SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION DOCKET NO. A-0677- 23 RONALD COSCIA, Plaintiff-Appellant,

v. CHW GROUP, INC., Defendant-Respondent.

________________________

Submitted March 13, 2024

– Decided July 2, 2024 Before Judges Accurso and Gummer. On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. DC

- 004585

- 23. McAndrew Vuotto, LLC, attorneys for appellant (Robert W. McAndrew, of counsel and on the briefs ). CHW Group, Inc., attorneys for respondent (Richard M. Grace, 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PER CURIAM NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court."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 t he 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- 0677

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Plaintiff Ronald Coscia appeals from an order dism issing his complaint against defendant CHW Group, Inc., doing business a s Choice Home Warranty, based on an arbitration clause in an unsi gned home warranty contract and ordering the parties to arbitration. We reverse. Coscia, who resides in Roanoke , Virginia, filed a Special Civil Part complaint alleging he entered into a one-year home warranty contract "number 715799774 " with Choice for an annual premium of $800, which he claims it breached by failing to repair or replace his furnac e . He alleged claims for breach of contract and violation of the Consumer Fr aud Act, N.J.S.A. 56 :8 -1 to

- 20 , seeking damages of $15,000, the former jurisdicti onal limit of the Special Civil Part before the July 1, 2022 amendment of Rule 6:1 -1(c), plus costs and attorney's fees. Choice filed an answer denying the allegations of t he complaint and a motion to dismiss based on the contract's mediation and arbitration clauses. Attached to counsel's certification in support of t he motion was a packet mailed to Coscia on an unspecified date. The packe t contained a n unsigned letter to "Ron" from "The Team @ CHOICE," welcoming and commending him for choosing Choice, and advising him to "take a moment to read through this booklet. Inside you will find your contract, selected coverage, and a3 A- 0677

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variety of information that will help you get the m ost out of your new home warranty. Your coverage is dependent on the plan y ou have selected." A "Common Questions" section advised that "[c]overage begins 30 days after enrollment and receipt of applicable contract fees and continues for 365 from your start date." The welcome letter advised that plaintiff could "si mply log on to our website located at www.ChoiceHomeWarranty .com and file your claim online." The contract enclosed included an a rbitration clause but did not reference the contract number, and although it cont ained a line for a buyer's signature and date, both were blank. No application or enrollment form completed by Coscia was included in the motion pape rs. Coscia opposed the motion, contending Choice had fa iled to put forth any document supporting its allegation that he had agreed to the arbitration provision, noting the agreement Choice provided was unsigned and the packet mailed to him after his purchase. The trial court granted Choice's motion to dismiss without hearing argument and without a stat ement of reasons required pursuant to Rule 1:7 -4(a), notwithstanding it signed a dispositive orde r dismissing the complaint with prejudice and order ing the parties to arbitration , an order appealable as of right pursuant to Rule 2 :2 -3(b )( 8) , even if only4 A- 0677

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staying the action as required by Rules 2:9-1(a)(3) and 2:9 -5(c) and N.J.S.A.
2A:23B -7(g). Because the enforceability of a contract, including an arbitration agreement, is a question of law, Atalese v. U.S. Le gal Servs. Grp., L.P., 219 N.J. 430, 446 (2014), our review is de novo. Goffe v. Foulke M gm t. Corp. , 238 N.J. 191, 207 (2019). On appeal, Coscia renews his argument to the trial court that he was never asked to sign anything indicating his agreeme nt to the arbitration provision in the unsigned contract provided to him after he signed up with Choice. He also adds that the trial court's failur e to have explained it s reasons for the decision requires, at the very least, a rem and. Choice fails to address either argument. Instead, it points out that Cosci a concedes both he and Choice are parties to a home warranty contract, num ber 7157 99774 , that contains a mandatory arbitration clause governed by the Federal Arbitration Act, 9 U.S.C. §§ 1- 16 , which it argues passes muster under Kernahan v. H ome Warranty Administrator of Florida, Inc., 236 N.J. 3 01, 319 (2019), requiring we affirm the trial court's decision to send the ca se to arbitration. The obvious factual issue in the case, unaddressed by both Choi ce and the trial court, is whether Coscia agreed to arbitr ate this dispute. Both federal5 A- 0677

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and State law are unequivocally clear that "[a]n ar bitration agreement is valid only if the parties intended to arbitrate because p arties are not required 'to arbitrate when they have not agreed to do so.'" Id. at 317 (quoting Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Junio r Univ., 489 U.S. 468, 478 (1989) ). "[B]asic contract formation and interpretation prin ciples still govern [arbitration agreements], for there must be a valid ly formed agreement to enforce." Id. at 307. Coscia is not challenging the validity of the contr act; he is trying to enforce the contract. His claim, as we understand it based on the sketchy record, is that he wasn't aware and did not underst and the contract contained an arbitration clause until he received the documen t in the mail, after he had already enrolled in the warranty program and paid t he fee. See Bernetich, Hatzell & Pascu, LLC v. Med. Rec. Online, Inc., 445 N.J. Super. 173, 184 (App. Div. 2016) (holding "a party may not impose a n arbitration clause after the parties have already exchanged consideration an d created an enforceable contract"); Paul v. Timco, Inc., 356 N.J. Super. 18 0, 185-86 (App. Div. 2002) (holding "the purchaser of a warranty may not be co mpelled to arbitrate warranty claims where the only sales document the p urchaser signed did not require arbitration and she did not subsequently ag ree to arbitration").6 A- 0677

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Coscia's claim that Choice didn't make him aware of the arbitration clause until after he had enrolled in the warranty program and paid the $800 fee must be decided by the court and not an arbitra tor as it goes to whether he agreed to arbitrate the underlying dispute over rep air or replacement of the furnace in the first place. See Goffe, 238 N.J. at 209 (explaining the rule of Prima Paint Corp. v. Flood & Conklin Manufacturing Co., 388 U.S. 395, 403-
04 (1967), that a claim of "fraud in the inducement o f the arbitration clause itself

— an issue which goes to the 'making' of the agreeme nt to arbitrate" is decided by the court, whereas "claims of fraud in t he inducement of the contract generally" must be decided by the arbitrat or). We reverse the order dismissing the complaint with prejudice and remand for its reinstatement and further proceeding s, including limited discovery on the purported agreement to arbitrate before consid eration of any renewed motion to compel arbitration, which should be decided under the standards of Rule 4:46 -2 and Brill v. Guardian Life Insurance Co. of Amer ica , 142 N.J. 520, 523 (1995). In the event summary judgment cannot be g ranted to either party, the court should resolve the issue through a summary trial limited to "'the making of the arbitration agreemen t or the failure, neglect, or refusal to perform the same,' as Section 4 of the [ Federal Arbitration Act]7 A- 0677

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envisions." Guidotti v. Legal Helpers Debt Resol., L.L.C. , 716 F.3d 764, 776 (3d Cir. 2013) (quoting Somerset Consulting, LLC v . United Cap. Lenders, LLC, 832 F. Supp. 2d 474, 482 (E.D. Pa. 2011) (quoting 9 U.S.C. § 4) ). Reversed and remanded. We do not retain jurisdiction.