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HomeMy WebLinkAbout2013-0108 CDI-INFRASTRUCTURE, LLC, : IN THE COURT OF COMMON PLEAS d/b/a L.R. KIMBALL : OF CUMBERLAND COUNTY, Petitioner, : PENNSYLVANIA v. : : NAVTECH, INC., : CIVIL ACTION - LAW Respondent. : NO. 13-0108 IN RE: PETITION TO ENFORCE AWARD OF ARBITRATOR BEFORE HESS, P.J. OPINION and ORDER Before the court is the Petition to Enforce Award of Arbitrator of CDI-Infrastructure, LLC, d/b/a L.R. Kimball (hereinafter “CDI”). (Pet. Enforce Award of Arb., filed Jan. 7, 2013). Respondent, Navtech, Inc. (hereinafter “Navtech”), filed an Answer to Petition to Enforce Award of Arbitrator and Motion to Vacate Award of Arbitrator on January 30, 2013. (Answer Enforce Award of Arb. and Mot. Vac. Award of Arb., filed Jan 30, 2013.) After an exchange of Preliminary Objections, this Court ultimately overruled the Amended Preliminary Objections of Petitioner to Respondent’s Answer to Petition to Enforce Award of Arbitrator and Motion to Vacate Award of Arbitrator. (Order, filed Apr. 7, 2013). Following that order, CDI filed a “Motion for Petition to Enforce Award of Arbitrator be Granted.” (Mot. Pet. Enforce Award of Arb. be Granted, filed Apr. 24, 2013). This Court then issued an Order directing the respondent to show cause why relief ought not be granted, stating that the petition shall be decided under PA. R.C.P. No. 206.7, and setting forth the timing for subsequent proceedings. (Order, filed May 10, 2013). Navtech filed an Answer. (Answer Mot. Pet. Enforce Award of Arb. be Granted, filed May 13, 2013). Briefs and a deposition were then filed and argument was held. This matter is now ripe for disposition. (Dep., filed Jul. 1, 2013). The relevant facts of this matter are: CDI is a limited liability company under the laws of Delaware and is qualified to do business in Pennsylvania with a principal place of business at 615 West Highland Avenue, Ebensburg, PA 15931. (Pet. Enforce Award of Arb., ¶ 3). Navtech is a Pennsylvania corporation with a principal place of business at 314 W. Main Street, New Bloomfield, PA 17068. (Pet. Enforce Award of Arb., ¶ 4). CDI’s predecessor in interest, L. Robert Kimball & Associates, Inc. and Navtech entered into a Subconsultant Agreement for Professional Services dated July 20, 2009 (hereinafter “Subconsultant Agreement”). (Pet. Enforce Award of Arb., ¶ 5). The Subconsultant Agreement provided that Navtech would provide surveying services to L. Robert Kimball& Associates, Inc., which, in turn, was performing work for Trumbull Corporation (hereinafter “Trumbull”). (Pet. Enforce Award of Arb., ¶ 6). Under the “Disputes” provision, the Subconsultant Agreement states: In case of any disputes between the SUBCONSULTANT and KIMBALL, the SUBCONSULTANT agrees to be bound to KIMBALL to the same extent that KIMBALL is bound to CONTRACTOR by the terms of KIMBALL’S contract with the CONTRACTOR and by any and all decisions or determinations made thereunder by the party or board so authorized in KIMBALL’S contract. The SUBCONSULTANT also agrees to be bound to KIMBALL to the same extent that KIMBALL is bound to CONTRACTOR by the final decisions of a court or (sic) competent jurisdiction, whether or not the SUBCONSULTANT is a party to the proceedings. No dispute shall interfere with the program [sic] of the project and the SUBCONSULTANT agrees to proceed with his work as directed, despite disputes the SUBCONSULTANT may have against KIMBALL or the CONTRACTOR or other parties. If arbitration is conducted by the CONTRACTOR and KIMBALL concerning any dispute between them which likewise involved a dispute between KIMBALL and the SUBCONSULTANT, then the SUBCONSULTANT agrees to a Joint Arbitration with CONTRACTOR, KIMBALL and SUBCONSULTANT as well as other parties thereto, pursuant to conditions ordered by rules of the American Arbitration Association. (Pet. Enforce Award of Arb., Ex. A). In relevant part, the Agreement, Subcontract No. 10562.0001, between L. Robert Kimball & Associates, Inc. and Trumbull (hereinafter “Design 2 Agreement”), implicated in the “Disputes” provision of the Subconsultant Agreement as “KIMBALL’S contract with the CONTRACTOR,” states: 10.2 If a dispute arises out of or relates to this Agreement or its breach, the parties shall endeavor to settle the dispute first through direct discussions. If the dispute cannot be settled through direct discussions, the parties shall endeavor to settle the dispute by mediation under the Construction Industry Mediation Rules for the American Arbitration Association. Issues to be mediated are subject to the exceptions in Paragraph 10.2.1 for arbitration. The location of the mediation shall be the location of the Project. Once a party files a request for mediation with the other party and with the American Arbitration Association, the parties agree to conclude such mediation within sixty (60) days of filling the request. 