Court Opinion

ID: 7806636
Source: CourtListenerOpinion
Date Created: 2022-09-06 16:09:50.920492+00
Date Added: 2024-06-11T16:30:15.810081
License: Public Domain

J-S24020-22

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

    BROTHER MORENO CONSTRUCTION,            :   IN THE SUPERIOR COURT OF
    LLC                                     :        PENNSYLVANIA
                                            :
                                            :
               v.                           :
                                            :
                                            :
    AIXIAN PROPERTIES, LLC AND              :
    NESTOR COLON                            :   No. 420 EDA 2022
                                            :
                     Appellants             :

               Appeal from the Order Entered December 30, 2021
      In the Court of Common Pleas of Philadelphia County Civil Division at
                              No(s): 201101496

BEFORE:      PANELLA, P.J., LAZARUS, J., and PELLEGRINI, J.*

MEMORANDUM BY LAZARUS, J.:                       FILED SEPTEMBER 6, 2022

        Aixian Properties, LLC (Aixian) and Nestor Colon appeal from the trial

court order, entered in the Court of Common Pleas of Philadelphia, granting

Brother Moreno Construction, LLC’s (Brother Moreno) petition to confirm an

arbitration award. After careful review, we affirm.

         On October 8, 2019, the parties entered into a joint venture agreement

(Agreement) to buy, renovate, and resell a property located at 2702 Oakford

Street in Philadelphia.    On November 17, 2020, Brother Moreno filed a

complaint against Aixian and Colon, alleging fraud, misrepresentation, and

breach of contract with respect to the Agreement.

        On December 18, 2020, Aixian and Colon filed preliminary objections to

the complaint, arguing that the court lacked jurisdiction over the matter

*   Retired Senior Judge assigned to the Superior Court.
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because the Agreement among the parties required any claims arising out of

the Agreement be resolved by mediation or binding arbitration. On February

23, 2021, the Honorable Karen Shreeves-Johns entered an order sustaining

the preliminary objections and staying the case pending the outcome of

binding arbitration.

      After the case was stayed, the parties signed a binding arbitration

agreement that stated:

      The award rendered by the arbitrator pursuant to this agreement
      shall be final and binding on all parties, subject to the statutory
      provisions of 42 [Pa.C.S.] § 7341 regarding the vacation or
      modification of an arbitration award upon a showing of fraud,
      misconduct, corruption, or other irregularity causing the rendition
      of an unjust, inequitable or unconscionable award. . . . A judgment
      or decree in conformity [with] the award may be entered by a
      court of the competent jurisdiction on application of either party.

Petition to Confirm Award of Arbitrator, 9/21/21, Exhibit B at ¶ 6.

Furthermore, the parties selected Vito F. Canuso, Jr., Esquire, as the arbitrator

from a list of three suggested arbitrators.

      An arbitration hearing was held on August 10, 2021. After the arbitrator

considered the memoranda, pleadings, testimony, and exhibits presented by

the parties, he issued an award of $157,707.00 in favor of Brother Moreno

and against Aixian and Colon, jointly and severally.       Canuso entered the

arbitration award on August 26, 2021, noting that he based his findings on

the Agreement, the receipts presented at the hearing for costs incurred, and

testimony as to the value of the property.

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      On September 21, 2021, Brother Moreno filed a petition to confirm the

arbitration award, arguing that neither Aixian nor Colon had made any

allegations of coercion, fraud, foul play, or misrepresentation against Brother

Moreno or the arbitrator.

      On October 12, 2021, Aixian and Colon filed a motion to modify or

vacate the arbitration award. They argued that Brother Moreno engaged in

fraud, misconduct, corruption, or other irregularity, causing the arbitrator to

go beyond the scope of his authority and rendering the rendition of an unjust,

inequitable, or unconscionable award. Specifically, Aixian and Colon alleged

that Brother Moreno submitted fraudulent expense reports, which included

double entries and work performed on other real estate projects outside the

Agreement. They also contended that the property was overvalued, and the

award should be reduced or vacated in light of a lower appraisal value for the

property.

      In its answer to the motion to modify or vacate, Brother Moreno asserted

that Aixian and Colon included evidence in their closing memorandum that

was never provided during discovery or entered into evidence at the

arbitration, including a report by an appraiser who did not appear or testify at

the hearing. Brother Moreno further noted that Colon, who is a real estate

agent, himself calculated the value of the property at the arbitration. Colon

valued the property at $315,000.00 to $325,000.00, which the arbitrator took

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into consideration in assigning the property a $320,000.00 value and

ultimately arriving at an award of $157,707.00.

