the
petition on December 1, 2015. On February 12, 2016, the trial court denied
the petition. See Order & Memorandum in Support of Order, 2/12/16, at 1
(“Mem.”).
On March 8, 2016, Torma filed a notice of appeal. On March 12, 2016,
the trial court ordered Torma to file a concise statement of errors
complained of on appeal pursuant to Pennsylvania Rule of Appellate
Procedure 1925 (“Rule 1925”). On March 28, 2016, Parrot filed a motion to
confirm the award and enter judgment, which the trial court granted that
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same day.2 Torma subsequently filed her concise statement on April 11,
2016. On June 3, 2016, the trial court filed an opinion pursuant to Rule
1925(a).3 See Opinion, 6/3/16 (“1925(a) Op.”).
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2
In its order, the trial court noted that the motion was unopposed.
3
While the Honorable Judith L.A. Friedman ruled on the petition to
modify or vacate and authored the February 12, 2016 order and
memorandum, the Honorable Timothy O’Reilly entered the Rule 1925(a)
opinion on Judge Friedman’s behalf.
In its Rule 1925(a) opinion, the trial court asked this Court to quash
the appeal. 1925(a) Op. at 1. The trial court stated that because Torma
appealed from the order denying her petition to modify or vacate the
arbitration award rather than the judgment entered on the arbitration award
and the time to appeal from the judgment has passed, Torma’s appeal is
patently untimely. Id. at 1-2. We disagree.
While the trial court is correct that an order denying a petition to
modify or vacate is not an appealable order pursuant to 42 Pa.C.S. § 7320,
we have held that an appeal lies from an order confirming an arbitration
award, which should be entered “either simultaneously with or following the
entry of the order denying the petition to vacate or modify.” Kemether v.
Aetna Life & Cas. Co., 656 A.2d 125, 126-27 (Pa.Super. 1995). In
Kemether, the trial court denied the Kemethers’ petition to modify or
vacate arbitration award and did not enter an order confirming the
arbitrator’s award. Id. at 126. The Kemethers appealed from the order
denying the petition, and Aetna asked this Court to quash the appeal,
arguing that the Kemethers were attempting to appeal a non-appealable
order. Id. We allowed the appeal, noting that, while the appeal was
improperly taken from the order denying the petition to modify or vacate,
the “responsibility for entering a confirming order in such a case lies with the
trial judge,” and “the Kemethers will not be punished for the trial court’s
failure to enter the required order.” Id. at 127 (citing Dunlap by Hoffman
v. State Farm Ins., 546 A.2d 1209, 1211 (Pa.Super. 1988)). Here, as in
Kemether, the trial court did not simultaneously enter an order confirming
the award and entered judgment when it denied Torma’s petition.
Therefore, we have jurisdiction to hear this appeal.
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Torma raises three issues on appeal:
A. Whether the court erred or abused its discretion in
concluding that the AAA’s failure to enforce the August
17th Order did not constitute an irregularity rendering the
Award unjust and inequitable.
B. Whether the court erred or abused its discretion in
concluding that the Arbitrator’s conduct did not result in
Appellant being denied a full and fair hearing.
C. Whether the court erred or abused its discretion in
concluding that the Arbitrator did not exceed the scope of
the arbitration clause in the [Construction Contract] when
he determined the Moving Contract was subject to AAA
jurisdiction.
Torma’s Br. at 4.
Agreements to arbitrate pursuant to the rules of the AAA are governed
by Pennsylvania’s common law arbitration statutes, 42 Pa. C.S. §§ 7341-42.
See Bucks Orthopaedic Surgery Assocs., P.C. v. Ruth, 925 A.2d 868,
871 (Pa.Super. 2007). Our standard of review of an order confirming an
arbitration award is limited:
The award of an arbitrator in a nonjudicial arbitration
which is not subject to statutory arbitration or to a similar
statute regulating nonjudicial arbitration proceedings is
binding and may not be vacated or modified 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. The arbitrators are the final judges of both law and
fact, and an arbitration award is not subject to reversal for
a mistake of either. A trial court order confirming a
common law arbitration award will be reversed only for an
abuse of discretion or an error of law. The appellant bears
the burden to establish both the underlying irregularity and
the resulting inequity by clear, precise, and indubitable
evidence.
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Andrew v. CUNA Brokerage Servs., Inc., 976 A.2d 496, 500 (Pa.Super.
