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PARKING UNLIMITED v. MONSOUR MEDICAL FOUNDATION (05/14/82)

filed: May 14, 1982.

PARKING UNLIMITED, INC., A CORPORATION,
v.
MONSOUR MEDICAL FOUNDATION, A CORPORATION, APPELLANT



No. 515 Pittsburgh, 1980, Appeal from the Order of the Court of Common Pleas, Civil Division, of Westmoreland County, 11244 of 1979.

COUNSEL

John R. Friedlander, Pittsburgh, for appellant.

B. Patrick Costello, Greensburg, for appellee.

Price, Brosky and Montemuro, JJ.

Author: Price

[ 299 Pa. Super. Page 291]

The issues presented for our consideration in this appeal are whether the court below erred in entering an order pursuant to a common law arbitration award and in refusing appellant permission to take depositions of additional witnesses.

The parties to the instant action entered into a written building contract*fn1 by which appellee, Parking Unlimited, Incorporated, agreed to furnish architectural and engineering services in connection with the construction of a parking garage and office building for appellant, Monsour Medical Foundation. The contract called for specified payments upon the performance of certain phases of the engineering work.*fn2 It also expressly provided for the arbitration of disputes arising out of the contract in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association. When appellee sought payment of the balance of the contract price which it claimed to be due, appellant denied any liability because of appellee's allegedly unsatisfactory performance. The parties then submitted the entire controversy for decision by a panel of arbitrators.*fn3 Appellee averred full compliance with the contract and completion of its obligations thereunder and claimed $101,829,

[ 299 Pa. Super. Page 292]

    with interest, as the unpaid balance. Appellant, on the other hand, claimed that the set of plans and specifications prepared by appellee was valueless.

The arbitrators conducted a hearing on September 19, 1979.*fn4 On October 18, 1979, the arbitrators announced an award in favor of appellee for the total amount claimed. Thereafter, appellee filed a petition to confirm the arbitrators' award. Appellant answered that the contract was void ab initio since professional services cannot be performed by a business corporation and, by way of new matter, asserted that the arbitration award was a nullity since after-discovered evidence established that false testimony was given at the proceeding. At the same time, appellant also moved for discovery since the averments of new matter set forth in the answer were dehors the record. Appellee's reply to new matter denied that it had engaged in any improper activity, and asserted that the arbitrators made their award after a full and fair hearing. On May 2, 1980, the Honorable Richard E. McCormick entered an order, in which the Honorable Gilfert M. Mihalich concurred, granting appellee's petition to confirm the award and denying appellant's request for additional discovery. This appeal followed.

[ 299 Pa. Super. Page 293]

In arbitration agreements under common law, the arbitrator is the final judge of both law and fact, and there is no authority which sanctions the vacatur of his decision for a mistake of either.*fn5 Allstate Insurance Co. v. McMonagle, 449 Pa. 362, 296 A.2d 738 (1972); Harwitz v. Selas Corp. Page 293} of America, 406 Pa. 539, 178 A.2d 617 (1962). Every presumption is in favor of the award's validity. Reinhart v. State Automobile Insurance Association, 242 Pa. Superior Ct. 18, 363 A.2d 1138 (1976). Nevertheless, a party can succeed in having an arbitrator's award vacated if it is alleged and proven, by clear, precise and convincing evidence, that he was "denied a hearing or that there was fraud, misconduct, corruption or some other irregularity of this nature on the part of the arbitrator which caused him to render an unjust, inequitable or unconscionable finding." International Brotherhood of Firemen and Oilers, AFL-CIO Local 1201 v. School District of Philadelphia, 465 Pa. 356, 350 A.2d 804 (1976), quoting Nationwide Mutual Insurance Co. v. Barbera, 443 Pa. 93, 95, 277 A.2d 821, 823 (1971). See 42 Pa.C.S.A. § 7341.

In the instant case, appellant alleges neither misconduct, corruption, nor denial of a hearing. Rather, appellant seeks to overturn the award by alleging that because appellee, as a business corporation,*fn6 contracted to perform professional services in violation of the Professional Corporation Law, Act of July 9, 1970, P.L. 461, No. 160, § 2(4), the arbitrators' decision permitting recovery for its services ...


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