CONNECTONE BANK VS. BERGEN PROTECTIVE SYSTEMS, INC. (L-3476-20, BERGEN COUNTY AND STATEWIDE) (CONSOLIDATED) ( 2021 )

NOT FOR PUBLICATION WITHOUT THE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 NOS. A-0468-20
A-1494-20
CONNECTONE BANK,
Plaintiff-Respondent,
v.
BERGEN PROTECTIVE
SYSTEMS, INC.,
Defendant-Appellant.
________________________
CONNECTONE BANK,
Plaintiff-Appellant,
v.
BERGEN PROTECTIVE
SYSTEMS, INC.,
Defendant-Respondent.
_________________________
Argued October 4, 2021 – Decided November 1, 2021
Before Judges Sumners and Firko.
On appeal from the Superior Court of New Jersey, Law
Division, Bergen County, Docket No. L-3476-20.
Caroline P. Wallitt (Kirschenbaum & Kirschenbaum,
PC) of the New York bar, admitted pro hac vice, argued
the cause for appellant Bergen Protective Services in A-
0468-20 and respondent Bergen Protective Services in
A-1494-20 (Kirschenbaum & Kirschenbaum, PC,
attorneys; Samuel Atlas and Caroline P. Wallitt, on the
briefs).
Peter R. Bray argued the cause for appellant
ConnectOne Bank in A-1494-20 and respondent
ConnectOne Bank in A-0468-20 (Bray & Bray, LLC,
attorneys; Peter R. Bray, on the briefs).
PER CURIAM
In these two appeals, calendared back-to-back and consolidated,
defendant Bergen Protective Systems, Inc. challenges two August 7, 2020 Law
Division orders, one denying its motion to compel arbitration and to dismiss the
complaint without prejudice and the other order granting plaintiff ConnectOne
Bank's cross-motion declaring defendant is not entitled to arbitrate certain
claims. Defendant also appeals from the September 21, 2020 order denying its
motion for reconsideration. In its cross-appeal, plaintiff appeals from a
December 18, 2020 order denying its motion in aid of litigant's rights seeking to
enforce the order entered on August 7, 2020. Plaintiff also appeals from the
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February 4, 2021 order denying its motion for reconsideration. For the reasons
that follow, we affirm all of the orders under review.
I.
We summarize the facts from the motion record as follows. Defendant is
an electronic security and fire alarms vendor located in Englewood Cliffs.
Between 2007 and 2018, defendant and plaintiff, including its predecessor -in-
interest, Bank of New Jersey (BNJ), entered into approximately fifty contracts
whereby defendant leased, installed, and serviced security, fire, and closed-
circuit television systems in various locations in New Jersey for plaintiff. The
final contract was executed on October 29, 2018 ("October 2018 contract") and
provided for maintenance of a street-facing ATM in Hoboken. The contract
contained a section headed "LEGAL ACTION," which provided:
The parties agree that due to the nature of the services
to be provided by [defendant], the monthly or other
periodic payments to be made by the Subscriber for the
term of this agreement form an integral part of
[defendant]'s anticipated profits; that in the event of
Subscriber's default it would be difficult if not
impossible to fix BPS's actual damages. Therefore, in
the event Subscriber defaults in the payment or any
charges to be paid to [defendant], the balance of all
payments for the entire term herein shall immediately
become due and payable, and Subscriber shall be liable
for [ninety percent] thereof as liquidated damages and
[defendant] shall be permitted to terminate all its
services, including but not limited to terminating
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monitoring service, under this agreement and to
remotely re-program or delete any programing without
relieving Subscriber of any obligation herein.
