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Roccograndi v. Martin

Superior Court of Pennsylvania

July 1, 2019


          Appeal from the Order Entered November 28, 2018 In the Court of Common Pleas of Luzerne County Civil Division at No(s): 2018-11641



          MURRAY, J.

         Theresa A. Martin, Toni F. Madden, and Donna M. Shultz (collectively, Appellants) appeal from the trial court's November 28, 2018 order pertaining to arbitration, and confirming "the awards on May 11, 2018 and June 27, 2018 and the Gattuso Report dated August 15, 2018." Trial Court Order and Decree Confirming Arbitration Award, 11/28/18, at unnumbered 1. Upon review, we affirm.

         In his May 11, 2018 interim award, American Arbitration Association arbitrator Steven Petrikis (Arbitrator) provided the following factual and procedural background:

[Appellants] are sisters Theresa [A]. Martin, Toni F. Madden and Donna M. Schultz []. [Appellees] are sisters Elizabeth A. Roccograndi and Catherine E. Podolak []. All are the children of Anthony Roccograndi. All parties are all trustees of certain trusts of all ownership of My Brother's Place ("MBP"), a former retail home improvements store, and, currently, owner and operator of certain commercial real estate in Wilkes-Barre. MBP was founded by Mr. Roccograndi and his four brothers, but Mr. Roccograndi ultimately purchased his brothers' interests. For many years, he was the driving force for [MBP's] retail stores and commercial leasing properties. He became incapacitated in 2010, and died on May 5, 2014.
At all relevant times, MBP was controlled by a Shareholder Agreement dated January 26, 1992, and MBP's Rules and Regulations governing the Board of Directors of [MBP] dated June 5, 1994, executed by all [Appellants and Appellees].
[Appellants and Appellees] are all of the directors of MBP. Ms. Podolak was the donee of a Power of Attorney for Mr. Roccograndi during his incapacitation. Ms. Roccograndi served as the [p]resident of MBP since 1995. [Appellants] through the trust instruments were collectively the majority shareholders of MBP at all relevant times, owning approximately 57.2% of MBP.
[Appellants and Appellees] were also parties to a Joint Venture Agreement ("JVA") known as Sisters' Fund and dated November 1, 1977. The Sisters' Fund operated as a type of private bank for savings, low interest home loans and/or education for the parties, as well as a vehicle for investments by the joint venturers. The JVA directs that Ms. Roccograndi and Ms. Martin shall serve as co-managing agents upon the death of Mr. Roccograndi.
On April 17, 2015, [Appellants] brought suit against [Appellees] . . . in the Court of Common Pleas of Luzerne County. The Complaint sought the liquidation of the assets of MBP, and an accounting of the Sisters' Funds Joint Venture []. Subsequently, [Appellants] filed a Motion for Appointment of a Custodian or Receiver requesting the Court to "appoint a receiver to liquidate the business or, in the alternative, a custodian and to manage the affairs of the corporation (MBP) and its assets." [Appellees] objected by asserting that all claims were subject to mandatory arbitration. However, before the matters were directed to this arbitration, the Luzerne County Court, by Order dated August 24, 2015, appointed Walter Grabowski, Esq. as the receiver of MBP with directions to liquidate and close the retail operation of MBP. He has done so. The Order also expressly stated that MBP's "real estate rental business shall continue." The Order also barred all parties from conducting any transaction unless specifically authorized by the receiver or the Court.
As stated in the Scheduling Order entered in this matter dated February 13, 2017, the parties agreed as follows:
The parties have agreed that all claims and defenses set forth in the Demands and Answering Statements in the cases identified above are properly subject to this arbitration. The parties further agreed that to the extent said claims and defenses are not encompassed by such arbitration provisions, the parties submit all such claims and defenses to this arbitration and consent to the jurisdiction of the American Arbitration Association to resolve all such claims and defenses. . . .
Accordingly, by the express agreement of the parties, jurisdiction of this arbitration encompasses all remaining claims.
* * *
At the parties' request, a single hearing . . . was held November 15 through November 17, 2017, in Wilkes-Barre, Pennsylvania. . . . The parties submitted post-hearing briefs and post-hearing reply briefs.

Arbitrator's Interim Award, 5/11/18, at 2-4 (underlining and emphasis omitted).

         As indicated above, after conducting a hearing and receiving submissions from both parties, the Arbitrator issued an interim award on May 11, 2018. The interim award issued legal conclusions on many issues, with the Arbitrator ruling for and against both parties. See Arbitrator's Interim Award, 5/11/18, at 31 ("No party is blame free for this matter and no party is wholly blameworthy.").

         In his interim award, the Arbitrator ordered both parties to provide complete status updates no later than June 1, 2018. Id. at 30. Pertinent to this appeal, the status updates were required to address "whether the co-managing agents have agreed to the appointment of a person to liquidate Sisters' Fund and the date when a proposed distribution will be provided." Arbitrator's Interim Award, 5/11/18, at 31. The Arbitrator retained jurisdiction for the entry of a final award "following the consideration of the parties' submission[s] of the status report[s]." Id.

         On June 27, 2018, the Arbitrator issued two final arbitration awards: one pertaining to MBP, and one concerning the Sisters' Fund. Both awards incorporated the findings and conclusions of the May 11, 2018 interim award. Arbitrator's MBP Final Award, 6/27/18, at 3; Arbitrator's Sisters' Fund Final Award, 6/27/18, at 2. The final award regarding MBP ordered, inter alia, the conclusion of Attorney Grabowski's receivership "thirty days from the date of this Final Award." Arbitrator's MBP Final Award, 6/27/18, at 3.

         In the Sisters' Fund final award, the Arbitrator stated:

In my Interim Award dated May 11, 2018 the parties were directed to advise whether the co-managing agents of the Sisters['] Fund had agreed to the appointment of the Gattuso Group to implement the liquidation of the Sisters['] Fund in accordance with the terms of the Joint Venture Agreement. I received a report from [Appellants] on May 31, 2018, and a report from [Appellees] on June ...

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