SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-2613-20

DELAWARE RIVER 

PARTNERS, LLC,

Plaintiff-Respondent,

v.

RAILROAD CONSTRUCTION

COMPANY, INC., 

Defendant-Appellant,

and 

RIGGS DISTLER AND 

COMPANY, INC. and

HUNTER SITE SERVICES, LLC,

Defendants-Respondents.

_____________________________

Argued May 2, 2022 – Decided June 24, 2022

Before Judges Messano, Enright and Marczyk.

On appeal from the Superior Court of New Jersey, Law 

Division, Gloucester County, Docket No. L-0026-21.

Michael F. McKenna argued the cause for appellant 

Railroad Construction Company, Inc. (Cohen Seglias 

NOT FOR PUBLICATION WITHOUT THE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.
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Pallas Greenhall & Furman, PC, attorneys; Michael F. 

McKenna and Timothy Ryan, on the briefs).

James H. Landgraf argued the cause for respondent 

Railroad Construction Company, Inc. (Dilworth 

Paxson, LLP, attorneys; James H. Landgraf and 

Benjamin W. Spang, on the brief).

PER CURIAM

In 2019, plaintiff Delaware River Partners, LLC, accepted a proposal from 

defendant Railroad Construction Company, Inc., to design, procure and 

construct a liquified petroleum gas unloading and loading facility in Gibbstown 

known as the Repauno Port & Rail Terminal Project (the Project). Plaintiff and 

defendant entered into a $75 million contract (the Contract). 

Disputes arose over defendant's timely performance, and informal dispute 

resolution procedures outlined in the Contract failed to resolve the issues. In 

January 2021, plaintiff filed a complaint against defendant in the Law Division; 

plaintiff also named Riggs Distler and Company, Inc. (Riggs), a subcontractor 

defendant hired to work on the Project, as a defendant. Riggs had filed a 

construction lien claim against the property as the result of a dispute with 

defendant over payment. Plaintiff's complaint alleged defendant breached the 

Contract, and it also sought to discharge Riggs' construction lien. 
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On February 19, 2021, defendant sent formal written notice to plaintiff 

invoking Section 12.1.3 of the Contract and demanding the complaint be 

dismissed and the dispute submitted to binding arbitration. Later that same day, 

defendant filed a formal motion to dismiss the complaint in the Law Division

"pursuant to the arbitration clause within" the Contract. 

Plaintiff opposed the motion and cross-moved to amend its complaint to 

add Hunter Site Services, LLC (Hunter), another subcontractor of defendant that 

also filed a construction lien claim, as a defendant. Riggs joined in defendant's 

motion arguing the arbitration provision applied to plaintiff's claim against 

Riggs; alternatively, Riggs asserted that plaintiff's claim seeking to discharge 

Riggs' construction lien should be stayed pending arbitration between plaintiff 

and defendant.

After considering oral argument, the judge denied defendant's motion to 

dismiss and granted plaintiff's motion to amend the complaint. The judge 

reasoned Section 12.1.3's language was ambiguous, was permissive regarding 

arbitration and did not compel plaintiff to arbitrate its claims against defendant. 

He entered an order on March 22, 2021, denying the motion to dismiss. 

Plaintiff soon filed its amended complaint, and defendant moved for 

reconsideration, with Riggs joining. Plaintiff filed opposition, and, in his oral 
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opinion of April 30, 2021, the judge denied the motion. He entered a conforming 

order, and this appeal followed.

Before us, defendant reprises the essential argument it made in the Law 

Division. It contends the only reasonable construction of the Contract's 

unambiguous dispute resolution provisions allowed either party to submit 

disputes to binding arbitration and compel the other party's participation.

Plaintiff reiterates its argument that Section 12.1.3 is permissive, and neither 

party can compel arbitration without the other's consent. Riggs has not 

participated in the appeal.

We agree with defendant. When viewed in their entirety, the only 

reasonable interpretation of the Contract's dispute resolution provisions 

permitted either party to compel arbitration of disputes that arose under the 

Contract. We reverse and remand the matter to the Law Division for entry of an 

appropriate order consistent with this opinion.

I.

Because we construe "arbitration agreements under general contract 

principles," Martindale v. Sandvik, Inc., 173 N.J. 76, 85 (2002), we start with 

the language of the Contract in this case. Article 12, entitled "Dispute 

Resolution," provides the following:
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12.1 In General. The [p]arties shall attempt to settle 

every dispute arising out of or in connection with this 

[a]greement ("Dispute"), by following the dispute 

resolution process set forth below in this Article 12, to 

the extent permitted by [l]aw. 