If [defendant] prevails in any litigation or
arbitration between the parties, Subscriber shall pay
[defendant]'s legal fees. In any action commenced by
[defendant] against Subscriber, Subscriber shall not be
permitted to interpose any counterclaim. The parties
agree that they may bring claims against the other only
in their individual capacity, and not as a class action
plaintiff or class action member in any purported class
or representative proceeding. Subject to Subscriber's
right to bring any claim against [defendant] for up to
[$1000] in small claims court having jurisdiction, any
dispute between the parties or arising out of this
agreement, including issues of arbitrability, shall, at the
option of any party, be determined by arbitration before
a single arbitrator administered by Arbitration
Services[,] Inc., under its Arbitration Rules
www.ArbitrationServicesInc.com, except that no
punitive damages may be awarded. Service of process
or papers in any legal proceeding or arbitration between
the parties may be made by [f]irst-[c]lass [m]ail
delivered by the U.S. Postal Service addressed to the
party's address in this agreement or another address
provided by the party in writing to the party making
service. Subscriber submits to the jurisdiction and laws
of New Jersey and agrees that any litigation or
arbitration between the parties must be commenced and
maintained in the county where [defendant]'s principal
place of business is located. The parties waive trial by
jury in any action between them unless prohibited by
law. Any action by Subscriber against [defendant]
must be commenced within one year of the accrual of
the cause of action or shall be barred. All actions or
proceedings against [defendant] must be based on the
provisions of this agreement. Any other action that
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Subscriber may have or bring against [defendant] in
respect to other services rendered in connection with
this agreement shall be deemed to have merged in and
be restricted to the terms and conditions of this
agreement, and this consent to arbitrate shall survive
the termination of this agreement.
On January 2, 2020, plaintiff acquired BNJ, becoming successor-in-
interest to its contracts. Citing a declining business market, in mid-2020,
plaintiff began shutting down several former BNJ branches including those with
active contracts with defendant. Consequently, plaintiff sought to terminate
what it deemed were now unnecessary contracts with defendant. By October of
2020, plaintiff had terminated all of its fifty contracts. Thereafter, defendant
submitted a demand for certification to Arbitration Services, Inc., seeking the
sum of $428,494.26 in damages and $214,247.13 in fees relative to the
termination of several agreements.
On June 16, 2020, plaintiff filed a complaint for declaratory judgment in
the Law Division against defendant seeking to invalidate the contracts entered
between the parties and BNJ, alleging in pertinent part that the liquidated
damages provisions contained in the contracts, if applicable, are
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"unconscionable, unfair, over-reaching, unreasonable, . . . [and] unenforceable,"
and violate the Uniform Commercial Code, N.J.S.A. 12A:2A-108(1).1
On July 21, 2020, in lieu of filing an answer, defendant filed a motion to
compel arbitration under N.J.S.A. 2A:23B-7(e) and (g), and to dismiss the
complaint without prejudice under Rule 4:6-2. In defendant's moving
certification in support of its motion, Joseph F. Cioffi, III, its vice president,
certified that on October 29, 2018, defendant and BNJ "executed their last
contract" relative to an ATM machine in Hoboken. Specifically, Cioffi
referenced the arbitration provision in the contract and quoted that "any dispute
between the parties or arising out of this agreement, including issues of
arbitrability, shall, at the option of any party, be determined by arbitration."
Defendant further argued that the October 29, 2018 contract contained a merger
1
N.J.S.A. 12A:2A-108(1) provides:
If the court as a matter of law finds a lease contract or
any clause of a lease contract to have been
unconscionable at the time it was made the court may
refuse to enforce the lease contract, or it may enforce
the remainder of the lease contract without the
unconscionable clause, or it may so limit the
application of any unconscionable clause as to avoid
any unconscionable result.
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clause, which bound all previous agreements and required arbitration of disputes
at either party's election.
Plaintiff opposed the motion, and filed a notice of cross-motion seeking:
(1) a declaration that any claims under the approximately fifty agreements were
not arbitrable; and (2) a dismissal or stay of defendant's demand for arbitration
filed with Arbitration Services, Inc. In the certification of counsel submitted in
support of plaintiff's notice of cross-motion, he certified that the fifty
agreements "were pre-printed forms;" some were "identified as equipment
leases"; the "agreements provide litigation must be maintained in New Jersey";
and several of the agreements "arguably" contain an "arbitration clause with an
arbitration to be administered by a privately-owned Long Island entity
(Arbitration Services, Inc.)."
Counsel also certified that "[n]one of the [a]greements [have] a mandatory
arbitration clause" or "even mention arbitration." Furthermore, plaintiff's
counsel certified in addition to the agreements referenced by defendant in its
arbitration demand, "there are three . . . other types of [f]orm [a]greements that
were executed," as well as "additional instances where the [f]orm [a]greements
annexed to the [a]rbitration [d]emand were executed." Plaintiff's counsel
attached a schedule to his certification comparing the sundry form agreements
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and noted most of the forms that mention arbitration have this provision buried
under a paragraph in bold print entitled, "Legal Action."
