DANIEL RIZZO v. ISLAND MEDICAL MANAGEMENT HOLDINGS, LLC
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APPROVAL OF THE APPELLATE DIVISION
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SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-0554-17T2
DANIEL RIZZO,
Plaintiff-Appellant,
v.
ISLAND MEDICAL MANAGEMENT
HOLDINGS, LLC and VINCENT
MORRA,
Defendants-Respondents.
_____________________________
Argued May 9, 2018 – Decided May 25, 2018
Before Judges Currier and Geiger.
On appeal from Superior Court of New Jersey,
Law Division, Union County, Docket No. L-0016-
17.
David H. Kaplan argued the cause for
appellant.
James P. Flynn argued the cause for
respondents (Epstein Becker & Green, PC,
attorneys; James P. Flynn, of counsel and on
the brief; Amy E. Hatcher, on the brief).
PER CURIAM
Plaintiff Daniel Rizzo appeals from an August 22, 2017 order
compelling arbitration of his discrimination claims and dismissing
his complaint with prejudice. For the following reasons, we
affirm.
Defendant Island Medical Holdings, LLC (Island Medical)
employed plaintiff as its Vice President of Recruiting from
February 2015 to January 4, 2016. Island Medical provides
"physician management services in emergency departments and urgent
care centers as well as hospitalist and integrated care programs."
Island Medical's main office is located in Hauppauge, New York.
Plaintiff was "responsible for directing and managing the
physician recruitment department as well as the development of
strategies for department improvement."
At the time he was hired, plaintiff entered into an employment
agreement (the Employment Agreement) that contained the following
arbitration and forum selection provision:
Any disputes arising under the terms of
this Employment Agreement will be subject to
binding arbitration conducted pursuant to the
rules of the American Arbitration Association.
The Arbitrator's determination shall be final
and binding and not subject to further appeal.
Venue for the Arbitration will be Hauppauge,
NY. This agreement shall be interpreted and
governed by laws of the State of New York
without giving effect to its conflict of laws
provisions.
Plaintiff signed the Employment Agreement following its
substantive provisions and below the following statement in bold
print: "I have reviewed the foregoing Employment Agreement and
2 A-0554-17T2
accept it, including all of its terms and conditions." The
Employment Agreement was signed on behalf of Island Medical by
Martin Trpis, its Vice President of Operations and General Counsel,
and by defendant Vincent Morra, its Chief Operating Officer. Morra
is a New York resident.
Whether defendant provided plaintiff with a New York office
is disputed. It is not disputed that plaintiff used his Westfield,
New Jersey house as a home office and performed a substantial
portion, but not all, of his work responsibilities from his house.
However, the company's New York address and a "631" area code are
reflected on defendant's business cards and on plaintiff's e-mail
signature.1
In November 2015, plaintiff sustained a serious head injury
outside of work. Plaintiff's neurologist recommended he remain
out of work until mid-December 2015 to recover. Plaintiff's
neurologist cleared him for light duty around this time. Plaintiff
presented a physician's note to Island Medical and advised its
staff of his medical condition. Plaintiff "also requested a
reasonable accommodation from the defendant based on the
recommendations of his physician."
1
The "631" area code covers Suffolk County, New York, where
Hauppauge is located.
3 A-0554-17T2
On January 4, 2016, in response to a discussion plaintiff
initiated with Morra concerning his medical condition, plaintiff
alleges Morra sent him an e-mail stating his "position was being
eliminated and that his duties were terminated immediately."
Plaintiff contends defendants hired a younger, healthier
individual to assume his responsibilities. After being terminated
and before filing his complaint, plaintiff filed for, and received,
New York State Unemployment Benefits. Plaintiff also filed a
temporary disability claim in New York.
On January 3, 2017, plaintiff filed a complaint alleging
wrongful termination in violation of the New Jersey Law Against
Discrimination (LAD),
N.J.S.A. 10:5-1 to -42, against defendants.
