Court Opinion

ID: 9386770
Source: CourtListenerOpinion
Date Created: 2023-04-13 16:07:49.372241+00
Date Added: 2024-06-11T17:18:08.356582
License: Public Domain

J-A03006-23

                                  2023 PA SUPER 65

    E. ALLEN REEVES, INC.                      :   IN THE SUPERIOR COURT OF
                                               :        PENNSYLVANIA
                                               :
                v.                             :
                                               :
                                               :
    OLD YORK, LLC AND                          :
    METROPOLITAN PROPERTIES OF                 :
    AMERICA, INC.                              :   No. 1116 EDA 2022
                                               :
    APPEAL OF: OLD YORK, LLC                   :

               Appeal from the Judgment Entered March 7, 2022
      In the Court of Common Pleas of Montgomery County Civil Division at
                             No(s): 2017-27160

BEFORE:      KING, J., SULLIVAN, J., and STEVENS, P.J.E.*

OPINION BY STEVENS, P.J.E.:                              FILED APRIL 13, 2023

        Old York, LLC (“Old York”) appeals from the judgment entered in favor

of E. Allen Reeves, Inc. (“Reeves”) pursuant to an order of the Court of

Common Pleas of Montgomery County confirming an arbitration award. After

careful review, we affirm.

        In July 2015, Reeves entered a contract with Old York in which Reeves

would serve as general contractor for the Colonade Amenities Building project

(“the Project”) in Jenkintown. Reeves completed work on the Project on

August 8, 2016.

        On February 27, 2017, Reeves filed for Chapter 11 bankruptcy in the

U.S. Bankruptcy Court in the Eastern District of Pennsylvania. After Reeves’s

bankruptcy filing, Old York stopped payment on its final deposit in Reeves’s

____________________________________________

*   Former Justice specially assigned to the Superior Court.
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bank account. Old York refused to pay Reeves the $66,133 balance of the total

project cost, which was approximately $1.3 million. The bankruptcy court

confirmed Reeves’s bankruptcy plan in September 2017.

       On November 17, 2017, Reeves filed a complaint seeking recovery of

the unpaid invoices as well as penalties and attorneys’ fees under Section 12

of the Contractor and Subcontractor Payment Act (CASPA), 73 P.S. § 512.1

       On December 11, 2017, Old York filed preliminary objections raising two

grounds for relief. First, Old York argued that bankruptcy law required Reeves

to assume all executory contracts it wished to pursue before the bankruptcy

court. Reeves had not identified the parties’ contract as an executory contract

with material obligations left unfinished. As such, Old York claimed Reeves

lacked standing to sue under the contract. Second, Old York claimed the

parties’ contract required all disputes to be submitted to binding arbitration.

       On January 2, 2018, Reeves filed an answer, conceding the dispute was

subject to arbitration and requesting that the trial court stay the case pending

arbitration. However, Reeves disputed that it lacked standing, asserting that

the parties’ contract was not executory as Reeves had completed work on the

Project before filing for bankruptcy. Thus, Reeves argued it was not required

to assume the contract before the bankruptcy court.

____________________________________________

1  Reeves brought his complaint against both Old York and Metropolitan
Properties of America, Inc., Old York’s management company. As discussed
infra, the arbitrator ultimately entered an award in favor of Reeves against
Old York. As Metropolitan is not a party to this appeal, we will limit our
discussion to Old York’s defense in this case.

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       Old York filed a response, arguing Reeves that had not performed all of

its material obligations as Reeves had not paid its subcontractors and suppliers

in full or provided Old York with lien waivers and warranties. Old York indicated

that the parties’ contract did not require Old York to make a final payment

until Reeves provided satisfactory evidence that all subcontractors had been

paid and that there were no claims, obligations, or liens remaining.

       On February 6, 2018, the trial court signed a form order provided by

Reeves staying the case pending arbitration and overruling the preliminary

objections. The order did not discuss whether Reeves had standing to sue.

