$98,000 win for Kenny, Burns & McGill

$98,000 win for Kenny, Burns & McGill.

$98,000 win for Kenny, Burns & McGill.

Any controversy or claim arising out of or relating to this contract, of (sic) the breach thereof, shall be settled by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association, and judgment upon the reward rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.  The parties specifically waive any rights under state law to move to set the arbitration decision aside and/or appeal, thus the arbitration decision shall be final and binding.  Any attorney’s fees incurred by the contractor in enforcement or arbitration under this contact shall be recoverable by the general contractor and will be paid by the subcontractor.  Subcontractor also agrees to be a party to any arbitration between or among the general contractor, owner, and/or other subcontractors if named as a party by the general contractor, and subcontractor shall be bound by such arbitration decision.  Both parties agree that this subcontract shall be governed by the laws of the State of Pennsylvania.

1. Common law arbitration principles apply to this award, as the contract was executed before the July 1, 2019 amendments repealing common law arbitration and the contract did not specify that Pennsylvania’s Arbitration Act applied.

1. “The Arbitration Act does not apply unless it is expressly or impliedly provided  for by the parties and its procedures are followed.” Gentile v. Weiss, 477 A.2d 544, 545-46 (Pa. Super. 1984); Runewicz v. Keystone Insurance Co., 383 A.2d 189, 191 (Pa. 1978).  Its provisions are applicable “only if the arbitration agreement specifically refers to the Act or there is other evidence, subsequent to the agreement, that the parties expressly or implicitly agreed that it should apply.” Hart v. State Farm Mutual Automobile Insurance Co., 431 A.2d 283, 285 (Pa. Super. 1981), overruled on other grounds, White v. Concord Mutual Insurance Co., 296 Pa. Super. 171, 442 A.2d 713, aff’d, 500 Pa. 103, 454 A.2d 982 (1982); see also: Gallagher v. Educator and Executive Insurers, Inc., 381 A.2d 986, 987 (Pa. Super. 1977).
2. Neither the agreement to arbitrate nor any subsequent agreement between the parties provided for statutory arbitration; therefore, common law arbitration principles apply.  Gentile, 477 A.2d 546 (Pa. Super. 1984); Campbell-Ellsworth, Inc. v. Holy Trinity Serbian Orthodox Church-School Congregation, 336 A.2d 346 (Pa.Super. 1975).
3.   Pa. R.A.P 903(a) states that a final order entered by the trial court becomes res judicata when the order is not appealed within thirty days of its entry. See Commonwealth, DOT v. Kmetz, 129 Pa. Commw. 97, 564 A.2d 1040, 1989 Pa. Commw. LEXIS 649 (1989).  The February 6, 2020 order disposed of all of the issues in the case, and was not timely appealed; therefore, the res judicata doctrine bars IHC from relitigating the issues raised in its Montgomery County Petition. 
4. The doctrine of res judicata applies, where, as here, four conditions are present: (1) identity in the thing sued upon; (2) identity of the cause of action; (3) identity of persons and parties to the action; and (4) identity of the quality or capacity of the parties suing or sued.  A final valid judgment upon the merits by a court of competent jurisdiction bars any future suit between the same parties or those in privity with them on the same cause of action. Bearoff v. Bearoff Bros., Inc., 327 A.2d 72 (Pa. 1974).  All these conditions are present here.  The Petition to Vacate filed in Philadelphia County is untimely; therefore, the award should be confirmed.
5. The Petition to Vacate the Award filed in Philadelphia County is untimely, as it was filed more than thirty days after the arbitration award was entered.  “In order to challenge the award of the arbitrator, a party must act within 30 days.”  DDP Contr., Inc. v. Haverford Walk Condo. Ass’n, 2006 Phila. Ct. Com. Pl. LEXIS 436, *1 (Nov. 13, 2006)(Dych, J.) citing 42 PA.C.S.A. § 7342(b). 
6. The Award should be confirmed, as the Parties expressly waived any right to move to set aside or appeal the arbitration award.

Any controversy or claim arising out of or relating to this contract, of (sic) the breach thereof, shall be settled by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association, and judgment upon the reward rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.  The parties specifically waive any rights under state law to move to set the arbitration decision aside and/or appeal, thus the arbitration decision shall be final and binding.  Any attorney’s fees incurred by the contractor in enforcement or arbitration under this contact shall be recoverable by the general contractor and will be paid by the subcontractor.  Subcontractor also agrees to be a party to any arbitration between or among the general contractor, owner, and/or other subcontractors if named as a party by the general contractor, and subcontractor shall be bound by such arbitration decision.  Both parties agree that this subcontract shall be governed by the laws of the State of Pennsylvania.

