GAIL FUNG VS. VARSITY TUTORS, LLC (SC-000355-18, 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NOT FOR PUBLICATION WITHOUT THE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-3650-17T4
GAIL FUNG,
Plaintiff-Respondent,
v.
VARSITY TUTORS, LLC,
Defendant-Appellant.
____________________________
Submitted April 8, 2019 – Decided April 25, 2019
Before Judges Messano, Fasciale and Gooden Brown.
On appeal from Superior Court of New Jersey, Law
Division, Bergen County, Docket No. SC-000355-18.
Ogletree, Deakins, Nash, Smoak & Stewart, PC,
attorneys for appellant (Michael Nacchio, on the brief).
Respondent has not filed a brief.
PER CURIAM
In this small claims special civil part case, defendant Varsity Tutors, LLC,
appeals from a March 5, 2018 final judgment entered after a bench trial. Judge
Joseph G. Monaghan conducted the trial, made credibility findings, and rendered
an oral and written opinion. The judge believed plaintiff that she did not see or
execute a purported agreement to arbitrate, considered all the evidence adduced
at trial, and awarded plaintiff $1694.14 for unpaid services that she rendered as
a tutor.
On appeal, defendant argues that (1) the judge erred by denying its motion
to dismiss and compel arbitration; (2) the judge abused his discretion in denying
defendant's adjournment request and motion for remote testimony; and (3) the
judge's verdict was entered against the weight of the evidence.1 We disagree
and affirm.
I.
Plaintiff filed her complaint on February 8, 2018, and received a trial date
for February 26, 2018. On February 22, 2018, defendant requested a thirty-day
1
Because defendant is appealing from a judgment entered after a bench trial,
the correct standard of review is whether there exists sufficient evidence in the
record to support the judge's findings. See Rova Farms Resort v. Inv'rs Ins. Co.,
65 N.J. 474, 483-84 (1974) (stating that in a "non-jury case," the judge's findings
"should not be disturbed unless they are so wholly insupportable as to result in
a denial of justice," and that the judge's findings are binding on appeal wh en
"supported by adequate, substantial and credible evidence.")
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adjournment to March 26, 2018, or alternatively, a one-week adjournment to
March 5, 2018. Although plaintiff objected – for medical issues – the judge
nevertheless granted defendant's request and adjourned the trial for one-week,
or until March 5, 2018.
On February 26, 2018, defendant filed a motion to dismiss the complaint,
compel arbitration, or alternatively permit remote testimony. Because the return
date of the motion was after the date of the adjournment, defendant requested
the judge adjourn the trial for a second time. Defendant produced a certification
of Christopher C. Swenson, defendant's vice president and general counsel,
indicating he was unavailable to appear in court for the March 5, 2018 trial
because he had to attend a meeting in Arizona. Plaintiff opposed defendant's
motions, and on the subject of the arbitration, asserted that she never signed an
agreement to arbitrate. The judge denied defendant's request for a second
adjournment of the trial.
Before the trial started on March 5, 2018, defendant argued the merits of
its motions to dismiss and compel arbitration, which the judge denied. As to the
request to compel arbitration, the judged needed to take testimony from plaintiff,
especially because of the contentions she raised in her opposition. The judge
then started the trial.
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II.
Defendant is a Missouri limited liability company that provides a live
learning platform to connect tutors with students/clients for online and in-person
tutoring. Plaintiff began working for defendant as a tutor, specializing in
standardized testing, in October 2017. She was an independent contractor, and
defendant provided opportunities for plaintiff to tutor students that fit her self-
selected criteria in certain subjects. Plaintiff would bill and be paid at an hourly
rate.
Plaintiff argued that defendant owed her a total $2301.11, from three
outstanding invoices. After hearing plaintiff's testimony and considering the
evidence presented, the judge found that plaintiff "proved her right to collection
of two of the invoices which comes out to $1694.14." The judge noted that
"[n]one of the payments [from defendant to plaintiff] match up for Dece mber
payments in terms of the $1024.16 or the $669.98 being paid in December."
Accordingly, the judge found that plaintiff proved that she was not paid for two
of the three invoices: one invoice for $1024.16 and another for $669.98, totaling
$1649.14.
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III.
We begin by addressing defendant's contention that the judge erred by
denying its motion to compel arbitration. We exercise de novo review of a
judge's decision on the enforceability of an arbitration clause. Morgan v.
Sanford Brown Inst., 225 N.J. 289, 302-03 (2016). Whether an arbitration
clause is enforceable is a legal issue; therefore, we afford no special deference
to the judge's determination of that issue. Hirsch v. Amper Fin. Servs., LLC,
215 N.J. 174, 186 (2013). Here, the judge made credibility findings as part of
his decision to deny the motion.
