Court Opinion

ID: 4953863
Source: CourtListenerOpinion
Date Created: 2021-09-24 13:26:53.581578+00
Date Added: 2024-06-11T08:15:30.446324
License: Public Domain

FORD ELLIOTT, Judge,
dissenting:
Because I find that the order appealed from, compelling arbitration in accordance with the rules of the American Arbitration Association, is interlocutory in nature, and that United Services Automobile Association (USAA) has failed to comply with the Rules of Appellate Procedure for perfecting an appeal from an interlocutory order, I must respectfully dissent.
This court has repeatedly held that an appeal from an order compelling arbitration is not a final order. See State Farm Fire and Casualty Co. v. Craley, 450 Pa.Super. 205, 207, 675 A.2d 732, 734 (1996) (an order denying insurer’s declaratory judgment action, sustaining insured’s preliminary objections, and compelling arbitration is not final; rather, it is interlocutory because the parties are forced into, not out of, court). See also *166Maleski v. The Mutual Fire, Marine and Inland Insurance Co., 534 Pa. 575, 580-81, 633 A.2d 1143, 1146 (1993) (pursuant to 42 Pa.C.S. § 7320(a)(1) [Uniform Arbitration Act], a party may take an appeal from a court order denying an application to compel arbitration; however, there is no corresponding statutory authority in existence that allows a party to take an appeal from an order that compels arbitration); Gardner v. Prudential Insurance Co., 332 Pa.Super. 358, 359, 481 A.2d 654, 655 (1984) (no statutory authority exists for review of an order which compels arbitration); Brennan v. General Accident Fire and Life Assurance Corp., Ltd., 307 Pa.Super. 288, 290, 453 A.2d 356, 357 (1982) (order directing common law arbitration [42 Pa.C.S. § 7341] was not an ap-pealable order).1 The order at issue instantly is therefore not an appeal from a final order, pursuant to Pá.RA..P. 341.2 With this proposition the majority agrees. (Majority opinion at 3.)
Without citation to authority, however, USAA argues, and the majority agrees, that there is no right of appeal from an arbitration award under the rules of the American Arbitration Association. (USAA’s brief at 8-9; majority opinion at 3.) Hence, USAA argues that the order compelling arbitration is final. (USAA’s brief at 10.) Nevertheless, my own research reveals that it has long been the law of Pennsylvania that arbitration pursuant to the rules of the American Arbitration Association is governed by the common law of arbitration. Zook v. Allstate Insurance Co., 349 Pa.Super. 328, 334-35, 503 A.2d 24, 27 (1986); Runewicz v. Keystone Insurance Co., 476 Pa. 456, 459-60, 383 A.2d 189, 191 (1978); Press v. Maryland Casualty Co., 227 Pa.Super. 537, 539-40, 324 A.2d 403, 404 (1974). In Brennan, supra, the court set forth the scope of review of common law arbitration, noting that “[judicial review of common law arbitration is very narrow. A court may not vacate or modify an award ‘unless it is clearly shown that a party was denied a hearing or that fraud, misconduct, corruption or other irregularity caused the rendition of an unjust, inequitable or unconscionable award.’ ” Brennan, supra at 291, 453 A.2d at 357, quoting 42 Pa.C.S.A. § 7341.
Another panel of this court noted that “ ‘Irregularity' refers not to the award itself, but to the process used in arriving at the award.” Hade v. Nationwide Insurance Co., 349 Pa.Super. 541, 546, 503 A.2d 980, 983 (1986), affirmed, 519 Pa. 227, 546 A.2d 615 (1988), overruled on other grounds, Ostroffv. Keystone Insurance Co., 357 Pa.Super. 109, 515 A.2d 584 (1986) (en banc). As the Hade court further observed, “Admittedly, a finding that the panel [of arbitrators] considered an issue beyond the scope of the arbitration clause would support a modification of the award on appeal.” Hade, supra at 546, 503 *167A.2d at 988. The basis for this conclusion was the Hade court’s observation that “in the face of the rule giving common law arbitrators unfettered discretion, it has been explicitly held that whether a given dispute is within the terms of an arbitration agreement is for the court to determine, provided this issue is not intertwined with the merits of the claim.” Id. A recent panel of this court followed Hade, holding that “if a common law arbitration panel exceeds the scope of the arbitration agreement, the award can be modified on this basis.” Ginther v. United States Fidelity and Guaranty Co., 429 Pa.Super. 255, 260, 632 A.2d 338, 335 (1993), allocatur denied, 538 Pa. 612, 645 A.2d 1316 (1994).
