TERENCE M. HAIGNEY VS. U-HAUL CO. OF NEW JERSEY, INC.,ET AL.(L-3542-14, MONMOUTH COUNTY AND STATEWIDE) ( 2017 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court."
Although it is posted on the internet, this opinion is binding only on the
parties in the case and its use in other cases is limited. R.1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-4692-14T3
TERENCE M. HAIGNEY,
Plaintiff-Respondent,
v.
U-HAUL CO. OF NEW JERSEY, INC.;1
U-HAUL INTERNATIONAL, INC.,
Defendants-Appellants.
____________________________
Argued November 10, 2016 – Decided June 29, 2017
Before Judges Simonelli, Carroll and Gooden
Brown.
On appeal from the Superior Court of New
Jersey, Law Division, Monmouth County, Docket
No. L-3542-14.
Daniel P. Waxman (Bryan Cave LLP) of the New
York bar, admitted pro hac vice, argued the
cause for appellants (Mr. Waxman and Post &
Schell, P.C., attorneys; Mr. Waxman and
Jonathan E. Ginsberg (Bryan Cave LLP), on the
briefs).
David P. Corrigan argued the cause for
respondent (Hobbie, Corrigan & Bertucio, P.C.,
attorneys; Mr. Corrigan and Michael R. Hobbie,
on the brief).
1
Referenced in the record also as U-Haul of New Jersey, Inc.
PER CURIAM
Defendants U-Haul Co. of New Jersey, Inc. and U-Haul
International, Inc. (collectively U-Haul) appeal from the May 13,
2015 Law Division order, which confirmed a June 19, 2014
arbitration award on liability in favor of plaintiff Terence M.
Haigney and dismissed U-Haul's counterclaim with prejudice.2 For
the following reasons, we affirm.
I.
We derive the following facts from the record. Haigney was
a fencing contractor since 1995. In his business, he often rented
trailers to transport bags of cement to his job sites using this
procedure: he would drive to the trailer supplier, the trailer
supplier would attach a trailer to his vehicle, and he would then
drive to the cement supplier and load bags of cement onto the
trailer and bring them to the job site.
On November 4, 2011, Haigney rented a six-foot by twelve-foot
open trailer from U-Haul. He went to U-Haul's facility in
Middletown, where U-Haul's employee, Thomas Bia, attached the
trailer to his vehicle. Haigney drove from U-Haul's premises to
a local Home Depot, where he loaded twenty bags of cement weighing
2
The arbitration was bifurcated, with the liability phase
proceeding first. Since this appeal only concerns the arbitrator's
award on liability, we do not address the damage award.
2 A-4692-14T3
eighty pounds each into the trailer. He then drove two miles to
a train station, where he picked up two day laborers. At no time
did Haigney notice any problems with the trailer or feel the
trailer whip or sway while he was driving.
While driving to his next destination, Haigney came to an
abrupt stop at a traffic light. After the light changed, he
accelerated to approximately thirty-five miles per hour and
proceeded downhill. As he drove, his steering wheel started
shaking violently and the trailer started swaying from side to
side. The trailer eventually disconnected and crashed into the
rear of his vehicle, punching a hole in the bumper and causing the
vehicle to flip over and the trailer to jackknife into a guardrail.
Haigney sustained serious permanent injuries as a result of
the accident. In a recorded statement given to an insurance
investigator from his hospital bed five days after the accident,
Haigney said that the trailer fishtailed uncontrollably, but he
had no idea why this happened. He said "I've had numerous
trailers. The guy put it on incorrectly or it was a faulty
trailer, I have no idea." He also said that he loaded cement in
the trailer and evenly distributed the load.
Haigney filed a complaint against U-Haul in the Law Division.
In lieu of filing an answer, U-Haul filed a motion to compel
binding arbitration pursuant to an arbitration agreement that
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compelled arbitration before a single arbitrator in accordance
with the commercial arbitration rules of the American Arbitration
Association (AAA). The arbitration agreement was governed by the
Federal Arbitration Act (FAA), 9 U.S.C.A. § 1 to 307. The court
granted the motion.
During discovery, Haigney advanced several theories of
liability, including: (1) the ball clamp that held the trailer
onto the trailer hitch that was attached to his vehicle was
defective and fractured and disconnected the trailer; (2) the
trailer's brakes were inoperable because U-Haul failed to install
brake fluid; and (3) U-Haul's employee improperly attached the
trailer to his vehicle (the improper attachment theory). Haigney
asserted that after he left U-Haul's premises, the inoperable
brakes created pressure on the ball clamp and ball mount when he
braked. This condition weakened the connection between the ball
clamp and ball mount, which was already weakened because the
trailer was attached improperly and the ball clamp was defective.
