J-A01022-24
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT O.P. 65.37
THE GUILIANO LAW GROUP, P.C. : IN THE SUPERIOR COURT OF : PENNSYLVANIA : v. : : : MAJUX MARKETING LLC AND : BERNARD A. CLARK : : No. 1525 EDA 2023 Appellants :
Appeal from the Order Entered June 1, 2023 In the Court of Common Pleas of Philadelphia County Civil Division at No(s): 210300347
BEFORE: LAZARUS, P.J., PANELLA, P.J.E., and COLINS, J.*
MEMORANDUM BY COLINS, J.: FILED FEBRUARY 26, 2024
Appellants, Majux Marketing LLC (Majux) and Bernard A. Clark (Clark)
(collectively, Defendants), appeal an order of the Court of Common Pleas of
Philadelphia County (trial court) overruling their preliminary objections
seeking to enforce an arbitration provision of a contract. For the reasons set
forth below, we affirm.
This case arises out of a November 2019 contract between the Guiliano
Law Group, P.C. (Plaintiff) and Majux under which Majux was to provide
website redesign services to Plaintiff. On March 3, 2021, Plaintiff filed a
complaint asserting claims against both Majux and its representative, Clark,
for breach of contract, fraud, negligence, unjust enrichment, and violation of
____________________________________________
* Retired Senior Judge assigned to the Superior Court. J-A01022-24
18 Pa.C.S. § 7611. Because Plaintiff stated on the cover sheet of its complaint
that the amount in controversy did not exceed $50,000, the action was
scheduled for compulsory judicial arbitration under 42 Pa.C.S. § 7361, which
provides for arbitration with a right of trial de novo on appeal from the
arbitrators’ award. Complaint Cover Sheet; Docket Entries at 2; 42 Pa.C.S. §
7361(d). Defendants filed preliminary objections to Plaintiff’s complaint in
which they sought dismissal of all claims against Majux other than Plaintiff’s
breach of contract claim, dismissal of all claims against Clark, and the striking
of the breach of contract claim for failure to attach the parties’ written
contract. In these preliminary objections, Defendants did not seek relief based
on an arbitration agreement between the parties, but stated in their motion
to strike for failure to attach the contract that they “reserve the right to object
to any amended complaint that properly attaches and alleges breach of the
actual contract” on the ground that the contract required “disputes to be
resolved by arbitration, not in court.” 5/13/21 Preliminary Objections ¶57.
On October 7, 2021, the trial court overruled Defendants’ preliminary
objections. Defendants filed an answer and new matter on October 26, 2021,
in which they denied liability to Plaintiff and asserted various defenses, a
counterclaim by Majux for failure to pay amounts that it alleged that Plaintiff
owed it under the contract, and counterclaims by Clark for assault and
intentional infliction of emotional distress. Defendants attached the parties’
written contract to their answer and new matter and pled that Plaintiff’s claims
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were barred by disclaimers and limitations of liability in the contract. Answer
and New Matter ¶¶8, 54-55, 64 & Exhibit 1. Although the written contract
contained a provision requiring that “[a]ny dispute” not resolved by good-faith
negotiation “shall be settled by arbitration,” Defendants did not plead in their
answer and new matter that Plaintiff was required by the contract to arbitrate
its claims or that Plaintiff’s action was barred by this arbitration provision.
Answer and New Matter ¶¶53-66 & Exhibit 1 § 21. Defendants also did not
file any motion to compel arbitration under the contract.
The parties took discovery in the trial court, see, e.g., Trial Court Order,
10/18/22, and the case proceeded to judicial arbitration under 42 Pa.C.S. §
7361. On April 19, 2023, the arbitrators issued an award finding in favor of
Defendants on all of Plaintiff’s claims, finding in favor of Majux on its
counterclaim against Plaintiff and awarding Majux $12,000, and finding in
favor of Plaintiff on Clark’s counterclaims. Report and Award of Arbitrators.
Plaintiff filed a timely appeal from the arbitrators’ award requesting a trial de
novo in accordance with 42 Pa.C.S. § 7361(d) on April 20, 2023.
On April 28, 2023, Defendants filed preliminary objections to Plaintiff’s
notice of appeal, asserting that the contract required arbitration of the claims
in this action and that the arbitration that had taken place was a contractual
arbitration from which Plaintiff had no right to a de novo appeal. On June 1,
2023, the trial court entered an order overruling Defendants’ preliminary
objections to the notice of appeal, concluding, inter alia, that Defendants were
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barred by waiver from enforcing the contract’s arbitration provision. Trial
Court Order, 6/1/23; Trial Court Opinion at 5-7. Defendants timely appealed
this order.
