Court Opinion

ID: 9391939
Source: CourtListenerOpinion
Date Created: 2023-05-03 18:08:53.969362+00
Date Added: 2024-06-11T17:18:43.616913
License: Public Domain

J-A06040-23

                                   2023 PA Super 75

    PENNENERGY RESOURCES, LLC,                 :   IN THE SUPERIOR COURT OF
    PINE RUN MIDSTREAM, LLC, & PER             :        PENNSYLVANIA
    MANAGER, LLC                               :
                                               :
                                               :
                v.                             :
                                               :
                                               :
    WINFIELD RESOURCES, LLC                    :   No. 979 WDA 2022
                                               :
                       Appellant               :

                  Appeal from the Order Entered July 25, 2022
       In the Court of Common Pleas of Allegheny County Civil Division at
                             No(s): GD 20-001043

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

OPINION BY PELLEGRINI, J.:                                 FILED: MAY 3, 2023

        This case arises out of two separate demands to arbitrate contractual

claims that Winfield Resources, LLC (Winfield) filed against PennEnergy

Resources, LLC (PennEnergy) and Pine Run Midstream, LLC (Pine Run). After

filing the demands, Winfield filed a motion for summary judgment in the

nature of a motion to compel arbitration. The trial court denied the motion

and stayed the arbitration, concluding that the parties never had a “meeting

of the minds” to arbitrate Winfield’s contractual claims because its claims arise

out of multiple agreements with conflicting arbitration provisions.      For the

reasons explained below, we find that Winfield’s claims fall within the scope

of the agreements’ arbitration provisions and reverse and remand.

____________________________________________

*   Retired Senior Judge assigned to the Superior Court.
J-A06040-23

                                       I.

                              The Agreements

      In July 2012, Winfield and PennEnergy entered into a Joint Development

Agreement (JDA) to develop oil and gas leases within a defined area of mutual

interest (AMI) in Butler and Armstrong Counties. As required by the JDA, the

two parties entered into a Joint Operating Agreement (JOA) addressing how

they would jointly explore, develop and produce the gas. Under the JOA, both

parties had the right to take in-kind or separately dispose of its share of all

gas produced from the AMI. Additionally, both the JDA and JOA had dispute

resolution provisions requiring the parties to arbitrate any disputes arising out

of or related to the agreements.

      In 2016, Pine Run was formed to take over from another company as

the midstream company gathering the gas production from the wells operated

in the AMI.     After its formation, Pine Run entered into a Gas Gathering

Agreement (GGA) with both PennEnergy and Winfield in January 2017. Under

the agreement, PennEnergy (as the producer) and Winfield (as the non-

operator) delivered gas to Pine Run (as the gatherer) and Pine Run operated

the gas gathering system. The GGA identified two then-unconnected delivery

points for the system: the DTI Burke Interconnect and the Big Pine Brewer

Interconnect.   The GGA also provided that PennEnergy would submit daily

nominations on behalf of itself and Winfield informing Pine Run of the volume

of gas that they would provide and the desired delivery point for that gas.

                                      -2-
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Finally, like the JDA and JOA, the GGA required that the parties arbitrate any

disputes arising from or related to the agreement.

                          First Arbitration Demand

      In November 2018, Winfield exercised its right under the JOA to take its

gas in-kind. Less than a year later, in June 2019, Pine Run connected the DTI

Burke and Big Pine Brewer delivery points, thus providing an alternative

delivery point/market for all gas dedicated to Pine Run.

      According to Winfield, PennEnergy and Pine Run initially honored

Winfield’s daily nominations but PennEnergy soon began unilaterally changing

the nominations, causing Winfield to incur additional costs.     To illustrate,

Winfield alleged in its dispute notice:

      … [On] July 30, 2019, Winfield nominated its gas to be sold 33,000
      MMBtus from the DTI Burke Meter and 9,100 MMBtus from the Big
      Pine Brewer meter. [PennEnergy] has refused to comply with
      Winfield’s request and has, instead, unilaterally, revised those
      nominations such that 26,000 MMBtus were nominated at the DTI
      Burke meter and the remaining 16,100 at the Brewer Meter…

                                      ***

      … [PennEnergy’s] failure to properly submit Winfield’s
      nominations to [Pine Run] has cost Winfield additional fees related
      to the transportation costs for unathorized gas sales at the Brewer
      meter, which are 20¢ per MMBTu more than the transportation
      costs for gas sales at the Burke meter. By causing Winfield’s gas
      to be sold at higher volumes than nominated at the Brewer meter,
      [PennEnergy] has cost Winfield substantial additional fees which
      it did not agree to incur.

                                      -3-
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R. 1399a.1

        As a result, in November 2019, Winfield filed a demand for arbitration

under both the JOA and GGA with the American Arbitration Association (AAA).

In its demand, Winfield named not only PennEnergy and Pine Run as

respondents, but also PER Manager, LLC (Manager), an affiliate of

PennEnergy.2      Winfield’s demand included four claims:   breach of contract

against PennEnergy and Manager under the JDA, JOA and GGA; breach of

contract against Pine Run; breach of contract against Manager; and

conversion against all respondents.

