JOSEPH SIGNOR v. GWC WARRANTY CORPORATION
Annotate this CaseNOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
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SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-0949-17T2
JOSEPH SIGNOR, individually
and on behalf of others similarly
situated,
Plaintiff-Respondent,
v.
GWC WARRANTY CORPORATION,
Defendant-Appellant.
__________________________________
Argued May 8, 2018 – Decided May 17, 2018
Before Judges Carroll and Mawla.
On appeal from Superior Court of New Jersey,
Law Division, Burlington County, Docket No.
L-1100-17.
Kerri E. Chewning argued the cause for
appellant (Archer & Greiner, PC, attorneys;
Kerri E. Chewning and Kate A. Sherlock, on the
briefs).
Lewis G. Adler argued the cause for respondent
(Lewis G. Adler, Law Office of Paul DePetris,
and Law Offices of Lee M. Perlman, attorneys;
Lewis G. Adler, Paul DePetris, and Lee M.
Perlman, on the brief).
PER CURIAM
Defendant GWC Warranty Corporation appeals from a September
15, 2017 order denying its motion to dismiss plaintiff's class
action complaint and compel arbitration. We reverse.
We take the following facts from the record. In November
2015, plaintiff Joseph Signor purchased a used 2003 Ford F-250
Superduty truck from 123 Auto Sales, LLC, in Branchville.
Plaintiff also purchased a powertrain plus service contract from
defendant for $916, covering the truck for 180 days or 7,500 miles.
The service contract application included the following
warning above the customer signature: "IMPORTANT INFORMATION:
Please refer to IMPORTANT DEFINITIONS section under TERMS &
Conditions for defined Boldfaced terms." Section 16 of the "Terms
& Conditions" of the contract contained the arbitration provision,
which read: "ARBITRATION PROVISION: READ THE FOLLOWING ARBITRATION
PROVISION ("Provision") CAREFULLY, IT LIMITS CERTAIN RIGHTS,
INCLUDING YOUR RIGHT TO OBTAIN RELIEF OR DAMAGES THROUGH COURT
ACTION." The provision states:
Any and all claims, disputes, or controversies
of any nature whatsoever (whether in contract,
tort, or otherwise, including statutory,
common law, fraud (whether by
misrepresentation or by omission) or other
intentional tort, property or equitable
claims) arising out of, relating to, or in
connection with (1) this Contract and the
purchase thereof; or (2) the validity[,]
scope, interpretation, and enforceability of
2 A-0949-17T2
this Provision or the entire Agreement
("Claim"), shall be resolved by binding
arbitration before a single arbitrator. All
arbitrations shall be administered by the
American Arbitration Association ("AAA") in
accordance with its Expedited Procedures of
the Commercial Arbitration Rules of the AAA
in effect at the time the Claim is filed. The
terms of this Provision shall control any
inconsistency between the AAA's Rules and this
Provision. . . . This Provision is part of a
transaction involving interstate commerce and
shall be governed by the Federal Arbitration
Act, 9 U.S.C. §1 et seq. . . . This Provision
shall inure to the benefit of and be binding
on You and Us and this Provision shall
continue in full force and effect subsequent
to and notwithstanding the expiration or
termination of this Contract. You agree that
any arbitration proceeding will only consider
Your Claims. Claims by, or on behalf of, other
individuals will not be arbitrated in any
proceeding that is considering Your Claims.
You and We understand and agree that because
of this Provision neither You nor Us will have
the right to go to court except as provided
above and to have a jury trial or to
participate as any member of a class of
claimants to any Claim.
In addition, under the section of the contract entitled "Special
State Disclosures/Requirements" the following language appears
under New Jersey: "The following is added to section #16
ARBITRATION PROVISION: Under this provision, you waive your right
to seek relief in a judicial forum."
Plaintiff filed a class action complaint in the Law Division,
a demand for declaratory judgment relief, and a demand for a jury
trial. Plaintiff alleged the contract violated the Truth in
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Consumer Contract, Warranty and Notice Act (TCCWNA),
N.J.S.A.
56:12-14 to -18, claimed the contract failed to make certain
disclosures under the Service Contracts Act (SCA),
N.J.S.A. 56:12-
87 to -96, and thus violated the New Jersey Consumer Fraud Act
(CFA),
N.J.S.A. 56:8-1 to -206, and the Uniform Commercial Code
(UCC),
N.J.S.A. 12A:1-101 to 12-26.
