J-A03006-18
2018 PA Super 75
HOWARD F. GRIEST, III : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellant :
:
v. :
:
KEVIN GRIEST :
:
Appellee : No. 2262 EDA 2017
Appeal from the Order Dated June 26, 2017
In the Court of Common Pleas of Chester County
Civil Division at No(s): 16-04054-RC
BEFORE: GANTMAN, P.J., McLAUGHLIN, J., and PLATT*, J.
OPINION BY GANTMAN, P.J.: FILED MARCH 27, 2018
Appellant, Howard F. Griest, III, appeals from the order entered in the
Chester County Court of Common Pleas, which overruled his preliminary
objections in the nature of a motion to assert arbitration and compel
bifurcation of the counterclaim of Appellee, Kevin Griest, in this partition
action. We reverse and remand for further proceedings.
The parties to this action are brothers. On April 12, 2000, the parties’
mother transferred two parcels of property to Appellant and Appellee as joint
tenants with the right of survivorship: (1) real property at 265 Killian Road,
Chester County, Pennsylvania (“Farm Property”); and (2) real property at 251
Killian Road, Chester County, Pennsylvania (“Rental Property”). On April 29,
2016, Appellant commenced this partition action against Appellee by writ of
summons. Appellant filed a complaint on January 3, 2017. Specifically,
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* Retired Senior Judge assigned to the Superior Court.
J-A03006-18
Appellant alleged that, since August of 2006, Appellee has retained exclusive
possession of the Farm Property. Appellant claimed Appellee refused to rent
the Farm Property, which prevented Appellant from collecting a fair rental
value for that land. Appellant conceded that Appellee has rented the Rental
Property to tenants since 2004, but Appellant insisted the rental income is
inadequate to pay for the taxes, insurance and maintenance expenses for both
properties. As a result, Appellant has had to contribute to those payments
while Appellee has paid nothing. Appellant sought partition of the Farm
Property and Rental Property so the parties can sell the properties, pay the
expenses of the sales, and equitably divide the net proceeds of the sales.
Appellant further requested an order assessing charges against Appellee for
the fair market rental value arising from Appellee’s exclusive use and
occupancy of the Farm Property, as well as reimbursement of the amounts
Appellant has paid for taxes, maintenance, and insurance for the properties.
On February 10, 2017, Appellee filed an answer and counterclaim,
introducing a third parcel of real property at 50 West Conestoga Road,
Elverson, Pennsylvania (“Elverson Property”). Appellee claimed the parties
entered into an agreement dated May 5, 2006 (“Agreement”), which is
relevant to the partition action. The Agreement provides, in pertinent part,
as follows:
AGREEMENT
THIS AGREEMENT made by and between [Appellant] and
[Appellee], both of Chester County, Pennsylvania
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(hereinafter collectively referred to as the “Partners”):
WHEREAS, the Partners are individuals and co-owners of
[the Farm Property]; and
WHEREAS, [Appellant] owns personal property separate and
distinct from the Farm Property; and
WHEREAS, [Appellee] owns personal property separate and
distinct from the Farm Property;
WHEREAS, [Appellant] desires to utilize the Partners’
interest in the Farm Property as collateral for purposes of
purchasing [the Elverson Property]; and
WHEREAS, [Appellee] is not a party to the purchase of the
[Elverson] Property; and
WHEREAS, [Appellee] has been asked by [Appellant] to sign
as a limited surety for [Appellant’s] purchase of the
[Elverson Property], which Surety Agreement will pledge
[Appellee’s] interest in the Farm Property as collateral for
[Appellant’s] purchase of the [Elverson] Property;
WHEREAS, [Appellee] is willing to sign a Limited Surety
Agreement, provided his personal property, which is
separate and distinct from the Farm Property, is exempt
from the Limited Surety Agreement; and
WHEREAS, in exchange for signing a Limited Surety
Agreement, [Appellee] has requested of [Appellant] the
right to receive Twenty Percent (20%) interest in the
