J-A06039-23

2023 PA Super 130

PENNENERGY RESOURCES, LLC 

Appellant

v.

WINFIELD RESOURCES, LLC AND 

MDS ENERGY DEVELOPMENT, LLC

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 IN THE SUPERIOR COURT OF

 PENNSYLVANIA

 No. 464 WDA 2022

Appeal from the Order Entered April 8, 2022

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

No(s): GD-19-008604

BEFORE: OLSON, J., NICHOLS, J., and PELLEGRINI, J.*

OPINION BY PELLEGRINI, J.: FILED: July 25, 2023

PennEnergy Resources, LLC (PennEnergy) appeals from the order of the 

Court of Common Pleas of Allegheny County (trial court) denying its petition 

to vacate an arbitrator’s award of $2.4 million in damages in favor of MDS 

Energy Development, LCC (MDS).

Briefly, PennEnergy and Winfield Resources, LLC (Winfield) entered an 

agreement to develop gas leases in Western Pennsylvania. Winfield later 

wanted to transfer part of its interest in the venture to MDS. The two executed 

an agreement under which MDS would get almost half of Winfield’s working

interest and Winfield would get membership units in a not-yet-identified MDS 

limited partnership that would develop the working interest. PennEnergy 

rejected the transfer and initiated arbitration against Winfield. After being 

____________________________________________

* Retired Senior Judge assigned to the Superior Court.
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joined to the arbitration, MDS counterclaimed for tortious interference with 

contract but waited until the arbitration hearing to disclose that it was 

prosecuting its claim for not only itself but also 2017 Marcellus Shale 

Development-LP (MDS 2017), the limited partnership intended to receive the

working interest. While not disputing that a general partner may prosecute a 

claim on a limited partnership’s behalf, PennEnergy objected to MDS not 

disclosing that it was doing so until the arbitration. In his final award, the

arbitrator recognized that MDS was proceeding as general partner for MDS 

2017 and awarded it $2.4 million in damages after finding that PennEnergy 

tortiously interfered with the putative transfer between Winfield and MDS. 

PennEnergy petitioned to vacate the award of damages and made several 

arguments based on MDS prosecuting the claim in a representative capacity. 

For its part, MDS countered that it could litigate the claim because it was MDS 

2017’s managing general partner and PennEnergy knew about the limited 

partnership’s role before the hearing. Finding this argument persuasive, the 

trial court confirmed the award.

On appeal, PennEnergy asserts several arguments for why the 

arbitrator’s award should have been vacated. Among others, PennEnergy 

contends that the award was fundamentally unjust and beyond the arbitrator’s 

power because: (1) MDS never disclosed that it was acting in a fiduciary 

capacity for the real party in interest that suffered damages, MDA 2017; (2) 

there was no arbitration agreement between PennEnergy and MDS 2017; and 
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(3) MDS 2017 was not an intended beneficiary of Winfield and MDS’s

agreement. For the reasons set forth in this Opinion, we reverse and vacate 

the trial court’s order confirming the arbitration award of damages.

I.

A.

In February 2012, PennEnergy entered into an asset purchase and sale 

agreement (APSA) to buy gas leaseholds and rights from Snyder Associated 

Companies and several of its affiliates, including Winfield. A few months later, 

as required by the APSA, PennEnergy and Winfield entered into a joint 

development agreement (JDA) to develop the leases within an 88,000-acre 

area of mutual interest (AMI) in Butler and Armstrong Counties. Under the 

agreement, PennEnergy owned about 80 percent of the working interest

within the AMI while Winfield’s portion was almost 20 percent.

The dispute arose a few years later when Winfield notified PennEnergy that 

it intended to transfer its working interest in three contract areas within the 

AMI to MDS. In November 2017, Winfield notified PennEnergy of the potential 

transfer through a draft “Notice of Joinder” naming MDS as the transferee of 

its interest in the JDA. Under § 6.2 of the JDA, Winfield had a right to transfer

all or part of its interest provided that:

A Transfer by any Party that is permitted pursuant to Section 6.1 

shall not be effective unless each other Party has received a 

document executed by both the transferring Party (or its legal 

representative) and the permitted transferee that includes: ... (b) 

such permitted transferee’s express agreement in writing to be 

bound by all of the terms and conditions of this [JDA] and the 
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Applicable Operating Agreements; ... and (d) representations and 

warranties from both the transferring Party and the permitted 

transferee that the Transfer was made in accordance with 

applicable Law (including state and federal securities Law) and the 

terms and conditions of this [JDA] and any applicable Associated 

Agreements.

JDA, 7/12/12, ¶ 6.2 (R. 86a-87a) (emphasis added).

PennEnergy did not consent to the joinder because MDS would not agree 

to be bound by all the provisions in the JDA. Their disagreement centered on 

whether MDS would be subject to the JDA for the entire AMI or only the 

geographic area involved in the transfer.

Notwithstanding PennEnergy’s refusal to consent to joinder, on February 

5, 2018, Winfield and MDS executed a purchase and sale agreement (PSA). 

The PSA states that the Seller (Winfield) agreed to sell, assign and transfer 

9.93 percent of Winfield’s working interest from its participating interest share

from the JDA. MDS would in turn assign the working interest to a not-yetidentified limited partnership of which MDS would be the managing general 

partner. As compensation for the transfer, Winfield would receive units in that 

unidentified limited partnership, later denominated as MDS 2017.1 The PSA 

also provided that “[o]nly the parties hereto, their respective successors and 

permitted assigned are intended to benefit from this Agreement and no other 

____________________________________________

1 We note that after reviewing the record, we find no evidence that MDS ever 

assigned the interest it received in the PSA to MDS 2017.
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Party, including the Limited Partnership, is intended to be a beneficiary 

hereof.”

Concurrent with their agreement, Winfield and MDS sent PennEnergy 

notice of joinder. As laid out in the notice, MDS agreed only to be bound by 

the JDA “specifically as it relates to and limited to” the three contract areas

within the AMI that it was receiving. Upon receiving the notice, PennEnergy 

rejected it and challenged the validity of Winfield’s transfer of the 9.93 percent

interest to MDS because it refused to consent to all the provisions of the JDA.

When PennEnergy later that month issued a capital call for the three 

contract areas, Winfield tendered PennEnergy nearly $6.3 million (10 percent 

of the total working interest) while MDS tendered almost $6 million (9.93 

percent of the total working interest). After accepting Winfield’s tender but 

rejecting MDS’s, PennEnergy informed Winfield that it was in default.

B.

With the dispute now clear, on March 9, 2018, MDS filed a two-count 

complaint against PennEnergy for tortious interference with contract and 

declaratory judgment in the Court of Common Pleas of Armstrong County.2 

____________________________________________

2 That case was captioned MDS ENERGY DEVELOPMENT, LLC, Plaintiff v. 

PENNENERGY RESOURCES, LLC, v. WINFIELD RESOURCES, LLS, Interested 

Party. In its complaint, MDS explained that Winfield was an interested party

under Section 7540 of the Declaratory Judgments Act, which provides that “all 

persons shall be made parties who have or claim any interest which would be 

affected by the declaration, and no declaration shall prejudice the rights of 

persons not parties to the proceeding.” See Complaint, 3/9/18, ¶ 15 (R. 
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Ten days later, on March 19, 2018, PennEnergy submitted a demand for 

arbitration seeking declaratory relief against Winfield with the American 

Arbitration Association (AAA).

In response to the demand, MDS and Winfield both filed motions in 

Armstrong County to stay arbitration. PennEnergy, however, pointed out that 

both the JDA and APSA contain broad arbitration provisions requiring all 

contractual disputes be arbitrated.