Consequently, the ball clamp detached and the trailer began to
sway, causing the crash.
Haigney asserted the improper attachment theory several times
in his answers to U-Haul's interrogatories. Although Haigney's
interrogatory answers were not presented to the arbitrator,
retired Judge Marina Corodemus, they are in the record on appeal.
4 A-4692-14T3
Nevertheless, there was other evidence supporting Haigney's
improper attachment theory. Bia testified at his deposition,
without objection, about the procedure he used to attach a trailer
to a vehicle. He testified that after connecting a trailer to a
vehicle, he would make sure it was properly attached by pushing
back on the ball clamp and listening for a click to make sure the
ball clamp was "all the way tight." He also testified that making
sure the ball clamp was tight kept it from separating from the
trailer coupler while driving, and acknowledged that if the ball
clamp was installed too loosely, "[i]t would come off and screw
everything up[]" and "cause problems." This deposition testimony
was read into the record during Haigney's case-in-chief without
objection.
On direct examination during the arbitration hearing, U-
Haul's representative and liability expert, James D. Fait,
testified about and demonstrated the proper method for attaching
a trailer. On cross-examination, he testified, without objection,
that the person attaching the trailer must tighten the ball clamp
until it is tight and that listening for one click was "not the
proper procedure. That's not what they are trained and that's not
the proper installation." Fait agreed with Bia that if the ball
clamp was not properly tightened, the trailer coupler "could come
off the ball [clamp], if you hit a bump or something like this[.]"
5 A-4692-14T3
Fait also acknowledged that if the trailer was not secured properly
and disconnected, it could possibly cause a crash.
In addition to this evidence, in his written summation on
liability, Haigney asserted, in part, that Bia's improper securing
of the ball clamp to the trailer coupler, which caused the ball
clamp to separate from the trailer coupler, was a proximate cause
of the accident. In its written summation on liability, U-Haul
responded in a footnote that Haigney's experts did not present the
improper attachment theory. However, U-Haul did not ask Judge
Corodemus to disregard or strike this theory; rather, U-Haul argued
that Fait had properly discredited it.
U-Haul conceded that the trailer lacked operable brakes due
to a lack of brake fluid, but asserted this was not a proximate
cause of the accident. Rather, U-Haul averred that Haigney's
improper loading of the cement bags onto the trailer with 100% of
the weight in front of the centerline was the sole proximate cause
of the accident. U-Haul concluded that the improper loading caused
a catastrophic loss of control as Haigney accelerated, and the
ball clamp fractured during the rollover of his vehicle, causing
the trailer to separate from the trailer coupler.
At his deposition, Haigney testified that he knew the proper
requirements for loading a trailer. He testified that the majority
of the weight should be ahead of the wheels, and noted that the
6 A-4692-14T3
U-Haul contract he signed stated "[y]ou should always . . . load
trailer heavier in the front[.]" As to how he loaded the cement
bags in the trailer on the day of the accident, he testified that
"[y]ou start in the front and then you behind -- you know, one row
of them and then two, you know." He did not recall whether he
loaded any of the bags to the rear of the centerline.
At the arbitration hearing, Haigney testified that he evenly
distributed the load of cement bags across the length of the
trailer bed. He explained that the trailer had to be loaded evenly
with about sixty percent of the weight loaded in the front half
and the remaining forty percent loaded behind the front half. He
also explained how he loaded the cement bags on the day of the
accident: he started in the front and put a first row of three
bags approximately two feet from the front wall, then put the next
row of three bags approximately one foot behind the front row, and
then put the last two bags approximately one foot behind the second
row. He then looked at the trailer from the side to make sure it
was level. He testified that he did not load all of the bags in
the front of the trailer, and that such loading "would be
completely unlevel[, and he] probably wouldn't have been able to
even get out of the [U-Haul] parking lot without [the trailer]
swaying all over the place." He reviewed an exhibit that showed
the side of a similar open trailer attached to a similar vehicle
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with twenty bags of cement all loaded in the front, and testified
that this was not the way his trailer looked from the side after
he loaded it. He emphasized that the trailer depicted in the
exhibit was so off level that the back wheels were almost off the
ground and no one would ever drive the trailer that way.
Antonio Sic, one of the day laborers, testified at the
arbitration hearing that prior to entering Haigney's vehicle, he
looked and saw that the cement bags were properly loaded on the
trailer and did not need to be fixed or rearranged. He testified
that the trailer was level and the cement bags were not loaded
entirely in the front. He also reviewed an exhibit showing twenty
cement bags all loaded up against the front wall of a similar
trailer, and testified this was not how the cement bags were loaded
in the subject trailer.
