Court Opinion

ID: 6293847
Source: CourtListenerOpinion
Date Created: 2022-02-18 17:11:36.222531+00
Date Added: 2024-06-11T09:00:23.406093
License: Public Domain

J-A27008-21

NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

 MARK HANKIN & INDUSTRIAL REAL       :   IN THE SUPERIOR COURT OF
 ESTATE MANAGEMENT D/B/A             :        PENNSYLVANIA
 HANMAR ASSOCIATES, MLP              :
                                     :
                                     :
              v.                     :
                                     :
                                     :
 KEYSTONE GRANITE & TILE, INC.       :   No. 2209 EDA 2020
                                     :
                   Appellant         :

            Appeal from the Order Entered October 23, 2020
          In the Court of Common Pleas of Philadelphia County
                 Civil Division at No(s): No. 200701385

 MARK HANKIN & INDUSTRIAL REAL       :   IN THE SUPERIOR COURT OF
 ESTATE MANAGEMENT D/B/A             :        PENNSYLVANIA
 HANMAR ASSOCIATES, MLP              :
                                     :
                                     :
              v.                     :
                                     :
                                     :
 KEYSTONE GRANITE & TILE, INC.       :   No. 2212 EDA 2020
                                     :
                   Appellant         :

            Appeal from the Order Entered October 23, 2020
          In the Court of Common Pleas of Philadelphia County
                 Civil Division at No(s): No. 200701385

 MARK HANKIN & INDUSTRIAL REAL       :   IN THE SUPERIOR COURT OF
 ESTATE MANAGEMENT D/B/A             :        PENNSYLVANIA
 HANMAR ASSOCIATES, MLP              :
                                     :
                   Appellants        :
                                     :
                                     :
              v.                     :
                                     :   No. 2220 EDA 2020
                                     :
 KEYSTONE GRANITE & TILE, INC.       :
J-A27008-21

              Appeal from the Order Entered October 23, 2020
            In the Court of Common Pleas of Philadelphia County
                   Civil Division at No(s): No. 200701385

 MARK HANKIN & INDUSTRIAL REAL            :   IN THE SUPERIOR COURT OF
 ESTATE MANAGEMENT D/B/A                  :        PENNSYLVANIA
 HANMAR ASSOCIATES, MLP                   :
                                          :
                   Appellants             :
                                          :
                                          :
              v.                          :
                                          :   No. 2293 EDA 2020
                                          :
 KEYSTONE GRANITE & TILE, INC.            :

              Appeal from the Order Entered October 23, 2020
            In the Court of Common Pleas of Philadelphia County
                   Civil Division at No(s): No. 200701385

BEFORE: PANELLA, P.J., DUBOW, J., and McCAFFERY, J.

MEMORANDUM BY PANELLA, P.J.:                    FILED FEBRUARY 18, 2022

      Mark Hankin & Industrial Real Estate Management d/b/a/ HanMar

Associates, MLP (“HanMar”), and Keystone Granite & Tile, Inc. (“Keystone”),

cross-appeal from the orders confirming the five arbitration awards entered in

favor of HanMar, confirming the arbitration award of costs and fees in favor

of HanMar, denying the remainder of HanMar’s petition to partially confirm

and partially vacate and modify the arbitration award, and denying Keystone’s

petition to partially confirm and partially vacate and modify the arbitration

award. The practical effect of the trial court’s two orders was to confirm the

awards in favor of HanMar, while vacating the awards in favor of Keystone but

refusing to otherwise modify the arbitration award. We affirm.

                                    -2-
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        Keystone leased warehouse space from HanMar pursuant to a 5-year

lease dated November 19, 2012, that expired on February 28, 2018. The lease

required Keystone to give HanMar at least one year’s notice of Keystone’s

intent not to renew the lease. On October 27, 2016, Keystone provided

HanMar with written notice of its intention not to renew the lease.1

____________________________________________

1   The relevant portion of the lease provides as follows:

25. Extensions – Renewals – CPI Escalator.

        A. Extensions. Lessee may terminate this Lease at the end of this
        term and any Renewal Term or Extension Term, by giving to
        Lessor written notice at least one (1) year prior thereto …; but in
        default of a timely Expiration Notice …, this Lease shall continue
        for an Extension Term equal to the original term hereof
        (“Extension Term”) commencing the day after the expiration of
        the current term …. In the event that Lessee … shall have given a
        valid and timely Expiration Notice, and Lessee shall fail or refuse
        to completely vacate the Premises and restore the same to the
        condition required in this Lease on or before the end of the term
        hereof (“Expiration Date”), then it is expressly agreed that Lessor
        shall have the option either:

           (i) to disregard the Expiration Notice as having no force and
           effect, whereupon the Expiration Notice shall be null and void,
           ab initio, as if never given; or

           (ii) treat Lessee as Holding Over, in accordance with paragraph
           2(C) hereof.

