SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-5215-15T3

REGINA M. FOTI, 

Individually and 

On Behalf of All 

Others Similarly

Situated,

Plaintiff-Appellant,

v.

TOYOTA MOTOR SALES,

U.S.A., INC.,

Defendant-Respondent.

______________________________________________

Argued January 24, 2017 – Decided

Before Judges Messano and Espinosa.

On appeal from the Superior Court of New 

Jersey, Law Division, Gloucester County, 

Docket No. L-0981-15.

Lewis G. Adler argued the cause for appellant 

(Mr. Adler and Law Office of Paul DePetris, 

attorneys; Mr. Adler, on the briefs).

J. Gordon Cooney, Jr. (Morgan, Lewis & 

Bockius) of the Pennsylvania bar, admitted pro 

hac vice, and Franco A. Corrado argued the 

cause for respondent (Morgan, Lewis & Bockius, 

attorneys; Mr. Corrado and Sean J. Radomski, 

on the brief).

PER CURIAM

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

This opinion shall not "constitute precedent or be binding upon any court." 

Although it is posted on the internet, this opinion is binding only on the 

parties in the case and its use in other cases is limited. R.1:36-3.

April 24, 2017
2 A-5215-15T3

Plaintiff Regina M. Foti leased a 2014 Toyota Corolla from 

Classic Imports, Inc. (Classic).1 She executed a written lease 

agreement (the lease) that bore the insignia and name of Toyota 

Financial Services, and specifically defined the term "lessor" as 

including Classic, its anticipated assignee, Toyota Lease Trust 

(TLT), and any future assignee. The lease also stated that Toyota 

Motor Credit Corporation (TMCC) would be "servicing the [l]ease." 

The final page was an assignment of the lease from Classic to TLT.

The lease contained a broad arbitration provision (the 

arbitration agreement) that provided in part:

You agree that any claims arising from or 

relating to this Lease or related agreements 

or relationships, including the validity, 

enforceability, arbitrability or scope of this 

Provision, at your or our election, are 

subject to arbitration. This includes, 

without limitation, claims in contract, tort, 

pursuant to statute, regulation, ordinance or 

in equity or otherwise, and claims asserted 

by you against us, and the following Covered 

Parties: [TLT], TMCC, and/or any of our or its 

affiliates and/or any of our or their 

employees, officers, successors, assigns or 

against any third party providing any product 

or service in connection with the Lease that 

you name as a co-defendant in any action 

against any of the foregoing.2

 

1 Classic apparently did business as Toyota of Turnersville.

2 When we quote the language of the lease, we continue to use its 

defined terms: "you," "your," or "yours" refer to plaintiff; and 

"we," "us," and "our" refer to Classic, TLT and any future 

assignee.
3 A-5215-15T3

[(Emphasis added).]

The arbitration agreement also included in bold print a class 

action waiver:

We, the Covered Parties and you are prohibited 

from participating in a class action or 

private attorney general action in court or 

class-wide arbitration with respect to any 

claims we, the Covered Parties or you have 

asserted against one another or other 

beneficiaries of this Provision. There should 

also be no joinder or consolidation of 

parties, except for multiple parties to this 

Lease.

The arbitration agreement further provided in capitalized text:

IF ANY PARTY ELECTS ARBITRATION WITH RESPECT 

TO A CLAIM, NEITHER YOU NOR WE NOR ANY COVERED 

PARTY WILL HAVE THE RIGHT TO LITIGATE THAT 

CLAIM IN COURT; TO HAVE A JURY TRIAL ON THAT 

CLAIM; TO ENGAGE IN PREARBITRATION DISCOVERY 

EXCEPT AS PROVIDED FOR IN THE RULES OF THE 

ADMINISTRATOR; OR TO PARTICIPATE AS A 

REPRESENTATIVE OR MEMBER OF ANY CLASS OF 

CLAIMANTS PERTAINING TO SUCH CLAIM. . . . 

OTHER RIGHTS THAT YOU WOULD HAVE IF YOU WENT 

TO COURT MAY NOT BE AVAILABLE IN ARBITRATION.

The following appeared at the end of the arbitration agreement in 

bold print: "By signing below, you agree that at the request of 

either you or us any controversy or claim between you and us shall

be determined by neutral binding arbitration in accordance with 

the terms of this Arbitration Provision." Plaintiff executed the 

lease in two places — immediately below this bold-print provision 

and again at the end of the lease.
4 A-5215-15T3

In July 2015, plaintiff filed a complaint on behalf of herself 

and other similarly situated consumers against defendant Toyota 

Motor Sales, U.S.A., Inc., alleging two violations of the Truthin-Consumer Contract, Warranty and Notice Act (TCCWNA), N.J.S.A.

