Samuel J. Marranca General Contracting Co., Inc. v. Amerimar Cherry Hill Associates Ltd. Partnership

• Decision Date: 20 July 1992
• Citation: 610 A.2d 499,416 Pa.Super. 45
• Parties: SAMUEL J. MARRANCA GENERAL CONTRACTING CO., INC. and Samuel J. Marranca v. AMERIMAR CHERRY HILL ASSOCIATES LIMITED PARTNERSHIP, Amerimar Realty Company, Amerimar Associates, C. Ronald Bleznak, David G. Marshall, Kenneth P. Balin, Linso Cherniahivsky & Associates, Ollie Cherniahivsky, United States Fire Insurance Company and Rollins Burdick & Hunter. Appeal of AMERIMAR CHERRY HILL ASSOCIATES LIMITED PARTNERSHIP, Amerimar Realty Co., Amerimar Associates, C. Ronald Bleznak, David G. Marshall and Kenneth P. Balin.
• Court: Pennsylvania Superior Court

Page 499

610 A.2d 499

416 Pa.Super. 45

SAMUEL J. MARRANCA GENERAL CONTRACTING CO., INC. and Samuel J. Marranca v. AMERIMAR CHERRY HILL ASSOCIATES LIMITED PARTNERSHIP Amerimar Realty Company, Amerimar Associates, C. Ronald Bleznak, David G. Marshall, Kenneth P. Balin, Linso Cherniahivsky & Associates, Ollie Cherniahivsky, United States Fire Insurance Company and Rollins Burdick & Hunter Appeal of AMERIMAR CHERRY HILL ASSOCIATES LIMITED PARTNERSHIP, Amerimar Realty Co., Amerimar Associates, C. Ronald Bleznak, David G Marshall and Kenneth P. Balin.

Superior Court of Pennsylvania.

Argued May 29, 1992.

Filed July 20, 1992.

Douglas B. Lang, Philadelphia, for appellants.

Wilbur H. Seitzinger, Jr., Philadelphia, for appellee Marranca.

Before CIRILLO, POPOVICH and HOFFMAN, JJ.

CIRILLO, Judge.

This is an appeal from an order of the Court of Common Pleas of Luzerne County denying appellants' petition to stay judicial proceedings and to compel arbitration. We affirm.

The parties entered into a contract for the construction of the Cherry Hill Residence Inn in Cherry Hill, New Jersey. Appellees Samuel J. Marranca General Contracting Company, Inc. and Samuel J. Marranca (Marranca) initiated the underlying lawsuit by filing a writ of summons against appellants, Amerimar Cherry Hill Associates Ltd., Amerimar Realty Co., Amerimar Associates, C. Ronald Bleznak, David G. Marshall, and Kenneth P. Balin (Amerimar). In its complaint Marranca also asserted claims against Linso, Cherniahivsky & Associates, an architectural firm, Ollie Cherniahivsky, the architect, United States Fire Insurance Company, the insurer, and Rollins, Burdick and Hunter, the insurance broker.

Pursuant to the contract, construction commenced on September 12, 1988. Approximately one year later, Amerimar contemplated termination of Marranca as general contractor; on September 26, 1989, Amerimar sent formal notice of termination to Marranca. On October 17, 1989, Marranca terminated the contract due to Amerimar's failure to make payment. Without Marranca's knowledge, Amerimar had allegedly removed Marranca's name as a named insured from the insurance policy on the project on October 12, 1989. On October 15, 1989, prior to Marranca's termination of the construction contract but after Amerimar's removal of Marranca from the insurance policy, an arson fire destroyed several partially constructed buildings. Marranca had requested but had not received the payment for this work.

On April 26, 1990, Marranca filed a writ of summons against Amerimar, the architect, the insurer and the insurance broker. The complaint was filed on June 25, 1990. Amerimar filed preliminary objections to the complaint alleging, inter alia, improper venue and forum non-conveniens. The preliminary objections were denied. Thereafter, on July 11, 1991, Amerimar filed its answer to Marranca's complaint. Approximately two weeks later, Amerimar filed a demand for arbitration pursuant to the terms of the construction contract between Marranca and Amerimar. Marranca refused this request, prompting Amerimar to file a motion to compel arbitration and stay judicial proceedings pursuant to 42 Pa.C.S. § 7304(a) and (d). The court denied Amerimar's motion finding that Amerimar had waived any right it may have had to such relief in this case.

