J-A29005-23

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT O.P. 65.37

EQM GATHERING OPCO, LLC, 

SUBSIDIARY OF EQM MIDSTREAM 

PARTNERS, LP, EQM POSEIDON 

MIDSTREAM, LLC (F/K/A) POSEIDON 

MIDSTREAM, A SUBSIDIARY OF EQM 

MIDSTREAM PARTNERS, LP, EQM 

OLYMPUS MIDSTREAM, LLC, OF A 

SUBSIDIARY OF EQM MIDSTREAM 

PARTNERS, LP, EQUITRANS WATER 

SERVICE (PA), LLC, A SUBSIDIARY 

OF EQM MIDSTREAM PARTNERS, LP, 

EQUITRANS WATER SERVICE (OH), 

LLC, A SUBSIDIARY OF EQM 

MIDSTREAM PARTNERS, LP

v.

FLYING W PLASTICS, INC., LEE 

SUPPLY COMPANY, INC., CORE & 

MAIN L.P., AND MICHELS 

CORPORATION

APPEAL OF: MICHELS CORPORATION

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 IN THE SUPERIOR COURT OF

 PENNSYLVANIA

 No. 603 WDA 2023

Appeal from the Order Entered April 12, 2023

In the Court of Common Pleas of Allegheny County Civil Division at 

No(s): GD 22-009441

BEFORE: BOWES, J., KUNSELMAN, J., and MURRAY, J.

MEMORANDUM BY BOWES, J.: FILED: March 21, 2024
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Michels Corporation (“Michels”) appeals from the order overruling its 

preliminary objections seeking dismissal of the underlying complaint based 

upon an agreement to arbitrate.

1

 We vacate and remand with instructions.

Plaintiffs filed the instant eighteen-count complaint against Michels, 

Flying W. Plastics, Inc., Lee Supply Company, Inc., and Core & Main L.P.

(collectively, “Defendants”) in 2022. This appeal concerns only whether 

Michels had a valid agreement to arbitrate with Plaintiffs EQM Gathering Opco, 

LLC (“EQM Gathering”) and EQM Poseidon Midstream, LLC (“EQM Poseidon”) 

(collectively, “EQM”). To make this determination, it is imperative that we

understand the context of this dispute, and thus we first set forth the 

foundational facts as recited by the trial court: 

[A]ll of the Plaintiff entities are engaged in the natural gas 

business providing natural gas and water gathering services. In 

order to fulfill contractual obligations related to water services that 

were negotiated in 2017, the Plaintiff entities would build and 

operate various parts of this system. Each entity contracted with 

multiple vendors in order [to] secure goods and services for the 

project. 

____________________________________________

1 We observe that “[a]n order overruling preliminary objections that seek to 

compel arbitration is an interlocutory order appealable as of right under 42 

Pa.C.S. § 7320(a)(1) and Pa.R.A.P. 311(a)(8).” McCrossin v. Comcast 

Spectacor, LLC, ___ A.3d ___, 2024 WL 439416, at *3 (Pa.Super. Feb. 6, 

2024) (cleaned up). To be so appealable, a party must prove that the dispute 

is bound by an arbitration agreement[.]” Armstrong World Indus., Inc. v. 

Travelers Indem. Co., 115 A.3d 342, 346 (Pa.Super. 2015). For the reasons 

discussed infra, we conclude that the parties are bound by an arbitration 

agreement as to the underlying claims, and therefore this appeal is properly 

before us. See McCrossin, 2024 WL 439416, at *3 (“Where the parties’ 

agreement requires arbitration, . . . the denial of enforcement is appealable 

as of right even though the parties’ agreement includes some pre-arbitration 

settlement procedures.”).
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With respect to the events giving rise to the action, the 

second amended complaint makes the following allegations:

34. On or about September 4, 2019, after many miles of 

pipe had been purchased, fused and installed, pipes began 

to burst and leak, resulting in third-party property damage 

and replacement of the subject piping.

35. Plaintiffs placed the Defendants herein on notice of the 

failure of the pipe and commenced an investigation, 

including testing of the pipes and fuses.

36. Following testing, numerous of Defendants’ materials 

and fuses were found to be defective, necessitating 

replacement of the entire waterline system in order to 

accommodate Plaintiff’s clients’ expectations and scheduled 

operations.

37. Upon information and belief, all pipe manufactured by 

Flying W Plastics for the years 2018 and 2019 were found 

to be defective such that the entire waterline system 

necessitated replacement.

38. Upon information and belief, fuses performed by Michels 

have failed to maintain the integrity of the fused pipe, 

contributing to the catastrophic failure.