       Thereafter, the parties proceeded to the arbitration of Reeves’s claim

along with a counterclaim filed by Old York. On December 6, 2019, the

arbitrator entered an award in favor of Reeves and against Old York for the

amount due along with interest (as set forth in the contract) as well as

penalties and attorneys’ fees (pursuant to CASPA), totaling $159,941.78. The

trial court also awarded Old York $5,500 on its counterclaim. As a result, the

arbitrator’s total net award to Reeves was $154,441.78. After Reeves filed an

application for modification of the award on December 16, 2019, the arbitrator

entered a modified order on January 8, 2020.2

       Old York filed motions to vacate the arbitration award, raising the sole

argument that the parties’ contract provided that the arbitrator did not have

authority to award penalties and attorneys’ fees to either party. The trial court
____________________________________________

2The January 8, 2020 order simply clarified the breakdown of the December
16, 2019 order, but did not make any modifications to the award.

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denied the motions, finding the arbitrator had authority under CASPA to award

penalties and attorneys’ fees notwithstanding the language in the contract.

      On November 20, 2020, Reeves filed a petition to confirm the arbitration

award and requested the entry of judgment with additional interest, penalties,

and attorneys’ fees under CASPA. The trial court entered an order indicating

that a hearing would be held after the completion of “discovery, if any.”

      On February 16, 2021, Old York served Reeves with a notice of

deposition of Reeves’s corporate designee and a request for production of

documents. On February 24, 2021, Reeves filed a motion for a protective order

seeking to prevent Reeves from having to respond to Old York’s discovery

request. On April 22, 2021, the trial court issued an order indicating Reeves

would only be required to provide the documents it would introduce as

evidence to seek damages beyond those imposed by the arbitrator.

      At a hearing on the petition to confirm on May 26, 2022, Old York

attempted to challenge Reeves’s standing on two grounds. First, Old York

claimed for the first time that bankruptcy law required Reeves to file this action

and arbitration in the name of Robert N. Reeves, Jr., the disbursing agent

appointed by the bankruptcy court, not Reeves, LLC. Second, Old York again

claimed that Reeves’s failure to assume the contract before the bankruptcy

court led to a lack of standing. Further, Old York reiterated its claim that

Reeves was not entitled to recover post-award attorneys’ fees under CASPA.

      Upon learning that Old York intended to raise these claims before the

bankruptcy court, the trial court stayed proceedings on the petition to give

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the parties the opportunity to “seek any appropriate relief from the Bankruptcy

Court.” After Old York sought relief in the bankruptcy court, Reeves filed a

“Motion to Dismiss the Adversary Complaint.” On December 6, 2021, the

Bankruptcy Court issued an order noting that it abstained from hearing this

matter and dismissed the Adversary Case, citing comity with state courts and

respect for state law.

      On March 7, 2022, the trial court granted Reeves’s petition to confirm

the arbitration award and entered judgment for Reeves and against Old York

in the amount of $216,155.42. This total included the arbitration award and

additional interest, penalties, and attorneys’ fees under CASPA. Old York filed

this appeal and complied with the trial court’s direction to file a concise

statement of errors complained of on appeal pursuant to Pa.R.A.P. 1925(b).

      Old York presents the following issues for review:

      1. Whether the lower court erred in overruling Old York’s
         preliminary objections challenging [Reeves’s] standing to
         pursue the underlying action, without a hearing or discovery,
         notwithstanding [Reeves’s] inconsistent and conflicting
         allegations in its bankruptcy proceedings?
      2. Whether the lower court erred in granting [Reeves’s] motion
         for protective order where the lower court, by order,
         contemplated that the parties would engage in discovery in
         connection with [Reeves’s] petition to confirm, Old York issued
         limited discovery requests to [Reeves] targeting the issues
         raised in the Petition to Confirm and response thereto, and
         granting the Motion for Protective Order impaired [Reeves’s]
         ability to defend against the Petition to Confirm?
      3. Whether the lower court erred in holding that the arbitrator did
         not exceed her scope of authority by awarding attorney’s fees
         as part of an arbitration award when the parties’ construction
         contract specifically precluded the arbitrator from doing so?