Before the second day of the arbitration hearing, U-Haul
conducted additional testing by placing twenty cement bags in a
similar trailer in the manner in which Haigney had testified at
the arbitration hearing. U-Haul took three photographs of the
trailer, which it sought to introduce into evidence to rebut
Haigney's arbitration testimony about how he loaded the cement
bags, which U-Haul asserted was diametrically different from his
deposition testimony. Judge Corodemus declined to consider the
rebuttal evidence based on a lack of notice to Haigney, and because
8 A-4692-14T3
the photographs were not offered for the truth of the matter
asserted and were merely illustrative.
In a June 19, 2014 written liability award, Judge Corodemus
addressed the alleged inconsistency between Haigney's deposition
testimony and arbitration testimony about how he loaded the
trailer. She found his arbitration testimony was consistent with
his statement to the insurance investigator and was corroborated
by Sic's testimony. She concluded that Haigney had properly loaded
the trailer.
Judge Corodemus did not find that the ball clamp was
defective; rather, she found it was damaged as a result of the
accident. However, she found that U-Haul breached its duty to
Haigney by allowing him to leave its premises with a trailer that
had inoperable brakes, and by failing to properly attach the
trailer to his vehicle. She concluded that these two conditions
were a proximate cause of the accident. She also concluded that
Haigney's failure to confirm that the trailer was properly attached
was also a proximate cause of the accident. Accordingly, Judge
Corodemus apportioned U-Haul's liability at eighty percent and
Haigney's at twenty percent. In a September 11, 2014 written
damages award, she awarded plaintiff $1,800,000, molded to
$1,440,000.
9 A-4692-14T3
Following U-Haul's failure to pay the damage award, Haigney
filed a verified complaint and order to show cause to confirm the
two arbitration awards. U-Haul sought to vacate the awards,
arguing that Judge Corodemus exceeded her authority by finding
liability on the improper attachment theory, of which it had no
notice and which was not alleged by Haigney or supported by lay
or expert evidence. U-Haul also argued that Judge Corodemus
exceeded her authority and violated due process by barring the
rebuttal photographs.
In a May 13, 2015 oral opinion, Judge Jamie S. Perri confirmed
the arbitration awards. Judge Perri found that Judge Corodemus
did not exceed her authority by finding negligence based on
improper attachment, reasoning as follows:
[Judge Corodemus'] decision was based on the
submissions and testimony presented in the
arbitration hearing. Her decision was in the
scope of [the] submissions because she relied
on the evidence to determine that each party
acted negligently. This did not delve into
an area of law foreign to the evidence or the
arguments presented by either side.
[Haigney] originally sought to prove [U-
Haul's] liability through allegations of
negligence in maintenance and inspection.
Broadly construed, Judge Corodemus' decision
was based on the theory that the U-Haul
employee who attached the trailer was
negligent in maintaining the trailer coupler
and hitch and failing to inspect the coupler
and hitch to insure it was properly attached.
10 A-4692-14T3
Here, Judge Corodemus was presented with
a set of facts and was obligated to determine
whether, based upon those facts, U-Haul owed
a duty to Haigney, the violation of which
proximately caused his injures. A careful
review of the arbitration record discloses
that in September 2013, Haigney stated in
response to U-Haul's interrogatories, that
damages were being sought on the basis that
"the U-Haul employee improperly connected and
improperly maintained [the] trailer to [his
vehicle]."
. . . .
Fait demonstrated the proper method for
attaching the coupler and ball mount on the
date of the accident.
. . . .
As such the evidence presented to Judge
Corodemus during the course of the hearing
established the proper method for securing the
trailer to the vehicle, a method that U-Haul
. . . allegedly taught to its affiliates
through training sessions and videos.
Evidence was also produced that Bia, a U-Haul
. . . employee had not properly secured the
trailer to the vehicle before it left the U-
Haul facility, and that he was of the belief
that "a click" was sufficient to secure the
trailer.
[U-Haul] . . . cannot claim surprise in
this regard since [it was] already in
possession of Bia's testimony and knew or
should have known of their own procedures and
instructions for inspecting the trailer and
securing it to the vehicle before releasing
it to the customer.
. . . .
Judge Corodemus' conclusions were
supported by the law and the factual record
11 A-4692-14T3
developed during the arbitration hearing. No
expert was required to add to Haigney's
position that Bia's negligence in failing to
properly secure the trailer was a proximate
cause of the accident. And Judge Corodemus
did not exceed her authority in rendering her
final decision and allocating negligence[.]
. . . .