In addition, plaintiff's counsel argued some forms have no heading for the
paragraphs that mention arbitration; some forms provide for a waiver of trial by
jury "in actions between them"; some forms mention "arbitration" and
"litigation" in the same paragraph; and some forms require arbitration or an
action be venued in Bergen County while "simultaneously" requiring an
arbitration be exclusively conducted with Arbitration Services, Inc., which has
no offices in Bergen County, and is not authorized to do business in New Jersey.
Further, counsel certified the forms do not state consistently if arbitration is a
mandatory forum for dispute resolution or if an award is binding.
On August 7, 2020, the trial court conducted oral argument on the motion
and cross-motion. In denying defendant's motion, the trial court held that:
I can’t find that the parties are compelled for their entire
relationship to this arbitration clause when it was
clearly written . . . to service one ATM machine. I don’t
find it fits within the parameters that would require
arbitration. And while the [c]ourt certainly does favor
arbitration, . . . [it] acknowledges that it is in fact the
Federal Arbitration Act [(FAA)] requires it, that
requires it when it’s knowing that that is in fact what
the parties are agreeing to.
Here, the only thing that the parties agreed to was that
this particular service agreement for this particular
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ATM was subject to arbitration. But it does not deal
with the entire transaction, or of the, as counsel has
argued, the [fifty] contracts that preceded it. And
which some have some arbitration clauses, et cetera.
And, again, it’s lack of specificity. The fact that it has
some unknown Long Island arbitration, a group to now
divest the parties of the ability to sue in [l]aw is too
problematic to compel arbitration. So the motion to
compel arbitration is denied and the matter will
continue in [l]aw.
Two memorializing orders were entered that day; one denying defendant's
motion to compel arbitration and the order granting plaintiff's cross -motion
requiring litigation of the claims. On August 7, 2020, defendant also filed an
answer and affirmative defenses to the complaint. Thereafter, defendant filed a
motion for reconsideration, which the trial court denied on September 21, 2020.
On October 15, 2021, defendant filed its notice of appeal.
On November 10, 2020, defendant filed an amended demand for
arbitration with Arbitration Services, Inc., and an amended answer followed by
three days later. On November 30, 2020, plaintiff filed a motion in aid of
litigant's rights pursuant to Rule 1:10-3, seeking to direct defendant to
immediately withdraw its amended demand for arbitration pending disposition
of defendant's appeal. Plaintiff also sought sanctions and counsel fees. In its
opposition to plaintiff's motion in aid of litigant's rights, defendant's counsel
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certified there was no violation of the three prior orders—two entered on August
7, 2020, and the other entered on September 21, 2020—and that its amended
demand for arbitration only encompassed twelve contracts containing an
arbitration provision. Defendant's counsel also certified that the three prior
orders simply declared defendant "is not entitle[d] to arbitrate the claims in the
action."
On December 18, 2020, without hearing oral argument, the trial court
denied plaintiff's motion in aid of litigant's rights. In its memorializing order
entered the same day, the trial court noted "the [c]ourt did not deny the right to
arbitrate on contracts that provided for such procedure, but only provided
[p]laintiff the right to proceed in law on contract rights that were not so
precluded by arbitration." An order to this effect was entered.
Thereafter, plaintiff filed a motion for reconsideration of the December
18, 2020 order, seeking to have it vacated and mandate defendant to withdraw
its amended arbitration demand. Specifically, plaintiff asserted: (1) the trial
court's decision that one or more of the contracts has a valid and enforceable
arbitration clause is inconsistent with the August 7, 2020 order insofar as there
was a determination there was no enforceable requirement for the parties to
arbitrate; (2) the trial court did not have jurisdiction to enter the December 18,
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2020 in light of defendant's pending appeal; and (3) an "after the fact
determination" relative to the August 7, 2020 orders did not preclude arbitration
and deprived plaintiff of the opportunity to appeal the ruling.
On February 4, 2021, 2 without hearing oral argument, the trial court
entered an order and a comprehensive rider to the order denying plaintiff's
motion for reconsideration and other relief, but permitted plaintiff to file an
amended complaint. In its order, the trial court applied the governing caselaw
and Rule 4:49-2.3 The court concluded plaintiff "failed to prove that the [c]ourt
based its decision on a palpably incorrect or irrational basis, . . . failed to
2
The order is stamped "filed" February 3, 2021. This is not germane to our
decision.