Defendant moved to dismiss plaintiff's complaint and compel
arbitration pursuant to the arbitration provision contained in the
service contract. Defendant argued the contracts contained a
valid arbitration clause and plaintiff's complaint failed to plead
viable TCCWNA or declaratory judgment claims.
The motion judge filed an order dismissing the count of
plaintiff's complaint asserting a violation of the UCC, as agreed
to by the parties. However, the judge denied defendant's motion
to dismiss the remaining claims and compel arbitration. The judge
found the arbitration clause was not a clear and unambiguous waiver
of the right to bring a class action, and found there was no mutual
assent to arbitration. The judge denied the motion to dismiss,
finding "[p]laintiff . . . raised issues of fact regarding whether
the TCCWNA is applicable to his claims[.]" This appeal followed.
I.
We begin by reciting our standard of review. The validity
of an arbitration agreement is a question of law; therefore, our
4 A-0949-17T2
review of an order denying a motion to compel arbitration is de
novo. 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)); see Atalese v. U.S. Legal Servs. Grp.,
L.P.,
219 N.J. 430, 445-46 (2014) ("Our review of a contract,
generally, is de novo, and therefore we owe no special deference
to the trial court's . . . interpretation. Our approach in
construing an arbitration provision of a contract is governed by
the same de novo standard of review." (citations omitted)).
Defendant argues the arbitration provision is valid and
enforceable because it clearly instructs the only way for the
parties to resolve all claims and disputes is through arbitration.
Defendant also argues the arbitration provision language is
straightforward, and clearly prohibits class action claims.
In order to determine whether arbitration should be
compelled, we must first address whether the arbitration provision
of a contract is valid and enforceable. Martindale v. Sandvik,
Inc.,
173 N.J. 76, 83, 92 (2002). Arbitration agreements should
be read liberally and in favor of arbitration. Garfinkel v.
Morristown Obstetrics & Gynecology Assocs., P.A.,
168 N.J. 124,
132 (2006) (quoting Marchak v. Claridge Commons, Inc.,
134 N.J.
275, 282 (1993)).
5 A-0949-17T2
Arbitration is fundamentally a matter of contract. NAACP of
Camden Cty. E. v. Foulke Mgmt. Corp.,
421 N.J. Super. 404, 424
(App. Div. 2011). However, "[a]rbitration's favored status does
not mean that every arbitration clause, however phrased, will be
enforceable." Atalese,
219 N.J. at 441. "An agreement to
arbitrate 'must be the product of mutual assent, as determined
under customary principles of contract law.'" Barr,
442 N.J.
Super. at 605-06 (quoting Atalese,
219 N.J. at 442).
"Mutual assent requires that the parties understand the terms
of their agreement[,]" and where the "agreement includes a waiver
of a party's right to pursue a case in a judicial forum, 'clarity
is required.'" Id. at 606 (quoting Moore v. Woman to Woman
Obstetrics & Gynecology, L.L.C.,
416 N.J. Super. 30, 37 (App. Div.
2010)). "[T]he waiver 'must be clearly and unmistakably
established,' and 'should clearly state its purpose,' . . . [a]nd
the parties must have full knowledge of the legal rights they
intend to surrender." Ibid. (citations omitted). Therefore, an
arbitration agreement should clearly state if it "depriv[es] a
citizen of access to the courts . . . ." Garfinkel,
168 N.J. at
132.
Here, the arbitration provision stated "[a]ny and all claims,
disputes, or controversies of any nature whatsoever . . . shall
be resolved by binding arbitration before a single arbitrator."
6 A-0949-17T2
In addition, the provision explains "[c]laims by, or on behalf of,
other individuals will not be arbitrated in any proceeding that
is considering your claims[,]" and "You and We understand and
agree that because of this Provision neither You nor Us will have
the right to go to court . . . to have a jury trial or to
participate as any member of a class of claimants to any [c]laim."
The motion judge concluded the arbitration provision was not
valid and enforceable because
the language does not seem unambiguous
regarding class action claims . . . . Th[e]
language seems to suggest that class actions
are permitted but not in arbitration.
