DiLucente Corp. v. Pennsylvania Roofing Co., Inc.
| Decision Date | 05 April 1995 |
| Citation | 655 A.2d 1035,440 Pa.Super. 450 |
| Parties | DiLUCENTE CORPORATION and Allegheny Surety Co., Appellants, v. PENNSYLVANIA ROOFING CO., INC., and The American Arbitration Association, Appellees. |
| Court | Pennsylvania Superior Court |
Andrew L. Horvath, Pittsburgh, for appellees.
Before ROWLEY, P.J., and HUDOCK and CERCONE, JJ.
This is an appeal from the order of the trial court which denied DiLucente Corporation's (DiLucente) motion for a preliminary injunction which sought to enjoin an arbitration hearing. We affirm.
The underlying action arose from a contract dispute between a general contractor, DiLucente, and a subcontractor, Pennsylvania Roofing Co., Inc., also known as Pennsylvania Roofing Systems, Inc. (Roofing), relative to construction work performed by the latter pursuant to a contract dated November 1, 1993. The contract included an arbitration clause, which reads in pertinent part:
ARBITRATION
30. In case of any dispute or disagreement under this agreement, or with respect to any other work performed on the job site, it is agreed that such dispute shall be submitted to the American Arbitration Association under the rules then pertaining to contractors or construction disputes. No law suit or any other action at law may be substituted without first complying with the terms of this arbitration provision.
Should any dispute or controversy whatsoever arise between the Contractor and Subcontractor, ... then Subcontractor shall follow all of the provisions of the contract documents with respect to conditions precedent to the making of claims and shall give twenty (20) days written notice to Contractor of Subcontractor's intent to resort to legal action; in which case Contractor, by mailing a notice within said twenty (20) day period, may elect to require the said Subcontractor or parties who contract with him to proceed pursuant to the American Arbitration Association Construction Industry Rules, in which case the judgment and award rendered by the arbitrators may be entered in any court having jurisdiction thereof; and should Contractor not elect to proceed through American Arbitration Association Rules, the Subcontractor and parties who contract with him shall then be limited to an action at law initiated in either Allegheny County or the site where the project is to be constructed, at the election of the contractor. In any event, regardless of any election, Contractor may at any time demand that Subcontractor be limited to the type of action to which the Contractor is limited, whether legal or by arbitration, if the contractor avers that another party is liable over to him for claims by this Subcontractor. Contractor may initiate an action against the Subcontractor in arbitration, law, or equity, at its option, and Subcontractor agrees that the various courts located in Allegheny County, Pennsylvania, or the site where the project is located, at the election of the Contractor, shall have jurisdiction of both the person and matter alleged in any complaint, and any arbitration shall be within the Pittsburgh district, unless Contractor desires to file elsewhere. The Subcontractor shall carry on the work and maintain the progress scheduled during any arbitration proceedings, unless otherwise agreed by Subcontractor and Contractor in writing.
Subcontract Agreement, 11/1/93, p 30 (emphasis added).
Pursuant to this clause, Roofing gave DiLucente written notice on February 2, 1994 of its intention to proceed to arbitration if their dispute remained unresolved. On March 15, 1994, Roofing filed a Demand for Arbitration with the American Arbitration Association (AAA). By letter dated March 21, 1994, DiLucente raised a qualified objection to arbitration of the underlying dispute. By letter dated April 1, 1994, the AAA set a hearing date of May 25, 1994 on the underlying contractual dispute. On May 2, 1994, DiLucente filed a Complaint in Equity in the Court of Common Pleas of Allegheny County, at GD94-7283, seeking to stay the scheduled AAA arbitration proceeding. On May 6, 1994, Roofing filed preliminary objections to DiLucente's complaint. On May 13, 1994, DiLucente filed a motion for injunction seeking to enjoin arbitration proceedings. On that same day, oral argument was held before the trial court on Roofing's preliminary objections and DiLucente's motion for injunction, after which the trial judge denied DiLucente's motion. On May 19, 1994, DiLucente filed an appeal to this Court. 1
Before reaching the merits of DiLucente's appeal we must determine whether it is interlocutory. Roofing claims that the May 13, 1994 order appealed from was interlocutory since DiLucente's motion for preliminary injunction was more in the nature of a petition requesting a stay of arbitration. Roofing relies on prior case law which held that an order compelling arbitration and staying court action is interlocutory since it "forces the parties into, rather than out of, court." Gardner v. Prudential Insurance Co., 332 Pa.Super. 358, 359, 481 A.2d 654, 655 (1984).
We cannot agree with Roofing's analysis. DiLucente followed proper procedure when filing a motion for injunctive relief. This Court has previously held that a trial court possesses subject matter jurisdiction to issue injunctive relief enjoining arbitration, prior to a determination of whether the underlying dispute is arbitrable. Langston v. National Media Corporation, 420 Pa.Super. 611, 616-19, 617 A.2d 354, 357-58 (1992). 2
Having concluded that DiLucente could properly seek injunctive relief to enjoin the arbitration, we refer to Pa.R.A.P., Rule 311(a)(4), 42 Pa.C.S., which states that an appeal may be taken as of right from an order refusing an injunction. Accordingly, DiLucente's appeal is not interlocutory and we may now address whether the trial court properly denied the preliminary injunction.
A preliminary injunction is an interim measure designed to preserve the status quo and protect the parties until a final hearing is held. Soja v. Factoryville Sportsmen's Club, 361 Pa.Super. 473, 477, 522 A.2d 1129, 1131 (1987). Injunctive relief is considered an extraordinary equitable remedy and may only be granted if the plaintiff has established a clear right to the relief requested. Id. The party seeking the injunction must establish that "there is an urgent necessity for interim relief before the case can be heard on the merits" and that immediate and irreparable harm, which cannot be compensated by damages, will result if the injunction is denied. Id. Furthermore, the plaintiff must demonstrate that greater injury would result by refusing the preliminary injunction than by granting it. John G. Bryant Company, Inc. v. Sling Testing and Repair, Inc., 471 Pa. 1, 7, 369 A.2d 1164, 1167 (1977) (citation omitted).
When reviewing the denial of a preliminary injunction, this Court will not inquire into the merits of a controversy, but will examine the record to determine if any apparently reasonable grounds exist for the trial court's action. S.D. Bowers, Inc. v. National Bank of the Commonwealth, 404 Pa.Super. 512, 513, 591 A.2d 324, 325 (1991). We will not reverse the trial court's order denying a preliminary injunction unless there has been a clear abuse of discretion or an error of law. Id.
DiLucente must prove that it has a clear right to enjoin the arbitration proceeding before it is entitled to injunctive relief. Absent an express agreement between the parties to submit their disputes to arbitration, a court may not compel arbitration. Hoffman v. Gekoski, 250 Pa.Super. 49, 53, 378 A.2d 447, 448 (1977). Furthermore:
When one party to an agreement to arbitrate seeks to enjoin the other from proceeding to arbitration, judicial inquiry is limited to the questions of whether an agreement to arbitrate was entered into and whether...
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