La Vale Plaza, Inc. v. R.S. Noonan, Inc.

La Vale Plaza, Inc. (La Vale) (plaintiff) entered a construction contract and arbitration agreement with R.S. Noonan, Inc. (Noonan) (defendant). A dispute arose between the parties about the payment due to Noonan. Noonan filed a demand for an arbitration under the American Arbitration Association (AAA) Rules. The arbitrators entered an award in favor of Noonan and declared the award was a full settlement of all claims. Two months after the arbitrator entered the award in favor of Noonan, La Vale brought a lawsuit, alleging Noonan failed to pay it the difference between the award and a deposit that La Vale delivered to Noonan during the arbitration proceedings. Noonan countered that the alleged amount asserted by Noonan was a partial payment on account and left a balance decided by the award. The district court held the dispute about whether the amount was a deposit or a payment on account raised a material question of fact and denied Noonan's motion for summary judgment. However, the district court also ordered sua sponte that the award be resubmitted to the arbitrators for clarification of its meaning relying on the Pennsylvania Arbitration Act of April 25, 1927 (Act of 1927). The court held the Act of 1927 applied to the dispute because the arbitration clause of the contract provided that it was to be enforceable under the prevailing arbitration law. La Vale appealed to the Third Circuit, contending the district court erred by referring the matter back to the arbitrators. La Vale argued that the arbitration was a common-law arbitration and that the court lacked the power to resubmit an award to arbitrators for clarification.