Furthermore, the waiver of class actions is a
part of the arbitration provision. It cannot
be held to be a clear and unambiguous waiver
of the rights to bring a class action.
We disagree.
A plain reading of the arbitration provision demonstrates it
is clearly a waiver of the parties' right to pursue claims in
court, either on an individual or a class action basis. We are
satisfied the terms of the arbitration clause here are "stated
with sufficient clarity and consistency to be reasonably
understood by the consumer who is being charged with waiving [his
or] her right to litigate a dispute in court." NAACP of Camden
Cty. E.,
421 N.J. Super. at 428.
7 A-0949-17T2
The provision here is similar to the one in Curtis v. Cellco
P'ship,
413 N.J. Super. 26 (App. Div. 2010). In Curtis, the first
page of the agreement instructed the consumer to "[p]lease
carefully read this Agreement[.]" Id. at 30. The agreement also
included the following language: "INSTEAD OF SUING IN COURT, WE
EACH AGREE TO SETTLE DISPUTES (EXCEPT CERTAIN SMALL CLAIMS) ONLY
BY ARBITRATION." Id. at 31. The court held "[t]he [a]greement's
arbitration clauses are 'clear and unambiguous' in their intent
and purpose to inform the reader that all disputes must be
presented in an arbitral forum, not a court." Id. at 38.
Here, similar language instructs the consumer to "refer to
IMPORTANT DEFINTIONS section under TERMS & CONDITIONS[,]" and
states all disputes and claims are to be settled in arbitration.
Thus, when read in conjunction with the provision stating "[c]laims
by, or on behalf of, other individuals will not be arbitrated in
any proceeding that is considering your claims" it is evident
class action claims cannot be asserted in any forum.
In declining to compel arbitration, the motion judge noted
plaintiff's contention the provision was invalid because it was
not found clearly on the first page, but "buried" on the eleventh
page of the contract. The judge cited Noble v. Samsung Elecs.
Am., Inc., no. 16-1903, 2
017 U.S. App. LEXIS 3841, (3d Cir. Mar.
3, 2017), whose facts plaintiff had likened to the facts here. In
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Noble, the court invalidated an arbitration clause because it was
located within the contract "in a manner that gave no hint to a
consumer that an arbitration provision was within." Id. at *7.
However, the facts here are dissimilar from Noble. The arbitration
provision in Noble was found on page 97 of a 143-page contract.
Id. at *2-3. Here, the service contract instructs consumers to
look within it for significant terms, is only eleven pages in
length, and the words "ARBITRATION PROVISION" appear in
capitalized, bold, and underlined letters.
Defendant argues the arbitration clause is clear and
unambiguous because it encompasses the claims raised in
plaintiff's complaint alleging violations of the CFA and TCCWNA.
Defendant points to the contract provisions, which define
arbitrable claims to include those "in contract, tort, or
otherwise, including statutory, common law, fraud
(misrepresentation or by omission), or other intentional tort,
property, or equitable claims."
Although courts favor arbitration, "[o]nly those issues may
be arbitrated which the parties have agreed shall be." Garfinkel,
168 N.J. at 132 (quoting In re Arbitration Between Grover &
Universal Underwriters Ins. Co.,
80 N.J. 221, 228 (1979)). Thus,
a "court may not rewrite a contract to broaden the scope of
arbitration[.]" Ibid. (alteration in original) (quoting Yale
9 A-0949-17T2
Materials Handling Corp. v. White Storage & Retrieval Sys., Inc.,
240 N.J. Super. 370, 374 (App. Div. 1990)).
Here, the arbitration provision broadly states disputes under
statutory and common law claims are to be arbitrated. In addition,
the contract employed broad language stating "[a]ny and all claims,
disputes, or controversies of any nature whatsoever . . . arising
out of" the service contract are subject to arbitration. Thus,
the plaintiff's CFA and TCCWNA claims fell within the scope of the
arbitration provision.
Finally, defendant notes plaintiff's contention he was not
afforded an opportunity to review the entire service contract.
Defendant asserts plaintiff's signature to the contract
demonstrates he reviewed its terms and we should reject such an
argument. The record demonstrates the motion judge did not rely
on this argument to render a decision, plaintiff does not re-
assert the argument on appeal, and we have affirmed for different
reasons. Therefore, we decline to address the argument. R. 2:11-
3(e)(1)(E).
Reversed.
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