Three counts are specifically made against . . . Michels, count XV 

– breach of express warranties; count XVI – breach of contract; 

and count XVII – negligence. Following the filing of the second 

amended complaint, Defendant Michels filed preliminary 

objections raising questions of fact raising the arbitration issue 

that gave rise to the instant appeal. 

Trial Court Opinion, 7/10/23, at 2-3 (cleaned up). The trial court heard 

argument on the preliminary objections on March 1, 2023. Thereafter, the 

court allowed both parties to submit supplemental briefs addressing the 
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application of our Supreme Court’s holding in Taylor v. Extendicare Health 

Facilities, Inc., 147 A.3d 490 (Pa. 2016).2

The genesis of the arbitration disagreement is a single provision 

contained within a Master Construction Services Agreement (“MCSA”)

executed between Michels and EQM Gathering, which provides in whole as 

follows:

18.1 Dispute Resolution. Any dispute, controversy or claim 

arising out of or relating to the rights and obligations under 

the Contract Documents shall be settled upon the mutual 

agreement of the Parties by binding arbitration in 

accordance with the Construction Industry Arbitration 

Rules of the American Arbitration Association or similar 

rules. Such arbitration shall be held in Allegheny County, 

Pennsylvania. The Parties agree to submit to the jurisdiction of 

the arbitration panel at such venue. The award rendered by the 

arbitrator(s) shall be final, and judgment, upon the arbitration 

award may be entered in any court having jurisdiction thereof. If 

either Party chooses to resolve any dispute by litigation, 

then the Parties irrevocably agree to submit to the 

exclusive jurisdiction of the Court of Common Pleas of 

Allegheny County, Pennsylvania or the United States 

District Court for the Western District of Pennsylvania. 

Contractor shall proceed diligently with any undisputed Work 

under the Contract Documents notwithstanding the existence of 

any dispute, controversy or claim, and during the pendency of any 

____________________________________________

2

In Taylor v. Extendicare Health Facilities, Inc., 147 A.3d 490, 493 (Pa. 

2016), the High Court held that the Federal Arbitration Act (“FAA”)

“preempt[ed] the application of [Pennsylvania Rule of Civil Procedure]

213(e)[, concerning compulsory joinder of wrongful death and survival 

actions], and require[d] arbitration of the survival claim against Extendicare.” 

In so holding, the Court noted that the relevant jurisprudence from the 

Supreme Court of the United States “instruct[ed] that the prospect of 

inefficient, piecemeal litigation proceeding in separate forums is no 

impediment to the arbitration of arbitrable claims.” Id. at 507. Thus, “the 

FAA binds state courts to compel arbitration of claims subject to an arbitration 

agreement.” Id. at 509 (citation omitted). 
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dispute resolution process as set forth in this Section. 

Notwithstanding the foregoing, in the event that a Party is sued 

or subjected to any other action or proceedings relating to 

Contractor or Company’s performance hereunder in any other 

state or forum, such Party shall have the right to join the other 

Party and prosecute its claims, or any one or more of them, 

against that Party in such other suit, action or proceeding.

MCSA, 11/20/18, at Art. 18, § 18.1 (emphases added).3

In light of this provision, EQM wrote to Michels on March 8, 2021, prior 

to the commencement of the instant litigation, inquiring about the appropriate 

dispute resolution process following the rupture in the pipelines. The letter 

provided in relevant part:

As you know, EQM . . . has recently taken several steps in an effort 

to amicably resolve the failure of the SGL0179 pipeline 

constructed by Michels. . . . Despite such attempts at cooperation, 

Michels insists that the failure is not its fault, but fails to provide 

any of its own testing results or data to support its position.

It will likely cost EQM in excess of [$]15 million to remediate the 

defects in the pipeline constructed by Michels, caused by faulty 

workmanship (in the form of improper fusions) by Michels’[s]

employees. Unfortunately, it appears that Michels’[s] only “offer” 

is that we return $800,000 of the approximate $1.8 million in 

retention that we have currently held. EQM hereby rejects this 

offer.

. . . . 

In addition, and in accordance with [§] 18.1 of the [MCSA], EQM 

agrees to arbitrate the dispute between us in Allegheny County, 

Pennsylvania, in accordance with the Construction Industry 

Arbitration Rules (“CIAR”) of the American Arbitration Association. 