[Elverson Property], under certain terms and conditions;
and
WHEREAS, [Appellant] is agreeable to meeting [Appellee’s]
requests in exchange for [Appellee’s] signing a Limited
Surety Agreement; and
WHEREAS, the Partners desire to set forth in this Agreement
the arrangement between them;
NOW THEREFORE, the Partners, intending to be legally
bound, mutually agree as follows:
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1. Pledge of Farm Property as Collateral for Purchase of
[Elverson] Property:
The Partners hereby agree to pledge the Farm Property
as collateral for [Appellant’s] purchase of the [Elverson]
Property. In making this pledge, [Appellee] will sign the
Limited Surety Agreement attached hereto and marked
as Exhibit “A”. The Partners acknowledge that [Appellee]
owns personalty, which is to be exempted from that
property being pledged as collateral. …
2. Refinancing of Loan for Purchase of [Elverson] Property:
The Partners acknowledge that [Appellant] has or will
receive financing to complete his purchase of the
[Elverson] Property. [Appellant] agrees that on June 2,
2011 or as soon as reasonably possible thereafter,
[Appellant] will apply for refinancing of any outstanding
loan encumbering the Farm Property. In seeking
refinancing, [Appellant] will make all reasonable efforts
to complete the refinancing without pledging any of the
Farm Property as collateral for the refinanced loan(s).
3. Consideration to [Appellee] for Signing Limited Surety
Agreement:
In exchange for [Appellee’s] signing the Limited Surety
Agreement, [Appellee] shall receive from [Appellant] a
Twenty Percent (20%) interest in [the Elverson
Property]. [Appellant] agrees that he will be solely
responsible for payment of all costs associated with the
ownership and maintenance of the real property
including, but not limited to taxes, water and sewer
rents, insurance, repairs and maintenance of the
property. Unless the property is sold to a third party on
or before June 2, 2011, [Appellee] agrees he will not seek
to sell his interest in the property or request any payment
from [Appellant] for [Appellee’s] interest in said property
until June 2, 2011. …
4. Farm Bank Account:
The Partners agree that all funds received by the Partners
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arising out of their operation of the Farm Property shall
be kept separate and distinct from any money received
by either [Appellant] or [Appellee] from other ventures
in which either partner may invest or otherwise be
involved. …
5. Farm Operation:
Each Partner shall devote as much time as is reasonably
possible to the operation of the Farm Property. Each
Partner understands that the other is involved in
businesses separate and distinct from the Partnership.
Each Partner will endeavor to work with the other to
further the interests of the Partnership, understanding
that time constraints and other commitments may
involve one partner contributing more time and/or effort
towards the operation of the Partnership than the other.
6. Profit and Loss:
The net profits or losses of the Partnership shall be
divided equally between the Partners; provided that if
one partner fails to materially contribute to the operation
of the Farm Property, appropriate adjustments shall be
made between the Partners to reflect the contribution
made by each partner toward the operation and
maintenance of the Farm Property.
7. Legal Fees and Costs:
In the event any claim or litigation is initiated against
[Appellee] by virtue of his signing the Limited Surety
Agreement or receiving a 20% interest in the [Elverson
Property], [Appellant] agrees to [indemnify] [Appellee]
for all legal costs [Appellee] incurs in defending himself
against any such claim or litigation. …
8. Choice of Law:
This Agreement shall be construed in accordance with the
laws of the Commonwealth of Pennsylvania.
9. Arbitration:
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Any disputes which arise from this Agreement shall be
submitted to binding arbitration in accordance with the
Rules of the American Arbitration Association and any
judgment on the award rendered by the arbitrator may
be entered in any court having jurisdiction thereof.
