ALLSTATE LENDING GROUP, INC. VS. THE GRAN CENTURIANS, INC. THOMAS BOROWSKI VS. MICHAEL SCANNEL (C-000145-18 AND L-3596-18, UNION COUNTY AND STATEWIDE) (CONSOLIDATED)

NOT FOR PUBLICATION WITHOUT THE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-3018-18T1
A-3827-18T1
A-4524-18T1
ALLSTATE LENDING GROUP,
INC.,
Plaintiff-Respondent,
v.
THE GRAN CENTURIONS, INC.,
and UNION COUNTY CAPITAL,
LLC,
Defendants-Appellants,
and
GARRY'S CATERING, LLC and
GARRY RUANE,
Defendants-Respondents.
_______________________________
THOMAS BOROWSKI, MELISSA
EISEN, SAMUEL BOROWSKI,
ITALSKI, LLC, UNION COUNTY
CAPITAL, LLC and THE GRAN
CENTURIONS, INC.,
Plaintiffs-Appellants,
v.
MICHAEL SCANNELL, individually,
and ALLSTATE LENDING GROUP,
INC.,
Defendants-Respondents.
_________________________________
Argued telephonically May 4, 2020 –
Decided June 23, 2020
Before Judges Messano, Vernoia and Susswein.
On appeal from the Superior Court of New Jersey,
Chancery Division and Law Division, Union County,
Docket Nos. C-000145-18 and L-3596-18.
Richard A. Grodeck argued the cause for appellants in
A-3018-18 and A-4524-18 and respondents in A-3827-
18 (Piro, Zinna, Cifelli, Paris & Genitempo, LLC,
attorneys; Richard A. Grodeck, on the briefs).
Sean Mack argued the cause for respondents Allstate
Lending Group, Inc. and Michael Scannell (Pashman
Stein Walder Hayden, PC, attorneys; Sean Mack and
Howard Pashman, on the briefs).
Barbara Schwartz argued the cause for respondents
Garry's Catering, LLC and Garry Ruane in A-3018-18
and appellants in A-3827-18 (Law Office of Paul
Swanicke, attorneys; Barbara Schwartz and Paul
Swanicke, on the brief).
PER CURIAM
A-3018-18T1
2
These three appeals arise from orders entered in two actions, one in the
Law Division and the other in the Chancery Division, involving common parties
and claims over the funding and payment of three loans totaling $2.65 million.
We scheduled the appeals back-to-back-to-back and now consolidate them for
purpose of issuing a single opinion. Resolution of the three appeals is centered
on a common issue: did the Law Division and Chancery Division correctly
determine claims asserted in the respective complaints are subject to binding
arbitration pursuant to arbitration agreements executed in connection with the
three loans? Based on our review of the records presented in light of the
applicable law, we conclude the courts correctly found the pertinent claims are
subject to the parties' arbitration agreements, and we affirm the challenged
orders.
I.
Prior to addressing the orders from which the appeals are taken, we
identify the parties and summarize the proceedings between them to provide
context for our discussion of the legal issues presented. The Gran Centurions ,
Inc. (TGC) is a non-profit corporation, the ownership of which is represented by
sixty-eight bonds. TGC owns a restaurant, a banquet facility, and real property
in Clark.
A-3018-18T1
3
Garry's Catering, LLC (Garry's) is party to a lease with TGC pursuant to
which it operates a banquet facility at TGC's Clark property. Garry Ruane
(Ruane) is Garry's sole member, and he is also a TGC bondholder. Under its
lease with TGC, Garry's had a right of first refusal to purchase TGC and its Clark
property if they were offered for sale.
In October 2016, Garry's filed a Chancery Division action (the 2016
action) against TGC challenging a proposed sale of TGC bonds to Union County
Capital, LLC (UCC). Garry's asserted the proposed sale of the bonds violated
its right of first refusal under its lease with TGC.
In 2017, Ruane filed a Chancery Division action (the 2017 action) against
Thomas Borowski (Borowski) and UCC, asserting Borowski was a principal in
UCC, and the "self-appointed [p]resident and/or [c]hairperson of [the] Board of
Trustees of TGC." The complaint alleged Borowski and UCC purchased the
bonds of certain TGC bondholders in violation of TGC's by-laws and had taken
various actions on TGC's behalf without proper legal authority. In particular,
the complaint alleged Borowski and UCC acted without proper legal authority
on TGC's behalf to borrow $1.65 million from Allstate Lending Group, Inc.
(Allstate) and mortgage TGC's Clark property to Allstate to secure payment of
the loan.
A-3018-18T1
4
On November 16, 2017, the 2016 and 2017 actions were settled. Garry's
and Ruane entered into a "MUTUAL RELEASE AND SETTLEMENT
AGREEMENT" with TGC, UCC, and Borowski, in which the parties released
each other from any and all claims that were made, or could have been made, in
the 2016 and 2017 actions and through the date of the agreement.