10.2.1 Any dispute arising out of (sic) relating to the Agreement or the breach thereof may, if not resolved by mediation and at Contractor’s discretion, be resolved by arbitration in Allegheny County, Pennsylvania, unless such other place is mutually agreed upon by both parties, in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association, and judgment entered upon the award. In the event that Contractor does not agree to resolution by arbitration, any dispute shall be resolved by litigation in a state or federal court in Allegheny County, Pennsylvania, before the Court without a jury, or before a jury, as Contractor alone shall in its discretion decide. The parties agree that Pennsylvania law will be controlling as to any dispute arising out of or relating in any way to this Agreement or breach thereof. (Pet. Enforce Award of Arb., Ex. A). On June 28, 2010, CDI acquired substantially all the assets of L. Robert Kimball & Associates, Inc. (Pet. Enforce Award of Arb., ¶ 8). Thereafter, a dispute arose between CDI and Navtech concerning the surveying that Navtech provided. (Pet. Enforce Award of Arb., ¶ 8). Subsequently, on or about July 9, 2012, CDI filed a demand for arbitration with the American Arbitration Association. On November 14, 2012, arbitration was held at 385 Cumberland Parkway, Mechanicsburg, PA. (Pet. Enforce Award of Arb., ¶ 10, Answer Enforce Award of Arb. and Mot. Vac. Award of Arb., ¶ 10). Navtech, then pro se, did not attend the arbitration proceeding. (Answer Enforce Award of Arb. and Mot. Vac. Award of Arb., ¶ 10). On November 3 17, 2012, the arbitrator issued an award in favor of CDI totaling $63,307 plus six percent interest on the principal sum per annum until paid in full. (Pet. Enforce Award of Arb., Ex. B). Navtech advances several theories as to why the award of the arbitrator should not be enforced and/or why the award should be vacated. Initially, Navtech asserts that the Arbitrator did not have jurisdiction over the dispute since the arbitration was requested outside Allegheny County without the substitute location being mutually agreed upon. (Answer Enforce Award of Arb. and Mot. Vac. Award of Arb., ¶ 14). Navtech then uses that same averment to underpin several grounds for vacating under 42 Pa.C.S § 7314(a)(1). (Answer Enforce Award of Arb. and Mot. Vac. Award of Arb., ¶ 15). Those grounds include theories that irregularity caused the rendition of an unjust, inequitable, or unconscionable award; that the arbitrator exceeded his powers; and that there was no agreement to arbitrate in the manner this case proceeded in. (Answer Enforce Award of Arb. and Mot. Vac. Award of Arb., ¶ ¶ 19-35). In its brief and at oral argument, Navtech advances additional arguments as to why the award should not be enforced. First, Navtech alleges that the Design Agreement did not modify the Subconsultant Agreement, and that the Subconsultant Agreement itself did not call for arbitration of disputes solely between L. Robert Kimball & Associates, Inc. and Navtech. (Resp’t’s Br. In Opp’n to Pet. to Enforce Arb. Award, 9). Second, in the alternative, Navtech argues that if the Design Agreement is incorporated, the terms of the agreement do not grant L. Robert Kimball & Associates, Inc. the right to unilaterally direct a dispute arising out of the Subconsultant Agreement that is solely between L. Robert Kimball & Associates, Inc. and Navtech to arbitration. (Resp’t’s Br. In Opp’n to Pet. to Enforce Arb. Award, 11). Navtech’s final argument from their brief, in the alternative, is that if the Design Agreement was incorporated and allowed L. Robert Kimball & Associates, Inc. to unilaterally bring the parties to arbitration, the arbitrator 4 did not have power to hear the matter because the arbitration did not take place in Allegheny County. (Resp’t’s Br. In Opp’n to Pet. to Enforce Arb. Award, 13). We are satisfied that we are not at liberty to consider any of the issues raised by Navtech. Without reaching the merits or the incorporation argument advanced by Navtech, we note that neither the Subconsultant Agreement nor the Design Agreement overcome the presumption of common law arbitration by expressly providing for statutory arbitration. See generally Jefferson Woodlands Partners, L.P. v. Jefferson Hills Boro., 881 A.2d 44, 48 (Pa. Cmwlth. 