2009) (internal citations and quotation marks omitted).
In the context of a common law arbitration award, an “irregularity
refers to the process employed in reaching the result of the arbitration, not
to the result itself.” McKenna v. Sosso, 745 A.2d 1, 4 (Pa.Super. 1999).
“A cognizable irregularity may appear in the conduct of either the arbitrators
or the parties.” Id. “The power and authority of arbitrators are wholly
dependent upon the terms of the agreement of submission, and they cannot
exercise authority as to matters not included therein, or validly determine
the dispute if they violate or act inconsistently with the terms of the
submission.” Boulevard Assocs. v. Seltzer P’ship, 664 A.2d 983, 987
(Pa.Super. 1995) (quoting Sley Sys. Garages v. Transp. Workers Union
of Am., 178 A.2d 560, 561 (Pa. 1962)).
Torma first argues that the trial court erred or abused its discretion in
finding that the arbitrator’s decision to allow Parrot’s claim to go forward
after Parrot failed to pay its arbitration fees by August 19 was discretionary
and not an irregularity in the arbitration process that required modification
or vacation of the award. Torma’s Br. at 18. According to Torma, the
arbitrator’s decision not to enforce the order and allow the hearing to
proceed evinced “the great deference the AAA and the [a]rbitrator granted
to Parrot[,] . . . [and] clearly showed that the AAA and the [a]rbitrator
brushed-off Parrot’s procedural noncompliance.” Id. Torma argues that she
“was not granted such deference by the AAA or the [a]rbitrator, and was
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prejudiced by their unequal treatment of the parties,” which created an
irregularity in the arbitration process. Id. We disagree.
The trial court found that the arbitrator acted within his discretion
because the “irregularity [Torma] alleged is a procedural one that the
arbitrator and the AAA failed to enforce their own orders and regulations.”
Mem. at 2. Considering “the relatively small amount of the unpaid balance
and the extent of the untimeliness,” the trial court found no abuse of
discretion, “much less one that led to an unjust, inequitable or
unconscionable award.” Id.
Here, the parties agreed to arbitrate any disputes pursuant to the
AAA’s Construction Industry Arbitration Rules and Mediation Procedures
(“AAA Rules”). AAA Rule 59 defines the power and authority of the
arbitrator when a party has not paid the ordered fees:
(a) If arbitrator compensation or administrative charges
have not been paid in full, the AAA may so inform the
parties in order that one of them may advance the
required payment.
(b) Upon receipt of information from the AAA that
payment for administrative charges or deposits for
arbitrator compensation have not been paid in full, to the
extent the law allows, a party may request that the
arbitrator issue an order directing what measures might be
taken in light of a party’s non-payment. Such measures
may include limiting a party’s ability to assert or pursue
their claim. In no event, however, shall a party be
precluded from defending a claim or counterclaim. The
arbitrator must provide the party opposing a request for
such measures with the opportunity to respond prior to
making any such determination. In the event that the
arbitrator grants any request for relief which limits any
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party’s participation in the arbitration, the arbitrator shall
require the party who is making a claim and who has made
appropriate payments, to submit such evidence as the
arbitrator may require for the making of an award.
(c) Upon receipt of information from the AAA that full
payments have not been received, the arbitrator, on the
arbitrator’s own initiative, may order the suspension of the
arbitration. If no arbitrator has yet been appointed, the
AAA may suspend the proceedings.
(d) If the arbitrator’s compensation or administrative fees
remain unpaid after a determination to suspend an
arbitration due to nonpayment, the arbitrator has the
authority to terminate the proceedings. Such an order shall
be in writing and signed by the arbitrator.
AAA Rule 59. The plain language of Rule 59 shows that decisions regarding
the suspension or termination of arbitration claims are wholly within the
arbitrator’s discretion. Declining to dismiss a claim in such a situation does
not establish that the arbitrator “brushed off Parrot’s procedural
noncompliance,” see Torma’s Br. at 18, and does not “import[] such bad
faith, ignorance of the law and indifference to the justice of the result” as to
require modification or vacation of the arbitration award. Allstate Ins. Co.
v. Fioravanti, 299 A.2d 585, 589 (Pa. 1973). We conclude that the trial
court did not abuse its discretion.
