Court Opinion

ID: 4257356
Source: CourtListenerOpinion
Date Created: 2018-03-22 19:29:57.417463+00
Date Added: 2024-06-11T13:55:21.278473
License: Public Domain

J-A05018-18

                                  2018 Pa. Super. 67

 DONALD E. HAVILAND, JR.                   :   IN THE SUPERIOR COURT OF
                                           :        PENNSYLVANIA
                      Appellant            :
                                           :
                                           :
              v.                           :
                                           :
                                           :
 KLINE & SPECTER, P.C.                     :   No. 1791 EDA 2017

                Appeal from the Order Entered May 12, 2017
    In the Court of Common Pleas of Philadelphia County Civil Division at
                            No(s): 080900336

BEFORE:    MURRAY, J., McLAUGHLIN, J., and STEVENS*, P.J.E.

OPINION BY MURRAY, J.:                                FILED MARCH 22, 2018

      Appellant, Donald E. Haviland, Jr. (Haviland), appeals from the order

denying his petition for a preliminary or special injunction to disqualify retired

Judge Mark Bernstein (Bernstein) as the court-appointed neutral arbitrator in

this matter. For the reasons that follow, we quash this appeal.

      Haviland and the law firm Kline & Specter (K&S) have been involved in

a long and acrimonious series of disputes.      In November 2001, K&S hired

Haviland, who is an attorney, to manage its newly-formed Class Action

Department.        The employment agreement between Haviland and K&S

(Employment Agreement) set forth the terms that would control the allocation

of client fees and costs in the event Haviland were to leave K&S. Specifically,

Paragraph 5 of the Employment Agreement stated that Haviland would have

to pay K&S a “referral fee” in the amount of one-third of the total fees he

received for any non-class action matter in which he continued to act as
____________________________________
* Former Justice specially assigned to the Superior Court.
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counsel after leaving K&S.           Employment Agreement, ¶ 5.          During his

employment       with   K&S,     Haviland      represented   the   Commonwealth   of

Pennsylvania (Commonwealth) in several lawsuits involving major brand-

name prescription drug companies known as the PA-AWP and Lupron Blues

litigation.

       In September 2006, Haviland left K&S because the law firm had decided

to close its Class Action Department. Upon leaving, Haviland continued to act

as counsel for the Commonwealth in the PA-AWP and Lupron Blues litigation.

Approximately six months later, Haviland obtained the Commonwealth’s first

favorable settlement with a defendant in those cases.

       On July 13, 2007, K&S filed a Petition for the Appointment of an

Arbitrator to adjudicate its dispute with Haviland regarding the apportionment

of costs and fees that Haviland and K&S would receive under the Employment

Agreement stemming from the PA-AWP and Lupron Blues litigation.                K&S

contended that Paragraph 5 of the Employment Agreement required Haviland

to pay K&S one-third of the total fees he received from the settlements in the

PA-AWP and Lupron Blues cases. This petition was the genesis of the series

lawsuits and arbitration proceedings and awards that Haviland and K&S

continue to litigate to this day.1

____________________________________________

1 K&S prevailed against Haviland in the arbitration proceedings that began in
July 2007.    On October 3, 2011, Haviland was ordered to pay K&S
$5,739,490.15, representing one-third of the fees that he had received in the
PA-AWP and Lupron Blues litigation (plus 6% interest).

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      On September 3, 2008, Haviland commenced this action by filing a

praecipe to issue a writ of summons. On November 13, 2008, the trial court

stayed the action pending the outcome of the arbitration proceedings in the

aforementioned related dispute between the parties. On January 22, 2016,

following the arbitration award in the related dispute, Haviland filed a

complaint in the instant action in which he alleged that K&S breached

Paragraph 6 of the Employment Agreement, which governs the allocation of

costs and fees in class-action lawsuits in which Haviland continued to act as

counsel after leaving K&S.    Haviland alleged that he was entitled to fees

stemming from several class-action lawsuits (unrelated to the PA-AWP and

Lupron Blues cases) that he handled while working for K&S that he never

received.

      On February 2, 2016, K&S filed preliminary objections in which it asked

the trial court to compel Haviland to submit his claims to arbitration pursuant

to Paragraph 10 of Employment Agreement. Paragraph 10 of the Employment

Agreement provides that the parties agreed to enforce the Employment

Agreement “by either binding arbitration under [Pennsylvania’s] Arbitration

Act of 1927 or through court action, at the option of K&S[.]” Employment

Agreement, ¶ 10. On March 17, 2016, the trial court sustained in part and

overruled in part the preliminary objections, remanding the matter to

arbitration pursuant to Paragraph 10 of the Employment Agreement.