* * *
(Agreement, dated 5/6/06, at 1-4; R.R. at 71a-74a). Essentially, Appellee
averred he agreed to “pledge” the Farm Property as collateral so that
Appellant’s business entity, 50 West Conestoga Road, LP, could purchase the
Elverson Property. In exchange, Appellee was to receive a twenty percent
(20%) interest in the Elverson Property. Appellee insisted Appellant failed to
pay him the amount owed. Under the Agreement, Appellee claimed the
parties decided to operate the Farm Property jointly and to devote as much
time as possible to the operation of the Farm Property. Appellee maintained
Appellant devoted no time to the Farm Property since 2005, leaving Appellee
to tend to the Farm Property on his own by raising livestock, harvesting crops,
and hiring someone to assist with the farm management. Appellee also
claimed he had expended substantial funds for maintenance of the Farm
Property and Rental Property. Appellee conceded the Agreement contains a
provision requiring any disputes arising from the Agreement to proceed to
binding arbitration. Nevertheless, Appellee suggested that all issues involving
the parties and the Farm Property, Rental Property, and Elverson Property
should be resolved together in one forum, the trial court. Appellee sought
partition of the Farm Property and the Rental Property, payment of his twenty
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percent (20%) interest in the Elverson Property, and reimbursement for the
expenses Appellee had paid to manage/operate the Farm Property and Rental
Property, as well as an order assessing charges against Appellant for his failure
to contribute to the management and operation of the Farm Property and/or
Rental Property.
Appellant filed preliminary objections to Appellee’s counterclaim on
March 1, 2017, under Pa.R.C.P. 1028(a)(6), based on the arbitration clause
in the parties’ Agreement.1 Appellant insisted the Elverson Property is
separate and distinct from the other properties, and Appellee’s claim for a
twenty percent (20%) interest in the Elverson property must proceed to
arbitration. Appellee responded to the preliminary objections on March 20,
2017, claiming the parties’ Agreement sets forth the parties’ obligations to the
Farm Property, which is part of the partition action. Appellee renewed his
request for a “global resolution” of all claims in the trial court.
By order dated June 26, 2017, and filed the next day, the court
overruled Appellant’s preliminary objections, stating:
[Appellant’s] Complaint raises a partition action regarding
two properties owned by the parties. [Appellee’s]
Counterclaim involves inter alia a written agreement
between the parties with regard to a third property. That
agreement contains an arbitration clause. [Appellant’s]
Preliminary Objection is based on that arbitration
agreement. Normally, we would sustain that Objection.
____________________________________________
1 See Pa.R.C.P. 1028(a)(6) (explaining preliminary objections may be filed by
any party to any pleading based on agreement for alternative dispute
resolution).
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However, the agreement also contains provisions related to
the two properties at issue in the instant action and could
impact the parameters of any partition. Finally, the
Counterclaim itself, in addition to mentioning the third
property, also makes averments that could impact any
partition.
(Order, filed 6/27/17, at 1 n.1; R.R. at 98a) (internal citation omitted).
Appellant timely filed a notice of appeal on July 14, 2017. On July 18, 2017,
the court ordered Appellant to file a concise statement of errors complained
of on appeal pursuant to Pa.R.A.P. 1925(b); Appellant timely complied on
August 7, 2017.
Appellant raises three issues for our review:
WHETHER THE CHESTER COUNTY COURT OF COMMON
PLEAS ABUSED ITS DISCRETION AND/OR ERRED AS A
MATTER OF LAW AND/OR ITS DECISION WAS
UNSUPPORTED BY COMPETENT EVIDENCE IN OVERRULING
APPELLANT’S PRELIMINARY OBJECTION TO APPELLEE’S
COUNTERCLAIM, WHICH PRELIMINARY OBJECTION
ASSERTED THE EXISTENCE OF AN AGREEMENT TO
ARBITRATE UNDER PA.R.C.P. 1028(A)(6), IN A PARTITION
ACTION WHEREIN THE COMPLAINT INVOLVES TWO
PROPERTIES OWNED BY THE PARTIES, WHEN THE
COUNTERCLAIM INVOLVES AN ENTIRELY DISTINCT THIRD
PROPERTY THAT HAS DIFFERENT OWNERSHIP, AND THE
ISSUES ASSERTED IN THE COUNTERCLAIM ARE GOVERNED
BY A WRITTEN AGREEMENT THAT, BY THE COURT’S
ACKNOWLEDGEMENT, SUBJECTS THE MATTERS IN THE
COUNTERCLAIM TO BINDING ARBITRATION IN
ACCORDANCE WITH THE RULES OF THE AMERICAN
ARBITRATION ASSOCIATION.