12.1.1 Mutual Discussions. If any dispute or 

difference of any kind whatsoever (a "Dispute") arises 

between the [p]arties in connection with, or arising out 

of, this [a]greement, the [p]arties within ten (10) days 

shall attempt to settle such Dispute in the first instance 

by mutual discussions between [o]wner and 

[c]ontractor.

12.1.2 Further Procedures. If the Dispute 

cannot be settled within ten (10) days by mutual 

discussions, then the Dispute shall be finally settled

under the provisions of this Section 12.1.2 or Section 

12.1.3. If the [p]arties fail to resolve any dispute 

through discussions pursuant to Section 12.1.1, either 

[p]arty shall have the right to provide written notice of 

the Dispute to the president or chief executive officer 

("Senior Management") of the other [p]arty. Upon a 

timely referral, the Senior Management of the [p]arties

shall consider the Dispute, review such relevant 

information as they may determine and issue their 

decision (which decision shall be confirmed in writing) 

within five (5) [b]usiness [d]ays after receiving the 

referral. If the Senior Management of the [p]arties

cannot resolve the issue within the [five b]usiness[-d]ay

period, then the [p]arties shall have the rights set forth 

below in Section 12.1.3.

12.1.3 Arbitration. Subject as hereinafter 

provided, any Dispute arising out of[,] or in connection 

with, this [a]greement and not settled by Section 12.1.1 

or Section 12.1.2 of this [a]greement may (regardless 

of the nature of the Dispute) be submitted by either 
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[p]arty to arbitration and finally settled in accordance 

with Commercial Arbitration Rules of the American 

Arbitration Association. The arbitration will be held in 

Gloucester County, New Jersey. There shall be a single 

arbitrator experienced in construction law. The 

arbitrator shall apply New Jersey law to resolve legal 

matters in dispute. The decision of the arbitrator shall 

be final and conclusive upon the parties hereto and shall 

be enforceable in a court of competent jurisdiction. 

Each party to the arbitration shall pay the 

compensation, costs, fees and expenses of its own 

witnesses, exhibits and counsel. The compensation, 

costs and expenses of the arbitrator, if any, shall be 

borne equally by the parties hereto. . . .

12.2 Continued Performance. During the 

conduct of dispute resolution procedures pursuant to 

this Article 12, (a) the [p]arties shall continue to 

perform their respective obligations under this 

Agreement, and (b) no [p]arty shall exercise any other 

remedies hereunder arising by virtue of the matters in 

dispute.

1

[(Emphasis added).]

Although the appellate record is unclear, after oral argument before us, it is 

undisputed that the parties participated in the procedures set out in Sections 

1

 The only other remedies expressly provided for in the Contract were in 

Sections 13, which defined events of default by defendant, as contractor, and 

plaintiff, as owner, and set forth available remedies in the event of default. In 

Section 13.2.4, the Contract provided: "Notwithstanding the availability and/or 

exercise of the foregoing remedies, [o]wner shall have all such other remedies 

available under applicable [l]aw." Section 13.4 permitted defendant to exercise 

certain remedies in the event of plaintiff's default, and to "pursue all such 

remedies as may be allowed under this [a]greement, at law or in equity." 
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12.1.1 and 12.1.2 without success. Therefore, the only issue remaining is 

whether having failed to resolve their dispute after exhausting those processes, 

did defendant, indeed, did either party, have the right to compel arbitration under 

Section 12.1.3?

II.

We begin answering that question by acknowledging our reliance "on the 

well-recognized national policy and the established State interest in favoring 

arbitration." Arafa v. Health Express Corp., 243 N.J. 147, 170 (2020) (quoting 

Martindale, 173 N.J. at 85). "Consequently, an 'agreement to arbitrate should 

be read liberally in favor of arbitration.'" Medford Twp. Sch. Dist. v. Schneider 

Elec. Bldgs. Ams., Inc., 459 N.J. Super. 1, 7 (App. Div. 2019) (quoting 

Angrisani v. Fin. Tech. Ventures, LP, 402 N.J. Super. 138, 148 (App. Div. 

2008)). 

Nonetheless, "basic contract formation and interpretation principles still 

govern," our review, "for there must be a validly formed agreement to enforce." 

