MAUREEN MARTINDALE v. SANDVIK, INC., et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. 5809-04-T1A-5809-04T1

MAUREEN MARTINDALE,

Plaintiff-Appellant,

v.

SANDVIK, INC., SANDVIK COROMANT

COMPANY, INC., PAUL HODGEN, RICK

ASKIN, and JOHN CASCIANO,

Defendants-Respondents.

______________________________________

 

Argued April 5, 2006 - Decided May 26, 2006

Before Judges Weissbard, Winkelstein and Sapp-Peterson.

On appeal from the Superior Court of New Jersey, Law Division, Bergen County,

L-3002-98.

Anthony N. Iannarelli, Jr. argued the cause for appellant.

Jill E. Jachera argued the cause for respondents (Morgan, Lewis & Bockius, attorneys; Ms. Jachera, on the brief).

PER CURIAM

Plaintiff Maureen Martindale appeals an order entered by the Law Division dated May 25, 2005, denying her motion to vacate the decision of the arbitrator granting summary judgment and dismissing her New Jersey Family Leave Act (NJFLA), N.J.S.A. 34:11B-1 to -16, Family Medical Leave Act (FMLA), 29 U.S.C.A. 2601 to 2654, and New Jersey Law Against Discrimination, (LAD), N.J.S.A. 10:5-1 to -49, claims against her former employer, defendant Sandvik, Inc. We affirm.

The salient facts are not disputed, but reflect a protracted procedural history. Plaintiff was hired by Sandvik in 1994 as a benefits administrator. At the time she was hired, she executed an employment agreement in which she agreed "THAT ALL DISPUTES RELATING TO [HER] EMPLOYMENT WITH SANDVIK OR TERMINATION, THEREOF, SHALL BE DECIDED BY AN ARBITRATOR SELECTED THROUGH THE LABOR RELATIONS SECTION OF THE AMERICAN ARBITRATION ASSOCIATION."

Plaintiff became pregnant in 1996. Due to complications with her pregnancy, plaintiff commenced disability leave. She was also approved for family and medical leave that was slated to commence after the expiration of her disability. Before that occurred, however, defendant underwent corporate reorganization. As part of the reorganization, plaintiff's position was eliminated effective November 8, 1996.

On March 30, 1998, plaintiff filed a complaint against her employer, defendant Sandvik, Inc.; Sandvik Coromant Company, Inc., a subsidiary; Supervisors Rick Askin and Paul Hogden; and the Human Resources Director, John Casciano. Plaintiff claimed defendants violated the NJFLA and the FMLA. The matter was removed to the Federal District Court. It was dismissed for failure to exhaust administrative remedies and remanded to state court, where plaintiff amended her complaint to assert a LAD claim. Defendants filed a motion to dismiss the complaint and to compel arbitration pursuant to the employment agreement. Alternatively, defendants sought partial summary judgment. The motion to compel arbitration was granted and the complaint was dismissed with prejudice, with the court never addressing the partial summary judgment motion.

Plaintiff filed a motion for reconsideration, which was denied. The court granted a subsequent motion to stay the orders pending appeal. In an unreported opinion, we affirmed the orders dismissing the complaint and compelling arbitration. Martindale v. Sandvik, Inc., No. A-3230-99 (App. Div. May 2, 2002). On July 17, 2002, the Supreme Court affirmed. Martindale v. Sandvik, Inc., 173 N.J. 76 (2002).

On October 30, 2002, plaintiff filed a demand for arbitration with the American Arbitration Association (AAA). Defendants filed a motion for summary judgment with the arbitrator on December 8, 2003. On July 19, 2004, plaintiff filed a motion to enforce litigant's rights, seeking to compel arbitration. On September 24, 2004, the court entered an order directing that an arbitration hearing be held within thirty days. Plaintiff requested and was granted an extension of time to propound additional written discovery, to which defendants responded. Defendants filed a motion for reconsideration of the court's decision. The trial court ordered that defendants had the right to have the arbitrator rule on their motion for summary judgment prior to any arbitration hearing.

On October 26, 2004, the arbitrator issued a summary judgment order in favor of defendants, finding plaintiff's claims were time-barred and failed to raise any genuine issue of fact. Plaintiff sought reconsideration on November 5, 2004, and the arbitrator denied that request on November 24, 2004. On January 25, 2005, the AAA notified the parties that "as of this date we are closing our files in the above matter." On March 5, 2005, plaintiff filed a second motion to enforce litigant's rights in the Law Division, seeking to have the arbitrator's decision overturned. The motion was denied on May 25, 2005. Plaintiff filed a Notice of Appeal to this court on July 7, 2005. Thereafter, the trial court issued a letter opinion on July 22, 2005. R. 2:5-1(b).

Plaintiff contends the trial court abused its discretion when it refused to set aside the arbitrator's decision that granted summary judgment and dismissed her complaint because defendant "has acted, since the final decision of the New Jersey Supreme Court, inconsistent with their right to arbitrate" and the case had in fact become "moribund until the [S]uperior [C]ourt then ordered the case be moved forward."