[T]he issue presented to Judge Corodemus was
whether U-Haul was negligent and whether its
negligence was a proximate casue of the
accident. The fact that she based her
decision on evidence developed during the
arbitration hearing which indicated
negligence for reasons other than those
originally embraced by [Haigney], does not
render her decision unenforceable.
Simply stated, Judge Corodemus was asked
to render decisions on liability and damages
based upon the evidence presented to her. She
carefully considered the evidence and came to
a reasonable conclusion that coincided with
the credible evidence regarding the cause of
the accident.
She assessed liability and apportioned it
between the parties. She did not exceed her
authority and did not consider or rule on
issues that were not properly before her.
Addressing whether Judge Corodemus exceeded her authority and
violated due process by barring rebuttal evidence, Judge Perri
found as follows:
U-Haul . . . attempts to equate evidentiary
decisions to misconduct under 9 [U.S.C.A. §]
10(a)(3). And argues that Judge Corodemus
denied U-Haul a fair hearing because she would
not consider rebuttal evidence regarding the
loading of the trailer. . . .
12 A-4692-14T3
This argument is simply without merit.
As previously noted U-Haul's defense was based
upon its claim that Haigney improperly loaded
the trailer and that this was the sole
proximate cause of the accident. During the
course of the arbitration U-Haul offered
extensive evidence on this issue and had the
opportunity to cross examine Haigney.
It was unquestionably within Judge
Corodemus' discretion to rule on evidence
issues such as denying [U-Haul's] application
to bar [Haigney's] expert witnesses, or in
declining to permit as rebuttal tests that
were performed by [U-Haul] while the
arbitration hearing was ongoing. The fact
that U-Haul was not given leave to present
further cumulative evidence on the issue, did
not deprive it of a fair hearing. And cannot
even remotely be considered misconduct on the
part of [Judge Corodemus]. . . . U-Haul . . .
[has] not shown that such decisions were
without basis or that they rise to the level
of warranting the invalidation of the
arbitration award.
This appeal followed.
Because a trial court's decision regarding an arbitration
award is a decision of law, our review is de novo, but with a
recognition of the wide authority bestowed upon the arbitrator by
statute. Minkowitz v. Israeli, 433 N.J. Super. 111, 136 (App.
Div. 2013) (citations omitted); Manger v. Manger, 417 N.J. Super.
370, 376 (App. Div. 2010); see also Metromedia Energy, Inc. v.
Enserch Energy Servs., 409 F.3d 574, 578 (3d Cir. 2005) (applying
the de novo standard of review to an arbitration award), cert.
denied, 546 U.S. 1089, 126 S. Ct. 1021, 163 L. Ed. 2d 852 (2006).
13 A-4692-14T3
Essentially, we must determine whether the arbitrator and the
trial court have each adhered to the requirements of the
controlling statute. Minkowitz, supra, 433 N.J. Super. at 136.
The FAA is the controlling statute here. "Review of
arbitration awards under the FAA is 'extremely deferential.'
Vacatur is appropriate only in 'exceedingly narrow'
circumstances[.]" Metromedia Energy, Inc., supra, 409 F.3d at 578
(citations omitted). Under the FAA, a binding arbitration award
may only be vacated :
(1) where the award was procured by
corruption, fraud, or undue means;
(2) where there was evident partiality or
corruption in the arbitrators, or either of
them;
(3) where the arbitrators were guilty of
misconduct in refusing to postpone the
hearing, upon sufficient cause shown, or in
refusing to hear evidence pertinent and
material to the controversy; or of any other
misbehavior by which the rights of any party
have been prejudiced; or
(4) where the arbitrators exceeded their
powers, or so imperfectly executed them that
a mutual, final, and definite award upon the
subject matter submitted was not made.
[9 U.S.C.A. § 10(a).]
Prior to Hall Street Associates, LLC v. Mattel, Inc., 552
U.S. 576, 128 S. Ct. 1396, 170 L. Ed. 2d 254 (2008), it was widely
accepted that a court could also vacate an award if the arbitrator
14 A-4692-14T3
showed a manifest disregard for the law. Ludwig Honold Mfg. Co.
v. Fletcher, 405 F.2d 1123, 1128 (3d Cir. 1969). Post-Hall Street,
the Supreme Court and Third Circuit case law left open the question
of whether the manifest disregard standard still applies. In any
event, even if it does apply, to demonstrate manifest disregard,
the party seeking to vacate an award must show that the arbitrator
acknowledged and subsequently disregarded an explicit, well-
settled, and clearly applicable legal rule in making her decision.
Paul Green Sch. of Rock Music Franchising, LLC. v. Smith, 389 F.
App'x 172, 177 (3d Cir. 2010).