EQM requests that Michels concur and communicate its agreement 

to arbitrate promptly to EQM. EQM will file its Demand for 

Arbitration under the CIAR promptly upon receipt of Michels’[s]

agreement to arbitrate. Absent such agreement, EQM will 

____________________________________________

3 The MCSA may be found in the Amended Complaint, 11/18/22, Exhibit D.
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commence litigation in western Pennsylvania. In either case, EQM 

will seek to collect all damages available to it regarding Michels’[s]

default under the MCSA, as well as any remedial costs associated 

with the investigation of this matter.

EQM remains willing to entertain serious discussion regarding

resolution as we pursue the avenues outlined above. We look 

forward to your prompt response.

March 8, 2021 Letter, at unnumbered 1-2.

4

In response, Michels recommended that the parties engage in the more 

informal process of mediation before deciding whether to pursue formal 

dispute resolution through arbitration or litigation. Specifically, Michels 

stated:

With all of that said, we still want to avoid protracted litigation. 

Perhaps an intermediate step prior to arbitration or a lawsuit 

would help resolve this matter. Before electing between 

arbitration and litigation in court Michels would agree to conduct

an early mediation. Perhaps the inclusion of a neutral third party 

could help move this matter forward. Please advise if mediation 

would be an acceptable intermediate solution. If so, we can ask 

our respective counsel to begin that process.

March 11, 2021 Letter, at unnumbered 2.

5

EQM acquiesced to the mediation proposal, but nonetheless insisted that 

the parties choose whether to proceed to arbitration or litigation in the event 

mediation failed: “While we are willing to see whether an amicable resolution 

____________________________________________

4 This letter can be found in Evidence in Support of Preliminary Objections, 

2/9/23, at Exhibit C.

5 This letter can be located in Plaintiffs’ Evidence in Support of Opposition to 

Defendant Michel’s Preliminary Objections Raising Questions of Fact, 2/9/23,

at Exhibit C.
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may be achieved through mediation, it is also necessary to determine whether 

any unresolved disputes will be submitted to arbitration or litigation. As such, 

we require Michels’[s] election regarding dispute resolution without further 

delay.” March 19, 2021 Letter.

6

Thereafter, Michels complied with the request and explicitly agreed to 

arbitration:

. . . Michels . . . is glad that EQM . . . is willing to participate in an 

early mediation concerning the dispute at issue. Our counsel will 

work with [EQM’s outside counsel] to select a mutually agreeable 

mediator.

If the parties are unable to resolve this matter and more formal 

dispute resolution proceedings are necessary, then Michels 

Corporation agrees to submit the parties’ claims to arbitration 

pursuant to the terms of the construction agreement.

March 30, 2021 Letter.7

Based upon the decision to try mediation before proceeding with the 

agreed-upon arbitration process, EQM and Michels entered into an agreement

(“Tolling Agreement”) to toll “the running of any applicable statutes of 

limitation or similar limitation periods, and any other defenses, whether

equitable, statutory, or otherwise” from August 25, 2021 through the 

expiration date, defined as “[thirty] days following the date on which a written 

____________________________________________

6 The March 19, 2021 letter can also be located in Plaintiffs’ Evidence in 

Support of Opposition to Defendant Michel’s Preliminary Objections Raising 

Questions of Fact, 2/9/23, at Exhibit D.

7 This letter can be found in Evidence in Support of Preliminary Objections, 

2/9/23, at Exhibit D.
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Notice of Termination” is provided to either Michels or EQM. See Tolling 

Agreement, 8/25/21.8 

In the preamble to the Tolling Agreement, the parties confirmed that 

they had initiated mediation and would proceed to arbitration if mediation was 

unsuccessful:

WHEREAS, a dispute has arisen between the Parties 

regarding Michels’[s] alleged responsibility for damages arising 

from and/or related to the failures of the pipeline and regarding 

EQM’s outstanding payments owed to Michels; and

WHEREAS the Parties have initiated the mediation process, 

yet no formal proceedings have occurred; and 

WHEREAS, if mediation fails, the Parties have elected to 

adjudicate this matter through the American Arbitration 

Association (hereinafter “AAA arbitration”); and

WHEREAS, the Parties wish to toll the running of any 

applicable statute of limitation and/or any other legal defense 

based upon the passage of time, during the period covered by this 

Agreement.

Id. The Tolling Agreement included an integration clause, clarifying that it 

“contain[ed] the entire understanding between the Parties regarding the 

matters addressed herein” and that the Tolling Agreement “shall supersede 

and prevail over prior communications between the Parties or their 

representatives regarding the matters contained herein.” Id.