Kernahan v. Home Warranty Adm'r of Fla., Inc., 236 N.J. 301, 307

(2019)(citations omitted). Because the enforceability of a contractual 

arbitration provision is a legal determination, we need not defer to the trial 

court's interpretative analysis, "unless we find it persuasive." Id. at 316 (citing 
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Morgan v. Sanford Brown Inst., 225 N.J. 289, 302–03 (2016)). We review the 

trial court's decision to compel or deny arbitration de novo. Skuse v. Pfizer, 

Inc., 244 N.J. 30, 46 (2020). 

"A court's objective in construing a contract is to determine the intent of 

the parties." Kernahan, 236 N.J. at 320 (citing Kieffer v. Best Buy, 205 N.J. 

213, 223 (2011)). "A basic tenet of contract interpretation is that contract terms 

should be given their plain and ordinary meaning." Id. at 321 (citing Roach v. 

BM Motoring, LLC, 228 N.J. 163, 174 (2017)). In addition, "[c]ontracts should 

be read 'as a whole in a fair and common sense manner.'" Manahawkin 

Convalescent v. O'Neill, 217 N.J. 99, 118 (2014) (quoting Hardy ex rel. Dowdell 

v. Abdul-Matin, 198 N.J. 95, 103 (2009)); see also Borough of Princeton v. Bd. 

of Chosen Freeholders of Mercer, 333 N.J. Super. 310, 325 (App. Div. 2000) 

(noting the contract "must be read as a whole, without artificial emphasis on one 

section, with a consequent disregard for others. Literalism must give way to 

context." (citing Schenck v. HJI Assocs., 295 N.J. Super. 445, 452–53 (App.

Div. 1996))).

Here, plaintiff urged the motion judge, and now urges us, to focus on 

Section 12.1.3's use of the word "may," contending it rendered the final step of 

a detailed, comprehensive dispute resolution scheme permissive. Plaintiff 
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contrasts the use of the word "shall" in Sections 12.1.1 and 12.1.2 and asserts

one party's demand for arbitration under Section 12.1.3 need not compel the 

other's participation. Under plaintiff's construction, even though Section 

12.1.3's express language provided "either" party could submit the dispute to 

arbitration, plaintiff cannot be compelled to arbitrate because both parties must

agree to arbitrate any dispute.

In Riverside Chiropractic Group v. Mercury Insurance Co., we considered 

an arbitration provision in an insurance contract that said a personal injury 

protection dispute "may be submitted to dispute resolution by" the injured party, 

the insured or the insured's provider. 404 N.J. Super. 228, 233 (App. Div. 2008). 

Based on the policy's plain language, we concluded the word "may" did "not 

mandate arbitration." Id. at 237. We distinguished the policy at issue from the 

language used in the "standard personal automobile policy," which stated 

"[e]ither party may make a written demand for arbitration." Id. at 238 (alteration 

in original). Although it was dicta, we noted, "The effect of that contract 

language could be construed as making arbitration mandatory, because if the 

insured elects to sue, the insurer can simply make a written demand for 

arbitration, which must then be honored." Ibid.
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In Medford Township, we were required to construe an arbitration 

provision contained in the last of three contracts executed by the parties, the first 

two of which contained no alternative dispute resolution procedure and included 

specific provisions anticipating resolution of disputes in court by including 

provisions regarding the governing law and venue. 459 N.J. Super. at 3–5. The 

third contract included an arbitration provision that said any contractual dispute 

"may be settled by binding arbitration." Id. at 4–5.

We distinguished the facts presented in Medford Township by expounding 

on our dicta in Riverside and noting the insurance contract there "did not provide 

'[e]ither party may make a written demand for arbitration.'" Id. at 9 (alteration 

in original) (quoting Riverside, 404 N.J. at 238). We recognized that "when an 

arbitration provision specifically permits either party to select arbitration, once 

invoked, the other party may be bound to arbitrate the dispute." Ibid. (emphasis 

added) (citing Local 771, I.A.T.S.E. v. RKO Gen., Inc., 546 F.2d 1107, 1115–

16 (2d Cir. 1977)).

We concluded that when reading the arbitration clause in pari materia with 

the provisions of the other two agreements, the arbitration clause "d[id] not 

evince a clear intent to waive the right to sue in court." Id. at 10. Nonetheless, 

we said that if the arbitration provision stood alone, its plain terms "might
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support [the] argument that it is mandatory because the term, 'may' permitted 

either of the two 'sophisticated' parties to invoke arbitration." Ibid. 