        After the AAA informed the parties that it would appoint a “provisional

arbitrator,” PennEnergy, Pine Run and Manager (collectively, Plaintiffs) filed a

complaint in the trial court for declaratory and injunctive relief against

Winfield.    Besides Manager not being a party to any of the agreements

allegedly breached, Plaintiffs emphasized that neither the JDA nor GGA

provided for a process involving a “provisional arbitrator.”      Plaintiffs also

contended that the JDA and GGA had conflicting arbitration procedures such

as how arbitrators would be selected; how many arbitrators there could be;

the timing of arbitration; discovery; and whether awards could include

____________________________________________

1   For the convenience of the parties, we refer to the reproduced record.

2 PennEnergy is owned and controlled by PER Upstream, LLC, which, in turn,
is owned and controlled by Manager. All three are distinct and separate legal
entities.

                                           -4-
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attorneys’ fees. Plaintiffs sought an injunction to stay arbitration “until [the

trial court] determines what rules or procedures apply to the dispute

resolution process and whether Manager can be forced to arbitrate.”            In

February 2020, the trial court granted Plaintiffs’ request for relief and ordered

Winfield’s arbitration stayed “until a final judgment is entered in this case[.]”

                           Second Arbitration Demands

       In May 2020, Winfield moved to lift the stay so that it could file new,

separate arbitration demands against only PennEnergy and Pine Run. After

that request was denied, Winfield went ahead with its plan anyway and, in

December 2020, dismissed its pending arbitration that sought arbitration

under both agreements and instead filed new AAA arbitration demands

separately against PennEnergy and Pine Run.          For PennEnergy, Winfield

alleged it was entitled to arbitration under the JDA and JOA, raising claims of

breach of duty of good faith and fair dealing and conversion. As for Pine Run,

Winfield alleged it was entitled to arbitration under the GGA and raised claims

of breach of contract, breach of duty of good faith and fair dealing, tortious

interference with contract and conversion.3

____________________________________________

3 In response to the new arbitration demands, PennEnergy and Pine Run filed
a joint motion for contempt and further injunctive relief, asserting that
separating Winfield’s claims into two separate arbitrations solved none of the
problems presented by the prior arbitration. Accordingly, they requested that
the trial court expand its existing stay to enjoin Winfield from proceeding with
the new injunctions.

                                           -5-
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       After filing the new demands, Winfield moved for summary judgment to

dismiss Plaintiffs’ declaratory action and thus lift the stay of arbitration.4

Winfield argued that it had mooted Plaintiffs’ complaints by (1) dismissing

Manager as a respondent, and (2) bringing separate arbitrations against

PennEnergy and Pine Run. Concerning the latter, Winfield asserted that any

complaints about what arbitration procedures applied to which claims involved

questions of procedural arbitrability to be decided by the arbitrator and not

the trial court.

       Plaintiffs responded that Winfield’s claims under the JDA or GGA were

not separately arbitrable because Winfield’s claims still arose out of multiple

agreements that had conflicting arbitration provisions.    Because Winfield’s

claims were hopelessly commingled, Plaintiffs argued that they never agreed

to arbitrate the kind of claims that Winfield was trying to raise because they

arose out of both the JDA/JOA and GGA. For these reasons, Plaintiffs urged

the trial court to continue its stay of arbitration and take over the merits of

Winfield’s claims.

                                Trial Court Decision

       On July 25, 2022, the trial court issued an order (1) denying Winfield’s

summary judgment motion, (2) staying the new arbitrations, and (3) taking

____________________________________________

4  After Winfield filed its new arbitration demands, PennEnergy and Pine Run
filed a joint motion for sanctions and injunctive relief in January 2021.

                                           -6-
J-A06040-23

over the merits of Winfield’s claims. Winfield timely appealed and, after being

ordered to do so, filed a Pa.R.A.P. 1925(b) statement.        In its statement,

Winfield argued that (1) Plaintiffs’ only complaints concerned questions of

procedural arbitrability that should not have been decided by the trial court,

and (2) Winfield had mooted Plaintiffs’ complaints by voluntarily dismissing

the first arbitration.

      In its Pa.R.A.P. 1925(a) opinion, the trial court determined that,

contrary to Winfield’s first claim, the main issue in the case was one of

substantive rather than procedural arbitrability—that is, whether Winfield’s

claims were arbitrable at all. See Trial Court Opinion (TCO), 9/20/22, at 3.

In finding that Winfield’s claims were not, the trial court explained:

      … Although it may seem obvious that there is an agreement to
      arbitrate here because the JDA and GGA both contain arbitration
      provisions, their simultaneous incompatibility and inseparability in
      this dispute is key to this inquiry. Where a situation, such as this,
      frustrates the purpose of arbitration to economically resolve
      parties’ disputes, Pennsylvania courts have previously refused to
      compel arbitration. School Dist. of Phila. v. Livingston-
      Rosenwinkel, P.C., 690 A.2d 1321, 1323 (Pa. Commw. Ct.
      1997). In that case, the Commonwealth Court did not order
      arbitration where the dispute “includes parties other than [the
      parties subject to the arbitration agreement] and includes issues
      that extend beyond interpretation of the Agreement’s terms.” Id.
      The Commonwealth Court determined that allowing litigation to
      proceed in separate forums with separate fact-finders would not
      promote the swift and orderly resolution of claims, as arbitration
      is designed to do. Id. Here, proceeding in two separate
      arbitration proceedings and without Manager, who is not a party
      to the arbitration agreements, presents the same problems of
      diseconomy and inconsistency.