3
Rule 4:49-2 provides:
Except as otherwise provided by R. 1:13-1 (clerical
errors) a motion for rehearing or reconsideration
seeking to alter or amend a judgment or order shall be
served not later than [twenty] days after service of the
judgment or order upon all parties by the party
obtaining it. The motion shall state with specificity the
basis on which it is made, including a statement of the
matters or controlling decisions which counsel believes
the court has overlooked or as to which it has erred, and
shall have annexed thereto a copy of the judgment or
order sought to be reconsidered and a copy of the
court's corresponding written opinion, if any.
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consider probative evidence, or . . . consider new information under the
circumstances." In addition, it emphasized:
The [c]ourt properly denied [p]laintiff's motion in aid
of litigants' rights because there was no violation of any
order. Neither the August [o]rders nor the September
[o]rder contain language preventing [defendant] from
seeking relief in arbitration for the claims asserted in
the [a]mended [d]emand, as they relate to the [twelve]
contracts with arbitration provisions. The narrow
issues before the [c]ourt were [defendant's] motion to
compel arbitration and [p]laintiff's cross-motion for an
order declaring that [defendant] is not entitled to
arbitrate the claims and disputes that are the subject of
this action, and [defendant's] subsequent motion for
reconsideration. As the [c]ourt stated in its December
[o]rder, the [c]ourt never denied [defendant] the right
to arbitrate on contracts that provided for such
procedure. The [p]laintiff's subsequent motion in aid
of litigant's rights is unable to show that [defendant]
violated an order of the [c]ourt, and therefore denial of
the motion is the appropriate result.
Plaintiff mischaracterizes the [c]ourt's previous
rulings as a conclusion that there is no enforceable
agreement to arbitrate any of the parties['] disputes. As
this [c]ourt spelled out for the parties in its December
[o]rder[,] "the [c]ourt did not deny the right to arbitrate
on contracts that provided for such procedure, but only
provided [p]laintiff the right to proceed in law on
contract rights that were not so precluded by
arbitration." Plaintiff also claims in this motion to
reconsider, that the contracts containing arbitration
provisions should not be adhered to because of
deficient arbitration provisions. Plaintiff may not now,
in a motion to reconsider, challenge the validity of the
arbitration agreements within the [twelve] contracts.
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Plaintiff is free to file a new motion if it chooses to
litigate the validity of those arbitration provisions.
Plaintiff asserts that having a portion of the
litigation continue in Bergen County, and another
portion go on to arbitration would be prejudicial.
Plaintiff asserts that costs of litigating in two places
concerning the same liquidated damages provisions
could expose the parties to different or inconsistent
results or could violate the [e]ntire [c]ontroversy
[d]octrine [(ECD),] which requires all claims to be
litigated in one court. Plaintiff's concerns are without
merit. See Waskevich v. Herold Law, P.A., 431 N.J.
Super. 293, 298 (App. Div. 2013); see also Alfano v.
BBO Seidman, LLP, 393 N.J. Super. 560, 574 (App.
Div. 2007) (holding that the [FAA] applied to an
arbitration agreement because the transactions at issue
occurred between a New Jersey resident and a German
corporation in New York). Assuming that the contracts
contain valid arbitration agreements, the application of
the FAA does not allow for bifurcation.
New Jersey law also allows for bifurcation or
allows [p]laintiff to seek a stay of litigation pending
arbitration—if it is overly concerned with the potential
increased expense and inconsistent results. See
[N.J.S.A.] 2A:23B-7(g) (giving parties the ability to
stay any proceedings involving claims subject to
arbitration, or, if severable, giving the [c]ourt the
ability to limit the stay to that claim); see also Hirsh v.
Amper Fin. Serv., LLC, 215 N.J. 174 (2013) (holding
that non-signatories to an arbitration agreement should
not be compelled to arbitrate and their claims should
proceed in litigation); Frumer v. Nat'l Home Ins. Co.,
420 N.J. Super. 7, 15 (App. Div. 2011) (Appellate
Division bifurcating claims without addressing whether
the FAA applied). In fact, in Hirsh, the Supreme Court
suggested such procedural tools as stays and severance,
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found at N.J.S.A. 2A:23B-7(g), for managing the
parallel proceedings. 215 N.J. at 196[] n.5; see also
Frumer, 420 N.J. Super. at 15.