The $1.65 million loan Allstate made to TGC, which Ruane challenged in
the 2017 litigation, was one of three loans Allstate made related to TGC and its
property. The proceeds from the three loans were intended to finance the
purchase of TGC bonds and TGC's real property in Clark by Borowski and UCC.
Disputes concerning the three loans, and the ensuing litigation, give rise to the
three pending appeals.
On December 6, 2016, Allstate loaned $500,000 to Borowski and
$500,000 to Italski, LLC (Italski). Borowski executed separate $500,000
promissory notes on his own behalf and on behalf of Italski. To secure payment
of the $500,000 loan to Borowski, he executed a mortgage in Allstate's favor on
property located in Linden. The $500,000 loan to Italski was secured by a
mortgage on property in Howell that Borowski executed on Italski's behalf.
Five weeks later, Allstate loaned $1.65 million to TGC. Borowski
executed a promissory note in that amount on behalf of TGC, as well as a
A-3018-18T1
5
mortgage in Allstate's favor on TGC's property in Clark. The mortgage secured
the performance of TGC's obligations under the note.
In connection with each of the loans, Borowski executed identical
"ARBITRATION AGREEMENTS" on his own behalf and on behalf of Italski
and TGC, respectively. Each agreement stated as follows:
Arbitration is a process by which both parties to a
dispute agree to submit the matter to an arbitrator who
has expertise in the area and to abide by the arbitrator's
decision. There is no right to a trial by jury and the
arbitrator's legal and factual determinations are
generally not subject to appellate review. Arbitration
rules of evidence and procedure are often less formal
and less rigid than the rules which apply in court.
Arbitration usually results in a decision much more
quickly than proceedings in court, and the attorneys'
fees and other costs incurred by both sides may be
substantially less. You are free to discuss the
advisability of arbitration with us, or with your own
independent counsel or any of your other advisors, and
to ask any questions which you may have. Both the
United States Supreme Court and the California
Supreme Court have endorsed arbitration as an
accepted and favored method of resolving disputes,
because it is economical and expeditious.
By signing this engagement agreement, we agree that,
in the event of any dispute or claim arising out of or
relating to this agreement, our relationship, our
charges, or our services, SUCH DISPUTE OR CLAIM
SHALL BE RESOLVED BY SUBMISSION TO
FINAL AND BINDING ARBITRATION IN LOS
ANGELES COUNTY, CALIFORNIA BEFORE A
RETIRED JUDGE OR JUSTICE. BY AGREEING TO
A-3018-18T1
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ARBITRATE, YOU WAIVE ANY RIGHT YOU
HAVE TO A COURT OR JURY TRIAL. If we are
unable to mutually agree on a retired judge or justice,
then each side will name one retired judge or justice and
the two named persons will select a neutral judge or
justice who will act as the sole arbitrator. The fees of
the arbitrator will be paid equally by both the Firm and
you.
Following execution of the notes, mortgages, and arbitration agreements
for the three loans, disputes arose between Allstate, as the lender and mortgagee,
and Borowski, Italski, and TGC, as the respective borrowers and mortgagors. It
appears the disputes concerned Allstate's funding of the loans, with Borowski,
Italski, and TGC claiming Allstate deducted improperly calculated prepaid
interest from the respective loan proceeds and otherwise improperly delayed
making the loan payouts to the respective borrowers.
As a result of the disputes, separate actions in the Law Division and
Chancery Division were commenced. Those actions resulted in the entry of the
orders from which the pending appeals were taken. We briefly describe in turn
each action and the orders at issue in the pending appeals.
The Chancery Division Action (A-3018-18 and A-3827-18)
In October 2018, Allstate filed a verified complaint in the Chancery
Division against TGC; UCC, "which owns [TGC]"; and Garry's, which Allstate
alleged "is the primary tenant at [TGC's] [p]roperty." The complaint alleged
A-3018-18T1
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TGC defaulted on the $1.65 million note to Allstate, and Allstate had served
TGC with a demand for arbitration over the matters in dispute. Allstate
requested the court appoint a receiver to collect rents and to maintain TGC's
property pending resolution of the underlying disputes between Allstate and
TGC in arbitration. 1 No claims were asserted against Garry's; it was named as
a defendant because it was obligated to pay rent pursuant to its lease with TGC.
In November 2018, Allstate moved for an order compelling TGC to
proceed to arbitration. TGC opposed the motion, arguing the arbitration
agreement was unenforceable because it was not the product of mutual assent as
to the arbitral forum and the rules to be applied during the arbitration. Garry's
did not oppose Allstate's motion to compel TGC to proceed to arbitration, and
Garry's counsel did not participate in the two hearings the court held on the
motion. In late November, Garry's filed an order to show cause, an answer to
the complaint, and cross-claims and a third-party complaint against Borowski,
UCC, TGC, and Borowski's wife and father.
