E. Allen Reeves v. Old York, LLC ( 2023 )

J-A03006-23
2023 PA SUPER 65
E. ALLEN REEVES, INC. : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
:
v. :
:
:
OLD YORK, LLC AND :
METROPOLITAN PROPERTIES OF :
AMERICA, INC. : No. 1116 EDA 2022
:
APPEAL OF: OLD YORK, LLC :
Appeal from the Judgment Entered March 7, 2022
In the Court of Common Pleas of Montgomery County Civil Division at
No(s): 2017-27160
BEFORE: KING, J., SULLIVAN, J., and STEVENS, P.J.E.*
OPINION BY STEVENS, P.J.E.: FILED APRIL 13, 2023
Old York, LLC (“Old York”) appeals from the judgment entered in favor
of E. Allen Reeves, Inc. (“Reeves”) pursuant to an order of the Court of
Common Pleas of Montgomery County confirming an arbitration award. After
careful review, we affirm.
In July 2015, Reeves entered a contract with Old York in which Reeves
would serve as general contractor for the Colonade Amenities Building project
(“the Project”) in Jenkintown. Reeves completed work on the Project on
August 8, 2016.
On February 27, 2017, Reeves filed for Chapter 11 bankruptcy in the
U.S. Bankruptcy Court in the Eastern District of Pennsylvania. After Reeves’s
bankruptcy filing, Old York stopped payment on its final deposit in Reeves’s
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* Former Justice specially assigned to the Superior Court.
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bank account. Old York refused to pay Reeves the $66,133 balance of the total
project cost, which was approximately $1.3 million. The bankruptcy court
confirmed Reeves’s bankruptcy plan in September 2017.
On November 17, 2017, Reeves filed a complaint seeking recovery of
the unpaid invoices as well as penalties and attorneys’ fees under Section 12
of the Contractor and Subcontractor Payment Act (CASPA), 73 P.S. § 512.1
On December 11, 2017, Old York filed preliminary objections raising two
grounds for relief. First, Old York argued that bankruptcy law required Reeves
to assume all executory contracts it wished to pursue before the bankruptcy
court. Reeves had not identified the parties’ contract as an executory contract
with material obligations left unfinished. As such, Old York claimed Reeves
lacked standing to sue under the contract. Second, Old York claimed the
parties’ contract required all disputes to be submitted to binding arbitration.
On January 2, 2018, Reeves filed an answer, conceding the dispute was
subject to arbitration and requesting that the trial court stay the case pending
arbitration. However, Reeves disputed that it lacked standing, asserting that
the parties’ contract was not executory as Reeves had completed work on the
Project before filing for bankruptcy. Thus, Reeves argued it was not required
to assume the contract before the bankruptcy court.
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1 Reeves brought his complaint against both Old York and Metropolitan
Properties of America, Inc., Old York’s management company. As discussed
infra, the arbitrator ultimately entered an award in favor of Reeves against
Old York. As Metropolitan is not a party to this appeal, we will limit our
discussion to Old York’s defense in this case.
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Old York filed a response, arguing Reeves that had not performed all of
its material obligations as Reeves had not paid its subcontractors and suppliers
in full or provided Old York with lien waivers and warranties. Old York indicated
that the parties’ contract did not require Old York to make a final payment
until Reeves provided satisfactory evidence that all subcontractors had been
paid and that there were no claims, obligations, or liens remaining.
On February 6, 2018, the trial court signed a form order provided by
Reeves staying the case pending arbitration and overruling the preliminary
objections. The order did not discuss whether Reeves had standing to sue.
Thereafter, the parties proceeded to the arbitration of Reeves’s claim
along with a counterclaim filed by Old York. On December 6, 2019, the
arbitrator entered an award in favor of Reeves and against Old York for the
amount due along with interest (as set forth in the contract) as well as
penalties and attorneys’ fees (pursuant to CASPA), totaling $159,941.78. The
trial court also awarded Old York $5,500 on its counterclaim. As a result, the
arbitrator’s total net award to Reeves was $154,441.78. After Reeves filed an
application for modification of the award on December 16, 2019, the arbitrator
entered a modified order on January 8, 2020.2
Old York filed motions to vacate the arbitration award, raising the sole
argument that the parties’ contract provided that the arbitrator did not have
authority to award penalties and attorneys’ fees to either party. The trial court
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2The January 8, 2020 order simply clarified the breakdown of the December
16, 2019 order, but did not make any modifications to the award.
