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GWIN ENGINEERS v. CRICKET CLUB ESTATES DEVELOPMENT GROUP (03/15/89)

filed: March 15, 1989.

GWIN ENGINEERS, INC., APPELLEE,
v.
CRICKET CLUB ESTATES DEVELOPMENT GROUP, A LIMITED PARTNERSHIP; TEAM DEVELOPMENT 3, A GENERAL PARTNERSHIP; JOHN W. KERNS, RICHARD TRUESDALE AND JOSEPH L. HALLER, PARTNERS, APPELLEES. APPEAL OF JOSEPH L. HALLER, APPELLANT



Appeal from the Order entered May 26, 1988 in the Court of Common Pleas of Blair County, Civil Division, at No. 1650 CP. 1980.

COUNSEL

C. Wayne Hippo, Hollidaysburg, for appellant.

John W. Heslop, Jr., Altoona, for appellees.

Brosky, Del Sole and Johnson, JJ.

Author: Del Sole

[ 382 Pa. Super. Page 534]

This is an appeal from a judgment entered following a trial court order confirming an arbitration award. We affirm.

Appellee entered an agreement with Cricket Club Estates Development Group to provide survey and engineering design services. The general partner of Cricket Club was Team Development 3, a general partnership equally owned

[ 382 Pa. Super. Page 535]

    and operated by Appellant and two other individuals. The agreement contained a clause requiring that any disputes or claims arising under the contract were to be decided by arbitration in accordance with the rules of the American Arbitration Association. Approximately ten months after the contract was executed, a corporate entity known as Team Development 3, Inc. came into existence and was substituted for the prior general partner in Cricket Club. This substitution was carried out without the written consent of Appellee, as required in the contract. Nearly two years after the substitution, Appellant resigned as an officer and director of the newly formed corporation and transferred all of his stock to another individual.

Several months later Appellee filed a demand for arbitration against Cricket Club, Team Development 3, and it's three partners, one of whom was Appellant. Appellant received notification of this demand and contacted Appellee's attorney to inform him that Appellant believed he was no longer liable for claims against Team Development 3. Appellant was not mailed notification of the time or place of the hearing but notification was sent to and received by one of Appellant's partners. This individual's name and address was listed as that belonging to Team Development 3. The principal place of business of Cricket Club was also listed in the contract at the same address under the care of the same individual. The arbitrator found in favor of Appellee in an amount totaling $21,725.79. A petition to confirm this award was granted and judgment was entered.

Appellant claims that he can not be bound by the terms of the contract since, individually, he was not a party to the agreement entered into between Appellee and Cricket Club. He also asserts that his liability was extinguished when a new corporation was formed and substituted as a general partner and because he transferred his corporate stock to another. It would be improper to reach the merits of these claims in view of our narrow standard of review in this matter.

[ 382 Pa. Super. Page 536]

The agreement at issue provided for arbitration according to the rules of the American Arbitration Association and did not provide for arbitration according to the rules of statutory arbitration. In such an instance the arbitration is one which falls under Subchapter B or Common Law Arbitration. Runewicz v. Keystone Ins. Co., 476 Pa. 456, 383 A.2d 189, 191 (1978). In arbitration governed by common-law principles, the arbitrators are the final judges of both law and fact and the award is not subject to judicial review for mistakes of either unless it is clearly shown that the party was denied a hearing or that fraud, misconduct, corruption, or other irregularity caused the rendition of an unjust, inequitable or unconscionable award. Greenspan v. United Services Auto. Assoc., 324 Pa. Super. 315, 471 A.2d 856 (1984). To prevail on these grounds, actual fraud must be shown, involving collusion with one of the parties, or misconduct intended to create a fraudulent result. Mellon v. Travelers Ins. Co., 267 Pa. Super. 191, 406 A.2d 759, 761 (1979). "An argument that the arbitrators were prejudiced or partial, or that they reached an award so unjust that it constitutes constructive fraud, will not be heeded. Similarly, an 'irregularity' will not be found simply upon a ...


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