Plaintiff's argument that the bifurcation would
violate the [ECD] is unfounded. The ECD is equitably
rooted, and its applicability is left to judicial discretion
based on the particular circumstances in a given case.
Yarborough v. State Operated School Dist. of City of
Newark, 455 N.J. Super. 136, 140 (App. Div. 2018); see
also Mystic Isle Dev. Corp. v. Perskie & Nehmad, PC,
142 N.J. 310, 322-23 (1995). It is true that under the
proper circumstances the ECD is correctly applied to
arbitration proceedings. See Shoremount v. APS Corp.,
368 N.J. Super. 252, 255 (App. Div. 2004). But, the
ECD should not be imported wholesale, and
arbitration—with its ordinarily narrow-framed issues—
does not "provide a forum conducive to extensive issue
. . . joinder." Jersey City Police Officer Benevolent
Ass'n v. City of Jersey City, 257 N.J. Super. 6, 14 (App.
Div. 1992).
The ECD was intended to compel the
adjudication of all components of a legal controversy in
a single litigation as a matter of fairness to the parties
and protection of the judicial system from unnecessary
waste, inefficiency and delay, but in this case the issues
between [p]laintiff and [d]efendant are the product of
several separate contracts and agreements. The fact
that only [twelve] of the [fifty] contracts contained an
arbitration provision, was a product of the two parties'
intent, and the [c]ourt will not require the parties to
arbitrate the claims of the [thirty-eight] contracts that
make no mention of arbitration, or to litigate the
[twelve] contracts that do reference arbitration. If
[plaintiff] was worried about being compelled to
arbitrate on some contracts but not others, it should
have included arbitration provisions in each contract or
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none at all. The resulting bifurcation is the product of
[plaintiff's] failure to do so.
However, the trial court granted plaintiff's motion to amend its pleading
under Rule 4:9-1 to add claims relative to defendant's alleged failure to remove
its equipment and overpayments under some of the agreements, which
ostensibly arose after its complaint was filed. A memorializing order was
entered. These appeals followed. 4
On appeal, defendant argues the two August 7, 2020 orders and the
September 21, 2020 order denying reconsideration should be reversed because:
(1) the trial court overlooked the parties' express delegation of arbitrability
issues when it improperly ruled on the arbitration provision's scope; and (2) the
court improperly denied defendant's motion in part due to its unfamiliarity with
the parties' chosen arbitration service.
In its appeal, plaintiff argues: (1) the trial court erred by not stopping the
arbitration of claims in the amended arbitration demand since the subject
agreements do not have a viable or enforceable arbitration requirements; (2) the
law of the case doctrine was violated by the rejection of plaintiff's application
4
On March 11, 2021, we entered an order consolidating these appeals, directed
the clerk to issue an accelerated briefing schedule for docket number A-1494-
20, and expedite the scheduling of oral argument.
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in aid of litigant's rights; (3) the failure to grant reconsideration and enforce the
August 7, 2020 order was erroneous; and (4) the failure to grant oral argument
was improper and warrants reversal of the subject order.
II.
Our review of an order denying a motion to compel arbitration is de novo.
Knight v. Vivint Solar Dev., LLC, 465 N.J. Super. 416, 425 (App. Div. 2020)
(citing Goffe v. Foulke Mgmt. Corp., 238 N.J. 191, 207 (2009)). When
reviewing a motion to compel arbitration, the court applies a two-prong inquiry:
(1) whether there is a valid and enforceable agreement to arbitrate disputes; and
(2) whether the dispute falls within the scope of the agreement. Martindale v.
Sandvik, Inc., 173 N.J. 76, 86, 92 (2002).
When a judge "is 'called on to enforce an arbitration agreement, [the
judge's] initial inquiry must be -- just as it is for any other contract -- whether
the agreement to arbitrate all, or any portion, of a dispute is "the product of
mutual assent, as determined under customary principles of contract law. "'"
Flanzman v. Jenny Craig, Inc., 244 N.J. 119, 137 (2020) (quoting Kernahan v.
Home Warranty Adm'r of Fla., Inc., 236 N.J. 301, 319 (2019)). "Under state
law, 'if parties agree on essential terms and manifest an intention to be bound by
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those terms, they have created an enforceable contract.'" Id. at 135 (quoting
Weichert Co. Realtors v. Ryan, 128 N.J. 427, 435 (1992)).
"An agreement to arbitrate, like any other contract, 'must be the product
of mutual assent, as determined under customary principles of contract law.'"