USAA instantly may therefore be able to challenge the arbitrators’ jurisdiction after an award is entered, on the basis that there was no arbitration agreement, hence no “scope” at all. As the Brennan court observed:
Although a party such as appellant may in some sense be out of court, that is true only temporarily. The controversy is not concluded, and we see no compelling need for immediate appellate review. If the arbitration is permitted to proceed, the party initially objecting to arbitration may win. The party would then no longer be aggrieved and no appeal would be required. At worst, the party will have been required to participate in an unnecessary arbitration, but that is no different than the situation where a party is required to go to trial after a court erroneously refuses to sustain a demurrer to a complaint.
Id. at 292-93, 453 A.2d at 358.
I recognize that the trial court’s order compelling arbitration was erroneous as a matter of law, relying as it did upon 31 Pa.Code 63.2(8). See McFarley v. American Independent Insurance Co., 444 Pa.Super. 191, 192-95, 663 A.2d 738, 739-40 (1995) (holding that arbitration is a matter of contract, and absent an agreement between the parties to arbitrate a particular issue, the parties cannot be compelled to arbitrate that issue; further holding that in the absence of a statutory requirement, arbitration may not be required by regulation, and citing specifically 31 Pa.Code 63.2(8)). See also Hiller v. Allstate Insurance Co., 300 Pa.Super. 149, n. 1, 446 A.2d 273, 274 n. 1 (1982) (statute that requires uninsured motorist coverage does not require arbitration, and court has held that in the absence of a statutory requirement, arbitration may not be required by regulation, such as 31 Pa.Code § 63.2), citing Ellison v. Safeguard Mutual Insurance Co., 209 Pa.Super. 492, 229 A.2d 482 (1967). Nevertheless, we cannot confer jurisdiction upon ourselves in order to redress any such error.
The order from which USAA takes its appeal is interlocutory. See cases cited supra. See also majority opinion at 162. “Under Pennsylvania law, an appeal may be taken from an interlocutory order as of right (Pa.R.A.P. 311), by permission (Pa.R.A.P. 313, 1301 et seq.), or from a collateral order (Pa.R.A.P. 313).” Miller v. Steinbach, 452 Pa.Super. 194, 681 A.2d 775, 777 (1996). Ride 311 lists those instances in which an appeal may be taken as of right, specifically noting that appeals from orders enumerated at 42 Pa.C.SA. § 7320 (including orders denying an application to compel arbitration) are not suspended by the Rule. Pa.RA..P. 311, Note, ¶ (a)(7), 42 Pa.C.SA.3 Appeals from orders compelling arbitration are neither listed nor noted, however. As a result, I conclude that USAA’s appeal from the order compelling arbitration is not an interlocutory appeal as of right.
“‘An interlocutory appeal may be taken by permission pursuant to Chapter 13 of the Rules of Appellate Procedure.’ ” Miller, supra at 198, 681 A.2d at 777, quoting Patton v. Hanover Insurance Co., 417 Pa.Super. 351, 352-54, 612 A.2d 517, 518 (1992), and citing Pa.R.A.P. 312; Pa.R.A.P. 1301 et seq. To invoke Rule 312, the trial court must certify that the order at issue “involves a controlling question of law as to which there is a substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate *168termination of the matter....” Continental Bank v. Andrew Building Co., 436 Pa.Super. 559, 568, 648 A.2d 551, 555 (1994), quoting 42 Pa.C.SA. § 702(b); Pa.R.AP. 312, 1311. Instantly, either Judge Louik’s or Judge Horgos’ order would have been certifiable under these criteria. Next, a prospective appellant must petition this court for permission to appeal within 30 days of the certified order. 42 Pa.R.AP. 1311(b), 42 Pa.C.SA. Certification by the trial court that the issue is appealable and the filing of a petition for permission to appeal are both jurisdictional prerequisites to taking an appeal from an interlocutory order that is not appealable as of right. Hoover v. Welsh, 419 Pa.Super. 102, 104-07, 615 A.2d 45, 46 (1992), allocatur denied, 535 Pa. 659, 634 A.2d 222 (1993). Here, however, USAA “has faded to invoke the procedure outlined in Chapter 13. Consequently, the order is not appealable by permission under the provisions of Chapter 13.” Miller, supra at 198, 681 A.2d at 777. See also Wilson v. Keystone Insurance Co., 289 Pa.Super. 101, 102-04, 432 A.2d 1071, 1072 (1981) (appeal was interlocutory where it was from an order dismissing Keystone’s petition to vacate an order compelling Keystone to appoint an arbitrator pursuant to terms of insurance contract; because the appeal was not interlocutory as of right, and because Keystone had failed to invoke the procedure outlined in Chapter 13 for seeking permission to take an interlocutory appeal, the appeal must be quashed).
