J-S77042-14

NON-PRECEDENTIAL DECISION – SEE SUPERIOR COURT I.O.P. 65.37

CAM FINANCIAL SERVICES D/B/A                 : IN THE SUPERIOR COURT OF
COUNTY MORTGAGE SERVICES,                    :        PENNSYLVANIA
                                             :
                Appellee                     :
                                             :
                     v.                      :
                                             :
BROADVIEW NETWORKS, INC.,                    :
                                             :
                Appellant                    : No. 2030 EDA 2014

                  Appeal from the Order Entered July 2, 2014,
              in the Court of Common Pleas of Delaware County,
                      Civil Division, at No(s): No. 14-2279

BEFORE:    STABILE, JENKINS, and STRASSBURGER, JJ.*

MEMORANDUM BY STRASSBURGER, J.:                   FILED FEBRUARY 06, 2015

     Broadview       Networks,   Inc.   (Broadview)   appeals   from   the   order

overruling its preliminary objection in the nature of a motion to compel

arbitration against CAM Financial Services d/b/a County Mortgage Services

(CAM). We vacate the order of the trial court and remand for proceedings

consistent with this memorandum.

     This case arises from a dispute between CAM, a corporation providing

low interest mortgages, and Broadview, a local, regional and long distance

telephone carrier.     CAM instituted this breach of contract action against

Broadview before a magisterial district judge. CAM asserted that “[b]etween

June 2009 and the present, [Broadview] overcharged [CAM] $26,568.00 for

services which it did not provide to [CAM] and for which [CAM] paid




*Retired Senior Judge assigned to the Superior Court.
J-S77042-14


[Broadview].” Complaint, 4/16/2014, at ¶ 14.         Thus, CAM requested

judgment in its favor for that amount plus pre-judgment interest.

     On February 26, 2014, the district judge found in CAM’s favor;

Broadview appealed to the Court of Common Pleas of Delaware County; and,

Broadview ruled CAM to file a complaint.       CAM complied and filed its

complaint on April 16, 2014.    Attached as Exhibit B to the complaint is a

“New Customer Enrollment Form and Letter of Agency” (Service Agreement)

dated June 1, 2009.    The primary contact on behalf of CAM was Joseph

Stonelake, who signed the forms. Included in that form is a section entitled

Dispute Resolution, which provided the following.

     The parties shall attempt to resolve all disputes in the spirit of
     cooperation without formal proceedings.      Any dispute which
     cannot be so resolved (other than the collection of amounts due
     for the Services and requests for injunctive relief) shall be the
     subject of mandatory arbitration.     Such arbitration shall be
     conducted in accordance with the U.S. Arbitration Act (Title 9,
     U.S. Code), and under the Commercial Arbitration Rules of the
     American Arbitration Association.     The arbitration shall be
     conducted in New York, New York. The decision of the arbitrator
     shall be final and binding upon the parties. Judgment upon the
     arbitration award may be entered in any court of competent
     jurisdiction.

Service Agreement, 6/1/2009, at 2.

     Also attached to the complaint is a Broadspeed Dynamic IP GR Order

Form dated June 2, 2009.       That order form was also signed by Joseph

Stonelake on behalf of CAM and provided for pricing of the services. In its

complaint, CAM averred that Joseph Stonelake was employed by CAM as a



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loan processor between 2006 and January 2012, and that David V. Gilbert

(Gilbert) was and is the Secretary for CAM. CAM stated that in “February,

June, and November 2009, Gilbert advised [Broadview’s] representative,

Daniel DiOrio (“DiOrio”), both orally and in writing that only Gilbert and

Victoria Stonelake, the Manager, were authorized by [CAM] to discuss,

negotiate, execute, agree to and enter into contracts on behalf of [CAM].”

Complaint, 4/16/2014, at ¶ 8. Furthermore, CAM averred that “[Broadview]

likewise knew this fact based upon previous contracts negotiated between

DiOrio on behalf of [Broadview] and [CAM].” Id. Attached to the Complaint

as Exhibit A were copies of e-mails between Gilbert and DiOrio, with a copy

to Joseph Stonelake, dated November 16, 2009, providing that “NOTHING IS

TO BE CHANGED WITHOUT Vick’s [] or my specific authorization[.]” On the

same day, DiOrio confirmed that “Nothing has been and nothing will[.]”

     On May 5, 2014, Broadview filed a preliminary objection to the

complaint   pursuant   to   Pa.R.C.P.    1028(a)(6),   which   provides   that   a

preliminary objection may be filed where there is an agreement for

alternative dispute resolution.   It requested the parties be compelled to

arbitrate this matter pursuant to the aforementioned clause in the Service

Agreement in light of the fact that CAM “utilized the services provided by

Broadview under the Service Agreement, including the services in dispute

here, as well as other services, and, with certain lapses, [CAM] paid




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Broadview for the services so provided.” Memorandum in Support of

Preliminary Objection, 5/5/2014, at ¶ 4.

        In response, CAM asserted that it should not be forced to arbitration

where the employee of CAM, Joseph Stonelake, who signed the Service

Agreement was not authorized to do so, and Broadview knew this

information at the time the Service Agreement was signed.        Alternatively,

CAM suggested that the instant dispute falls outside the language of the

arbitration provision in the Service Agreement, because it is a collection

action.

