SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION DOCKET NO. A-3315- 22

SPRING OAKS CAPITAL SPV, LLC, AS SUCCESSOR TO ORIGINAL CREDITOR BLUE RIDGE BANK (UPGRADE), Plaintiff-Respondent,

v. CURTIS BANTON, Defendant-Appellant,

and CURTIS BANTON, individually and on behalf of all others similarly situated,Third-Party PlaintiffAppellant,

v. SPRING OAKS CAPITAL SPV, LLC, Defendant-Respondent, NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court.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 parti es in the case and its use in other cases is limite d. R. 1:36- 3.2 A- 3315

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v. SPRING OAKS CAPITAL, LLC, PAGAYA ACQUISITION TRUST I, and PAGAYA AI DEBT SELECTION GRANTOR TRUST 2020

- 3, Third-Party Defendants- Respondents.

______________________________

Argued March 19, 2024

– Decided April 11, 2024 Before Judges Natali and Puglisi. On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L

- 0539

- 23. Mark H. Jensen argued the cause for appellant Curti s Banton (Kim Law Firm LLC, attorneys; Yongmoon Kim and Mark H. Jensen, on the briefs). Jeremy J. Zacharias and Joseph Michael DeFazio argued the cause for respondents (Marshall Dennehey Warner Coleman & Goggin, attorneys for respondents Spring Oaks Capital SPV , LLC, and Spring Oaks Capital, LLC ; Troutman Pepper Hamilton Sanders, LLP , attorneys for respondents Pagaya Acquisition Trust I, and Pagaya AI Debt Selection Grantor Trust 2020 -3 ; Walter F. Kawalec III, Jeremy J. Zacharias, and Joseph Michael DeFazio, on the joint brief).

PER CURIAM3 A- 3315

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By leave granted, defendant/third-party plaintiff Cur tis Banton appeals from the Law Division's April 14, 2023 order granti ng the joint motion to compel arbitration filed by plaintiff/third-party d efendants Spring Oaks Capital SPV, LLC and Spring Oaks Capital, LLC (the Spring O aks entities), Pagaya Acquisition Trust I and Pagaya AI Debt Selection Gr antor Trust 2020-3 (the Pagaya entities) ; and the June 13, 2023 order denying Banton's motion for

reconsideration. On February 2, 2021, defendant signed a loan agreem ent for $6,720 with Blue Ridge Bank. The loan agreement contained an a rbitration agreement requiring any dispute to be resolved exclusively th rough arbitration. The arbitration agreement defined a dispute as any unre solved disagreement between the parties that ar ose out of or related in any way to the agreement, the loan, or the relationship between the parties , including Upgrade, Inc., which was the loan servicer, or any assignee or holder of the loan. A dispute also included any disagreement about whether the arbitration agreement was enforceable or valid, the meaning of the arbitration agreement, and wheth er a disagreement is a dispute subject to binding arbitration. The arbitration agreement included an opt-out provi sion, which required the borrower to send an arbitration opt-out notice to Blue Ridge Bank, care of4 A- 3315

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Upgrade, Inc. The arbitration agreement also provi ded that its provisions were to be governed exclusively by the Federal Arbitrati on Act (FAA), 9 U.S.C. §§

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. According to the certification of counsel filed wi th the trial court, Blue Ridge Bank sold, assigned and conveyed the loan to the Pagaya Trusts, but Upgrade, Inc. remained the loan servicer. The Pagaya Trusts subsequently assigned all rights, title and interest in the loan to Spring Oaks Capital, LLC, which then conveyed the loan to its subsidiary, Spr ing Oaks Capital SPV , LLC

. On April 3, 2022, defendant defaulted on the loan. On October 19, 2022, Spring Oaks SPV, LLC filed a complaint against Banton in the Law Division, Special Civil Part, seekin g to recover the defaulted debt along with costs of suit. In addition to his answer and affirmative defenses, Banton filed a class action counterclaim against Spring Oaks Capital SPV, LLC

and a third-party complaint against Spring Oaks Capital, LLC and the Pagaya

entities. In the counterclaim and third-party complaint, defe ndant alleged Spring Oaks SPV, LLC failed to obtain a license und er the New Jersey Consumer Finance Licensing Act, N.J.S.A. 17:11C -1 to -89, and therefore the assignment and any rights conveyed by it were void and unenforceable.5 A- 3315

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Because Banton alleged a class action, the matter w as transferred from the Special Civil Part to the Law Division. The Pagaya and Spring Oaks entities then filed a joint motion to compel arbitration. Banton conceded there was a valid arbitration agreement but argued, as he does on appeal, that the Pagaya and Spring Oaks entities were not legally assigned the ability to compel arbitration, and even if they were, they waived the ability to compel arbitration by their conduct in the litigation. We disagree and a ffirm. We review a trial court's decision to compel arbitr ation de novo. Flanzman v. Jenny Craig, Inc., 244 N.J. 119, 131 (2 020). Pursuant to Rule 2:2

- 3(a), "[o]rders compelling arbitration are deemed f inal for purposes of appeal," and because they are a "legal determination," the d ecision is reviewed de novo. Hirsch v. Amper Fin. Servs., LLC, 215 N.J. 174, 186 (2013). Our Supreme Court held that "[i]n reviewing such orders, we are mindful of the strong preference to enforce arbitration agreements, both at the state and federal level."