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      4. Whether the lower court erred in determining that the
         amendment to Section 503 of the Pennsylvania Contractor and
         Subcontractor Payment Act, 73 P.S. § 501, et seq. (“CASPA”)
         prohibiting a waiver of penalties should apply retroactively to
         previously executed construction contracts or that the
         prohibition precluded contracting parties from limiting the
         venue for claims for such penalties?
      5. Whether the lower court erred in awarding attorney's fees
         purportedly incurred by [Reeves’s] bankruptcy counsel in its
         March 7, 2022 order granting the petition to confirm, where
         such fees were not incurred in the prosecution of [Reeves’s]
         collection action?

Old York’s Brief, at 5-6 (issues reordered for ease of review).

      As a preliminary matter, we must decide which principles of arbitration

apply to the case at bar.

      Chapter 73 of the Pennsylvania Judicial Code governs statutory,
      common law and judicial arbitration. Section 7301-7320 of
      Subchapter A apply to statutory arbitration proceedings and are
      known collectively as the Pennsylvania Uniform Arbitration Act
      (“UAA”). Section 7341 and 7342 of Subchapter B apply to common
      law arbitration proceedings. Whether an arbitration agreement is
      subject to the UAA (Sections 7301-7320 of Subchapter A) or
      common law (Sections 7341-7342 of Subchapter B) arbitration
      principles depends on whether the agreement is in writing and
      expressly provides for arbitration under the UAA. Absent an
      express statement in the arbitration agreement, or a subsequent
      agreement by the parties which calls for the application of the UAA
      statutory provisions in Subchapter A, an agreement to arbitrate is
      conclusively presumed to be at common law and subject to the
      provisions of Subchapter B.

Sage v. Greenspan, 765 A.2d 1139, 1141 (Pa.Super. 2000) (citations

omitted).

      This Court has held that an arbitration clause providing for binding

arbitration pursuant to the American Arbitration Association (AAA) signifies

common law arbitration. U.S. Claims, Inc. v. Dougherty, 914 A.2d 874, 876

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(Pa.Super. 2006) (citing 42 Pa.C.S.A. § 7302(a); Runewicz v. Keystone

Ins. Co., 383 A.2d 189, 191 (Pa. 1978)). In this case, the parties’ contract

states that the parties shall resolve disputes through arbitration “administered

by the American Arbitration Association, in accordance with the Construction

Industry Arbitration Rules in effect on the date of this agreement.” See

Contract, §§ 5.1, 21.4. Thus, this case is a matter of common law arbitration.

      In its first issue, Old York claims the trial court erred in overruling its

preliminary objections to the initial complaint in which Old York argued that

Reeves did not have standing to sue on the contract as it had not assumed

the parties’ contract before the bankruptcy court. While Old York admits that

the parties’ contract contained a valid arbitration clause, Old York suggests

that the trial court should have held a hearing or allowed discovery to develop

the standing claim before sending the case to arbitration.

      However, Old York failed to preserve this issue for our review. Section

7342 of Subchapter B, Common Law Arbitration, provides in pertinent part:

      (b) Confirmation and judgment.—On application of a party
      made more than 30 days after an award is made by an arbitrator
      under § 7341 (relating to common law arbitration) the court shall
      enter an order confirming the award and shall enter a judgment
      or decree in conformity with the order....

