SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-2619-17T4

MAYA ITZHAKOV,

Plaintiff-Respondent,

v.

DAVID SEGAL,

Defendant-Appellant.

_____________________________

Argued October 24, 2018 – Decided August 28, 2019

Before Judges Koblitz, Ostrer and Currier.

On appeal from the Superior Court of New Jersey, Law 

Division, Ocean County, Docket No. L-3022-17.

Shalom D. Stone argued the cause for appellant (Stone 

Conroy LLC, attorneys; Shalom D. Stone, on the 

briefs).

Jonathan R. Mehl argued the cause for respondent.

PER CURIAM

Plaintiff Maya Itzhakov sued defendant David Segal for breach of a 2017 

contract (2017 Contract) that she alleged required him to pay her for her interest 

NOT FOR PUBLICATION WITHOUT THE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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in two pharmacies in Lakewood. Segal contends a religious court should 

arbitrate the dispute. Although the 2017 Contract says nothing about arbitration, 

Segal argues that arbitration provisions in two earlier contracts are valid and 

cover Itzhakov's claims. 

The trial judge denied without prejudice Segal's motion to stay Itzhakov's 

breach-of-contract suit and to compel arbitration before the Badatz Rabbinical 

Court of Lakewood. Citing Atalese v. U.S. Legal Services Group, L.P., 219 N.J. 

430 (2014), the trial judge concluded that the provisions upon which Segal relied

did not, with sufficient clarity, convey that disputes must be resolved in 

arbitration and not in a judicial forum. The judge ordered defendant to file an 

answer and the parties to conduct plenary discovery. The judge stated that if 

defendant could present evidence that the parties understood their agreements to 

require arbitration and bar judicial resolution, defendant could renew his motion.

Segal appeals, contending that Atalese does not govern the parties' 

commercial contract; Itzhakov's claims fall within the scope of the arbitration 

provisions in the parties' earlier contracts; and discovery is unnecessary. In the 

alternative, Segal argues that discovery should be limited to the validity and 

scope of the arbitration agreements. We agree with Segal's alternative argument 

and modify the court's order accordingly.
3

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I.

At various times, both Itzhakov and Segal held interests in the Refuah and 

Westgate pharmacies in Lakewood. On November 29, 2015, Itzhakov sold to 

Segal her twenty-five percent interest in Westgate Pharmacy LLC, which 

operated the pharmacy by the same name. Written in Hebrew, their agreement 

obliged Segal to pay Itzhakov $150,000 – $10,000 upon signing; $4000 on 

January 1, 2016; and $4000 a month for the following thirty-four months.1 

Itzhakov remained responsible for certain costs incurred before the sale, which 

Segal could deduct from his payments. 

The Westgate agreement includes two dispute resolution provisions. The 

first pertains to issues of contract interpretation. It states, "This document shall 

be interpreted only and exclusively by the document's drafter, Mr. Yisroel 

Knopfler, and we accept his interpretation as if it were one hundred valid and 

credible witnesses." The second pertains to relevant "questions of Jewish law." 

It states:

It is hereby agreed between us that any questions of 

Jewish law that are relevant to this sale and to this 

document shall be decided by the Lakewood Rabbinical 

Court, and we are required to do as they decide, and 

 

1

 We granted Segal's motion to supplement the record with an English 

translation of the agreement. Itzhakov has not identified any alleged errors in 

the translation.
4

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signing this document constitutes an acceptance of 

everything in the arbitration agreement that the said 

court regularly uses, and under no circumstances shall 

any dispute between us come to the civil courts, G-d 

forbid.

Over five years earlier, Segal acquired a ten-percent interest in Lakewood 

Pharmacy LLC (Lakewood LLC), which operated the Refuah Pharmacy. 

Lakewood LLC was then owned by Itzhakov, Dora Yakubov and Isaac 

Shimunov. Segal acquired his interest in the company by an assignment

agreement (Lakewood Assignment), apparently solely from Yakubov's share. 

