Canter’s Pharmacy, Inc. v. Elizabeth Associates

On January 7, 1987, Schneider Health Services, Inc., Orrie M. Rockwell, Jr., and Canter’s Pharmacy, Inc., doing business as Westbrook Pharmacy and Surgical Supply (Westbrook), entered into a partnership agreement to operate a personal-care facility named Elizabeth Associates (Elizabeth) (defendant). The partnership agreement contained an arbitration provision that required the parties to arbitrate any dispute, with the decision of the arbitrators to be final. The partnership agreement was silent as to a definite term of the partnership. The partnership began suffering financial losses, requiring the partners to provide additional capital contributions pursuant to the partnership agreement. Westbrook refused to contribute additional capital. Elizabeth filed suit in the Allegheny County Court of Common Pleas against Westbrook to recover the additional capital contributions. Westbrook answered Elizabeth’s complaint and filed a counterclaim seeking a partnership accounting and dissolution of the partnership. Westbrook subsequently filed a separate action against Elizabeth alleging breach of the partnership agreement. Elizabeth did not respond to the separate action. The court then consolidated the two actions on Westbrook’s motion. Elizabeth filed a motion to stay the consolidated case pending arbitration as required under the partnership agreement. The trial court granted Elizabeth’s motion and entered an order staying the consolidated case. Westbrook appealed, arguing that the consolidated case sought dissolution that is not arbitrable.