Battaglia v. McKendry

233 F.3d 720, 2000 WL 1754230
CourtCourt of Appeals for the Third Circuit
DecidedNovember 30, 2000
Docket99-1751
StatusUnknown
Cited by10 cases

This text of 233 F.3d 720 (Battaglia v. McKendry) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Battaglia v. McKendry, 233 F.3d 720, 2000 WL 1754230 (3d Cir. 2000).

Opinion

OPINION OF THE COURT

AMBRO, Circuit Judge

Raymond J. Battaglia, Sr. (“Battaglia”) appeals from an order of the United States District Court for the Eastern District of Pennsylvania (the “District Court”) that granted summary judgment in favor of Mary Ann McKendry, Mary Anne Battag-lia, James Doorcheck, Inc., Raymond Bat-taglia, Jr. and James Battaglia (collectively, the “Appellees”), denied Battaglia’s cross-motion for summary judgment and ordered that the parties’ claims be arbitrated without further delay. Battaglia claims on appeal that the District Court erred by failing to hold that under Pennsylvania law the arbitrator does not have the authority to determine whether an issue is arbitrable. We conclude that the District Court did rule on this issue, and we affirm its ruling that under Pennsylvania law it was for the Court to determine the scope of the arbitration clause. Bat-taglia also asserts on appeal that the District Court erred in finding that the arbitration clause was broad enough to reach *722 (i) disputes relating to the formation of the underlying settlement agreement, and (ii) disputes arising from a related consulting agreement. We affirm the District Court’s determination that the arbitration clause is sufficiently broad to reach disputes relating to the formation of the settlement agreement. However, because we conclude that there are genuine issues of material fact in dispute with respect to the integration of the settlement and consulting agreements, we reverse and remand to the District Court to reconsider, in light of this opinion, whether the arbitration clause in the settlement agreement reaches disputes arising from the consulting agreement.

I. JURISDICTION AND STANDARD OF REVIEW

Jurisdiction was proper in the District Court pursuant to 28 U.S.C. § 1332. We have jurisdiction over the District Court’s final order compelling arbitration under 28 U.S.C. § 1291.

Our review of the District Court’s grant of summary judgment is plenary. See Becton Dickinson & Co. v. Wolckenhauer, 215 F.3d 340, 343 (3d Cir.2000).

[Sjummary judgment should be granted if, after drawing all reasonable inferences from the underlying facts in the light most favorable to the non-moving party, the court concludes that there is no genuine issue of material fact to be resolved at trial and [that] the moving party is entitled to judgment as a matter of law.

Kornegay v. Cottingham, 120 F.3d 392, 395 (3d Cir.1997) (quoting Spain v. Gallegos, 26 F.3d 439, 446 (3d Cir.1994)) (quoting Petruzzi’s IGA Supermarkets, Inc. v. Darling-Delaware Co., 998 F.2d 1224, 1230 (3d Cir.1993)). “Summary judgment may be granted based on the interpretation of a contract only if ‘the contract is so clear that it can be read only one way.’ ” PaineWebber Inc. v. Hofmann, 984 F.2d 1372, 1378 (3d Cir.1993) (quoting Tigg Corp. v. Dow Coming Corp., 822 F.2d 358, 361 (3d Cir.1987)).

II. FACTS

Battaglia is the father of Mary Ann McKendry, Raymond Battaglia, Jr. and James Battaglia and the father-in-law of Mary Anne Battaglia. Battaglia is also the former President of James Doorcheek, Inc. (the “Company”). Raymond Battaglia. Jr. and James Battaglia are the President and the Secretary/Treasurer, respectively, of the Company. Raymond Battaglia, Jr., James Battaglia and Mary Ann McKendry are each one-third shareholders in the Company. They held the same ownership interests and control of the Company in November 1990, at the time of the settlement at issue in this case.

Appellees Mary Ann McKendry and Mary Anne Battaglia are trustees under the Agreement of Trust of Mary A. Bat-taglia (the wife, now deceased, of Battag-lia), dated March 12, 1985 (the “Trust”). 1 The Trust provides, among other things, that the “Trustees shall distribute to my husband, RAYMOND, all of the net income in annual or more frequent periodic installments.” Upon Battaglia’s death, the Trust provides that “the balance of principal then remaining of this trust shall be distributed to my [Mary A. Battaglia’s] children.”

Following his wife’s death, Battaglia filed an action against the Appellees and others in the District Court captioned Battaglia v. Brantz, et al., Civil Action No. 90-1511 (the “Litigation”). In the Litigation, Battaglia complained that the trustees were not investing Trust assets in order to maximize income, but instead were maximizing principal to benefit themselves. It is not clear from the record what allegations were made with respect *723 to the Company. In any event, the parties resolved the Litigation by entering into a settlement agreement (the “Settlement Agreement”) and a consulting agreement (the “Consulting Agreement,” and together with the Settlement Agreement, the “Agreements”). 2 A form of the Consulting Agreement was attached to the Settlement Agreement as Exhibit A. The Settlement Agreement provides, among other things, that “[t]he Trustees shall invest the Trust assets in such a way as to maximize the income to Battaglia during his lifetime.”

The Settlement Agreement contains several references to the Consulting Agreement:

NOW, THEREFORE, intending to be fully and legally bound, and in consideration of the mutual promises set forth herein, the parties hereto agree as follows:
1. Simultaneously with the execution of this Settlement Agreement, Battaglia and the Company have entered into a Consulting Agreement in the form attached hereto as Exhibit A.
8. All parties to this Settlement Agreement will act in good faith to secure to Battaglia the benefits of this Settlement Agreement and all of the amounts due to him under the Consulting Agreement, and will cause the Company to do likewise. In the event of a transfer of Company assets ... or of a transfer of a controlling interest in the stock of the Company, the Company shall take whatever steps are necessary to ensure that the obligations due to Battaglia under the Consulting Agreement are paid by the transferee.
The Consulting Agreement also refers to the Settlement Agreement:
11. Miscellaneous.... The Settlement Agreement executed concurrently with this Consulting Agreement, to which Settlement Agreement the Company and the Consultant, among others, are parties, does not merge into this Consulting Agreement.

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233 F.3d 720, 2000 WL 1754230, Counsel Stack Legal Research, https://law.counselstack.com/opinion/battaglia-v-mckendry-ca3-2000.