ALEXANDER DEFINA VS. GO AHEAD AND JUMP 1, LLC (L-5751-15, BERGEN COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE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-1861-17T2
ALEXANDER DEFINA, A MINOR,
by his parents and guardians
ad litem, MICHAEL DEFINA and
DAHIANA DEFINA,
Plaintiffs-Respondents,
v.
GO AHEAD AND JUMP 1, LLC,
d/b/a SKY ZONE INDOOR
TRAMPOLINE PARK, SKY ZONE,
LLC and SKY ZONE FRANCHISE GROUP,
LLC,
Defendants-Appellants.
Argued May 15, 2018 – Decided June 5, 2018
Before Judges Yannotti and Carroll.
On appeal from Superior Court of New Jersey,
Law Division, Bergen County, Docket No.
L-5751-15.
Kelly A. Waters and Jose D. Roman argued the
cause for appellants (Wood Smith Henning &
Berman, LLP, attorneys for appellants Sky
Zone, LLC and Sky Zone Franchise Group, LLC;
Powell & Roman, LLC, attorneys for appellant
Go Ahead and Jump 1, LLC, d/b/a Sky Zone Indoor
Trampoline Park; Kelly A. Waters and Jose D.
Roman, of counsel and on the joint briefs;
Deborah J. Davison and Samuel G. John, on the
joint briefs).
David K. Chazen argued the cause for
respondents (Chazen & Chazen, LLC, attorneys;
David K. Chazen, on the brief).
PER CURIAM
Sky Zone, LLC (Sky Zone) and Sky Zone Franchise Group, LLC
(Sky Zone Franchise) (collectively, the franchisor defendants)
appeal from a November 7, 2017 order denying their motion to compel
arbitration and stay further proceedings in this matter.1 We
affirm.
I.
Alexander Defina, a minor, sustained a fractured ankle while
participating in a game of trampoline dodgeball at the Sky Zone
Indoor Trampoline Park (SZITP) in Pine Brook. Before gaining
access to the trampoline facility, Alexander's father, Michael
Defina, was required to sign a document entitled, "Participation
Agreement, Release and Assumption of Risk" (the Agreement).
1
The amended notice of appeal also designates defendant Go Ahead
and Jump 1, LLC (GAAJ) as an appellant. Such designation appears
erroneous, since the motion that resulted in the November 7, 2017
order was filed only by Sky Zone and Sky Zone Franchise, and GAAJ
did not seek any relief, nor was any relief sought or ordered
against GAAJ. Hence, for purposes of this opinion, all references
to defendants relate only to Sky Zone and Sky Zone Franchise unless
otherwise specified.
2 A-1861-17T2
The Agreement provides in pertinent part that, in
consideration of SZITP allowing participation
in trampoline games or activities, I for
myself and on behalf of my child(ren) and/or
legal ward, heirs, administrators, personal
representatives, or assigns, do agree to hold
harmless, release and discharge SZITP of and
from all claims, demands, causes of action,
and legal liability, whether the same be known
or unknown, anticipated or unanticipated, due
to SZITP's ordinary negligence[;] and I, for
myself and on behalf of my child(ren) and/or
legal ward, heirs, administrators, personal
representatives, or any assigns, further agree
that except in the event of SZITP's gross
negligence and willful and wanton misconduct,
I shall not bring any claims, demands, legal
actions and causes of action, against SZITP
for any economic and non-economic losses due
to bodily injury, death, property damage
sustained by me and/or my minor child(ren)
that are in any way associated with SZITP
trampoline games or activities. Should SZITP
or anyone acting on their behalf be required
to incur attorney's fees and costs to enforce
this Agreement, I for myself and on behalf of
my child(ren), and/or legal ward, heirs,
administrators, personal representatives or
assigns, agree to indemnify and hold them
harmless for all such fees and costs.
The Agreement includes an arbitration clause, which states:
If there are any disputes regarding this
agreement, I on behalf of myself and/or my
child(ren) hereby waive any right I and/or my
child(ren) may have to a trial and agree that
such dispute shall be brought within one year
of the date of this Agreement and will be
determined by binding arbitration before one
arbitrator to be administered by JAMS pursuant
to its Comprehensive Arbitration Rules and
Procedures. I further agree that the
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arbitration will take place solely in the
state of Texas and that the substantive law
of Texas shall apply. If, despite the
representations made in this agreement, I or
anyone on behalf of myself and/or my
child(ren) file or otherwise initiate a
lawsuit against SZITP, in addition to my
agreement to defend and indemnify SZITP, I
agree to pay within [sixty] days liquidated
damages in the amount of $5,000 to SZITP.
Should I fail to pay this liquidated damages
amount with the [sixty] day time period
provided by this Agreement, I further agree
to pay interest on the $5,000 amount
calculated at 12% per annum.2
In addition, the Agreement included the following statement,
which was printed in bold type:
By signing this document, I acknowledge that
if anyone is hurt or property is damaged
during my participation in this activity, I
may be found by a court of law to have waived
my right to maintain a lawsuit against SZITP
on the basis of any claim from which I have
released them herein. I have had sufficient
opportunity to read this entire document. I
understand this Agreement and I voluntarily
agree to be bound by its terms.
