Morse, J. v. Fisher Asset Management
206 A.3d 521
Pa. Super. Ct.2019Background
- Joyce Morse entered an investment-adviser contract with Fisher Asset Management on January 4, 2008, containing a JAMS arbitration clause governed by Delaware law.
- Morse filed a six‑count civil complaint in Allegheny County in June 2009 (breach of fiduciary duty, fraud, UTPCPL, negligence, breach of contract, failure to supervise).
- Defendants filed preliminary objections under Pa.R.C.P. 1028(a)(6) to compel arbitration; the trial court sustained the objections and dismissed the complaint on May 13, 2010. Morse did not appeal that dismissal.
- Morse filed an arbitration statement of claim with JAMS on March 4, 2016, substantially identical to her 2009 complaint; the arbitrator dismissed the claim with prejudice as time‑barred on March 10, 2017, relying on JAMS rules permitting dispositive disposition.
- Morse petitioned in court to vacate the arbitration award arguing (a) her 2009 filing tolled the statutes of limitation because the court’s 2010 dismissal operated as a stay, (b) the arbitrator exceeded authority and denied a hearing, and (c) she sought appointment of a new arbitrator. The trial court denied vacatur; this appeal followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial‑court dismissal of Morse’s 2009 complaint tolled or stayed the statute of limitations | Morse: the May 13, 2010 order enforcing arbitration automatically stayed the action and tolled limitations, so her 2016 arbitration was timely | Defendants: they sought enforcement via preliminary objections under Rule 1028, which dismisses rather than stays; only a § 7304 petition to compel would produce a stay | Held: Dismissal on preliminary objections under Rule 1028(a)(6) does not stay the action and does not toll statutes of limitation; Morse’s claim was time‑barred |
| Whether statutes of limitation were for the arbitrator to decide | Morse: JAMS rules do not preclude application of statutes of limitations and she contends no limitations applied | Defendants: the arbitration clause incorporated JAMS rules giving arbitrators authority to decide procedural defenses, including limitations | Held: Issue of applicability of statutes of limitation was properly before the arbitrator under the arbitration clause and JAMS rules |
| Whether denial of an evidentiary hearing was an irregularity requiring vacatur | Morse: arbitrator dismissed without a hearing, producing an unfair result | Defendants: JAMS rules allow summary dispositive rulings; Andrew (distinguished) required a hearing because the discovery rule was contested | Held: No irregularity shown; no hearing required here because timing of accrual was not disputed and Andrew is distinguishable |
| Whether the court should appoint a new arbitrator | Morse: asks court to appoint local arbitrator(s) to hear the case | Defendants: arbitration clause required JAMS retired judge in Philadelphia; issue is inconsistent with agreement | Held: Moot given affirmance of dismissal/vacatur denial; court need not appoint an arbitrator |
Key Cases Cited
- Andrew v. CUNA Brokerage Servs., 976 A.2d 496 (Pa. Super. 2009) (arbitrator should hold evidentiary hearing where accrual/discovery timing is disputed)
- Vogt v. Liberty Mut. Fire Ins. Co., 900 A.2d 912 (Pa. Super. 2006) (judicial review of arbitration awards is narrow; vacatur only for hearing denial, fraud, misconduct, corruption, or similar irregularity)
- F.J. Busse Co. v. Zipporah, L.P., 879 A.2d 809 (Pa. Super. 2005) (party seeking vacatur bears the burden to show irregularity and resulting inequity by clear, precise, and indubitable evidence)
- Merchants Mut. Ins. Co. v. American Arbitration Ass'n, 248 A.2d 842 (Pa. 1969) (arbitrators may decide applicability of statutes of limitation when clause grants them authority)
- Woodward Heating & Air Conditioning Co. v. American Arbitration Ass'n, 393 A.2d 917 (Pa. Super. 1978) (whether a claim is time‑barred may be determined by arbitration)