3

 Agreeing with PennEnergy, the Court of 

Common Pleas of Armstrong County denied the motions on April 4, 2018, 

finding that “an applicable agreement to arbitrate exists and governs the 

dispute,” and that there was “nothing in the record indicating that all parties 

cannot participate in the already-initiated arbitration proceedings, as [MDS’s] 

claims are based upon, and derivative of, the rights and obligations of the 

applicable agreement between [PennEnergy] and [Winfield.]”4

Accordingly, a few weeks later, on April 23, 2018, PennEnergy joined 

MDS as a respondent to its pending arbitration. After being joined, MDS filed 

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433a). MDS brought another action against PennEnergy in the Court of 

Common Pleas of Butler County, No. 2020-10863, on behalf of another 

limited partnership, this time with the caption reading: MDS ENERGY 

DEVELOPMENT, LLC, as Managing General Partner for MDS 2018 - MARCELLUS 

SHALE DEVELOPMENT, LP, Plaintiff, v. PENNENERGY RESOURCES, LLC, 

Defendant. (R. 3802).

3 While not a party to the JDA, MDS was a signatory of the APSA.

4 See Order, 4/18/2018, at 1 (R. 466a).
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its counterclaim in the arbitration. However, rather than seek both monetary 

damages for tortious interference and declaratory relief like it did in its state 

court action, MDS sought only declaratory relief that PennEnergy’s 

interpretation of the JDA’s transfer provisions were incorrect.

C.

In October 2018, MDS and Winfield rescinded their PSA. A month later, 

MDS moved to dismiss itself from the arbitration, arguing that rescission of 

the agreement had rendered moot any determination about its propriety. In 

so doing, MDS contended that it believed that its tortious interference claim

remained pending in Armstrong County and was not referred to arbitration. 

If the arbitrator disagreed, however, MDS requested that it be granted leave 

to amend its counterclaim so that it could add its tortious interference claim. 

As will become relevant when addressing whether there was an arbitration 

agreement, PennEnergy opposed MDS’s attempt to get out of the arbitration

and reasserted the arguments it raised in opposition to MDS’s and Winfield’s 

motions to stay arbitration. On December 18, 2018, the arbitrator issued a 

procedural order denying MDS’s motion to dismiss but granting it leave to 

amend its pleadings “so that the arbitrator can hear and decide its tortious 

interference claims and other claims urged against PennEnergy in the 

Pennsylvania state court.”5

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5 See Arbitrator’s Procedural Order Five, 12/18/18, at 2 (R. 3950a).
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In accordance with the arbitrator’s order, on January 11, 2019, MDS 

amended its counterclaim to include the tortious interference claim against 

PennEnergy. In its claim, MDS alleged that PennEnergy improperly rejected 

its transfer with Winfield, causing it to suffer damages “in the tens of millions 

of dollars” because it missed out on tax deductions attributable to MDS’s 

intangible drilling costs for the wells, lost opportunity costs and lost profits.6

D.

The four-day arbitration hearing was held in Pittsburgh in February 

2019. At the hearing, MDS’s principal, Michael Snyder, testified that MDS was 

suing on not only its own behalf but also MDS 2017 as its “representative” and 

“fiduciary.” When asked why this representative status was not disclosed in 

MDS’s claim, Snyder testified that he did not think it needed to be because 

MDS is a fiduciary for the limited partnership.

MDS also submitted its expert report of the damages that it was seeking 

for its tortious interference claim. In his report, MDS’s expert described how 

Winfield, rather than receive cash, would have received units in MDS 2017 in 

consideration of transferring part of its working interest to MDS. In assessing 

the economic benefit that MDS would have received from the working interest, 

the expert relied on the financial model used by MDS in its communications 

with its limited partnership investors. In so doing, however, the expert 

____________________________________________

6 See MDS’s Amended Counterclaims, 1/11/19, at 14 (R. 225a).
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clarified that he had not been asked to determine the amount of the economic 

benefit that should have been allocated between MDS, as the general partner, 

and MDS 2017, as the limited partnership. In total, the expert calculated a 

potential economic benefit between $9 million to $14 million that MDS would 

have received “but for” PennEnergy’s rejection of the transfer.

In its post-hearing brief, PennEnergy argued that MDS lacked standing 

to recover for MDS 2017 since none of MDS’s pleadings asserted that it was 

proceeding in a representative capacity for the limited partnership’s benefit. 

While it did not dispute that MDS could bring a representative action as the 

managing general partner of MDS 2017, PennEnergy contended that MDS 

needed to include the limited partnership in the caption of its claim and 

disclose its representative status and the damages that it was seeking.

On May 14, 2019, the arbitrator issued his final award finding that 

PennEnergy wrongfully withheld approval of joinder in the JDA between 

Winfield and MDS. He did so because he did not accept PennEnergy’s 

argument that § 6.2 of the JDA requires that the transferee (MDS) had to give 

its express agreement in writing to be bound by “all” of the terms of the JDA.7 

____________________________________________

7 The arbitrator found that §6.2 does not preclude all transfers without consent 

to all provisions of the JDA because “§ 6.1 grants Winfield the right to transfer 

all or any portion of its rights or obligations under this Agreement (the JDA), 

any of such Party’s Participating Interest Share, the Joint Interests or any 

other rights or interests obtained or acquired hereunder. Clearly, under the 

plain and unambiguous language, Winfield could transfer all or any portion of 

its rights or obligations under the JDA. To interpret the intent of the parties 
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Consistent with that finding, the arbitrator further found that PennEnergy 

tortiously interfered with the PSA. While finding that Winfield itself suffered 

no damages, the arbitrator awarded MDS $2.4 million in damages after 

considering the range of damages identified in the expert reports. Relevant 

here, while not addressing PennEnergy’s arguments about MDS appearing in 

a representative capacity for MDS 2017, the arbitrator identified MDS as the

general partner for MDS 2017, the entity who had suffered damages.8

E.

On June 13, 2019, PennEnergy petitioned to vacate the arbitration 

award in the trial court, contesting only the arbitrator’s award in favor of MDS 

for PennEnergy’s tortious interference.

9

 PennEnergy advanced several 

grounds for vacating the award, almost all of which related to MDS’s 

____________________________________________

as [PennEnergy] argues would create any inconsistency between the language 

of § 6.1 and § 6.2(b) as well as with the language found in the rest of the 

contract an arbitrator is not to construe language in one part of the contract 

to nullify or undermine another part of the contract.” Final Award, 5/14/19, 

at 14 (R. 45a). Because “[t]he arbitrators are the final judges of both law and 

fact, their award [is] not ... subject to reversal for a mistake of either.” Cargill

v. Northwestern Nat. Ins. Co. of Milwaukee, Wis., 462 A.2d 833, 835

(Pa. Super. 1983) (citations omitted).

8 See Final Award, 5/14/19, at 2 (R. 33a).

9 MDS successfully moved to strike PennEnergy’s petition because PennEnergy 

failed to attach a notice of presentment. PennEnergy appealed from the trial 

court’s order but also filed and served an amended petition complying with 

the trial court’s order. As a result, this Court later quashed PennEnergy’s 

appeal. See PennEnergy Resources, LLC v. Winfield Resources, LLC,

1091 WDA 2019 (Pa. Super. June 26, 2020) (unpublished memorandum).
J-A06039-23

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prosecution of the tortious interference claim in a representative capacity on 

behalf of MDS 2017. PennEnergy alleged that the arbitrator exceeded his 

powers by awarding MDS damages that were suffered by a third party, MDS 

2017; that the arbitrator could not decide an issue between PennEnergy and 

MDS 2017 that was not part of any arbitration agreement; and that MDS 2017, 

as the real party in interest, needed to litigate its own claim.