Atalese v. U.S. Legal Servs. Grp., LP, 219 N.J. 430, 442 (2014) (quoting
NAACP of Camden Cnty. E. v. Foulke Mgmt. Corp., 421 N.J. Super. 404, 424
(App. Div. 2011)). "Simply put, without an agreement to arbitrate, there can be
no arbitration." MZM Constr. Co. v. N.J. Bldg. Laborers Statewide Benefit
Funds, 974 F.3d 386, 397 (3d Cir. 2020) (citing Sandvik AB v. Advent Int'l
Corp., 220 F.3d 99, 104 (3d Cir. 2000)).
"[P]arties may delegate threshold arbitrability questions to the arbitrator,
so long as the parties' agreement does so by 'clear and unmistakable' evidence."
Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524, 530 (2019)
(quoting First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944 (1995)).
"Unless the parties have clearly delegated to an arbitrator the decision whether
the parties agreed to arbitration, the issue is for a court to resolve." Morgan v.
Sanford Brown Inst., 225 N.J. 289, 295-96 (2016) (citing Kaplan, 514 U.S. at
944); see also Knight, 465 N.J. Super. at 428 (holding that "the trial court
initially resolves the issues of fact pertaining to the formation of the arbitration
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provision."); Henry Schein, Inc., 139 S. Ct. at 530 ("[B]efore referring a dispute
to an arbitrator, the court determines whether a valid arbitration agreement
exists."); MZM Constr. Co., 974 F.3d at 402 ("[U]nder section 4 of the FAA, [9
U.S.C. §§ 1 to 16,] courts retain the primary power to decide questions of
whether the parties mutually assented to a contract containing or incorporating
a delegation provision.").
Whether the parties "clearly delegated" that threshold question about the
formation of the agreement to an arbitrator is to be determined by a judge
applying the same "elements necessary for the formation of a contract under
state law." Morgan, 225 N.J. at 295 (citing Kaplan, 514 U.S. at 944). First
addressing defendant's appeal and applying the controlling principles, we
conclude there was no error by the trial court in finding that the arbitration
provision in the October 29, 2018 contract is enforceable. The parties are
sophisticated—plaintiff is a multi-state bank and defendant is a multi-state
security company. Therefore, we interpret the arbitration provision through that
lens. Kernahan, 236 N.J. at 321-22.
We are satisfied that the arbitration provision set forth in the October 29,
2018 contract comports with the mandate in Atalese requiring clear and
unambiguous language addressing waiver of the parties' right to bring suit. 219
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N.J. at 445. Moreover, the subject arbitration provision identifies the arbitration
entity that would arbitrate the dispute, despite some misgivings by the trial court,
which law governs, the venue of the proceeding, and the types of damages to be
sought.
On appeal, defendant contends that the question of whether the October
29, 2018 contract covers the parties' entire relationship is one for an arbitrato r
to decide, not the trial court judge. And, defendant argues the plain language of
the agreement indicates that the parties intended to encompass all of their
contracts under the terms of their agreement. We disagree.
As already noted, "'whether the parties have a valid arbitration agreement
at all' is a 'gateway' question" to be determined by a court of law. Muhammad
v. Cnty. Bank of Rehoboth Beach, 189 N.J. 1, 12 (2006) (quoting Green Tree
Fin. Corp. v. Bazzle, 539 U.S. 444, 452 (2003) (plurality opinion)). This is
codified in N.J.S.A. 2A:23B-6(b), which provides that the "court shall decide
whether an agreement to arbitrate exists or a controversy is subject to an
agreement to arbitrate." Our Supreme Court has held that this language
expressly delegates the determination of enforceability of an arbitration
provision to the courts. Hirsch v. Amper Fin. Servs., 215 N.J. 174, 187-88
(2013). Included in this duty is assessing whether a "particular claim[] at issue
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fall[s] within the clause's scope." Id. at 188 ("Importantly, a court may not
rewrite a contract to broaden the scope of arbitration.") (internal quotation marks
and citation omitted).
Here, the trial court found the arbitration provision contained in the
October 29, 2018 contract was limited to that contract only. The record supports
this finding. Moreover, applying N.J.S.A. 2A:23B-6(b) and Hirsh, the trial
court, and not an arbitrator, had jurisdiction here to determine whether an
agreement to arbitrate exists. Therefore, we reject defendant's first argument.