TCO at 4-5 (some citations omitted).

                                      -7-
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      The trial court found that joining the two arbitrations into one did not

work either though, explaining:

      … Pennsylvania courts have held that agreements to arbitrate, like
      any other contract, must contain essential terms that are
      enforceable. Wert v. Manorcare of Carlisle PA, LLC, 124 A.3d
      1248, 1260 (Pa. 2015); Stewart v. GGNSC-Canonsburg, LLC,
      9 A.3d 215, 219-20 (Pa. Super. Ct. 2010). In both of these cases,
      the Courts refused to enforce an arbitration agreement where the
      agreement set forth an arbitration forum and procedures that
      were no longer enforceable but failed to expressly specify that
      these terms were non-essential to the agreement to arbitrate.
      The Courts did not infer an agreement to arbitrate in the absence
      of the enforceability of these essential terms. Here, Winfield
      makes the unavailing argument that the parties have some
      agreement to arbitrate, and that the procedures by which the
      arbitration will be governed can be determined by an arbitrator.
      However, the arbitration procedures to which PennEnergy agreed,
      and those to which Pine Run agreed, remain essential terms.
      Whether and however an arbitrator may even go about deciding
      which of these procedures governs the dispute is of no moment,
      because either PennEnergy or Pine Run will lose the benefit of its
      bargain for an essential term to the arbitration agreement if they
      proceed together in a single arbitration proceeding.

Id. at 5.

      The trial court concluded that this case involves a situation where the

parties “failed to anticipate these issues arising when they drafted arbitration

provisions with conflicting procedures.” Id. For support of this conclusion,

the trial court cited a Tenth Circuit Court of Appeals decision, Ragab v.

Howard, 841 F.3d 1134 (10th Cir. 2016), for the proposition that there is no

“meeting of the minds” where parties enter into multiple agreements

containing conflicting arbitration procedures. Id. at 5-6 (citing Ragab, 814

F.3d at 1137).     Here, the trial court concluded, the JDA’s and GGA’s

                                     -8-
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irreconcilable arbitration procedures indicated that the parties never had a

“meeting of the minds” with respect to arbitration. Id. at 6.

      Accordingly, the trial court held that it was constrained to take over the

merits of Winfield’s claims because “the contracting parties failed to anticipate

these issues arising when they drafted arbitration provisions with conflicting

procedures.” Id.

                                      II.

      Because Winfield appeals from the denial of a summary judgment

motion, we must first determine whether we have jurisdiction over this

matter. See McDonald v. Whitewater Challengers, Inc., 116 A.3d 99,

104 (Pa. Super. 2015) (“[A]n order denying summary judgment is ordinarily

a non-appealable interlocutory order.”). Winfield argues that the trial court’s

order was appealable as of right under 42 Pa.C.S. § 7320 and Pennsylvania

Rule of Appellate Procedure 311(a)(8). See Winfield’s Brief at 1. Under Rule

311(a)(8), an appeal may be taken as of right from “[a]n order that is made

final or appealable by statute or general rule, even though the order does not

dispose of all claims and of all parties.” Pa.R.A.P. 311(a)(8). Under Section

7320(a)(1) of the Uniform Arbitration Act, meanwhile, “[a]n appeal may be

taken from ... [a] court order denying an application to compel arbitration

made under section 7304 (relating to proceedings to compel or stay

arbitration).” 42 Pa.C.S. § 7320(a)(1).

                                      -9-
J-A06040-23

      In Coticcia v. Malcovery Sec., LLC, 2021 WL 5827318 (Pa. Super.

December 8, 2021) (unpublished memorandum), a panel of this Court

considered whether an order denying partial summary judgment was

appealable as an order refusing to compel arbitration.        There, after the

appellee filed a shareholder action, the appellant petitioned to compel

arbitration because appellee’s claims were based on an agreement with an

arbitration provision. The trial court partially granted the petition to compel

arbitration but found that some of the appellee’s claims were not based on the

agreement.     After discovery, both parties moved for partial summary

judgment on the remaining claims. After the trial court denied both motions

because there were genuine issues of material fact, appellant appealed.

      On appeal, appellant argued that the denial of his motion for summary

judgment was immediately appealable under Rule 311(a)(8) because his

motion was, in substance, a motion to compel arbitration. The panel agreed

and found that although an order denying summary judgment is ordinarily a

non-appealable interlocutory order, appellant’s summary judgment motion

requested that the trial court compel arbitration because the remaining claims

relied on the agreement with the arbitration provision. Id. at *4. Accordingly,

the panel concluded that when the trial court denied appellant’s motion, it

effectively declined compelling arbitration, thus rendering its order appealable

under Rule 311(a)(8). Id.

