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INDEPENDENCE DEVELOPMENT v. AMERICAN ARBITRATION ASSOCIATION AND LIEBERMAN (03/18/75)

decided: March 18, 1975.

INDEPENDENCE DEVELOPMENT, INC., ET AL., APPELLEES,
v.
AMERICAN ARBITRATION ASSOCIATION AND LIEBERMAN, INC., APPELLANT



COUNSEL

Richard H. Elliott, Doris Benson, Clark, Ladner, Fortenbaugh & Young, Philadelphia, for appellant.

John Philip Diefenderfer, Stuckert, Yates & Krewson, Newtown, for appellees.

Eagen, O'Brien, Roberts, Pomeroy, Nix and Manderino, JJ. Jones, C. J., did not participate in the consideration or decision of this case. Roberts and Pomeroy, JJ., filed a dissenting opinion.

Author: Eagen

[ 460 Pa. Page 391]

OPINION OF THE COURT

On June 2, 1970, Lieberman, Inc. [Lieberman] entered into a stock purchase option agreement with independence Development, Inc. [Independence] and Middletown Commons, Inc. [Middletown].*fn1 Lieberman was a licensed real estate broker and the agreement, which designated Lieberman as the "Buyer",*fn2 set forth that Lieberman was acting as agent for an undisclosed principal and authorized Lieberman to assign its interest under the agreement. The agreement further provided that certain real estate commissions, due upon the exercise of the option, were to be divided between Lieberman and Fred L. Herrmann, Inc. [Herrmann] agent for the sellers.

In due course, Lieberman elected to exercise the option and then assigned its rights thereunder to the undisclosed

[ 460 Pa. Page 392]

    principal. However, the real estate commissions due in accordance with the contract were not paid. On January 20, 1972, Lieberman filed a notice of demand for arbitration with the American Arbitration Association of Philadelphia, charging that Independence and Middletown had failed to and refused to pay the real estate commissions due it.*fn3 Independence and Middletown then filed a complaint in equity in the Court of Common Pleas of Bucks County asking that Lieberman be enjoined from seeking arbitration on the ground that arbitration was not an available form of relief. After a hearing, the chancellor entered a decree nisi granting the requested injunction. Exceptions thereto were later dismissed by a court en banc, and the decree nisi was made a final decree. This appeal ensued.

Whenever one party to an agreement seeks to enjoin the other from proceeding to arbitration, judicial inquiry is limited to two questions: (1) Was an agreement to arbitrate entered into; and (2) Does the dispute involved fall within the arbitration clause. Borough of Ambridge Water Authority v. J. Z. Columbia, Pa. , 328 A.2d 498 (1974). Instantly, there does exist an agreement to arbitrate "[a]ny controversy between Buyer and Sellers with respect to this Agreement."*fn4 Nevertheless, Independence and Middletown contend the matter in dispute, broker's commissions, was not intended to be embraced within the arbitration provision. They claim that Lieberman, in earning broker's commissions,

[ 460 Pa. Page 393]

    was not acting as a "Buyer" and, therefore, may not invoke the arbitration clause.

Lieberman's claim for broker's commissions arises from Section 12.4 of the ...


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