10 In making 

these claims, PennEnergy did not dispute that MDS could litigate on MDS 

2017’s behalf as its managing general partnership, but if it wished to so, it 

needed to disclose that in the caption of its claim.11

PennEnergy also asserted that the arbitrator lacked jurisdiction to award 

any damages suffered by MDS 2017 because MDS and Winfield’s February 

2018 PSA—which is the agreement that PennEnergy was found to have 

interfered with—expressly disclaimed the limited partnership as a party or 

____________________________________________

10 Section 8620 of Pennsylvania’s Uniform Limited Partnership Act provides, 

in relevant part, that “(a) Separate entity.--A limited partnership is an entity 

distinct from its partners. . . . (d) Powers.--A limited partnership has the 

capacity to sue and be sued in its own name and the power to do all things 

necessary or convenient to carry on its activities and affairs.” 15 Pa.C.S. 

§ 8620.

11 In support for this contention, PennEnergy relied on Pennsylvania Rule of 

Civil Procedure 2002, which provides, in relevant part, that “all actions shall 

be prosecuted by and in the name of the real party in interest, without 

distinction between contracts under seal and parol contracts.” Pa.R.Civ.P. 

2002(a). Under the rule, when a plaintiff is “acting in a fiduciary or 

representative capacity,” the plaintiff must disclose that capacity “in the 

caption and in the plaintiff’s initial pleading[.]” Pa.R.Civ.P. 2002(b)(1).
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intended beneficiary to the agreement.

12

 According to PennEnergy, to have 

standing to recover for tortious interference with contract, a plaintiff must be 

a party to the contract with which the defendant interfered or, in limited 

circumstances, the intended third-party beneficiary of that contract. 

Consequently, PennEnergy argued, the arbitrator exceeded his powers in 

awarding damages to MDS 2017 for a claim that it could not legally pursue.

Responding to these arguments, MDS asserted that PennEnergy 

“willfully ignores Pennsylvania precedent establishing that MDS, as managing 

general partner of MDS 2017, had standing to arbitrate its claim for tortious 

contractual interference against [PennEnergy] on behalf of MDS 2017.”13 To 

that end, MDS disavowed PennEnergy’s reliance on the Rules of Civil 

Procedure for arguing that it had to include its representative capacity in the 

caption of its state court civil action or arbitration counterclaim since 

arbitration proceedings are not governed by the Rules. In any event, MDS 

continued, PennEnergy was aware several months before arbitration that MDS 

2017 would ultimately receive the working interest.

____________________________________________

12 See PennEnergy’s Omnibus Brief at 40-41 (R. 1619a-1620a).

13 See MDS’s Brief in Opposition to PennEnergy’s Petition to Vacate Arbitration 

Award, 11/16/20, at 4 (R. 804a); see also at 16 (R. 816).
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F.

On April 8, 2022, the trial court denied PennEnergy’s petition and 

confirmed the arbitrator’s award but acknowledged that the arbitrator’s award 

bestowed $2.4 million in damages “to MDS 2017.” Trial Court Opinion (TCO), 

4/8/22, at 1. In its supporting opinion, the trial court first addressed 

PennEnergy’s real party in interest claim, that is, whether MDS could represent

MDS 2017 in a representative capacity as its managing general partner. 

Finding that MDS could so, the trial court explained:

In this case, MDS 2017-LP would be the real party in 

interest. However, under Pennsylvania law, general partners of 

limited partnerships may sue on behalf of limited partnerships. 

“The rules establish that a ‘partner’ is an individual who bears 

unlimited liability for the partnership obligations and, as such, is 

authorized to prosecute and defend actions arising from the 

partnership’s activities.” In re Lawrence County Tax Claim 

Bureau, 998 A.2d 675, 680 (Pa. Cmwlth. 2010).[14] Further, 

“[p]artnerships are not recognized as separate entities like a 

corporation is; a limited partnership can only act through its 

designated agent (the general partner), and the general partner 

can be liable for the obligations of the limited partnership.” Id. at 

679. Therefore, MDS may litigate on behalf of MDS 2017-LP as 

the general partner of the limited partnership.

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14 In Lawrence County, the Commonwealth Court held that a general partner 

in a partnership had authority to represent the partnership pro se to stop a 

judicial sale of partnership property because the general partner could have 

been held liable for the rights and obligations of the partnership in his 

individual capacity. Lawrence Cty., 998 A.2d at 680.
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TCO at 12 (case citation altered).

15

 Having so found, the trial court also 

agreed with MDS that it need not disclose its representative status in the 

caption of its claim because the Rules of Civil Procedure do not apply to 

arbitration proceedings. Id. at 12-13.

The trial court next addressed PennEnergy’s argument that MDS failed

to disclose that it was acting in a representative capacity for MDS 2017. On 

this point, the trial court found that MDS became aware of MDS 2017 at the 

very least before the arbitration hearing because it sought discovery into 

financial information about the limited partnership. Id. at 5, n.2. That being 

the case, the trial court found that MDS’s failure to disclose that it was 

____________________________________________

15 Section 8642 of Pennsylvania Uniform Limited Partnership Act of 2016

provides:

(a) General rule.--Each general partner is an agent of the limited 

partnership for the purposes of its activities and affairs. An act of 

a general partner, including the signing of a document in record 

form in the partnership’s name, for apparently carrying on in the 

ordinary course the partnership’s activities and affairs, or 

activities and affairs of the kind carried on by the partnership, 

binds the partnership, unless the general partner did not have 

authority to act for the partnership in the particular matter and 

the person with which the general partner was dealing knew or 

had notice that the general partner lacked authority.

(b) Act outside of ordinary course.--An act of a general partner 

which is not apparently for carrying on in the ordinary course the

limited partnership’s activities and affairs, or activities and affairs 

of the kind carried on by the partnership, binds the partnership 

only if the partner had actual authority to take the act.

15 Pa.C.S. § 8642 (emphasis added).
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proceeding in a representative capacity did not rise to the level of that needed 

to vacate an arbitrator’s award.

As noted above, the Court has determined that MDS may litigate 

on behalf of MDS 2017, acting as its general partner. Also noted 

above, PennEnergy knew of MDS 2017 before the arbitration 

hearing began; notably, when it attempted to conduct discovery 

into the “unnamed limited partnership.” Frankly, [PennEnergy’s] 

argument fails to reach the “unconscionable” and “unjust” 

standard. MDS is legally entitled to litigate on behalf of MDS 2017 

and the fact that MDS 2017 was “not a named party” on the 

pleadings does not rise to the level of “unjust” or “unconscionable” 

that is required to vacate an arbitration award.

Id. at 16 (cleaned up).

The trial court likewise rejected PennEnergy’s argument that the 

arbitrator exceeded his powers because he could not award damages for any 

loss suffered by MDS 2017 since it was not a third-party beneficiary under the 

PSA. Id. at 17-18. On this point, the trial court found that MDS 2017 was an 

assignee rather than a third-party beneficiary of the PSA because the 

agreement unambiguously stated that MDS “shall assign” the acquired 

interests to an MDS partnership developing the working interest. Id. at 18. 

