SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-5399-15T4

CASTLE REALTY MANAGEMENT,

LLC, ASSIGNEE OF CC DAHMS,

LLC t/a RE/MAX CONNECTION

REALTORS,

Plaintiff-Respondent,

v.

KEVIN BURBAGE, AUGUSTA 

INVESTMENTS, INC. d/b/a

RE/MAX PREFERRED,

Defendants-Appellants.

_______________________________

Argued May 4, 2017 – Decided

Before Judges Lihotz and Whipple.

On appeal from Superior Court of New Jersey, 

Chancery Division, Burlington County, Docket 

No. C-118-15.

Barry W. Rosenberg argued the cause for 

appellant.

Christopher C. Fallon, III, argued the cause 

for respondent (Fox Rothschild LLP, attorneys; 

Mr. Fallon, Adam Busler and Nathan M. Buchter,

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NOT FOR PUBLICATION WITHOUT THE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.

July 13, 2017
2 A-5399-15T4

Plaintiff, Castle Realty Management, t/a Re/Max Connection 

Realtors and defendant, Augusta Investments, t/a Re/Max Preferred 

are competing franchisees of Re/Max of New Jersey (Re/Max). Kevin 

Burbage is a licensed real estate broker who worked for plaintiff 

then left to work for defendant. 

Plaintiff filed this ten-count verified complaint and order 

to show cause against Burbage and defendant in the Chancery 

Division, seeking equitable and monetary relief, alleging, among 

other things, Burbage violated the non-compete clause of his 

employment agreement, and defendant improperly solicited Burbage 

and its other employees, by engaging in unfair competition. 

Defendant moved to dismiss the complaint, arguing plaintiff's

franchise agreement required disputes be submitted to arbitration. 

In a June 14, 2016 order, supported by a written opinion, 

Judge Paula T. Dow denied the motion to dismiss. Judge Dow also 

denied defendant's motion for reconsideration. Plaintiff withdrew 

its requests for equitable remedies and the matter was transferred 

to the Law Division. 

The denial of defendant's motion to dismiss and compel 

arbitration, although not a final judgment, is appealable of right. 

See R. 2:2-3(a)(3) (An order "denying arbitration shall also be 

deemed a final judgment of the court for appeal purposes."); see 

also Jaworski v. Ernst & Young US LLP, 441 N.J. Super. 464, 472 
3 A-5399-15T4

(App. Div.), certif. denied, 223 N.J. 406 (2015). On appeal, 

defendant seeks reversal, maintaining plaintiff's action must be 

dismissed based on the arbitration clause in its franchise 

agreement with Re/Max. Defendant asserts the franchise structure 

mandates dispute resolution procedures among franchisees, as well 

as between franchisee and franchisor, and the contract clause 

barring a third-party beneficiary's reliance was not applicable 

to this matter. We are unpersuaded and affirm. 

As franchisees, plaintiff and defendant separately executed 

identical franchise agreements with Re/Max. The respective 

agreements contain identical provisions regarding the resolution 

of disputes arising from the relationship with Re/Max. Section 

15 contains the following provisions: 

A. DISPUTE RESOLUTION.

The RE/MAX Dispute Resolution System ("the 

RDRS") is a set of rules and procedures for 

the resolution of disputes, complaints, claims 

or other problems ("Disputes") that arise 

between you and other affiliates of the RE/MAX

Network of offices and real estate agents. 

B. DISPUTES INVOLVING RE/MAX FRANCHISES, SALES 

ASSOCIATES OR THEIR RE/MAX AFFILIATES.

In the event of a Dispute involving you, any 

other RE/MAX franchisee, any RE/MAX Sales 

Associate (whether affiliated with your Office 

or any other RE/MAX office) or other RE/MAX 

Affiliate, you agree to submit the Dispute to 

mediation and, if unsuccessful, to binding 
4 A-5399-15T4

arbitration using the RDRS, if it is then 

available.