Defendants filed a notice of removal to the United States District
Court for the District of New Jersey. Following motion practice,
the District Court remanded the case to the Superior Court of New
Jersey.
Subsequently, defendants moved to compel arbitration pursuant
to the Employment Agreement's arbitration and forum selection
provision. Plaintiff opposed the motion, claiming the arbitration
clause was not enforceable because it did not contain an express
waiver of his statutory rights and the right to a jury trial.
Plaintiff further argued the arbitration clause was limited to
"disputes arising under the terms of this Employment Agreement"
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and did not extend to claims involving statutory rights under the
LAD. Plaintiff also argued the arbitration clause should not
apply to his claims against Morra individually.
Defendants argued the forum selection and arbitration clause
was enforceable, the Employment Agreement must be interpreted
under New York law, and similarly worded arbitration clauses are
enforceable in New York despite the absence of an express waiver
of statutory rights and the right to seek relief in court.
Plaintiff concedes, under New York law, an arbitration clause in
the employment context does not have to contain an express waiver
of the right to enforce statutory rights in court to be valid and
enforceable. During the motion hearing, plaintiff limited his
argument to the arbitration provision's failure to comply with New
Jersey law with regard to LAD claims. Plaintiff contended no
other issues should be part of the analysis and did not argue that
New York law would not require arbitration.
On August 22, 2017, the trial court granted defendants' motion
and issued an order compelling arbitration of all of plaintiff's
claims and dismissing the complaint with prejudice. In a written
opinion, the trial court held plaintiff made "no argument that New
York would not require arbitration" and left "unopposed the
authority provided in the [m]oving [b]rief in support of that
contention." The judge concluded "the agreement expressly notes
5 A-0554-17T2
that it is governed by New York law" and "even if no such clear
choice of law provision were present, New York was the center of
[p]laintiff's employment, and, therefore, its law applies here."
The judge further determined plaintiff's claims against Morra
were also subject to mandatory arbitration, reasoning:
Employees are covered by their employer's
arbitration agreement "to the extent that the
alleged misconduct relates to their behavior
as officers or directors or in their
capacities as agents of the corporation."
Hirschfield Prods., Inc. v. Mirvish,
88 N.Y 2d
1054, 1056 (1996). This rule permitting
employee non-signatories to invoke the
arbitration agreement of their employer is
followed not only by the New York Court of
Appeals, but by the Second Circuit Court of
Appeals as well. See Roby v. Corp. of Lloyd's,
996 F.2d 1353, 1360 (2d Cir. 1993) (stating
that "employees or disclosed agents of an
entity that is a party to an arbitration
agreement are protected by that agreement").
Further, it is somewhat of a
mischaracterization of the agreement to say
Vincent Morra was a non-signatory because
Morra in fact signed the agreement for Island
Medical. He clearly is, therefore, a
"disclosed agent of an entity that is a party
to an arbitration agreement," and is therefore
"protected by that agreement.["] Campaniello
Imps., Ltd. v. Saporiti Italia SpA, 117 F.3d 655, 668 (2d Cir. 1997) (citing [Roby, 996
F.2d at 1360)].
6 A-0554-17T2
The judge cited several additional New Jersey and Third Circuit
opinions to support his conclusion.2
The judge also held plaintiff was judicially estopped from
contending he was not employed within the State of New York after
he applied for, and received, New York State Unemployment Benefits.
This appeal followed.
On appeal, plaintiff raises the following points:
POINT I
THE TRIAL COURT ERRED IN RULING THAT NEW YORK
RATHER THAN NEW JERSEY HAS THE GREATEST
INTEREST IN THE PLAINTIFF'S LITIGATION.
POINT II
THE DEFENDANT'S ARBITRATION CLAUSE IS
INSUFFICIENT BECAUSE IT FAILED TO CONTAIN A
WAIVER OF THE PLAINTIFF'S STATUTORY RIGHTS AS
WELL AS THE RIGHT TO A JURY TRIAL.
