Independence Development, Inc. v. American Arbitration Ass'n

59 Pa. D. & C.2d 416, 1972 Pa. Dist. & Cnty. Dec. LEXIS 289
CourtPennsylvania Court of Common Pleas, Bucks County
DecidedMay 18, 1972
Docketno. 72-2018-07-5
StatusPublished
Cited by1 cases

This text of 59 Pa. D. & C.2d 416 (Independence Development, Inc. v. American Arbitration Ass'n) is published on Counsel Stack Legal Research, covering Pennsylvania Court of Common Pleas, Bucks County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Independence Development, Inc. v. American Arbitration Ass'n, 59 Pa. D. & C.2d 416, 1972 Pa. Dist. & Cnty. Dec. LEXIS 289 (Pa. Super. Ct. 1972).

Opinion

MOUNTENAY, J.,

This is an action

in equity whereby plaintiffs seek to enjoin defendant, American Arbitration Association (hereinafter “AAA”) from arbitrating a dispute between plaintiffs and defendant Lieberman, Inc. (hereinafter “Lieberman”) and to enjoin Lieberman from submitting the said controversy to arbitration. Plaintiffs applied for a preliminary injunction, and by the time the hearing thereon was held, defendants had filed preliminary objections demurring and raising the question of venue. Following the hearing, it was agreed among the parties that all of their evidence had already been offered at the hearing on the application for a preliminary injunction and that the court, therefore, might make final disposition of the matter without further hearing. A formal stipulation was filed to this effect, and following the filing of an answer by Lieberman only, the pleadings were closed, as per said stipulation.

On June 2, 1970, Lieberman entered into an agreement with the corporate plaintiffs, which owned certain Bucks County real estate, and with the individual plaintiffs, who were the shareholders of the corporate plaintiffs, whereby Lieberman acquired an option to purchase all of the stock of the corporate plaintiffs [418]*418and thus secure, for all practical purposes, an option on the land itself. The particular provisions of the agreement which bear upon the present controversy will be set forth at length in our discussion of the demurrer. Lieberman was a licensed real estate broker, and the agreement in question, which clearly designates Lieberman as the “Buyer,” also set forth that Lieberman was acting as agent for an undisclosed principal and authorized Lieberman to assign its interest under the agreement. In due course, Lieberman elected to exercise the option and then assigned its rights thereunder unto a third party. The agreement provided for arbitration by the AAA of certain controversies thereunder, and a dispute having arisen between plaintiffs and Lieberman as to the payment by plaintiffs of a commission allegedly due Lieberman under the agreement, Lieberman sought to have this controversy submitted to arbitration. Plaintiffs, taking the position that the arbitration provisions of the agreement did not embrace the particular type of controversy in question, filed the instant action to enjoin arbitration. Both defendants were served in Philadelphia County by deputized service, but it has been stipulated that Lieberman regularly does business in Bucks County. Basically, the issues now before us are: (1) Whether venue is properly laid in Bucks County, and (2) whether the arbitration provision of the agreement embraced the particular controversy in which the parties are presently engaged.

As to the question of venue, Pennsylvania Rule of Civil Procedure 1503(a), specifically applicable to actions in equity, provides that, “Except as otherwise provided by . . . Rule of the Supreme Court ... an action may be brought in and only in a county in which (1) the defendant or a principal defendant may [419]*419be served, or (2) the property . . . which is the subject matter of the action is located.”1 Defendants argue that since neither defendant was served in Bucks County nor could properly have been served in Bucks County, the venue requirements of clause (1) have not been met.2

Defendants’ argument overlooks Pa. R. C. P. 2179(a)(2) which states generally that an action may be brought against a corporation in and only in, inter aha, a county where it regularly conducts business.3 Since it has been stipulated that defendant Lieberman [420]*420regularly conducts business in Bucks County, the venue requirements of Rule 2179(a), at least as applied to Lieberman, have been met.4

We are then faced with the question of whether Rules 2179 and 1503 are in conflict, and if so, which rule supersedes the other. It is interesting to note that rule 1503(a) begins with the qualifying statement, “Except as otherwise provided by an Act of Assembly, [or] Rule of the Supreme Court . . .” (Italics supplied.)

On the other hand, the qualifying preamble of rule 2179 says, “Except as otherwise provided by an Act of Assembly . . but makes no reference whatever to another rule of court. This, in itself, is some indication that rule 1503(a) is intended to yield to rule 2179(a). Indeed, Goodrich-Amram §1503(a)-l, asserts that there is no conflict between the two rules and that venue is properly established if the requirements of either are met. This commentary reads as follows:

“Against defendants which are not individuals, the venue provisions of the Rules, applicable to the particular class of defendant involved, will govern. This creates no ambiguity or conflict. Rule 1503 permits venue to be laid where ‘the defendant’ may be served. If the defendant, for example, is a corporation, Rule 2179(a), which applies both to actions at law and in equity, will define the counties in which the corporation may be served. Rule 2179(a) is incorporated by reference. The venue requirements of Rule 1503 will be satisfied if the venue requirements of Rule 2179(a) are met. All that is necessary, in most cases, is to show that the corporation legally conducts business in the county in order to validate the venue.

[421]*421“In those instances where there may be a different result under the tiuo venue provisions it should be sufficient if either one authorizes the institution of the action in the county in which it was brought. Otherwise, a Rule such as 2179(b)(3), which permits an action upon a policy of insurance to be brought in the county where the plaintiff resides, would be a nullity insofar as it applies to actions in equity.” (Italics supplied.)

See also Everett v. Robbins et al., 80 D. & C. 207 (1951), which, although decided prior to the promulgation of rule 1503, reaches the same result with respect to the Act of April 6, 1859, P. L. 387, as amended, 12 PS §1254.

In view of the foregoing, we are of the opinion that venue has been properly laid in Bucks County insofar as Lieberman is concerned.

The situation with respect to AAA, however, is somewhat doubtful. In the first place, insofar as the record discloses, AAA neither regularly conducts business in Bucks County nor maintains either a registered office or a principal place of business in the county so as to fall within the provisions of either subparagraph (1) or (2) of rule 2179(a). Secondly, while the negotiations took place in Bucks County and plaintiffs actually signed the contract in Bucks County, the record does not disclose where Lieberman signed the agreement. Moreover, we do not know whether plaintiffs were the last of the contracting parties to affix their signatures. That is to say, the record is consistent with plaintiffs’ having signed the agreement first and Lieberman’s having executed it later in another county. We cannot conclude on the basis of this record that the agreement was actually “completed” in Bucks County, and, accordingly, venue cannot be established under rule 2179(a)(4) pertaining to situations where a “trans[422]*422action or occurrence . . . out of which the cause of action arose” took place within the county. A,distinction must be drawn between a transaction or occurrence and part of a transaction. That which we have before us constitutes only part of a transaction. See Craig v. W. J.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Wagner v. Pennsylvania Dairy Herd Improvement Ass'n
548 A.2d 649 (Commonwealth Court of Pennsylvania, 1988)

Cite This Page — Counsel Stack

Bluebook (online)
59 Pa. D. & C.2d 416, 1972 Pa. Dist. & Cnty. Dec. LEXIS 289, Counsel Stack Legal Research, https://law.counselstack.com/opinion/independence-development-inc-v-american-arbitration-assn-pactcomplbucks-1972.