Defendants present the following single issue for our review:
Did the trial court err in overruling Appellants/Defendants’ Preliminary Objections to a de novo Notice of Appeal of an arbitration award issued by a judicial arbitration panel where the contract between the parties specified that “any dispute” was to be “settled by arbitration” and a full and fair judicial arbitration took place and was the forum selected by the Appellee/Plaintiff?
Appellants’ Brief at 5. In addition to arguing that the trial court properly
overruled Defendants’ preliminary objections, Plaintiff asserts that this appeal
must be quashed because the trial court’s order is an unappealable
interlocutory order.
Because it goes to our jurisdiction to decide this appeal, we first address
the issue of whether the trial court’s order is an appealable order. Plaintiff is
correct that an order overruling preliminary objections is an interlocutory
order. In re Estate of Atkinson, 231 A.3d 891, 897 (Pa. Super. 2020);
Chase Manhattan Mortgage Corp. v. Hodes, 784 A.2d 144, 145 (Pa.
Super. 2001). An order overruling preliminary objections that seek to compel
arbitration, however, is an interlocutory order appealable as of right pursuant
to 42 Pa.C.S. § 7320(a)(1) and Pa.R.A.P. 311(a)(8). Estate of Atkinson,
231 A.3d at 897; Saltzman v. Thomas Jefferson University Hospitals,
Inc., 166 A.3d 465, 468 n.1 (Pa. Super. 2017); Provenzano v. Ohio Valley
General Hospital, 121 A.3d 1085, 1089 n.1 (Pa. Super. 2015). This rule
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applies even where the preliminary objection that asserts that the claim is
subject to arbitration does not specifically request an order compelling
arbitration. Waters v. Express Container Services of Pittsburgh, LLC,
284 A.3d 1217, 1221 n.1 (Pa. Super. 2022); Estate of Atkinson, 231 A.3d
at 896-97; Provenzano, 121 A.3d at 1089 n.1, 1093.
Here, although Defendants’ preliminary objections that are the subject
of this appeal did not request an order compelling arbitration and asserted
that the judicial arbitration that had occurred constituted binding arbitration,
the preliminary objections did seek to enforce an agreement to arbitrate and
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J-A01022-24
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT O.P. 65.37
THE GUILIANO LAW GROUP, P.C. : IN THE SUPERIOR COURT OF : PENNSYLVANIA : v. : : : MAJUX MARKETING LLC AND : BERNARD A. CLARK : : No. 1525 EDA 2023 Appellants :
Appeal from the Order Entered June 1, 2023 In the Court of Common Pleas of Philadelphia County Civil Division at No(s): 210300347
BEFORE: LAZARUS, P.J., PANELLA, P.J.E., and COLINS, J.*
MEMORANDUM BY COLINS, J.: FILED FEBRUARY 26, 2024
Appellants, Majux Marketing LLC (Majux) and Bernard A. Clark (Clark)
(collectively, Defendants), appeal an order of the Court of Common Pleas of
Philadelphia County (trial court) overruling their preliminary objections
seeking to enforce an arbitration provision of a contract. For the reasons set
forth below, we affirm.
This case arises out of a November 2019 contract between the Guiliano
Law Group, P.C. (Plaintiff) and Majux under which Majux was to provide
website redesign services to Plaintiff. On March 3, 2021, Plaintiff filed a
complaint asserting claims against both Majux and its representative, Clark,
for breach of contract, fraud, negligence, unjust enrichment, and violation of
____________________________________________
* Retired Senior Judge assigned to the Superior Court. J-A01022-24
18 Pa.C.S. § 7611. Because Plaintiff stated on the cover sheet of its complaint
that the amount in controversy did not exceed $50,000, the action was
scheduled for compulsory judicial arbitration under 42 Pa.C.S. § 7361, which
provides for arbitration with a right of trial de novo on appeal from the
arbitrators’ award. Complaint Cover Sheet; Docket Entries at 2; 42 Pa.C.S. §
7361(d). Defendants filed preliminary objections to Plaintiff’s complaint in
which they sought dismissal of all claims against Majux other than Plaintiff’s
breach of contract claim, dismissal of all claims against Clark, and the striking
of the breach of contract claim for failure to attach the parties’ written
contract. In these preliminary objections, Defendants did not seek relief based
on an arbitration agreement between the parties, but stated in their motion
to strike for failure to attach the contract that they “reserve the right to object
to any amended complaint that properly attaches and alleges breach of the
actual contract” on the ground that the contract required “disputes to be
resolved by arbitration, not in court.” 5/13/21 Preliminary Objections ¶57.