The Agreement also contains a severability clause, which states
that, "I agree that if any portion of this agreement is found to
2
In the previous appeal we noted that GAAJ "had chosen not to
enforce the forum selection clause in the Agreement, and had agreed
that the arbitration could be conducted in New Jersey or New York,
with New Jersey choice of law and a New Jersey arbitrator." Defina
v. Go Ahead and Jump I, LLC, No. A-1371-15 (App. Div. July 12,
2016) (slip op. at 6). In their reply brief in the present appeal,
defendants take a similar position.
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be void or unenforceable, the remaining portions shall remain in
full force and effect."
In June 2015, plaintiffs filed a complaint asserting claims
against GAAJ for simple negligence and gross negligence related
to GAAJ's operation of the SZITP facility that resulted in
Alexander's injury. The complaint also alleged that GAAJ's use
of the Agreement was an unconscionable commercial practice in
violation of the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -
184, and the New Jersey Truth in Consumer Contract, Warranty and
Notice Act (TCCWNA), N.J.S.A. 56:12-14 to -18. Plaintiffs sought
an award of compensatory and punitive damages, interest,
attorney's fees, and costs of suit.
GAAJ filed a motion to compel arbitration and stay proceedings
in the lawsuit. On October 23, 2015, the trial court granted the
motion, and ordered plaintiffs to submit any disputes with GAAJ
to arbitration. On December 4, 2015, the trial court denied
plaintiffs' motion for reconsideration.
Plaintiffs appealed the October 23, 2015 and December 4, 2015
orders. Plaintiffs argued, among other things, that the trial
court erred by enforcing the arbitration clause in the agreement.
We agreed, and reversed the orders in an unpublished opinion.
Defina v. Go Ahead and Jump I, LLC, No. A-1371-15 (App. Div. July
12, 2016) (slip op. at 7, 12-13). We explained:
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We are convinced that the arbitration
clause at issue in this matter did not clearly
and unambiguously inform plaintiff that he was
giving up his right to bring claims arising
out of the participation in activities at
SZITP in a court of law and have a jury decide
the case. The arbitration clause states that
the person signing the agreement waives any
right to a "trial" and agrees that any dispute
shall be determined "by binding arbitration
before one arbitrator to be administered by
JAMS pursuant to its Comprehensive Arbitration
Rules and Procedures."
Although the clause refers to a "trial",
there is no "clear and unambiguous statement
that the person signing the Agreement is
waiving [his] right to sue or go to court to
secure relief." [Atalese v. U.S. Legal Servs.
Grp., L.P., 219 N.J. 430, 446 (2014)].
Indeed, there is no reference in the clause
to a court or a jury. The Agreement also does
not explain how arbitration differs from a
proceeding in a court of law. We conclude
that the Agreement did not clearly and
unambiguously inform Michael Defina that he
was "giving up his right to bring [his] claims
in court and have a jury resolve the dispute."
Id. at 447 (footnote omitted).
[Id. at 12.]
After the matter was remanded to the trial court, plaintiffs
amended their complaint to add the franchisor defendants, Sky Zone
and Sky Zone Franchise. On May 15, 2017, the United States Supreme
Court issued its opinion in Kindred Nursing Centers Ltd. P'ship
v. Clark, 137 S. Ct. 1421, 1424, 1429 (2017), holding that
arbitration agreements governed by the Federal Arbitration Act
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(FAA), 9 U.S.C. §§ 1-16, must be placed "on equal footing with all
other contracts."
In September 2017, the franchisor defendants filed a motion
to compel arbitration and stay the lawsuit. They argued that our
July 12, 2016 decision in this matter was no longer valid because,
after Kindred Nursing, New Jersey courts could no longer rely upon
the reasoning in Atalese as a basis for refusing to enforce an
arbitration agreement. Alternatively, they contended the
arbitration provision was enforceable even under the standard
established in Atalese, and that our prior holding to the contrary
was erroneous.
The motion was assigned to a different judge, who rejected
the franchisor defendants' arguments. In an oral opinion, the
judge explained:
the Kindred Nursing Center Supreme Court
decision . . . held unequivocally that, '[a]
[c]ourt may invalidate an arbitration
agreement based on generally applicable
contract defenses like fraud or
unconscionability but not on legal rules that
apply only to arbitration and that derive
their meaning from the fact that an agreement
to arbitrate is at issue.
This is not what happened in the Defina
Appellate Division decision of July 12, 2016,
and . . . that decision is not affected by the
Kindred Nursing Center's [United States]
Supreme Court decision because . . . Kindred
Nursing . . . clearly and unequivocally
reiterates [and] reinforces that the [c]ourt
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is to apply contract principles in reviewing
these arbitration provisions, like any other
contract, and should not give an arbitration
provision a separate or higher standard for
presentation and enforcement.
