from the Judgment Entered July 5, 2016 In the Court of Common
Pleas of Chester County Civil Division at No(s): 2015-08168,
BEFORE: DUBOW, J., SOLANO, J., and FORD ELLIOTT, P.J.E.
the Court are consolidated cross-appeals filed by William F.
Lex and Dr. Marvin Weinar from the trial court's April
28, 2016 order (1) granting Weinar's petition to confirm
an arbitration award, and (2) sustaining Lex's
preliminary objections and dismissing Weinar's second
amended complaint. The appeals arise out of Weinar's
efforts to enforce an arbitration award that was rendered in
his favor on February 14, 2013. After unsuccessfully seeking
to enforce the award in New York state and federal courts and
in a federal court in Pennsylvania, Weinar initiated this
action in the Chester County Court of Common Pleas, filing
both a petition to enforce the arbitration award under
Pennsylvania law and a complaint asserting numerous claims
against Lex relating to Lex's failure to pay the
arbitration award. The trial court granted Weinar's
petition to enforce the arbitration award and dismissed his
complaint. We affirm the granting of the petition, vacate the
dismissal of the complaint, and remand for further
while working as a securities broker for McGinn Smith &
Co., sold Weinar approximately $400, 000 in notes. In April
of 2010, the Securities and Exchange Commission filed an
action against McGinn Smith, its principals, and the issuers
of all the notes sold to Weinar. As a result of this and
other legal actions, the notes became worthless. On December
14, 2000, Weinar filed a statement of claim against Lex
pursuant to the Code of Arbitration Procedure of the
Financial Institution Regulatory Authority
(FINRA). Weinar asserted that Lex acted negligently
and breached various fiduciary and contractual duties by,
among other things, recommending investments that were
unsuitable to Weinar's objectives and not properly
diversified. On February 14, 2013, after an arbitration
proceeding in Pennsylvania, a panel of arbitrators issued an
award in favor of Weinar that included $270, 000 in
compensatory damages, plus interest at a rate of 6%,
compounded annually, and fees of $7, 862.50.
same day, Weinar filed a petition to enforce the arbitration
award in a New York state court under Section 7510 of the New
York Civil Practice Law and Rules. Lex removed the action to
the U.S. District Court for the Southern District of New York
on the basis of diversity jurisdiction and then filed a
motion to dismiss the case for lack of personal jurisdiction.
April 3, 2013, while Lex's motion to dismiss was pending
in the Southern District of New York, Lex filed a petition in
the U.S. District Court for the Eastern District of
Pennsylvania (the "EDPA Action"), in which he
sought to vacate the arbitration award under the Federal
Arbitration Act (FAA). The EDPA Action was stayed until
January 23, 2014, when the New York federal district court
dismissed the New York action for lack of personal
jurisdiction over Lex. On May 22, 2014, Weinar filed a
cross-petition in the EDPA action to confirm the arbitration
award. In the cross-petition, Weinar urged the court to apply
Pennsylvania law, which "does not impose a time limit on
motions to confirm an arbitration award." Weinar's
Cross-Pet. to Confirm Arbitration Award at ¶ 12.
March 31, 2015, the Honorable Norma L. Shapiro entered an
order in the EDPA action granting in part and denying in part
Lex's petition to vacate the arbitration award. See
Lex v. Weinar, Civ. A. No. 13-mc-96, 2015 WL 1455810
(E.D. Pa. Mar. 31, 2015). Judge Shapiro also denied as untimely
Weinar's cross-petition to confirm the award. She
explained that even though federal jurisdiction in the case
was based on diversity of citizenship,  the case was
"brought under the FAA, " and she was required to
apply the FAA's provisions, rather than state law, to an
FAA case brought in federal court because the parties had not
contractually opted out of the FAA's requirements.
Id. at *2. She held that Weinar's May 22, 2014
cross-petition to confirm the February 14, 2013 arbitration
award was untimely because "[t]he FAA one-year deadline
for moving to confirm the arbitration award" applied.
Id. at *3, citing FAA § 9, 9 U.S.C.
§ 9 (stating that any party may apply for an order
confirming an arbitration award "at any time within one
year after the award is made").
filed a motion for reconsideration of Judge Shapiro's
March 31, 2015 order, requesting that Judge Shapiro confirm
the arbitration award as modified by the March 31, 2015 order
or remand the matter to FINRA Dispute Resolution for issuance
of an amended award with recalculated interest in accordance
with the March 31, 2015 order. On May 20, 2015, Judge Shapiro
denied the motion for reconsideration, reiterating that
Weinar's petition to confirm was untimely under the FAA
and stating that the March 31, 2015 order left no confusion
as to the calculation of interest. Weinar did not appeal from
Judge Shapiro's March 31, 2015 or May 20, 2015 orders.