                                     - 10 -
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       The same reasoning applies here.5           While Winfield did not expressly

request that the trial court compel arbitration in its summary judgment

motion, it requested that the trial court “lift all stays.” See R. 479a. Winfield

also asserted that neither PennEnergy nor Pine Run have ever disputed the

arbitrability of the claims asserted against them, as both parties merely asked

for the trial court to determine which arbitration procedures apply to those

claims. Id. at R. 477a. Winfield also claimed that it had mooted the complaint

for declaratory relief by dismissing Manager as a respondent and bringing new,

separate arbitrations against PennEnergy and Pine Run.             Id. at R. 478a.

Because Winfield unmistakably sought to lift the stay on arbitration so that it

could proceed with the newly-filed arbitration, we hold that the trial court, in

denying Winfield’s motion for summary judgment, effectively declined

compelling arbitration, thus making its order immediately appealable under

Rule 311(a)(8).

                                           III.

       On appeal, Winfield raises two issues:

       I. Whether the trial court erred in denying Winfield’s motion for
       summary judgment and issuing an order staying the AAA
       Arbitrations, where the only claims asserted by Plaintiffs in the
       complaint concern questions of procedural arbitrability.

____________________________________________

5  While Coticcia is an unpublished non-precedential memorandum decision,
it may still be cited for its persuasive value. See Pa.R.A.P. 126(b) (providing
that unpublished non-precedential memorandum decisions of the Superior
Court filed after May 1, 2019, may be cited for their persuasive value).

                                          - 11 -
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      II. Whether the trial court erred in denying Winfield's motion for
      summary judgment and issuing an order staying the AAA
      Arbitrations, where Winfield voluntarily ameliorated all alleged
      procedural defects raised by Plaintiffs in the complaint, and thus
      all claims in the complaint were rendered moot.

Winfield’s Brief at 4 (cleaned up).

      Winfield’s first issue subsumes its argument that its claims against

PennEnergy and Pine Run are separately arbitrable under the JDA/JOA and

GGA, respectively. To address this issue, we must address the trial court’s

determination on substantive arbitrability: that the parties never intended to

arbitrate contractual claims implicating both the JDA/JOA and GGA, even

though all the agreements contain arbitration provisions.

      As discussed, Winfield’s motion was in effect a petition to compel

arbitration. In making that determination, “[w]e employ a two-part test to

determine whether the trial court should have compelled arbitration:       (1)

whether a valid agreement to arbitrate exists, and (2) whether the dispute is

within the scope of the agreement.” Davis v. Ctr. Mgmt. Grp., LLC, 192

A.3d 173, 180 (Pa. Super. 2018) (citations, quotation marks and brackets

omitted). “Whether a written contract includes an arbitration agreement and

whether the parties’ dispute is within the scope of the arbitration agreement

are questions of law subject to this Court’s plenary review.” In re Estate of

Atkinson, 231 A.3d 891, 898 (Pa. Super. 2020). See also TTSP Corp. v.

Rose Corp., 217 A.3d 1269, 1280 (Pa. Super. 2019) (“The resolution of the

                                      - 12 -
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two-part test implicates substantive arbitrability, over which the courts have

jurisdiction.”) (citation omitted).

      In determining whether a claim falls within the scope of an arbitration

clause, we consider “the factual underpinnings of the claim rather than the

legal theory alleged in the complaint.”        Saltzman v. Thomas Jefferson

Univ. Hosps., Inc., 166 A.3d 465, 476 (Pa. Super. 2017) (citation omitted).

As we have explained:

      A “broad” arbitration clause in a contract is one that is
      unrestricted, contains language that encompasses all disputes
      which relate to contractual obligations, and generally includes “all
      claims arising from the contract regardless of whether the claim
      sounds in tort or contract.” Thus, where the arbitration
      provision is a broad one, and “[i]n the absence of any
      express provision excluding a particular grievance from
      arbitration, ... only the most forceful evidence of a purpose
      to exclude the claim from arbitration can prevail.”

Provenzano v. Ohio Valley Gen. Hosp., 121 A.3d 1085, 1096 (Pa. Super.

2015) (citations omitted; emphasis added).

      Both Pennsylvania and federal law impose a strong public policy
      in favor of enforcing arbitration agreements. Accordingly, if a
      valid agreement to arbitrate exists and the dispute falls within the
      scope of the arbitration agreement, the dispute must be submitted
      to arbitration and the [trial] court’s denial of arbitration must be
      reversed.

In re Estate of Atkinson, supra (citations omitted); see also Davis, 192

A.3d at 183 n.13 (stating that “[o]ur Supreme Court [in Taylor v.

Extendicare Health Facilities, Inc., 147 A.3d 490, 509 (Pa. 2016)] has

instructed courts to ‘consider questions of arbitrability with a healthy regard

for the federal policy favoring arbitration’ ”).

                                      - 13 -
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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).

                                     IV.

                                      A.