At a December 21, 2018 hearing, the court denied Allstate's motion to
compel arbitration, finding the parties to the arbitration agreements did not have
"a meeting of the minds," but it also stated it would issue a written opinion
1
The court entered a January 4, 2019 order appointing a rent receiver.
A-3018-18T1
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setting forth its statement of reasons. On December 31, 2018, the court entered
an order granting Ruane leave to intervene and denying Garry's and Ruane's
request for appointment of a fiscal agent and conservator of TGC.
A few days later, the court requested additional briefing and argument on
issues related to Allstate's motion to compel arbitration. Following the
submission of additional briefs on behalf of Allstate and TGC, and an opposition
brief filed on behalf of Garry's, the court heard additional argument on Allstate's
motion to compel arbitration.
The Chancery Division judge subsequently issued a detailed March 1,
2019 written opinion finding the arbitration agreement between TGC and
Allstate enforceable and TGC was obligated to arbitrate Allstate's claims. On
March 1, 2019, the court also entered an order directing TGC and Allstate to
proceed to arbitration.2 The court did not order Garry's to arbitrate any of the
claims asserted in its cross-claims or third-party complaint against TGC,
Borowski, UCC, or Borowski's wife or father.
2
The order includes a typographical error. It includes the following, "IT IS on
this 1st day of March, 2018," but the order accompanied the court's March 1,
2019 written opinion and is marked filed by the court on "March 1, 2019."
A-3018-18T1
9
The court subsequently entered an order pursuant to R. 2:9-5(c) staying
the arbitration pending TGC's appeal from the March 1, 2019 order compelling
arbitration. TGC's appeal from the March 1, 2019 order in A-3018-18.
The court later entered an April 12, 2019 order dismissing the case
because the "parties [were] going to arbitration." Garry's appealed from the
court's March 1, 2019 and April 12, 2019 orders, and its appeal is pending in A-
3827-18.
In a July 31, 2019 order, we granted in part and denied in part Garry's
motion for a remand, vacation of the settlement of the 2016 and 2017 actions to
which Garry's was a party, and consolidation of those actions with the pending
Chancery Division case. We remanded to the Chancery Division for
reinstatement of the complaint and other pleadings to allow for the filing of
responsive pleadings and discovery. Our order effectively reversed and vacated
the court's April 12, 2019 dismissing the Chancery Division action. We directed
that the matter "may proceed as to all other issues and parties not subject to the
arbitration order."
A-3018-18T1
10
The Law Division Action (A-4524-18)
In December 2018, Borowski, TGC, Italski, and UCC, filed a complaint
in the Law Division against Allstate and its principal Michael Scannell.3 The
complaint asserted the following claims arising from the three loans: an
accounting for each of the loans; breach of contract; breach of the covenant of
good faith and fair dealing; breach of the New Jersey Consumer Fraud Act
(CFA), N.J.S.A. 56:8-1 to -224; breach of the "Consumer Finance Licensing
Act"; intentional infliction of emotional distress; tortious interference with
contract rights; and violations of the New Jersey "Civil RICO" statute, N.J.S.A.
2C:4-2.4 The complaint also sought a declaratory judgment that the arbitration
agreements executed as part of the three loans were "unenforceable as a matter
of law."
3
It appears the action was commenced with the filing of a complaint, which
was amended prior to the filing of any responsive pleading. The complaint to
which we refer is the amended complaint. We note that Borowski's wife and
father were also plaintiffs in the action. We do not address the allegations
pertinent to them because they are not parties to the arbitration agreements at
issue on appeal; they were not ordered to participate in the arbitration; and they
do not appeal from the court's orders at issue on appeal.
4
The cause of action for violation of what Borowski, Italski, and TGC
characterized as the "Consumer Finance Licensing Act" was later withdrawn at
their request. Their complaint did not include a citation to the statute(s) they
claimed comprise the purported act.
A-3018-18T1
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Allstate and Scannell moved to dismiss the complaint for lack of
jurisdiction over Scannell and for failure to state a claim upon which relief may
be granted, and, in the alternative, they moved for a "stay" of the action "in favor
of arbitration." In a May 24, 2019 opinion issued from the bench, the Law
Division judge determined Borowski's, Italski's and TGC's arbitration
agreements with Allstate are binding and enforceable, and the claims asserted in
the complaint are subject to the arbitration obligation.
In a June 13, 2019 order, the court granted in part and denied in part the
motion. The court ordered that the claims asserted by Borowski, Italski and
TGC against Allstate be determined in an arbitration proceeding initiated by
Allstate. Borowski, Italski, and TGC appealed from the court's order. Their
appeal is pending in A-4524-18.
The Pending Appeals
Parties appealing from orders compelling arbitration may appeal as of
right because the orders are "deemed . . . final judgment[s] of the court for appeal
purposes." R. 2:2-3(a)(3); see also R. 2:2-3(a)(1) (providing for appeals as of
right from "final judgments of the Superior Court trial divisions"). Here, TGC,
Borowski, and Italski appeal from the Law Division's June 13, 2019 order
compelling arbitration of the claims involving Allstate, and TGC appeals from
A-3018-18T1
12
the Chancery Division's March 1, 2019 order compelling arbitration, also of the
claims involving Allstate.