See Keystone’s Response in Opposition, 8/14/20, Exhibit A (Lease
Agreement), at ¶ 25(A); see also id., at § 2(C) (providing that if Lessee
remains in possession of the Premises or fails to restore the Premises as
dictated by the lease, holding over creates a month-to-month tenancy, for
which the monthly installment of Minimum Annual Rent triple that required
under the Minimum Annual Rent payment effective on the last day of the
preceding term).

                                           -3-
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      Pursuant to this notice, the lease required Keystone to restore the leased

premises to a specified condition, to complete an Environmental Study of the

premises, and to fully vacate the premises prior to February 28, 2018. If

Keystone failed any of these requirements, the lease agreement provided

HanMar with an option to consider the lease automatically renewed despite

Keystone’s prior notice.

      On March 1, 2018, HanMar concluded that Keystone had failed to timely

vacate the premises and failed to restore the premises to the specified

condition. HanMar subsequently billed Keystone for rent pursuant to the lease

agreement. Keystone filed a declaratory judgment action in the Court of

Common Pleas of Montgomery County, seeking a determination that the lease

had not been renewed. HanMar filed preliminary objections, and the

Montgomery County action was stayed to permit the parties to arbitrate their

dispute pursuant to the terms of the lease agreement.

      HanMar submitted seven individual disputes to be arbitrated. Under the

lease agreement, the parties were required to submit proposed awards for

each dispute, and the arbitrator was limited to choosing between the two

proposed awards in resolving each issue. In other words, the arbitrator had

only two options for resolving each dispute—HanMar’s proposal or Keystone’s

proposal. The lease agreement also specifically provided that the arbitrator

did not have the power to award punitive damages.

                                     -4-
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      The arbitrator entered an award that found in favor of HanMar for all of

the disputes except Dispute #3 and Dispute #5.        In Disputes #3 and #5,

HanMar’s proposed awards stated that HanMar had properly exercised its

option to treat the lease as automatically renewed.

      In contrast, Keystone’s proposed awards provided that the lease

agreement was unconscionable. While HanMar argued to the arbitrator that

Keystone’s responses were untimely under the lease agreement, the arbitrator

rejected HanMar’s arguments and accepted Keystone’s responses.

      In the decision, the arbitrator stated there was no dispute that Keystone

did not deliver an Environmental Study to HanMar, as required by paragraph

27(B) of the Lease. See Keystone’s Response in Opposition, 8/14/20, Exhibit

B (Arbitration Award), at 2. However, the arbitrator found certain provisions

of the lease agreement unconscionable and held that Keystone had

substantially complied with the terms of the lease. See id., at 4-9.

      As a result, the arbitrator entered each of HanMar’s Proposed Awards,

except Proposed Awards #3 and #5, based upon the conclusions that those

Proposed Awards constituted a penalty. See id., at 13. The arbitrator also

entered two of Keystone’s Proposed Awards: (i) declaring that the initial lease

term terminated on February 28, 2018, and (ii) declaring that Keystone’s

October 27, 2016 written expiration notice was valid and enforceable. See id.,

                                     -5-
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at 16-17. Finally, the arbitrator awarded HanMar costs and fees totaling

$119,067.00.2 See id., at 20.

       On July 22, 2020, HanMar filed in the Montgomery Court of Common

Pleas a petition to partially confirm and partially vacate and modify the

arbitration award and to confirm the award of attorneys’ fees, expenses and

costs and reimbursement of arbitration costs.3 HanMar argued that in failing

____________________________________________

2 HanMar submitted an attorneys’ fees certification claiming that HanMar
incurred a total of $135,495.46 for legal feels, costs, arbitration expenses and
court reporter fees. See HanMar’s Motion to Partially Confirm and Partially
Vacate and Modify Arbitration Award, 7/22/20, Exhibit B (Arbitration Award),
at 19-20. The arbitrator also reviewed evidence that HanMar estimated the
costs to repair the leased premises was approximately $114,000.00, and the
environmental study would cost an estimated $1,500.00. See id., at 20. The
arbitrator concluded that the total claimed fees were not reasonable and
proportionate, and limited the reimbursement of fees and expenses to
$100,000.00. See id. The arbitrator further detailed the fees associated with
the arbitration proceedings and the American Arbitration Association’s
administrative fees and directed Keystone to reimburse HanMar in the amount
of $19,067.15. See id.