A rider to the assignment consisted of two sections. The first contained

various representations of the "Assignor," including that Itzhakov consented to 

the assignment and waived her "right of first refusal to purchase Assignor's 

membership interests." The second section – consisting of ten subsections –

addressed the LLC's future governance. The subsections covered Segal's option 

to purchase, with Itzhakov's consent, an additional ten percent interest; terms of 

Segal's employment by the pharmacy; Yakubov's and Shimunov's agreement to 

train Segal; Segal's agreement not to compete with Yakubov's or Shimunov's 

other ventures; members' voting rights; and right of first refusal if Segal decided 

to sell his interest. Another subsection stated, "All income[] from 
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sale/income/refinance/otherwise to be disbursed proportionate to ownership 

interest after first paying all outstanding business expenses." 

The eighth subsection, entitled, "Dispute Resolution – Beth Din," stated, 

"All disputes arising from this transaction shall be decided solely by the Badatz 

Rabbinical Court of Lakewood . . . in accordance with the standard arbitration 

agreement of the Rabbinical Court, which is hereby incorporated into this 

agreement."

In the years that followed, Yakubov and Shimunov divested their 

remaining interests, leaving Segal and Itzhakov as equal owners of Lakewood 

LLC. Then, in 2017, Lakewood LLC sold its interest in Refuah Pharmacy and

its inventory to third parties.

Itzhakov alleged that she and Segal entered into the 2017 Contract, which 

governed distribution of the proceeds as well as Segal's outstanding obligations 

from his purchase of the Westgate pharmacy. The alleged contract begins as if 

it were the Refuah sale agreement – although the buyers were not signatories. It 

states:

AGREEMENT made this 5rd [sic] day of May, 2017 by 

and between (i) Lakewood Pharmacy LLC d/b/a Refuah 

Pharmacy, a New Jersey limited liability company . . . 

(hereinafter referred to as the "Owner"), David Segal, 

an individual . . . and Maya Itzhakov, an individual . . . 

and (ii) Refuah RX LLC, a New Jersey limited liability 
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company . . . (hereinafter referred to as the 

"Pharmacy"). Agreed to sell above mentioned

pharmacy to: Rachel Brach, an individual . . . and Gitel 

Mann, an individual . . . (Rachel Brach and Gitel Mann 

are hereinafter collectively referred to as the 

"Purchaser's Members") . . . for ONE MILLION TWO 

HUNDRED THOUSAND US DOLLARS 

($1,200,000.00). Which is SEVEN HUNDRED 

THOUSAND US DOLLARS ($700,000.00) for 

purchase of Pharmacy, and FIVE HUNDRED 

THOUSAND US DOLLARS ($500,000.00) for 

Inventory.[2]

The 2017 Contract goes on to address distribution of the proceeds of the 

sale:

David Segal and Maya Itzhakov are equal partners of 

50% each for Lakewood Pharmacy, LLC DBA Refuah 

Pharmacy . . . agree to receive SIX HUNDRED 

THOUSAND US DOLLARS ($600,000.00) each 

during closing. Also as a good will David Segal agrees 

to give Maya Itzhakov additional TWENTY 

THOUSAND US DOLLARS ($20,000.00). All three 

check will be paid in form of CERTIFIED CHECKS 

made out to MAYA ITZHAKOV $360,000.00 plus 

another check of $240,000.00, plus $20,000.00; and 

David for $600,000.00.

Apparently, Segal was still in the process of paying Itzhakov and Yakubov for 

transfers of interest previously made, as the agreement also states, "David Segal 

 

2

 For the reader's convenience, we have removed bold type where it appears in 

the agreement.
7

A-2619-17T4

agrees to continue any payments do [sic] to Maya Itzhakov and Dora Yakubov 

for MAY of 2017, and further if closing takes longer then [sic] expected."

The 2017 Contract also separately states the balance then due from the 

Westgate sale, and adds that Segal would pay amounts charged to certain credit 

cards:

David Segal agrees to pay for Westgate Pharmacy, LLC 

. . . the balance of $120,000.00 owed to Maya Itzhakov, 

plus all open Chase Master credit cards in full in 

amount of EIGHTY TWO THOUSAND SIX 

HUNDRED SIX US DOLLARS AND SEVENTY 

NINE CENTS, ($82,606.79) and THIRTY FOUR 

THOUSAND SEVEN HUNDRED SEVENTEEN US 

DOLLARS AND SIXTY CENTS ($34,717.60) plus all 

the interest and extra charges may be prior closing [sic] 

or after.

Though the contract states that it was signed on May 5, 2017, Segal 

maintains that only he signed it. He asserts he forwarded it to Itzhakov, who 

never signed it.

