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A contract calling for arbitration to be conducted in accordance with the American Arbitration Association’s rules requires that an AAA arbitrator conduct the session, a split Pennsylvania Superior Court panel has ruled in an unpublished opinion. The parties in Rinnier v. Terminix International Co. had explicitly agreed to conduct the arbitration using the AAA’s commercial arbitration rules, but they disputed whether the language in their contract — “arbitration shall be conducted in accordance with the commercial arbitration rules then in force of the [AAA]” — also required the appointment of an AAA arbitrator. The 2-1 panel said that because the parties agreed to abide by the AAA rules and the rules themselves call for the appointment of an AAA arbitrator, the Delaware County Common Pleas Court erred when it appointed an independent arbitrator to hear the case. President Judge Joseph A. Del Sole offered a dissent, contending that the contract required only that the arbitration be conducted in accordance with the association’s rules. Del Sole said that Terminix International Co., which had argued for an AAA arbitrator, didn’t allege any noncompliant feature of the proceeding itself but objected to “the initiation of the arbitration and the selection of the arbitrator.” Lawyer Rocco P. Imperatrice, who represented the plaintiffs in the case, said Monday that he has filed petitions for reconsideration and reargument with the court. Imperatrice, of Dilworth Paxson in Newtown Square, declined to comment further on the ruling. Terminix’s lawyer, Mitchell S. Pinsly of Margolis Edelstein, did not return calls to his office for comment Monday. The panel’s majority, Judge Joan Orie Melvin and Senior Judge Phyllis W. Beck, rejected the trial court’s finding that Terminix should have included the AAA’s standard arbitration clause in its contract with the plaintiffs if arbitration was to be conducted by an AAA arbitrator. The AAA’s standard clause specifies that any arbitration would be “administered by the American Arbitration Association,” according to the opinion. Terminix had argued to the court that the AAA’s rules were incorporated by reference into its contract with the plaintiffs, Michael and Kim Rinnier of Villanova. Terminix noted that the clause at issue has appeared in many other contracts where its interpretation hasn’t been challenged, according to the opinion. The Rinniers alleged in court documents that their exterminator, Terminix, had failed to rid their home of termites and repair damage caused by the infestation, which continued for more than eight years. The Rinniers requested arbitration three times to resolve their dispute with Terminix, suggesting names of arbitrators. Terminix refused the requests, arguing that the proceeding had to be conducted by AAA arbitrators, according to the opinion. Without any prescribed method of appointing an arbitrator, Delaware County Common Pleas Court Judge Kenneth A. Clouse appointed an independent arbitrator to hear the dispute between the Rinniers and Terminix over the alleged damage to the Rinniers’ home, according to the opinion. After several days of hearing testimony and evidence in March 2003, the arbitrator awarded the Rinniers more than $792,000, according to the opinion. In the Superior Court’s discussion of the issue, it noted that the agreement to arbitrate was one at common law because the contract didn’t expressly provide for statutory arbitration under the Pennsylvania Uniform Arbitration Act. Because the arbitration wasn’t conducted in accordance with the parties’ agreement, the court concluded that the arbitration award “resulted from an ‘irregularity’ in the entire arbitration process” and should be vacated. It remanded the matter to the Delaware County Court of Common Pleas.

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