Although Garry's is not subject to any orders compelling it to proceed in
arbitration, it appeals from the Chancery Division's March 1, 2019 order
compelling TGC to proceed to arbitration and the court's April 12, 2019 order
dismissing the Chancery Division action that we effectively reversed in our July
31, 2019 order. As noted, our July 31, 2019 order reinstated the Chancery
Division action and permitted the continued litigation of all claims, including
Garry's, that are not subject to the court's order compelling arbitration.
II.
We first consider the issues common to the orders compelling arbitration
because they are properly presented as appeals from the final judgments
embodied in the Chancery Division's March 1, 2019 order and the Law
Division's June 13, 2019 order. The challenges to the orders are founded on
identical grounds. TGC, Italski, and Borowski assert the arbitration agreements
are unenforceable because they do not specify an arbitral forum; they do not
encompass the claims asserted in the actions; and they do not include a waiver
of the right to proceed in court on their statutory claims against Allstate. TGC,
Italski, and Borowski claim the purported deficiencies in the arbitration
A-3018-18T1
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agreements establish there was no meeting of the minds between the respective
parties and, as a result, the agreements are unenforceable.
We apply a de novo standard of review when construing an arbitration
provision in a contract. Morgan v. Sanford Brown Inst., 225 N.J. 289, 302-03
(2016); Atalese v. U.S. Legal Servs. Grp., LP, 219 N.J. 430, 445-46 (2014). We
apply the same de novo review when deciding whether a valid and enforceable
arbitration agreement exists. 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)). We owe "no special deference to the judge's determination of
[the enforceability of an arbitration agreement]." Flanzman v. Jenny Craig, Inc.,
456 N.J. Super. 613, 619 (App. Div. 2018), certif. granted, 237 N.J. 310 (2019).
Here, both federal and state laws governing arbitration agreements are
applicable. The Federal Arbitration Act, 9 U.S.C. §§ 1 to 16, and the Uniform
Arbitration Act, N.J.S.A. 2A:23B-1 to -36, favor arbitration of disputes. KPMG
LLP v. Cocchi, 565 U.S. 18, 21 (2011); Roach v. BM Motoring, LLC, 228 N.J.
163, 173 (2017).
"An agreement to arbitrate, like any other contract, 'must be the product
of mutual assent, as determined under customary principles of contract law.'"
Atalese, 219 N.J. at 442 (citing NAACP of Camden Cty. E. v. Foulke Mgmt.
A-3018-18T1
14
Corp., 421 N.J. Super. 404, 424 (App. Div. 2011)). "Mutual assent requires that
the parties have an understanding of the terms to which they have agreed." Ibid.
A legally enforceable agreement requires a "meeting of the minds." Ibid. (citing
Morton v. 4 Orchard Land Tr., 180 N.J. 118, 120 (2004)).
TGC, Borowski, and Italski assert the arbitration agreements are
unenforceable because they do not identify the arbitral forum. In Flanzman, we
defined the arbitral forum "as the mechanism – or setting – that parties utilize to
arbitrate their dispute." 456 N.J. Super. at 623. Here, the arbitration agreements
clearly provide a mechanism and the setting for the arbitration of the parties'
disputes. The agreements state the arbitrations will take place before a mutually
agreed upon retired California judge or justice, and, where no mutual agreement
is reached, each party will select one retired judge or justice and the two named
persons select a neutral judge or justice who will act as the sole arbitrator . This
provision defines the arbitral forum. As we explained in Flanzman, where the
parties "agree that a dispute [will] be arbitrated by an arbitral institution, or an
arbitrator or arbitrators, then that is the agreed upon forum." Ibid. (emphasis
added).
TGC, Borowski, and Italski also assert there was no meeting of the minds,
and therefore no enforceable contracts to arbitrate, because the arbitration
A-3018-18T1
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agreements do not define the rules by which the arbitrations will be conducted.
They contend that although the agreements state the "rules of evidence and
procedure are often less formal and less rigid than the rules which apply in
court," the agreements do not sufficiently define the rules governing the
arbitration proceedings. They claim the arbitration agreements are
unenforceable because a binding agreement to arbitrate must define "both the
rights that have been waived and the rights that have taken their place." Kleine
v. Emeritus at Emerson, 445 N.J. Super. 545, 552-53 (App. Div. 2016).
TGC, Borowski, and Italski rely on our decision in Flanzman, where we
considered the enforceability of a putative arbitration agreement that provided
the claims and controversies between the parties were to be "settled by final and
binding arbitration." 456 N.J. Super. at 618. The agreement did not provide for
an arbitral forum; that is, the agreement did not define any mechanism or setting
for the arbitration of the parties' dispute. Id. at 622.