56:12-14 to -18. She claimed the vehicle's warranty notice (1) 

contradicted and misstated consumers' rights under New Jersey's 

Lemon Law (Lemon Law), N.J.S.A. 56:12-29 to -49, requiring notice 

by certified mail return receipt requested to the manufacturer 

prior to making a Lemon Law complaint; and (2) in doing so, failed 

to include the verbatim language required by the Lemon Law and its 

regulations.

Before filing an answer, defendant moved to compel 

arbitration, and plaintiff cross-moved for partial summary 

judgment. After considering oral argument, the motion judge 

granted defendant's motion, entering an order compelling 

arbitration, requiring plaintiff to "pursue the claims . . . on 

an individualized basis" and dismissing the complaint without 

prejudice.3 

Before us, plaintiff argues the judge erred, because there 

was "no meeting of the minds" and therefore no "enforceable 

agreement"; as non-signatory to the lease, defendant was not 

 

3 A second order denied plaintiff's cross-motion.
5 A-5215-15T3

entitled to enforce the arbitration agreement; the arbitration 

agreement does not apply to plaintiff's claim because issues 

concerning the manufacturer's warranty are exempted from its 

terms; because plaintiff's complaint is brought as a "private 

attorney general" action, it is beyond the scope of the arbitration 

agreement; and, the arbitration agreement is "unenforceable as to 

the putative class." Having considered these arguments in light 

of the record and applicable legal standards, we affirm.

We conduct a de novo review of the trial court's order 

compelling arbitration. Hirsch v. Amper Fin. Servs., LLC, 215 

N.J. 174, 186 (2013). "In reviewing such orders, we are mindful 

of the strong preference to enforce arbitration agreements 

. . . ." Ibid. When evaluating a motion to dismiss a complaint 

and compel arbitration, a court must undertake a two-pronged 

analysis. First, the court must determine whether the parties 

have entered into a valid and enforceable agreement to arbitrate 

disputes. Id. at 188. Second, the court must determine whether 

the dispute falls within the scope of the agreement. Ibid.

"[S]tate contract-law principles generally . . . determin[e]

whether a valid agreement to arbitrate exists." Hojnowski v. 

Vans Skate Park, 187 N.J. 323, 342 (2006). "In evaluating the 

existence of an agreement to arbitrate, a court 'consider[s] the 

contractual terms, the surrounding circumstances, and the purpose 
6 A-5215-15T3

of the contract.'" Hirsch, supra, 215 N.J. at 188 (alteration in 

original) (quoting Marchak v. Claridge Commons, Inc., 134 N.J.

275, 282 (1993)). Plaintiff argues that, while she may have 

agreed to arbitrate certain disputes, she never agreed to 

arbitrate any disputes with defendant, who was a non-signatory to 

the lease. 

"The United States Supreme Court has recognized that, in the 

context of arbitration, 'traditional principles of state law allow 

a contract to be enforced by or against nonparties to the contract 

through assumption, piercing the corporate veil, alter ego, 

incorporation by reference, third party beneficiary theories, 

waiver and estoppel.'" Ibid. (emphasis added) (quoting Arthur 

Andersen LLP v. Carlisle, 556 U.S. 624, 631, 129 S. Ct. 1896, 

1902, 173 L. Ed. 2d 832, 840 (2009)). The arbitration agreement 

in this case specifically included TLT, TMCC, "and/or any of our 

or its affiliates." We reject plaintiff's assertion that she did 

not know defendant was affiliated with TLT or TMCC because the 

language of the arbitration agreement was confusing.4 

 

4 Plaintiff's brief cites a number of California decisions and 

argues the federal Ninth Circuit Court of Appeals has specifically 

rejected defendant's asserted grounds for compelling arbitration 

as an affiliate of the signatory. Close examination reveals none 

of those decisions are particularly persuasive, because the 

arbitration agreement at issue in those decisions did not include 

the "affiliate" language contained in this lease. See Kramer v. 
7 A-5215-15T3

Plaintiff further argues that her claims fall outside the 

scope of the arbitration agreement. She contends the TCCWNA 

claims involve inadequacies and inaccuracies of the Lemon Law

statement provided by defendant and "in no way implicate the 

lease, which expressly leaves plaintiffs to pursue such remedies 

against the manufacturer alone via its warranty." We again 

disagree.

