## Facts

- La Vale Plaza, Inc. hired R.S. Noonan, Inc. as general contractor for construction of a shopping center under a contract containing an arbitration clause requiring disputes to be submitted under AAA rules and making an arbitral decision a condition precedent to suit.
- A dispute arose regarding the amount owed to Noonan, and Noonan demanded arbitration with the American Arbitration Association.
- On December 10, 1963, the arbitrators awarded Noonan $30,861.64 and stated the award was in full settlement of all claims submitted to arbitration.
- During the arbitration, La Vale paid Noonan $56,429.66 to obtain a continuance of a hearing.
- After the award, La Vale claimed the $56,429.66 was a deposit and sued to recover $25,568.02 as an overpayment compared to the award.
- Noonan contended the $56,429.66 was a partial payment on account, and that the award represented the remaining balance; Noonan did not counterclaim for the award amount.

## Issues

1. Whether the parties’ arbitration was statutory under the Pennsylvania Arbitration Act of 1927 or instead a common-law arbitration.
2. If the arbitration was common-law, whether a court had authority to resubmit the award to the arbitrators for clarification under statutory correction/resubmission provisions.

## Decision

- The Third Circuit held the arbitration was common-law rather than statutory under the Pennsylvania Arbitration Act of 1927.
- Because the arbitration was common-law, the district court lacked authority to resubmit the award to the arbitrators for clarification.
- The court reversed the order resubmitting the award and remanded for further proceedings.
- The court left intact the district court’s determination that a genuine factual dispute existed about whether the $56,429.66 was a deposit or a payment on account.

## Legal Principles

- Under Pennsylvania law, parties must clearly elect statutory arbitration; a clause referencing AAA procedures and enforceability under “prevailing arbitration law” does not, without more, constitute a clear adoption of the statutory arbitration framework.
- Common-law arbitration awards are subject to very limited judicial interference; courts generally may not reopen the arbitral process to clarify or reshape an award.
- Statutory provisions permitting modification, correction, or resubmission of an award for non-merits “form” defects do not apply when the arbitration is common-law.
- Disputes about the effect of an award on collateral matters (such as interim payments) are to be resolved in subsequent litigation rather than by sending the award back to the arbitrators.

## Conclusion

The Third Circuit ruled that the parties’ arbitration proceeded as a common-law arbitration, so the district court could not rely on statutory authority to resubmit the award for clarification; the case was remanded for the court to resolve the parties’ payment characterization dispute without reopening the arbitration.


La Vale Plaza, Inc. v. R.S. Noonan, Inc., 378 F.2d 569 (3d Cir. 1967)