WHETHER THE CHESTER COUNTY COURT OF COMMON
PLEAS ABUSED ITS DISCRETION AND/OR ERRED AS A
MATTER OF LAW AND/OR ITS DECISION WAS
UNSUPPORTED BY COMPETENT EVIDENCE IN OVERRULING
APPELLANT’S PRELIMINARY OBJECTION TO APPELLEE’S
COUNTERCLAIM, WHICH PRELIMINARY OBJECTION
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ASSERTED THE EXISTENCE OF AN AGREEMENT FOR
BINDING ARBITRATION IN ACCORDANCE WITH THE RULES
OF THE AMERICAN ARBITRATION ASSOCIATION UNDER
PA.R.C.P. 1028(A)(6), WHEN APPELLEE/COUNTERCLAIM
PLAINTIFF ADMITTED THE EXISTENCE OF A WRITTEN
AGREEMENT FOR BINDING ARBITRATION WITH RESPECT
TO THE ISSUES SET FORTH IN THE COUNTERCLAIM.
WHETHER THE CHESTER COUNTY COURT OF COMMON
PLEAS ABUSED ITS DISCRETION AND/OR ERRED AS A
MATTER OF LAW AND/OR ITS DECISION WAS
UNSUPPORTED BY COMPETENT EVIDENCE IN OVERRULING
APPELLANT’S PRELIMINARY OBJECTION TO APPELLEE’S
COUNTERCLAIM, WHICH PRELIMINARY OBJECTION
ASSERTED THE EXISTENCE OF AN AGREEMENT FOR
ARBITRATION UNDER PA.R.C.P. 1028(A)(6), WHEN THE
COURT FOUND THAT THE SUBJECT AGREEMENT
CONTAINED AN AGREEMENT TO SUBMIT ALL DISPUTES TO
BINDING ARBITRATION, AND ACKNOWLEDGED THAT IT
WOULD NORMALLY SUSTAIN THE OBJECTION BASED ON
THE ARBITRATION AGREEMENT, BUT NONETHELESS
PROCEEDED TO OVERRULE THE PRELIMINARY OBJECTION
ON [THE] BASIS THAT THE AGREEMENT COULD
PURPORTEDLY IMPACT THE PARTITION ACTION AND THE
COUNTERCLAIM MENTIONS THE THIRD PROPERTY AND
MAY PURPORTEDLY IMPACT THE PARTITION.
(Appellant’s Brief at 5-6).
For purposes of disposition, we combine Appellant’s issues. Appellant
argues his claims for partition are separate and distinct from Appellee’s
allegations in the counterclaim relating to the Elverson Property and the
parties’ Agreement, so the parties should litigate Appellant’s partition
complaint in the trial court and Appellee’s counterclaim in arbitration.
Appellant asserts the parties’ Agreement contains a clear and valid agreement
to arbitrate claims arising out of the Agreement. Appellant avers the
Agreement pertains mainly to the Elverson Property, as entirely distinct from
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the Farm Property and Rental Property, which are subjects of the partition
action. Appellant emphasizes that neither Appellant nor Appellee individually
owns the Elverson Property; instead, an entity called 50 West Conestoga
Road, LP owns the Elverson Property. Appellant stresses 50 West Conestoga
Road, LP is not even a party to this action. Appellant suggests that litigating
Appellee’s counterclaim in the partition action would deprive that entity of due
process. Appellant complains Appellee is attempting to utilize the partition
action to bypass the binding arbitration clause in the parties’ Agreement.