3 The 2017 Contract includes no provision on arbitration or 

dispute resolution. 

In her Superior Court complaint, Itzhakov alleged that the 2017 Contract

was binding, and Segal had breached it by failing to make any of the payments 

due. Segal responded, in support of his motion to stay the contract action and 

 

3

 The record before us does not include a fully executed copy of the contract. 
8

A-2619-17T4

to refer the dispute to the Rabbinical Court, that the dispute resolution provisions 

in the Lakewood Assignment and Westgate Agreement governed.4 

In denying Segal's motion, the trial judge left open the possibility of 

referring the matter to the Rabbinical Court if discovery established that the 

parties understood they were required to arbitrate before that forum and barred 

from litigating in civil court. However, the court did not limit discovery to the 

issues of the validity and scope of the arbitration provisions.

This appeal followed.

II.

Segal contends that the arbitration provisions in the Lakewood 

Assignment and the Westgate Agreement are valid contractual obligations that 

cover Itzhakov's claims, notwithstanding that she alleges breach only of the 

2017 Contract.

 

4

 In his supporting certification, Segal also addressed the merits of Itzhakov's 

claim. He alleged the 2017 agreement was not binding because Itzhakov never 

signed it. He asserted that an attorney for Itzhakov drafted an initial version; 

Segal made changes to the draft, thus constituting a counter-offer; and Itzhakov 

never accepted the changes by signing it. Segal also alleged the sale did not 

yield $1.2 million because Refuah's debts offset sale proceeds, and the inventory 

was stale and did not sell for $500,000. He contended that Itzhakov's initial 

proposal required him to guarantee the buyers' payments, but he altered that 

provision in his revised draft. 
9

A-2619-17T4

A.

We consider first the validity and enforceability of the arbitration 

agreements. We review that issue de novo, owing no deference to the trial court. 

Morgan v. Sanford Brown Inst., 225 N.J. 289, 302-03 (2016). "[A]rbitration is 

a matter of contract and a party cannot be required to submit to arbitration any 

dispute which he has not agreed so to submit." AT&T Techs., Inc. v. Commc'ns 

Workers of Am., 475 U.S. 643, 648 (1986) (citation omitted); see also Atalese, 

219 N.J. at 441. We apply state contract-law principles, placing arbitration 

agreements "on an equal footing with other contracts." Morgan, 225 N.J. at 303 

(quoting Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63, 67 (2010)).

Like any contract, an arbitration agreement "must be the product of mutual 

assent," which "requires that the parties have an understanding of the terms to 

which they have agreed." Atalese, 219 N.J. at 442 (quoting NAACP of Camden 

Cty. E. v. Foulke Mgmt., 421 N.J. Super. 404, 424 (App. Div. 2011)). In 

particular, a contractual waiver of the right to pursue a claim in court must be

"clearly and unmistakably established." Id. at 444 (quoting Garfinkel v. 

Morristown Obstetrics & Gynecology Assocs., P.A., 168 N.J. 124, 132 (2001)).

The waiver provision must "in some general and sufficiently broad way . . . 
10 A-2619-17T4

explain that the plaintiff is giving up her right to bring her claims in court or 

have a jury resolve the dispute." Id. at 447. 

Whether there was mutual assent depends not on the parties' "real intent 

but [on] the intent expressed or apparent in the writing," Leodori v. CIGNA 

Corp., 175 N.J. 293, 300 (2003) (quoting Garfinkel, 168 N.J. at 135),

considering "the contractual terms, the surrounding circumstances, and the 

purpose of the contract," Marchak v. Claridge Commons, Inc., 134 N.J. 275, 282 

(1993). This is consistent with our long-standing precedent governing contract 

interpretation in general. See Friedman v. Tappan Dev. Corp., 22 N.J. 523, 531 

(1956); see also Nester v. O'Donnell, 301 N.J. Super. 198, 210 (App. Div. 1997) 

(stating that the meaning of a contract's terms is determined by looking to "the 

objective manifestations of the parties' intent"). "Evidence of the circumstances 

is always admissible in aid of the interpretation . . . even when the contract on 

its face is free from ambiguity." Atl. N. Airlines, Inc. v. Schwimmer, 12 N.J. 