N.J.S.A. 2A:24-7 provides in relevant part that:

A party to the arbitration may, within 3 months after the award is delivered to him, unless the parties shall extend the time in writing, commence a summary action in the court aforesaid for the confirmation of the award or for its vacation, modification or correction. Such confirmation shall be granted unless the award is vacated, modified or corrected.

For the party seeking to vacate an arbitration decision, the failure to move to vacate the award in a timely manner results in the loss of the right to institute a summary vacation action. See City of Atl. City v. Laezza, 80 N.J. 255, 268 n.2 (1979) (city precluded from moving for vacation of award because more than three months had already elapsed from the time that the award was rendered). As the Supreme Court reasoned in Policeman's Benevolent Ass'n, Local 292 v. Borough of N. Haledon, 158 N.J. 392 (1999):

Strict enforcement of the three-month limit on a summary action to vacate, on the other hand, supports arbitration as an alternative, not an invitation, to litigation. An action to vacate challenges the underlying validity of the award and disrupts arbitration as a speedy and efficient method of resolving disputes. Thus, the three-month limit on an action to modify or vacate an award provides the losing party with the incentive to take timely action.

[Id. at 402 (citation omitted).]

Here, in addressing plaintiff's motion to vacate the arbitration decision and to compel a hearing on the merits of plaintiff's claims, the trial court stated:

[W]hile plaintiff's motion was one to enforce "litigant's rights," it was in essence the result of the plaintiff's displeasure with the outcome of the arbitration proceeding, and as such there are certain procedural rules which must be followed.

Any appeal of an arbitrator's award or decision must be filed in a timely manner. The statute provides parties with a three month time frame in which they can seek a vacation or a confirmation of the arbitrator's decision. The statute does not provide exceptions to this three month rule. Application of this strict time limitation to the instant matter indicates that any action taken with regard to the arbitrator's October 26, 2004 decision must have been filed by January 27, 2005. Therefore from a procedural standpoint plaintiff's motion, which was filed March 7, 2005, was untimely and improper under the rules.

As recognized by the trial court, plaintiff failed to file a timely challenge to the arbitrator's decision. Even counting three months from November 11, 2004, the date of the denial of plaintiff's request for reconsideration, plaintiff's filing was still untimely. At oral argument, plaintiff's counsel suggested that following the November 11, 2004, decision, he undertook additional steps to appeal the arbitrator's decision with AAA, and that the letter dated January 25, 2005, advising the parties that the AAA was closing its files is the date from which the clock started to run on the time within which to file a motion to vacate the decision. The record does not support plaintiff's position.

Following the entry of the November 11, 2004, order denying plaintiff's motion for reconsideration, the record does not indicate that plaintiff took any other action before the AAA. In plaintiff's brief, she argues, "as to [her] request for an appeal before the AAA, the request has simply been ignored." In his November 10, 2004, letter to Case Manager Linda S. Hendrickson, plaintiff's counsel writes:

I wish to amend my letter of November 5, 2004, seeking reconsideration or, in the alternative, an appeal of the arbitrator's decision, of October 27, 2004, to dismiss Ms. Martindale's claim, and incorporate the following:

Rule 32 of the Labor Arbitration Rules provides the following relief:

32. Reopening of Hearings

The hearings may for good cause shown be reopened by the arbitrator at will or on the motion of either party at any time before the award is made but, if the reopening of the hearings would prevent the making of the award within the specific time agreed upon by the parties in the contract out of which the controversy has arisen, the matter may not be reopened unless both parties agree to extend the time. When no specific date is fixed in the contract the arbitrator may reopen the hearings and shall have 30 days from the closing of the reopened hearings within which to make an award.

Since claimant Martindale's employment application provided for arbitration in accordance to the AAA's Labor Arbitration Rules, a remedy should be available to her pursuant to the foregoing rule. Accordingly, Martindale requests that the decision of the arbitrator be vacated and that her claim proceed to a hearing on the merits. Additionally, it has been Martindale's belief that all of the decisions rendered by the courts of the State of New Jersey directed that her case be "arbitrated" based upon the merits through a hearing.

Since Martindale has been denied her fundamental right to a hearing, it is requested that, consistent with Labor Arbitration Rule 32 and the decisions of the New Jersey Courts that her claim be scheduled for a hearing on the earliest possible date.

Accordingly, it is respectfully requested that the arbitrator's ruling be set aside and that the claimant be allowed to proceed to a hearing on the merits of her case. In the alternative, it is requested that this case proceed to appellate review of the arbitrator's decision.

In response, the arbitrator denied the motion for reconsideration and advised that "In all other respects the SUMMARY JUDGMENT ORDER dated October 24, 2004, is reaffirmed and remains in full force and effect." Thus, it is clear from this order that the arbitrator considered and rejected what purportedly was plaintiff's appeal. We therefore find no merit to plaintiff's contention that the AAA ignored her request for appellate review by the AAA.