Appellant maintains the dispute at issue in Appellee’s counterclaim, involving
Appellant’s alleged breaches of his obligations under the Agreement, is
unquestionably within the scope of the arbitration provision. Appellant insists
the mere mention of the Farm Property in the Agreement should not permit
Appellee to evade the arbitration clause and litigate all claims at the same
time. Appellant concludes the arbitration clause governs Appellee’s
counterclaim and this Court must reverse the trial court’s order denying
arbitration of, and retaining jurisdiction over, the counterclaim. We agree in
part but not on the grounds stated.
Initially, as a general rule:
[A]n order [overruling] preliminary objections is
interlocutory and not appealable as of right. There exists,
however, a narrow exception to this oft-stated rule for cases
in which the appeal is taken from an order denying a petition
to compel arbitration. Our decisional law has made clear
that the issue of whether a party agreed to arbitrate a
dispute is a threshold, jurisdictional question that must be
decided by the court.
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Pisano v. Extendicare Homes, Inc., 77 A.3d 651, 654 (Pa.Super. 2013),
appeal denied, 624 Pa. 683, 86 A.3d 233 (2014), cert. denied, ___ U.S. ___,
134 S.Ct. 2890, 189 L.Ed.2d 838 (2014) (internal citations and quotation
marks omitted). The relevant standard and scope of review in this context
are as follows:
Our review of a claim that the trial court improperly
denied the appellant’s preliminary objections in the
nature of a petition to compel arbitration is limited to
determining whether the trial court’s findings are
supported by substantial evidence and whether the
trial court abused its discretion in denying the petition.
In doing so, we employ a two-part test to determine
whether the trial court should have compelled arbitration.
First, we examine whether a valid agreement to arbitrate
exists. Second, we must determine whether the dispute is
within the scope of the agreement.
* * *
Whether a claim is within the scope of an arbitration
provision is a matter of contract, and as with all questions
of law, our review of the trial court’s conclusion is plenary.
Id. at 654-55 (internal citations and quotation marks omitted). In making
these determinations, courts must bear in mind:
(1) arbitration agreements are to be strictly construed
and not extended by implication; and (2) when parties
have agreed to arbitrate in a clear and unmistakable
manner, every reasonable effort should be made to
favor the agreement unless it may be said with
positive assurance that the arbitration clause involved
is not susceptible to an interpretation that covers the
asserted dispute.
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To resolve this tension, courts should apply the rules of
contractual constructions, adopting an interpretation that
gives paramount importance to the intent of the parties and
ascribes the most reasonable, probable, and natural conduct
to the parties. In interpreting a contract, the ultimate goal
is to ascertain and give effect to the intent of the parties as
reasonably manifested by the language of their written
agreement.
Provenzano v. Ohio Valley General Hosp., 121 A.3d 1085, 1095
(Pa.Super. 2015) (internal citations omitted).
Pennsylvania law endorses the nationally accepted liberal policy favoring
arbitration embodied in the Federal Arbitration Act at 9 U.S.C. §§ 1-16
(“FAA”):
[The enactment of the FAA] expresses a liberal federal
policy favoring arbitration agreements. [Congress’] purpose
was to overcome state legislative and judicial efforts to
undermine the enforceability of arbitration agreements,
inter alia, by establishing a substantive rule of federal law
placing such agreements upon the same footing as other
contracts. The federal statute thus requires that a written
provision…to settle by arbitration a controversy thereafter
arising out of such contract or transaction…shall be valid,
irrevocable, and enforceable, save upon any grounds at law
or in equity for the revocation of any contract.2
2 Pennsylvania law reflects an identical policy
embodied in the Uniform Arbitration Act. See 42
Pa.C.S.[A]. § 7303 (“A written agreement to subject
any existing controversy to arbitration or a provision
in a written agreement to submit to arbitration any
controversy thereafter arising between the parties is
valid, enforceable, and irrevocable, save upon such
grounds as exist at law or in equity relating to the
validity, enforceability or revocation of any contract”).
Salley v. Option One Mortg. Corp., 592 Pa. 323, 330, 925 A.2d 115, 118-
19 (2007). See also Taylor v. Extendicare Health Facilities, Inc., 637
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Pa. 163, 194, 147 A.3d 490, 509 (2016) (stating: “Section 2 of the FAA binds
state courts to compel arbitration of claims subject to an arbitration
agreement”; this directive is mandatory); Ross Development Co. v.
