Fastuca v. L.W. Molnar & Associates

950 A.2d 980, 2008 Pa. Super. 99, 2008 Pa. Super. LEXIS 994
CourtSuperior Court of Pennsylvania
DecidedMay 9, 2008
StatusPublished
Cited by24 cases

This text of 950 A.2d 980 (Fastuca v. L.W. Molnar & Associates) 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
Fastuca v. L.W. Molnar & Associates, 950 A.2d 980, 2008 Pa. Super. 99, 2008 Pa. Super. LEXIS 994 (Pa. Ct. App. 2008).

Opinion

OPINION BY BENDER, J.:

¶ 1 Louis W. Molnar, Jr. and Mary Lou Molnar, individually and trading and doing business as L.W. Molnar & Associates, and L.W. Molnar & Associates (the Molnars) appeal the trial court’s order terminating common law arbitration of claims raised in the underlying civil action by Diane L. Fastuca. The Molnars contend that the trial court abused its discretion in attempting to terminate the arbitration or alter the findings of the arbitrator prior to entry of a final award. We concur in the Mol-nars’ assessment of the trial court’s ruling. Accordingly, we reverse the court’s order and reinstate the arbitration proceedings.

¶ 2 L.W. Molnar & Associates was created in 1972 as a general partnership for the operation and management of real estate investment properties subject to a partnership agreement. The partnership consisted of Louis W. Molnar, Mary Lou Molnar, and Diane Fastuca, the three of whom are adult siblings as well as business partners. Sometime in 1998, Fastuca became dissatisfied with the manner in which partnership proceeds were divided and retained counsel to represent her interests. Unable to resolve the matter over a period of several years, Fastuca informed the Mol-nars by letter of September 20, 2003, of her intention to dissolve the partnership and to seek distribution of her partnership share pursuant to 15 Pa.C.S. § 8353.

¶ 3 Shortly thereafter, Fastuca filed a motion for preliminary injunction to prevent dissipation of partnership assets pending resolution of the parties’ dispute, followed by a complaint in equity seeking dissolution of the partnership and a winding up of affairs. In response, the Mol-nars filed a motion to compel arbitration pursuant to the corresponding provision of the partnership agreement. The presiding motions judge received briefs in support of the parties’ respective motions and convened oral argument. Arguing in favor of the proposed transfer, the Molnars asserted that the Pennsylvania Uniform Arbitration Act, 42 Pa.C.S. § 7301, et seq., requires the court to compel arbitration any time a valid agreement to arbitrate exists and the objects of the dispute fall within the intended scope of the arbitration clause. Memorandum of Law in Opposition to Plaintiffs Motion for Preliminary Injunction and in Support of Defendant’s Petition to Compel Arbitration at 7 (citing 42 Pa.C.S. §§ 7304(a), (d), 7342(a)). Fastu-ca countered that her notice of dissolution had rendered the arbitration agreement inapplicable to the pending dispute and that the Pennsylvania Uniform Partnership Act, 15 Pa.C.S. § 8359, vested her with a statutory right to have partnership affairs wound up by the court. Brief in Opposition to Motion to Compel Arbitration, 1/28/04, at 8 (citing Girard Bank v. Haley, 460 Pa. 237, 332 A.2d 443 (1975); [983]*983Canter’s Pharmacy, Inc. v. Elizabeth Assocs., 396 Pa.Super. 505, 578 A.2d 1326 (1990)).

¶ 4 At the conclusion of oral argument, the court found that because the arbitration clause of the partnership agreement was not clearly inapplicable, the matter must be referred to arbitration. Consequently, by order of February 4, 2004, the court ordered “that the parties shall proceed with arbitration of all issues raised in Plaintiffs Motion for Preliminary Injunction and Plaintiffs Complaint in Equity, in accordance with the partnership agreement among the parties.” Order of Court, 2/4/04. Additionally, the court denied Fas-tuca’s motion for preliminary injunction and dismissed her complaint without prejudice.

¶ 5 Following entry of the court’s order, the parties selected David B. Fawcett, Esquire, to arbitrate their case in accordance with the rules of the American Arbitration Association. On September 15, 2004, Arbitrator Fawcett convened a proceeding (on the nature of which the parties disagree) at which he received oral argument.1 Thereafter, on September 17, 2004, Arbitrator Fawcett issued a document designated “Findings of Arbitrator” in which he reached the following salient conclusions:

1. In the September 20, 2003 letter of Diane L. Fastuca, a partner, in a partnership known as L.W. Molnar & Associates, to the Partnership, she validly exercised her right to dissolve the Partnership under the provisions of 15 Pa. C.S. § 8353.
3. The dissolution exercised by Ms. Fastuca is under § 8353(2) of the Partnership Act, and the dissolution is in contravention of the written Partnership Agreement between the parties.
íjs Hí Jjs
6. If the Partnership Agreement contains express provisions relating to the Partnership, the disposition of those issues are [sic] governed by the provisions of the Partnership Agreement, not the Partnership Act, and the terms of the Agreement will be enforced.
7. Louis Molnar and Mary Lou Molnar have not caused dissolution wrongfully and under Section 8360(b)(2) have the right against Diane Fastuca to damages for breach of contract. They have the right to continue the business and pay the value of Diane Fastuca’s interest in the Partnership at the time of the dissolution, less any damages caused to Louis Molnar and Mary Lou Molnar by the wrongful dissolution and without consideration of the goodwill of the Partnership.
‡ ‡
11. Diane L. Fastuca and her representative shall be provided immediate access to all the Partnership books, records and accounts and any other relevant information as to the value of the business of L.W. Molnar & Associates. ‡ ‡ $
14. The Arbitrator will retain jurisdiction to resolve any controversy or claim regarding the purchase price and/or the value of the interest that the partner, Diane Fastuca[,] is entitled to, or any further dispute between the parties pertaining to the dissolution of L.W. Molnar & Associates.
15. The parties are directed to promptly exchange the records and information necessary for the evaluation of Diane Fastuca’s interest in the Partnership [984]*984and the purchase price for her partnership interest.

Findings of Arbitrator, 9/17/04, at 2-4.

¶ 6 Following entry of the foregoing “Findings of Arbitrator,” Fastuca remained unable to secure full disclosure of the requisite partnership records and, on January 31, 2005, filed with the Arbitrator a Motion to Compel Production of Partnership Records. Although the record suggests that the Arbitrator granted the Motion, certain documents were not provided, ostensibly due to their destruction in a flood in 2004. Consequently, in November 2005, Fastuca filed with the Arbitrator a Motion for Entry of an Order for Contempt for Failure to Produce Partnership Records Pursuant to Directive of Arbitrator and Leave to Enforce in the Court of Common Pleas of Allegheny County, Pennsylvania. At a hearing convened on the Motion on December 15, 2005, counsel for the partnership testified concerning the state of partnership records, but the Arbitrator refused to receive the testimony of Fastuca’s accountants concerning their efforts to obtain disclosure of those records.

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Bluebook (online)
950 A.2d 980, 2008 Pa. Super. 99, 2008 Pa. Super. LEXIS 994, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fastuca-v-lw-molnar-associates-pasuperct-2008.