3 Regarding the timeliness of HanMar’s petition, we note that a party must
challenge an arbitration award within 30 days of the date on which the award
was entered. See 42 Pa.C.S.A. § 7342(b) (providing that a court shall confirm
an arbitration award after 30 days); see also U.S. Claims, Inc. v.
Dougherty, 914 A.2d 874, 877 (Pa. Super. 2006) (stating that a party’s
failure to file a petition to vacate or modify an arbitration award within 30 days
will result in waiver of claims). Instantly, 30 days following the entry of the
arbitration award was March 26, 2020. However, as part of the statewide
judicial emergency declared as a result of the COVID-19 pandemic, the
Pennsylvania Supreme Court directed that any pleadings that “are required to
be filed between March 19, 2020, and May 8, 2020, generally SHALL BE
DEEMED to have been timely if they are filed by close of business on May 11,
2020.” See In re General Statewide Judicial Emergency, 230 A.3d 1015
(Pa. filed April 28, 2020) (per curiam). The parties originally filed their
petitions in the Court of Common Pleas of Montgomery County prior to May
(Footnote Continued Next Page)

                                           -6-
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to enter its Proposed Awards #3 and #5, the arbitrator exceeded the scope of

its jurisdiction as set forth in the arbitration agreement. HanMar therefore

asked the court to vacate any “award” entered as to Proposed Awards #3 and

#5, and to confirm the arbitrator’s decision in all other respects.

       On July 24, 2020, the trial court entered an order granting HanMar’s

petition in its entirety. Specifically, regarding Disputes #3 and #5, the trial

court vacated the arbitrator’s determination, and entered HanMar’s Proposed

Awards #3 and #5.

       On July 28, 2020, in response to HanMar’s petition, Keystone filed its

own petition to partially confirm and partially vacate and modify the arbitration

awards and to set aside the award of costs and fees. Keystone argued that

HanMar was not entitled to attorneys’ fees because paragraph 38(A)(viii) is

unconscionable. See Keystone’s Petition to Partially Confirm and Partially

Vacate and Modify the Arbitration Awards, 7/28/20, at 13-25. Keystone also

argued that HanMar’s attorneys’ fees certification was excessive and

disproportionate. See id., at 25-30. Additionally, Keystone asked the court to

vacate the awards entered in favor of HanMar, to confirm the awards entered

in favor of Keystone, and to enter Keystone’s remaining Proposed Awards.

See id., at 31-52.

____________________________________________

11, 2020. The court concluded that venue was improper in Montgomery
County and entered an order on July 15, 2020, directing the parties to re-file
the petitions in Philadelphia County. Because HanMar promptly filed its
petition in Philadelphia County, we deem it timely filed.

                                           -7-
J-A27008-21

       On August 3, 2020, Keystone filed a motion for reconsideration of the

trial court’s order granting HanMar’s petition, claiming that the court had

improperly granted the petition without affording Keystone 20 days to

respond. HanMar filed responses to Keystone’s petition and motion. On August

5, 2020, the trial court vacated its July 24, 2020 order and directed Keystone

to file a response to HanMar’s petition to partially affirm and partially vacate

the arbitration award. Keystone timely complied.

       On October 23, 2020, the trial court entered two separate orders

addressing the parties’ respective petitions. Responding to HanMar’s petition,

the trial court confirmed the awards entered in HanMar’s favor, confirmed the

award for costs and fees, and denied HanMar’s petition in all other respects.

Importantly, in distinction from its July 24, 2020 order, the trial court refused

HanMar’s request to vacate the arbitrator’s decision on Disputes #3 and #5.

As to Keystone’s petition, the trial court denied the petition, concluding that

the lease as a whole was neither unconscionable nor a contract of adhesion

because Keystone, as a corporation, did not establish that it lacked choice and

equal bargaining power.4 HanMar and Keystone each filed timely appeals from

____________________________________________

4 In its Opinion, the trial court also explained that it did not confirm the
arbitration award as to Keystone’s Proposed Awards (i) and (ii) because they
were untimely filed, and the arbitrator lacked jurisdiction to consider them.
See Trial Court Opinion, 3/12/21, at 4.

                                           -8-
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both orders and court-ordered Pa.R.A.P. 1925(b) concise statements of errors

complained of on appeal.5,      6

       Because paragraph 38(A) of the Lease Agreement provides for a final

and binding arbitration under the rules of the American Arbitration

Association, this is a matter of common law arbitration. See Dougherty, 914

A.2d at 876. We employ a limited standard of review in appeals from trial

court orders confirming an arbitration award:

       The 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. The arbitrators are the final judge of both
       law and fact, and an arbitration award is not subject to reversal
       for a mistake of either. A trial court order confirming a common
       law arbitration award will be reversed only for an abuse of
       discretion or an error of law.