     With those principles in mind, we first look at the arbitrability of

Winfield’s claims against PennEnergy. In its demand, Winfield invoked both

Section 11.10 of the JDA and Article XVI(E) of the JOA. The JDA provides:

     Section 11.10 Dispute Resolution and Arbitration; Waiver of Jury
     Trial. Any dispute, claim or controversy arising out of or
     relating to this Agreement, including the negotiation,
     formation, validity, enforceability, interpretation, application,
     performance, breach, enforcement or termination of this
     Agreement … whether sounding in contract, tort, statute, equity
     or otherwise, shall be resolved in accordance with the procedures
     specified in this Section 11.10, which shall be the sole and
     exclusive procedures for the resolution of any Dispute.

                                    ***

           (b) If the Dispute has not been resolved by negotiation
        within 30 days after the Dispute Notice Date, either Party
        may submit it to binding arbitration in accordance with the
        Commercial Arbitration Rules then in effect of the American
        Arbitration Association, except as otherwise provided herein.

                                    - 14 -
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R. 89a (emphasis added).6

       As noted, a “broad” arbitration clause is unrestricted, has language

encompassing all contractual disputes relating to contractual obligations, and

generally includes “all claims arising from the contract regardless of whether

the claim sounds in tort or contract.” Provenzano, supra. Judged against

those criteria, the JDA’s and JOA’s arbitration provisions are “broad,” covering

any disputes, claims or controversies that “arise out of or relate” to the

agreements. Neither agreement contains any express provisions excluding

any particular grievance from arbitration, and there’s no forceful evidence that

either Winfield or PennEnergy intended to prevent arbitration of any kind of

claim arising from their relationship as the operator and non-operator.

       As a result, after review, we find that Winfield’s claims against

PennEnergy “arise out of or relate” to the JDA and JOA. Regardless of their

merits, Winfield’s claims against PennEnergy, at least as stated in its demand,

“arise out of or relate” to the JDA and JOA, the agreements under which it

seeks arbitration against PennEnergy. In its demand, Winfield alleges that

after it exercised its right to take gas in-kind under the JOA, PennEnergy failed

and refused to honor Winfield’s daily nominations.       According to Winfield,

____________________________________________

6Article XVI(E) of the JOA contains nearly an identical provision requiring “any
dispute, claim or controversy arising out of or relating to this agreement” to
be resolved in accordance with the procedures set out in the JOA, all of which
essentially mirrored those in the JDA. See R. 412a.

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“[t]his is a clear violation of Winfield’s rights under the JOA,” and that “the

JOA obligates PennEnergy to honor and accurately convey Winfield’s

nominations.”7 Winfield asserts the same in its breach of duty of good faith

and fair dealing claim, alleging that “PennEnergy has willfully breached, and

continues to willfully breach, its duties to Winfield under the JDA in refusing

to honor Winfield’s express direction as to the nomination of its gas for sale.”8

Likewise, for conversion, Winfield contends that PennEnergy’s actions violate

the JDA.9 Confined to the allegations in the demand, we find that Winfield’s

contractual claims against PennEnergy “arise from or relate to” the JDA and

JOA, and that PennEnergy would not be forced to arbitrate a claim for which

it did not agree to arbitrate under those agreements’ arbitration provisions.

                                               B.

          Whether the same can be said for Winfield’s claims against Pine Run is

a more difficult question.         We first review the GGA’s dispute resolution

provision to determine what disputes, claims or controversies it was intended

to cover. Like the JDA and JOA, the GGA’s arbitration clause is a “broad” one

requiring the parties to arbitrate any claims or disputes that “arise out of or

relate” to the GGA.

____________________________________________

7   Demand for Arbitration, 12/10/21, at 6 (R. 268a).

8   Id. at 8 (R 270a).

9   Id.

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            16.7 Dispute Resolution. Any claim or dispute which
      arises between the Parties in connection with this
      Agreement shall be resolved solely in accordance with the
      Arbitration Procedures set forth in Exhibit E to this Agreement.
      Any Party may seek a preliminary injunction or other provisions
      of judicial relief, if in its sole judgment such action is necessary to
      avoid irreparable damage or to preserve the status quo. Despite
      any such protective action, the parties will continue to try to
      resolve the dispute in accordance with the Arbitration Procedures
      set forth in Exhibit E to this Agreement. The Parties’ agreement
      to resolve such claims or disputes in accordance with the
      provisions of Exhibit E to this Agreement shall survive the
      expiration or termination of this Agreement.

R. 125a (emphasis added).

      Meanwhile, Exhibit E of the GGA provides, in relevant part:

      any and all disputes or claims by any party arising from or
      related to this Agreement that cannot be amicably settled, shall
      be determined solely and exclusively by arbitration in accordance
      with the Federal Arbitration Act and using the rules of the
      American Arbitration Association or any successor thereof when
      not in conflict with such act.

R. 136a (emphasis added).

      These provisions broadly include any disputes or claims by any party

that arise from or relate to the GGA, as no express provision excludes any

particular grievance from arbitration. On this point, we note that the GGA

includes the JDA in its definitions and references the agreement twice

elsewhere in its provisions. While none of these references relate to the daily

nominations of the gas, the parties were still aware of Winfield and

PennEnergy’s relationship under the JDA and were free to exclude any claims

that implicated both the JDA and GGA from being arbitrable under the GGA.