On October 7, 2021, the trial court overruled Defendants’ preliminary
objections. Defendants filed an answer and new matter on October 26, 2021,
in which they denied liability to Plaintiff and asserted various defenses, a
counterclaim by Majux for failure to pay amounts that it alleged that Plaintiff
owed it under the contract, and counterclaims by Clark for assault and
intentional infliction of emotional distress. Defendants attached the parties’
written contract to their answer and new matter and pled that Plaintiff’s claims
-2- J-A01022-24
were barred by disclaimers and limitations of liability in the contract. Answer
and New Matter ¶¶8, 54-55, 64 & Exhibit 1. Although the written contract
contained a provision requiring that “[a]ny dispute” not resolved by good-faith
negotiation “shall be settled by arbitration,” Defendants did not plead in their
answer and new matter that Plaintiff was required by the contract to arbitrate
its claims or that Plaintiff’s action was barred by this arbitration provision.
Answer and New Matter ¶¶53-66 & Exhibit 1 § 21. Defendants also did not
file any motion to compel arbitration under the contract.
The parties took discovery in the trial court, see, e.g., Trial Court Order,
10/18/22, and the case proceeded to judicial arbitration under 42 Pa.C.S. §
7361. On April 19, 2023, the arbitrators issued an award finding in favor of
Defendants on all of Plaintiff’s claims, finding in favor of Majux on its
counterclaim against Plaintiff and awarding Majux $12,000, and finding in
favor of Plaintiff on Clark’s counterclaims. Report and Award of Arbitrators.
Plaintiff filed a timely appeal from the arbitrators’ award requesting a trial de
novo in accordance with 42 Pa.C.S. § 7361(d) on April 20, 2023.
On April 28, 2023, Defendants filed preliminary objections to Plaintiff’s
notice of appeal, asserting that the contract required arbitration of the claims
in this action and that the arbitration that had taken place was a contractual
arbitration from which Plaintiff had no right to a de novo appeal. On June 1,
2023, the trial court entered an order overruling Defendants’ preliminary
objections to the notice of appeal, concluding, inter alia, that Defendants were
-3- J-A01022-24
barred by waiver from enforcing the contract’s arbitration provision. Trial
Court Order, 6/1/23; Trial Court Opinion at 5-7. Defendants timely appealed
this order.
Defendants present the following single issue for our review:
Did the trial court err in overruling Appellants/Defendants’ Preliminary Objections to a de novo Notice of Appeal of an arbitration award issued by a judicial arbitration panel where the contract between the parties specified that “any dispute” was to be “settled by arbitration” and a full and fair judicial arbitration took place and was the forum selected by the Appellee/Plaintiff?
Appellants’ Brief at 5. In addition to arguing that the trial court properly
overruled Defendants’ preliminary objections, Plaintiff asserts that this appeal
must be quashed because the trial court’s order is an unappealable
interlocutory order.
Because it goes to our jurisdiction to decide this appeal, we first address
the issue of whether the trial court’s order is an appealable order. Plaintiff is
correct that an order overruling preliminary objections is an interlocutory
order. In re Estate of Atkinson, 231 A.3d 891, 897 (Pa. Super. 2020);
Chase Manhattan Mortgage Corp. v. Hodes, 784 A.2d 144, 145 (Pa.
Super. 2001). An order overruling preliminary objections that seek to compel
arbitration, however, is an interlocutory order appealable as of right pursuant
to 42 Pa.C.S. § 7320(a)(1) and Pa.R.A.P. 311(a)(8). Estate of Atkinson,
231 A.3d at 897; Saltzman v. Thomas Jefferson University Hospitals,
Inc., 166 A.3d 465, 468 n.1 (Pa. Super. 2017); Provenzano v. Ohio Valley
General Hospital, 121 A.3d 1085, 1089 n.1 (Pa. Super. 2015). This rule
-4- J-A01022-24
applies even where the preliminary objection that asserts that the claim is
subject to arbitration does not specifically request an order compelling
arbitration. Waters v. Express Container Services of Pittsburgh, LLC,
284 A.3d 1217, 1221 n.1 (Pa. Super. 2022); Estate of Atkinson, 231 A.3d
at 896-97; Provenzano, 121 A.3d at 1089 n.1, 1093.