C. ALTERNATIVES.

If the RDRS is not offered or otherwise 

available or the dispute is between RE/MAX 

Regional and Franchise Owner, the Dispute 

shall be submitted to an alternative mediation 

and arbitration system mutually acceptable to 

the parties of the Dispute. If the parties 

cannot agree on an alternative mediation and 

arbitration system, then the Dispute shall be 

submitted to the American Arbitration 

Association for mediation, and if 

unsuccessful, for binding arbitration in 

accordance with its Commercial Mediation Rules 

or Commercial Arbitration Rules, as 

appropriate. 

Section 16 addresses the construction of the agreement and 

its enforcement. Paragraph 16.N. specifically states:

N. NO LIABILITY TO OTHERS; NO OTHER 

BENEFICIARIES.

We will not, because of this Agreement or by 

virtue of any approvals, advice or services 

provided to you, be liable to any person or 

legal entity who is not a party to this 

Agreement. You understand that you are not a 

third party beneficiary of any other franchise 

agreement between us and other RE/MAX 

franchisees and that you have no independent 

right to enforce the terms of, or require 

performance under, any other franchise 

agreement. 

When Burbage left his employment with plaintiff and joined 

defendant's office, plaintiff initiated this action. Plaintiff 

alleged Burbage breached his employment contract. Other counts
5 A-5399-15T4

in the complaint alleged Burbage and defendant engaged in slander, 

trade libel, unfair competition, and conspiracy, as well as 

misappropriating trade secrets and confidential information. 

Initial disagreements arose regarding discovery and venue. 

Defendant moved to dismiss the complaint and transfer the matter 

to the RE/Max Dispute Resolution System, pursuant to paragraph 15 

of each parties' franchise agreement. Following oral argument, 

Judge Dow entered an order which temporarily enjoined Burbage from 

contacting plaintiff's employees and using its trade secrets. On 

the return date of the order to show case, the pending motions 

were adjourned and the parties were directed to proceed to 

mediation, which proved unsuccessful. 

Plaintiff withdrew its request for injunctive relief and 

moved to transfer the matter to the Law Division. Oral argument

on the outstanding motions was conducted on June 10, 2016. 

Construing the respective franchise agreements, Judge Dow 

concluded defendant had no right to force plaintiff to an arbitral 

forum. Plaintiff's motion to transfer the action to the Law 

Division was granted. Defendant's motion for reconsideration was 

denied. This appeal ensued.

We "review the denial of a request for arbitration de novo." 

Frumer v. Nat'l Home Ins. Co., 420 N.J. Super. 7, 13 (App. Div. 

2011). Whether parties have contracted to arbitrate as well as 
6 A-5399-15T4

the applicability and scope of an arbitration agreement is a legal 

issue, subject to this court's plenary review. See Atalese v. 

U.S. Legal Servs. Grp., L.P., 219 N.J. 430, 445-46 (2014) ("Our 

review of a contract, generally, is de novo, and therefore we owe 

no special deference to the trial court's . . . interpretation.

Our approach in construing an arbitration provision of a contract 

is governed by the same de novo standard of review.") (citations 

omitted), cert. denied, ___ U.S. ___, 135 S. Ct. 2804, 192 L. Ed.

2d 847 (2015). "Arbitrability . . . whether the parties have 

agreed to submit to an arbitrator or a court the authority to 

decide whether a dispute is subject to arbitration" is an issue 

"for a court to resolve" absent a specific agreement to the 

contrary. Morgan v. Sanford Brown Inst., 225 N.J. 289, 295-96 

n.1, (2016). 

An agreement to arbitrate, like any other 

contract, "must be the product of mutual 

assent, as determined under customary 

principles of contract law." NAACP of Camden 

Cnty. E. v. Foulke Mgmt., 421 N.J. Super. 404, 

424 (App. Div.), certif. granted, 209 N.J. 96 

(2011), and appeal dismissed, 213 N.J. 47 

(2013). A legally enforceable agreement 

requires "a meeting of the minds." Morton v. 