Finally, I must disagree with the majority, which found that USAA’s appeal is an appeal from a collateral order, pursuant to Pa. RA.P. 313. A collateral order has been defined as an order “separable from and collateral to the main cause of action ...” Continental Bank, supra at 567, 648 A.2d at 555, quoting Pa.RA.P. 313(b). This court recently had occasion to discuss the collateral order doctrine in Hanson v. Federal Signal Corporation, 451 Pa.Super. 260, 265-67, 679 A.2d 785, 788 (1996). As the Hanson court observed:
The collateral order doctrine is essentially an exception to the final judgment rule. The doctrine emerged in Cohen v. Beneficial Industrial Loan Corporation, 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528[] (1949), and was adopted by the Pennsylvania Supreme Court in Bell [v. Beneficial Consumer Discount Co., 465 Pa. 225, 348 A.2d 734 (1975) ]. In Pugar v. Greco, 483 Pa. 68, 394 A.2d 542 (1978), our supreme court stated:
In Cohen, the Supreme Court of the United States carved out an exception to the final judgment rule for situations where postponement of appeal until after final judgment might result in irreparable loss of the right asserted.... We applied Cohen in Bell v. Beneficial Consumer Discount Company, 465 Pa. 225, 228, 348 A.2d 734, 735 (1975), where we said:
Whether an order is final and appeal-able cannot necessarily be ascertained from the face of a decree alone, nor simply from the technical effect of the adjudication. The finality of an order is a judicial conclusion which can be reached only after an examination of its ramifications.
Hanson, supra at 787-88, quoting Pugar, supra at 73, 394 A.2d at 545, quoting Bell, supra.
As the Pugar court noted:
Under Cohen, an order is considered final and appealable if (1) it is separable from and collateral to the main cause of action; (2) the right involved is too important to be denied review; and (3) the question presented is such that if review is postponed until final judgment in the case, the claimed right will be irreparably lost.
Pugar, supra at 73, 394 A.2d at 545, citing Cohen, supra, 337 U.S. at 546, 69 S.Ct. at 1225. “However, to qualify under the Cohen exception all three factors must be met.” Fried v. Fried, 509 Pa. 89, 95, 501 A.2d 211, 214 (1985). As our sister court has observed:
The requirements that must be satisfied to permit an appeal under the collateral order doctrine are stringent and must be narrowly construed. Narrow construction of the collateral order doctrine is required to protect the integrity of the fundamental legal principle that only final orders may be appealed. To hold otherwise would al*169low the collateral order doctrine to swallow up the final order rule...
Watson v. City of Philadelphia, 665 A.2d 1815, 1317 (Pa.Cmwlth.1995).4
The majority concludes that “without question,” the order to compel arbitration at issue instantly is collateral to the main cause of action — the declaratory judgment action. (Majority opinion at 162.) It then finds that the question of whether a court may order an out-of-state insurer to submit to arbitration on a newly created tort is an important one, and that going forward with the arbitration will result in a loss of appellate review. (Id. at 162-168.) While I agree that the issue is important, I would not find that appellate review will, even under the narrow scope permitted by § 7341, necessarily be precluded. See Ginther, supra and Hade, supra. Additionally, I cannot agree that the order at issue instantly is collateral to the main cause of action. A brief review of the procedural posture of this case is illustrative.