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denied the motions, finding the arbitrator had authority under CASPA to award
penalties and attorneys’ fees notwithstanding the language in the contract.
On November 20, 2020, Reeves filed a petition to confirm the arbitration
award and requested the entry of judgment with additional interest, penalties,
and attorneys’ fees under CASPA. The trial court entered an order indicating
that a hearing would be held after the completion of “discovery, if any.”
On February 16, 2021, Old York served Reeves with a notice of
deposition of Reeves’s corporate designee and a request for production of
documents. On February 24, 2021, Reeves filed a motion for a protective order
seeking to prevent Reeves from having to respond to Old York’s discovery
request. On April 22, 2021, the trial court issued an order indicating Reeves
would only be required to provide the documents it would introduce as
evidence to seek damages beyond those imposed by the arbitrator.
At a hearing on the petition to confirm on May 26, 2022, Old York
attempted to challenge Reeves’s standing on two grounds. First, Old York
claimed for the first time that bankruptcy law required Reeves to file this action
and arbitration in the name of Robert N. Reeves, Jr., the disbursing agent
appointed by the bankruptcy court, not Reeves, LLC. Second, Old York again
claimed that Reeves’s failure to assume the contract before the bankruptcy
court led to a lack of standing. Further, Old York reiterated its claim that
Reeves was not entitled to recover post-award attorneys’ fees under CASPA.
Upon learning that Old York intended to raise these claims before the
bankruptcy court, the trial court stayed proceedings on the petition to give
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the parties the opportunity to “seek any appropriate relief from the Bankruptcy
Court.” After Old York sought relief in the bankruptcy court, Reeves filed a
“Motion to Dismiss the Adversary Complaint.” On December 6, 2021, the
Bankruptcy Court issued an order noting that it abstained from hearing this
matter and dismissed the Adversary Case, citing comity with state courts and
respect for state law.
On March 7, 2022, the trial court granted Reeves’s petition to confirm
the arbitration award and entered judgment for Reeves and against Old York
in the amount of $216,155.42. This total included the arbitration award and
additional interest, penalties, and attorneys’ fees under CASPA. Old York filed
this appeal and complied with the trial court’s direction to file a concise
statement of errors complained of on appeal pursuant to Pa.R.A.P. 1925(b).
Old York presents the following issues for review:
1. Whether the lower court erred in overruling Old York’s
preliminary objections challenging [Reeves’s] standing to
pursue the underlying action, without a hearing or discovery,
notwithstanding [Reeves’s] inconsistent and conflicting
allegations in its bankruptcy proceedings?
2. Whether the lower court erred in granting [Reeves’s] motion
for protective order where the lower court, by order,
contemplated that the parties would engage in discovery in
connection with [Reeves’s] petition to confirm, Old York issued
limited discovery requests to [Reeves] targeting the issues
raised in the Petition to Confirm and response thereto, and
granting the Motion for Protective Order impaired [Reeves’s]
ability to defend against the Petition to Confirm?
3. Whether the lower court erred in holding that the arbitrator did
not exceed her scope of authority by awarding attorney’s fees
as part of an arbitration award when the parties’ construction
contract specifically precluded the arbitrator from doing so?
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4. Whether the lower court erred in determining that the
amendment to Section 503 of the Pennsylvania Contractor and
Subcontractor Payment Act, 73 P.S. § 501, et seq. (“CASPA”)
prohibiting a waiver of penalties should apply retroactively to
previously executed construction contracts or that the
prohibition precluded contracting parties from limiting the
venue for claims for such penalties?
5. Whether the lower court erred in awarding attorney's fees
purportedly incurred by [Reeves’s] bankruptcy counsel in its
March 7, 2022 order granting the petition to confirm, where
such fees were not incurred in the prosecution of [Reeves’s]
collection action?
Old York’s Brief, at 5-6 (issues reordered for ease of review).
As a preliminary matter, we must decide which principles of arbitration
apply to the case at bar.