Clearly, "a court may not rewrite a contract to broaden the 

scope of arbitration." Hirsch, supra, 215 N.J. at 188 (quoting 

Garfinkel v. Morristown Obstetrics & Gynecology Assocs., P.A.,

168 N.J. 124, 132 (2001)). However, the arbitration agreement in 

this case covered

any claims arising from or relating to th[e] 

Lease or related agreements or relationships, 

including the validity, enforceability, 

arbitrability or scope of this Provision, at 

your or our election, are subject to 

arbitration. This includes, without 

limitation, claims in contract, tort, pursuant 

to statute, regulation . . . or otherwise 

. . . .

 

Toyota Motor Corp., 705 F.3d 1122, 1124, 1127 n.3 (9th Cir. 2013) 

(arbitration provisions did not include "covered party" language 

and Toyota did not contend it was "a transferee, employee or agent 

of the dealership" such that it could compel arbitration); In re 

Toyota Motor Corp., 838 F. Supp. 2d 967, 988-90 (C.D. Cal. 2012) 

(no express "covered party" language in the arbitration 

provisions); Soto v. Am. Honda Motor Co., 946 F. Supp. 2d 949, 

955 (N.D. Cal. 2012) (reasoning the term "third parties" in the 

arbitration provision did not include the defendant 

manufacturer). 
8 A-5215-15T3

[(Emphasis added).]

Plaintiff acknowledges that the Lemon Law requires defendant to 

provide the notice, see N.J.S.A. 56:12-34(a), and TCCWNA required 

Classic, as lessor, to deliver the notice. N.J.S.A. 56:12-15. 

Moreover, the lease expressly advised plaintiff that the car was 

"subject to the standard new warranty from the manufacturer." In 

short, the Lemon Law notice was clearly a related agreement that 

arose from the lease itself, and we reject any contention that the 

terms and conditions in the Lemon Law notice rendered the 

provisions of the arbitration agreement sufficiently ambiguous so 

as to foreclose its enforceability.

Plaintiff argues that, even if the class-action waiver 

provision applies, claims on behalf of the putative class must be 

stayed pending her individual arbitration. We again disagree.

Plaintiff misconstrues AT&T Mobility LLC v. Concepcion, 563 

U.S. 333, 131 S. Ct. 1740, 179 L. Ed. 2d 742 (2011), to support 

her claim. In Concepcion, the Supreme Court upheld the validity 

of class action waiver provisions, stating businesses may require 

consumers to bring claims only in individual arbitrations, rather 

than in court as part of a class. Concepcion, supra, 563 U.S. at 

346-52, 131 S. Ct. at 1749-53, 179 L. Ed. 2d at 755-59. Plaintiff 

cites to our Court's decision in Muhammad v. County Bank of 
9 A-5215-15T3

Rehoboth Beach, Delaware, 189 N.J. 1, 22 (2006), cert. denied, 549 

U.S. 1338, 127 S. Ct. 2032, 167 L. Ed. 2d 763 (2007), as support 

for the proposition that a class-arbitration waiver in a consumer 

contract was unconscionable. However, the Third Circuit Court of 

Appeals held the Federal Arbitration Act (the FAA), 9 U.S.C.A. § 

1 to § 16, pre-empted that holding. 

[A] state law that seeks to impose class 

arbitration despite a contractual agreement 

for individualized arbitration is 

inconsistent with, and therefore preempted by, 

the FAA, irrespective of whether class 

arbitration is desirable for unrelated 

reasons. Therefore, . . . the rule 

established by the New Jersey Supreme Court 

in Muhammad is preempted by the FAA.

[Litman v. Cellco P'ship, 655 F.3d 225, 231 

(3d Cir. 2011) (emphasis added) (internal 

quotations and citation omitted).]

Lastly, plaintiff contends she filed her complaint as a 

"private attorney general action," which is expressly excluded by 

the arbitration agreement. We find no support for this proposition 

either in plaintiff's brief or elsewhere. By the express terms 

of the arbitration agreement, plaintiff waived her right to 

"participat[e] in a class action or private attorney general action 

in court or class-wide arbitration." There is nothing in the 

arbitration agreement that exempts plaintiff's individual claims, 

however characterized, from arbitration.

Affirmed.