In his Motion to Compel Arbitration, Randall Shears, Jr. (Shears) noted that he demanded arbitration under the rules of the American Arbitration Association on March 4,1991. (Motion to Compel Arbitration, R.R. at 117a, citing Exhibit 2, R.R. at 123a.) By letter dated April 19,1991, USAA denied the claim and refused to submit to arbitration. (R.R. at 125a-126a.) According to the motion to compel, the parties then agreed to submit to a declaratory judgment on stipulated facts. (R.R. at 118a.) This averment was neither admitted nor denied by USAA (See Answer to Motion to Compel Arbitration, R.R. at 134a.) USAA then filed a complaint in declaratory judgment on or about November 4, 1992, to which Shears filed an answer. Both parties then filed motions for judgment on the pleadings. By opinion and order dated January 28, 1994, Judge Louik denied USAA’s motion for judgment on the pleadings, finding that Shears had a cause of action in tort against USAA for uninsured motorist benefits. Judge Louik did not, however, rule on Shears’ motion, which is still pending before that court. USAA neither attempted to file an appeal, nor followed the prerequisites for seeking permission to appeal pursuant to Rule 1311. Over nine months later, on or about September 12, 1994, Shears filed his motion to compel arbitration in which he stated that, “based on the aforesaid order [Judge Louik’s order], [Shears] hereby respectfully requests the Court to grant an Order compelling this matter to arbitration via the American Arbitration Association per [Shears’] demand on March 4, 1991.” (R.R. at 118a.) Thus, the motion to compel arbitration was merely the next procedural step necessary to implement Judge Louik’s opinion and order vis-a-vis the declaratory judgment action. Clearly, therefore, the motion to compel arbitration cannot be considered collateral to the declaratory judgment action, as the majority holds.
Finding Judge Horgos’ order compelling arbitration to be interlocutory, and finding that USAA has failed to take advantage of any opportunity to seek permission to appeal from an interlocutory order, I would quash the instant appeal. I must, therefore, respectfully dissent.

. I agree with the Gardner court’s observation that the Brennan court misread 42 Pa.C.S.A. § 7320 when it stated in dictum that an appeal may be taken from an order compelling statutory arbitration pursuant to 42 Pa.C.S.A. § 7320.
I also note that § 7320, relating to the appeala-bility of court orders, was made applicable to common law arbitration by statute in 1982, except for subsection (a)(4), relating to the appeala-bility of a court order modifying or correcting an award. See 42 Pa.C.S.A. § 7342. As a result, statutory authority now exists to appeal from a court order denying an application to compel common law arbitration, but not from a court order granting such an application to compel. See 42 Pa.C.S.A. § 7320(a)(1).

. I find USAA’s reliance on Cunningham v. Prudential Property & Casualty Insurance Co., 340 Pa.Super. 130, 489 A.2d 875 (1985), misplaced. It is true that the order appealed from in Cunningham compelled arbitration. Nevertheless, the order also sustained Prudential’s demurrer to the Cunninghams' complaint in assumpsit, in which the Cunninghams alleged that they were entitled to be compensated for their personal injuries because the insurer breached the contract of insurance when it failed to appoint an arbitrator pursuant to a clause in the insurance policy mandating statutory arbitration of disputes. Because the Cunninghams were “out of court” on their action in assumpsit, which was distinct from a determination of their entitlement to benefits under the policy, this court held that the order was final, hence appealable.
Instantly, however, the declaratory judgment action brought by USAA merely seeks to determine whether it is Hable for uninsured motorist benefits under the terms of the policy, as construed in relation to applicable state law; no independent cause of action is alleged. Hence, USAA is not "out of court” instantly on an independent cause of action. In fact, based upon Judge Louik’s order, discussed infra, USAA now appears to be “in court” on an additional, tort, theory.

. Rule 311 was amended April 10, 1996, effective April 27, 1996. Because the instant order was entered April 24, 1995, however, the amendments are not applicable to this appeal. Nothing in the amendments would alter the outcome, however.

. I recognize that the Commonwealth Court was viewing the collateral order doctrine from the perspective of the federal courts, which do not view that doctrine as an exception to the final order rule; instead, federal courts, in the interest of achieving a healthy legal system, view the doctrine as a rule that allows a small class of decisions that do not terminate litigation to be treated as final. Watson, supra, 665 A.2d at 1317, citing Digital Equipment Coup. v. Desktop Direct, Inc., 511 U.S. 863, 114 S.Ct. 1992, 128 L.Ed.2d 842 (1994).