We observed that "[s]electing an arbitral institution," such as the
American Arbitration Association, as the arbitral forum "informs the parties, at
a minimum, about that institution's general arbitration rules and procedures. "
Id. at 626. We noted that "[w]ithout knowing [that] basic information, parties
A-3018-18T1
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to an arbitration agreement will be unfamiliar with the rights that replaced
judicial adjudication," and "will not reach a 'meeting of the minds.'" Ibid.
In Flanzman, we relied on Oasis Health & Rehabilitation of Yazoo City,
LLC v. Smith, where the court found an arbitration agreement enforceable
because it included "an agreed method for selection" of the arbitrator. 42 F.
Supp. 3d 821, 826 (S.D. Miss. 2014). We observed that in Oasis, by providing
a method for the selection of the arbitrator, the parties "reached a 'meeting of
the minds' as to what rights replaced the right to a jury trial." Flanzman, 456
N.J. Super. at 629. We further found an agreement adequately reflects a meeting
of the minds about what replaced the rights the parties have given up when it
provides for the selection of a neutral arbitrator or "permit[s] each party to pick
an arbitrator and then those arbitrators . . . select [a] neutral arbitrator." Id. at
630. Here, the arbitration agreements provide the identical information.
In Flanzman, we were not required to address the precise issue presented
here. Instead, we considered an arbitration agreement that "omitted any
reference whatsoever to an arbitral forum," and we concluded that, as a result,
the parties did not reach a meeting of the minds on the arbitral forum. 456 N.J.
Super. at 622. As we have explained, the parties here expressly agreed upon an
arbitral forum—a retired California judge or justice—in a manner supporting a
A-3018-18T1
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finding there was a meeting of the minds between TGC, Borowski, and Italski,
respectively, and Allstate, as we defined the requirement in Flanzman.
In her written opinion, the Chancery Division judge rejected TGC's,
Borowski's, and Italski's argument the arbitration agreements do not sufficiently
define the rules and procedures governing the arbitration proceedings. The court
found that, as a matter of law, the New Jersey Arbitration Act (the Act), N.J.S.A.
2A:23B-1 to -36, provides the arbitration procedures applicable under the
agreements. We agree.
"In New Jersey, agreements to arbitrate made on or after January 1, 2003,
are governed by the . . . Act." Kimm v. Blisset, LLC, 388 N.J. Super. 14, 28
(App. Div. 2006); see also N.J.S.A. 2A:23B-3 (stating the "act governs all
agreements to arbitrate made on or after January 1, 2003").5 The arbitration
agreements between Allstate and TGC, Borowski, and Italski are governed by
the Act's requirements because they were executed in 2016 and 2017. Indeed,
none of the parties disputes the agreements are governed by the Act.
5
The Act, however, does not apply to agreements to arbitrate "between an
employer and a duly elected representative of employees under a collective
bargaining agreement or collectively negotiated agreement." N.J.S.A. 2A:23B -
3(a). This exception does not apply to the agreements between Allstate and
TGC, Borowski, and Italski, respectively.
A-3018-18T1
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Our Supreme Court has explained the Act provides the procedural rules
governing an arbitration proceeding where the parties' agreement does not
provide otherwise. In Kernahan v. Home Warranty Administrator of Florida,
Inc., the Court stated that "[u]nless superseded by the parties' agreement, the . .
. Act prescribes the rules governing the conduct of the [arbitration] proceeding."
236 N.J. 301, 324 (2019). Similarly, in Fawzy v. Fawzy, the Court observed the
Act "recognizes the contractual nature of the arbitration remedy and sets forth
the details of the arbitration procedure that will apply unless varied or waived
by contract." 199 N.J. 456, 469 (2009).
In Flanzman, we recognized the parties are not required to "detail in the
arbitration agreement the exact manner in which the arbitration proceeding will
proceed" because, at least in part, N.J.S.A. 2A:23B-15(a) provides the arbitrator
with discretion to decide the manner in which the arbitration will take place.
456 N.J. Super. at 626. In addition, and as noted, we also held that a general
indication in the agreement "that one or more individuals will arbitrate the case,"
like that included in the agreements here, sufficiently "addresses the rights that
replaced the right to judicial adjudication" to support a finding the parties had
the meeting of the minds required for an enforceable contract. Ibid.
A-3018-18T1
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Parties to an arbitration agreement may waive or modify certain of the
Act's requirements, see N.J.S.A. 2A:23B-4, but where they choose not to do so,
the Act governs the arbitration proceeding, Kimm, 388 N.J. Super. at 28. Here,
the sophisticated commercial parties involved in these coordinated loans totaling
$2.65 million opted not to waive the requirements of the Act, and, by doing so,
they elected and agreed to be governed by the Act's provisions. See ibid. None
of the parties contend they were unaware of the Act's provisions or its
application to the arbitration agreements, nor could they because "the principle
is well established that every person is conclusively presumed to know the law,
statutory and otherwise[,]" and "parties are 'presumed to have contracted with
reference to the existing law.'" Widmer v. Twp. of Mahwah, 151 N.J. Super.