Without such an express provision, though, we are again left with a “broad”

                                      - 17 -
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arbitration provision and a presumption in favor of finding that the claims are

arbitrable under the agreement.

           Next, we look at Winfield’s allegations against Pine Run in its demand.

Throughout its background section, Winfield alleges that Pine Run violated the

GGA by accepting PennEnergy’s daily nominations on behalf of Winfield, even

though Pine Run knew those nominations had been changed by PennEnergy.

Winfield alleged that “Pine Run was on notice that PennEnergy improperly

revised Winfield’s nominations but took no action to honor Winfield’s

nominations in violation of the [GGA].”10 Winfield further alleged that “Pine

Run’s refusal to acknowledge Winfield’s nominations and its complicity with

PennEnergy’s unilateral rejection and revision of Winfield’s nominations of gas

Winfield owns … is a clear violation of Winfield’s rights under the [GGA.]”11

Finally, Winfield ended its background by alleging that “Pine Run’s willful

facilitation of PennEnergy’s breach of contract in violation of Pine Run’s

contractual duties to Winfield under the [GGA] has cost Winfield additional

fees related to the transportation costs for the unathorized gas sales at the

Brewer meter.”12

____________________________________________

10   Demand for Arbitration, 12/10/21, at 5 (R. 255a).

11   Id.

12   Id. at 6 (R. 256a).

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        While asserting much of the same in its statement of claims, Winfield

also mixed in several allegations about PennEnergy. For instance, in its breach

of contract claim, Winfield asserted that “PennEnergy has the duty to

accurately convey Winfield’s nominations and Pine Run has the duty to honor

Winfield’s nominations.”13         Winfield added that Pine Run “has willfully

facilitated PennEnergy’s breach of contract in violation of its contractual duties

to Winfield under the [GGA],” as Pine Run was “fully aware of PennEnergy’s

contractual breach in failing to submit Winfield’s nominations as specifically

directed by Winfield.”14

        As a threshold matter, we find that Winfield’s dispute with Pine Run

“arises from or relates to” the GGA, as shown by Winfield’s numerous

allegations that Pine Run was obligated under the GGA to honor Winfield’s

daily gas nominations. Again, in the absence of an express provision excluding

a particular dispute from arbitration, we presume that Winfield and Pine Run

intended to arbitrate any disputes arising from the GGA, and Winfield, at least

according to its demand, alleges that Pine Run violated the GGA by failing to

honor its daily gas nominations that were submitted through PennEnergy.

        The harder question—and the one that the trial court could not get

past—is whether Winfield’s claims against Pine Run were non-arbitrable

____________________________________________

13   Id. at 7 (R. 257a).

14   Id. at 8 (R. 258a).

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because they included allegations concerning PennEnergy. According to Pine

Run and as the trial court found, Winfield’s hybrid claims hopelessly

commingled allegations pertaining to the parties’ duties under the JDA, JOA

and GGA even though Pine Run was not a party to the JDA or JOA. That

Winfield freely mixed in allegations about PennEnergy into its claims against

Pine Run cannot be disputed.             For what purpose Winfield added these

allegations into its demand against Pine Run is unclear, since it does not

appear that any of Winfield’s claims against Pine Run would require it to prove

that PennEnergy also breached the JDA and JOA.15

       That said, we cannot conclude as the trial court did that Winfield’s claims

against Pine Run were rendered non-arbitrable simply because they included

extraneous allegations against PennEnergy. First, as noted, “[t]o determine

whether a plaintiff’s claims fall within the scope of an arbitration clause, we

must consider the factual underpinnings of the claim rather than the legal

____________________________________________

15 For its tortious interference of contract claim, Winfield would need to
establish the existence of a contractual relationship between itself and Penn
Energy. All the remaining elements of the claim would be confined to Penn
Energy’s actions because the elements for tortious interference with a
contractual relations are (1) the existence of a contractual relationship
between the complainant and a third party; (2) an intent on the part of the
defendant to harm the plaintiff by interfering with that contractual
relationship; (3) the absence of privilege or justification on the part of the
defendant; and (4) the occasioning of actual damage as a result of defendant’s
conduct. See Empire Trucking Co., Inc. v. Reading Anthracite Coal Co.,
71 A.3d 923, 933 (Pa. Super. 2013) (original brackets omitted), (citing
Restatement (Second) of Torts § 766 (1979)).

                                          - 20 -
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theory alleged in the complaint.” Saltzman, supra (citation and quotation

marks omitted). Here, it is hardly surprising that the factual underpinnings of

Winfield’s claims against Pine Run arise in part out of Winfield’s prior

contractual relationship with PennEnergy. Indeed, Pine Run was formed for

the purpose of taking over as the midstream company gathering the gas

production from the wells operated in the AMI. Just because Winfield’s claims

are not perfectly segregated should not doom their arbitrability, especially

when the JDA, JOA and GGA—while being separate agreements—all addressed

different aspects of a joint venture to explore, develop, produce and transport

gas in the AMI.