Chapter 73 of the Pennsylvania Judicial Code governs statutory,
common law and judicial arbitration. Section 7301-7320 of
Subchapter A apply to statutory arbitration proceedings and are
known collectively as the Pennsylvania Uniform Arbitration Act
(“UAA”). Section 7341 and 7342 of Subchapter B apply to common
law arbitration proceedings. Whether an arbitration agreement is
subject to the UAA (Sections 7301-7320 of Subchapter A) or
common law (Sections 7341-7342 of Subchapter B) arbitration
principles depends on whether the agreement is in writing and
expressly provides for arbitration under the UAA. Absent an
express statement in the arbitration agreement, or a subsequent
agreement by the parties which calls for the application of the UAA
statutory provisions in Subchapter A, an agreement to arbitrate is
conclusively presumed to be at common law and subject to the
provisions of Subchapter B.
Sage v. Greenspan, 765 A.2d 1139, 1141 (Pa.Super. 2000) (citations
omitted).
This Court has held that an arbitration clause providing for binding
arbitration pursuant to the American Arbitration Association (AAA) signifies
common law arbitration. U.S. Claims, Inc. v. Dougherty, 914 A.2d 874, 876
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(Pa.Super. 2006) (citing 42 Pa.C.S.A. § 7302(a); Runewicz v. Keystone
Ins. Co., 383 A.2d 189, 191 (Pa. 1978)). In this case, the parties’ contract
states that the parties shall resolve disputes through arbitration “administered
by the American Arbitration Association, in accordance with the Construction
Industry Arbitration Rules in effect on the date of this agreement.” See
Contract, §§ 5.1, 21.4. Thus, this case is a matter of common law arbitration.
In its first issue, Old York claims the trial court erred in overruling its
preliminary objections to the initial complaint in which Old York argued that
Reeves did not have standing to sue on the contract as it had not assumed
the parties’ contract before the bankruptcy court. While Old York admits that
the parties’ contract contained a valid arbitration clause, Old York suggests
that the trial court should have held a hearing or allowed discovery to develop
the standing claim before sending the case to arbitration.
However, Old York failed to preserve this issue for our review. Section
7342 of Subchapter B, Common Law Arbitration, provides in pertinent part:
(b) Confirmation and judgment.—On application of a party
made more than 30 days after an award is made by an arbitrator
under § 7341 (relating to common law arbitration) the court shall
enter an order confirming the award and shall enter a judgment
or decree in conformity with the order....
42 Pa.C.S.A. § 7342(b) (emphasis added).
Based on this language,
[t]his Court has consistently interpreted section 7342(b) to
require that any challenge to the arbitration award be made in an
appeal to the Court of Common Pleas, by filing a petition to vacate
or modify the arbitration award within 30 days of the date of the
award. See Sage, 765 A.2d at 1142; Lowther v. Roxborough
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Mem'l Hos., 738 A.2d 480, 485 (Pa.Super.1999); Beriker v.
Permagrain Products, Inc., 347 Pa.Super. 102, 500 A.2d 178,
179 (1985). A party must raise alleged errors in the arbitration
process in a timely petition to vacate or modify the arbitration
award or the claims are forever waived. See Sage, 765 A.2d at
1142; Lowther, 738 A.2d at 488; Caron v. Reliance Ins. Co.,
703 A.2d 63, 65 (Pa.Super.1997) (“[A]ny issue related to the
arbitrators' decision ... has been waived due to appellant's failure
to file a timely petition to vacate, as required by 42 Pa.C.S. §
7314.”) (citations omitted).
Dougherty, 914 A.2d at 877.
It is well-established that “in Pennsylvania, whether a party has
standing to maintain an action is not a jurisdictional question. Thus, an issue
relating to standing is subject to waiver.” Commonwealth v. Fields, 197
A.3d 1217, 1225–26 (Pa.Super. 2018) (citations omitted). See also In re
Estate of Brown, 30 A.3d 1200, 1204 (Pa.Super. 2011) (citation omitted)
(finding the issue of standing may be waived “if not objected to at the earliest
possible opportunity”).
As noted above, Old York’s preliminary objections alleged that Reeves
lacked standing but also indicated the parties agreed to resolve their disputes
through arbitration. After Reeves conceded the parties’ contract contained a
valid arbitration clause, the trial court stayed the case pending arbitration and
overruled Old York’s preliminary objections without any discussion of the
standing claim. Thereafter, the parties proceeded to arbitration. After a full
hearing, the arbitrator entered an award in favor of Reeves.3
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3 The arbitration hearing was not transcribed. However, Old York averred that
it raised the standing issue before the arbitrator at the hearing.