As a result, because the assignee stands in the shoes of the assignor, then 

MDS 2017, as the intended assignee of the MDS’s working interest, could sue

a third party for tortious interference of a contract. Id. at 18-19. Thus, even 

though MDS 2017 was not named in the PSA, MDS as its general partner could 

sue on the limited partnership’s behalf and the arbitrator did not exceed his 

powers. Id. at 19.
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Finally, the trial court found that PennEnergy was judicially estopped 

from arguing that the arbitrator exceeded his authority because there was no 

agreement to arbitrate between itself and MDS 2017. Id. at 20. In so finding, 

the trial court noted that PennEnergy successfully opposed MDS’s motion to 

dismiss itself from the arbitration since the arbitrator agreed with its position 

and kept MDS in the arbitration. Id.

After confirmation of the arbitrator’s award, PennEnergy timely filed this 

appeal to argue the trial court erred in dismissing its petition to vacate the 

arbitrator’s award.

II.

In general, judicial review of arbitration awards is “extremely 

deferential.” Metromedia Energy, Inc. v. Enserch Energy Servs., Inc., 

409 F.3d 574, 578 (3d Cir. 2005). Rather, mindful of the strong policy in 

favor of commercial arbitration, we begin with the presumption that the award 

is enforceable. We do not entertain claims that an arbitrator has made factual 

or legal errors. McKenna v. Sosso, 745 A.2d 1, 4-5 (Pa. Super. 1999). An 

arbitrator is also not required to provide a rationale for his or her decision or 

how it arrived at monetary damages. When parties agree to resolve their 

disputes before an arbitrator without involving the courts, the courts generally 

will enforce the bargains implicit in such agreements by enforcing arbitration 

awards whether there are clear errors of law or fact, and it is hard to discern
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how the arbitrator arrived at the amount of money damages awarded. Hall 

St. Assocs., LLC v. Mattel, Inc., 552 U.S. 576, 584 (2008).

This does not mean, though, that an arbitration award is not subject to 

any judicial review. Section 7314(a)(1) of the Pennsylvania Uniform 

Arbitration Act (PUAA) states that an award can be vacated:16

(1) On application of a party, the court shall vacate an award 

where:

(i) the court would vacate the award under section 7341 

(relating to common law arbitration) if this subchapter were not 

applicable;

(ii) there was evident partiality by an arbitrator appointed 

as a neutral of corruption or misconduct in any of the arbitrators 

prejudicing the rights of any party;

(iii) the arbitrators exceeded their powers;

(iv) the arbitrators refused to postpone the hearing upon 

good cause being shown therefor or refused to hear evidence 

material to the controversy or otherwise so conducted the 

hearing, contrary to the provisions of section 7307 (relating to 

hearing before arbitrators), as to prejudice substantially the rights 

of a party; or

(v) there was no agreement to arbitrate and the issue of the 

existence of an agreement to arbitrate was not adversely 

determined in proceedings under section 7304 (relating to court 

proceedings to compel or stay arbitration) and the applicant-party 

raised the issue of the existence of an agreement to arbitrate at 

the hearing.

____________________________________________

16 While there was disagreement in the trial court, the parties appear to agree 

that PUAA provisions regarding vacating an arbitration award apply.
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42 Pa.C.S. § 7314(a)(1).17

As can been seen, Section 7314(a)(1)(i) allows a statutory arbitration 

award to be vacated for the same reasons that a common law arbitration 

award can be vacated, which is when “it is clearly shown that a party was 

denied a hearing or that ... other irregularity caused the rendition of an unjust, 

inequitable or unconscionable award.” See 42 Pa.C.S. §§ 7314(a)(1)(i) and 

7341.18

____________________________________________

17 Our standard of review of the denial of a motion to vacate an arbitrator’s 

award is well-settled: “we will reverse a trial court’s decision regarding 

whether to vacate an arbitration award only for an abuse of discretion or error 

of law.” Joseph v. Advest, Inc., 906 A.2d 1205, 1208 (Pa. Super. 2006)

(citing Conner v. Daimler Chrysler Corp., 820 A.2d 1266, 1269 (Pa. Super.

2003)). In other words, on a motion to confirm or vacate an arbitration award, 

we review the trial court’s legal conclusions de novo and its factual findings 

for clear error. The threshold question of whether agreement to arbitrate 

exists is one which the lower court, and reviewing courts, has the authority to 

adjudicate. Patton v. Hanover Ins. Co., 612 A.2d 517, 520 (Pa. Super.

1992) (citation omitted).

18 “Irregularity refers to the process employed in reaching the result of the 

arbitration, not the result itself.” Gargano v. Terminix Int'l Co., L.P., 748 

A.2d 188, 193 (Pa. Super. 2001). Moreover, the irregularity must “import [] 

‘such bad faith, ignorance of the law [,] and indifference to the justice of the 

result’ as would cause a court to vacate an arbitration award.” F.J. Busse 

Co. v. Zipporah, L.P., 879 A.2d 809, 811 (Pa. Super. 2005) (citation 

omitted). “Notice and the opportunity to be heard are essential elements of 

a fair hearing. Litigants require not simply notice that a hearing is to occur, 

but also notice of the issues to be litigated. A principal function of pleadings, 

even in their shortened, modern form, is to focus the litigants’ attention on 

the issues so that they may marshal their evidence and prepare their 

arguments.” Mellon v. Travelers Inc. Co., 406 A.2d 759, 762 (Pa. Super.

1979).
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A.

On appeal, PennEnergy argues, among other things, that the arbitrator 

was without jurisdiction and exceeded his authority by awarding damages 

incurred by MDS 2017 because it was not a party to the arbitration and did 

not seek to be joined in the arbitration. PennEnergy also argues that its due 

process rights were violated because, until the arbitration hearing, MDS never 

disclosed that it was acting on behalf and seeking damages for MDS 2017. 

For its part, MDS contends that as the managing general partner of MDS 2017,

it had the right to litigate on the limited partnership’s behalf, and that 

PennEnergy knew before the hearing that MDS 2017 was the tax vehicle to 

which MDS would convey its interest. MDS also asserts that PennEnergy is 

judicially estopped from arguing that there was no arbitration agreement

because it opposed MDS’s motion to dismiss itself from the arbitration.

Under the PUAA, the arbitrator’s award can be vacated if an arbitrator 

“exceed[s] [his] powers” or determines issues when “there was no agreement 

to arbitrate,” 42 Pa.C.S. §7314(a)(1)(iii) & (v), or when he awards damages 

for injuries sustained by a third party not subject to an arbitration agreement 

or joined as a party to the arbitration. See, e.g., Civan v. Windermere 

Farms, Inc., 180 A.3d 489, 499 (Pa. Super. Ct. 2018) (“the arbitration panel 

exceeded its power by determining that the panel had jurisdiction over the 

contractor, the contractor never agreed to arbitrate disputes arising out of the 
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agreement of sale, and the buyers failed to obtain an order compelling the 

contractor to arbitrate.”).

Moreover, an arbitrator’s decision can be vacated when an arbitrator 

makes an award for claims that were never raised by or against parties that 

are not named in the arbitration. See, e.g., Mellon, 406 A.2d at 762; Alaia 

v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 928 A.2d 273, 277 (Pa. 

Super. 2007). See also Eljer Mfg. v. Kowin Dev. Corp., 14 F.3d 1250, 

1256 (7th Cir. 1994) (“Though the arbitration clause is broadly worded, it 

cannot be construed to delegate to the arbitrator the power to arbitrate 

disputes between [plaintiff] and a third party.”); Nationwide Mut. Ins. Co. 

v. Home Ins. Co., 330 F.3d 843, 848 (6th Cir. 2003) (holding arbitration 

panel exceeds its authority when it mandates payment to a non-party).