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      Importantly, the trial court’s March 17, 2016 order required Haviland

and K&S to each appoint an arbitrator and provide notice to all parties of the

individual selected within 20 days of the date of the order. The order further

provided that the named arbitrators for each party were to confer and select

a third, neutral arbitrator within 45 days of the date of the order. The order

stated that if the named arbitrators were unable to agree upon a neutral

arbitrator, the trial court would appoint one.

      After both parties selected their arbitrators, the arbitrators convened,

but were unable to agree on a third, neutral arbitrator. Over the course of

the next several months, the trial court successively appointed three neutral

arbitrators, each of whom recused themselves from the case.        Two of the

arbitrators left the case after Haviland sought their recusal, and the other

arbitrator recused on his own accord. Thereafter, the trial court appointed

Bernstein.

      On January 13 and 19, 2017, in response to Bernstein’s request for

information relating to the dispute, Haviland asked Bernstein to disclose any

conflicts of interest prior to taking any action in this matter. On January 20,

2017, Bernstein responded by email that he was a retired judge from the

Court of Common Pleas of Philadelphia County, that he had presided over

cases involving Haviland’s counsel and other cases involving K&S, and that

since his retirement he had not arbitrated any disputes involving either of the

parties. Haviland’s Petition to Disqualify/Enjoin Bernstein, 4/20/17, Exhibit 5

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(Bernstein Email, 1/20/17). Thus, Bernstein stated that he did not believe

that any conflict existed that would preclude him from serving as a neutral

arbitrator in this case. Id.

      On February 18, 2017, however, Bernstein sent Haviland another email

in which he discussed a potential conflict relating to his employment as an

adjunct professor at the Thomas R. Kline School of Law at Drexel University.

Thomas Kline (Kline), one of the named partners at K&S, made a large

donation to the law school, which was renamed in his honor. In the February

18, 2017 email to Haviland’s counsel, Bernstein stated:

            By email dated January 20, 2017, a copy of which is
            below, I advised that there are no conflicts that would
            prohibit my participation in this matter. I can only
            imagine that your client is concerned because I am
            [sic] adjunct professor at the Thomas R. Kline
            [S]chool of [L]aw. I believe that fact is commonly
            known and is contained on my C.V. which can be
            publicly       found       on        my         website
            www.judgebernstein.org. What may not be common
            knowledge is I have been teaching at Drexel [S]chool
            of Law before its name was changed and when it was
            known as the Earle Mack [S]chool of [L]aw. Please
            advise your clients that there are no conflicts that
            would prohibit my participation as an arbitrator in this
            matter.

Id. at Exhibit 6 (Bernstein Email, 2/18/2017).

      On March 9, 2017, in a letter to Bernstein, Haviland formally motioned

for Bernstein’s recusal based on his employment at the Thomas R. Kline School

of Law at Drexel University.    Id. at Exhibit 7 (Letter, 3/9/17).     Haviland

asserted that Bernstein was “consciously or subconsciously” predisposed to

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ruling against him because Kline had made a substantial gift to Bernstein’s

employer, was the Chairman of the Board of the law school, and because

Bernstein was under the supervision of Gwen Roseman Stern, the Director of

Trial Advocacy at the law school and the wife of an attorney at K&S. Id.

      On April 3, 2017, by email, Bernstein denied Haviland’s motion for

disqualification and recusal. Bernstein explained: “I have no doubt of my

ability to participate as a neutral arbitrator on this panel of arbitrators to

decide the issues presented solely on the basis of the law and evidence.” Id.

at Exhibit 9 (Bernstein Email, 4/3/17).     Bernstein maintained that he has

taught at the law school since long before it was renamed the Thomas R. Kline

School of Law and that Kline has no involvement with his teaching at the

school.