4 Orchard Land Trust, 180 N.J. 118, 120 

(2004). Parties are not required "to 

arbitrate when they have not agreed to do so." 

Volt Info. Scis. v. Bd. of Trs. of Leland 

Stanford Jr. Univ., 489 U.S. 468, 478, 109 S. 

Ct. 1248, 1255, 103 L. Ed. 2d 488, 499 (1989); 

see Garfinkel[ v. Morristown Obstetrics & 

Gynecology Assocs., P.A.], 168 N.J. [124,] 132 
7 A-5399-15T4

[(2001)] ("'[O]nly those issues may be 

arbitrated which the parties have agreed shall 

be.'" (quoting In re Arbitration Between 

Grover & Universal Underwriters Ins. Co., 80 

N.J. 221, 228 (1979))).

Mutual assent requires that the parties 

have an understanding of the terms to which 

they have agreed. "An effective waiver 

requires a party to have full knowledge of his 

legal rights and intent to surrender those 

rights." Knorr v. Smeal, 178 N.J. 169, 177 

(2003) (citing W. Jersey Title & Guar. Co. v. 

Indus. Trust Co., 27 N.J. 144, 153 (1958)). 

"By its very nature, an agreement to arbitrate 

involves a waiver of a party's right to have 

. . . claims and defenses litigated in court." 

Foulke, supra, 421 N.J. Super. at 425.

[Atalese, supra, 219 N.J. at 442.]

Consequently, "a court may invalidate an arbitration clause 

'upon such grounds as exist at law or in equity for the revocation 

of any contract.'" Id. at 441. (quoting Martindale v. Sandvik, 

Inc., 173 N.J. 76, 85 (2002)). "Our state-law jurisprudence makes 

clear 'that when a contract contains a waiver of rights — whether 

in an arbitration or other clause — the waiver must be clearly and

unmistakably established.'" Morgan, supra, 225 N.J. at 308-09 

(quoting Atalese, supra, 219 N.J. at 444). "No magical language 

is required to accomplish a waiver of rights in an arbitration 

agreement." Id. at 309. Furthermore, "'courts operate under a 

presumption of arbitrability in the sense that an order to 

arbitrate the particular grievance should not be denied unless it 
8 A-5399-15T4

may be said with positive assurance that the arbitration clause 

is not susceptible of an interpretation that covers the asserted 

dispute.'" Griffin v. Burlington Volkswagen, Inc., 411 N.J. Super.

515, 518 (App. Div. 2010) (quoting EPIX Holdings Corp. v. Marsh & 

McLennan Cos., 410 N.J. Super. 453, 471 (App. Div. 2009)); cf., 

Yale Materials Handling Corp. v. White Storage & Retrieval Sys., 

Inc., 240 N.J. Super. 370, 374 (App. Div. 1990) (A "court may not 

rewrite a contract to broaden the scope of arbitration. . . ."). 

We turn to the agreement under review. 

In our review of an arbitration agreement, the 

agreement's terms "are to be given their plain 

and ordinary meaning." M.J. Paquet v. N.J. 

DOT, 171 N.J. 378, 396 (2002). We are tasked 

with discerning "the intent of the parties." 

Kieffer v. Best Buy, 205 N.J. 213, 223 (2011). 

If the meaning of a provision is ambiguous, 

the provision should be construed against the 

drafter because, "as the drafter, it chose the 

words that may be susceptible to different 

meanings." Id. at 224.

[Roach v. BM Motoring, LLC, 228 N.J. 163, 174 

(2017).]