September 9, 2015, Weinar instituted the current action by
filing a complaint against Lex in the Court of Common Pleas
of Chester County, based on Lex's failure to pay the
arbitration award. In his second amended complaint, Weinar
asserted the following claims: (1) breach of contract, by
failing to "abide by and perform" the arbitration
award; (2) conversion, by retaining money out of which
Weinar's demand for payment of the arbitration award
could be satisfied; (3) unjust enrichment; (4) confirmation
of the arbitration award; and (5) a request for a declaratory
judgment regarding the amount of the arbitration award and
any judgment to be entered upon it. In addition to
declaratory relief, Weinar sought damages of $270, 000, plus
interest, fees, and "such further relief as [the trial
court] deems just and proper." Second Am. Compl. at 5,
filed preliminary objections to Weinar's second amended
complaint, arguing that, because of the EDPA ruling, the
requested relief was barred in its entirety by the doctrine
of res judicata. In addition, Lex contended that
Weinar failed to state a claim for breach of contract;
Weinar's conversion claim was barred by the gist of the
action doctrine and failed to state a claim upon which relief
could be granted; Weinar's unjust enrichment claim was
barred by res judicata and/or collateral estoppel;
Weinar's claim for confirmation of the award should be
dismissed because an application for confirmation of an
arbitration award must be made by petition; and Weinar could
not obtain a declaratory judgment on an uncontroverted and
finally litigated issue. Weinar responded by filing
preliminary objections to Lex's preliminary objections,
arguing that (1) Pennsylvania law does not permit preliminary
objections based on res judicata or collateral
estoppel; (2) Pennsylvania law does not permit preliminary
objections based on matters outside the complaint; (3)
Weinar's complaint was not barred by res
judicata; (4) Lex's objections to Weinar's
breach of contract and conversion claims were impermissible
"speaking demurrers"; and (5) Lex's objection
to Weinar's claim for confirmation of the award was moot
in light of Weinar's filing of a petition to confirm the
on December 15, 2015, Weinar filed a petition to confirm the
arbitration award under Section 7342(b) of the Judicial Code,
which provides that "the court shall enter an order
confirming the award and shall enter a judgment or decree in
conformity with the order" if a party applies for such
relief "more than 30 days after an award is made."
See 42 Pa. C.S. § 7342(b). Lex opposed that
petition, arguing that it was barred by res judicata
and that the FAA's one-year statute of limitations for
confirming an arbitration award preempted Section 7342(b),
which contains no statute of limitations.
trial court held a hearing on April 15, 2016,  and both parties
submitted post-hearing letters to the court. On April 28,
2016, the trial court issued an opinion and order (1)
granting Weinar's petition to confirm the arbitration
award, and (2) sustaining Lex's preliminary objections
and dismissing Weinar's second amended complaint. The
trial court did not rule on Weinar's preliminary
objections to Lex's preliminary objections.
trial court held that "the FAA does not preempt the
Pennsylvania Arbitration Statutes regarding the time limit
within which a party must petition to confirm an arbitration
award." Trial Ct. Op., 4/28/16, at 7. The court reasoned
that the lack of a one-year time limit for confirming an
arbitration award under 42 Pa. C.S. § 7342(b) was a mere
procedural matter that did not interfere with the federal
policy of ensuring enforceability of arbitration agreements.
Id. at 10-12. The trial court further explained that
it sustained Lex's preliminary objections because
Weinar's second amended complaint "merely seeks to
re-litigate the arbitration." Id. at 13.
12, 2016 Lex filed a notice of appeal from the trial
court's confirmation of the arbitration award. On May 26,
2016, Weinar filed a notice of cross-appeal from the order
sustaining Lex's preliminary objections to Weinar's
second amended complaint.
June 22, 2016 opinion issued in response to Lex's appeal
from the confirmation ruling, the trial court explained that
it rejected Lex's res judicata argument because
there was no identity of the two causes of action (the EDPA
action and the present action) and it rejected Lex's
collateral estoppel argument because the EDPA court
"never evaluated whether the petition to confirm would
have been granted under Pennsylvania law." Trial Ct.