      On April 20, 2017, Haviland filed with the trial court a petition for a

preliminary or special injunction to enjoin and disqualify Bernstein from acting

as the neutral arbitrator. In addition to the aforementioned alleged potential

conflicts, Haviland argued that Bernstein must recuse for failing to make

complete and timely disclosures of the alleged disqualifying conflicts of

interest.   On May 12, 2017, the trial court denied Haviland’s petition to

disqualify Bernstein.   The trial court concluded that “a reasonable person

would not question Bernstein’s ability to be impartial[.]”       Trial Ct. Op.,

7/17/17, at 8. The court explained:

             Bernstein is recently retired from sitting on the bench
             for the Court of Common Pleas of Philadelphia and is

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              familiar and aware of his duty to be impartial. He was
              appointed by this court for his experience and
              reputation for integrity and fairness. Bernstein is an
              adjunct professor and does teach two courses at the
              Thomas R. Kline School of Law, Advanced Evidence
              and Pennsylvania Practice.         The courses were
              designed by Bernstein at the request of the then Dean
              Roger Denis. These courses are the same two courses
              he taught when the law school was known as [the]
              Earle Macke School of Law. Kline had nothing to do
              with Bernstein’s position at the law school and
              continues to have no involvement in Bernstein’s
              teaching of these courses.       Similarly, as for the
              allegations that Bernstein is supervised by the wife of
              an attorney employed by [K&S], there is no evidence
              that Bernstein and Ms. Stern have any contact with
              one another at the law school.          Based on the
              foregoing, one may not reasonably conclude that
              Bernstein will be influenced in favor of defendant.

Id. at 7-8.

       On May 23, 2017, Haviland filed a timely notice of appeal. 2 On August

3, 2017, K&S responded by filing an application to dismiss on the basis that

Haviland had filed an appeal from a non-appealable order. On September 14,

2017, this Court, by per curiam order, denied the application without prejudice

to K&S’s right to raise the issue before the merits panel.

       On appeal, Haviland presents the following issue for our review:

              Whether the trial court erred in improperly and
              reflexively denying [Haviland]’s Petition for Injunctive
              Relief, without a hearing or argument, where ample
              evidence demonstrated the need to enjoin this

____________________________________________

2  The trial court did not order Haviland to file a concise statement of errors
complained of on appeal pursuant to Rule 1925(b) of the Pennsylvania Rules
of Appellate Procedure. The trial court, however, did author an opinion in
support of its decision.

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            arbitration from proceeding with [Bernstein] as the
            purported “neutral arbitrator,” because of his
            significant conflicts of interest, which he repeatedly
            resisted even disclosing.

Haviland’s Brief at 2.

      Before discussing the issue raised by Haviland, we address K&S’s

application to dismiss this appeal, as it implicates our jurisdiction. K&S argues

that we should quash Haviland’s appeal as interlocutory.

      In support of this argument, K&S first asserts that the trial court’s order

denying Haviland’s petition to disqualify Bernstein from acting as the neutral

arbitrator is an interlocutory order that is not appealable as of right or as a

collateral order. In his answer, Haviland responds by arguing that because he

is appealing from an order denying a petition to enjoin Bernstein from acting

as the neutral arbitrator, the order is appealable as of right under Rule

311(a)(4) of the Pennsylvania Rules of Appellate Procedure as an order

denying an injunction.

      This Court may address the merits of an appeal taken from “(a) a final

order or an order certified as a final order; (2) an interlocutory order

[appealable] as of right; (3) an interlocutory order [appealable] by

permission; or (4) a collateral order.” Commerce Bank v. Kessler, 46 A.3d
724, 728 (Pa. Super. 2012), quoting Stahl v. Redcay, 897 A.2d 478, 485

(Pa. Super. 2006) (citations omitted); see also Pa.R.A.P. 341(b).          “As a

general rule, only final orders are appealable, and final orders are defined as

orders disposing of all claims and all parties.” Am. Indep. Ins. Co. v. E.S.,

                                      -8-
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809 A.2d 388, 391 (Pa. Super. 2002); see also Pa.R.A.P. 341(a) (“[A]n

appeal may be taken as of right from any final order of a government unit or

trial court.”).

      The May 12, 2017 order denying Haviland’s petition to disqualify does

not constitute a final order as defined by Rule 341(b). The order plainly does

not dispose of all claims and all parties, as Haviland sought the recusal of

Bernstein prior to the arbitration award in this case. Haviland does not dispute

this assessment. Rather, Haviland asserts that the order is appealable under

Rule 311(a), which governs appeals as of right from interlocutory orders, as

an order denying an injunction.      Rule 311(a)(4) permits an interlocutory

appeal as of right taken from an order “granting, continuing, modifying,

refusing or dissolving injunctions or refusing to dissolve or modify injunctions.”

Pa.R.A.P. 311(a)(4).