____________________________________________

5  We observe that the October 23, 2020 orders, when read together,
ultimately confirm the arbitrator’s award with respect to all issues except
HanMar’s contention that the lease automatically renewed; the orders denied
confirmation or modification of the lease renewal rulings. Further, following
praecipe by HanMar, judgment was entered on the orders. Accordingly, this
appeal is properly before us. See 42 Pa.C.S.A. § 7342 (directing that 42
Pa.C.S.A. § 7321.29, except subsection (a)(4), be applied to common law
arbitration proceedings); 42 Pa.C.S.A. § 7321.29 (allowing appeals from
orders confirming or denying confirmation of an arbitration award and from
final judgments entered after an award has been confirmed, vacated without
a re-hearing, or modified).

6These appeals were entered on four separate Superior Court dockets. Upon
motion by HanMar, this Court consolidated the appeals for review.

                                           -9-
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Id. (citations, quotation marks and brackets omitted); see also Roccograndi

v. Martin, 214 A.3d 251, 256 (Pa. Super. 2019) (stating that “[t]he standard

of review in arbitration confirmation cases is whether, in interpreting the

award, the trial court exceeded its scope of authority by an abuse of discretion

or error of law.”).

       On appeal, the cross-appellants each raises multiple claims for our

review. See HanMar’s Brief at 4-5; Keystone’s Brief at 7-12.7,    8   For ease of

discussion, we will address related claims together. All of the parties’ claims

can be grouped into one of four categories: (1) HanMar’s claim that 42

Pa.C.S.A. § 7342(b) required the trial court to confirm its Proposed Awards;

(2) HanMar’s contention that the arbitrator acted without authority in failing

to conclude that the lease had automatically renewed; (3) Keystone’s

contention that the entire lease agreement was unconscionable and

unenforceable; and (4) Keystone’s claim that the arbitrator’s award was so

ambiguous as to be unenforceable.

____________________________________________

7 Keystone’s statement of questions involved includes a subsection (B.), which
was not specifically included in its Pa.R.A.P. 1925(b) concise statement of
errors complained of on appeal. However, the issues in subsection (B.) restate
the issues presented in subsection (A.), though they are rephrased to
challenge whether the trial court erred in granting HanMar’s petition. Thus,
while we decline to deem these issues waived, we need not separately address
the arguments raised therein.

8 Unless otherwise indicated, we will cite the parties’ arguments from the brief
for which they are identified as the appellant in these cross-appeals.

                                          - 10 -
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      We will first address HanMar’s assertion that the arbitrator was required

to confirm its Proposed Awards #3 and #5 under 42 Pa.C.S.A. § 7342(b). See

HanMar’s Brief at 37. HanMar argues that because the trial court refused to

enter HanMar’s Proposed Awards #3 and #5 and denied Keystone’s petition

to confirm the entry of its own Proposed Awards, there is effectively no

confirmed award for Disputes #3 and #5. See id., at 38.

      Section 7342(b) provides that, “[o]n application of a party made more

than 30 days after an award is made by an arbitrator under section 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). “This language has been interpreted as mandatory.”

Vogt v. Liberty Mut. Fire Ins. Co., 900 A.2d 912, 919 (Pa. Super. 2006).

      However, this language has consistently been interpreted as a limitation

period. See Sage v. Greenspan, 765 A.2d 1139, 1142 (Pa. Super. 2000). As

such, it requires that any challenge to a common law arbitration award be

filed within thirty days. See id. If a challenge is filed after thirty days, it is

untimely and deemed waived. See id.

      Here, HanMar clearly petitioned the trial court to vacate or modify the

arbitrator’s award, and Keystone followed suit. Since the condition precedent

(no challenge to the award within thirty days) was not met, section 7342(b)’s

mandate for confirmation does not apply. HanMar’s contention that section

7342(b) requires confirmation of its Proposed Awards merits no relief.

                                     - 11 -
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      Next, we will address HanMar’s claim that the arbitrator, and by

extension, the trial court, erred in failing to conclude the lease had been

automatically renewed. HanMar contends that the arbitrator exceeded his

jurisdiction by failing to enter its Proposed Awards #3 and #5. See HanMar’s

Brief at 19. According to HanMar, because Keystone did not timely submit its

Proposed Awards, the arbitrator’s only option was to enter HanMar’s Proposed

Awards #3 and #5. See id., at 21; see also id., at 24-25 (arguing that “[t]he

Arbitrator could not have been more wrong in his conclusions that he had the

authority to disregard the express provisions of the arbitration clause that

limited his authority to picking from the eligible Proposed Awards timely

submitted.”).