Defendant's second argument—that the trial court denied its motion, in
part, due to its unfamiliarity with the parties' chosen arbitration service —lacks
merit and does not warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).
Suffice it to say, the trial court's comment that utilizing the services of
Arbitration Services, Inc. is "too problematic" is amply supported by the record.
Arbitration Services, Inc. is a privately-owned arbitration service based in Long
Island with no ties to Bergen County and no authority to conduct business in
New Jersey. However, this does not vitiate the arbitration clause in the October
29, 2018 contract. Flanzman v. Jenny Craig, Inc., 244 N.J. 119, 141 (2020)
("Should the parties prove unable or unwilling to agree upon an arbitrator, the
court may exercise its appointment authority in accordance with N.J.S.A.
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2A:23B-11 on the application of either party, and the designated arbitrator may
conduct the arbitration in accordance with the procedures described in N.J.S.A.
2A:23B-15.") The arbitration clauses under review require "an action" be
conducted in Bergen County. Therefore, the trial court was correct in its
analysis. Based upon our de novo review, we review all of the orders pertinent
to defendant's appeal.
III.
We now turn to the issues raised in plaintiff's appeal. Plaintiff first
contends the trial court erred by not stopping the arbitration of claims in
defendant's amended arbitration demand, arguing the subject agreements do not
have viable or enforceable arbitration requirements. Again, we disagree.
In its December 18, 2020 order, the trial court emphatically stated plaintiff
had "the right to proceed in law on contract rights that were not so precluded by
arbitration." Based upon our review of the record, plaintiff has failed to present
any contradictory evidence. We are satisfied the trial court clearly expressed its
reasoning and decision in its December 18, 2020 order. Moreover, the trial court
clarified its holding in its February 4, 2021 order and comprehensive rider, and
we affirm substantially for the reasons expressed by the court. And, the trial
court properly found the "resulting bifurcation,"—referring to the twelve
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contracts that have an arbitration provision and the thirty-eight contracts that do
not—"is the product of [plaintiff's] failure to do so."
We likewise reject plaintiff's second argument that the law of the case
doctrine was violated when the trial court denied its motion in aid of litigant's
rights. The law of the case doctrine generally prohibits a second judge, in the
absence of additional developments or proofs, from differing with an earlier
ruling. See Lombardi v. Masso, 207 N.J. 517, 538-39 (2011). The doctrine "is
a non-binding rule intended to 'prevent re[-]litigation of a previously resolved
issue.'" Id. at 538 (quoting In re Estate of Stockdale, 196 N.J. 27, 311 (2008)).
"A hallmark of the law of the case doctrine is its discretionary nature,
calling upon the deciding judge to balance the value of judicial deference for the
rulings of a coordinate judge against those 'factors that bear on the pursuit of
justice and, particularly, the search for truth.'" Id. at 538-39 (quoting Hart v.
City of Jersey City, 308 N.J. Super. 487, 498 (App. Div. 1998)). While the law
of the case doctrine is a discretionary, non-binding rule, "[p]rior decisions on
legal issues should be followed unless there is substantially different evidence
at a subsequent trial, new controlling authority, or the prior decision was clearly
erroneous." Sisler v. Gannett Co., 222 N.J. Super. 153, 159 (App. Div. 1987).
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The law of the case doctrine has no application here. Saliently, the same
trial court decided all of the orders under review and its decision was consistent
throughout the procedural history of the case. The trial court did not depart from
its original ruling and expounded upon its decision in the subsequent motions
filed thereafter. There was no new controlling legal authority and the trial
court's ruling initially on August 7, 2020 was not "clearly erroneous" because it
was based on the prevailing case law and the evidence in the record. Sisler, 222
N.J. Super. at 159.
Specifically, plaintiff asserts on appeal the trial court ruled that disputes
under all of the agreements were not arbitrable and there was no enforceable
undertaking to arbitrate disputes under the agreements. This contention is belied
by the record, which clearly reflects the trial court's sound reasoning in respect
of the issues presented to it. We therefore conclude there was no error, and the
law of the case doctrine does not apply.
Plaintiff's next argument, that the trial court failed to grant reconsideration
and enforce the August 7, 2020 order, similarly lacks merit. Our review of
motions for reconsideration under Rule 4:49-2 is governed by a deferential
standard. Motions for reconsideration are granted only under very narrow
circumstances:
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Reconsideration should be used only for those cases
which fall into that narrow corridor in which either (1)
the [c]ourt has expressed its decision based upon a
palpably incorrect or irrational basis, or (2) it is obvious
that the [c]ourt either did not consider, or failed to
appreciate the significance of probative, competent
evidence.