Next, Torma argues that she was denied a full and fair hearing
because the arbitrator stopped her counsel’s cross-examination of Chambers
on both the Construction and Moving Contracts and refused to view the
subject walls and roof of the building. Torma’s Br. at 21. Torma argues that
because “the right to cross-examination is crucial to the conduct of a ‘full
and fair hearing[,]’” the arbitrator’s unilateral stoppage of cross-examination
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denied her such a hearing. Id. at 19 (quoting Reisman v. Ranoel Realty
Co., 303 A.2d 511, 514 (Pa.Super. 1973)). According to Torma, she was
denied a full and fair hearing because cross-examination of Chambers would
have elicited relevant testimony that was material to the resolution of the
case. Id. at 20. We disagree.
An arbitrator’s decision to end cross-examination or refuse to hear
testimony on the basis that such information is irrelevant or unnecessary
may in some circumstances deny the examining party a full and fair hearing
and require modification or vacation of an arbitration award. But to prevail,
the examining party must also show that such action led to the omission of
relevant, material evidence, rather than being a “mere mistake of law or fact
binding upon all parties and the court.” Smaligo v. Fireman’s Fund Ins.
Co., 247 A.2d 577, 580 (Pa. 1968). In Smaligo, our Supreme Court held
that an arbitrator’s failure to hear an expert witness’s proffered testimony
about the decedent’s “future earning ability and capacity” denied the
plaintiffs a full and fair hearing. Id. at 579. In Allstate Ins. Co. v.
Fioravanti, 299 A.2d 585 (Pa. 1973), the Court applied Smaligo to a
situation where counsel was not permitted to present a memorandum on a
controlling legal issue but was permitted to argue the issue before the
arbitrators. There, the Court held that while the arbitrator’s decision in
Smaligo led to the “complete omission of critical factual evidence,” the
appellant in Fioravanti had, “at most, one [f]orm of argument . . . closed
off by the arbitrators.” Id. at 588. Because the arbitrator did not preclude
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all argument on the issue, the Fioravanti Court “found no denial of a full
and fair hearing.” Id.
Here, Torma’s counsel was allegedly prevented from cross-examining
Chambers about the terms of the Construction and Moving Contracts, which
the arbitrator ruled was irrelevant and unnecessary to the issues because he
would decide the meaning of the contract terms. Because interpretation of
contract terms is generally a question of law and not fact, see
Szymanowski v. Brace, 987 A.2d 717, 722 (Pa.Super. 2009), we conclude
that the trial court did not abuse its discretion in finding that the arbitrator,
at worst, made an evidentiary error if there was an ambiguity in the
contracts.4 This case is more akin to Fioravanti than Smaligo, as the
arbitrator did not exclude critical factual evidence, but rather declined to
hear interpretations of the contract language. Because Torma does not
allege that she was prevented from presenting legal argument regarding
these interpretations, we conclude that she was not denied a full and fair
hearing.5
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4
The AAA Rules, although not binding on this Court, provide that
“[t]he arbitrator shall determine the admissibility, relevance, and materiality
of the evidence offered . . . . [and] may reject evidence deemed by the
arbitrator to be . . . unnecessary.” AAA Rule 35(b). Thus, while the
arbitrator was required to afford Torma a full and fair hearing on her claims,
the AAA Rules, agreed to in the arbitration clause, similarly provided the
arbitrator discretion to reject evidence he considered unnecessary.
5
Torma also asserts that there is clear evidence that the arbitrator
stopped her counsel from cross-examining Chambers “on the proposed
(Footnote Continued Next Page)
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Similarly, we conclude that the arbitrator’s decision not to view the
roof and parapet walls was not misconduct. Torma proffered testimony from
an expert witness regarding the condition of the walls and roof, and the
arbitrator determined that close-up inspection of the roof and parapet walls
would be cumulative. Under the AAA Rules, the arbitrator was free to
“reject evidence [he] deemed . . . to be cumulative.” AAA Rule 35(b). Thus,
the trial court did not abuse its discretion.