      HanMar argues that by concluding that the challenged provisions were

punitive, the arbitrator made “other findings” in violation of the arbitration

provision. See id., at 25-28. Additionally, HanMar asserts that the arbitrator

erred in concluding that its Proposed Awards #3 and #5 constituted a penalty.

See id., at 31; see also id., at 32-33 (arguing that its Proposed Awards did

not seek punitive damages).

      By contrast, Keystone argues that the arbitrator properly declined to

enter HanMar’s Proposed Awards #3 and #5. See Keystone’s Brief at 58-61.

Keystone claims that HanMar failed to establish actual damages to support

the imposition of a liability of over $403,000.00. See id., at 60. Keystone also

asserts that the trial court erred by reversing the arbitrator’s entry of its

                                     - 12 -
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Proposed Awards (i) (finding the lease terminated February 28, 2018) and (ii)

(finding Keystone’s written notice to terminate the lease was effective to avoid

automatic renewal of the lease). See id., at 62-65.9

       Paragraph 38 of the lease agreement sets forth the arbitration process:

       38. Miscellaneous.

       A. Any and all controversies, claims or disputes of any kind or
       nature whatsoever arising out of or relating in any way to this
       Lease, including controversies, disputes or claims involving
       performance under this Lease or breach thereof, shall be settled
       by final and binding arbitration administered by the American
       Arbitration Association in Philadelphia, Pennsylvania under its
       Commercial Arbitration Rules as modified herein. The
       modifications contained herein shall supersede the American
       Arbitration Association’s commercial arbitration rules and shall be
       construed as jurisdictional. Notwithstanding the foregoing, or
       anything else contained to the contrary, Lessor [HanMar] retains
       the right and may avail itself of any and all rights and remedies
       as provided for or pursuant to this Lease in any court of competent
       jurisdiction including exercising the warrants of attorney to
       confess judgment, money damages, ejectment, or possession.
       Further, nothing contained herein shall be construed to limit
       Lessor’s right to obtain equitable relief whatsoever in a court of
       competent jurisdiction.

             Judgment upon any award rendered by the American
       Arbitration Association may be entered in any court having
____________________________________________

9 Keystone does not acknowledge the untimely filing of its counterclaim and
Proposed Awards, nor does Keystone support its argument with discussion of
pertinent legal authorities beyond citations to our standard of review. See
Pa.R.A.P. 2119(a) (requiring an appellant’s argument to include “such
discussion and citation of authorities as are deemed pertinent.”). Keystone
baldly asserts that the arbitrator’s failure to enter its Proposed Awards was
“ambiguous,” and fails to support its claims with citation and discussion of
relevant authorities. See Pa.R.A.P. 2119(a); see also Commonwealth v.
Reyes-Rodriguez, 111 A.3d 775, 781 (Pa. Super. 2015) (stating that
“[w]hen an appellant cites no authority supporting an argument, this Court is
inclined to believe there is none.”).

                                          - 13 -
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     jurisdiction thereof. The following standards which shall be
     construed as jurisdictional, shall supplement the regulations of
     the American Arbitration Association and shall control in the event
     of a conflict:

        (i) Lessee shall file its request for arbitration with the
        Philadelphia office of the American Arbitration Association
        within thirty (30) days after the controversy, controversies,
        claim(s) or dispute(s) first arose and the failure of the Lessee
        to file a timely claim … shall be deemed a waiver of Lessee’s
        rights with respect to such controversy, controversies, claim(s)
        or dispute(s) and full award shall be granted to Lessor with
        respect to all claims raised by Lessee. At Lessor’s request, the
        timeliness of the submission shall be addressed and resolved
        on a preliminary basis and prior to commencement of any
        proceedings on the merits of such claims.

        (ii) Within twenty (20) days of filing the claim, the claimant
        shall submit its proposed award(s) (the “Proposed Award”) to
        the American Arbitration Association with a copy to respondent.
        Within twenty (20) days after claimant’s submission of its
        Proposed Award, the respondent shall submit its Proposed
        Award to the American Arbitration Association. The
        respondent’s failure to submit its Proposed Award
        within said twenty (20) days shall be deemed untimely
        and the arbitrator shall have no jurisdiction to consider
        it.

        (iii) Each individual item of dispute (an “Individual Dispute”)
        shall be submitted as a separate Proposed Award for decision
        making purposes. The arbitrator shall rule on each Individual
        Dispute in the parties’ respective proposed awards.