Op., 6/22/16, at 13-14. In an opinion issued on July 13,
2016, in response to Weinar's appeal from the dismissal
of his complaint, the court reasoned that Weinar's breach
of contract claim was barred by res judicata, his
unjust enrichment claim was barred by collateral estoppel,
and his conversion claim was barred by the "gist of the
action" doctrine. Trial Ct. Op., 7/13/16, at 7-9.
trial court entered judgment on July 5, 2016. Under Pa.R.A.P.
905(a)(5), the previously filed notices of appeal are treated
as if filed following the entry of judgment. The
cross-appeals therefore are now properly before this Court.
1467 EDA 2016
Appeal From the Confirmation of the Arbitration
appeal, Lex raises the following issues:
1. In light of the 2011 U.S. Supreme Court case AT&T
Mobility LLC v. Concepcion, 563 U.S. 333 (2011)[, ]
which holds that states cannot enforce laws or
"procedures inconsistent with the FAA, " did the
[t]rial [c]ourt err by applying Pennsylvania's unlimited
statute of limitations to enforce an arbitration award when
this statute of limitations is inconsistent with the one-year
time period prescribed by the FAA?
2. Did the [t]rial court err in its finding that the
unlimited statute of limitations provided by 42 Pa.C.S.
§ 7342(b) does not conflict with the policies and goals
of the FAA, even though the FAA has an identified goal of
facilitating expeditious resolution of disputes?
3. In determining whether Pennsylvania's statute of
limitations to confirm an arbitration was preempted by the
FAA, was it an error for the [t]rial [c]ourt to reject
preemption based upon a purported distinction as to whether
the issue was "procedural" as opposed to
4. Was it error for the [t]rial [c]ourt to rely upon
pre-Concepcion decisions to reach its conclusion
that the FAA did not preempt 42 Pa.C.S. § 7342(b)?
5. Does the doctrine of res judicata bar a court
from considering the timeliness of the filing of a petition
where that same issue has already been finally adjudicated by
a court of competent jurisdiction?
Lex's Brief at 2.
issues challenge the trial court's confirmation of the
arbitration award in favor of Weinar. Arbitration is a
non-judicial means of resolving disputes. Although parties
may voluntarily agree to comply with an arbitration award,
enforcement of the award cannot be compelled unless the
prevailing party has the award "confirmed" in a
judicial proceeding that then gives the arbitrators'
ruling the effect of a court judgment. See Thomas H.
Oehmke, Commercial Arbitration § 133:1 (3d ed. 2017).
federal and Pennsylvania law provide means by which an
arbitration award may be confirmed. The relevant federal
statute is the FAA, which applies to "a written
agreement to arbitrate 'in any maritime transaction or a
contract evidencing a transaction involving
commerce.'" Moses H. Cone Mem. Hosp. v. Mercury
Constr. Corp., 460 U.S. 1, 24 (1983) (quoting FAA, 9
U.S.C. § 2). Neither Lex nor Weinar disputes that their
agreement to arbitrate under the FINRA Code is subject to the
FAA. See Moscatiello v. Hilliard, 939 A.2d 325, 326
(Pa. 2007) (noting that FAA governs arbitration under rules
of the National Association of Securities Dealers
(FINRA's predecessor)). The FAA "create[s] a body of
federal substantive law of arbitrability, applicable to any
arbitration agreement within the coverage of the Act."
Moses H. Cone, 460 U.S. at 24. One of its
provisions, Section 9, authorizes "any party to the
arbitration" to apply to a state or federal court for an
order confirming an arbitration award. 9 U.S.C. § 9.
Section 13 provides:
The judgment so entered shall have the same force and effect,
in all respects, as, and be subject to all the provisions of
law relating to, a judgment in an action; and it may be
enforced as if it had been rendered in an action in the court
in which it is entered.
9 U.S.C. § 13.
as discussed below, the FAA robustly preempts any state law
that interferes with the enforceability of an agreement to
arbitrate, it creates "no federal policy favoring
arbitration under a certain set of procedural rules, "
Volt Info. Sci. v. Bd. of Trs. of Leland Stanford Junior
Univ., 489 U.S. 468, 476 (1989), and leaves the parties
free to seek enforcement of their arbitration award under
state law, rather than the FAA. Hall St. Assocs., LLC v.
