MICHAEL STERN v. CHALLENGE FINANCIAL INVESTORS CORP.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-2817-05T22817-05T2

MICHAEL STERN,

Plaintiff-Appellant,

v.

CHALLENGE FINANCIAL INVESTORS

CORPORATION,

Defendant-Respondent.

_________________________________

 

Argued November 13, 2006 - Decided November 29, 2006

Before Judges Lintner and C.L. Miniman.

On appeal from the Superior Court of

New Jersey, Law Division, Bergen County,

L-3022-05.

Carl A. Salisbury argued the cause for appellant (Killian & Salisbury, attorneys; Mr. Salisbury, on the brief).

Janice G. Dubler argued the cause for respondent (Montgomery, McCracken, Walker & Rhoads, attorneys; Ms. Dubler and Stacy Alison Fols, on the brief).

PER CURIAM

Plaintiff, Michael Stern, sued his former employer, defendant, Challenge Financial Investors Corporation, seeking monetary damages and alleging violation of the Conscientious Employee Protection Act (CEPA), N.J.S.A. 34:19-1 to -14, breach of contract, failure to pay commissions, and indemnification for charges incurred by plaintiff in the ordinary course of defendant's business. Defendant moved to dismiss the complaint and enforce an arbitration clause found in its Employee Dispute Resolution Policy and a forum selection clause found in its Branch Manager and Branch Management Company Agreements requiring that any action taken to enforce both management agreements be maintained in Florida. The motion judge dismissed plaintiff's complaint and ordered arbitration to take place in Florida. On appeal, plaintiff concedes that the disputes raised in his complaint should be resolved by arbitration but contends that the judge erred in enforcing the forum selection clause. We agree and reverse that portion of the order requiring arbitration to take place in Florida.

We need not address the merits of the allegations in plaintiff's complaint. Defendant is a mortgage company with 292 branch offices throughout the country. On May 29, 2002, plaintiff signed a Branch Manager Agreement, identifying plaintiff as "desir[ing] to operate a branch office for [defendant] located at 1605 John St., Suite 120, Ft. Lee, N.J. 07024." The Branch Manager Agreement provided the following pertinent provisions:

e. This Agreement shall be governed by and interpreted in accordance with the laws of the State of Florida, excluding any choice-of-laws provisions.

. . . .

g. Any action taken to enforce this Agreement shall be maintained in the Pinellas County Court, Florida. The parties expressly consent to the jurisdiction of said court and agree that said court shall be a proper venue for any such action.

The Branch Manager Agreement did not have an arbitration clause.

The Branch Management Company Agreement, also dated May 29, identified the Fort Lee location as a principal office of the "Management Company" and Michael Stern as the "Branch Manager" of the office. The Branch Management Company Agreement provided:

If any dispute or disagreement shall arise in connection with any interpretation of this Agreement, its performance or nonperformance, or the figures and calculations used, the parties hereto shall make every effort to meet and settle their disputes in good faith informally. If the parties cannot agree on a written settlement . . . then the matter in controversy shall be settled by arbitration, in accordance with the rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction. The place of any arbitration shall be Largo, Florida.

The Branch Management Company Agreement was not signed by defendant and neither the Fort Lee Branch nor the Management Company became operable.

On October 12, 2002, plaintiff signed defendant's Employee Dispute Resolution Policy, acknowledging that "[a]s a condition of my employment . . . I hereby agree to . . . submit all claims, disputes or issues, relating to or arising out of my employment for resolution by arbitration." At the time plaintiff signed the Employee Dispute Resolution Policy, he was employed by defendant as a loan officer in its Elmwood Park branch office. The Branch Manager of the Elmwood Park Branch was Ralph Luis.

In April 2004, plaintiff contacted two of defendants' executives and alleged that Luis was stealing money from the branch, sexually harassing a female employee, and accepting kickbacks in violation of N.J.A.C. 3:15-9.1. Defendant, thereafter, terminated plaintiff's employment at the Elmwood Park Branch.

On appeal, plaintiff essentially argues that the Employee Dispute Resolution Policy governs. He contends that neither the Branch Manager Agreement nor the Branch Management Company Agreement is operable because plaintiff was not a branch manager and that they are inconsistent with one another because the Branch Manager Agreement sets jurisdiction with the Florida, court while the Branch Management Company Agreement requires Florida arbitration. Plaintiff also asserts that his claims do not arise from either the Branch Manager Agreement or Branch Management Company Agreement, but from his position with defendant at the Elmwood Park branch office. Defendant counters, claiming New Jersey enforces forum selection clauses and that, when the three documents signed by plaintiff are read together, the parties' intent is to resolve any dispute in Florida.

Generally, our courts will enforce forum selection clauses "unless the party objecting thereto demonstrates (1) the clause is a result of fraud or overweening bargaining power, or (2) enforcement in a foreign forum would violate strong public policy of the local forum, or (3) enforcement would be seriously inconvenient for the trial." Wilfred MacDonald Inc. v. Cushman Inc., 256 N.J. Super. 58, 63-64 (App. Div.) (citations omitted), certif. denied, 130 N.J. 17 (1992). However, defendant's reliance on the enforceability of the forum selection clause in the May 29, 2002, Branch Manager and Branch Management Company Agreements is misplaced. Plaintiff was not a branch manager during the relevant times nor was the Fort Lee branch office ever in operation. The simple answer is that, as an employee at defendant's Elmwood Park branch office, plaintiff came under the terms of the subsequently executed Employee Dispute Resolution Policy, which had no forum selection clause. Therefore, plaintiff is not contractually precluded from filing for arbitration in New Jersey. Defendant's claims to the contrary lack sufficient merit to warrant further discussion in a written opinion. R. 2:11-3(e)(1)(E).

Accordingly, we reverse the Law Division order insofar as it requires plaintiff to file for arbitration in Florida. We, however, affirm that portion of the order dismissing plaintiff's complaint.

 

The agreement excepted from arbitration any claims for workers' compensation, unemployment compensation benefits, claims by the company for injunctive relief, and/or disclosure of trade secrets or confidential information, and defalcation by an employee unless otherwise prohibited by applicable state or federal law.

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A-2817-05T2

 

November 29, 2006