BRUNO R. LAKE v. JDN AA, LLCAnnotate this Case
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
DOCKET NO. A-0
BRUNO R. LAKE,
JDN AA, LLC d/b/a AUDI OF
NEWTON and AJA MARSHALL,
November 13, 2014
Argued October 21, 2014 Decided
Before Judges Reisner and Higbee.
On appeal from the Superior Court of New Jersey, Law Division, Sussex County, Docket No. L-0279-11.
Andrew W. Li argued the cause for appellant (The Wolf Law Firm, LLC, attorneys; Andrew R. Wolf, of counsel; Mr. Li, of counsel and on the brief).
Robert C. Chapin argued the cause for respondents (Montgomery, Chapin & Fetten, P.C., attorneys; Mr. Chapin, on the brief).
Plaintiff Bruno R. Lake appeals from a Law Division order dated August 9, 2013, granting a motion filed by JDN AA, LLC d/b/a Audi of Newton (JDN), and its employee, Aja Marshall (collectively, defendant), to require Lake to continue participating in arbitration. The August 9 order, which is the only order properly before us on this appeal, enforced an earlier order entered on May 9, 2012, which compelled the parties to proceed to arbitration pursuant to a contractual arbitration clause.1
Even after entering an order that otherwise terminates litigation in court, a trial judge has continuing authority to enforce that order. See R. 2:9-1(a); GMAC v. Pittella, 205 N.J. 572, 586-87 (2011). Because we find that the trial court had inherent authority to enforce its May 9, 2012 order, and did not err in determining to enforce that order, we affirm.
Arbitration is intended to expeditiously resolve disputes, not spawn more litigation. See Barcon Associates, Inc. v. Tri-County Asphalt Corp., 86 N.J. 179, 187 (1981). Unfortunately, the parties have spent an undue amount of time litigating over the forum in which to litigate their dispute. As a result, a complaint filed in April 2011 is still unresolved. After reviewing the record, we conclude that each side bears some responsibility for the delay in implementing the court's arbitration order. We briefly summarize the history.
Plaintiff filed a complaint against defendant auto dealer, over various issues surrounding his purchase of a used car. After some delay, which the trial court found was not extensive enough to bar enforcement of the arbitration clause, defendant moved to dismiss the case in favor of arbitration. Although the order enforcing arbitration was entered in May 2012, plaintiff did not file a demand for arbitration with the American Arbitration Association (AAA) until November 2012. The record presented to us reflects that the demand was not filed earlier because the parties were trying to settle the case.
Once the arbitration demand was filed, AAA notified both sides by a letter dated December 27, 2012 that the arbitration fee was due by January 10, 2013, that the parties' contract required defendant to pay the fee, but that plaintiff could also pay the fee and obtain reimbursement. Neither side responded to this letter, or to a series of follow-up letters from AAA asking, and then directing, that both sides contact the AAA as to whether either of them was willing to pay the fee.
Plaintiff has offered no excuse for failing to respond. Defendant's excuse was that a long-time, trusted paralegal in the law firm representing defendant was stricken with cancer and failed to attend to the matter. According to defense counsel, he did not discover that the paralegal had not sent in the check to AAA until sometime in March 2013. By that time, AAA had dismissed the arbitration demand and had stated that it would not conduct any further arbitrations for JDN. Additionally, by that time, plaintiff had filed a class action lawsuit against JDN, with himself as the only named plaintiff. Although plaintiff's original complaint was filed in Sussex County, the class action was filed in Union County.2
Shortly after the class action complaint was served on defendant, its counsel realized the arbitration had been dismissed by AAA. In early March 2013, he mailed AAA a check for the fee. He eventually persuaded AAA to modify its position, and filed a motion with the trial court to enforce the May 9, 2012 arbitration order. Plaintiff opposed the motion.