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Old York’s subsequent motion to vacate the arbitration award was
limited to its claims that the arbitrator erred in awarding Reeves penalties and
attorneys’ fees. Old York did not challenge the trial court’s decision to send
the case to arbitration without expressly ruling on Old York’s standing claim
nor claimed the arbitrator erred in entering an award in Reeves’s favor despite
Old York’s standing claim.
Instead, Old York waited to raise these claims until after the trial court
denied its petition to vacate the arbitration award and Reeves filed a petition
to confirm the award. Old York then attempted to challenge Reeves’s standing
at a hearing on the petition to confirm on the basis that Reeves had failed to
assume the contract in bankruptcy court. In addition, Old York raised a
completely new standing claim based on its allegation that Reeves failed to
bring this action in the name of the proper party.
However, “a challenge to the validity of an arbitration award asserted
for the first time in opposition to a petition to confirm is procedurally
inadequate to preserve claims for judicial review.” Dougherty, 914 A.2d at877 (citing Sage, 765 A.2d at 1142; Lowther, 738 A.2d at 485).
In this case, the trial court had no opportunity to address Old York’s
claims of error on the issue of standing as Old York failed to preserve either
of its arguments on standing in its petition to vacate the arbitration award.
Accordingly, Old York’s challenges to Reeves’s standing, raised in response to
Reeves’s petition to confirm the arbitration award, are untimely and waived.
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In its second issue, Old York claims the trial court erred in relieving
Reeves from complying with its discovery requests where the lower court, by
order, contemplated that the parties would engage in discovery in connection
with Reeves’s petition to confirm the arbitration award.
However, as previously discussed, Old York was seeking discovery in an
attempt to develop its claim that Reeves lacked standing, a claim which should
have been previously raised in the petition to vacate the arbitration award.
Consistent with our finding above that Old York failed to preserve its standing
argument in the petition to vacate the award, the trial court correctly entered
a protective order providing that Reeves was only required to provide Old York
with documents it would introduce as evidence in support of its request for
additional interest, attorneys’ fees, and penalties in the petition to confirm.
Thus, Old York is not entitled to relief on this claim.
In its third and fourth issues, Old York claims the trial court erred in
finding the arbitrator did not exceed her scope of authority by awarding
Reeves attorneys’ fees and penalties pursuant to CASPA. In reviewing an
arbitration award, our standard of review is limited as:
the law favors non-judicial dispute resolution that the parties have
agreed to. Alternate dispute resolution is economical in terms of
time, expenditure of judicial resources and transactional costs.
Limited judicial review also imposes finality in a contested matter.
To permit anything but limited judicial review defeats the purpose
of ...arbitration.
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F.J. Busse Co. v. Sheila Zipporah, L.P., 879 A.2d 809, 811 (Pa.Super.
2005) (quoting Boulevard Associates v. Seltzer Partnership, 664 A.2d
983, 987 (Pa.Super. 1995) (citation omitted)).
Thus, our standard of review is very limited:
[t]he 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.
42 Pa.C.S.A. § 7341. We recognize that “arbitrators are the final judges of
both law and fact, and an arbitration award is not subject to reversal for a
mistake of either.” D'Amelia v. Toll Bros., 235 A.3d 321, 325 (Pa.Super.
2020) (citing Dougherty, 914 A.2d at 876-77 (citations omitted)).
In conjunction with this standard, our courts recognize that 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.However, an award may be corrected if the arbitrator exceeds the scope
of his or her authority. Gargano v. Terminix Int'l Co., L.P., 784 A.2d 188,
193 (Pa.Super. 2001). “‘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
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dispute if they violate or act inconsistently with the terms of the submissions.’”
Boulevard Associates, 664 A.2d at 987 (quoting Sley Sys. Garages v.
Transportation Workers Union of Am., 178 A.2d 560, 561 (Pa. 1962)).
By way of background,
CASPA is a comprehensive statute enacted in 1994 to cure abuses
within the building industry involving payments due from owners
to contractors, contractors to subcontractors, and subcontractors
to other subcontractors. The underlying purpose of CASPA is to
protect contractors and subcontractors and to encourage fair
dealing among parties to a construction contract. The statute
provides rules and deadlines to ensure prompt payments, to
discourage unreasonable withholding of payments, and to address
the matter of progress payments and retainages. Under
circumstances prescribed in the statute, interest, penalties,
attorney's fees, and litigation expenses may be imposed on an
owner, contractor, or subcontractor who fails to make payment to
a contractor or subcontractor in compliance with the statute.