Credibility is always for the factfinder (here, the judge) to determine.
Ferdinand v. Agric. Ins. Co. of Watertown, N.Y., 22 N.J. 482, 492 (1956).
"Appellate courts should defer to trial courts' credibility findings that are often
influenced by matters such as observations of the character and demeanor of
witnesses and common human experience that are not transmitted by the
record." State v. Kuropchak, 221 N.J. 368, 382 (2015) (quoting State v. Locurto,
157 N.J. 463, 474 (1999)). Our review is "limited to 'whether the findings made
could reasonably have been reached on sufficient credible evidence present in
the record.'" Id. at 382-83 (quoting State v. Johnson, 42 N.J. 146, 162 (1964)).
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The judge found defendant failed to prove that plaintiff received or
executed a contract with the arbitration clause. Thus, under basic contract
principles, the judge determined that there was no valid contract, and
consequently, no agreement to arbitrate. The judge reached this conclusion
primarily based on his credibility findings. But the judge also found "plaintiff's
testimony about not agreeing to [a]rbitration and not having a copy of the
agreement to be both credible and consistent with the documentary evidence."
In light of our deferential review, we decline to disturb the judge's credibility
findings. We conclude that there exists sufficient credible evidence in the record
to support the judge's findings.
IV.
The granting or denial of an adjournment is left to the discretion of the
trial judge. Kosmowski v. Atlantic City Med. Ctr., 175 N.J. 568, 575 (2003). A
judge abuses his discretion when his "decision [was] made without a rational
explanation, inexplicably departed from established policies, or rested on an
impermissible basis." Flagg v. Essex Cty. Prosecutor, 171 N.J. 561, 571 (2002)
(citation and internal quotation marks omitted). Rule 6:4-7(a), governing the
special civil part, provides:
All requests for adjournments of hearings, trials and
complementary dispute resolution events shall be made
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to the clerk's office as soon as the need is known, but
absent good cause for the delay not less than [five] days
before the scheduled court event. Prior to contacting
the clerk's office, the party requesting the adjournment
shall notify the adversary that the request is going to be
made and, except for requests made pursuant to
paragraph (b) of this rule, shall then notify the clerk of
the adversary's response. The court shall then decide
the issue and, if granted, assign a new date. The
requesting party shall notify the adversary of the court's
response.
The judge granted defendant's first request, in which defendant suggested
the one-week adjournment. In its letter requesting the first adjournment,
defendant did not mention Swenson's required attendance at the meeting in
Arizona, which had been scheduled for several months. Plaintiff objected to
defendant's request for another adjournment. We conclude that the judge did
not abuse his discretion – that is, his decision was not "made without a rational
explanation, inexplicably departed from established policies, or rested on an
impermissible basis."
Defendant also argues that the judge incorrectly denied its motion for
telephonic testimony of its witness, Swenson. The judge concluded that he
would not be taking telephonic testimony and stated, "this whole case is going
to turn on credibility and how does [plaintiff] have the opportunity to cross -
examine effectively somebody who's on the phone in Tempe, Arizona?" In his
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supplemental statement of reasons supporting the judgment, the judge further
explained: "The [c]ourt noted that credibility would be an important factor in
the case. The [c]ourt would be unable to assess credibility via telephonic
testimony and, further, plaintiff would be deprived of the ability to conduct [a
thorough] cross[-]examination."
In State v. Santos, 210 N.J. 129, 141 (2012), our Supreme Court
articulated a two-part test for admitting telephonic testimony, which was
distilled from Judge Pressler's opinion in Aqua Marine Products, Inc. v. Pathe
Computer Control Systems, Corp., 229 N.J. Super. 264, 275 (App. Div. 1988):
First, the court must determine whether the opposing
party has consented to the testimony or whether there
is a "special circumstance," also referred to as an
"exigency," "compelling the taking of telephone
testimony." Aqua Marine, 229 N.J. Super. at 275.
Second, the court must be satisfied that "the witness'
identity and credentials are known quantities" and that
there is some "circumstantial voucher of the integrity
of the testimony." Ibid.[Santos, 210 N.J. at 141.]
Moreover, "as the second part to the test implies, it poses substantial practical
and logistical hurdles that an applicant seeking leave to present telephonic
testimony must satisfy in order [to] meet the test's demand for preservation of
the essential integrity of the testimony." Id. at 142.