293, 301 (1953). Such extrinsic evidence is considered not to vary or contradict 

the writing but to illuminate it. Id. at 301-02.

In Atalese, the Court invalidated an arbitration agreement in a contract for 

debt-adjustment services between an individual consumer and a firm. 249 N.J. 

at 446. The agreement empowered the parties to submit a dispute to an arbitrator 
11 A-2619-17T4

whose decision would be final. Ibid. The Court focused on the fact that the 

contract did not explain what arbitration was or how it varied from judicial 

dispute resolution; nor did the contract clearly and unambiguously state that 

plaintiff was waiving her right to sue in court. Ibid. 

Segal contends that the rule of Atalese applies only to consumer and 

employment contracts. We are unpersuaded. No doubt, the Court in Atalese

focused on consumers. But the principle that a person must knowingly waive 

the right to sue in court applies to any contracting party, whatever the contract's 

purpose. The "average member of the public" to whom the Court refers may 

enter into a contract on behalf of his or her business, or to secure a consumer 

product or service. See id. at 442. In either case, the person must understand 

that arbitration precludes the right to sue. Ibid.

A party's sophistication may certainly bear on whether he or she 

knowingly and voluntarily agreed to a contract's terms. See McMahon v. City 

of Newark, 195 N.J. 526, 546 (2008) (determining to enforce a contract between 

"obviously sophisticated parties"); Van Duren v. Rzasa-Ormes, 394 N.J. Super. 

254, 265 (App. Div. 2007) (noting that contracting parties were "highly 

sophisticated businesspeople of relatively equal bargaining position"), aff'd o.b., 

195 N.J. 230 (2008). However, even a sophisticated party, or one represented 
12 A-2619-17T4

by counsel, will not be deemed to waive his or her rights – whether 

constitutional, statutory, or common-law – without clear and unambiguous 

language. See Garfinkel, 168 N.J. at 136 (rejecting the suggestion "that the 

Court should focus predominately on the plaintiff's level of sophistication to 

ensure that he acted of his own volition," because "the Court must be convinced 

that he actually intended to waive his statutory rights" through "[a]n 

unambiguous writing"); see also Dispenziere v. Kushner Cos., 438 N.J. Super. 

11, 18-20 (App. Div. 2014).

1.

Applying the foregoing principles, we affirm the trial court's conclusion 

that, on its face, the Lakewood Assignment does not explain with sufficient 

clarity that the parties waived their right to sue in civil court by submitting to 

dispute resolution by the Lakewood Rabbinical Court; nor does it clearly 

contrast arbitration with litigation. The Lakewood Assignment simply states

that "[a]ll disputes arising from this transaction shall be decided solely by the 

Badatz Rabbinical Court of Lakewood . . . in accordance with the standard 

arbitration agreement of the Rabbinical Court, which is hereby incorporated into 
13 A-2619-17T4

this agreement." Yet, there is no evidence that the parties were provided, or 

understood the terms of that "standard arbitration agreement." 5 

On the other hand, discovery may disclose extrinsic evidence that 

illuminates the meaning of the arbitration provision. In particular, in the years 

since the Lakewood Assignment was executed, the parties may have referred 

matters to the Rabbinical Court and demonstrated an awareness that resort to a 

judicial forum was barred. See Michaels v. Brookchester, Inc., 26 N.J. 379, 388 

(1958) (stating that "subsequent conduct of the parties in the performance of the 

agreement may serve to reveal their original understanding"); see also 

Restatement (Second) of Contracts § 202 cmt. g (Am. Law Inst. 1981) (stating 

that "[t]he parties to an agreement know best what they meant, and their action 

under it is often the strongest evidence of their meaning"). Furthermore, it may 

conceivably be demonstrated that within the Orthodox Jewish community, a 

provision that calls for dispute resolution by a Rabbinical Court is clearly 

understood to preclude resort to civil courts. See Meshel v. Ohev Sholom 

Talmud Torah, 869 A.2d 343, 348 (Md. 2005) (noting the view that "under 

Jewish law disputes between Jews are, to the extent possible, to be decided by 

other Jews through the mechanism of a Beth Din," or rabbinical court). The 

 

5

 The "standard arbitration agreement" is not included in the record before us.
14 A-2619-17T4

"vocabulary of a particular place," see Restatement (Second) of Contracts § 202 

cmt. f – in this case, the Orthodox Jewish community – may be relevant in 

interpreting the arbitration provision of the Lakewood Assignment. 