El-Gharbaoui v. Ajayi, 260 A.3d 944, 954 (Pa.Super. 2021) (citation and
brackets omitted).
Specifically, Old York claims that the arbitrator had no authority to
award Reeves attorneys’ fees and penalties pursuant to CASPA when the
parties’ contract precluded the arbitrator from doing so. Old York relies on the
following language in the contract:
Judgment on Final Award. The award rendered by the arbitrator
or arbitrators shall be final, and judgment may be entered upon it
in accordance with applicable law in any court having jurisdiction
thereof. However, no arbitrator(s) shall have the authority to
enter an award of punitive damages or attorneys fees to either of
the parties.
Contract, § 21.9 (emphasis added).
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Section 512(b) of the CASPA provides that “[n]otwithstanding any
agreement to the contrary, the substantially prevailing party in any
proceeding to recover any payment under this act shall be awarded a
reasonable attorney fee in an amount to be determined by the court or
arbitrator, together with expenses.” 73 P.S. § 512(b) (emphasis added).
Based on this language, this Court has held that Section 512(b) clearly
provides that attorneys’ fees under CASPA cannot be waived by contract. John
B. Conomos, Inc. v. Sun Co. (R&M), 831 A.2d 696, 711 (Pa.Super. 2003)
(finding Section 512(b) of CASPA “expressly provides that even in the event
that the parties agree otherwise, attorneys' fees and expenses are not
waiveable”).
In comparison to the language relative to attorneys’ fees, CASPA
provides different language with respect to interest due on impermissibly
delayed payments. Section 505(d) of CASPA allows the parties to contractually
waive such interest:
[e]xcept as otherwise agreed by the parties, if any progress or
final payment to a contractor is not paid within seven days of the
due date established in subsection (c), the owner shall pay the
contractor, beginning on the eighth day, interest at the rate of 1%
per month or fraction of a month on the balance that is at the time
due and owing.
73 P.S. § 505(d) (emphasis added). This Court has held that Section 505(d)
permits parties to “agree either to waive interest on untimely payments, or to
accrue interest at a rate other than one percent.” Conomos, 831 A.2d at 710.
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On appeal, Old York asserts that the parties’ contract does not seek to
completely waive the award of attorneys’ fees, but simply limits the authority
of the arbitrator such that only the trial court would have power to award such
fees. Thus, Old York argues that Reeves “was therefore obligated to seek
recovery of attorneys’ fees in the court of common pleas and not in
arbitration.” Old York’s Brief, at 35. We disagree.
The trial court properly exercised its discretion in finding that “the “non-
waiver provision of section [5]12(b) cannot be evaded by couching the waiver
language in the form of a limitation on the authority of an arbitrator.” Trial
Court Opinion, 6/9/22, at 13. Section 512(b) states that “in any proceeding”
under CASPA, the substantially prevailing party “shall be awarded an
reasonable attorney fee in an amount to be determined by the court or
arbitrator.” 73 P.S. § 512(b) (emphasis added).
We agree that the statutory language set forth in Section 512(b) is
controlling and must prevail over the language set forth in the contract. Thus,
the trial court did not err in finding the arbitrator had the authority to award
Reeves attorneys’ fees notwithstanding the language in the parties’ contract.
Likewise, we find no error in the trial court’s decision to uphold the
arbitrator’s imposition of penalties against Old York pursuant to CASPA despite
the contract’s language stating that the arbitrator did not have authority to
award “punitive damages” to either party. CASPA requires that penalties be
imposed for failure to comply with its provisions:
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If arbitration or litigation is commenced to recover payment due
under this act and it is determined that an owner, contractor or
subcontractor has failed to comply with the payment terms of this
act, the arbitrator or court shall award, in addition to all other
damages due, a penalty equal to 1% per month of the amount
that was wrongfully withheld.