      Second, because there was an arbitration clause in the GGA, the trial

court’s determination concerning Pine Run was limited to determining whether

Winfield’s dispute with Pine Run was “within the scope of the agreement.” As

discussed, the agreement (GGA) was a “broad” one requiring the parties to

arbitrate any disputes or claims “arising from or related to” the GGA. That

Winfield included extraneous allegations about PennEnergy does nothing to

change that its dispute with Pine Run—that is, that Pine Run was obligated

under the GGA to honor Winfield’s daily gas nominations submitted by

PennEnergy—still falls within the GGA’s arbitration provision.

      To recap, regardless of what it also alleges in the demand concerning

PennEnergy, Winfield is alleging that Pine Run was obligated under the GGA

to honor its daily gas nominations, and Winfield now seeks to arbitrate those

                                    - 21 -
J-A06040-23

claims under the GGA’s arbitration clause, which provides for arbitration of

any claims or disputes “arising from or related to” the GGA. Because Winfield’s

claims at the very least “relate to” the GGA, we find that they fall within the

scope of the GGA’s arbitration and that the trial court erred in concluding

otherwise.

                                          V.

                                          A.

      That does not end our inquiry, however. While we find that Winfield’s

separate claims against PennEnergy and Pine Run fall within the scope of the

parties’ respective agreements, there remains the question about whether

Winfield can proceed with two separate arbitrations, especially since the JDA

and GGA contain conflicting procedures for how arbitration should be

conducted on the agreement. As noted, the trial court concluded that allowing

the   two    arbitration   proceedings     to     proceed   presented   problems   of

“diseconomy and inconsistency,” citing for support the Commonwealth Court’s

decisions in School Dist. of Phila. v. Livingston-Rosenwinkel, P.C., 690

A.2d 1321 (Pa. Cmwlth. 1997).

      In that case, the School District of Philadelphia entered into an

agreement with an architectural firm to build a high school. The architectural

firm, in turn, retained a mechanical and plumbing engineer for the project.

Under their agreement, the architectural firm and engineer agreed to arbitrate

any claims arising related to their agreement. When the School District later

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J-A06040-23

sued the architectural firm after the school was built, the architectural firm

filed a joinder complaint against several other defendants, including the

engineer, alleging they were solely or jointly liable. In response, the engineer

filed preliminary objections asserting that its agreement with the architectural

firm compelled arbitration.      After the trial court denied the preliminary

objections, the engineer appealed.

      On appeal, the Commonwealth Court held that the engineer could not

compel arbitration “because the underlying dispute involves entities which

were not parties to the [agreement between the architectural firm and the

engineer] and because enforcement of the arbitration provision would

frustrate the public policy interest in efficient dispute resolution.” Id. at 1322.

      The Commonwealth Court observed that if the dispute involved only the

architectural firm and the engineer, there would be no issues with arbitration

given the breadth of the arbitration clause and the law’s preference for the

settlement of disputes through arbitration. Id. at 1322-23. However, the

underlying dispute arose from an action filed by a third party—the School

District—that was not subject to the agreement with the arbitration clause.

Id. at 1323.

      Moreover, the Commonwealth Court noted, the School District filed its

action in the trial court, thus making the Pennsylvania Rules of Civil Procedure

applicable.    Under Pa.R.C.P. 2252, governing the joinder of additional

defendants, the architectural firm had a right to join the engineer as an

                                      - 23 -
J-A06040-23

additional defendant. Because there was no exception for arbitration in the

rule that would limit the architectural firm’s right, the engineer could not

compel arbitration in place of joinder. Id.

      Finally, the Commonwealth Court ended its discussion by observing that

“enforcement of an arbitration provision where, as here, the underlying

dispute includes parties not subject to the arbitration process, would frustrate

rather than foster the objectives of alternative dispute resolution.” Id. If the

architectural firm was forced to arbitrate its claims against the engineer, then

the architectural firm would have to relitigate the same liability and damage

issues in two separate forums with two different fact-findings, which would be

“uneconomical for the court as well as the parties involved.”         Id.   The

Commonwealth Court concluded, “arbitration would not promote the swift and

orderly resolution of claims; instead, it would engender a protracted,

piecemeal disposition of the dispute.” Id.

      We find the trial court’s reliance on School Dist. of Phila. misplaced.

First, while the underlying dispute there involved entities which were not

subject to the arbitration provision (the School District), the dispute here

involves parties that are subject to at least one of the agreements (Pine Run)

or both (PennEnergy).

      Second, the procedural postures of the two cases are different.        In

School Dist. of Phila., the engineer sought to compel arbitration of a joinder

complaint filed in a trial court, even though the Rules of Civil Procedure

                                     - 24 -
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provided no exception for arbitration; here, in contrast, Winfield seeks to

arbitrate claims that it initiated in arbitration with the AAA making the

Commonwealth Court’s reasoning inapplicable to this case.

