2004 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

10-20-2004

NJ Sch Bd Assn Ins v. Druz

Precedential or Non-Precedential: Non-Precedential

Docket No. 03-4304

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NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No: 03-4304

NEW JERSEY SCHOOL BOARDS 

ASSOCIATION INSURANCE GROUP,

v.

DEAN WITTER REYNOLDS INC.;

DANIEL A. DRUZ

Daniel A. Druz, Appellant

 

On Appeal from the United States District Court

for the District of New Jersey

(Civil Action No. 88-5584)

District Judge: Hon. John W. Bissell

Argued: September 22, 2004

Before: McKEE, Circuit Judges,

ROSENN and WEIS, Senior Circuit Judges.

(Opinion filed: October 20, 2004)

DAN A. DRUZ, ESQ. (Argued)

Suite 1000

291 East Main Street

Manasquan, NJ 08060

EDWARD S. NATHAN (Argued)

Stern & Kilcullen

75 Livingston Avenue

Roseland, NJ 07068

Attorney for Dean Witter Reynolds

OPINION
2

McKEE, Circuit Judge.

Appellant Dan A. Druz, argues that the District Court abused its discretion in

denying his motion to lift a stay of arbitration that had been imposed in 1995. For the

reasons that follow, we agree and we will vacate the judgment of the District Court and

remand with instruction to lift the 1995 stay and refer the matter to arbitration before the

NYSE.

Because the facts and procedural history are not in dispute and known to the

parties, we need not reiterate them except insofar as maybe helpful to our brief

discussion. 

Judge Barry explained the reason for imposing the 1995 stay as follows: 

it being the opinion of the court that given Druz’s 

representation that what he is seeking to arbitrate before the

NYSE is a separate and independent action for malicious

prosecution “concerning [the New Jersey] indictment” (and

wholly apart from whether the parties have agreed to arbitrate

such a dispute, an issue as to which this court has grave doubts),

his claim is, at best, premature in that forum and in this or any

other forum, it being undisputed that, among other requisites,

termination of the criminal prosecution favorable to Druz is

required for a malicious prosecution action to accrue; and

it being the opinion of the court that, although the State of

New Jersey has not – or has not yet – intervened in this matter,

proceeding with arbitration on the malicious prosecution claim

would unduly interfere with an ongoing state criminal

proceeding.

Id.

It is therefore clear that Judge Barry originally imposed the 1995 stay in
 

1The parties have focused our attention on whether the District Court’s ruling was

contrary to Howsam v. Dean Witter, 537 U.S. 70 (2002). However, since the NYSE

arbitration will proceed, issues such as laches, estoppel and delay can now best be

addressed within the arbitration process.

 

2

See United States v. Swift & Co., 286 U.S. 106 (1932) and Republic of Philippines v.

Westinghouse Electric Co., 43F3d65, (3d Cir., 1994). 

3

order to ensure that the NYSE arbitration did not proceed until after the conclusion

of the criminal proceedings and related ethical investigation that had been initiated

against Druz. However, those proceedings have now concluded in Druz’s favor. 

Based on the record before us it appears that Druz is not now the subject of any

pending criminal or ethical investigation.

Since the 1995 stay was imposed in order to avoid any conflict with the then

pending criminal and ethical investigations, the stay no longer serves its original

purpose. Accordingly, we conclude that the District Court erred in denying Druz’s

motion to lift the 1995 stay of arbitration before the NYSE.1

Therefore, we will vacate the judgment of the District Court and remand so

that the court may lift the 1995-court-imposed stay and refer the matter to

arbitration.2