Torma’s last claim is that both the arbitrator and the trial court erred
in ruling that the arbitration clause in the Construction Contract applied to
disputes arising from the later-executed Moving Contract. Torma argues
that the Moving Contract is outside the scope of the Construction Contract,
including the arbitration clause, because the Construction Contract’s
arbitration provision is “limited to disputes and issues about the design and
_______________________
(Footnote Continued)
Change Orders and the provisions of the [Construction Contract] related
thereto that evidenced the proposed Changes Orders included in Parrot’s
claim were invalid and unenforceable pursuant to the terms of the
[Construction Contract].” Torma’s Br. at 20. To the extent that such
testimony constituted parol evidence of the agreement, we would agree, as
evinced by our ruling on Torma’s jurisdiction challenge, that such evidence
would have been relevant. However, instead of presenting a record or any
other evidence, testimonial or otherwise, Torma merely asserts that her
counsel intended to cross-examine Chambers as to the parties’ intent in
executing the contracts. Therefore, we conclude that Torma is not entitled
to relief, as she has not presented clear, precise, and indubitable evidence
regarding this alleged impropriety. See Gargano v. Terminix Int’l Co.,
L.P., 784 A.2d 188, 193 (Pa.Super. 2001) (“[An a]ppellant bears the burden
to establish both the underlying irregularity and the resulting inequity by
‘clear, precise, and indubitable evidence.’”) (quoting McKenna, 745 A.2d at
4).
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construction of the renovations.” Torma’s Br. at 23. According to Torma,
the Moving Contract is a separate contract that “has nothing to do with the
design and construction of renovations to the . . . [b]uilding[.]” Rather, the
parties “entered into [the Moving Contract] . . . for the sole purpose of
Parrot selling Torma’s personal property.” Id. at 24. As a result, Torma
argues that the arbitrator “exceed[ed] the scope of his jurisdiction when he
considered the parties[’] dispute arising from the Moving Contract.” Id.
The “question . . . whether a party agreed to arbitrate a dispute is a
jurisdictional question that must be decided by a court.” Smith v.
Cumberland Grp., Ltd., 687 A.2d 1167, 1171 (Pa.Super. 1997).
Therefore, the trial court must determine “whether a dispute is within the
terms of an arbitration agreement.” Hassler v. Columbia Gas
Transmission Corp., 464 A.2d 1354, 1356 (Pa.Super. 1983). The question
whether an agreement containing no arbitration clause is nevertheless
subject to arbitration because it is integrated into another agreement that
contains an arbitration clause must be decided by the courts. Huegel v.
Mifflin Constr. Co., 796 A.2d 350, 354 (Pa.Super. 2002). Because “the
arbitrator’s authority is restricted to the powers the parties have granted
them in the arbitration agreement, we may examine whether the common
law arbitrator exceeded the scope of his authority.” Gargano v. Terminix
Int’l Co., L.P., 784 A.2d 188, 193 (Pa.Super. 2001).
Here, Torma and Parrot disagree as to whether the Moving Contract
was an integrated component of the Construction Contract and, thus,
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subject to arbitration. If the arbitrator entered a decision on the Moving
Contract without jurisdiction to hear the claim, then the award must be
vacated, as a court cannot enter judgment on a claim over which it has no
jurisdiction. See Aronson v. Sprint Spectrum, L.P., 767 A.2d 564, 568
(Pa.Super. 2001) (“Jurisdiction is the capacity to pronounce a judgment of
the law on an issue brought before the court through due process of law . . .
. Without such jurisdiction, there is no authority to give judgment and one
so entered is without force or effect.”) (quoting Bernhard v. Bernhard, 668
A.2d 546, 548 (Pa.Super. 1995)). However, if the arbitrator correctly
determined that he had jurisdiction over the matter and properly considered
the Moving Contract claim, then the award would be proper, as Torma does
not challenge the arbitrator’s ruling itself but only his jurisdiction to hear the
claim. Torma’s Br. at 21.
Upon review of the Construction Contract and the Moving Contract, we
conclude that, contrary to the apparent view of both the arbitrator and the
trial court,6 the terms of the two contracts do not clearly resolve the
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6
In its lone paragraph on the issue, the trial court admits that this
“question . . . may warrant closer judicial review,” but concludes that the
arbitrator’s decision was correct:
[O]ur review of the [Construction Contract] and [Moving
Contract] does not reveal any error by the arbitrator. The
Petition complains mostly about the demands for payment
made by Parrot and presents little regarding how the
[Moving Contract] is not ancillary to and incorporated into
the [Construction Contract]. Therefore, even if we are
(Footnote Continued Next Page)
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question whether disputes under the Moving Contract are subject to the
arbitration clause in the Construction Contract.
When the words of an agreement are clear and
unambiguous, the intent of the parties is to be ascertained
from the language used in the agreement, . . . which will
be given its commonly accepted and plain meaning[.]