Central to all PennEnergy’s issues is whether MDS 2017 was a party to 

the litigation because MDS was a party and it served as the managing general 

partner of MDS 2017. MDS first became involved in the litigation when it 

brought its action in the Court of Common Pleas of Armstrong County against 

PennEnergy for tortious interference based on wrongfully withholding approval 

of the notice of its joinder in the PSA sought by Winfield. As noted, the Court 

of Common Pleas of Armstrong County ordered that the case be referred to 

arbitration because MDS’s rights were “based upon, and derivative of, the 

rights and obligations” of Winfield’s under the JDA. Unlike the Butler County 

case note above, see infra n.2, MDS made no mention in its Armstrong 
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County action that it was also seeking damages on MDS 2017’s behalf as its 

managing general partner. Because MDS did not do so, PennEnergy joined 

only MDS as a party to the arbitration after the Court of Common Pleas of 

Armstrong County referred its action to the pending arbitration. After 

PennEnergy did so, MDS did not respond to the joinder that it was also acting 

as the general partner of MDS 2017.

As discussed, MDS filed its counterclaim after being joined but sought 

only declaratory relief, as it believed that its tortious interference claim was 

not referred to arbitration. It was not until its motion to dismiss was denied 

that it counterclaimed for tortious interference only a month before the 

arbitration. Again, when it finally filed its counterclaim for tortious 

interference in the arbitration, MDS made no mention of MDS 2017 or that it 

was pursing the claim in a representative capacity on the limited partnership’s 

behalf. By failing to so, PennEnergy claims, it did not become aware that MDS 

was seeking damages until the time of the arbitration hearing.

Notwithstanding that it was never named or mentioned in the pleadings 

before the Court of Common Pleas of Armstrong County or in MDS’s

counterclaim, or that MDS was bringing this action as the general partner, the 

arbitrator awarded damages to MDS as the general partner of MDS 2017. The 

arbitrator seems to have accepted Snyder’s argument that MDS did not have

to disclose that it was not only seeking damages on its own behalf but also on 

behalf of MDS 2017 as its “representative” and “fiduciary.” The trial court also 
J-A06039-23

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accepted that MDS 2017 does not have to be named because general partners 

can bring actions on behalf of the limited partnership, and MDS was MDS

2017’s managing general partner making it a party to the action.

While general partners can bring an action on behalf of a limited 

partnership, that does not mean that any time a party sues that it is also suing 

on behalf of any limited partnership that it happens to be a general partner. 

A limited partnership “is an entity distinct from its partner” and has the 

“capacity to sue and be sued in its own name.” 15 Pa.C.S. § 8620. Because 

the limited partnership is a distinct entity, for a general partner to bring an 

action on behalf of the limited partnership, it is required to do so in the name 

of the limited partnership. See Pa.R.Civ.P. 2002(b)(1) (“A plaintiff may sue 

in his or her own name without joining as plaintiff or use-plaintiff any person 

beneficially interested when such plaintiff ... is acting in a fiduciary or 

representative capacity, which capacity is disclosed in the caption and in the 

plaintiff's initial pleading.”). A party defending the claim should be on notice 

who is seeking damages.

Notice and the opportunity to be heard are essential elements of a fair 

hearing. As the trial court noted, under Pennsylvania Rules of Civil Procedure,

requiring the party to be named in the caption does not apply to arbitration 

proceedings. What those Rules ensure, however, is that a party’s due process 

rights are protected by giving that party notice of the issues so that they may 

marshal their evidence and prepare their arguments. See Mellon v. 
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Travelers Inc. Co., 406 A.2d 759, 762 (Pa. Super. 1979).19 For similar 

reasons, under 42 Pa.C.S. §7314(a)(1), courts may vacate an award when a 

party’s due process rights are violated or when a hearing is not fair because 

a party is deprived of knowing who the party is for which damages are being 

sought.

In this case, no one is contending that MDS 2017 brought the action in 

its own name. What is being contended by MDS is that it brought this action 

not only on its behalf but as general partner of MDS 2017, even if it did not 

disclose that that is what it is doing. However, ignoring whether MDS 2017 

could be a party to the arbitration even if notice were given, PennEnergy did 

not receive the requisite notice that MDS was suing on behalf of MDS 2017 or 

that MDS was seeking damages on MDS 2017’s behalf until the arbitration 

began and to which it objected. Basic due process demands that notice be 

given as to who is the party bringing the action and on whose behalf and what 

damages are being sought. In other words, who has “skin in the game.”

Contrary to Snyder’s testimony that it did not need to disclose that MDS 

was not only seeking damages on its own behalf but also on behalf of MDS 

2017 as its “representative” and “fiduciary,” when an entity that is a general 

____________________________________________

19 We also note that Rule R-4(e) of the AAA Commercial Arbitration Rules 

provides that “Information to be included with any arbitration filing includes: 

(i). the name of each party; ... [and] (iv). a statement setting forth the nature 

of the claim including the relief sought and the amount involved[.]” AAA 

Commercial Rules R-4(e)(i) & (iv).
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partner of a limited partnership is part of an arbitration does not mean that 

the limited partnership automatically becomes a party to litigation.20 Because 

PennEnergy did not receive direct notice that MDS was acting as general 

partner for MDS 2017 in the arbitration, the arbitration proceeding violated 

PennEnergy’s due process rights to a fair hearing and, likewise, the arbitrator 

lacked jurisdiction to hear the matter and exceeded his authority in awarding 

damages to MDS 2017 because it was not a party to the action.

B.

That does not end the matter because, even if all that is true, MDS 

contends that PennEnergy was aware or should have known that it was 

bringing the action in a representative capacity on behalf of MDS 2017. To 

begin, we note that such notice does not satisfy due process because there is 

an affirmative duty on the part of a party seeking to hold another party for 

____________________________________________

20 Yet this is what the trial court seems to hold in rejecting PennEnergy’s 

complaints about MDS not disclosing its representative status. In support, the 

trial court cited our Commonwealth Court’s decision in Lawrence County for 

the proposition that a managing general partner and its limited partnership 

can be treated interchangeably. As noted above, see infra n.14, in Lawrence 

County, the Commonwealth Court merely allowed an individual general 

partner of a limited partnership can personally appear and represent the 

partnership pro se in legal actions. Lawrence Cty., 998 A.2d at 680. As the 

Commonwealth Court later clarified, Lawrence County did not hold that a 

limited partnership is “legally interchangeable” with its individual partners. 

See Jamestown Condominium v. Sofavoy, 2019 WL 2401318, * 2 (Pa. 

Cmwlth. May 3, 2019) (unpublished memorandum).
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damages, even under the AAA Rules, to name that party and the claim it is 

asserting against that party before it makes it obligated to pay damages.

MDS’s position also benefits from its own failure to give direct notice 

that it was bringing the action as the general partner of MDS 2017. If MDS 

would have given such notice, then PennEnergy could have opposed MDS

2017’s participation because there was no agreement and MDS did not have 

any rights to recover any damages under the dispute being arbitrated. (See

Part III of this Opinion). In any event, there is nothing that establishes that 

PennEnergy indirectly knew that MDS was acting on behalf of MDS 2017 before 

the arbitration hearing.