____________________________________________

8 The Tolling Agreement is located within Plaintiffs’ Evidence in Support of 

Opposition to Defendant Michel’s Preliminary Objections Raising Questions of 

Fact, 2/9/23, at Exhibit B.
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In April 2022, Michels submitted a change order requesting over $1

million in connection with its inspection of the pipeline to determine the cause 

of the ruptures. The parties disputed, and continue to dispute, whether they 

had participated in a full mediation session at that point. Regardless, EQM 

rejected the change order and, approximately two months later, initiated the 

underlying litigation. 

We now turn to how the parties and the trial court interpreted the 

foregoing documents and conduct. According to Michels, § 18.1 of the MCSA

“requires the parties to arbitrate if they so choose.” Michels’s brief at 17 

(emphasis in original). Michels asserts that such a choice was made by the 

parties as of March 30, 2021, when Michels explicitly agreed to EQM’s offer to 

arbitrate the dispute if mediation failed. Id. at 19. 

On the other hand, EQM avers that “under the terms of the MCSA, the 

parties could choose to arbitrate a dispute unless either party chose to 

resolve the dispute by litigation.” EQM’s brief at 14 (emphasis in original). 

In that vein, EQM maintains that while the choice to arbitrate was not 

“mandatory or irrevocable” by the terms of § 18.1, the same provision 

provided that a choice by either party to litigate was irrevocable. Id. at 16. 

Thus, per the express terms of the MCSA, EQM believes it was entitled to 

withdraw its agreement to arbitrate at any time and instead pursue litigation.

The court interpreted § 18.1 as providing the contracting parties with 

the option to mutually agree to either arbitrate or litigate any dispute. Despite 
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this choice, the court adhered to EQM’s focus on § 18.1 only mentioning 

irrevocability in terms of the choice to litigate. See Trial Court Opinion, 

7/10/23, at 7. Based on this reading, the court held that nothing presented 

by the parties “indicate[d] that the agreement to arbitrate made pursuant to 

the MCSA [§] 18.1 did not remain elective and revocable in favor of litigation 

in this forum.” Id. at 14. Therefore, the “court conclude[d] that the parties 

did not have an express agreement to arbitrate the dispute[,]” and overruled 

Michels’s preliminary objections. Id. at 15 (cleaned up).

This timely appeal followed. Both Michels and the trial court complied 

with Pa.R.A.P. 1925. Michels raises a single issue for our consideration: “Did 

the trial court commit an error of law [by] denying Michels’s Preliminary 

Objections seeking to compel arbitration pursuant to a binding written 

agreement?” Michels’s brief at 7.

We begin with the pertinent legal principles:

Our standard of review of a claim that the trial court improperly 

overruled preliminary objections in the nature of a petition to 

compel arbitration is clear. Our review is limited to determining 

whether the trial court’s findings are supported by substantial 

evidence and whether the trial court abused its discretion in 

denying the petition.

In doing so, we employ a two-part test to determine whether the 

trial court should have compelled arbitration. First, we examine 

whether a valid agreement to arbitrate exists. Second, we must 

determine whether the dispute is within the scope of the 

agreement.

Whether a claim is within the scope of an arbitration provision is 

a matter of contract, and as with all questions of law, our review 

of the trial court’s conclusion is plenary.
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Fineman, Krekstein & Harris, P.C. v. Perr, 278 A.3d 385, 389 (Pa.Super. 

2022) (cleaned up). In evaluating an agreement to arbitrate, we also consider 

the following:

(1) arbitration agreements are to be strictly construed and not 

extended by implication; and (2) when parties have agreed to 

arbitrate in a clear and unmistakable manner, every reasonable 

effort should be made to favor the agreement unless it may be 

said with positive assurance that the arbitration clause involved is 

not susceptible to an interpretation that covers the asserted 

dispute.

Id. (cleaned up).

Here, the parties do not contest the second question, whether the 

dispute falls within the scope of an agreement to arbitrate. Rather, they focus 

solely on the first part of the test, i.e., whether there was a valid agreement 

to arbitrate. EQM contends that the arbitration provision of § 18.1 does not 

contain the word “irrevocably . . . or any similar language[.]” EQM’s brief at 

16. In interpreting § 18.1, the trial court focused on the inclusion of the word 

“irrevocably” in the context of the choice to litigate and concluded that this 

choice of words permitted a party, at any time, to rescind a prior mutual 

agreement to arbitrate in favor of resolving the dispute through litigation. 