Advanced Bldg. Development, Inc., 803 A.2d 194, 196 (Pa.Super. 2002)
(reiterating historical perspective in Pennsylvania law favoring arbitration);
Smith v. Cumberland Group, Ltd., 687 A.2d 1167, 1171 (Pa.Super. 1997)
(stating: “As a matter of public policy, the courts of this Commonwealth
strongly favor the settlement of disputes by arbitration”). “Under the FAA,
any doubts concerning the scope of arbitrable issues should be resolved in
favor of arbitration.” Provenzano, supra at 1097 (internal citation and
quotation marks omitted). Importantly: “The essential and overarching
purpose of the FAA…is to ensure the enforcement of arbitration agreements
according to their terms so as to facilitate streamlined proceedings and
resolution of claims.” Id. at 1098 (internal citation and quotation marks
omitted).
Instantly, Appellant’s complaint alleged Appellee: (1) retained exclusive
possession of the Farm Property since August of 2006; (2) refused to rent the
Farm Property, which prevented Appellant from collecting a fair rental value
for that land; and (3) rented the Rental Property for an amount inadequate to
pay for the taxes, insurance and maintenance expenses for both properties,
which forced Appellant to contribute to those expenses. Appellant sought
partition of the Farm Property and Rental Property so the parties could sell the
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properties, pay the expenses of the sales, and equitably divide the net
proceeds of the sales. Appellant further requested an order assessing charges
against Appellee for the fair market rental value arising from Appellee’s
exclusive use and occupancy of the Farm Property, as well as reimbursement
of the amounts Appellant paid for taxes, maintenance, and insurance for the
properties.
Appellee’s counterclaim alleged Appellant: (1) failed to pay Appellee the
twenty percent (20%) interest owed under the Agreement regarding the
Elverson Property; (2) devoted no time to operation of the Farm Property since
2005; and (3) caused Appellee to expend substantial funds for maintenance
of the Farm Property. Appellee also sought partition of the Farm Property and
Rental Property, payment of his twenty percent (20%) interest in the Elverson
Property, and reimbursement for the expenses Appellee paid to
manage/operate the Farm Property and Rental Property, as well as an order
assessing charges against Appellant for his failure to contribute to the
management and operation of the Farm Property and/or Rental Property.
The parties concede the Agreement contains a valid arbitration clause.
(See Agreement at ¶ 9; R.R. at 74a). The Agreement delineates the parties’
rights and duties regarding the Elverson Property and implicates the Farm
Property. For example, the Agreement specifies that the parties will use the
Farm Property as collateral for Appellant to obtain the Elverson Property; in
exchange, Appellee will receive a twenty percent (20%) interest in the
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Elverson Property. (See id. at ¶¶ 1, 3; R.R. at 72a). The Agreement requires
Appellant to receive financing to complete the purchase of the Elverson
Property and apply for refinancing of any outstanding loan encumbering the
Farm Property, without pledging any of the Farm Property as collateral for the
refinanced loan(s). (Id. at ¶ 2; R.R. at 72a). Under the Agreement, the
parties must keep all funds received from operation of the Farm Property
separate and distinct from any other money either partner obtains through
individual ventures or investments. (Id. at ¶ 4; R.R. at 73a). The Agreement
instructs the parties to devote as much time as is reasonably possible to
operation of the Farm Property and to work with each other to further the
interests of the “Partnership.” (Id. at ¶ 5; R.R. at 73a). The parties agreed
that any profits or losses of the “Partnership” will be divided equally between
the “Partners”; provided that if one partner fails to contribute materially to
operation of the Farm Property, appropriate adjustments will be made
between the Partners to reflect the contribution made by each Partner toward
the operation and maintenance of the Farm Property. (Id. at ¶ 6; R.R. at
73a).
