Strausser Enterprises, Inc. v. Segal & Morel, Inc.
89 A.3d 292
Pa. Super. Ct.2014Background
- Strausser and Appellants (Segal & Morel entities and Kenneth Segal) had a contract requiring common-law arbitration of disputes arising from real-estate development agreements.
- Strausser sought and the trial court compelled arbitration; multiple arbitration panels were involved (an initial Walters Panel and later the Redding Panel that decided the substantive claims).
- The Redding Panel issued a majority decision (Sept. 26, 2012) awarding Strausser damages and concluding Strausser was entitled to counsel fees, but it did not determine the amount of fees and signaled additional proceedings might be required for certain damage issues.
- Appellants filed a petition to vacate after receiving arbitration opinions; Strausser filed to confirm the award. The trial court struck Appellants’ petition to vacate and entered judgment confirming the Redding Panel decision for over $15 million.
- On appeal, the superior court held the Redding Panel decision was not a final common-law arbitration “award” because it left unresolved the amount of counsel fees and contemplated further proceedings; therefore the trial court lacked authority to confirm and enter judgment. The judgment and the April 19, 2013 order were vacated and the matter remanded for the arbitrators to complete their work.
Issues
| Issue | Plaintiff's Argument (Strausser) | Defendant's Argument (Segal/Appellants) | Held |
|---|---|---|---|
| Whether trial court erred in compelling arbitration (Nov. 9, 2010 order) | Arbitration agreement was valid and claims were within its scope; trial court correctly compelled arbitration | Some claims were barred by res judicata and should have been litigated before the Walters Panel, so court erred in compelling arbitration | No relief for Appellants; trial court properly limited to deciding existence/scope of arbitration, not merits; res judicata argument belonged to arbitrators |
| Whether the Redding Panel decision constituted a final common-law arbitration “award” | The decision was final on the merits; unresolved counsel-fee calculation is ancillary and does not prevent confirmation | The decision is not an "award" under Fastuca because it left unresolved the amount of counsel fees and contemplated further proceedings | Ruling for Appellants: Under Fastuca an award must finally resolve all matters submitted; because counsel-fee amount (and possibly further factfinding) remained, no final award existed and confirmation was premature |
| Whether counsel-fee claim is merely ancillary and does not prevent finality | Counsel-fee claim is ancillary and does not defeat finality; confirmation and judgment may proceed | Counsel-fee claim was submitted to arbitration and requires factual/legal determinations, so it prevents finality | Court rejects Strausser: fee claim submitted to arbitrators renders decision nonfinal for purposes of Section 7341/7342 |
| Whether trial court erred in striking Appellants’ petition to vacate if Redding Panel decision was an award | If an award existed, Appellants’ petition to vacate was untimely and properly struck | If no award existed, petition to vacate was premature to strike | Moot (court concluded no award existed); because decision was nonfinal, striking petition was not reached on merits |
Key Cases Cited
- Fastuca v. L.W. Molnar & Assocs., 10 A.3d 1230 (Pa. 2011) (defines common-law arbitration “award” as one that finally resolves all matters submitted to the arbitrator)
- Great Am. Ins. Co. v. Am. Arbitration Ass’n, 260 A.2d 769 (Pa. 1970) (prior Pennsylvania precedent emphasizing finality as the sine qua non of an arbitration award)
- Santiago v. State Farm Ins. Co., 683 A.2d 1216 (Pa. Super. 1996) (standards for compelling arbitration: existence of agreement and scope inquiry only)
- Samuel-Bassett v. Kia Motors Am., 34 A.3d 1 (Pa. 2011) (discusses ancillary attorney-fee awards in non-arbitration contexts)