When, however, an ambiguity exists, parol evidence is
admissible to explain or clarify or resolve the ambiguity,
irrespective of whether the ambiguity is patent, created by
the language of the instrument, or latent, created by
extrinsic or collateral circumstances. A contract is
ambiguous if it is reasonably susceptible of different
constructions and capable of being understood in more
than one sense.
Miller v. Poole, 45 A.3d 1143, 1146 (Pa.Super. 2012) (internal citations
and quotation marks omitted).
The Construction Contract contains an integration clause which states
that the contract “represents the entire Agreement between [Torma] and
[Parrot, which] supersedes all prior negotiations representations or
Agreements.” The Construction Contract, however, allows for amendment
“by written instrument signed by both [Torma] and [Parrot].” Constr.
Contract at 3. The Construction Contract also provides for certain change
_______________________
(Footnote Continued)
required to look more closely at this issue, we find that the
arbitrator correctly concluded that the [Moving Contract]
was in the nature of a Change Order and was therefore
part of the [Construction Contract].
Mem. at 3.
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orders under Article 9 and additional services under Article 2.57 that, while
executed by separate written contract, may be covered by the terms of the
Construction Contract. The Moving Contract does not specifically reference
the Construction Contract, but it does include a statement that “[b]oth
[Torma] and Parrot agree that [the Moving Contract] is a fair and equitable
way to protect and recover costs associated with the handling and selling
[of] the machines and equipment during the construction repairs to the
property.” Moving Contract, 6/6/14. Neither contract defines the
relationship between the two.
Torma argues that the arbitration clause of the Construction Contract
does not apply to the Moving Contract. According to Torma, “[t]he plain
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7
Article 2.5 provides:
2.5.1 [Parrot] will provide the following additional services
upon the request of [Torma]. A written [a]greement
between [Torma] and [Parrot] shall define the extent of
such additional services and the amount and manner in
which [Parrot] will be compensated for such additional
services.
2.5.2 Services related to investigation, appraisals or
evaluations of existing conditions, facilities or equipment,
or verification of the accuracy of existing drawings or other
[Torma]-furnished information.
2.5.3 Services related to Owner-furnished equipment,
furniture and furnishings which are not a part of this
[Construction Contract].
Constr. Contract at 5.
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language of the Moving Contract makes it clear that its scope applied to the
moving, storing, and selling of personal property . . . . [, which] has nothing
to do with the design and construction of renovations to the . . . [b]uilding.”
Torma’s Br. at 24. Parrot argues in response that the Moving Contract “was
a change order to the [Construction C]ontract as the removal of items and
other preparations were necessary as part of the renovations.” Parrot’s Br.
at 8. According to Parrot, “the parties contemplated and executed that
agreement as part of the [C]onstruction [C]ontract and incorporated it and
other change orders.” Id. Because we find that both of these
interpretations8 are reasonably plausible,9 we remand the matter to the trial
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8
While neither party argues this point, we note that the Moving
Contract could also be reasonably interpreted as an additional service under
Construction Contract Article 2.5. et seq.
9
This Court has, at least once before, concluded that a contract
without an arbitration clause was nevertheless subject to arbitration because
a later contract between the parties, which contained an arbitration clause,
incorporated the earlier contract. See Huegel, 796 A.2d at 356-57
(concluding that an integration clause in the later contract for home
financing, combined with “numerous references in the [later] contract to the
[earlier] contract [for home improvement services] and the goods and
services described therein” applied the later contract’s arbitration clause “to
any claims arising from the [plaintiffs’] purchase of the goods and services
from [the defendant] as well as the obligations arising from the financing
provided.”). The Huegel court, however, benefitted from a later contract
for financing that, in addition to containing an integration clause, referred
specifically to the earlier home improvement contract and its terms. Id. at
356. Unlike Huegel, the record before us provides little detail of the
relationship between the two agreements, and the later contract, while
between the same parties, contains only one vague reference to the
renovations.
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court so that the parties may present evidence to assist the trial court in
determining whether the arbitrator had jurisdiction over the Moving Contract
claim.
Order affirmed with respect to Torma’s allegations of prejudice and
denial of full and fair hearing. Order reversed with respect to the trial
court’s ruling concerning the arbitrator’s jurisdiction over the Moving
Contract claim. Case remanded with instructions. Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 1/11/2017
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