        On July 1, 2014, the trial court overruled Broadview’s preliminary

objection. Broadview timely filed a notice of appeal. 1 The trial court did not

order Broadview to file a concise statement of errors complained of on

appeal pursuant to Pa.R.A.P. 1925, but the court did file an opinion pursuant

to Pa.R.A.P. 1925(a).



1
    We recognize that the

        [d]enial of preliminary objections is ordinarily an interlocutory
        order not subject to immediate appeal. Nevertheless:
        Pennsylvania Rule of Appellate Procedure 311 provides that an
        interlocutory appeal may be taken as of right from any order
        which is made appealable by statute. The Uniform Arbitration
        Act, 42 Pa.C.S.A. §§ 7301 et seq., states that an appeal may be
        taken from ‘[a] court order denying an application to compel
        arbitration....’ 42 Pa.C.S.A. § 7320(a)(1).

Midomo Co. v. Presbyterian Hous. Dev. Co., 739 A.2d 180, 182-83 (Pa.
Super. 1999) (some quotations and citations omitted).


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            Our standard of review for a denial of preliminary
      objections in the nature of a petition to compel arbitration is
      limited to determining whether the trial court’s findings are
      supported by substantial evidence and whether the trial court
      abused its discretion in denying the petition. Where a party to a
      civil action seeks to compel arbitration, a two-part test is
      employed.     First, the trial court must establish if a valid
      agreement to arbitrate exists between the parties. Second, if
      the trial court determines such an agreement exists, it must
      then ascertain if the dispute involved is within the scope of the
      arbitration provision. If a valid arbitration agreement exists
      between the parties, and the plaintiff’s claim is within the scope
      of the agreement, the controversy must be submitted to
      arbitration.

Callan v. Oxford Land Dev., Inc., 858 A.2d 1229, 1233 (Pa. Super. 2004)

(citations omitted).

      Preliminary objections in the nature of a petition to compel arbitration

filed pursuant to Pa.R.C.P. 1028(a)(6) cannot be determined from facts of

record. See Pa.R.C.P. 1028(c)(2) (“Note: Preliminary objections raising an

issue under subdivision (a)(1), (5), (6), (7) or (8) cannot be determined

from facts of record.”). The Rule further provides that “[i]f an issue of fact is

raised, the court shall consider evidence by depositions or otherwise.”

Pa.R.C.P. 1028(c)(2).

      Instantly, the trial court offered the following conclusion in its decision

to overrule the preliminary objection.

      In the instant case, if the averments set forth in [CAM’s]
      Complaint are accepted as being true, then the Service
      Agreement upon which [Broadview] grounds its arbitration claim
      is not binding upon [CAM] since no authorized representative of
      [CAM] approved the [Enrollment Form].       Accordingly, while



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     arbitration may be a favored method of resolving disputes in
     Pennsylvania, a party may not be forced into such an
     agreement, and on the well pleaded facts that exist of record, no
     such agreement was in place.

Trial Court Opinion, 8/13/2014, at 2.

     On appeal, Broadview asserts that this conclusion was error for the

following reasons.

           CAM accepted and utilized for nearly five years the
     telecommunications and related services provided by Broadview
     under the Service Agreement and these services were by no
     means limited to those in dispute here. During these five years,
     CAM regularly interacted with Broadview regarding the Services
     being provided by Broadview, raising multiple service and billing
     issues; in other words, CAM repeatedly insisted upon the service
     quality and billing accuracy rights afforded it under the Service
     Agreement. Moreover, CAM, with some lapses, paid Broadview
     for the Services provided under the Service Agreement at the
     rates and pursuant to the terms and conditions set forth in the
     Service Agreement, imploring Broadview, during one of these
     aforesaid payments lapses, not to disconnect its services for
     nonpayment. Indeed, the very documents submitted by [CAM]
     with its Complaint confirm that CAM’s Secretary knew that
     Broadview was installing the Services at CAM’s location before
     such installation was complete and did not at that time disavow
     [Joseph] Stonelake’s authority to execute the Service
     Agreement, or seek rescission of the Service Agreement.

Broadview’s Brief at 19.

     In other words, Broadview inartfully asserts that the trial court applied

the rules incorrectly by assuming the facts of CAM’s complaint to be true,

when Broadview was arguing those facts were false. There is no question

that, pursuant to the aforementioned rules, the trial court was required to

make a factual determination about the veracity of the allegations in the



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complaint by considering the averments in the preliminary objections as

well. Moreover, had the trial court required additional facts to make such a

determination, it should have considered “evidence by deposition or

otherwise.” Pa.R.C.P. 1028(c)(2).

     Accordingly, the trial court erred as a matter of law, and we vacate the

order of the trial court.     We remand for the trial court to consider the

preliminary    objections   filed   by   Broadview   consistent   with   Pa.R.C.P.

1028(c)(2), and make the factual determinations as to whether “a valid

agreement to arbitrate exists between the parties… [and] if … such an

agreement exists, … ascertain if the dispute involved is within the scope of

the arbitration provision.” Callan, 858 A.2d at 1233.

     Order vacated.     Case remanded for proceedings consistent with this

memorandum. Jurisdiction relinquished.

Judgment Entered.




Joseph D. Seletyn, Esq.

Prothonotary



Date: 2/6/2015




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