HARRISBURG — A state appeals court recently reversed a lower court’s arbitration award in a dispute over realtor fees.

On June 5, the state Superior Court ruled that U.S. Spaces Inc., the appellant, may have the right to seek judicial redress against Berkshire Hathaway Home Services, Fox & Roach over a disputed arbitration award. The Superior Court sent the case back to the lower court for further proceedings.

The dispute centers around realtor fees between U.S. Spaces and Berkshire Hathaway Home Services, Fox & Roach. An arbitration hearing was scheduled for April 25, 2016, but the court refused to hold the hearing because of the “absence of U.S. Spaces’s broker of record, who was not scheduled to be a witness at the proceeding,” according to the appeals court decision.

The arbitration panel then ruled against U.S. Spaces, which then asked the Philadelphia County Court of Common Pleas to vacate the arbitration decision, alleging that “it was denied a full and fair hearing.” The lower court, however, denied U.S. Spaces’ petition. 

U.S. Spaces appealed, and the appeals court reversed the lower court’s decision, ruling that the Judicial Code stipulates that common law arbitration can be vacated or changed if “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 court held that the only “valid basis” for the lower court’s decision was that U.S. Spaces’s petition did not “provide a legal basis for relief.” The Superior Court, however, ruled that if U.S. Spaces’s allegations are true, it would have a legal basis to strike down the arbitration agreement.

“U.S. Spaces has alleged that it was denied its right to an opportunity to be heard when the arbitration panel decided the matter without a hearing,” the appeals court said in its decision. 

“It asserts that the arbitration panel’s decision that the broker of record was required to be present was contrary to the rules agreed upon by the parties for arbitration of disputes. We cannot conclude that these allegations are insufficient as a matter of law. Under [the Judicial Code] these allegations, if proved, are sufficient to vacate the arbitration award. We therefore reverse and remand for further proceedings.”

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Harrisburg, PA - 17120

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