73 P.S. § 512(a) (emphasis added).
Although Old York points out that Section 512(a) does not contain the
clause “notwithstanding any agreement to the contrary” that appears in
Section 512(b), Section 512(a) provides mandatory penalties that “shall” be
imposed in arbitration against a party who has failed to comply with CASPA’s
payment terms. Section 512(a) does not contain any language allowing the
parties to waive CASPA’s penalties. Based on these distinctions, this Court
held in Conomos that CASPA does not allow parties to contractually waive
the penalties set forth in Section 512(a).4
Moreover, while the parties’ contract states that the arbitrator cannot
award “punitive damages” to either party, CASPA’s civil penalties set forth in
Section 512(a)(1) can be differentiated from punitive damages. As noted
above, Section 512(a)(1) provides for a penalty equal to 1% per month of the
amount that was wrongfully withheld pursuant to CASPA’s terms. In
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4 CASPA was subsequently amended in 2018 to include a specific prohibition
on the contractual waiver of its provisions. Section 503(c) of CASPA now
provides that “[u]nless specifically authorized under this act, parties to a
contract or other agreement may not waive a provision of this act by contract
or other agreement.” 73 P.S. § 503(c). This provision became effective on
October 10, 2018, after the cause of action arose in this case. We need not
discuss whether this amendment is relevant to this case, as Old York is not
entitled to relief even without the application of this new law.
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comparison, to seek punitive damages, a party has a higher burden to show
“outrageous conduct, that is, for acts done with a bad motive or with a reckless
indifference to the interests of others. Punitive damages are penal in nature
and are proper only in cases where the defendant's actions are so outrageous
as to demonstrate willful, wanton or reckless conduct.” Sears, Roebuck &
Co. v. 69th St. Retail Mall, L.P., 126 A.3d 959, 983 (Pa.Super. 2015)
(citations, quotation marks, and brackets omitted).5
Accordingly, we conclude that the trial court did not abuse its discretion
or commit an error of law in upholding the arbitrator’s award of attorneys’
fees and penalties pursuant to CASPA.
Lastly, Old York claims the trial court erred in awarding attorneys’ fees
incurred by Reeves’s bankruptcy counsel as Old York claims that such fees
were not incurred in the prosecution of this action. We disagree.
The issue of whether a substantially prevailing party should be awarded
attorneys’ fees under CASPA is within the trial court’s discretion. Waller Corp.
v. Warren Plaza, Inc., 95 A.3d 313, 316 (Pa.Super. 2014) (citation omitted).
Thus, our standard of review of a trial court’s decision to award attorneys’ fees
under CASPA is “whether the trial court palpably abused its discretion.” Id.(quoting Zimmerman v. Harrisburg Fudd I, L.P., 984 A.2d 497 (Pa.Super.
2009)).
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5 Old York makes no argument that the penalties set forth in CASPA constitute
punitive damages at common law under this heightened standard, but baldly
claims that the civil penalties set forth in CASPA can be referred to as punitive
damages and suggests that terms can be used interchangeably.
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Our review of the record shows that Reeves’s pursuit of this action under
CASPA in the lower court and its defense against Old York’s petition in
bankruptcy court are intertwined. In seeking to recover payment due when
Old York failed to comply with the terms of CASPA, Reeves was forced to
defend itself in bankruptcy court when Old York specifically sought to prevent
the confirmation of the arbitrator’s award in this case by filing a petition in the
bankruptcy court.
We agree that it was reasonable for Reeves to retain bankruptcy counsel
to handle the proceedings in bankruptcy court in order to recover on its claim
pursuant to CASPA in this case. After the bankruptcy court issued its decision
abstaining from ruling on Old York’s adversary petition and deferring to the
trial court on principles of comity, Reeves employed its bankruptcy counsel to
address the trial court on Reeves’s position on how to proceed.
As noted above, CASPA provides that “the substantially prevailing party
in any proceeding to recover any payment under this act shall be awarded a
reasonable attorney fee in an amount to be determined by the court or
arbitrator.” 73 P.S. 512(b) (emphasis added). As noted above, the purpose of
CASPA is to make a contractor whole when it is forced to file litigation in order
to recover payments that were unreasonably withheld under the Act. El-
Gharbaoui, supra.
As the trial court determined that Reeves is the substantially prevailing
party in this case, Section 512(b) requires that Reeves be awarded a
reasonable attorney fee in its pursuit to recover payment under CASPA. Thus,
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the trial court did not abuse its discretion in awarding Reeves attorneys’ fees
for its defense of the arbitrator’s award in bankruptcy court.
For the foregoing reasons, we affirm the trial court’s judgment in favor
of Reeves and against Old York.
Judgment affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 4/13/2023
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