• The Petition to Vacate Improperly Seeks to Attack the Legal and Factual Findings of the Arbitrator

• The Petition to Vacate seeks to attack the legal and factual findings of the arbitrator, an improper basis to seek to vacate the award.  “The arbitrators are the final judges of both law and fact, and an arbitration award is not subject to a reversal for a mistake of either.” Prudential Property and Cas. Ins. Co. v. Stein, 683 A.2d 683, 685 (Pa. Super. 1996).

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.

42 Pa.C.S.A. § 7341

• The Petition seeks to undermine the factual and legal basis of the award.  The Petition challenges evidentiary decisions (consideration or (sic) evidence not in the record), interpretation of law (leading edge doctrine), violation of AAA rules (form of written decision), findings of fact (award and unjust enrichment), manner of proceedings (failure to rule on motion See  Strausser Enters. v. Segal & Morel, Inc., 154 A.3d 842 (Pa. Super. 2016) (Petitioner’s claim that the arbitrator failed to consider the evidence it presented seeks to undermine the factual and legal basis of the award, which is not a proper reason to vacate a common law arbitration award.)

in the amount of $98,623.48 plus interest at the rate of 6.3 percent from August 24, 2018 until the date of payment of the award; and granting any other relief this Honorable Court deems just and appropriate. 

Respectfully submitted,

KENNY, BURNS & MCGILL

By:           /s/ Thomas D. Kenny

Thomas D. Kenny, Esquire

Eileen T. Burns, Esquire

MEMORANDUM OF LAW IN SUPPORT

OF THE PETITION TO CONFIRM ARBITRATION AWARD

1. LEGAL ARGUMENT
2. The Arbitration Award must be confirmed as more than thirty days have passed since the Award, and Defendant has not filed a timely motion to set aside the award.

“The Arbitration Act does not apply unless it is expressly or impliedly provided for by the parties and its procedures are followed.” Gentile v. Weiss, 477 A.2d 544, 545-46 (Pa. Super. 1984); Runewicz v. Keystone Insurance Co., 383 A.2d 189, 191 (Pa. 1978).  Its provisions are applicable “only if the arbitration agreement specifically refers to the Act or there is other evidence, subsequent to the agreement, that the parties expressly or implicitly agreed that it should apply.” Hart v. State Farm Mutual Automobile Insurance Co., 431 A.2d 283, 285 (Pa. Super. 1981), overruled on other grounds, White v. Concord Mutual Insurance Co., 296 Pa. Super. 171, 442 A.2d 713, aff’d, 500 Pa. 103, 454 A.2d 982 (1982); see also: Gallagher v. Educator and Executive Insurers, Inc., 381 A.2d 986, 987 (Pa. Super. 1977).

Neither the agreement to arbitrate nor any subsequent agreement between the parties provided for statutory arbitration; therefore, common law arbitration principles apply.  Gentile, 477 A.2d 546 (Pa. Super. 1984); Campbell-Ellsworth, Inc. v. Holy Trinity Serbian Orthodox Church-School Congregation, 336 A.2d 346 (Pa. Super. 1975). Pursuant to common law arbitration rules, the court shall confirm the award and enter judgment upon application of a party made more than thirty days after the award.  The statute provides: 

(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 common law arbitration), the court shall enter an order confirming the award and shall enter a judgment or decree in conformity with the order.$98,000 win for Kenny, Burns & McGill.

42 Pa.C.S. § 7342(b). 

did not file a motion for reconsideration or an appeal within thirty days of the date of the entry of the order denying its Petition to Vacate.  Pa. R.A.P 903(a) states that a final order entered by the trial court becomes res judicata when the order is not appealed within thirty days of its entry. See Commonwealth, DOT v. Kmetz, 129 Pa. Commw. 97, 564 A.2d 1040, 1989 Pa. Commw. LEXIS 649 (1989). The February 6, 2020 order disposed of all of the issues in the case, and was not  timely appealed; therefore, the res judicata doctrine bars from relitigating the issues raised in its Montgomery County Petition. 

The doctrine of res judicata applies, where, as here, four conditions are present: (1) identity in the thing sued upon; (2) identity of the cause of action; (3) identity of persons and parties to the action; and (4) identity of the quality or capacity of the parties suing or sued.  A final valid judgment upon the merits by a court of competent jurisdiction bars any future suit between the same parties or those in privity with them on the same cause of action. Bearoff v. Bearoff Bros., Inc., 327 A.2d 72 (Pa. 1974).  All these conditions are present here. 