"Likewise, an arbitrator's 'improvident, even silly,
factfinding' does not provide a basis for a reviewing court to
refuse to enforce the award." Metromedia Energy, Inc., supra, 409
F.3d at 578 (citation omitted). In reviewing an arbitration award,
courts do not consider claims of factual or legal error by an
arbitrator. Major League Umpire Ass'n v. Am. League of Prof'l
Baseball Clubs, 357 F.3d 272, 279-80 (3d Cir. 2004), cert. denied,
543 U.S. 1049, 125 S. Ct. 861, 160 L. Ed. 2d 769 (2005). "[T]here
must be absolutely no support at all in the record justifying the
arbitrator's determinations for a court to deny enforcement of an
award." News Am. Publ'ns, Inc. Daily Racing Form Div. v. Newark
Typographical Union, Local 103, 918 F.2d 21, 24 (3d Cir. 1990)
(internal citations omitted).
15 A-4692-14T3
Further, 9 U.S.C.A. § 10(a)(3) cannot be read "to intend that
every failure to receive relevant evidence constitutes misconduct
which will require the vacation of an arbitrator's award."
Sherrock Bros. v. DaimlerChrysler Motors Co., LLC, 260 F. App'x
497, 501 (3d Cir. 2008) (quoting Newark Stereotypers' Union No.
18 v. Newark Morning Ledger Co., 397 F.2d 594, 599 (3d Cir. 1968)).
9 U.S.C.A. § 10(a)(3) does not require arbitrators to hear all
evidence proffered to them; an arbitrator is only required to
provide parties with "an adequate opportunity to present its
evidence and argument." Tempo Shain Corp. v. Bertek, Inc., 120
F.3d 16, 20 (2d Cir. 1997). Misconduct under 9 U.S.C.A. 10(a)(3)
"will not be found 'unless the aggrieved party was denied a
fundamentally fair hearing.'" Vitarroz Corp. v. G. Willi Food
Int'l Ltd., 637 F. Supp. 2d 238, 248 (D.N.J. 2009) (quoting
Sherrock Bros., supra, 260 F. App'x at 501).
On appeal, U-Haul does not allege that the liability award
was procured by corruption, fraud, or undue means, or that there
was evident partiality or corruption. 9 U.S.C.A. § 10(a)(1)-(2).
Rather, U-Haul argues that Judge Perri erred in confirming the
arbitration award because Judge Corodemus exceeded her authority
and showed a manifest disregard for the law by finding liability
on an issue not advanced by Haigney, for which it had no notice;
and Judge Corodemus exceeded her authority and engaged in
16 A-4692-14T3
misconduct in refusing to hear evidence pertinent and material to
the controversy.
We find no merit in U-Haul's argument. The sole issue in
this case was negligence, and that was the only issue Judge
Corodemus decided. Haigney consistently asserted U-Haul's
negligence based on deficient maintenance, inspection, and
operation of the ball clamp and ball mount. Haigney relied in
part, on the improper attachment theory, and advanced this theory
of liability well before the arbitration hearing in his discovery
responses, placing U-Haul on notice it was an issue in this case.
Further, the parties presented the improper attachment theory
during the arbitration hearing and in their post-hearing
submissions without objection. We agree with Judge Perri that
Judge Corodemus' reliance on evidence developed during the
arbitration hearing which indicated negligence for reasons other
than those Haigney originally advanced did not render the
liability award unenforceable. We are satisfied that Judge
Corodemus did not consider or rule on issues that were not
properly before her or show a manifest disregard for the law. She
properly ruled on the sole issue – negligence.
Nor did Judge Corodemus exceed her authority or engage in
misconduct in refusing to hear evidence pertinent and material to
the controversy. Haigney did not change his testimony at the
17 A-4692-14T3
arbitration hearing. He did not testify at his deposition that
he loaded the trailer unevenly, and he never deviated from his
statement to the insurance investigator that he evenly distributed
the load of cement bags. His arbitration testimony was consistent
that he had evenly loaded the trailer, and was corroborated by
Sic's testimony.
In any event, AAA R-34 gave Judge Corodemus broad discretion
to admit or bar evidence: "The arbitrator shall determine the
admissibility, relevance, and materiality of the evidence offered
and may exclude evidence deemed by the arbitrator to be cumulative
or irrelevant." During the arbitration hearing, U-Haul presented
extensive evidence and had the opportunity to cross-examine
Haigney on how he loaded the trailer. The fact that Judge
Corodemus declined to consider the three photographs did not
deprive U-Haul of an adequate opportunity to present its evidence
and argument, or deny it a fair hearing.
Affirmed.
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