Here, although Defendants’ preliminary objections that are the subject
of this appeal did not request an order compelling arbitration and asserted
that the judicial arbitration that had occurred constituted binding arbitration,
the preliminary objections did seek to enforce an agreement to arbitrate and
sought a stay of the action “pending final resolution of the arbitration,” not
confirmation of the arbitration award. 4/28/23 Preliminary Objections ¶¶3-9,
14-43, 45-47, 50-57 & attached proposed order. Because the preliminary
objections sought enforcement of an agreement to arbitrate and a stay of
litigation pending arbitration, the trial court’s order overruling these
preliminary objections is appealable as of right pursuant to 42 Pa.C.S. §
7320(a)(1) and Pa.R.A.P. 311(a)(8), and we therefore have jurisdiction to
hear this appeal. Waters, 284 A.3d at 1221 n.1; Estate of Atkinson, 231
A.3d at 896-97; Provenzano, 121 A.3d at 1089 n.1, 1093.
Defendants’ argument that the trial court erred in denying enforcement
of the parties’ arbitration agreement, however, fails on the merits. The right
to enforce an arbitration agreement can be waived. DiDonato v. Ski
Shawnee, Inc., 242 A.3d 312, 318 (Pa. Super. 2020); Goral v. Fox Ridge,
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Inc., 683 A.2d 931, 933 (Pa. Super. 1996). Where a party avails itself of the
judicial process by engaging in discovery and litigating in court for an extended
period of time without seeking to enforce its arbitration agreement, it waives
its right to binding arbitration. DiDonato, 242 A.3d at 318-23; O’Donnell v.
Hovnanian Enterprises, Inc., 29 A.3d 1183, 1187-89 (Pa. Super. 2011);
Stanley-Laman Group, Ltd. v. Hyldahl, 939 A.2d 378, 386-88 (Pa. Super.
2007).
Here, Defendants did not seek to compel arbitration in their preliminary
objections to Plaintiff’s complaint or plead in their answer and new matter that
Plaintiff was required to arbitrate its claims. In addition, Defendants engaged
in discovery in the trial court without raising any claim that Plaintiff was
required to arbitrate its claims and did not assert a right to binding contractual
arbitration for approximately two years while it litigated the case in court.
Defendants raised the contention that the claims in the action were subject to
binding arbitration only after participating in a non-binding arbitration that
was part of the judicial process. By this conduct of lengthy, active litigation
in court without any assertion of a right to contractual arbitration, Defendants
availed themselves of the judicial process and waived their right to enforce
their contract’s arbitration agreement.
Defendants’ contention that they did not need to compel arbitration at
an earlier time because the judicial arbitration was an arbitration under the
contract is without merit. If the judicial arbitration were to be converted to a
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binding arbitration under the parties’ contract from the compulsory arbitration
under 42 Pa.C.S. § 7361 that it was scheduled to be, it was necessary that
the parties agree or that the court determine prior to the judicial arbitration
that it would be binding arbitration under the contract and not arbitration
under 42 Pa.C.S. § 7361. Defendants did not at any time prior to the judicial
arbitration contend or advise Plaintiff or the trial court that they considered
the judicial arbitration to be a binding arbitration under the contract. Instead,
Defendants first took the position that the judicial arbitration constituted an
arbitration under the contract only after they had prevailed at the judicial
arbitration, leaving themselves the option of obtaining a trial de novo if they
did not like the result of that arbitration. Defendants’ claim that they believed
that the fact that the case was scheduled for judicial arbitration from the date
that the complaint was filed obviated the need to raise the contractual
arbitration issue is belied by their recognition in their initial preliminary
objections to the complaint that the contract’s arbitration requirement was an
issue to be raised. 5/13/21 Preliminary Objections ¶57.
Because the trial court correctly held that Defendants waived their right
to binding arbitration, we affirm its order overruling Defendants’ preliminary
objections seeking to enforce that right to binding arbitration.
Order affirmed. Jurisdiction relinquished.
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Date: 2/26/2024
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