Brother Moreno Construction v. Aixian Properties ( 2022 )

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NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
BROTHER MORENO CONSTRUCTION, : IN THE SUPERIOR COURT OF
LLC : PENNSYLVANIA
:
:
v. :
:
:
AIXIAN PROPERTIES, LLC AND :
NESTOR COLON : No. 420 EDA 2022
:
Appellants :
Appeal from the Order Entered December 30, 2021
In the Court of Common Pleas of Philadelphia County Civil Division at
No(s): 201101496
BEFORE: PANELLA, P.J., LAZARUS, J., and PELLEGRINI, J.*
MEMORANDUM BY LAZARUS, J.: FILED SEPTEMBER 6, 2022
Aixian Properties, LLC (Aixian) and Nestor Colon appeal from the trial
court order, entered in the Court of Common Pleas of Philadelphia, granting
Brother Moreno Construction, LLC’s (Brother Moreno) petition to confirm an
arbitration award. After careful review, we affirm.
On October 8, 2019, the parties entered into a joint venture agreement
(Agreement) to buy, renovate, and resell a property located at 2702 Oakford
Street in Philadelphia. On November 17, 2020, Brother Moreno filed a
complaint against Aixian and Colon, alleging fraud, misrepresentation, and
breach of contract with respect to the Agreement.
On December 18, 2020, Aixian and Colon filed preliminary objections to
the complaint, arguing that the court lacked jurisdiction over the matter
* Retired Senior Judge assigned to the Superior Court.
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because the Agreement among the parties required any claims arising out of
the Agreement be resolved by mediation or binding arbitration. On February
23, 2021, the Honorable Karen Shreeves-Johns entered an order sustaining
the preliminary objections and staying the case pending the outcome of
binding arbitration.
After the case was stayed, the parties signed a binding arbitration
agreement that stated:
The award rendered by the arbitrator pursuant to this agreement
shall be final and binding on all parties, subject to the statutory
provisions of 42 [Pa.C.S.] § 7341 regarding the vacation or
modification of an arbitration award upon a showing of fraud,
misconduct, corruption, or other irregularity causing the rendition
of an unjust, inequitable or unconscionable award. . . . A judgment
or decree in conformity [with] the award may be entered by a
court of the competent jurisdiction on application of either party.
Petition to Confirm Award of Arbitrator, 9/21/21, Exhibit B at ¶ 6.
Furthermore, the parties selected Vito F. Canuso, Jr., Esquire, as the arbitrator
from a list of three suggested arbitrators.
An arbitration hearing was held on August 10, 2021. After the arbitrator
considered the memoranda, pleadings, testimony, and exhibits presented by
the parties, he issued an award of $157,707.00 in favor of Brother Moreno
and against Aixian and Colon, jointly and severally. Canuso entered the
arbitration award on August 26, 2021, noting that he based his findings on
the Agreement, the receipts presented at the hearing for costs incurred, and
testimony as to the value of the property.
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On September 21, 2021, Brother Moreno filed a petition to confirm the
arbitration award, arguing that neither Aixian nor Colon had made any
allegations of coercion, fraud, foul play, or misrepresentation against Brother
Moreno or the arbitrator.
On October 12, 2021, Aixian and Colon filed a motion to modify or
vacate the arbitration award. They argued that Brother Moreno engaged in
fraud, misconduct, corruption, or other irregularity, causing the arbitrator to
go beyond the scope of his authority and rendering the rendition of an unjust,
inequitable, or unconscionable award. Specifically, Aixian and Colon alleged
that Brother Moreno submitted fraudulent expense reports, which included
double entries and work performed on other real estate projects outside the
Agreement. They also contended that the property was overvalued, and the
award should be reduced or vacated in light of a lower appraisal value for the
property.
In its answer to the motion to modify or vacate, Brother Moreno asserted
that Aixian and Colon included evidence in their closing memorandum that
was never provided during discovery or entered into evidence at the
arbitration, including a report by an appraiser who did not appear or testify at
the hearing. Brother Moreno further noted that Colon, who is a real estate
agent, himself calculated the value of the property at the arbitration. Colon
valued the property at $315,000.00 to $325,000.00, which the arbitrator took
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into consideration in assigning the property a $320,000.00 value and
ultimately arriving at an award of $157,707.00.
On December 30, 2021, the Honorable Abbe F. Fletman entered an order
granting Brother Moreno’s petition to confirm the arbitration award and
denying Aixian and Colon’s motion to modify or vacate the award. On January
27, 2022, Aixian and Colon filed a notice of appeal. They raise the following
issues, verbatim:
1. [Whether] it was an abuse of discretion and error of law for the
[c]ourt to confirm the [a]rbitration [a]ward where it was clearly
demonstrated by [Aixian and Colon] that the underlying
[a]ward could be vacated or modified because [Aixian and
Colon] clearly showed that [they were] denied a hearing or that
fraud, misconduct, corruption[,] or other irregularity caused
rendition of an unjust, inequitable or unconscionable award
pursuant to the Uniform Arbitration Act-Sub Chapter B-
Common Law Arbitration 42 Pa.C.S. § 7342?