79, 83 (App. Div. 1977) (quoting Silverstein v. Keane, 19 N.J. 1, 13 (1955)
(citations omitted)); see also Camden Bd. of Educ. v. Alexander, 181 N.J. 187,
195 (2004) (finding "[a]s a general matter, legislative and other regulatory
enactments are 'a silent factor in every contract'" (quoting Silverstein, 19 N.J. at
13)).
TGC, Borowski, and Italski do not challenge the courts' conclusions the
Act provides the procedures for the arbitration proceedings under the
agreements. Instead, they contend the Act's procedures are not sufficiently
A-3018-18T1
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comprehensive to adequately detail the rights replacing those given up by the
parties by proceeding to arbitration. They argue the Act "simply confers upon
an arbitrator the authority to conduct proceedings as the arbitrator deems
appropriate 'for a fair and expeditious disposition of the proceeding [s].'" The
argument ignores the Act's plain provisions, which provide detailed and defined
authorizations, requirements, and limitations concerning the arbitration process.
The Act authorizes the arbitrator to "decide whether a condition precedent
to arbitrability has been fulfilled and whether a contract containing a valid
agreement to arbitrate is enforceable." N.J.S.A. 2A:23B-6(c). The Act also
authorizes the arbitrator to "issue orders for provisional remedies, including
interim awards, as the arbitrator finds necessary to protect the effectiveness of
the arbitration proceeding and to promote the fair and expeditious resolution of
the controversy, to the same extent and pursuant to the same conditions as if the
controversy were the subject of a civil action." N.J.S.A. 2A:23B-8(b)(1). The
Act further provides the process for initiating an arbitration, N.J.S.A. 2A:23B-
9; for consolidation of separate arbitration proceedings, N.J.S.A. 2A:23B-10;
and for the arbitrator's disclosure of information that might affect his or her
impartiality, N.J.S.A. 2A:23B-12.
A-3018-18T1
21
Moreover, the Act defines the arbitration process, N.J.S.A. 2A:23B-15,
including a requirement that the arbitration be conducted "in such manner as the
arbitrator considers appropriate for a fair and expeditious disposition of the
proceeding," and authorizing the arbitrator to "hold conferences with the parties
to the arbitration proceeding . . . and, among other matters, determine the
admissibility, relevance, materiality, and weight of any evidence." N.J.S.A.
2A:23B-15(a). Under the Act, the arbitrator sets "a time and place" for the
hearing, may adjourn the hearing, and "may hear and decide the controversy
upon the evidence produced [by a party] although a party who was duly notified
of the arbitration proceeding did not appear." N.J.S.A. 2A:23B-15(c). Parties
to the arbitration have "a right to be heard, to present evidence . . ., to cross -
examine witnesses appearing at the hearing," N.J.S.A. 2A:23B-15(d), and to "be
represented by a lawyer," N.J.S.A. 2A:23B-16.
Further, an arbitrator may issue subpoenas for the attendance of witnesses
and production of evidence at the hearing, which "shall be served in the manner
for service of subpoenas in a civil action," and may permit the depositions of
witnesses. N.J.S.A. 2A:23B-17(a) and (b). An arbitrator may also "permit such
discovery as [he or she] decides is appropriate . . . taking into account the needs
of the parties . . . and the desirability of making the proceeding fair, expeditious,
A-3018-18T1
22
and cost effective." N.J.S.A. 2A:23B-17(c). The Act also requires the arbitrator
"make a record of an award," sign or otherwise authenticate the award, and
provide notice of the award to the parties within the time agreed to by the parties
or established by the court. N.J.S.A. 2A:23B-19(a) and (b).
The Act further authorizes an arbitrator to "award punitive damages or
other exemplary relief if such an award is authorized by law in a civil action
involving the same claim," N.J.S.A. 2A:23B-21(a), reasonable attorney's fees
and expenses "if such an award is authorized by law," N.J.S.A. 2A:23B-21(b),
and all other remedies "the arbitrator considers just and appropriate under the
circumstances," N.J.S.A. 2A:23B-21(c).
In sum, TGC's, Borowski's, and Italski's claim the Act does not
sufficiently define the rules governing the arbitration process is without any
foundation. The Act provides a comprehensive and detailed set of rules,
requirements, and limitations concerning an arbitrator's duties and authority, as
well as the manner in which an arbitration shall be conducted. The Act's
provisions, which the parties acknowledge govern the arbitration agreements,
sufficiently informed the parties about the "rules and procedures" applicable to
the arbitrations such that the parties were "[]familiar with the rights that replaced
judicial adjudication." Flanzman, 456 N.J. Super. at 626. We are therefore
A-3018-18T1
23
convinced the courts correctly determined the arbitration agreements reflected a
meeting of the minds resulting in binding contracts defining the arbitral forum
and the procedural rights that replaced those TGC, Borowski, and Italski gave
up by agreeing to forego litigation in court and proceed to arbitration.