42 Pa.C.S.A. § 7342(b) (emphasis added).

      Based on this language,

      [t]his Court has consistently interpreted section 7342(b) to
      require that any challenge to the arbitration award be made in an
      appeal to the Court of Common Pleas, by filing a petition to vacate
      or modify the arbitration award within 30 days of the date of the
      award. See Sage, 765 A.2d at 1142; Lowther v. Roxborough

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       Mem'l Hos., 738 A.2d 480, 485 (Pa.Super.1999); Beriker v.
       Permagrain Products, Inc., 347 Pa.Super. 102, 500 A.2d 178,
       179 (1985). A party must raise alleged errors in the arbitration
       process in a timely petition to vacate or modify the arbitration
       award or the claims are forever waived. See Sage, 765 A.2d at
       1142; Lowther, 738 A.2d at 488; Caron v. Reliance Ins. Co.,
       703 A.2d 63, 65 (Pa.Super.1997) (“[A]ny issue related to the
       arbitrators' decision ... has been waived due to appellant's failure
       to file a timely petition to vacate, as required by 42 Pa.C.S. §
       7314.”) (citations omitted).

Dougherty, 914 A.2d at 877.

       It is well-established that “in Pennsylvania, whether a party has

standing to maintain an action is not a jurisdictional question. Thus, an issue

relating to standing is subject to waiver.” Commonwealth v. Fields, 197

A.3d 1217, 1225–26 (Pa.Super. 2018) (citations omitted). See also In re

Estate of Brown, 30 A.3d 1200, 1204 (Pa.Super. 2011) (citation omitted)

(finding the issue of standing may be waived “if not objected to at the earliest

possible opportunity”).

       As noted above, Old York’s preliminary objections alleged that Reeves

lacked standing but also indicated the parties agreed to resolve their disputes

through arbitration. After Reeves conceded the parties’ contract contained a

valid arbitration clause, the trial court stayed the case pending arbitration and

overruled Old York’s preliminary objections without any discussion of the

standing claim. Thereafter, the parties proceeded to arbitration. After a full

hearing, the arbitrator entered an award in favor of Reeves.3

____________________________________________

3 The arbitration hearing was not transcribed. However, Old York averred that
it raised the standing issue before the arbitrator at the hearing.

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      Old York’s subsequent motion to vacate the arbitration award was

limited to its claims that the arbitrator erred in awarding Reeves penalties and

attorneys’ fees. Old York did not challenge the trial court’s decision to send

the case to arbitration without expressly ruling on Old York’s standing claim

nor claimed the arbitrator erred in entering an award in Reeves’s favor despite

Old York’s standing claim.

      Instead, Old York waited to raise these claims until after the trial court

denied its petition to vacate the arbitration award and Reeves filed a petition

to confirm the award. Old York then attempted to challenge Reeves’s standing

at a hearing on the petition to confirm on the basis that Reeves had failed to

assume the contract in bankruptcy court. In addition, Old York raised a

completely new standing claim based on its allegation that Reeves failed to

bring this action in the name of the proper party.

      However, “a challenge to the validity of an arbitration award asserted

for the first time in opposition to a petition to confirm is procedurally

inadequate to preserve claims for judicial review.” Dougherty, 914 A.2d at

877 (citing Sage, 765 A.2d at 1142; Lowther, 738 A.2d at 485).

      In this case, the trial court had no opportunity to address Old York’s

claims of error on the issue of standing as Old York failed to preserve either

of its arguments on standing in its petition to vacate the arbitration award.

Accordingly, Old York’s challenges to Reeves’s standing, raised in response to

Reeves’s petition to confirm the arbitration award, are untimely and waived.

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      In its second issue, Old York claims the trial court erred in relieving

Reeves from complying with its discovery requests where the lower court, by

order, contemplated that the parties would engage in discovery in connection

with Reeves’s petition to confirm the arbitration award.

      However, as previously discussed, Old York was seeking discovery in an

attempt to develop its claim that Reeves lacked standing, a claim which should

have been previously raised in the petition to vacate the arbitration award.

Consistent with our finding above that Old York failed to preserve its standing

argument in the petition to vacate the award, the trial court correctly entered

a protective order providing that Reeves was only required to provide Old York

with documents it would introduce as evidence in support of its request for

additional interest, attorneys’ fees, and penalties in the petition to confirm.

Thus, Old York is not entitled to relief on this claim.