The judge then reviewed our July 12, 2016 decision, and
similarly concluded the subject arbitration clause could not be
enforced because it failed to inform the person signing the
Agreement that he was waiving his right to proceed in court and
have a jury decide the case. The judge entered an order denying
the motion on November 7, 2017. This appeal followed.
II.
We begin by reciting our standard of review. The validity
of an arbitration agreement is a question of law; therefore, our
review of an order denying a motion to compel arbitration is de
novo. Barr v. Bishop Rosen & Co., Inc., 442 N.J. Super. 599, 605
(App. Div. 2015) (citing Hirsch v. Amper Fin. Servs., LLC, 215
N.J. 174, 186 (2013)); see Atalese, 219 N.J. at 445-46 ("Our review
of a contract, generally, is de novo, and therefore we owe no
special deference to the trial court's . . . interpretation. Our
approach in construing an arbitration provision of a contract is
governed by the same de novo standard of review." (citations
omitted)).
On appeal, defendants renew their argument that the trial
court's decision should be reversed because it relied on Atalese,
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which defendants maintain has been abrogated by Kindred Nursing.
Defendants contend Atalese established a standard that was
arbitration-specific and thus violates Kindred Nursing, which
precludes a state from disfavoring arbitration agreements, or
imposing rules on arbitration agreements that do not apply to
contracts generally. Alternatively, defendants argue the
arbitration clause is valid and enforceable because it clearly
instructs the only way for the parties to resolve all claims and
disputes is through arbitration.
In Kindred Nursing, the United States Supreme Court reviewed
a decision of the Kentucky Supreme Court that invalidated clauses
in agreements a wife and daughter entered into with an entity that
operated nursing homes, using powers of attorney they obtained
from family members, which required that claims or controversies
be submitted to binding arbitration. Kindred Nursing, 137 S. Ct.
at 1425. In reversing, the Court found the Kentucky Supreme
Court's decision violated the FAA by singling out arbitration
agreements for disfavored treatment. Id. at 1426-29. Thus, in
ruling that a person holding a general power of attorney was not
allowed to enter into an arbitration agreement for the person
granting the power unless the representative possessed specific
authority to waive his principal's rights under the Kentucky
Constitution to access the courts and to trial by jury, the
9 A-1861-17T2
Kentucky Supreme Court flouted the FAA's mandate to place
arbitration agreements on an equal footing with all other
contracts. Ibid.
Contrary to defendants' argument, we conclude Kindred Nursing
does not abrogate Atalese, upon which our July 12, 2016 decision
and the trial court relied. Rather, in Atalese, the New Jersey
Supreme Court explicitly recognized that "[t]he FAA requires
courts to 'place arbitration agreements on an equal footing with
other contracts and enforce them according to their terms.'"
Atalese, 219 N.J. at 441 (quoting AT&T Mobility v. Concepcion, 563
U.S. 333, 339 (2011)).
Thus, "a state cannot subject an arbitration
agreement to more burdensome requirements
than" other contractual provisions. An
arbitration clause cannot be invalidated by
state-law "defenses that apply only to
arbitration or that derive their meaning from
the fact that an agreement to arbitrate is at
issue."
Arbitration's favored status does not
mean that every arbitration clause, however
phrased, will be enforceable . . . . Section
2 of the FAA "permits agreements to arbitrate
to be invalidated by 'generally applicable
contract defenses.'" Accordingly, the FAA
"permits states to regulate . . . arbitration
agreements under general contract
principles," and a court may invalidate an
arbitration clause "'upon such grounds as
exist at law or in equity for the revocation
of any contract.'"
[Ibid. (citations omitted).]
10 A-1861-17T2
In Atalese, the Court concluded that
[t]he requirement that a contractual provision
be sufficiently clear to place a consumer on
notice that he or she is waiving a
constitutional or statutory right is not
specific to arbitration provisions. Rather,
under New Jersey law, any contractual "waiver
of rights provision must reflect that [the
party] has agreed clearly and unambiguously"
to its terms.
[Id. at 443 (citations omitted).]
The Court emphasized that "[a]rbitration clauses are not singled
out for more burdensome treatment than other waiver-of-rights
clauses under state law. Our jurisprudence has stressed that when
a contract contains a waiver of rights – whether in an arbitration
or other clause – the waiver 'must be clearly and unmistakably
established.'" Id. at 444 (citation omitted).
Having concluded that Atalese is not abrogated by Kindred
Nursing, we find no basis to revisit or depart from our July 12,
2016 decision invalidating the arbitration clause at issue in the
present case. As noted, we previously determined the subject
arbitration clause does not clearly and unmistakably inform the
party signing it that he or she is agreeing to waive their right
to be heard in court or their constitutional right to a trial by
jury. Nor does the clause explain what arbitration is or how it
differs from bringing a claim in court. Guided by Atalese, our
11 A-1861-17T2
July 12, 2016 ruling retains the same validity today as it did
when it was decided.
Affirmed.
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