        (iv) The arbitrator shall have jurisdiction to enter only
        one Proposed Award with respect to each Individual
        Dispute from the Proposed Awards submitted by one or
        the other party, together with all amounts payable under
        paragraph 38 and may not make other findings. The
        arbitrator shall have neither authority nor jurisdiction to
        award punitive damages. The award of the arbitrator shall
        be supported by a reasoned opinion including a finding
        regarding the reasons for the decision, findings of fact, and
        citations to the relevant provisions of this Lease and/or legal

                                   - 14 -
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         authority with respect to each item in dispute or with respect
         to as many items of the dispute as requested by either party.

                                    ***

         (viii) All costs and expenses of arbitration, including the
         arbitrator’s fee, shall be taxed against and paid by the losing
         party (the “losing party” who shall be defined as the party who
         has been awarded less than the other party) and shall be added
         to the award. Each party shall bear its own attorneys fees,
         except that if the arbitration is brought as a result of a
         claim for payments of Minimum Annual Rent and/or
         Additional Rent from the Lessee and Lessor shall be the
         winning party….

Keystone’s Response in Opposition, 8/14/20, Exhibit A (Lease Agreement), at

¶ 38 (emphasis added).

      Regarding HanMar’s Proposed Award #3, the arbitrator acknowledged

that Keystone did not timely vacate the premises, “although only by a day[.]”

Keystone’s Response in Opposition, 8/14/20, Exhibit B (Arbitrator’s Award),

at 12. The arbitrator stated that Keystone’s liability for an extended 5-year

lease term totaled $403,275.00. See id. By contrast, HanMar’s estimated

their repair costs at $114,000.00 and the cost of the Environmental Study was

estimated at $1,500.00. See id. Accordingly, the arbitrator stated that “[b]y

[HanMar] exercising its option to extend the Commercial Lease for five years

they called for payment of approximately 3.5 times the damages they have

allegedly suffered.” Id. The arbitrator declined to enter the award, concluding

that it constituted a penalty. See id., at 13; see also id. (leaving open the

option for HanMar to seek actual damages sustained as a result of the breach).

                                    - 15 -
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As to Proposed Award #5, the arbitrator relied on its reasoning set forth

regarding Proposed Award #3. See id., at 14.

      On review, the trial court agreed with the arbitrator’s conclusion that

HanMar’s Proposed Awards #3 and #5 constituted a penalty. See Trial Court

Opinion, 3/12/21, at 6, 9-10; see also id., at 9 (concluding that HanMar’s

Proposed Award #3 “requested damages exceeding the compensatory

damages needed to restore the Premises and return [HanMar] to its position

prior to the breach.”). The trial court also concluded that because Keystone’s

corresponding Proposed Awards were untimely filed, the arbitrator lacked

jurisdiction to entertain them. See id., at 16.

      We begin by noting that the assumption underlying HanMar’s argument

raises a novel issue under Pennsylvania law. Because the lease agreement

defines certain procedural directives for the arbitration as “jurisdictional,” it

contends that Pennsylvania courts have the power to vacate the arbitrator’s

award if the court concludes the arbitrator erred in applying these procedural

directives. And HanMar is correct in noting that our jurisprudence has

established that challenges to the jurisdiction of an arbitration tribunal must

be decided by a court. See Civan v. Windermere Farms, Inc., 180 A.3d

489, 495 (Pa. Super. 2018). However, the jurisdiction at issue in our

precedents has always been whether a party consented to arbitration of the

dispute at issue. See id.

                                     - 16 -
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      Here, there is no dispute that the parties agreed to arbitrate the dispute

about whether the lease automatically renewed; both parties submitted

proposed awards on the issue to the arbitrator. Therefore, generally, the

question of the proper procedure to be followed during arbitration is “reserved

for the arbitrators.” Shamokin Area School Auth. V. Farfield Co., 454 A.2d

126, 127 (Pa. Super. 1982). Whether that general rule is overridden by the

parties’ defining certain procedural requirements as jurisdictional is an open

question in Pennsylvania law. See, e.g., U.S. Spaces, Inc. v. Berkshire

Hathaway Home Servs. Fox & Roach, 165 A.3d 931, 934 (Pa. Super. 2017)

(observing that “[j]udicial review of a common law arbitration award is

severely limited as otherwise arbitration would be an unnecessary stage of

litigation, causing only delay and expense without settling the dispute”).

      However, we need not reach this issue, as even if we accept HanMar’s

position that the lease agreement has made these procedural directives

jurisdictional, we conclude HanMar is due no relief. In HanMar’s view, because

paragraph 38(A)(iv) requires the arbitrator to choose between the parties’

proposed awards, the arbitrator—and subsequently, the reviewing trial court—

was compelled to enter HanMar’s Proposed Awards #3 and #5. However,

paragraph 38(A)(iv), which HanMar contends is jurisdictional, also prohibits

the arbitrator from entering an award of punitive damages. See Keystone’s

Response in Opposition, 8/14/20, Exhibit A (Lease Agreement), at ¶ 38(A)(iv).