Mattel, Inc., 552 U.S. 576, 590 (2008). Pennsylvania
makes available two statutory schemes for arbitration of
cases not filed in court. One, the Uniform Arbitration Act,
42 Pa. C.S. §§ 7301-7320, governs arbitrations
under agreements that "expressly provide" that
they are subject to that Act "or any other similar
statute." 42 Pa. C.S. § 7302(a). All other
arbitration agreements are "conclusively presumed"
to be governed by what the Judicial Code calls "common
law arbitration" under 42 Pa. C.S. §§
7341-7342. See Moscatiello, 939 A.2d at 327. No
party to this case contends that the arbitration agreement at
issue here falls under the Uniform Act; accordingly, the
Judicial Code's "common law" provisions apply
to this case. Among the "common law" provisions is
Section 7342(b), which states that if a party makes an
appropriate application, "the court shall enter an order
confirming the award and shall enter a judgment or decree in
conformity with the order." 42 Pa. C.S. § 7342(b).
unsuccessfully seeking confirmation of the award in federal
court under the FAA, Weinar successfully applied for
confirmation in the Chester County Court of Common Pleas
under Section 7342(b). Lex now contends that the trial court
erred in confirming the award because the federal order
declining confirmation precluded confirmation by the court in
Chester County and, alternatively, because confirmation is
barred by the FAA's one-year statute of limitations,
which preempts the longer period for filing a confirmation
application under Pennsylvania law.
trial court order confirming a common law arbitration award
will be reversed only for an abuse of discretion or an error
of law." Sage v. Greenspan, 765 A.2d 1139, 1142
(Pa. Super. 2000), appeal denied, 784 A.2d 119 (Pa.
2001). As we discuss below, each of Lex's contentions
presents a question of law as to which our standard of review
is de novo.
a court should avoid constitutional issues if possible,
see Commonwealth v. Karetny, 880 A.2d 505, 519 (Pa.
2005), and because Lex's preemption issues ultimately are
grounded in the U.S. Constitution's Supremacy Clause,
Art. VI cl. 2, we begin our analysis with Lex's fifth
issue, in which Lex contends that confirmation of the
arbitration award under Pennsylvania law is barred by res
judicata (claim preclusion) as a result of Judge
Shapiro's decision in the EDPA action. The trial court
held that res judicata did not apply
because there was no identity of the two causes of action
(the cause of action in the EDPA case and the cause of action
in the instant case). Trial Ct. Op., 6/22/16, at 13.
explained the res judicata doctrine as follows:
The doctrine of res judicata prevents a party from
instituting litigation that has been the subject of a
lawsuit. We explained the concept in Stoeckinger v.
Presidential Financial Corp. of Delaware Valley, 948
A.2d 828, 832 n.2 (Pa. Super. 2008) (footnote omitted):
"Res judicata" means "a thing adjudged"
or a matter settled by judgment. Traditionally, American
courts have used the term res judicata to indicate
claim preclusion, i.e., the rule that a final judgment
rendered by a court of competent jurisdiction on the merits
is conclusive as to the rights of the parties and constitutes
for them an absolute bar to a subsequent action involving the
same claim, demand or cause of action.
Robinson Coal Co. v. Goodall, 72 A.3d 685, 689 (Pa.
Super. 2013). Preclusion is a question of law, and our
review is de novo. See Rickard v. Am.
Nat'l Prop. & Cas. Co., ___ A.3d ___, 2017 WL
4803951, at * 3 (Pa. Super., Oct. 25, 2017) (en
EDPA action, Judge Shapiro declined to confirm the FINRA
arbitration award because Weinar did not seek confirmation
until May 22, 2014, more than one year after the February 14,
2013 date of the award. Noting that Section 9 of the FAA
requires that a request for confirmation be made "within
one year after the award is made, " 9 U.S.C. § 9,
she held that Weinar's request for confirmation was
time-barred. Although Weinar asked Judge Shapiro to confirm
the award pursuant to Pennsylvania law, which does not
require a confirmation request to be made within one year,
Judge Shapiro held that she was required to apply the
FAA's one-year deadline in a case brought under the FAA.
Lex contends that Judge Shapiro's statute of limitations
decision bars Weinar's state-law confirmation request in
the Chester County court, but we disagree.
preclusive effect of a federal judgment is a question of
federal law. Semtek Int'l Inc. v. Lockheed Martin
Corp., 531 U.S. 497, 507 (2001); In re
Stevenson, 40 A.3d 1212, 1223 (Pa. 2012). However,
federal law permits a state court to accord a judgment in a
federal diversity case the same preclusive effect as it would
have if it were a judgment of a state court in that state,
unless the state preclusion rule would be ...