Campbell-Ellsworth, Inc. v. Holy Trinity Serbian Orthodox Church-School Congregation

336 A.2d 346, 233 Pa. Super. 126, 1975 Pa. Super. LEXIS 1438
CourtSuperior Court of Pennsylvania
DecidedMarch 31, 1975
DocketAppeal, No. 489
StatusPublished
Cited by10 cases

This text of 336 A.2d 346 (Campbell-Ellsworth, Inc. v. Holy Trinity Serbian Orthodox Church-School Congregation) is published on Counsel Stack Legal Research, covering Superior Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Campbell-Ellsworth, Inc. v. Holy Trinity Serbian Orthodox Church-School Congregation, 336 A.2d 346, 233 Pa. Super. 126, 1975 Pa. Super. LEXIS 1438 (Pa. Ct. App. 1975).

Opinions

Opinion by

Hoffman, J.,

This appeal presents issues concerning the scope of judicial review of awards rendered by common law arbitrators.

[129]*129The parties entered into a written construction contract on June 13, 1969. Pursuant to the arbitration clause in the contract, the appellant-contractor filed a written demand for arbitration on April 19, 1973, asserting a claim for $322,922.72 in unpaid costs. The appellee-owner submitted an answer and counterclaim. Eight days of hearings were held by an arbitration panel consisting of two lawyers and an engineer. On April 23, 1974, the arbitrators handed down a net award of $225,000 in favor of the appellant. The appellant file a Petition to Confirm the Arbitration Award in the Court of Common Pleas of Allegheny County. The appellee filed an answer and a Petition to Vacate the arbitration award. The lower court, after receiving briefs and hearing oral argument, granted the appellee’s motion to vacate and remanded for an arbitration de novo before another panel of arbitrators. On August 1, 1974, this Court granted the appellant’s Petition for Allowance of Appeal.

The arbitration clause in the lengthy contract provides in pertinent part: “All claims, disputes and other matters in questions arising out of or relating to, this Contract or the breach thereof,... shall be decided by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association then obtaining unless the parties mutually agree otherwise. This agreement so to arbitrate shall be specifically enforceable under the prevailing arbitration law. The award rendered by the arbitrators shall be final, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof.”

Initially, it is necessary to decide whether this clause provides for arbitration at common law or arbitration under the Act of 1927.1 The distinction is crucial because the Act provides a much broader scope of judicial review [130]*130than obtains at common law. In order to make the determination, the contractual language and the procedure followed during the arbitration must be examined. Wingate Construction Co. v. Schweizer Dipple, Inc., 419 Pa. 74, 213 A. 2d 275 (1965). It is well-settled that the Arbitration Act of 1927 did not abolish the applicability of common law rules to the enforcement of agreements to arbitrate. John A. Robbins Co., Inc. v. Airportels, Inc., 418 Pa. 257, 210 A. 2d 896 (1965). Therefore, the parties are free to designate that either statutory or common law rules shall apply. When the agreement is silent, common law rules control the enforcement of the award, unless the parties subsequently agree, expressly or impliedly, to apply the Act. Robbins, supra. See also, La Vale Plaza, Inc. v. R. S. Noonan, Inc., 378 F. 2d 569 (3d Cir. 1967). In the present case, therefore, this Court is limited in its review by the strict standards existing at common law.

Our Court has recently reiterated the applicable standards in passing on a petition to vacate an arbitration award: “Such a petition will not succeed, however, unless it can be shown by clear, precise, and indubitable evidence that a party was denied a hearing, or that there was fraud, misconduct, or other irregularity that has caused the rendition of an unjust, inequitable, or unconscionable award. Allstate Ins. Co. v. Fioravanti, 451 Pa. 108, 299 A. 2d 585 (1973); Press v. Maryland Cas. Co., 227 Pa. Superior Ct. 537, 324 A. 2d 403 (1974).” United Services Automobile Assoc. Appeal, 227 Pa. Superior Ct. 508, 512-513, 323 A. 2d 737 (1974). (Emphasis added). The allegations adopted by the lower court as grounds for vacating the award of the arbitrators must be examined against these standards.

In its opinion, the lower court stated that there were two grounds which compelled it to vacate the arbitration award: that the arbitrators had exceeded their authority in their award of damages, and that the appellee was [131]*131denied a full and fair hearing “on what may have been a controlling point in the determination of damages.”

The contract between the parties was a Standard Form of the American Institute of Architects under which the contractor is reimbursed for his costs and is paid a percentage of the “Cost of Work” as a fee. The contract provided that all work had to be performed within one year and that all claims for extensions of time had to be made in writing. The appellant admittedly breached both provisions. The lower court held that “... there is no doubt that the arbitrators exceeded their authority, for if these terms had governed, a very different award would have resulted.” Apparently, the lower court believed that the arbitrators were bound by the four corners of the contract and could not award damages for a period beyond the expiration date of the contract. Under certain circumstances, this conclusion is erroneous as a matter of Pennsylvania contract law. Thus, the vacation of the award on that ground would negate the oft-stated principle that the common law arbitrator is the final judge of both law and fact and his award is not subject to disturbance for a mistake of either. See, e.g., Harwitz v. Selas Corporation of America, 406 Pa. 539, 178 A. 2d 617 (1962); Allstate Ins. Co. v. Fioravanti, supra.

The two provisions of the contract cited by the lower court may have been waived by the appellee. • The time fixed in the contract was fifty-two weeks, and time was stated to be “of the essence.” In Warner Company v. MacMullen, 381 Pa. 22, 112 A. 2d 74 (1955), however, the Pennsylvania Supreme Court stated: “... even though the time fixed in an agreement for settlement is stated to be of the essence of the agreement, it may be extended by oral agreement or be waived by the conduct of the parties, and where the parties treat the agreement as in force after the expiration of the time specified for settlement it becomes indefinite as to time ...” 381 Pa. at [132]*13229, 112 A. 2d at 78. Furthermore, even if the costs incurred by the contractor in the period beyond the expiration of fifty-two weeks are to be treated as “extra costs” not contemplated by the parties, they may nevertheless be recoverable by the contractor-appellant. In Exton Drive-In, Inc. v. The Home Indemnity Co., 436 Pa. 480, 261 A. 2d 319 (1969), the appellant argued that the trial court incorrectly awarded the cost of certain extras to the contractor because no written order for them was obtained as required by the contract. The Court held that the owner had waived the requirement. The contract in the present case is a typical construction contract, interpreted by our courts many times. “Construction contracts typically provide that the builder will not be paid for extra work unless it is done pursuant to a written change order, yet courts frequently hold that owners must pay for extra work done at their oral direction. See generally Annot, 2 A.L.R. 3d 620, 648-82 (1965). This liability can be based on several theories. For example, the extra work may be said to have been done under an oral agreement separate from the written contract and not containing the requirement of a written authorization. 3A Cor-bin on Contracts, §756 at p. 505 (1960). The requirement of a written authorization may also be considered a condition which has been waived. 5 Williston on Contracts, §689 (3d ed. 1961).” Universal Builders, Inc. v. Moon Motor Lodge, Inc., 430 Pa. 550, 557-558, 244 A.

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Bluebook (online)
336 A.2d 346, 233 Pa. Super. 126, 1975 Pa. Super. LEXIS 1438, Counsel Stack Legal Research, https://law.counselstack.com/opinion/campbell-ellsworth-inc-v-holy-trinity-serbian-orthodox-church-school-pasuperct-1975.