POINT III
THE TRIAL COURT'S DETERMINATION THAT DEFENDANT
MORRA WAS AN OFFICER OR DIRECTOR OF DEFENDANT
[ISLAND MEDICAL] CONSTITUTES ERROR AND
PLAINTIFF'S CLAIM AGAINST THE NON-SIGNATORY OF
THE EMPLOYMENT UNDERSTANDING SHOULD NOT BE
DISMISSED.
2
See Tracinda Corp. v. DaimlerChrysler AG,
502 F.3d 212, 224 (3d
Cir. 2007); Pritzker v. Merrill Lynch, Pierce Fenner & Smith,
Inc.,
7 F.3d 1110, 1121-22 (3d Cir. 1993); Alfano v. BDO Seidman,
LLP,
393 N.J. Super. 560 (App. Div. 2007); Singer v. Commodities
Corp.,
292 N.J. Super. 391, 413-14 (App. Div. 1996).
7 A-0554-17T2
"The existence of a valid and enforceable arbitration
agreement poses a question of law . . . ." Barr v. Bishop Rosen
& Co.,
442 N.J. Super. 599, 605 (App. Div. 2015). We review a
trial court's decision to compel or deny arbitration de novo.
Dispenziere v. Kushner Cos.,
438 N.J. Super. 11, 15 (App. Div.
2014) (citing Hirsch v. Amper Fin. Servs., LLC,
215 N.J. 174, 186
(2013)). "Therefore, 'the trial court's interpretation of the law
and the legal consequences that flow from established facts are
not entitled to any special deference.'" Ibid. (quoting Waskevich
v. Herold Law, PA,
431 N.J. Super. 293, 297 (App. Div. 2013)
(citations omitted)). However, when reviewing an order to compel
arbitration, courts must take into account the strong public policy
both at the state and federal levels favoring arbitration
agreements. Hirsch,
215 N.J. at 186.
Plaintiff contends New Jersey has a greater interest in
plaintiff's case than New York and, as a result, should have its
law applied. Plaintiff claims he performed a substantial amount
of his work at his home office in New Jersey, received his medical
treatment in New Jersey, reported his disability and leave
information from New Jersey, spent his leave time in New Jersey,
and received his termination letter at his New Jersey address.
Plaintiff argues "defendant has a continuous and deliberate
8 A-0554-17T2
presence" in New Jersey "as it seeks employees, physicians and
clients from [the state]."
"When deciding whether the parties agreed to arbitrate a
certain matter (including arbitrability), courts generally . . .
should apply ordinary state-law principles that govern the
formation of contracts." First Options of Chicago, Inc. v. Kaplan,
514 U.S. 938, 944 (1995). Pursuant to "the Uniform Arbitration
Act,
N.J.S.A. 2A:23B-1 to -32, an arbitration agreement is . . .
'valid, enforceable, and irrevocable except upon a ground that
exists at law or in equity for the revocation of a contract.'"
Cole v. Jersey City Med. Ctr.,
215 N.J. 265, 276 (2013) (quoting
N.J.S.A. 2A:23B-6). Furthermore, New Jersey has a strong public
policy in favor of arbitration as a means of dispute resolution.
See Hojnowski v. Vans Skate Park,
187 N.J. 323, 342 (2006).
The law is well-settled "that a court cannot hear a case as
to which it lacks subject matter jurisdiction." Pepper v.
Princeton Univ. Bd. of Trs.,
77 N.J. 55, 65 (1978) (citations
omitted). A corollary to that principle is that "[a] court lacks
subject matter jurisdiction over a case if it is brought in an
ineligible forum." Hoffman v. Supplements Togo Mgmt., LLC,
419 N.J. Super. 596, 606 (App. Div. 2011) (citing Pepper,
77 N.J. at
65). For that reason, "a plaintiff cannot file suit in a court
if he or she has entered into an enforceable agreement to bring
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such claims in another forum." Ibid. (citing Carnival Cruise
Lines, Inc. v. Shute,
499 U.S. 585, 593-94 (1991)).
A forum selection clause in a contract is enforceable unless:
(1) it is a result of "fraud, undue influence, or overweening
bargaining power;" (2) it violates "a strong public policy;" or
(3) enforcement would be seriously inconvenient for the trial.
