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Reco Equipment, Inc. v. John T. Subrick Contracting, Inc.

Section 514 of the Pennsylvania Contractor and Subcontractor Payment Act, which precludes parties to a construction contract from agreeing to litigate disputes in any state other than Pennsylvania, does not apply to collateral third party agreements.

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�1 Appellant, John T. Subrick Contracting, Inc., appeals from the Order denying its petition to strike a foreign judgment in favor of Appellee, RECO Equipment, Inc., which was transferred from Ohio pursuant to the Uniform Enforcement of Foreign Judgments Act (UEFJA), 42 Pa.C.S.A. � 4306. We affirm.

�2 The record reflects the dispute underlying the foreign judgment stemmed from a rental agreement entered into in Pennsylvania. In 1995, Appellant, an excavating contractor, entered into a construction contract with the Mon Valley Sewage Authority for the installation of sewer lines for a residential development located in the Borough of Donora. At some point during the project the Appellant determined there was a need for an additional hydraulic excavator to complete the work. Appellee is an Ohio corporation with branch offices in Pennsylvania and is in the business of selling, servicing and leasing industrial equipment. Accordingly, Appellant contacted Appellee at its Cranberry Township office and entered into a rental agreement for the use of one of their hydraulic excavators. After delivery of the machine to the construction site a dispute arose over its performance and as to whether the type of machine supplied was the one agreed upon. Approximately one month later Appellant returned the machine to Appellee’s Cranberry location and refused to pay the rental price.

�3 On November 8, 1996, Appellee initiated a civil action in the Court of Common Pleas of Belmont County, Ohio against Appellant for the collection of the unpaid account concerning the rental agreement. Appellant filed a motion to dismiss on January 2, 1997, simply stating as its basis a lack of jurisdiction. On January 9, 1997, Appellee responded by filing a motion to stay the action pending arbitration. The court held arguments on both motions. At the hearing Appellee conceded that jurisdiction over the dispute was properly subject to arbitration pursuant to contractual agreement. Specifically, the rental agreement contained the following clause:

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