Title: PBA Local 292 v. Borough of North Haledon

State: new-jersey

Issuer: New Jersey Supreme Court

Document:

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized). POLLOCK, J., writing for a unanimous Court. In this appeal, the Court considers whether common-law arbitration has survived the passage of the Arbitration Act, N.J.S.A. 2A:24-1 to -11 (the Act ). In November 1993, North Haledon hired a Special Law Enforcement Officer to perform patrol and desk work on regularly scheduled police shifts. The PBA claimed that the replacement of a regular officer with a special officer violated both its collective bargaining agreement (the Agreement ) with the Borough and N.J.S.A. 40A:14-146.16(b), which allows special officers to assist, but not replace, regular officers. The Borough claimed that short-staffing within the police department had created an emergency under N.J.S.A. 40A:14-118 and -122, entitling the Borough to hire special officers during the emergency's existence. Pursuant to a clause in the Agreement, the PBA filed a grievance, and the matter proceeded to arbitration. In February 1995, the arbitrator entered an award in favor of the PBA. Thereafter, due to its past experience with a summary action for confirmation under the Arbitration Act, the PBA decided not to file a summary action, but rather to wait and seek confirmation through a plenary proceeding. By waiting, the PBA hoped to preclude an untimely action by the Borough to vacate the award. Similarly, the Borough did nothing, hoping that if it did not move to vacate the award, the PBA would fail to file a timely action to confirm, thereby rendering the award unenforceable. Four months after the entry of the arbitration award, the PBA instituted a plenary action for confirmation by summons and complaint in the Chancery Division. Two months later, the Borough filed an answer and counterclaim, seeking vacation of the award and asserting numerous affirmative defenses. The PBA claimed that the Borough's counterclaim was time-barred as beyond the three-month limit set forth in the summary confirmation section of the Arbitration Act. The Chancery Division agreed and confirmed the award. In a divided opinion, the Appellate Division concluded that the failure of either party to institute a timely summary action prevented both the PBA's confirmation and the Borough's vacation of the award. Consequently, two members of the panel affirmed the Chancery Division's refusal to vacate and reversed its confirmation of the award. Judge Rodriguez however dissented from the court's disposition. He believed that common-law arbitration survived the passage of the Act and would have remanded the matter to the Chancery Division to proceed as a common-law action to confirm. The appeal is before the Supreme Court as of right on the basis of Judge Rodriguez's dissent. HELD: In the absence of a specific agreement to the contrary, a party may institute a common-law plenary action to confirm an arbitration award after the expiration of the three-month limit specified by N.J.S.A. 2A:24-7. 1. Nothing in the Act's provisions or history purports to repeal common-law arbitration. (pp. 5-6) 2. Judicial review of arbitration awards is limited to the grounds specified in N.J.S.A. 2A:24-8 -- fraud, corruption, or undue means. (p. 7) 3. If an action to confirm is not instituted within three months of the award's delivery, the party seeking to confirm loses its right to do so in a summary proceeding and must resort instead to a plenary action. However, the party seeking to vacate or modify an arbitration award must do so within three months of the award's delivery or lose its right to institute a summary vacation and its right to counterclaim in a plenary confirmation action. (pp. 7-8) 4. The Agreement between the PBA and the Borough did not specify that arbitration would be conducted in accordance with the Act alone. Rather, the parties agreed only to submit disputes for arbitration to PERC arbitrators and in accordance with PERC rules, which do not contain any prohibition against using common-law procedures. (pp. 8-10) 5. A party may institute a common-law plenary action to confirm an award after the expiration of the three-month limit specified by N.J.S.A. 2A:24-7. (pp. 10-11) 6. Sound policy considerations support the continuing availability of common-law confirmation. Although denial of common-law enforcement would provide an incentive for the prevailing party to make a timely application to confirm, nothing in the Act's terms or history suggests that the Legislature intended so harsh a rule. (p.12) 7. Strict enforcement of the three-month limit on a summary action to vacate supports arbitration as an alternative, not an invitation, to litigation, and further provides the losing party with the incentive to take timely action. (p. 13) 8. Other legislative schemes also treat the losing party less favorably than the prevailing party. (pp. 13-14) 9. While barring a losing party from asserting affirmative defenses in a plenary action to confirm would provide a powerful incentive for that party to act promptly to vacate the award, the cost of the bar could potentially result in the enforcement of an award that is against public policy, resulting in the undue expenditure of public funds. (p. 14) 10. If parties wish to confine themselves to the Act's time limit, they may so specify in their agreement. Otherwise, the prevailing party retains the common-law right to seek confirmation in a plenary proceeding within the six-year statute of limitations applicable to contracts. (p. 15) Judgment of the Appellate Division is REVERSED, and the matter is REMANDED to the Chancery Division. CHIEF JUSTICE PORITZ and JUSTICES HANDLER, O'HERN, GARIBALDI, STEIN, and COLEMAN join in JUSTICE POLLOCK's opinion. POLICEMAN'S BENEVOLENT ASSOCIATION, LOCAL 292, Plaintiff-Appellant, v. BOROUGH OF NORTH HALEDON, Defendant-Respondent. Argued December 1, 1998 -- Decided June 8, 1999 On appeal from the Superior Court, Appellate Division, whose opinion is reported at 305 N.J. Super. 454 (1997). Kevin P. McGovern argued the cause for appellant (Schneider, Goldberger, Cohen, Finn, Solomon, Leder & Montalbano, attorneys). James V. Segreto argued the cause for respondent (Segreto & Segreto, attorneys; John J. Segreto, on the brief). Joseph Licata submitted a brief on behalf of amicus curiae New Jersey State AFL-CIO (Loccke & Correia, attorneys; Richard D. Loccke, of counsel). Robert E. Anderson, General Counsel, submitted a brief on behalf of amicus curiae New Jersey Public Employment Relations Commission. The opinion of the Court was delivered by POLLOCK, J. In this appeal we revisit the question whether common-law arbitration has survived the passage of the Arbitration Act, N.J.S.A. 2A:24-1 to -11 (the Act ). The Appellate Division doubted that common-law arbitration survived. 305 N.J. Super. 454, 457, 459 (App. Div. 1997). Accordingly, the court held that plaintiff, the Policeman's Benevolent Association, Local 292 (PBA), could not resort to a plenary action to confirm an award resulting from grievance arbitration with defendant, the Borough of North Haledon ( North Haledon or the Borough ). Id. at 465, 466. One judge dissented in part. Id. at 466 (Rodr guez, J. dissenting). The PBA appealed of right. R. 2:2-1. We reverse and remand the matter to the Chancery Division. CHIEF JUSTICE PORITZ and JUSTICES HANDLER, O'HERN, GARIBALDI, STEIN, and COLEMAN join in JUSTICE POLLOCK's opinion. NO. A-183 POLICEMAN'S BENEVOLENT ASSOCIATION, LOCAL 292, Plaintiff-Appellant, v. BOROUGH OF NORTH HALEDON, Defendant-Respondent. DECIDED