We also reject TGC's, Borowski's, and Italski's argument the arbitration
agreements do not include a clear waiver of their right to a jury trial. Their
argument is undermined by the plain language of the agreements. Each
agreement plainly states in bold language that "BY AGREEING TO
ARBITRATE, YOU WAIVE ANY RIGHT YOU HAVE TO A COURT OR
JURY TRIAL." The agreements further explain the differences between an
arbitration and a court proceeding, and they note that "[t]here is no right to a
trial by jury" in an arbitration. This language constitutes a "clear and
unambiguous [statement] that the [person signing the agreement] is waiving
[the] right to sue or go to court to secure relief," Atalese, 219 N.J. at 446, and,
under the circumstances presented here, it resulted in an effective and
enforceable waiver of TGC's, Borowski's, and Italski's respective rights to a jury
trial.
TGC, Borowski, and Italski also argue that, even if he arbitration
agreements are enforceable, they do not include a waiver of their respective
A-3018-18T1
24
rights to prosecute in court their statutory claims under the CFA and New Jersey
Civil RICO statute. They further assert their claims against Allstate and its
principal Scannell for threats and intimidation do not fall within the arbitration
obligation set forth in the agreements.
In the first instance, the court did not order that any claims against
Scannell proceed to arbitration because he is not party to any of the arbitration
agreements. In addition, the claims against Allstate, including the statutory and
common laws, must be arbitrated because they are encompassed by the plain and
broad language of the arbitration agreements.
In their respective arbitration agreements, TGC, Borowski, and Italski
agreed to submit to arbitration "any dispute or claim arising out of or relating
to" their mortgage and loan agreements with Allstate, and their respective
"relationship[s]" with Allstate, and Allstate's "charges, or . . . services." This
language unambiguously encompasses each of the claims asserted by TGC,
Borowski, and Italski against Allstate because each claim, and including their
statutory claims, arise out of or relate to the mortgage and loan agreements,
Allstate's charges or services, or TGC's, Borowski's, and Italski's respective
relationships with Allstate.
A-3018-18T1
25
TGC, Borowski, and Italski assert their statutory claims—under the CFA
and the Civil RICO statutes—are not encompassed by the arbitration agreements
because the agreements do not expressly provide for the waiver of statutory
causes of action. In Atalese, the Court "emphasize[d] that no prescribed set of
words must be included in an arbitration clause to accomplish a waiver of rights"
as long as the language "clear[ly] and unambiguously" provides that the parties
"choos[e] to arbitrate disputes rather than have them resolved in a court of law."
219 N.J. at 447. The Court in Atalese found an arbitration agreement to be
unenforceable, but not because the agreement failed to expressly refer to the
waiver of statutory claims. Id. at 446-47. Instead, the Court found the
arbitration agreement unenforceable because it failed to include "clear and
unambiguous language that plaintiff is waiving her right to sue or go to court to
secure relief." Id. at 446. The arbitration agreements here do not suffer from a
similar infirmity.
TCG, Borowski, and Italski rely on the Court's decision in Garfinkle,
claiming it requires an arbitration agreement expressly provide for a waiver of
statutory claims for such claims to be within the obligation to arbitrate. In
Garfinkle, the Court determined an employment agreement that included an
obligation to arbitrate claims "arising out of, or relating to, [the] [a]greement or
A-3018-18T1
26
the breach thereof," 168 N.J. at 128, did not cover claims arising under the New
Jersey Law Against Discrimination, N.J.S.A. 10:5-1 to 5-49, because "the
language suggests the parties intended to arbitrate only those disputes involving
a contract term, a condition of employment, or some other element of the
contract itself," id. at 135. It was under those circumstances that the Court found
the agreement's failure to include an express reference to statutory claims
reflected an intention to exclude statutory claims from the arbitration. Id. at
134-35. See Martindale v. Sandvik, Inc., 173 N.J. 76, 96 (2002) (explaining that
in Garfinkle, the Court found the parties intended to arbitrate only claims arising
"from the employment agreement itself" because the arbitration provision was
limited to claims "arising from the '[a]greement or the breach thereof'" (quoting
Garfinkle, 168 N.J. at 134)).
Here, the arbitration agreement does not include language limiting the
claims subject to arbitration like that in Garfinkle. To the contrary, by their
express terms, the arbitration agreements not only include disputes arising out
of or relating to the mortgage and loan agreements and Allstate's charges and
services, they also include disputes arising out of TGC's, Borowski's, and
Italski's respective "relationships" with Allstate. Thus, all of the claims asserted,
including their statutory causes of action, fall under the arbitration agreements'
A-3018-18T1
27
broad umbrella. See, e.g., Griffin v. Burlington Volkswagen, Inc., 411 N.J.