Likewise, as to the merits of plaintiff's claim that the award should have been vacated, we are not persuaded that there is a basis to do so on this record. The proper standard by which we review private arbitration awards was definitively articulated in Tretina Printing Inc. v. Fitzpatrick & Assocs. Inc., 135 N.J. 349, 358 (1994), where the Court adopted the reasoning of Chief Justice Wilentz in his concurring opinion in Perini Corp. v. Greate Bay Hotel & Casino, Inc., 129 N.J. 479 (1992). The Chief Justice stated, "arbitration awards may be vacated only for fraud, corruption, or similar wrongdoing on the part of the arbitrators. [They] can be corrected or modified only for very specifically defined mistakes as set forth in [N.J.S.A. 2A:24-9]." Id. at 548 (Wilentz, C.J., concurring).

The Tretina Court rejected the concept of setting aside an arbitration award because of a mistake in law. Tretina, supra, 135 N.J. at 356-57 (noting that under previous standard court could vacate whenever an arbitrator's award "embraced egregious mistakes of law"). Specifically, under N.J.S.A. 2A:24-8, a court is permitted to vacate an award based on the following narrow grounds:

a. Where the award was procured by corruption, fraud or undue means;

b. Where there was either evident partiality or corruption in the arbitrators, or any thereof;

c. Where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause being shown therefore, or in refusing to hear evidence, pertinent and material to the controversy, or of any other misbehaviors prejudicial to the rights of any party;

d. Where the arbitrators exceeded or so imperfectly executed their powers that a mutual, final and definite award upon the subject matter submitted was not made.

[N.J.S.A. 2A:24-8.]

"[I]n rare circumstances a court may also vacate an arbitration award for public-policy reasons." Tretina, supra, 135 N.J. at 364.

In his letter opinion of July 22, 2005, the trial court concluded:

[T]his Court finds that the arbitration proceedings held in the instant matter were conducted in accordance with the Alternative Procedure for Dispute Resolution Act, and further that there are no grounds for the Plaintiff's instant motion. The Plaintiff's motion is devoid of any evidence which would establish "fraud, corruption or similar wrongdoing," on the part of the arbitrator. . . . Because [that] standard . . . was not satisfied this Court denied Plaintiff's motion[.]

We have reviewed plaintiff's arguments in light of the record and applicable law and conclude that plaintiff has not demonstrated a basis upon which the award may be vacated. The gravamen of plaintiff's argument centers around her belief that she was entitled to a hearing on the merits of her claim and that the grant of summary judgment by the arbitrator demonstrated the "entire process was a farce, perpetrated by an arbitration association that stood to gain financially from its relationship with defendant-respondents[.]"

On October 30, 2002, plaintiff filed a Demand for Arbitration, pursuant to the American Arbitration Association, National Rules for the Resolution of Employment Disputes (effective January 1, 2004) (National Rules). Under those rules, the arbitrator:

has the authority to set the rules for the conduct of the proceedings and shall exercise that authority to afford a full and equal opportunity to all parties to present any evidence that the arbitrator deems material and relevant to the resolution of the dispute.

. . . .

The arbitrator may grant any remedy or relief that the arbitrator deems just and equitable, including any remedy or relief that would have been available to the parties had the matter been heard in court.

[Id. at 22, 34(d).]

The fact that the arbitrator permitted defendant to file a motion for summary judgment and the disposition affected plaintiff's ability to proceed to a hearing on the merits of her claim does not mean the arbitrator exceeded the scope of his authority.

As a general rule, the scope of an arbitrator's authority is set by the issues that he or she is called upon to decide. United Servs. Auto. Ass'n v. Turck, 156 N.J. 485-86 (1998); Berger v. First Trenton Indem. Co., 339 N.J. Super. 402, 406 (App. Div. 2001). Further, "[a]rbitrators in the private sector have broad discretion in determining legal issues" so long as they fall within the scope of the arbitration agreement. Dep't of Law & Pub. Safety v. State Troopers Fraternal Ass'n of N.J., Inc., 91 N.J. 464, 469 (1982). "The essence of arbitration is, of course, that the arbitrators decide both the facts and the law." Daly v. Komline-Sanderson Eng'g Corp., 40 N.J. 175, 178 (1963). Here, in the employment application, plaintiff agreed that "ALL DISPUTES RELATING TO [HER] EMPLOYMENT WITH SANDVIK OR TERMINATION, THEREOF, SHALL BE DECIDED BY AN ARBITRATOR SELECTED THROUGH THE LABOR RELATIONS SECTION OF THE AMERICAN ARBITRATION ASSOCIATION." Thus, the broad language of the agreement permitted the arbitrator to entertain a summary judgment motion.

Affirmed.

 

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A-5809-04T1

May 26, 2006