The lease agreement does not define “punitive damages.” HanMar asserts that

                                    - 17 -
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“punitive damages,” as used in the lease agreement, “refers to a punitive

damages claim in an ad damnum clause, i.e., requested relief of a monetary

punitive damage in excess of compensatory damages in order to punish a

defendant.” HanMar’s Brief at 32. However, HanMar points to no place in the

record reflecting any agreement between the parties concerning how this term

would be construed under the lease. Therefore, construction of the term

“punitive damages” was a question of law and fact appropriately tasked to the

arbitrator. See Civan, 180 A.3d at 493.

      The trial court did not conclude that the arbitrator’s finding was

unconscionable or the result of procedural irregularity. And we can find no

error in the trial court’s determination. Further, we discern no abuse of

discretion or legal error by the trial court in failing to substitute HanMar’s

Proposed Awards #3 and #5. Accordingly, HanMar’s arguments that the trial

court erred in failing to find the lease automatically renewed merits no relief.

      Next, we turn to Keystone’s challenges to the enforceability of the lease

and the related challenge to the award of attorneys’ fees. Keystone argues

that the arbitrator’s entry of an award for attorneys’ fees, costs, expenses and

arbitration costs was “ambiguous” and “in need of clarification.” Keystone’s

Brief at 20. According to Keystone, paragraph 38(A)(viii) (concerning costs,

fees and expenses) is procedurally and substantively unconscionable. See id.,

at 21. Keystone points to the portion of paragraph 38(A)(viii) that allows

HanMar to recover its expenses and attorneys’ fees if HanMar succeeds on a

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claim seeking minimum annual rent or additional rent from Keystone;

Keystone highlights the fact that there is no reciprocal provision which would

make HanMar responsible for Keystone’s expenses and fees. See id., at 26,

27-28, 37.

      Additionally, Keystone argues that the commercial lease is a contract of

adhesion, and Keystone lacked the ability to modify any unfavorable contract

terms. See id., at 29. Keystone claims that the parties have unequal

bargaining power, because Keystone’s president, Mustafa Kol, has only a high

school education and is a Turkish immigrant, while Mark Hankin has been a

real estate developer since the 1970s. See id., at 25-26, 30, 31-32.

      In response, HanMar contends Keystone did not establish that it lacked

equal bargaining power or meaningful choice. See HanMar’s Brief as Appellee

at 32. HanMar claims that Kol has been a citizen of the United States since

2006, and Keystone was represented through the transaction by a full service

commercial real estate brokerage firm. See id., at 32-33. HanMar also directs

our attention to two addenda to the lease agreement in support of its assertion

Keystone was able to negotiate lease terms. See id., at 35 n.4.

      Commercial leases are governed by contract law principles. See

Gamesa Energy USA, LLC v. Ten Penn Ctr. Assocs., L.P., 217 A.3d 1227,

1238 (Pa. 2019). “An adhesion contract is a standard-form contract prepared

by one party, to be signed by the party in a weaker position, usually a

consumer, who adheres to the contract with little choice about the terms.”

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Am. S. Ins. Co., Inc. v. Halbert, 203 A.3d 223, 228 (Pa. Super. 2019)

(citation omitted); see also Todd Heller, Inc. v. United Parcel Serv., Inc.,

754 A.2d 689, 700 (Pa. Super. 2000) (explaining that the hallmark of an

adhesion contract is the lack of equal bargaining power between the parties).

       Even where a contract is one of adhesion, it is not necessarily

unconscionable and unenforceable as a matter of law. See Salley v. Option

One Mortg. Corp., 925 A.2d 115, 127 (Pa. 2007).

       [A] contract or term is unconscionable, and therefore avoidable,
       where there was a lack of meaningful choice in the acceptance of
       the challenged provision and the provision unreasonably favors
       the party asserting it. The aspects entailing lack of meaningful
       choice and unreasonableness have been termed procedural and
       substantive unconscionability, respectively. The burden of proof
       generally concerning both elements has been allocated to the
       party challenging the agreement, and the ultimate determination
       of unconscionability is for the courts. Nevertheless, where
       material facts are disputed, for example, concerning the general
       commercial background underlying a challenged transaction
       and/or the commercial needs of a particular trade, fact finding
       may be necessary.

Id. at 119-20 (footnotes and internal citations omitted).