Ibid.

"Reconsideration is a matter within the sound discr etion of the Court, to be exercised in the interest of justice." Cummings v. Bahr, 295 N.J. Super. 374, 384 (App. Div. 1996). We review the trial court's denial of a motion for6 A- 3315

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reconsideration under the abuse of discretion stand ard. Branch v. Cream-OLand Diary , 244 N.J. 567 , 582 ( 2021 ). As he did before the trial court, defendant alleg es the Spring Oaks and Pagaya entities failed to establish they w ere assigned the rights under the agreement, including the right to compel arbitratio n. See New Century Fin. Serv., Inc v. Oughla, 437 N.J. Super. 299, 314 (201 4) ("plaintiffs must prove that they own the . . . debts on which they sue, wh ether one characterizes it as standing to sue or an essential element of proof on an assigned claim."); see also Sullivan v. Visconti, 68 N.J.L. 548, 550 (1902) ("w here the suit is brought by the assignee in his own name he must aver and prove that the cause of action was, in fact, assigned to him."). The Pagaya and Spring Oaks entities argue they did in fact demonstrate the assignments. Defendant also claims, as he did in his complaint and motion for reconsideration, the Spring Oaks and Pagaya entitie s were not licensed under N.J.S.A. 17:11C-33(a)(b) and therefore the collection of the debt violates public policy. 1 See Accountemps Div. of Robert Half, Inc. v. Birch Tree Grp., Ltd. ,

1 Banton relies on unpublished opinions from state an d federal court throughout this point in his appellate brief. Unpublished decisions a re not precedential and cannot be cited by this court, and counsel did not confirm compliance with the requirement that all contrary unpublished opinions known to counsel were also served on the court and opposing counsel. See Rule 1:36 -3.7 A- 3315

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115 N.J. 614, 626 (1989) (" public policy precludes enforcement of a contract entered into in violation of [a] licensing statute. "). The Pagaya and Spring Oaks entities contend they obtained the proper licenses.

We need not reach the merits of either of these is sues because they are both subject to arbitration under the agreement, an d "a court may not decide an arbitrability question that the parties have delega ted to an arbitrator." Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524, 530 (2019); see also Amalgamated Transit Union, Loc. 880 v. N.J. Transit Bus Operations, Inc., 200 N.J. 105 (2009). Here, Banton challenged assignmen t of the loan and the ability of the purported assignee to collect the debt, whic h is a dispute about the "relationship between [the parties]" and "whether [ the ] arbitration agreement . . . is enforceable," as defined in the arbitratio n agreement. Even if there is a question whether eith er issue raised by Banton constitutes a "dispute" as defined in the arbitration agreement, that issue is subject to arbitration under the agreement as well. Lastly, Banton reiterates the Spring Oaks entities waived their right to

invoke the arbitration clause. We are un persuaded by this argument. The Supreme Court in Morgan v. Sundance, Inc. held that "[t]o decide whether a waiver has occurred, the court focuses on the actions of the person8 A- 3315

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who held the right." 142 S. Ct. 1708, 1713 (2002). A "court assessing waiver does not generally ask about prejudice. Waiver, we have said, 'is the intentional relinquishment or abandonment of a known right.'" Ibid. (quoting U.S. v. Olano , 507 U.S. 725, 733 (1993)). Here, Spring Oaks Capital SPV, LLC filed a complai nt to collect the debt in the Special Civil Part. Banton exercised his ri ght to file an answer, counterclaim and third-party claim, which was then transferred to the Law

Division. Because Banton disputed aspects of the allegations in the complaint, Spring Oaks took no further action in the lawsuit a nd instead invoked its right to arbitration. Nothing about Spring Oaks's action s prior to that constitute an intentional relinquishment or abandonment of its ri ght to arbitration, and Banton's claims to the contrary are without merit. First, Banton's interpretation of waiver suggests that a lending entity would be barred from arbitration by filing a compla int. This is an absurd conclusion, because a complaint could result in def ault or payment of the debt , neither of which would necessitate the invocation o f an arbitration clause. It is only when a dispute arises, as demonstrated by Bant on's actions in this matter,

that a lender must decide whether to invoke arbitration or waive arbitration and litigate the matter. Moreover , a lending entity may need to preserve its ability9 A- 3315

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to file a complaint within the applicable statute o f limitations, notwithstanding its right to arbitration. And lastly, th e agreement here was subject to the FAA , which provides at 9 U.S.C. § 3:

If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pendin g, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under suc h an ag reement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, providing the applicant for the stay is not in defa ult in proceeding with such arbitration. Because the FAA refers to "any suit or proceeding be[ing] br ought in any of the courts," it encompasses the scenario here. To adop t Banton's argument would render this language in the FAA superfluous, and we may not interpret the statute in this manner. See Cupido v. Perez, 415 N .J. Super. 587, 595 (App. Div. 2010) ("'Courts should construe a statute, if possible, so no term is rendered superfluous or meaningless.' ") (citing 1A Sutherland Statutory Construction, 163 (7th ed.)). Because we agree with the trial court's decision t o stay the matter and compel arbitration, we find no abuse of discretion in its denial of the motion for

reconsideration.10 A- 3315

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Affirmed.