      On December 30, 2021, the Honorable Abbe F. Fletman entered an order

granting Brother Moreno’s petition to confirm the arbitration award and

denying Aixian and Colon’s motion to modify or vacate the award. On January

27, 2022, Aixian and Colon filed a notice of appeal. They raise the following

issues, verbatim:

      1. [Whether] it was an abuse of discretion and error of law for the
         [c]ourt to confirm the [a]rbitration [a]ward where it was clearly
         demonstrated by [Aixian and Colon] that the underlying
         [a]ward could be vacated or modified because [Aixian and
         Colon] clearly showed that [they were] denied a hearing or that
         fraud, misconduct, corruption[,] or other irregularity caused
         rendition of an unjust, inequitable or unconscionable award
         pursuant to the Uniform Arbitration Act-Sub Chapter B-
         Common Law Arbitration 42 Pa.C.S. § 7342?

      2. [Whether] it was an abuse of discretion and error of law for the
         Court to confirm the [a]rbitration [a]ward because [Aixian and
         Colon] showed that [Brother Moreno] during the [a]rbitration
         [h]earing engaged in fraud, misconduct, and corruption by
         submitting as evidence during the [a]rbitration [h]earing[:] (1)
         fraudulent expense reports; (2) overvalued real estate
         estimates; (3) double entries; and (4) invoices for work
         performed by [Brother Moreno] on projects not related to the
         dispute that in sum resulted in the [a]rbitrator exceeding his
         authority and to render an [a]ward that was unconscionable
         and unjust pursuant to Uniform Arbitration Act-Sub Chapter B-
         Common Law Arbitration 42 Pa.C.S. § 7342?

Brief for Appellant, at 4.

      Arbitration is a well-accepted form of dispute resolution that has been

repeatedly endorsed by the courts of this Commonwealth. See MacPherson

v. Magee Mem’l Hosp. for Convalesence, 128 A.3d 1209, 1219 (Pa. Super.

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2015) (en banc) (“Pennsylvania has a well-established public policy that

favors arbitration[.]”) (citation omitted). As we have held, the “award of an

arbitrator in a nonjudicial arbitration . . . 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.” Sage v. Greenspan, 765 A.2d

1139, 1142 (Pa. Super. 2000); 42 Pa.C.S. § 7341. 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. Furthermore, “arbitrators are the final

judges of both law and fact, and an arbitration award is not subject to reversal

for a mistake of either.” U.S. Claims, Inc. v. Dougherty, 914 A.2d 874, 876

(Pa. Super. 2006). A “trial court order confirming a common law arbitration

award will be reversed only for abuse of discretion or an error of law.”

Prudential Prop. & Cas. Ins. Co. v. Stein, 683 A.2d, 683, 685 (Pa. Super.

1996).

      Prior to addressing the merits of the appellants’ claims, we must

determine whether they were properly preserved for judicial review. Section

7342(b) of the Pennsylvania Uniform Arbitration Act has consistently been

interpreted to require that any challenge to an arbitration award be made in

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an appeal to the Court of Common Pleas by filing a petition to vacate or modify

the arbitration award within thirty days of the date of the award. See

Sage, 765 A.2d at 1142. An objection to an arbitration award filed after the

thirty-day period will be deemed untimely and waived. Id. We have also held

that challenges to the validity of an arbitration award asserted for the first

time in opposition to a petition to confirm are procedurally inadequate to

preserve claims for judicial review. Dougherty, 914 A.2d at 877.

      Instantly, our review of the record confirms the trial court’s finding that

Aixian and Colon did not file their motion to vacate or modify the arbitration

until October 12, 2021, more than thirty days after the date of the award

entered on August 26, 2021. See Trial Court Opinion, 3/23/22, at 5. Since

Aixian and Colon did not raise their challenges to the arbitration award within

thirty days of its entry, they did not preserve their claims for judicial review.

See Sage, 765 A.2d at 1142 (challenge to arbitration award waived where

filed more than thirty days after entry of award). Accordingly, the trial court

properly confirmed the award after the passage of thirty days as required by

42 Pa.C.S. § 7342(b), and we afford Aixian and Colon no relief.1

1 Even if Aixian and Colon had timely filed a motion to vacate or modify the
arbitration award, we agree with the trial court that their underlying claims
are meritless. See Trial Court Opinion, 3/23/22, at 5-6. Aixian and Colon
have not shown fraud, misconduct, corruption, or other irregularity in the
arbitration process “by clear, precise, and indubitable evidence.”        See
McKenna, 745 A.2d at 4. Furthermore, we have noted that “[n]either we nor
the trial court may retry the issues addressed in arbitration or review the
tribunal’s disposition of the merits of the case.” Civan v. Windmere Farms,
Inc., 180 A.3d 489, 493 (Pa. Super. 2018). Instantly, the arbitrator
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     Order affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 9/6/2022

considered the briefs, testimony, and evidence presented at the arbitration
hearing before rendering the award. As Brother Moreno explained in its brief,
Aixian and Colon attempted to rely on evidence neither produced in discovery
nor presented at the hearing, including a report from an appraiser who did not
appear or testify at the hearing. Although Aixian and Colon claimed the
property was overvalued at arbitration, Colon himself provided a higher value
than the one the arbitrator adopted in his findings.         Considering this
information, the trial court did not err by granting Brother Moreno’s petition
and denying apellants’ motion to vacate or modify the binding arbitration
award.
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