       Here, the arbitrator concluded that the lease agreement constituted a

contract of adhesion, and Keystone had no choice but to accept the terms.

See Keystone’s Response in Opposition, 8/14/20, Exhibit B (Arbitrator’s

Award), at 6.10 The trial court, in reviewing the arbitrator’s award, concluded

that Keystone failed to prove that it lacked any meaningful choice regarding

____________________________________________

10  We observe, however, that the arbitrator primarily discussed the time for
filing arbitration claims and proposed awards in rendering its decision.

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J-A27008-21

the lease terms. See Trial Court Opinion, 3/12/21, at 13-14. The trial court

therefore refused to confirm those portions of arbitrator’s award that found

the lease to a contract of adhesion. Our review confirms the trial court’s

conclusion.

      The instant case involves a dispute arising out of a commercial lease

agreement, in which Keystone, the lessee, is a corporation. In such settings,

we generally presume that parties executing a commercial lease have

relatively equal bargaining power. See Cambria-Stoltz Enters. v. TNT

Invs., 747 A.2d 947, 950 (Pa. Super. 2000). As the trial court aptly noted,

Keystone was represented by a full service commercial real estate brokerage

throughout the execution of the lease agreement; Keystone contemplated

purchasing the leased premises; Keystone had experience in executing and

negotiating commercial leases for other venues; and, through its commercial

broker, Keystone had the opportunity to either negotiate the lease terms or

consider additional properties. See Trial Court Opinion, 3/12/21, at 13-14.

While this is undoubtedly a scenario in which one party exerted its

substantially superior bargaining power to obtain favorable contract terms, we

cannot say the lease agreement was unquestionably a contract of adhesion as

a matter of law. As a result, we can discern no abuse of discretion or legal

error by the trial court. No relief is due on these claims.

      Keystone    further   argues    that    the   attorneys’   fees   award   is

disproportionate and excessive. See Keystone’s Brief at 38-41. Keystone

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claims that the fee certification provided by HanMar is excessive in relation to

the nature of the dispute, and instead, is punitive in nature. See id., at 39.

Further, Keystone asserts that HanMar’s fee certification should be reduced

by any amount incurred through their pursuit of unconscionable claims. See

id., at 41-46.

       Keystone fails to provide any legal support for these claims. See

Pa.R.A.P. 2119(a). Accordingly, these claims are waived. See Lackner v.

Glosser, 892 A.2d 21, 29 (Pa. Super. 2006) (stating that “arguments which

are not appropriately developed are waived.        Arguments not appropriately

developed include those where the party has failed to cite any authority in

support of a contention.”) (citation omitted).11

       In each of its remaining claims, Keystone challenges the remaining

awards entered in favor of HanMar as “ambiguous” and “in need of

clarification.” See Keystone’s Brief at 47-58. Keystone argues that the

arbitrator’s awards are “speculative and ambiguous with respect to damages

and with respect to the determination of who was the prevailing party for the

purpose of awarding attorney’s fees….” Id. at 50. However, Keystone’s final

____________________________________________

11 Our review reveals that Keystone did not challenge the award of counsel
fees as disproportionate and excessive in its court-ordered Pa.R.A.P. 1925(b)
concise statement. For this reason, as well, these claims are waived. See
Pa.R.A.P. 1925(b)(4)(vii) (providing that “[i]ssues not included in the
Statement … are waived.”); In re Estate of Daubert, 757 A.2d 962, 963 (Pa.
Super. 2000) (explaining that issues not raised in a Rule 1925(b) concise
statement are deemed waived).

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claims are largely underdeveloped, and provide no legal authority to support

these contentions. See Pa.R.A.P. 2119(a). “This Court will not act as counsel

and will not develop arguments on behalf of an appellant.” Bombar v. West

Am. Ins. Co., 932 A.2d 78, 93 (Pa. Super. 2007). Accordingly, these claims

are waived.

      Even if not waived, Keystone has failed to establish the trial court erred.

Once again, the final arbiter of both law and fact was the arbitrator. Keystone

has failed to establish under the appropriate standard of review that judicial

intervention with the arbitrator’s award is appropriate. No relief would be due

even if Keystone had not waived this issue.

      Based upon the foregoing, we affirm the trial court orders confirming

the five arbitration awards entered in favor of HanMark, confirming the

arbitration award of costs and fees in favor of HanMark, denying the remainder

of HanMar’s petition to partially confirm and partially vacate and modify the

arbitration award, and denying Keystone’s petition to partially confirm and

partially vacate and modify the arbitration award.

      Orders affirmed.

Judgment Entered.

Joseph D. Seletyn, Esq.
Prothonotary

Date: 2/18/2022

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