      In its third and fourth issues, Old York claims the trial court erred in

finding the arbitrator did not exceed her scope of authority by awarding

Reeves attorneys’ fees and penalties pursuant to CASPA. In reviewing an

arbitration award, our standard of review is limited as:

      the law favors non-judicial dispute resolution that the parties have
      agreed to. Alternate dispute resolution is economical in terms of
      time, expenditure of judicial resources and transactional costs.
      Limited judicial review also imposes finality in a contested matter.
      To permit anything but limited judicial review defeats the purpose
      of ...arbitration.

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F.J. Busse Co. v. Sheila Zipporah, L.P., 879 A.2d 809, 811 (Pa.Super.

2005) (quoting Boulevard Associates v. Seltzer Partnership, 664 A.2d

983, 987 (Pa.Super. 1995) (citation omitted)).

      Thus, our standard of review is very limited:

      [t]he award of an arbitrator in a nonjudicial arbitration which is
      not subject to statutory arbitration or to a similar statute
      regulating nonjudicial arbitration proceedings is binding and may
      not be vacated or modified 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.

42 Pa.C.S.A. § 7341. We recognize that “arbitrators are the final judges of

both law and fact, and an arbitration award is not subject to reversal for a

mistake of either.” D'Amelia v. Toll Bros., 235 A.3d 321, 325 (Pa.Super.

2020) (citing Dougherty, 914 A.2d at 876-77 (citations omitted)).

      In conjunction with this standard, our courts recognize that the

“appellant bears the burden to establish both the underlying irregularity and

the resulting inequity by clear, precise[,] and indubitable evidence.” McKenna

v. Sosso, 745 A.2d 1, 4 (Pa.Super. 1999) (internal citations omitted). In this

context, “irregularity refers to the process employed in reaching the result of

the arbitration, not the result itself.” Id.

      However, an award may be corrected if the arbitrator exceeds the scope

of his or her authority. Gargano v. Terminix Int'l Co., L.P., 784 A.2d 188,

193 (Pa.Super. 2001). “‘The power and authority of arbitrators are wholly

dependent upon the terms of the agreement of submission, and they cannot

exercise authority as to matters not included therein, or validly determine the

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dispute if they violate or act inconsistently with the terms of the submissions.’”

Boulevard Associates, 664 A.2d at 987 (quoting Sley Sys. Garages v.

Transportation Workers Union of Am., 178 A.2d 560, 561 (Pa. 1962)).

      By way of background,

      CASPA is a comprehensive statute enacted in 1994 to cure abuses
      within the building industry involving payments due from owners
      to contractors, contractors to subcontractors, and subcontractors
      to other subcontractors. The underlying purpose of CASPA is to
      protect contractors and subcontractors and to encourage fair
      dealing among parties to a construction contract. The statute
      provides rules and deadlines to ensure prompt payments, to
      discourage unreasonable withholding of payments, and to address
      the matter of progress payments and retainages. Under
      circumstances prescribed in the statute, interest, penalties,
      attorney's fees, and litigation expenses may be imposed on an
      owner, contractor, or subcontractor who fails to make payment to
      a contractor or subcontractor in compliance with the statute.

El-Gharbaoui v. Ajayi, 260 A.3d 944, 954 (Pa.Super. 2021) (citation and

brackets omitted).

      Specifically, Old York claims that the arbitrator had no authority to

award Reeves attorneys’ fees and penalties pursuant to CASPA when the

parties’ contract precluded the arbitrator from doing so. Old York relies on the

following language in the contract:

      Judgment on Final Award. The award rendered by the arbitrator
      or arbitrators shall be final, and judgment may be entered upon it
      in accordance with applicable law in any court having jurisdiction
      thereof. However, no arbitrator(s) shall have the authority to
      enter an award of punitive damages or attorneys fees to either of
      the parties.

Contract, § 21.9 (emphasis added).