Kubis & Perszyk Assocs., Inc. v. Sun Microsystems, Inc.,
146 N.J.
176, 186-88 (1996) (citing M/S Bremen v. Zapata Off-Shore Co.,
407 U.S. 1, 10-15 (1972)).
The Employment Agreement provides: "Any disputes arising
under the terms of the Employment Agreement" are "subject to
binding arbitration conducted pursuant to the rules of the American
Arbitration Association." It further provides: "Venue for the
arbitration will be in Hauppauge, [New York]." The Employment
agreement also provides it "shall be interpreted and governed by
the laws of the State of New York without giving effect to its
conflict of laws provisions."
The terms of the forum selection clause are clear and
unambiguous. Those terms must be "given their 'plain and ordinary
meaning.'" Nester v. O'Donnell,
301 N.J. Super. 198, 210 (App.
Div. 1997) (quoting Kaufman v. Provident Life and Cas. Ins. Co.,
828 F. Supp. 275, 283 (D.N.J. 1992), aff'd,
993 F.2d 877 (3d Cir.
1993)). None of the exceptions to enforcement of a forum selection
10 A-0554-17T2
clause apply here. Therefore, the forum selection clause is
enforceable. Consequently, plaintiff's claims are subject to
binding arbitration under the rules of the American Arbitration
Association, venued in Hauppauge, New York, with the Employment
Agreement interpreted under New York law. Because we find the
terms of the forum selection clause clearly and unambiguously
established New York law would control disputes related to
plaintiff's employment, we need not address plaintiff's contention
that the arbitration clause is insufficient under New Jersey law.
Plaintiff only argued the issue of whether the arbitration
provision complied with New Jersey law before the trial court.
Consequently, we need not address plaintiff's claim here that the
trial court erred in deciding that New York, rather than New
Jersey, has the greatest interest in this claim as appellate courts
may not "consider questions or issues not properly presented to
the trial court when an opportunity for such a presentation [was]
available." State v. Robinson,
200 N.J. 1, 20 (2009) (quoting
Nieder v. Royal Indem. Ins. Co.,
62 N.J. 229, 234 (1973)). Because
we find the terms of the forum selection clause established New
York law would control, and because plaintiff did not preserve
this issue for appeal, we do not consider plaintiff's greater
interest argument.
11 A-0554-17T2
Plaintiff applied for and received unemployment benefits in
New York. That application was premised on his assertion he was
employed within the State of New York. In light of our ruling,
we also do not reach the issue of whether the trial court erred
in determining plaintiff is judicially estopped from asserting a
contrary position by disclaiming New York employment in this
proceeding.
Finally, plaintiff contends Morra should not be protected by
the arbitration provision because the Employment Agreement was
between the plaintiff and Island Medical and not Morra. Plaintiff
further argues the trial court erred by making a determination as
to the relationship between Morra and Island Medical. We are
unpersuaded by these arguments.
Plaintiff concedes Morra is Island Medical's Chief Operating
Officer and signed the Employment Agreement on behalf of Island
Medical in that capacity. Employees are covered by their
employer's arbitration agreement "to the extent that the alleged
misconduct relates to their behavior as officers or directors or
in their capacities as agents of the corporation." Hirschfield
Prods., Inc.,
88 N.Y 2d at 1056. This rule permitting employee
non-signatories to invoke an arbitration agreement of their
employer is supported not only by the decision of the New York
Court of Appeals, ibid., but also by decisions of the Second
12 A-0554-17T2
Circuit Court of Appeals, see Roby, 996 F.2d at 1360, the Third
Circuit, see Pritzker, 7 F.3d at 1121-22, and the Appellate
Division of this State, see Singer,
292 N.J. Super. at 413-14.
Therefore, the trial court appropriately found that plaintiff's
claims against Morra are also subject to mandatory binding
arbitration in New York.
Affirmed.
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