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The Pennsylvania Superior Court has upheld the denial of a motion to vacate an arbitration award in favor of an asset management firm sued for breach of fiduciary duty and fraud.

Specifically, the three-judge appellate panel in Morse v. Fisher Asset Management held that a when a trial court sustains preliminary objections seeking enforcement of an arbitration agreement and accordingly dismisses a complaint, then the dismissal does not pause the statute of limitations.

In 2009, plaintiff Joyce Morse sued Fisher Asset Management and two employees for breach of fiduciary duty, common-law fraud, violations of the Unfair Trade Practices and Consumer Protection Law, negligence, breach of contract, and failure to supervise, according to Superior Court Judge Mary P. Murray's opinion. The court dismissed the complaint based on the arbitration agreement and Morse did not appeal.

Six years later, Morse filed an arbitration statement claim that was dismissed by an arbitrator after Fisher argued it was time-barred. Morse then petitioned to vacate the arbitration award, which was denied by the trial judge.

“We agree with appellees that when presented with appellant's complaint in 2009, they could have sought enforcement of the arbitration agreement by either filing preliminary objections or a petition to compel arbitration. Had they opted to proceed with a petition to compel under Section 7304 and the trial court granted it, the resulting court order would have, consistent with Appellant's argument, had to include a stay of the proceeding,” Murray said in the court's March 15 opinion.

“However,” she continued, “appellees opted to file preliminary objections under Rule 1028, seeking dismissal. Neither Rule 1028, nor any other Rule of Civil Procedure or other Pennsylvania authority, provides that an order sustaining preliminary objections, with respect to enforcing an agreement to arbitrate, stays an action. We thus agree with appellees that when the court sustained their preliminary objections and dismissed appellant's 2009 complaint, the action was not stayed. As appellees note, appellant did not appeal from the order dismissing her action. Accordingly, the court's May 13, 2010, order did not stay the 2009 action and did not toll the statute of limitations.”

Morse also argued that the arbitrator erred in dismissing her claim without a hearing, but that argument was also rejected by the court.

Lastly, Morse argued that her case was “doomed” and asked the court to appoint an arbitrator from the Pittsburgh bar.

Fisher argued “that the 'agreement unequivocally requires that [arbitration] be heard by a retired judge from JAMS in Philadelphia,'” according to Murray. “While we agree with appellees, the issue is moot because our disposition negates any need for the appointment of an arbitrator.”

Arthur Stroyd of Del Sole Cavanaugh Stroyd represents FIsher and said, “So far, we're pleased but not surprised” with the Superior Court's ruling.

Scott Hare represents Morse and and did not return a call seeking comment.

(Copies of the 13-page opinion in Morse v. Fisher Asset Management, PICS No. 19-0333, are available at http://at.law.com/PICS.)