A plain reading of the provision belies this assertion. Section 18.1 

provides that “[a]ny dispute, controversy or claim arising out of or relating to 

the rights and obligations under the Contract Documents shall be settled 

upon the mutual agreement of the Parties by binding arbitration in 

accordance with the Construction Industry Arbitration Rules of the American 
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Arbitration Association or similar rules.” MCSA, 11/20/18, at Art. 18, § 18.1 

(emphasis added). Nothing in this provision indicates that the election is 

revocable after agreed upon by both parties, or that any such controversies 

may be subject to arbitration once the parties so chose. As for the choice to 

litigate, that provision states that “[i]f either Party chooses to resolve any 

dispute by litigation, then the Parties irrevocably agree to submit to the 

exclusive jurisdiction of the Court of Common Pleas of Allegheny County, 

Pennsylvania or the United States District Court for the Western District of 

Pennsylvania.” MCSA, 11/20/18, at Art. 18, § 18.1. Although the word

“irrevocable” was used here, it indicates merely the choice of forum if litigation 

is pursued. It does not mean that the decision to litigate from one party 

supersedes or renders voluntary the arbitration provision once the parties 

agreed to arbitrate. In order words, the parties were to decide whether to 

mutually agree to arbitration, or if they could not reach such an agreement,

one party could elect to proceed to litigation. Once the parties agreed to 

arbitration however, by the terms of § 18.1, that was how they shall proceed. 

Here, it is clear from our review of the certified record that EQM and 

Michels agreed as of March 30, 2021, to pursue arbitration should mediation 

prove unsuccessful. See Pisano v. Extendicare Homes, Inc., 77 A.3d 651, 

661 (Pa.Super. 2013) (“[W]hen addressing the specific issue of whether there 

is a valid agreement to arbitrate, courts generally should apply ordinary statelaw principles that govern the formation of contracts, but in doing so, must 

give due regard to the federal policy favoring arbitration.” (cleaned up)). That 
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contractual agreement was confirmed by the Tolling Agreement and could not 

be withdrawn by EQM’s subsequent change of heart and desire to proceed to

litigation. Thus, there was a valid agreement to arbitrate in place at the time 

EQM initiated this lawsuit.9 

We are not persuaded by EQM’s argument that the intermediary step of 

mediation somehow weakened the mutual choice to engage in arbitration as 

the formal dispute resolution process. The terms of the Tolling Agreement did 

not dictate how long the parties had to participate in mediation before 

proceeding with arbitration, only that they could do so after mediation proved 

unsuccessful, either because the parties decided not to pursue mediation any

longer or because the mediator could not reach a compromise. What is clear 

is that the parties expressly indicated their desire to proceed to arbitration if 

mediation did not resolve their dispute. Stated simply, whenever any party 

deemed mediation unsuccessful, the agreement to arbitrate would then take 

effect. Neither the MCSA nor EQM’s frustrations with Michels during the 

mediation process granted EQM the right to unilaterally change course, 

rescind the agreed-upon arbitration, and force the parties to instead resolve 

the dispute through litigation.

Finally, we reject the trial court’s reasoning insofar as it overruled the 

preliminary objections based upon the premise that the agreement to arbitrate 

____________________________________________

9 While the parties focus on the MCSA as the controlling document, we observe 

that the same result would hold even if we analyzed this matter solely upon 

the integrated Tolling Agreement because it confirmed the parties’ mutual 

assent to arbitrate the underlying dispute in the event mediation failed.
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was between only EQM and Michels, whereas there were several other parties 

ultimately named in the litigation. See Trial Court Opinion, 7/10/23, at 15 

(concluding that “as the dispute changed and expanded . . . and encompassed 

other potentially liable parties, the mutuality in agreement expressly required 

to submit a dispute to arbitration did not exist”). As aptly argued by Michels, 

and “as our Supreme Court made abundantly clear in Taylor, the prospect of 

piecemeal, possibly duplicative litigation is no longer an impediment to 

arbitrability where a valid agreement exists.” Von Sick v. ANC Builders, 

Inc., 298 A.3d 424, 429 (Pa.Super. 2023).

Unpersuaded by the trial court’s reasoning and EQM’s arguments, and

having determined that both portions of our two-part test have been satisfied, 

we hold that the trial court abused its discretion in overruling Michels’s 

preliminary objections to compel arbitration. See Fineman, 278 A.3d at 389. 

EQM correctly stated that “[i]t is undisputed that the MCSA provided for 

arbitration only upon the express agreement of the parties with respect to a 

particular dispute.” EQM’s brief at 20. Our review of the record confirms that 

this is precisely what occurred. Accordingly, we vacate the order overruling 

Michels’s preliminary objections to compel arbitration, and remand for the 

entry of an order referring the dispute between EQM and Michels to arbitration

in accordance with § 18.1 of the MCSA.

Order vacated. Case remanded for entry of order consistent with the 

dictates of this decision. Jurisdiction relinquished.
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3/21/2024