First, MDS claims that “Michael Snyder made clear that the tortious 

interference claims were being litigated on behalf of both MDS and MDS 2017, 

with MDS, the managing general partner of the MDS 2017 limited partnership, 

acting as representative and fiduciary for MDS 2017. (R. 23a; R. 1468a;

(3038a; 3078-79a).” MDS’s Brief at 9. That argument is somewhat 

misleading. While Snyder did testify that he was suing on behalf of MDS 2017, 

he only made those statements in his testimony at the arbitration hearing 

where he testified that he did not think that he had to disclose that MDS was 

seeking damages on MDS 2017’s behalf. The other citations refer to his 
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deposition testimony that was taken after the arbitration hearing as part of

PennEnergy’s motion to vacate the arbitration award.

21

The only direct evidence that MDS can point to that PennEnergy had any 

notice that it was bringing this action as MDS’s general partner was in its prehearing brief it filed shortly before the hearing. In its pre-hearing brief, MDS 

asserted:

PennEnergy’s misconduct, having no discernible business purpose 

and seemingly undertaken out of spite for Winfield’s principal—

Michael Snyder’s father—and MDS, damaged MDS (both itself and 

as representative for [MDS 2017], on whose behalf MDS acquired 

the interests) in the term of millions of dollars.

MDS’s Pre-Hearing Brief at 2 (R. 1128a). Even though it never mentioned 

MDS 2017 in its amended counterclaim, MDS claimed that this one sentence 

among many shows that PennEnergy was put on notice that MDS brought the 

tortious interference claim on behalf of itself and as a representative for MDS

____________________________________________

21 The first citation, R. 23a, cites PennEnergy’s petition to vacate where it 

recounts that Snyder stated for the first time at the arbitration hearing that 

MDS was operating in a representative capacity. The citation at R. 1468a is 

from the arbitration hearing where he admitted that MDS’s counterclaim did 

not disclose that MDS was suing as a fiduciary and representative on behalf 

of MDS 2017, and stated that he did not think that MDS had to disclose its 

representative capacity. The citations, meanwhile, at R. 3038a and R. 3078-

79a, are from Snyder’s April 20, 2021 deposition taken in conjunction with 

PennEnergy’s petition to vacate. His testimony at R. 3038a merely states that 

MDS is the general partner of MDS 2017, that it has no officers or employees 

and that it was never mentioned in the pleadings. At R. 3078-79a, Snyder 

merely reiterates his testimony at the arbitration hearing that MDS was under 

no obligation to disclose its representative capacity before the arbitration 

hearing that it was also suing as MDS 2017.
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2017. Slipping a statement into a pre-hearing brief, however, does not amend 

the pleadings or put a party, presuming that even if it were read, on legal 

notice that a party is being added or the claim is being amended; it is the 

same as springing the issue at the arbitration hearing.

A pre-hearing brief addressing the party’s position cannot add new 

parties or advance new claims in the proceeding. Rather, formal notice is 

required. Arbitration rules are loose, but not that loose; otherwise, the rules 

themselves would violate due process. In any event, Penn Energy objected 

to inclusion of this claim at the hearing, the first opportunity that it had, that 

it did not have fair notice that MDS was bringing this action on behalf of MDS

2017.

Second, MDS claims that even if PennEnergy did not have direct notice, 

it knew or should have known that MDS was bringing this action because

depositions, pre-hearing briefs and expert damages reports made PennEnergy

aware of the damages that MDS was asserting tortious interference claims 

both for itself and as representative for MDS 2017. In support of this 

argument, MDS cites:

• A September 2018 deposition of Winfield’s principal, David 

Snyder, where PennEnergy’s counsel asked whether it was correct 

that “MDS Energy Development LLC would assign the interest it 

acquired from Winfield to this 2017 MDS limited partnership.” Mr. 

Snyder responded that it was. (R. 1125a).

• In September 2018 when PennEnergy deposed Michael

Snyder and questioned him at length about MDS’s role as the 

managing general partner of limited drilling partnerships. Mr. 
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Snyder explained how investors directly invested into the MDS 

limited partnership. (R. 1125-26a).

• A December 2018 pre-arbitration hearing brief where 

PennEnergy itself described the MDS claim as tortious interference 

with the agreement “by which MDS would acquire its share

and Winfield would become a unit-holder in an MOSaffiliated investment partnership.” (R. 1126-27a, emphasis 

in original).

• In a pre-hearing submission, PennEnergy asserted that MDS 

had “divulged that the transaction required a further transfer of the

Winfield Participating Interest Share to an MDS-related 

investment partnership, and Winfield would receive units in 

that partnership, but no cash.” (R. 1127a, emphasis supplied).

• MDS’s pre-hearing expert damages report clearly stated 

that, in place of cash, Winfield would receive units in MDS 2017 in 

consideration of the transfer of the 9.93 percent working interest 

from Winfield to MDS. (R. 1127a). The MDS expert did not 

allocate the economic benefits to derive from the working interest 

among MDS, MDS 2017 and other entities. (R. 1127-28a).

Again, indirect notice does not satisfy the due process requirement and 

a party’s obligation to give a party notice of who is seeking redress. In any 

event, none of those above actions would put PennEnergy on notice that MDS 

was bringing an action on behalf of MDS 2017. PennEnergy was not required 

to divine in what capacities MDS was acting when MDS did not say for whom 

it was acting. MDS also asserts that PennEnergy was aware of the damages 

that MDS asserted, both for itself and as representative for MDS 2017,

because it sought more discovery into the identities of the hundreds of 

investors in MDS 2017, (R. 1128a) which MDS opposed. Even when 

responding to PennEnergy’s request merely weeks before the arbitration 

hearing, MDS never stated that it was acting as the general partner for MDS 
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2017, which may have led to a different outcome on whether the discovery 

request was granted.22

C.

PennEnergy also contends that the trial court erred when it held that 

Penn Energy was “judicially estopped” from arguing that it had no arbitration 

agreement with MDS 2017. Judicial estoppel applies only when a party takes

an inconsistent position that a court relies on to resolve a disputed issue. See, 

e.g., Trowbridge v. Scranton Artificial Limb Co., 747 A.2d 862, 864 (Pa. 

2000) (requiring that a party assume an inconsistent position that was 

“successfully maintained”).23 As a result, the trial court never addressed 

____________________________________________

22 In the Butler County case referred to in footnote 2, MDS 2018 had 698 

general partners. Section 8646(a) of the Uniform Limited Partnership Act

provides: “General rule.--Each general partner has equal rights in the 

management and conduct of the limited partnership’s activities and affairs. 

Except as provided in this title, any matter relating to the activities and affairs 

of the partnership is decided exclusively by the general partner or, if there is 

more than one general partner, by a majority of the general partners.” 

15 Pa. C.S. § 8646(a) (emphasis added).

23 In re Adoption of S.A.J., 838 A.2d 616, Pa. 2003), our Supreme Court 

stated: “the purpose of judicial estoppel is to uphold the integrity of the courts 

by ‘preventing parties from abusing the judicial process by changing positions 

as the moment requires.’” Id. at 621 (quoting Trowbridge, 747 A.2d at 

865). In Tops Apparel Mfg. Co. v. Rothman, 244 A.2d 436 (Pa. 1968), our 

Supreme Court stated that “[a]dmissions ... contained in pleadings, 

stipulations, and the like are usually termed ‘judicial admissions’ and as such 

cannot be later contradicted by the party who made them.” Id. at 438 

(internal footnote omitted). In Tops, we noted our longstanding reliance on 

this principle and stated that “[w]hen a man alleges a fact in a court of justice, 

for his advantage, he shall not be allowed to contradict it afterwards. It is 

against good morals to permit such double dealing in the administration of 
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PennEnergy’s contention that it did not have an agreement to arbitrate MDS

2017’s claims.

