Toll Naval Associates v. Chun-Fang Hsu
85 A.3d 521
| Pa. Super. Ct. | 2014Background
- Hsu purchased a condo from Toll in 2007 and later complained about lack of a parking spot; a March 2009 settlement deeded Hsu a parking spot and included a broad general release in favor of Toll.
- In June 2009 Hsu filed an arbitration claim alleging the conveyed condo was ~300 sq ft smaller than promised under the sale agreement.
- Toll argued the 2009 general release barred Hsu’s square-footage claim; parties submitted letter briefs and the arbitrator (Samuel A. Karsch) treated the issue as a preliminary legal question decided on the papers.
- The arbitrator ruled the general release did not bar the square-footage claim, held an arbitration hearing on the merits, and awarded Hsu $94,795 on December 5, 2011.
- Toll moved to vacate the arbitration award (denied by a judge); Hsu then petitioned to confirm the award, judgment was entered, and Toll appealed, also contesting a later trial-court order vacating a consolidation order.
Issues
| Issue | Plaintiff's Argument (Hsu) | Defendant's Argument (Toll) | Held |
|---|---|---|---|
| Whether Toll was denied a hearing under the UAA when the arbitrator decided enforceability of the prior release without an evidentiary hearing | Andrew requires a full hearing when material evidence affects the issue; arbitration panel should have considered evidence | Toll says it was denied a hearing and material evidence would have affected the release’s scope | Court: No denial — Toll affirmatively requested the issue be decided on the papers and there was no dispute requiring evidentiary hearing; parties can relinquish the hearing opportunity |
| Whether the arbitrator ignored the plain language of the general release and thus the award should be vacated | Release’s broad language bars Hsu’s subsequent square-footage claim | Arbitrator interpreted the release as limited to the matters specified (parking/discrimination); Toll contends this was wrong | Court: Arbitrator’s contract interpretation is a matters of law/fact for arbitrators; disagreement over interpretation is not a basis to vacate absent process irregularity |
| Whether the award violates public policy favoring settlements (i.e., enforcement of releases) | Affirming award undermines settlements and public policy that favors release enforcement | Arbitrator and court balanced policy against arbitrator’s reasonable interpretation | Court: Public-policy argument is essentially a disagreement with arbitrator’s legal judgment; not a valid ground to vacate under §7341 |
| Whether the award is unjust, inequitable, or unconscionable because Toll paid consideration for a broad release | Toll paid valuable consideration for release covering known/unknown claims; holding Toll liable is unconscionable | Hsu relies on arbitrator’s finding that the release didn’t cover this claim | Court: No showing of fraud, misconduct, or such irregularity (bad faith/ignorance) that would make the award unconscionable; mere displeasure with result insufficient |
| Whether the trial court’s March 18, 2013 order (vacating consolidation) violated Pa. R.A.P. 1701 after appeals were filed | Toll says the trial court lost jurisdiction and order was void | Trial court argued the consolidation was entered in error and later vacated it | Court: Vacated the March 2013 order (procedural error) but that did not affect affirmance of judgment on the award |
Key Cases Cited
- U.S. Claims, Inc. v. Dougherty, 914 A.2d 874 (Pa. Super. 2006) (standard: common-law arbitration awards binding unless denial of hearing or fraud/misconduct/irregularity)
- Andrew v. CUNA Brokerage Servs., Inc., 976 A.2d 496 (Pa. Super. 2009) (arbitration must provide opportunity to be heard; failure to consider material evidence can require hearing)
- Giant Markets, Inc. v. Sigma Marketing Sys., Inc., 459 A.2d 765 (Pa. Super. 1983) (party who does not proffer evidence cannot later claim denial of hearing)
- Curran v. City of Philadelphia, 107 A. 636 (Pa. 1919) (a party may relinquish right to a hearing but burden is on proponent to show such relinquishment)
- Allstate Ins. Co. v. Fioravanti, 299 A.2d 585 (Pa. 1973) ("other irregularity" requires bad faith, ignorance of law, or indifference to justice to vacate an award)
- F.J. Busse Co., Inc. v. Sheila Zipporah, L.P., 879 A.2d 809 (Pa. Super. 2005) (discusses scope of "other irregularity" and limits on vacating awards)