In an oral opinion, the trial judge reasoned that he had inherent authority to enforce his own order, and he construed the motion as seeking such enforcement.3 He accepted defendant's counsel's explanation that the approximately two-month delay in payment was due to the illness of a trusted employee, and found that constituted excusable neglect for the delay in tendering the arbitration fee. The judge stated, "When an employee gets sick and things fall through the cracks, it shouldn't get in the way of justice." At oral argument of this appeal, both sides confirmed that AAA is now willing to conduct the arbitration, in light of the August 9, 2013 order directing the parties to return to arbitration.4
We agree with the trial judge's characterization of the issue before him. Contrary to plaintiff's argument, the judge was not "reinstating" the complaint; he was enforcing the final order entered on May 9, 2012. He had inherent authority to do so. R. 2:9-1(a); GMAC, supra, 205 N.J. at 586-87. Most of plaintiff's additional arguments are directed at the merits of the May 9 order; we decline to consider those arguments because that order is outside the scope of this appeal.
In arguing that defendant waived the right to arbitration, plaintiff relies heavily on Cole v. Jersey City Medical Center, 215 N.J. 265 (2013). That case concerned waiver in the context of a delay in asking the court to send the case to arbitration. Because the case arose in that context, many of the factors Cole discusses (e.g., the extent of discovery in the court litigation) are inapplicable here; they would have been applicable to the May 9 order, but that order is not before us. The issue in this case is whether, by mistakenly failing to remit the arbitration fee, defendant waived or forfeited an arbitration right the court had already granted. In considering that issue, we do find relevant Cole's holding that we review de novo a trial judge's decision as to whether there was a waiver, but we owe great deference to the trial judge's factual findings underlying that decision. Id. at 275.
We also consider cases more closely on point to this situation. Where one party deliberately stalls the arbitration process by failing to pay the fee, it is appropriate to find waiver. See Sink v. Aden Ent., Inc., 352 F.3d 1197 (9th Cir. 2003). However, where both sides bear some responsibility for the delay, courts have declined to find waiver in such a situation. See Duerlein v. N.J. Auto. Full Ins. Underwr. Assoc., 261 N.J. Super. 634, 642-43 (App. Div. 1993). Moreover, as noted, the issue of waiver is fact sensitive, and we defer to the trial judge's factual findings. See Cole, supra, 215 N.J. at 275, 280. Here, the trial judge accepted defense counsel's explanation for the delay and concluded that the situation constituted excusable neglect. Hence, the delay was not due to an intentional effort to delay the arbitration. See id. at 277. In light of his factual findings we find no basis to second-guess the trial judge's decision.
In reaching that conclusion, we bear in mind that arbitration is a favored alternative as a matter of both federal and state policy, Cole, supra, 215 N.J. at 276, and that both sides bear some responsibility for the delay in getting this dispute before an arbitrator. Neither party responded to AAA's correspondence asking each of them to contact AAA about the fee. Neither attorney picked up the phone and discussed this issue with his adversary. Instead of moving to vacate the outstanding May 9, 2012 order requiring arbitration, and moving to reinstate the complaint, plaintiff waited two months and then filed essentially the same lawsuit in another vicinage. Moreover, plaintiff has not shown how he was prejudiced by defendant's two-month delay in tendering the arbitration fee. Id. at 280-81.
On this record, we find no error in the trial judge's decision. Accordingly, we affirm the August 9, 2013 order. Plaintiff's additional arguments are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). The long-delayed arbitration of plaintiff's original complaint should proceed forthwith.
1 The May 9, 2012 order, which the trial judge denominated a Final Order, was appealable as of right. R. 2:2-3(a). Plaintiff did not file a timely appeal from that order. In response to defendant's motion, we entered an order limiting the scope of this appeal to the August 9, 2013 order. However, in derogation of our decision limiting the appeal, much of plaintiff's brief is devoted to criticizing the May 9 order. Those arguments are irrelevant to the issues properly before us.
2 The class action complaint was eventually transferred to Sussex County. The class action lawsuit is not before us.
3 The trial court did not "reinstate" the complaint. However, for future reference, we note that the language in the May 9, 2012 order concerning reinstating the complaint if arbitration proves "unsuccessful" is ambiguous. It is unclear whether the language was mistakenly drawn from an order concerning non-binding mediation, or whether it was intended to allow an application to reinstate the complaint if the party who originally sought arbitration later waived the right.
4 The August order is not directed to AAA, that is, it does not order AAA to take any action. Rather, it orders plaintiff to participate in arbitration.