In this case, there is no dispute that plaintiff and defendant are 

sophisticated parties who executed a $75 million dollar contract while 

represented by counsel; indeed, the parties do not dispute that the Contract was 

revised, and edits were made to prior drafts to address concerns raised by 

counsel. Nor do the parties dispute that Article 12 of the Contract anticipated a 

three-step alternative dispute resolution procedure applicable to every "dispute," 

defined as "any dispute or difference of any kind whatsoever . . . aris[ing] 

between the [p]arties in connection with, or arising out of" the Contract. 

Plaintiff's breach of contract claim is a dispute within the express language of 

Article 12.

The first step under Article 12 required "Mutual Discussions," but Section

12.1.2 provided that if the dispute was not "settled within ten . . . days by mutual 

discussions," it "shall be finally settled under the provisions of . . . Section 12.1.2 

or Section 12.1.3." (emphasis added). By its express language, the Contract

required every dispute to be "finally settled" using the procedures outlined in 

Article 12.
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The second step under Article 12 required the "Senior Management of the 

Parties" to consider the dispute if "either [p]arty . . . provide[d] written notice" 

and a "timely referral." Critically, if the dispute was not resolved by senior 

managers, Section 12.1.2 provided that "the [p]arties shall have the rights set 

forth . . . in Section 12.1.3." (emphasis added). 

What were those "rights"? According to plaintiff, Section 12.1.3 only 

gave either party the ability to submit the dispute to binding arbitration if the 

other agreed, something both parties could have agreed to do in the absence of 

Section 12.1.3. Parties to a dispute are always free to submit a disagreement to 

arbitration, even without an express dispute resolution provision. Plaintiff's 

interpretation of the Contract accords defendant no "rights" under Section 

12.1.3. The only logical construction of the provisions when read in their 

entirety is that either party had the "right" to submit the dispute to arbitration 

and compel the other party's participation.

Indeed, that conclusion is bolstered by the detailed arbitration procedure 

outlined in Section 12.1.3, setting forth a proceeding before an arbitrator 

"experienced in construction law," in a designated arbitral forum, with costs 

equally borne by the parties. The arbitrator's decision was to be "final and 

conclusive" as to the dispute. (emphasis added). Those provisions, presumably 
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negotiated by the parties, were hardly necessary if either party were free to 

refuse to arbitrate whenever the other party elected to do so. Rather, the only 

reasonable interpretation of those detailed provisions is that the parties decided 

to set the parameters for the arbitration in advance of either party invoking 

Section 12.1.3's provisions.

We conclude the only reasonable construction of the Contract is that urged 

by defendant. We therefore reverse the order denying defendant's motion to 

dismiss. We remand the matter to the trial court to enter an order staying 

plaintiff's complaint against defendant and ordering the parties to arbitration in 

accordance with Section 12.1.3 of the Contract.

We decline to address issues raised by plaintiff regarding the counts in its 

amended complaint seeking to discharge the lien claims of Riggs and Hunter. 

As noted, Riggs did not participate in this appeal, nor did Hunter, which was 

only added as a party to the litigation in the Law Division concurrently with the 

judge's decision. Given the judge's disposition of defendant's motion, he did not 

need to consider Riggs' contention, and one asserted by defendant in its reply 

brief, that contractual provisions in the subcontract between Riggs and 

defendant require the lien claim be "subsumed" within the arbitration. 
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Nor did the judge need to consider an argument Riggs presented when it 

joined defendant's motion to dismiss. Riggs cited N.J.S.A. 2A:44A-24.1(c), 

which provides: 

The court shall stay the suit to the extent that the 

lien claimant's contract or the contract of another party 

against whose account the lien claim is asserted 

provides that any disputes pertaining to the validity or 

amount of a lien claim are subject to arbitration or other 

dispute resolution mechanism.

Our caselaw also supports staying proceedings in the trial court in situations 

where some parties in the litigation are not parties to the arbitration agreement 

being enforced. See, e.g., Elizabethtown Water Co. v. Watchung Square 

Assocs., LLC, 376 N.J. Super. 571, 578 (App. Div. 2005) ("Where significant 

overlap exists between parties and issues, courts generally stay the entire action 

pending arbitration." (quoting Crawford v. W. Jersey Health Sys., 847 F. Supp. 

1232, 1243 (D.N.J. 1994))). 

In short, the parties are free to present arguments to the Law Division 

judge whether plaintiff's claims against Riggs and Hunter should proceed, be 

stayed pending arbitration between plaintiff and defendant, or be "subsumed" 

within the arbitration proceeding, even though neither Riggs nor Hunter were 

parties to the Contract.
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Reversed and remanded. We do not retain jurisdiction.