Appeals Court Interprets Procedural Rule: Trial Held After Arbitration No-Show Must Follow Standard Practice

By Danielle N. Rodier
Of the Legal Staff
 
A judge conducting a de novo hearing in an arbitration proceeding in which one party has failed to appear must still follow the standard rules applicable to a trial, the Superior Court has ruled.
 
In Hayes v. Donohue Designer Kitchen Inc., the unanimous three-judge panel, in what apparently is the first-ever interpretation of Rule 1303 of the Pennsylvania Rules of Civil Procedure by a commonwealth appeals court, vacated a decision by a Delaware County Common Pleas Court judge who entered judgment on an arbitration appeal without hearing evidence.
 
Rule 1303(b) may speed up a de novo trial, but it certainly does not erase the need for one to take place, Superior Court Judge John T. Bender said in the court opinion.
 
"Another way to describe the[effect]of the new provisions to Rule 1303 is that it accelerates the time for conducting a de novo trial," Bender said. "Normally, the de novo trial would take place only after an appeal. Now, the de novo trial may be conducted immediately.
 
"However, other than this acceleration, and the fact that it will be an ex-parte proceeding, there is no indication that the nature of the trial is to be otherwise affected."
 
According to the opinion, Timothy and Ann Hayes sued Donohue Designer Kitchen and Patricia Donohue for alleged failure to complete a renovation of their kitchen in a timely manner. The Hayeses filed an action in district justice court in Delaware County. The defendants did not appear at the hearing, and judgment was entered in favor of the Hayeses.
 
The defense filed an appeal to the arbitration division. A hearing was scheduled, and, again, the defendants did not appear.
 
The Hayeses requested, under Pa.R.C.P. 1303(b), that the case be taken to a trial judge. It went before Delaware County Common Pleas Judge Charles B. Burr, who, Bender said, "conducted a proceeding that reads similar to a colloquy in criminal court."
 
Bender said a Court Administrator's Office representative called the case before the trial judge, Burr called the parties to step forward, and the representative described the case. Bender said the Hayeses' counsel presented to Burr the basic facts of the action and was asked a few questions by Burr.
 
Once that exchange was over, Bender said, Burr announced that he was entering judgment in the amount of $18,847.
 
"Notably, the transcript does not reflect that any witnesses were called or sworn, nor was any documentary evidence authenticated and introduced, nor were stipulations entered as to material facts," Bender said.
 
The defendants appealed to the Superior Court, arguing the propriety of the trial court's having entered a judgment.
 
Rule 1303(b) holds that if one party is not ready for a hearing, the arbitrators will make an award unless the court orders a continuance or "hears the matter."
 
Bender said the present case asked the court to define the phrase "hears the matter."
 
Bender wrote a bit about the genesis of the provisions of Rule 1303 in question, saying that they were created to deal with the problem of parties failing to appear for scheduled arbitration proceedings and that they provided a harsh penalty.
 
But the court said the provisions did not affect the need for a trial in such situations.
 
"Although the effect of the rule might be to create a circumstance where a party may win primarily by default of the other party, there is no indication that the rule was meant to circumvent the requirement that a 'trial' take place, and that a verdict rest upon competent evidence," Bender said.
 
"Indeed, the Explanatory Comment states [that] 'if the court hears the matter, then the parties will have had their trial in the court of common pleas.'"
 
There are obviously certain prerequisites to a trial, Bender said, such as the introduction of evidence and conclusions of fact.
 
The proceeding that took place before Burr was not a trial, Bender said, because no evidence was introduced.
 
"Indeed, although appellants' challenge was more specifically directed at the procedure utilized by the court, had appellants simply asserted that the verdict was unsupported by the evidence and that they [were] entitled to a judgment notwithstanding the verdict, the claim would have undeniable merit and leave the verdict subject to reversal," Bender said.
 
"Consequently, we must conclude that the judgment entered is void as being non-compliant with Pa.R.C.P. 1303(b)."
 
The court vacated Burr's ruling and remanded the case to the arbitration division.
 
In a footnote, Bender acknowledged that some might argue with the court's decision, saying the defendants were not entitled to a new trial because they missed the arbitration hearing without a sufficient excuse.
 
But no arbitration took place and no arbitration award was entered, he said, leaving the last remaining judgment, that of the district justice court, to stand.
 
(Copies of the eight-page opinion in Hayes v. Donohue Designer Kitchen Inc., PICS NO. 03-0275, are available from The Legal Intelligencer. Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information. Some cases are not available until 1 p.m.)   
 
This article is reprinted with permission from the March 4, 2003 issue of The Legal Intelligencer. Copyright 2003 ALM Properties, Inc. Further duplication without permission is prohibited. All rights reserved.