In both Petitions, Therefore, the Petition to Vacate should be denied and the CCC’s Petition to Confirm should be granted.  Dixon v. LaSalle Bank, 2008 Phila. Ct. Com. Pl. LEXIS 138, *3-5

• The Petition to Vacate filed in Philadelphia County is untimely as it was filed more than thirty days after the Arbitration Award; therefore, the award should be confirmed.

“In order to challenge the award of the arbitrator, a party must act within 30 days.”  DDP Contr., Inc. v. Haverford Walk Condo. Ass’n, 2006 Phila. Ct. Com. Pl. LEXIS 436, *1 (Nov. 13, 2006)(Dych, J.) citing 42 PA.C.S.A. § 7342(b). 

See DDP Contr., Inc.,  2006 Phila. Ct. Com. Pl. LEXIS 436, *1 (holding (Nov. 13, 2006)(Dych, J.) citing 42 Pa. C.S.A. § 7342(b). $98,000 win for Kenny, Burns & McGill.

• The Award should be confirmed, as the Parties expressly waived any right to move to set aside or appeal the arbitration award.

The Parties waived their rights to set aside the arbitration award.  The contractual provision governing arbitration  provided:

Any controversy or claim arising out of or relating to this contract, of (sic) the breach thereof, shall be settled by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association, and judgment upon the reward rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.  The parties specifically waive any rights under state law to move to set the arbitration decision aside and/or appeal, thus the arbitration decision shall be final and binding.  Any attorney’s fees incurred by the contractor in enforcement or arbitration under this contact shall be recoverable by the general contractor and will be paid by the subcontractor.  Subcontractor also agrees to be a party to any arbitration between or among the general contractor, owner, and/or other subcontractors if named as a party by the general contractor, and subcontractor shall be bound by such arbitration decision.  Both parties agree that this subcontract shall be governed by the laws of the State of Pennsylvania.

See Exhibit B.

• The Arbitration Award Should be Confirmed Because the Petition to Vacate Improperly Seeks to Attack the Legal and Factual Findings of the Arbitrator.

Assuming the Petition to Vacate was properly filed before this Court, the Petition should be denied as it improperly seeks to attack the legal and factual findings of the arbitrator.  “The arbitrators are the final judges of both law and fact, and an arbitration award is not subject to a reversal for a mistake of either.” Prudential Property and Cas. Ins. Co. v. Stein, 683 A.2d 683, 685 (Pa. Super. 1996).

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.

42 Pa.C.S.A. § 7341

The Petition seeks to undermine the factual and legal basis of the award.  The Petition challenges evidentiary decisions (consideration or (sic) evidence not in the record), interpretation of law (leading edge doctrine), violation of AAA rules (form of written decision), findings of fact (award and unjust enrichment), manner of proceedings (failure to rule on motion and failure to place  hearing exhibits into evidence); and amount of award (misconduct and unjust, inequitable & unconscionable award). 

does not allege it was denied a hearing or that fraud, corruption or misconduct tainted the hearing.  simply does not like the result, and, unfortunately for  an unfavorable result is not subject to appeal.  See  Strausser Enters. v. Segal & Morel, Inc., 154 A.3d 842 (Pa. Super. 2016)

(Petitioner’s claim that the arbitrator failed to consider the evidence it presented seeks to undermine the factual and legal basis of the award, which is not a proper reason to vacate a common law arbitration award.).$98,000 win for Kenny, Burns & McGill.

In addition, the proceedings were not transcribed, and the Court in Montgomery County granted leave to conduct discovery.  Even after discovery,has not come forth with any evidence, let alone clear and convincing evidence to support its claim.  Accordingly, the award should be confirmed.

1. RELIEF SOUGHT

going reasons, Petitioner  this Honorable Court enter an appropriate Order confirming the Arbitration Award, entering judgment in favor of  Company, LLC and against in the amount of $98,623.48 plus interest at the rate of 6.3 percent from until the date of payment of the award; and granting any other relief this Honorable Court deems just and appropriate. 

Respectfully submitted,

KENNY, BURNS & MCGILL

By:           /s/ Thomas D. Kenny

Thomas D. Kenny, Esquire

Eileen T. Burns, Esquire

$98,000 win for Kenny, Burns & McGill.