2007) (an agreement to arbitrate is presumed to be an agreement to arbitrate under the principles applicable to common law arbitration unless the agreement is in writing and expressly provides for statutory arbitration). 42 Pa.C.S. § 7341 provides that an award of an arbitrator “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 statute then goes on to provide: (b) Confirmation and judgment .--On application of a party made more than 30 days after an award is made by an arbitrator under section 7341 (relating to shall common law arbitration) the court enter an order confirming the award and shall enter a judgment or decree in conformity with the order. Section 7302(d)(2) (relating to special application) shall not be applicable to proceedings under this subchapter. 42 Pa.C.S. §7342(b). (emphasis added.) “This section has consistently been interpreted to require that any challenge to the arbitration award be made in an appeal to the Court of Common Pleas by the filing of a petition to vacate or modify the arbitration award within thirty (30) days of the date of the award.” Lowther v. Mem’l Hosp., 738 A.2d 480, 485 (Pa. Super. 1999). “Specifically, a party must raise alleged irregularities in the arbitration process in a timely petition to vacate or modify an arbitration award.” Id. “[A]fter the passage of the 30 days’ time, [the trial court] is required to enter an order confirming the 5 award enter judgment in conformity with the order.” Sage v. Greenspan, 765 A.2d 1139, 1143 (Pa. Super. 2000). This is consistent with the position that arbitrators are to be the final judges of law and fact, and an arbitration award is not subject to reversal for a mistake of either. Prudential Prop. & Cas. Ins. Co. v. Stein, 683 A.2d 683, 684 (Pa. Super. 1996). In Beriker v. Permagrain Products, Inc., 500 A.2d 178 (Pa. Super. 1985), the defendant, as in this case, responded to a motion to confirm an arbitration award by asserting that there had been no agreement to arbitrate. In that case, the defendants had even filed an equity action seeking to enjoin the arbitration. Id. at 178. Preliminary injunctive relief had been denied by the trial court and no appeal had been taken from that order. Id. The matter proceeded to arbitration and the arbitrators entered an award in favor of the plaintiff. Id. at 179. Thirty days elapsed and an application was made for an order confirming the award. Id. In the meantime, no action had been taken to modify the award until the defendant filed an Answer to the Petition to Confirm Arbitration Award. Id. In construing Section 7342(b), the Court said: The statute clearly provides, however, that any issues a party wishes to raise must be raised within thirty days of the date of the award, since after that time it is mandatory for the trial court to confirm an award upon application of either party. This is in keeping with the thirty-day time period for appeals established by the legislature in other types of cases. Id. Here, the Award of Arbitrator was issued on November 17, 2012. Navtech did not attempt to vacate or modify the award in the 30 days that followed. The next action that took place was CDI’s filing of their Petition to Enforce Award of Arbitrator on January 7, 2013. The first response from Navtech was received on January 30, 2013 in the form of 6 an Answer to Petition to Enforce Award of Arbitrator and Motion to Vacate Award of Arbitrator, well outside the 30 day window. As such, the Court is required to enter an order confirming the award. ORDER nd AND NOW, this 22 day of October, 2013, it is ordered that the Petition for Enforcement of Award of Arbitrator is GRANTED and judgment is entered in the amount of $63,307.00 plus interest at six (6) percent per annum from November 17, 2012. BY THE COURT, ___________________________ Kevin A. Hess, P.J. G. William Myers, Esquire 164 South Barrens Road Martinsburg, PA 16662 For the Petitioner Mathew Ridley, Esquire 301 Market Street P.O. Box 109 Lemoyne, PA 17043 For the Respondent 7 CDI-INFRASTRUCTURE, LLC, : IN THE COURT OF COMMON PLEAS d/b/a L.R. KIMBALL : OF CUMBERLAND COUNTY, Petitioner, : PENNSYLVANIA v. : : NAVTECH, INC., : CIVIL ACTION - LAW Respondent. : NO. 13-0108 IN RE: PETITION TO ENFORCE AWARD OF ARBITRATOR BEFORE HESS, P.J. ORDER nd AND NOW, this 22 day of October, 2013, it is ordered that the Petition for Enforcement of Award of Arbitrator is GRANTED and judgment is entered in the amount of $63,307.00 plus interest at six (6) percent per annum from November 17, 2012. BY THE COURT, ___________________________ Kevin A. Hess, P.J. G. William Myers, Esquire 164 South Barrens Road Martinsburg, PA 16662 For the Petitioner Mathew Ridley, Esquire 301 Market Street P.O. Box 109 Lemoyne, PA 17043 For the Respondent