Specifically, "[i]t is . . . the intent expressed or apparent in 

the writing that controls." Garfinkel, supra, 168 N.J. at 135 

(quoting Quigley v KPMG Peat Marwick, LLP, 330 N.J. Super. 252, 

266 (App. Div.), certif. denied, 165 N.J. 527 (2000)); see also

Marchak v. Claridge Commons, Inc., 134 N.J. 275, 282 (1993) (In 

evaluating the existence of an agreement to arbitrate, a court 
9 A-5399-15T4

"consider[s] the contractual terms, the surrounding circumstances, 

and the purpose of the contract.").

Here, plaintiff's franchise agreement with Re/Max and 

defendant's agreement with Re/Max each contain a dispute 

resolution clause requiring mediation and arbitration. 

Defendant's position is plaintiff's agreement mandates it 

arbitrate not only disputes with its franchisor Re/Max, but also 

disputes with any other Re/Max franchisee, including the issues 

raised in this matter. The question is whether defendant can rely 

on the clause in plaintiff's agreement with Re/Max to compel it

arbitrate its claims with defendant and Burbage. 

The specific language of paragraph 15.B. states: 

In the event of a Dispute involving you, any 

other RE/MAX franchisee, any RE/MAX Sales 

Associate (whether affiliated with your Office 

or any other RE/MAX office) or other RE/MAX 

Affiliate, you agree to submit the Dispute to 

mediation and, if unsuccessful, to binding 

arbitration using the RDRS, if it is then 

available.

Logically, this clause appears to support defendant's position 

that Re/Max intended to require all franchisees to resolve 

disagreements using arbitration. However, the clause does not 

stand alone. It is followed by paragraph 16.N., which suggests 

such a possibility is foreclosed by stating: "You understand that 

you are not a third party beneficiary of any other franchise 
10 A-5399-15T4

agreement between us and other Re/Max franchisees and that you 

have no independent right to enforce the terms of, or require 

performance under, any other franchise agreement." 

Our Supreme Court mandates arbitration clauses must clearly 

show the parties to the agreement understand and agree to waive 

their right to proceed before our courts. Atalese, supra, 219 

N.J. at 442-43 ("Moreover, because arbitration involves a waiver 

of the right to pursue a case in a judicial forum, 'courts take 

particular care in assuring the knowing assent of both parties to 

arbitrate, and a clear mutual understanding of the ramifications 

of that assent.'") (quoting Foulke, supra, 421 N.J. Super. at 

425). Here, an ambiguity exists in the scope of matters covered 

by paragraphs 15 and 16. In such an instance, the agreement should 

be "strictly construed," which would reject the position taken by 

defendant that plaintiff unequivocally agreed to submit to 

arbitration its claims against defendant and Burbage. See Roach, 

supra, 228 N.J. at 179. 

Consequently, we must reject defendant's argument suggesting 

the third-party beneficiary clause applies to non-Re/Max 

franchisees making it inapplicable to this dispute. The appeal 

does not present, and we do not comment on Re/Max's rights to 

compel plaintiff's or plaintiff's obligations to its franchisor; 

notably Re/Max is not a party to this litigation. "The standard 
11 A-5399-15T4

applied by courts in determining third-party beneficiary status 

is 'whether the contracting parties intended that a third party 

should receive a benefit which might be enforced in the courts.'" 

Reider Cmtys. v. N. Brunswick, 227 N.J. Super. 214, 222 (App. Div. 

1988) (quoting Brooklawn v. Brooklawn Hous. Corp., 124 N.J.L. 73, 

77 (E. & A. 1940)), certif. denied, 113 N.J. 638 (1988). "[T]he 

intention of contracting parties to benefit an unnamed third party 

must be garnered from an examination of the contract and a 

consideration of the circumstances attendant to its execution." 

Ibid. 

Accordingly, our interpretation of paragraph 16.N. excludes 

enforcement of the agreement by non-parties to that contract, and 

only "a person for whose benefit a contract is made may sue on the 

contract in any court." Id. at 221. 

We affirm the June 14, 2016 order as well as the July 26, 

2016 order denying reconsideration. We remand the matter to the 

Law Division for further disposition. 

Affirmed.