      Haviland titled his motion seeking the recusal of Bernstein as follows:

“Plaintiff Haviland’s Petition For A Preliminary Or Special Injunction To Enjoin

And Disqualify Mark I. Bernstein From Acting As The ‘Neutral’ Arbitrator.”

Petition to Enjoin and Disqualify, 4/20/17. Although Haviland asks this Court

to interpret his petition to enjoin and disqualify as a request for injunctive

relief, our review of the petition reveals that Haviland sought nothing more

than for the trial court to order the disqualification or recusal of Bernstein as

arbitrator. See id. This Court has held that “[f]or purposes of considering

timeliness of appeals we must look beyond the title to the contents and

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substance of the motion in order to characterize it.” Maliszewski v. Rendon,

542 A.2d 170 n.1 (Pa. Super. 1988); see also Bucks Orthopaedic Surgery

Assocs., P.C. v. Ruth, 925 A.2d 868, 871 (Pa. Super. 2007); Walt Med. v.

Electro-Nucleonics,     583 A.2d 492,    494   n.2   (Pa.   Super.   1990);

Fortune/Forsythe v. Fortune, 508 A.2d 1205, 1208 (Pa. Super. 1986).

Accordingly, we characterize Haviland’s petition to enjoin and disqualify as a

motion for the recusal of Bernstein as the neutral arbitrator in this matter.

      The question of whether we have jurisdiction to review the merits of

Haviland’s appeal turns on whether an order denying a pre-award petition to

disqualify an arbitrator is an appealable non-final order. Although we have

been unable to locate a case directly on point, we conclude that the case law

addressing the interlocutory nature of pre-trial recusals of trial judges is

persuasive and instructive. See Sheehan v. Nationwide Ins. Co., 779 A.2d
582, 584-85 (Pa. Super. 2001) (analogizing the recusal of arbitrator to the

recusal of a trial judge); see also 231 Pa. Code § 1302(e) (stating that any

arbitrator “who would be disqualified for any reason that would disqualify a

judge under the Code of Judicial Conduct shall immediately withdraw as an

arbitrator”).

      In support of its position that we should dismiss Haviland’s appeal as

interlocutory, K&S relies on this Court’s decision in In re Bridgeport Fire

Litigation, 51 A.3d 224 (Pa. Super. 2012).           In Bridgeport Fire, the

appellants filed a motion seeking the recusal of the trial judge presiding over

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their class action litigation, which the trial court denied after its approval of

the settlement agreements. Id. at 227-28. On appeal from that order, this

Court issued a rule to show cause as to why the appellants’ appeal should not

be quashed as interlocutory. Id. at 229. This Court noted that the trial court’s

“order denying [Certain Class Plaintiffs’] motion for recusal appears to be

premature since an order on a motion for recusal is an interlocutory order for

purposes of an appeal.” Id. The appellants asserted that if the appeal from

the order denying their motion for recusal was not ripe for review, it would

never be reviewable because all of the issues in the case had been resolved.

Id.

       This Court initially agreed with the appellants that the case represented

“a ‘somewhat anomalous situation’ in that the trial court’s order denying the

motion to recuse was not filed until after final judgment was entered in this

case and the appeals from the final judgment and all prior interlocutory orders

were decided.” Id. The panel observed, however, that there were still several

motions relating to the settlement of the class action lawsuit awaiting the trial

court’s determination. Id. at 230. Thus, this Court held that the appropriate

time for review of the order denying the appellants’ motion for recusal was

after the resolution of those motions and quashed the appeal. Id. at 230-31.3

____________________________________________

3 Haviland asserts that Bridgeport Fire was an appeal from an order denying
an injunction, and as such, this Court concluded that it was immediately

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       Indeed, this Court has routinely held that a pre-trial motion seeking to

recuse a judge from further proceedings is not a final order.            See In re

Bridgeport Fire Litig., 51 A.3d at 229 (“an order on a motion for recusal is

an interlocutory order for purposes of an appeal”); see also Rohm and Haas

Co. v. Lin, 992 A.2d 132, 149 (Pa. Super. 2010); Krieg v. Krieg, 743 A.2d
509, 511 (Pa. Super. 1999); Hahalyak v. Integra Fin. Corp., 678 A.2d 819

(Pa. Super. 1996); Kenis v. Perini Corp., 682 A.2d 845 (Pa. Super. 1996).