2. [Whether] it was an abuse of discretion and error of law for the
Court to confirm the [a]rbitration [a]ward because [Aixian and
Colon] showed that [Brother Moreno] during the [a]rbitration
[h]earing engaged in fraud, misconduct, and corruption by
submitting as evidence during the [a]rbitration [h]earing[:] (1)
fraudulent expense reports; (2) overvalued real estate
estimates; (3) double entries; and (4) invoices for work
performed by [Brother Moreno] on projects not related to the
dispute that in sum resulted in the [a]rbitrator exceeding his
authority and to render an [a]ward that was unconscionable
and unjust pursuant to Uniform Arbitration Act-Sub Chapter B-
Common Law Arbitration 42 Pa.C.S. § 7342?
Brief for Appellant, at 4.
Arbitration is a well-accepted form of dispute resolution that has been
repeatedly endorsed by the courts of this Commonwealth. See MacPherson
v. Magee Mem’l Hosp. for Convalesence, 128 A.3d 1209, 1219 (Pa. Super.
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2015) (en banc) (“Pennsylvania has a well-established public policy that
favors arbitration[.]”) (citation omitted). As we have held, the “award of an
arbitrator in a nonjudicial arbitration . . . 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.” Sage v. Greenspan, 765 A.2d
1139, 1142 (Pa. Super. 2000); 42 Pa.C.S. § 7341. The “appellant bears the
burden to establish both the underlying irregularity and the resulting inequity
by clear, precise[,] and indubitable evidence.” McKenna v. Sosso, 745 A.2d
1, 4 (Pa. Super. 1999) (internal citations omitted). In this context,
“irregularity refers to the process employed in reaching the result of the
arbitration, not the result itself.” Id. Furthermore, “arbitrators are the final
judges of both law and fact, and an arbitration award is not subject to reversal
for a mistake of either.” U.S. Claims, Inc. v. Dougherty, 914 A.2d 874, 876
(Pa. Super. 2006). A “trial court order confirming a common law arbitration
award will be reversed only for abuse of discretion or an error of law.”
Prudential Prop. & Cas. Ins. Co. v. Stein, 683 A.2d, 683, 685 (Pa. Super.
1996).
Prior to addressing the merits of the appellants’ claims, we must
determine whether they were properly preserved for judicial review. Section
7342(b) of the Pennsylvania Uniform Arbitration Act has consistently been
interpreted to require that any challenge to an arbitration award be made in
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an appeal to the Court of Common Pleas by filing a petition to vacate or modify
the arbitration award within thirty days of the date of the award. See
Sage, 765 A.2d at 1142. An objection to an arbitration award filed after the
thirty-day period will be deemed untimely and waived. Id. We have also held
that challenges to the validity of an arbitration award asserted for the first
time in opposition to a petition to confirm are procedurally inadequate to
preserve claims for judicial review. Dougherty, 914 A.2d at 877.
Instantly, our review of the record confirms the trial court’s finding that
Aixian and Colon did not file their motion to vacate or modify the arbitration
until October 12, 2021, more than thirty days after the date of the award
entered on August 26, 2021. See Trial Court Opinion, 3/23/22, at 5. Since
Aixian and Colon did not raise their challenges to the arbitration award within
thirty days of its entry, they did not preserve their claims for judicial review.
See Sage, 765 A.2d at 1142 (challenge to arbitration award waived where
filed more than thirty days after entry of award). Accordingly, the trial court
properly confirmed the award after the passage of thirty days as required by
42 Pa.C.S. § 7342(b), and we afford Aixian and Colon no relief.1
1 Even if Aixian and Colon had timely filed a motion to vacate or modify the
arbitration award, we agree with the trial court that their underlying claims
are meritless. See Trial Court Opinion, 3/23/22, at 5-6. Aixian and Colon
have not shown fraud, misconduct, corruption, or other irregularity in the
arbitration process “by clear, precise, and indubitable evidence.” See
McKenna, 745 A.2d at 4. Furthermore, we have noted that “[n]either we nor
the trial court may retry the issues addressed in arbitration or review the
tribunal’s disposition of the merits of the case.” Civan v. Windmere Farms,
Inc., 180 A.3d 489, 493 (Pa. Super. 2018). Instantly, the arbitrator
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Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 9/6/2022
considered the briefs, testimony, and evidence presented at the arbitration
hearing before rendering the award. As Brother Moreno explained in its brief,
Aixian and Colon attempted to rely on evidence neither produced in discovery
nor presented at the hearing, including a report from an appraiser who did not
appear or testify at the hearing. Although Aixian and Colon claimed the
property was overvalued at arbitration, Colon himself provided a higher value
than the one the arbitrator adopted in his findings. Considering this
information, the trial court did not err by granting Brother Moreno’s petition
and denying apellants’ motion to vacate or modify the binding arbitration
award.
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