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US Spaces, Inc. v. Berkshire Hathaway Homeservices

Superior Court of Pennsylvania

June 5, 2017

US SPACES, INC. Appellant
v.
BERKSHIRE HATHAWAY HOMESERVICES, FOX & ROACH

         Appeal from the Order Entered July 7, 2016 In the Court of Common Pleas of Philadelphia County Civil Division at No(s): 16-0602786

          BEFORE: PANELLA, J., SHOGAN, J., and RANSOM, J.

          OPINION

          PANELLA, J.

         Rules 206.1 - 207.7 of the Rules of Civil Procedure govern civil petition practice in Pennsylvania. These rules provide that petition practice will proceed through the issuance, to the respondent, of a rule to show cause why the relief requested should not be granted. See Pa.R.C.P. 206.4. As a default, the decision to issue such a rule is discretionary with the trial court. See id. However, the Courts of Common Pleas are permitted to adopt a local rule that modifies the default and instead provides for issuance of the rule to show cause "as of course." Pa.R.C.P. 206.4(a)(1).

         In this appeal, we are asked to determine whether a trial court can decide to refuse to issue a rule to show cause where a local rule provides for issuance "as of course." We conclude that the adoption of such a local rule acts to constrain the discretion of the trial court in all but the most egregious cases. We therefore reverse and remand for further proceedings.

         On June 24, 2016, Appellant U.S. Spaces, Inc., filed a petition to vacate an arbitration award in the Philadelphia Court of Common Pleas. In its petition, U.S. Spaces asserted that a dispute over its entitlement to realtor fees between itself and Appellee, Berkshire Hathaway Home Services, Fox & Roach, had been submitted to arbitration in accordance with the professional association that both parties are affiliated with. The arbitration panel was scheduled to hear the matter on April 25, 2016. However, the panel declined to hold a hearing due to the absence of U.S. Spaces's broker of record, who was not scheduled to be a witness at the proceeding.

         Implicit in the petition's allegations is that the panel entered a final decision against U.S. Spaces. U.S. Spaces appealed the panel's decision to a procedural review tribunal pursuant to the association's arbitration rules. That tribunal affirmed the original panel's decision on June 10, 2016. U.S. Spaces subsequently requested that the Court of Common Pleas vacate the arbitration award under 42 Pa.C.S.A. 7341, common law arbitration, on the basis that it was denied a full and fair hearing of its claims.

         The Court of Common Pleas reviewed U.S. Spaces's petition and did not issue a rule to show cause. Rather, it entered an order denying the petition on July 7, 2016. U.S. Spaces then filed this timely appeal.

         As noted previously, Pa.R.C.P. 206.4 provides the Courts of Common Pleas two options in responding to the filing of a petition. The default option, codified in Pa.R.C.P. 206.5, provides the court discretion in whether to issue a rule to show cause when presented with a petition. The alternative, codified in Pa.R.C.P. 206.6, must be chosen by the adoption of a local rule and provides for the issuance of a rule to show cause "as of course."

The purpose of Rules 206.5 through 206.7 is to create a record from which the court may determine disputed issues of fact raised by the petition and answer. If the answer does not raise disputed issues of fact, then the petition and answer are ready for decision by the court without the fact-finding process and new Rule 206.7(b) so states.

Pa.R.C.P. 206.4, Comment.

         If a respondent does not file an answer to a rule to show cause, "all averments of fact in the petition may be deemed admitted[.]" Pa.R.C.P. 206.7(a). "The rule provides some flexibility by giving the court discretion to consider an answer not timely filed. If an answer is never filed, there would be little basis upon which the court might exercise its discretion and the averments of fact in the petition would be deemed admitted." Pa.R.C.P. 206.7, Comment. If the respondent files an answer that does not raise issues of material fact, the petitioner may request that the court decide the matter as a matter of law. See Pa.R.C.P. 206.7(b).

         Where a respondent files an answer raising issues of material fact, both parties are entitled to proceed with discovery as permitted by the court. See Pa.R.C.P. 206.7(c), (d). The burden, however, rests with the petitioner to establish its right to relief. See Pa.R.C.P. 206.7(c).

         The scheme set forth by Rules 206.1 - 206.7 provides flexibility for courts to handle petitions in a manner consistent with the need for consistent docket management. In counties that do not adopt a local rule, the default provides that the court will act as a "gatekeeper, " reviewing petitions for their merit. The level of proof that the rule requires to be appended to such petitions is an issue not currently before us. At the very least, however, it is clear that, under ...


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