Additionally, this Court has stated that an appeal from the denial of a pre-trial

motion to recuse does not fall within any of the categories listed in Rules 311

(Interlocutory Appeals as of Right) or 313 (Collateral Orders)4 of the

Pennsylvania Rules of Appellate Procedure and that consequently, appeals

from such orders are premature. Krieg, 743 A.2d at 511.

____________________________________________

appealable as of right. Answer to Application to Dismiss, 8/21/17, at 11.
Clearly, as discussed above, this is not what occurred in Bridgeport Fire.

4   Rule 313 provides:

              (a) General rule. An appeal may be taken as of right
              from a collateral order of an administrative agency or
              lower court.

              (b) Definition.       A collateral order is an order
              separable from and collateral to the main cause of
              action where the right involved is too important to be
              denied review and the question presented is such that
              if review is postponed until final judgment in the case,
              the claim will be irreparably lost.

Pa.R.A.P. 313.

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      Therefore, we hold that an order denying a motion seeking the recusal

or disqualification of an arbitrator, as with an order denying the recusal of a

trial judge, is not a final order or an interlocutory order appealable as of right

or a collateral order.   This conclusion comports with Section 7320 of the

Uniform Arbitration Act, which governs appeals from court orders in arbitration

matters. Section 7320 provides as follows:

            (a) General rule.--An appeal may be taken from:

               (1) A court order denying an application to compel
               arbitration made under section 7304 (relating to
               proceedings to compel or stay arbitration).

               (2) A court order granting an application to stay
               arbitration made under section 7304(b).

               (3) A court order confirming             or   denying
               confirmation of an award.

               (4) A court order modifying or correcting an award.

               (5) A court order vacating an award without
               directing a rehearing.

               (6) A final judgment or decree of a court entered
               pursuant to the provisions of this subchapter.

            (b) Procedure.--The appeal shall be taken in the
            manner, within the time and to the same extent as an
            appeal from a final order of court in a civil action.

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42 Pa.C.S.A. § 7320.         Nowhere does Section 7320 state that, under the

Uniform Arbitration Act, an appellant may appeal an order denying a motion

or petition seeking the recusal or disqualification of an arbitrator.5

____________________________________________

5  As mentioned above, the Employment Agreement provides that any issue
relating to the enforcement of the agreement is to be governed by the
Arbitration Act of 1927, 5 P.S. § 161 et seq. The Arbitration Act of 1927 was
repealed and replaced by the Pennsylvania Uniform Arbitration Act of 1980,
42 Pa.C.S.A. §§ 7301-7320. Despite the repeal of the 1927 Act, “parties
remain free to agree to proceed according to the 1927 Act.” See Pantellis
v. Erie Ins. Exch., 890 A.2d 1063, 1065 (Pa. Super. 2006).

      Nevertheless, this Court has held that the 1980 ACT controls the manner
and time for taking arbitration appeals. We explained:

              [E]ven if the parties are in agreement that this matter
              was to be resolved under the 1927 Act, that
              agreement does not, and cannot, dictate which act
              governs the taking of an appeal. Section 175 of the
              1927 Act has been repealed, and Section 7320 of the
              1980 Act now controls the manner and time for the
              taking of statutory arbitration appeals. Cf. Seay v.
              Prudential Prop[.] and Cas[.] Ins. Co., [] 543 A.2d
1166 ([Pa. Super.] 1988) (where terms of insurance
              contract called for arbitration in accordance with
              provisions of 1927 Act, 42 Pa.C.S.[A.] § 7320 still
              governed appealability of order confirming arbitration
              award).

              Moreover, a review of 5 P.S. § 175 of the 1927 Act
              reveals that it closely tracks the language of 42
              Pa.C.S.[A.] § 7320. Hence, were we to find that the
              provisions of the 1927 Act govern the taking of this
              appeal, we would nonetheless reach the same result
              infra.

Dunlap by Hoffman v. State Farm Ins. Co., 546 A.2d 1209, 1210 (Pa.
Super. 1988)

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       Accordingly, because the trial court’s May 12, 2017 denying Haviland’s

petition to disqualify Bernstein is not a final order or an interlocutory order

appealable as of right or a collateral order,6 we do not have jurisdiction to

review the merits, and therefore quash the appeal.

       Appeal quashed. Case remanded. Jurisdiction relinquished.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 3/22/18

____________________________________________

6 We also note that Haviland did not seek an appeal pursuant to Pennsylvania
Rule of Appellate Procedure 312, which governs interlocutory appeals by
permission. See Pa.R.A.P. 312.

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