Super. 515, 518 (App. Div. 2010) (explaining "[c]ourts have generally read the
terms 'arising out of' or 'relating to' a contract as indicative of an 'extremely
broad' agreement to arbitrate any dispute relating in any way to the contract"
(quoting Angrisani v. Financial Tech. Ventures, L.P., 402 N.J. Super. 138, 149
(App. Div. 2008)).
In Martindale, the Court found similarly broad language included
statutory claims within the arbitration obligation, even though the agreement
made no mention of statutory claims. 173 N.J. at 96. The Court held that an
agreement providing that the plaintiff waived her right to a jury trial in any
action related to her employment, and that all disputes related to her employment
were subject to arbitration, was sufficient to cover any related statutory claims.
Id. at 96. The same result applies here. The arbitration agreements broadly,
and without limitation, define the claims and disputes subject to arbitration, and
TGC's, Borowski's, and Italski's claims clearly fall within the arbitration
requirement. They are therefore bound to arbitrate their statutory claims against
Allstate.
We therefore affirm the Chancery Division's March 1, 2019 order
directing TGC and Allstate to proceed in arbitration over the claims against each
A-3018-18T1
28
other. We also affirm the Law Division's June 13, 2019 order requiring that
TGC, Borowski, and Italski, respectively, and Allstate proceed in arbitration on
their claims against each other.
We note that Garry's and Ruane appeal in A-3827-18 from the Chancery
Division's March 1, 2019 order compelling Allstate and TGC to proceed to
arbitration, and from the court's April 12, 2019 order dismissing the Chancery
Division action. We do not address the merits of Garry's's and Ruane's appeal
from the April 12, 2019 order because, as noted, our July 31, 2019 order on their
motion effectively reversed the April 12, 2019 order, and it remanded the matter
for proceedings on the claims, including all of those asserted by Garry's and
Ruane in their cross-claims and third-party complaint, which are not subject to
the requirements of the arbitration agreements. Garry's and Ruane are not
parties to the arbitration agreements, and, therefore, our July 31, 2019 order
permits and requires the litigation of their claims on remand in the Chancery
Division. We therefore dismiss their appeal in A-3827-18 as to the court's April
12, 2019 order as moot.
Garry's and Ruane also make numerous arguments supporting their
contention the arbitration agreement between TGC and Allstate is
unenforceable. Allstate contends Garry's and Ruane lack standing to contest the
A-3018-18T1
29
enforceability of the arbitration agreement because neither is a party to the
agreement and they are not third-party beneficiaries entitled to assert claims
arising under the agreements.
It is a basic tenet of appellate review that "[o]nly a party aggrieved by a
judgment may appeal therefrom." Price v. Hudson Heights Dev., LLC, 417 N.J.
Super. 462, 466 (App. Div. 2011) (quoting Howard Sav. Inst. v. Peep, 34 N.J.
494, 499 (1961)); see also Calabro v. Campbell Soup Co., 244 N.J. Super. 149,
169 (App. Div. 1990). "[I]t is certain that there can be no appeal from an order
by which a party is not aggrieved. The very object of the appeal is to redress an
injury. If there be no injury to redress, there can be no appeal . . . ." Price, 417
N.J. Super. at 466 (quoting Green v. Blackwell, 32 N.J. Eq. 768, 770 (E. & A.
1880)). Mere dissatisfaction with a court order does not constitute a redressable
injury. Ibid. (citing Hughes v. Eisner, 8 N.J. 228, 229 (1951) (dismissing for
want of jurisdiction an appeal from a party who was successful in the Appellate
Division but appealed out of dissatisfaction with the court's opinion)). Instead,
"to be aggrieved, the party 'must have a personal or pecuniary interest or
property right adversely affected by the judgment.'" N.J. Dep't of Envtl. Prot.
v. Exxon Mobil Corp., 453 N.J. Super. 272, 296 (App. Div. 2018) (quoting
Howard Sav. Inst., 34 N.J. at 499).
A-3018-18T1
30
We agree Garry's and Ruane lacked standing to assert any claims related
to TGC's arbitration agreement with Allstate. They are not parties to the
agreement and are not aggrieved by the court's March 1, 2019 order compelling
TGC and Allstate to arbitrate disputes and claims solely between them. Garry's
and Ruane may pursue their claims in the Chancery Division action. We
therefore dismiss Garry's and Ruane's appeal in A-3827-18 from the court's
March 1, 2019 order because they lack standing.
In addition, even if we found Garry's and Ruane had standing to challenge
the court's March 1, 2019 order compelling arbitration between TGC and
Allstate, we have considered their arguments and find they are without sufficient
merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). We note
only that we affirm the Chancery Division's March 1, 2019 order compelling
arbitration of the claims between TGC and Allstate for each of the reasons
previously detailed in our discussion of the issues in A-3018-18.
Affirmed as to A-3018-18 and A-4524-18. A-3827-18 is dismissed.
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31