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      Section 512(b) of the CASPA provides that “[n]otwithstanding any

agreement to the contrary, the substantially prevailing party in any

proceeding to recover any payment under this act shall be awarded a

reasonable attorney fee in an amount to be determined by the court or

arbitrator, together with expenses.” 73 P.S. § 512(b) (emphasis added).

      Based on this language, this Court has held that Section 512(b) clearly

provides that attorneys’ fees under CASPA cannot be waived by contract. John

B. Conomos, Inc. v. Sun Co. (R&M), 831 A.2d 696, 711 (Pa.Super. 2003)

(finding Section 512(b) of CASPA “expressly provides that even in the event

that the parties agree otherwise, attorneys' fees and expenses are not

waiveable”).

      In comparison to the language relative to attorneys’ fees, CASPA

provides different language with respect to interest due on impermissibly

delayed payments. Section 505(d) of CASPA allows the parties to contractually

waive such interest:

      [e]xcept as otherwise agreed by the parties, if any progress or
      final payment to a contractor is not paid within seven days of the
      due date established in subsection (c), the owner shall pay the
      contractor, beginning on the eighth day, interest at the rate of 1%
      per month or fraction of a month on the balance that is at the time
      due and owing.

73 P.S. § 505(d) (emphasis added). This Court has held that Section 505(d)

permits parties to “agree either to waive interest on untimely payments, or to

accrue interest at a rate other than one percent.” Conomos, 831 A.2d at 710.

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      On appeal, Old York asserts that the parties’ contract does not seek to

completely waive the award of attorneys’ fees, but simply limits the authority

of the arbitrator such that only the trial court would have power to award such

fees. Thus, Old York argues that Reeves “was therefore obligated to seek

recovery of attorneys’ fees in the court of common pleas and not in

arbitration.” Old York’s Brief, at 35. We disagree.

      The trial court properly exercised its discretion in finding that “the “non-

waiver provision of section [5]12(b) cannot be evaded by couching the waiver

language in the form of a limitation on the authority of an arbitrator.” Trial

Court Opinion, 6/9/22, at 13. Section 512(b) states that “in any proceeding”

under CASPA, the substantially prevailing party “shall be awarded an

reasonable attorney fee in an amount to be determined by the court or

arbitrator.” 73 P.S. § 512(b) (emphasis added).

      We agree that the statutory language set forth in Section 512(b) is

controlling and must prevail over the language set forth in the contract. Thus,

the trial court did not err in finding the arbitrator had the authority to award

Reeves attorneys’ fees notwithstanding the language in the parties’ contract.

      Likewise, we find no error in the trial court’s decision to uphold the

arbitrator’s imposition of penalties against Old York pursuant to CASPA despite

the contract’s language stating that the arbitrator did not have authority to

award “punitive damages” to either party. CASPA requires that penalties be

imposed for failure to comply with its provisions:

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       If arbitration or litigation is commenced to recover payment due
       under this act and it is determined that an owner, contractor or
       subcontractor has failed to comply with the payment terms of this
       act, the arbitrator or court shall award, in addition to all other
       damages due, a penalty equal to 1% per month of the amount
       that was wrongfully withheld.

73 P.S. § 512(a) (emphasis added).

       Although Old York points out that Section 512(a) does not contain the

clause “notwithstanding any agreement to the contrary” that appears in

Section 512(b), Section 512(a) provides mandatory penalties that “shall” be

imposed in arbitration against a party who has failed to comply with CASPA’s

payment terms. Section 512(a) does not contain any language allowing the

parties to waive CASPA’s penalties. Based on these distinctions, this Court

held in Conomos that CASPA does not allow parties to contractually waive

the penalties set forth in Section 512(a).4

       Moreover, while the parties’ contract states that the arbitrator cannot

award “punitive damages” to either party, CASPA’s civil penalties set forth in

Section 512(a)(1) can be differentiated from punitive damages. As noted

above, Section 512(a)(1) provides for a penalty equal to 1% per month of the

amount that was wrongfully withheld pursuant to CASPA’s terms. In

____________________________________________

4 CASPA was subsequently amended in 2018 to include a specific prohibition
on the contractual waiver of its provisions. Section 503(c) of CASPA now
provides that “[u]nless specifically authorized under this act, parties to a
contract or other agreement may not waive a provision of this act by contract
or other agreement.” 73 P.S. § 503(c). This provision became effective on
October 10, 2018, after the cause of action arose in this case. We need not
discuss whether this amendment is relevant to this case, as Old York is not
entitled to relief even without the application of this new law.