[Fusco v. Bd. of Educ. of City of Newark, 349 N.J.
Super. 455, 462 (App. Div. 2002) (quoting D'Atria v.
D'Atria, 242 N.J. Super. 392, 401 (Ch. Div. 1990)).]
"[A] trial court's reconsideration decision will be left undisturbed unless
it represents a clear abuse of discretion." Pitney Bowes Bank, Inc. v. ABC
Caging Fulfillment, 440 N.J. Super. 378, 382 (App. Div. 2015) (citing Hous.
Auth. of Morristown v. Little, 135 N.J. 274, 283 (1994)). "An abuse of
discretion 'arises when a decision is "made without a rational explanation,
inexplicably departed from established policies, or rested on an impermissible
basis."'" Ibid. (quoting Flagg v. Essex Cnty. Prosecutor, 171 N.J. 561, 571
(2002)). "Reconsideration cannot be used to expand the record and reargue a
motion," and "[a] litigant should not seek reconsideration merely because of
dissatisfaction with a decision of the [c]ourt." Cap. Fin. Co. of Delaware Valley,
Inc. v. Asterbadi, 398 N.J. Super. 299, 310 (App. Div. 2008) (second alteration
in original) (second quoting D'Atria, 242 N.J. Super. at 401).
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Here, we discern no abuse of discretion in the trial court's denial of
plaintiff's reconsideration motion. The trial court did not base its initial decision
on a "palpably incorrect or irrational basis," and it did not fail to consider
evidence. Ibid. (quoting D'Atria, 242 N.J. at 401). We also conclude the trial
court did not act in an arbitrary, capricious, or unreasonable manner in denying
plaintiff's motion in aid of litigant's rights.
Finally, plaintiff takes issue with the trial court not conducting oral
argument in connection with its motion in aid of litigant's rights and motion for
reconsideration. Plaintiff asserts its request for oral argument in both instances
was ignored, and the trial court did not provide a justification for not scheduling
oral argument.
Rule 1:6-2(d) governs oral argument on motions in civil cases and
provides in relevant part:
[N]o motion shall be listed for oral argument unless a
party requests oral argument in the moving papers or in
timely-filed answering or reply papers, or unless the
court directs. A party requesting oral argument may,
however, condition the request on the motion being
contested. If the motion involves pretrial discovery or
is directly addressed to the calendar, the request shall
be considered only if accompanied by a statement of
reasons and shall be deemed denied unless the court
otherwise advises counsel prior to the return day. As to
all other motions, the request shall be granted as of
right.
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"The denial of oral argument when a motion has properly presented a
substantive issue to the court for decision 'deprives litigants of an opportunity
to present their case fully to a court.'" Palombi v. Palombi, 414 N.J. Super. 274,
285 (App. Div. 2010) (quoting Mackowski v. Mackowski, 317 N.J. Super. 8, 14
(App. Div. 1998)). "[A] request for oral argument respecting a substantive
motion may be denied." Raspantini v. Arocho, 364 N.J. Super. 528, 531 (App.
Div. 2003). Under Rule 1:6-2(d), a trial court may decide a motion on the papers
when there are no contested facts requiring an evidentiary hearing for
disposition. See Pressler & Verniero, Current N.J. Court Rules, cmt. 5 on Rule
1:6-2(d), (2022); Guzman v. City of Perth Amboy, 214 N.J. Super. 167, 176
(App. Div. 1986). The movant must show there was prejudice warranting
reversal if the trial court denies a request for oral argument on a motion.
Finderne Heights Condo. Ass'n, 390 N.J. Super. 154, 165-66 (App. Div. 2007).
Here, the trial court was well within its discretion in denying plaintiff's
requests for oral argument. The motions did not warrant an evidentiary hearing
and the trial court articulated its reasons supporting its decision in each instance.
We discern no prejudice or reversible error. Therefore, we reject plaintiff's
contention on this point.
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To the extent we have not addressed a particular argument, it is because
our disposition makes it unnecessary or the argument was without sufficient
merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). In sum,
we affirm all of the orders under review in these consolidated appeals.
Affirmed.
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