The trial court invoked judicial estoppel solely based on a statement in 

PennEnergy’s brief in opposition to MDS’s November 28, 2018 motion to 

dismiss itself from the arbitration. In that brief, PennEnergy stated:

... Further, under Pennsylvania law, when a party, such as MDS, 

claims a right or a benefit under an agreement even though it is 

not a signatory to that agreement, it may nevertheless be 

compelled to arbitrate a dispute, particularly where the facts of 

the matter are “inexplicably intertwined,” with claims already 

subject to arbitration. ...

PennEnergy’s Brief in Opposition to MDS’s Motion to Dismiss, 12/12/18, at 9-

10 (R. 4663a-4664a).

The trial court took that statement to mean that when PennEnergy 

opposed MDS’s motion to dismiss itself from the arbitration, it was somehow 

also opposing MDS 2017’s dismissal from the action. As a result, the trial 

court concluded that it was judicially estopped from contending that it did not 

have an agreement to arbitrate with MDS 2017.

However, when PennEnergy filed its brief opposing MDS’s attempt to get 

____________________________________________

justice.” Id. at 438, n. 8 (citing Wills v. Kane, 2 Grant 60, 63 (Pa. 1853)).

“Federal courts have long applied this principle of estoppel where litigants play 

‘fast and loose’ with the courts by switching legal positions to suit their own 

ends.” Trowbridge, 747 A.2d at 865 (quoting Ligon v. Middletown Area 

School District, 136 Pa. Cmwlth. 566, 584 A.2d 376, 380 (1990)). We note, 

without taking a position, that it did not include briefs as one of the 

submissions for which judicial estoppel applied.
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out of the arbitration, PennEnergy did not know that MDS was also bringing 

the action on behalf of MDS 2017. As can be seen, the cited passage from 

PennEnergy’s 2018 opposition brief refers only to MDS and makes no mention 

of MDS 2017, which is unsurprising, since it did not yet know that MDS was 

litigating the tortious interference claim on behalf of MDS 2017.

Because it was unaware that MDS was bringing the action as general 

partner of MDS 2017, we do not see how that statement in PennEnergy’s brief 

opposing MDS’s motion to dismiss itself from the action contradicts its position 

now that MDS 2017 did not have an arbitration agreement with PennEnergy. 

Simply, judicial estoppel does not apply because PennEnergy took no position 

on MDS 2017’s participation because it did know that MDS was in the future 

going to allege that it was acting both for itself and as MDS 2017’s general 

partner in the arbitration proceeding. Newman Dev. Grp. of Pottstown, 

LLC v. Genuardi’s Fam. Mkt., Inc., 98 A.2d 645, 656 (Pa. Super. 2014) 

(rejecting application of judicial estoppel where no inconsistent position 

existed).

That then leaves the question whether the arbitrator’s award should be 

vacated because “there was no agreement to arbitrate” between PennEnergy 

and MDS 2017. See 42 Pa.C.S. § 7314(a)(5).

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. “The scope of arbitration 

is determined by the intention of the parties as ascertained in 

accordance with the rules governing contracts generally. These 

are questions of law and our review is plenary.”
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Arbitration is a matter of contract, and parties to a contract cannot 

be compelled to arbitrate a given issue absent an agreement 

between them to arbitrate that issue. Even though it is now the 

policy of the law to favor settlement of disputes by arbitration and 

to promote the swift and orderly disposition of claims, arbitration 

agreements are to be strictly construed and such agreements 

should not be extended by implication.

Elwyn v. DeLuca, 48 A.3d 457, 461 (Pa. Super. 2012) (citations omitted).

To begin with, there is no dispute that MDS could arbitrate its 

contractual claim against it because both parties were signatories of the APSA, 

which, as noted, contained a broad arbitration clause. Likewise, there can 

also be no dispute that PennEnergy and MDS 2017—which is a distinct entity 

from its partners and has the capacity to sue and be sued in its own name—

do not have an arbitration agreement. Indeed, if MDS 2017 sought to pursue

a tortious interference claim against PennEnergy in its own name, it would not 

be able to pursue that claim through arbitration proceedings. We are not 

aware, however, of any authority for the proposition that MDS seeks to 

advance, namely, that a general partner can arbitrate a contractual claim 

against another party in a representative capacity for a limited partnership 

even though that limited partnership and the other party do not have an 

arbitration agreement.

In the absence of such authority, we are constrained to apply our 

established precedent that arbitration agreements should not be extended by 

implication, which, in this case, means that PennEnergy and MDS’s arbitration 

agreement in the 2012 APSA cannot be extended as providing for future 
J-A06039-23

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representative actions by one party for the benefit of an as-yet-created limited 

partnership. If we were to hold the opposite, then a general partnership could

always secure an arbitral forum for a limited partnership’s claims even if that 

limited partnership did not have an arbitration agreement with the party from 

which it sought recovery. Again, we hold that the trial court erred in not 

vacating the arbitrator’s award because “there was no agreement to arbitrate” 

between PennEnergy and the real party in interest, MDS 2017.

D.

Accordingly, to summarize thus far, the arbitrator’s award must be 

vacated under Section 7314(a)(1) of the PUAA because the proceeding was 

“irregular” since PennEnergy did not receive notice that MDS was bringing this 

action as MDS 2017’s general partner; there was no agreement to submit to 

arbitration any claims by MDS 2017; and the arbitrator exceeded his authority 

by addressing a claim over which he had no jurisdiction to arbitrate.

III.

Even assuming that requisite notice was given by MDS that it was also

bringing the tortious interference claim as the general partner of MDS 2017, 

the award must still be vacated because the arbitrator did not have jurisdiction 

and/or exceeded his authority by awarding damages incurred by MDS 2017. 

It lacked jurisdiction because PennEnergy never agreed to arbitrate any claim 

for tortious interference damages sought by MDS 2017, as well as because 
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MDS-2017 did not have rights in any February 2018 PSA between MDS and 

Winfield that subjected PennEnergy to arbitration.

In this case, the contractual obligation that PennEnergy was deemed to 

have breached under its JDA with Winfield was whether it wrongfully withheld 

approval of the joinder of MDS to succeed to some of Winfield’s contractual 

interests in that agreement. After PennEnergy’s refusal to approve joinder,

MDS and Winfield still decided to execute the February 2018 PSA that provided 

for MDS’s interests to be conveyed to an unnamed MDS limited partnership, 

later identified outside of that agreement as MDS 2017. The damages the

arbitrator awarded were not incurred by Winfield or MDS but for losses 

purportedly incurred by MDS 2017.

Arbitrators only have jurisdiction over claims and damages which the 

parties agreed to arbitrate. Ignoring that only MDS was made a party to the 

arbitration by the Court of Common Pleas of Armstrong County, only MDS was 

joined in the arbitration, and that MDS 2017 was not even named in the 

February 2018 PSA, the arbitrator might have had jurisdiction to award 

damages if MDS 2017 any rights under the February 18, 2018 PSA if proper 

notice had been given. Though not a party to the PSA, MDS may have been 

able to bring the tortious interference claim where it was treated as a thirdparty beneficiary to the PSA.

As we have explained:

Our Supreme Court adopted the Restatement (Second) of Torts

§ 766 in Adler, Barish, Daniels, Levin and Creskoff v.
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Epstein, 482 Pa. 416, 393 A.2d 1175, 1182 (1978). Section 766 

of the Restatement defines the tort of intentional interference with 

existing contractual relations and provides:

One who intentionally and improperly interferes with the 

performance of a contract (except a contract to marry) 

between another and a third person by inducing or otherwise 

causing the third person not to perform the contract, is 

subject to liability to the other for the pecuniary loss resulting 

to the other from the failure of the third person to perform 

the contract.