      Third, we find the Commonwealth Court’s public policy concerns

inapplicable here. As noted, because the School District was not a party to

the arbitration agreement, the architectural firm would be forced to essentially

litigate its joinder complaint two times—once in the trial court against the

other defendants and once against the engineer in arbitration. Here, while

there be two separate arbitrations for a dispute that arises out of a common

set of facts, the separate arbitration proceedings would not litigate the same

exact case because, as discussed in the previous section, Winfield’s respective

claims against PennEnergy and Pine Run arise out of different agreements—

the JDA/JOA for PennEnergy and the GGA for Pine Run.                 While the

Commonwealth Court in School Dist. of Phila. warned against “protracted,

piecemeal disposition of the dispute,” we find nothing in its discussion that

would support the proposition that the trial court seemed to extract: that two

separate arbitrations involving similar facts cannot proceed unless they are

joined into one. In the absence of such a directive, we will not read one into

the Commonwealth Court’s decision.

                                      B.

      The other case on which the trial court relied was Ragab v. Howard,

841 F.3d 1134 (10th Cir. 2016), which the trial court found instructive for the

                                     - 25 -
J-A06040-23

proposition that there was “no meeting of the minds” because the agreements

between the parties contained conflicting arbitration provisions. See TCO at

5-6.

       In Ragab, the plaintiff and the defendant entered into six different

agreements, each one containing conflicting arbitration provisions about which

rules govern, how the arbitrator will be selected, the notice required to

arbitrate and attorneys’ fees. When plaintiff later sued in Colorado, defendant

moved to compel arbitration. The trial court, however, denied the motion,

“concluding that there was no actual agreement to arbitrate as there was no

meeting of the minds as to how claims that implicated the numerous

agreements would be arbitrated.” Ragab, 841 F.3d at 1136.

       On appeal, by a 2-1 vote, the Tenth Circuit Court of Appeals affirmed.

In so doing, the majority observed that while no Colorado court has addressed

whether parties can be compelled to arbitrate given conflicting arbitration

provisions, other courts have found that irreconcilable differences across

multiple arbitration provisions indicate that the parties did not agree to

arbitrate. Id. at 1137. While recognizing that some courts have compelled

arbitration despite the existence of conflicting arbitration provisions, the

majority noted that the agreements in those cases provided the solution for

such a conflict.   Id. at 1138.    In their case, however, the plaintiff and

defendant’s agreements contained no such conflict provision. As a result, the

majority found that the “conflicting details in the multiple arbitration

                                    - 26 -
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provisions indicate that there was no meeting of the minds with respect to

arbitration.” Id.

      Justice (then-Judge) Neil Gorsuch dissented from the majority and

would have concluded that the parties agreed to arbitrate.        Id. at 1139

(Gorsuch, J., dissenting).       He emphasized that all six of the parties’

interrelated agreements contained arbitration clauses.      Even though the

agreements “differ[ed] on the details concerning how arbitration should

proceed,” he believed “treating the procedural details surrounding arbitration

in this case as nonessential terms would do a good deal more” to effectuate

the intent of the parties. Id.

      As Winfield notes, the Fifth Circuit followed Justice Gorsuch’s reasoning

a few years later in Matter of Willis, 944 F.3d 577 (5th Cir. 2019). There, a

bankruptcy court relied on Ragab in denying a motion to compel arbitration

where two agreements contained arbitration clauses that were similar but not

identical. On appeal, the Fifth Circuit declined to follow Ragab, finding that

the parties’ intentions to arbitrate were “unmistakable” considering both

arbitration clauses broadly covered “all claims and disputes” between the

parties. Id. at 582. That the arbitrations contained conflicting provisions did

nothing to change that the parties agreed to arbitrate because, “[t]hough the

agreements differ over procedural details, they speak with one voice about

whether to arbitrate.” Id. (emphasis in original).

                                      - 27 -
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       After review, we find the reasoning in Matter of Willis more persuasive

than that in Ragab.16 Here, like the agreements in Matter of Willis, the

JDA, JOA and GGA each contained broad arbitration provisions requiring

arbitration of any claims or disputes “arising out of or related” to the

respective agreements. While those agreements may have differed in various

aspects about how an arbitration would be conducted under the respective

agreements, each agreement agreed on the essential terms that the parties

intended to arbitrate any claims related to the contracts. That the agreements

differed on the procedures for how arbitration would proceed does nothing to

detract from the unmistakable conclusion that the parties still had a “meeting

of the minds” to arbitrate any claims arising out of the agreements rather than

litigate them in the trial court. As a result, we find the trial court’s reliance on

Ragab unavailing and decline to conclude that the conflicting arbitration

procedures between the JDA/JOA and GGA nullify the arbitration provisions

contained in those agreements.

       Accordingly, we reverse the trial court’s order and remand with

instructions to the trial court to dismiss Plaintiffs’ declaratory action and lift all

____________________________________________

16This Court “is not bound by the decisions of federal courts, other than the
United States Supreme Court, or the decisions of other states’ courts ...
[H]owever, we may use them for guidance to the degree we find them useful
and not incompatible with Pennsylvania law.” Eckman v. Erie Ins. Exch.,
21 A.3d 1203, 1207 (Pa. Super. 2011) (internal citation omitted).

                                          - 28 -
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stays on the pending arbitration proceedings that Winfield filed against

PennEnergy and Pine Run.

      Order reversed; case remanded with instructions to the trial court;

jurisdiction relinquished.

      Judge Olson joins the opinion.

      Judge Nichols concurs in the result.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 5/3/2023

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