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comparison, to seek punitive damages, a party has a higher burden to show

“outrageous conduct, that is, for acts done with a bad motive or with a reckless

indifference to the interests of others. Punitive damages are penal in nature

and are proper only in cases where the defendant's actions are so outrageous

as to demonstrate willful, wanton or reckless conduct.” Sears, Roebuck &

Co. v. 69th St. Retail Mall, L.P., 126 A.3d 959, 983 (Pa.Super. 2015)

(citations, quotation marks, and brackets omitted).5

       Accordingly, we conclude that the trial court did not abuse its discretion

or commit an error of law in upholding the arbitrator’s award of attorneys’

fees and penalties pursuant to CASPA.

       Lastly, Old York claims the trial court erred in awarding attorneys’ fees

incurred by Reeves’s bankruptcy counsel as Old York claims that such fees

were not incurred in the prosecution of this action. We disagree.

       The issue of whether a substantially prevailing party should be awarded

attorneys’ fees under CASPA is within the trial court’s discretion. Waller Corp.

v. Warren Plaza, Inc., 95 A.3d 313, 316 (Pa.Super. 2014) (citation omitted).

Thus, our standard of review of a trial court’s decision to award attorneys’ fees

under CASPA is “whether the trial court palpably abused its discretion.” Id.

(quoting Zimmerman v. Harrisburg Fudd I, L.P., 984 A.2d 497 (Pa.Super.

2009)).
____________________________________________

5 Old York makes no argument that the penalties set forth in CASPA constitute
punitive damages at common law under this heightened standard, but baldly
claims that the civil penalties set forth in CASPA can be referred to as punitive
damages and suggests that terms can be used interchangeably.

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      Our review of the record shows that Reeves’s pursuit of this action under

CASPA in the lower court and its defense against Old York’s petition in

bankruptcy court are intertwined. In seeking to recover payment due when

Old York failed to comply with the terms of CASPA, Reeves was forced to

defend itself in bankruptcy court when Old York specifically sought to prevent

the confirmation of the arbitrator’s award in this case by filing a petition in the

bankruptcy court.

      We agree that it was reasonable for Reeves to retain bankruptcy counsel

to handle the proceedings in bankruptcy court in order to recover on its claim

pursuant to CASPA in this case. After the bankruptcy court issued its decision

abstaining from ruling on Old York’s adversary petition and deferring to the

trial court on principles of comity, Reeves employed its bankruptcy counsel to

address the trial court on Reeves’s position on how to proceed.

      As noted above, CASPA provides that “the substantially prevailing party

in any proceeding to recover any payment under this act shall be awarded a

reasonable attorney fee in an amount to be determined by the court or

arbitrator.” 73 P.S. 512(b) (emphasis added). As noted above, the purpose of

CASPA is to make a contractor whole when it is forced to file litigation in order

to recover payments that were unreasonably withheld under the Act. El-

Gharbaoui, supra.

      As the trial court determined that Reeves is the substantially prevailing

party in this case, Section 512(b) requires that Reeves be awarded a

reasonable attorney fee in its pursuit to recover payment under CASPA. Thus,

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the trial court did not abuse its discretion in awarding Reeves attorneys’ fees

for its defense of the arbitrator’s award in bankruptcy court.

      For the foregoing reasons, we affirm the trial court’s judgment in favor

of Reeves and against Old York.

      Judgment affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 4/13/2023

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