By entering the Agreement, the parties decided on a set of rules that
would govern their pursuit of Appellant’s purchase of the Elverson Property
and their joint operation of the Farm Property. All of the allegations in both
the complaint and counterclaim concerning the Farm Property and the
Elverson Property fall within the scope of the Agreement and its arbitration
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provision. (See id. at ¶¶ 1, 3, 5, 6; R.R. at 72a-73a).
Additionally, the parties utilized the Farm Property as collateral for
Appellant’s purchase of the Elverson Property. The court cannot partition the
Farm Property in a proceeding separate from claims surrounding the Elverson
Property and the parties’ Agreement, as the lender for the loan on the Elverson
Property would have a lien on the Farm Property, in the event of a default,
thereby destabilizing the Agreement.
Each party also asserted claims related to the Rental Property. The
Agreement does not specifically mention the Rental Property. Nevertheless,
the Agreement repeatedly refers to the “Partnership” and makes clear “[e]ach
Partner will endeavor to work with the other to further the interests of the
Partnership, understanding that time constraints and other commitments may
involve one partner contributing more time and/or effort towards the
operation of the Partnership than the other.” (Id. at ¶ 5; R.R. at 73a). The
parties’ rights and duties concerning the Farm Property and the Elverson
Property vis-à-vis the Rental Property are so inextricably intertwined that
claims pertaining to all three properties should be adjudicated in one forum.
In other words, adjudication of claims regarding the Elverson Property
implicates claims regarding the Farm Property, which necessarily implicates
claims regarding the Rental Property.
In light of the parties’ relationship, course of conduct in executing the
Agreement to arbitrate, and to facilitate streamlined proceedings and
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resolution of claims, we consider issues involving joint ownership of and
contribution to the Partnership and the three properties to fall within the scope
of arbitrable issues. See Provenzano, supra (reversing trial court’s order
overruling preliminary objections in form of petition to compel arbitration of
claim under Wage Payment and Collection Law (“WPCL”); WPCL claim arose
out of alleged breach of employment contract containing arbitration clause
and was temporally and factually related to appellee’s contract claim; in
overruling preliminary objections, trial court subordinated liberal policy
favoring arbitration shared in prevailing federal and state law). Compare
Taylor, supra (holding FAA preempts application of Pa.R.C.P. 213(e)
(requiring consolidation of wrongful death and survival claims for trial);
decedent signed agreement with nursing home facility providing that any
disputes arising between parties must be submitted to arbitration; wrongful
death action had to be adjudicated in trial court, because arbitration
agreement, signed only by decedent, did not bind claims of decedent’s
wrongful death beneficiaries; wrongful death action was not derivative of
decedent’s survival claim, because wrongful death action belonged only to
statutory claimants and not to decedent; concluding wrongful death and
survival claims had to be bifurcated, with beneficiaries’ wrongful death claim
to proceed in trial court and decedent’s survival claim to proceed in
arbitration).
Unlike Taylor, where the arbitration agreement could not bind the
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wrongful death beneficiaries, here Appellant and Appellee signed the
Agreement containing the arbitration provision. Further, nothing in the Rules
of Civil Procedure prohibits litigation of a partition action in the arbitration
forum. See Pa.R.C.P. 1551-1574 (governing actions for partition of real
property). Therefore, we see no need to bifurcate resolution of the claims
raised in this case. Thus, we conclude all claims in this matter should proceed
in the single forum of arbitration, to avoid conflicting resolutions and/or the
potential for duplicative awards.2 Accordingly, we reverse the order overruling
Appellant’s preliminary objections to Appellee’s counterclaim and remand for
further proceedings.
Order reversed; case remanded for further proceedings. Jurisdiction is
relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 3/27/18
____________________________________________
2 At oral argument, the Court gave the parties an opportunity to waive the
arbitration clause so all claims could proceed in the trial court. Following
argument, Appellant’s counsel notified this Court that the parties were unable
to reach a stipulation regarding a common forum for all their claims at one
time. Upon remand, the trial court might want to revisit the waiver potential.
If the parties still cannot agree, the trial court must direct all claims to proceed
to arbitration.
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