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decided: August 1, 1978.


Appeal from the Order of the Court of Common Pleas of Lebanon County in case of Palmyra Borough Authority v. Perry Construction, Inc., No. 54, Year 1977.


Roger D. Susanin, with him Cunniff, Bray & McAleese, and, of counsel, Ehrgood & Ehrgood and A. Harry Ehrgood, for appellant.

J. Bruce Walter, with him James L. Atkins, Solicitor, for appellee.

President Judge Bowman and Judges Crumlish, Jr., Wilkinson, Jr., Mencer, Rogers, Blatt and DiSalle. Opinion by Judge Wilkinson, Jr. Dissenting Opinion by Judge DiSalle. Judge Rogers joins in this dissent.

Author: Wilkinson

[ 37 Pa. Commw. Page 127]

This is an appeal from an order of the Lebanon County Court of Common Pleas which overruled appellant's preliminary objections to appellee's petition for declaratory judgment. Appellee's motion to quash the appeal as interlocutory was denied by the Superior Court but such order was vacated by this Court for

[ 37 Pa. Commw. Page 128]

    want of jurisdiction of that court following transfer of the proceeding here. Arguments on both the motion to quash and the merits of the appeal were heard together. We deny appellee's motion to quash and affirm the common pleas court's overruling of appellant's preliminary objections.

The procedural background of this difficult case requires recitation of the facts at some length. During the fall of 1976, appellee solicited bids for extension of sewer lines, enlargement of sewage treatment facilities and possible installation of a sanitary sewage collection system with a neighboring municipality. The bids were opened at the advertised time on October 19, 1976 and appellant's bid was found to be the lowest. On October 25, 1976 four business days after the opening of the bids, appellant's president discovered that an alleged substantial clerical error had been made in the compilation of appellant's bid. He notified appellee that day of the error and simultaneously requested that appellant be permitted to withdraw its bid from consideration and to have its bid be returned without forfeiture. This request was denied by appellee after it conducted a three-day hearing in November 1976 to receive appellant's evidence in support thereof. Appellant then notified appellee that it was electing to arbitrate appellee's decision, basing its purported right of such election on Section 4 of the Act of January 23, 1974, P.L. 9, 73 P.S. § 1604 (known and referred to here as the Public Contracts Act) and "the Palmyra Borough Authority rules and regulations adopted [thereunder]." Appellant requested and obtained a list of arbitrators from the American Arbitration Association, which directed appellee to participate in the selection of a panel. Appellee then filed its petition for declaratory judgment in the common pleas court, requesting, inter alia, a declaration that appellant had

[ 37 Pa. Commw. Page 129]

    no right of arbitration since it had not given notice of a claim of right to withdraw the bid within two business days, as required by Section 2 of the Public Contracts Act, 73 P.S. § 1602, a stay of the arbitration procedures until appellant's right to arbitration could be determined, and a decree determining the controversy.

The common pleas court entered a preliminary order the next day staying all other proceedings pending the determination of appellee's petition for declaratory judgment. Appellant then filed its preliminary objections to appellee's petition, claiming that since Section 1604 "expressly and clearly" provides arbitration as a remedy, the common pleas court lacks jurisdiction over the subject matter of the dispute. The preliminary objections were overruled by the common pleas court in August 1977. Appellant filed an appeal in the Superior Court, in response to which appellee filed a motion to quash on the basis that the appeal was interlocutory. Appellant asserted that the appeal was permissible, even though interlocutory, since it was of a ruling on preliminary objections which had questioned the jurisdiction of the common pleas court, pursuant to Section 1 of the Act of March 5, 1925, P.L. 23, as amended, 12 P.S. § 672. The Superior Court denied the motion to quash. Following the transfer of the appeal to this Court, appellee filed another motion to quash on identical grounds. On November 16, 1977, this Court vacated, for want of jurisdiction, the Superior Court's denial of appellee's motion to quash and directed that argument on the motion and on the merits of appellant's appeal be made together.

The first issue before us, therefore, is whether appellee's motion to quash should be granted. Appellee contends that because a common pleas court unquestionably has jurisdiction under the Act of June 18, ...

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