Rest. (2d) of Torts § 766.

Salsberg v. Mann, 262 A.3d 1267, 1270 (Pa. Super. 2021), appeal granted, 

275 A.3d 964 (Pa. 2022).

To prevail on a claim for intentional interference with a contract, a 

plaintiff is required to prove, by a preponderance of the evidence, four 

elements: (1) the existence of a contractual relationship between the 

complainant and a third party; (2) the purposeful action on the part of the 

defendant intended to harm the existing relationship; (3) the absence of 

privilege or justification on the part of the defendant; and (4) actual harm to 

the complainant as a result of the defendant’s conduct. See Maverick Steel

Co. v. Dick Corp./Barton Malow, 54 A.3d 352, 354-55 (Pa. Super. 2012).

Under the first element of the tort, the plaintiff must be a party to the 

contract or a third part beneficiary.

In order for a third party beneficiary to have standing to recover 

on a contract, both contracting parties must have expressed an 

intention that the third party be a beneficiary, and that intention 

must have affirmatively appeared in the contract itself. Scarpitti 

v. Weborg, 609 A.2d 147, 149 (Pa. 1992). Furthermore,
J-A06039-23

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to be a third party beneficiary entitled to recover on a 

contract it is not enough that it be intended by one of the 

parties to the contract and the third person that the latter 

should be a beneficiary, but both parties to the contract

must so intend and must indicate that intention in the 

contract; in other words, a promisor cannot be held liable to 

an alleged beneficiary of a contract unless the latter was 

within his contemplation at the time the contract was entered 

into and such liability was intentionally assumed by him in his 

undertaking.

Kirschner v. K & L Gates LLP, 46 A.3d 737, 762 (Pa. Super. 2012) (quoting 

Spires v. Hanover Fire Ins. Co., 364 Pa. 52, 70 A.2d 828, 830–31 (1950)

(emphases in original), overruled in part by, Guy v. Liederbach, 459 A.2d

744 (Pa. 1983)) (parallel citations omitted).

While parties are free to explicitly state that a contract provision is 

intended to create third-party beneficiary rights and identify, by name, the 

holder of those rights, we also note that “[p]arties may explicitly state that a 

contract is not intended to create third-party beneficiary rights or identify the 

specific persons who do not hold these rights, as noted in Section 302(1) of 

the Restatement (Second) of Contracts.” McGaffic v. City of New Castle, 

74 A.3d 306, 312 (Pa. Cmwlth. 2013).

Here, MDS 2017, through MDS prosecuting as its general partner 

prosecuting the claim, did not have any rights under the PSA because that 

agreement explicitly disclaimed that the limited partnership, later identified as 

MDS 2017, was a third-party beneficiary under the agreement. That provision 

reads in full as follows:
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No Third Party Beneficiary. Only the Parties hereto, their 

respective successors and permitted assigns are intended to 

benefit from this Agreement and no other Party, including the 

Limited Partnership, is intended to be a beneficiary hereof.

(Emphasis added.)

PSA, ¶ 5(d) (R. 381a). The agreement defines the “limited partnership” as 

“the MDS partnership development developing said working interest,” which 

would be MDS 2017. Id. ¶ 3 (R. 380a). Under the express term of MDS and 

Winfield’s agreement then, the unnamed limited partnership, later 

denominated MDS 2017, was not a party or an intended third-party

beneficiary of the contract with which damages that PennEnergy was alleged 

to have tortiously interfered.

Even if proper notice that MDS were purportedly prosecuting the tortious 

interference claim as its general partner, MDS 2017 has no rights in that 

agreement or standing to recover on MDS and Winfield’s agreement as a thirdparty beneficiary. That agreement expressly stated that there would be no 

third-party beneficiaries under the agreement. In so stating, MDS and 

Winfield expressly provided that the MDS limited partnership, which was 

ultimately intended to be MDS 2017, was not an intended beneficiary. Thus, 

even though the agreement contemplated that Winfield would be paid in the 

form of units in MDS 2017, the agreement still explicitly disclaimed that there 

was any intent to make MDS 2017 a beneficiary. Consequently, because it 

was neither a contracting party nor an intended third-party beneficiary, MDS 
J-A06039-23

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2017 would be unable to recover against PennEnergy for tortiously interfering 

with MDS and Winfield’s agreement.

As discussed, the trial court found PennEnergy’s claim unavailing 

because, as PennEnergy itself acknowledged in its petition to vacate, MDS was 

required under the agreement to assign its acquired interest to a limited 

partnership. That provision provided, in relevant part:

(b) [MDS] shall assign the Acquired Interests to the Limited 

Partnership pursuant to a form of assignment instrument that is 

reasonably satisfactory to [Winfield], which form of assignment 

instrument shall reference this unrecorded Agreement to the 

effect that [Winfield] has certain rights, as provided, with respect 

to the granting of such assignment and the re-assignment of the 

Acquired Interests.

PSA, ¶ 3(b) (R. 381a).

Besides there being no evidence that MDS ever executed such an 

assignment, even if one had occurred, that would not provide the arbitrator 

with authority to arbitrate a claim with a party and claim that PennEnergy did 

not agree to arbitrate.

In any event, the trial court’s interpretation of the contract elevates this 

paragraph over the provision expressly disclaiming that the limited 

partnership, MDS 2017, is not a third-party beneficiary. As PennEnergy 

highlights,

It is well-settled that clauses in a contract should not be read as 

independent agreements thrown together without consideration 

of their combined effects. Terms in one section of the contract, 

therefore, should never be interpreted in a manner which nullifies 

other terms in the same agreement. Furthermore, the specific 

controls the general when interpreting a contract.
J-A06039-23

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Trombetta v. Raymond James Fin. Services, Inc., 907 A.2d 550, 560 (Pa.

Super. 2006) (citations omitted) (emphasis added). Indeed, “[i]t is 

fundamental that one part of a contract cannot be so interpreted as to annul 

another part and that writings which comprise an agreement must be 

interpreted as a whole.” Southwestern Energy Prod. Co. v. Forest Res.,

LLC, 83 A.3d 177, 187 (Pa. Super. 2013) (citation omitted).

Again, MDS and Winfield included a provision in their agreement 

addressing third-party beneficiaries and expressly provided that no other 

party, including the MDS limited partnership, was a third party beneficiary of 

the agreement. However, by finding that MDS 2017 was an assignee of MDS’s

rights to the PSA, of which there was no proof of an assignment, the trial court 

effectively read the provision providing for MDS 2017’s eventual assignment

as annulling MDS and Winfield’s unambiguous provision specifically 

disclaiming the limited partnership as a beneficiary. Applying the above 

principles, we cannot agree with this reading, as it essentially reads the 

provision for no third-party beneficiaries out of the contract.

Accordingly, for all these reasons, we vacate the trial court’s order 

confirming the arbitration award and remand with instructions to vacate the 
J-A06039-23

- 40 -

arbitrator’s award limited to paragraph five of the arbitrator’s May 14, 2019 

final award.

24

Order reversed and remanded with instructions. Jurisdiction 

relinquished.

Judge Olson joins the Opinion.

Judge Nichols concurs in the result.

Judgment Entered.

Joseph D. Seletyn, Esq.

Prothonotary

Date: 7/25/2023

____________________________________________

24 Because we have vacated the award for the aforesaid reasons, we need not 

address PennEnergy’s additional claim that damages could not be recovered

because its conduct amounted to a good faith dispute over contract terms.