On appeal, Amerimar presents one issue for our consideration: Whether the trial court erred in refusing to stay the proceedings and in refusing to compel arbitration pursuant to 42 Pa.C.S. § 7304 and the express terms of a construction contract entered into by the parties?

In reviewing a decision of a trial court, our scope of review is limited to determining whether the trial judge's findings are supported by substantial evidence or whether the trial court abused its discretion. Northview Motors, Inc. v. Attorney General, 128 Pa.Cmwlth. 54, 562 A.2d 977, allocatur denied, 525 Pa. 605, 575 A.2d 570 (1989). With this standard in mind, we will review the contract provision at issue and the applicable case law and rules of court.

The relevant portions of the contract provide:

Para. 7.9.1. All claims, disputes and other matters in question between the Contractor [Marranca] and the owner [Amerimar] arising out of, or relating to, the Contract Documents or the breach thereof, ... shall be decided by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association then obtaining unless the parties mutually agree otherwise.

An addendum was added to paragraph 7.9.1, which provides in relevant part:

Nothing contained herein shall prevent any party from seeking and obtaining legal or equitable relief as may be available at law or in equity.

The trial court determined that Amerimar had waived its right to elect arbitration, stating:

We need not and do not decide whether or not the arbitration clause is applicable and/or enforceable because we believe that under the circumstances Amerimar has waived and/or abandoned any right it may have had to such relief in this case. We emphasize that Amerimar Defendants never opposed this civil action until resort was made to this Court for at least a third time by the Plaintiffs for some form of relief. The record in this case unequivocally establishes a willingness on the part of the Amerimar Defendants to have the Court of Common Pleas adjudicate the issues being raised without resort to arbitration as long as the Court was not the Luzerne County Court of Common Pleas. Clearly, Amerimar was ready to litigate this case in another jurisdiction and, accordingly, we find it difficult to understand and/or appreciate how, after having made and lost the venue and forum non-conveniens arguments, it can now contend that the arbitration provision is mandatory and not elective.

We agree with the trial court's conclusion that Amerimar waived its right to enforce the arbitration clause.

Waiver is a voluntary and intentional abandonment or relinquishment of a known right. Zitelli v. Dermatology Education & Research Foundation, 409 Pa.Super. 219, 240, 597 A.2d 1173, 1184 (1991). See also 28 Am.Jur.2d, Estoppel and Waiver § 30. Waiver may be established by a party's express declaration or by a party's undisputed acts or language so inconsistent with a purpose to stand on the contract provisions as to leave no opportunity for a reasonable inference to the contrary. See 17A Am.Jur.2d, Contracts § 656. Here, Amerimar's conduct amounts to waiver. Amerimar chose not to file a petition to compel arbitration. Amerimar also elected not to assert arbitration as an affirmative defense either in preliminary objections or in new matter. Instead, Amerimar waited until it had received an adverse ruling on pretrial motions before invoking and seeking to enforce the arbitration provision of the contract. Further, Amerimar initiated other proceedings in different jurisdictions regarding matters related to the contract. This conduct is inconsistent with Amerimar's present contention that the arbitration provision is mandatory and not elective.

The defense of arbitration is an affirmative defense; it must be pleaded in new matter or it is waived. Pennsylvania Rule of Civil Procedure 1030 provides in pertinent part:

All affirmative defenses including but not limited to defenses of ... arbitration and award, ... shall be pleaded in a responsive pleading under the heading "New Matter." A party may set forth as new matter any other material facts which are not merely denials of the averments of the preceding pleadings.

Pa.R.C.P. 1030. In addition, Rule 1032 provides in relevant part:

A party waives all defenses and objections which he does not present either...