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As to the first prong of the Aqua Marine test, plaintiff did not consent to
defendant presenting telephonic testimony. And there was no "special
circumstance or exigency." Defendant's witness, Swenson, was unable to appear
because he had to attend a meeting in Arizona. Defense counsel did not inform
the court of this scheduling conflict when he requested his first adjournment. In
his supplemental statement, the judge reasoned:
Defendant failed to submit that Mr. Swenson was
the only person – or even the most knowledgeable
person – with information regarding plaintiff's work
history with defendant. Mr. Swenson is corporate
counsel for defendant and most of plaintiff's
interactions and communications with defendant was
through a Ms. Katherine Karzel. Ms. Karzel is,
according to Mr. Swenson's Certification, defendant's
Manager of Tutor Engagement. Defendant never
offered to produce Ms. Karzel or any other witness in
lieu of Mr. Swenson. Defendant never advised the
[c]ourt that Ms. Karzel was unavailable or there was no
one else from the defendant company familiar with
plaintiff's work history.
. . . In paragraph 7 of Mr. Swenson's Certification Mr.
Swenson advised he would "investigate" plaintiff's
complaints regarding outstanding invoices. Mr.
Swenson did not allege to have more direct and specific
knowledge of plaintiff's situation.
Moreover, the judge elaborated that,
[e]verything about [Swenson's] [C]ertification is
generally that's what we will do; we're going to
arbitrate, we're going to make her come out to Missouri,
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et cetera. But he does not say I have personal
knowledge, I had a phone call with her, after the phone
call we discussed this clause to the contract, she signed
it, or anything else. He just says here's our working
model, I have personal knowledge this is our general
working model. That's what he's saying.
Importantly, we reiterate that the judge noted credibility was a primary
factor and that he would be unable to assess Swenson's credibility by telephone,
and that plaintiff would be unable to cross-examine Swenson effectively.
Accordingly, we conclude that defendant failed to satisfy either prong under
Aqua Marine, and the judge did not abuse his discretion when he denied
defendant's request to present telephonic testimony.
V.
Finally, we conclude that there exists sufficient evidence in the record to
support the judge's findings that defendant owed plaintiff $1694.14 for unpaid
services that she rendered.
Defendant contends that plaintiff misrepresented her evidence of the
invoices, and asserts that plaintiff's exhibits were not invoices but rather simply
an "activity log" that accounted for plaintiff's activity and the hours that she
billed. During the trial, when plaintiff offered the three outstanding invoices
into evidence, defense counsel objected to the documents as hearsay and that
they were not authenticated. The judge engaged in a colloquy with plaintiff and
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asked her if the three documents were the alleged outstanding amounts owed to
her. Plaintiff explained,
[y]es, they're from me to the company and it's right off
the company's website, you see the top of it, that's how
we invoice the client and that's what [defendant] uses
to pay us. It's on the [defendant's] website, we have to
use it, so I was only able to get a snapshot of it because
they had shut me down prior to. But I knew that I would
need it if I was going to pursue trying to get money from
them.
The judge overruled defense counsel's objection and admitted the documents
into evidence. We see no abuse of discretion. Even if the documents were not
technically "invoices," they accurately depicted plaintiff's activity on
defendant's website and indicated the amount of hours that plaintiff billed and
the amount owed to plaintiff. Furthermore, plaintiff's own independent
testimony demonstrated the basis for the judge's findings as to the correct
amount of unpaid services rendered.
Importantly, defense counsel conceded that defendant did not pay plaintiff
the $605.97 because defendant was investigating whether plaintiff was billing
more hours than she worked. In his oral decision, the judge noted that two of
the three amounts that plaintiff claimed were outstanding – $1024.16 and
$669.98 – did not match up with any of the checks paid to plaintiff, which were
offered into evidence by defendant. However, the judge noted that plaintiff
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billed defendant for $605.97 on December 24 and on December 27, plaintiff
received a check in the amount of $605.97. Thus, the judge determined that
plaintiff was not owed for this invoice, which she alleged was still outstanding.
But, the judge found that plaintiff proved by a preponderance of the evidence
that she was not paid on the other two invoices in the amounts of $1024.16 and
$669.97. The judge reasoned, "[t]here's no evidence of any of those payments."
He therefore awarded plaintiff a total of $1694.14.
To the extent that we have not addressed all of the parties' arguments, we
conclude that they lack sufficient merit to warrant discussion in this written
opinion. R. 2:11-3(e)(1)(E). We add these brief remarks. Although defendant
argues that the parties are required to arbitrate in St. Louis, Missouri, the judge
believed plaintiff that she never saw or executed such an agreement. And we
flatly reject defendant's arguments that the judge's discretionary rulings denied
it due process.
Affirmed.
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