2.

The Westgate Agreement does not suffer from the same lack of clarity

regarding the waiver of judicial dispute resolution. That agreement obliges the 

parties to refer to the Rabbinical Court all "questions of Jewish law that are 

relevant to this sale and to this document" and specifically provides that "under 

no circumstances shall any dispute between [the parties] come to the civil 

courts." Consistent with Atalese, this provision clearly and unmistakably 

conveys that the parties waive resort to a judicial forum to resolve relevant 

questions of Jewish law. 

On the other hand, the reference of interpretative questions to Yisroel 

Knopfler does not necessarily preclude judicial resolution of disputes 

implicating such questions. It simply requires the parties to "accept his 

interpretation" of the language he drafted. Under the agreement, Knopfler's 

interpretation could be offered before the Rabbinical Court, if it is adjudicating 

a relevant question of Jewish law, or it could be offered before the civil court, 

if it is adjudicating some other question. The parties have simply consented to 
15 A-2619-17T4

Knopfler's interpretation. That does not make Knopfler an arbitrator. See

Capparelli v. Lopatin, ___ N.J. Super. ___, ___ (App. Div. 2019) (slip op. at 29) 

(concluding that parties' referral of certain issues to their corporation's former 

counsel for his "final and binding determination" was not an arbitration 

agreement).

The Westgate Agreement's arbitration clause is problematic, nonetheless.

That is because it raises a question of religious doctrine that may render the 

clause unenforceable by a civil court. Arbitrability under the Westgate 

Agreement depends on a finding that the dispute raises "questions of Jewish law 

that are relevant to this sale and to this document." 

"[T]the law presumes that a court, not an arbitrator, decides any issue 

concerning arbitrability," unless there is "clea[r] and unmistakabl[e]" contrary 

evidence. Morgan, 225 N.J. at 304 (citation omitted). As the agreement did not 

expressly assign to the Rabbinical Court the task of determining what qualifies 

as an issue of Jewish law – as distinct from the task of resolving such issues – it 

is the court's presumptive responsibility to decide whether an issue is arbitrable. 

However, defining what constitutes an issue of Jewish law must be 

decided according to "neutral principles," that is, objective secular principles 

that do not require a court to intrude into religious questions. See Elmora 
16 A-2619-17T4

Hebrew Ctr, Inc. v. Fishman, 125 N.J. 404, 414-15 (1991) (stating that a court 

may resolve a dispute involving an ecclesiastical body by applying neutral, but 

not religious, principles); Meshel, 869 A.2d at 354, 363 (compelling arbitration 

by rabbinical court, consistent with neutral principles, where synagogue's 

bylaws required arbitration of members' claims against the congregation). 

Deciding what constitutes a "question of Jewish law" would unavoidably 

entangle the court in religious matters. The only possible means of resolution 

by neutral principles may be by accepting Knopfler's interpretation of the 

agreement, including his definition of "questions of Jewish law that are relevant 

to this sale and to this document."

We cannot decide, on this record, whether hearing from Knopfler will be 

sufficient to enable the trial court to decide the arbitrability of Westgate-related 

issues applying neutral principles. As Segal filed his motion in lieu of an 

answer, we do not know what questions or defenses he may raise relating to 

Westgate. We know only that he contends the 2017 Contract is not binding at 

all because Itzhakov did not sign it. It is unclear whether the necessity of a 

signature raises "a question of Jewish law," or whether Knopfler's interpretation 

will enable the court to determine that threshold question according to neutral 

principles.
17 A-2619-17T4

B.

Even if an arbitration agreement is valid and enforceable, the court must 

ascertain whether a dispute falls within its scope. A court must resolve 

ambiguities about the scope of an arbitration in favor of arbitration. See, e.g.,

Lamps Plus, Inc. v. Varela, ___ U.S. ___, ___, 139 S. Ct. 1407, 1418 (2019). 

The "presumption of arbitrability" applies "only where a validly formed and 

enforceable arbitration agreement is ambiguous about whether it covers the 

dispute at hand . . . [and] where the presumption is not rebutted." Granite Rock 

Co. v. Int'l Bhd. of Teamsters, 561 U.S. 287, 301 (2010). The presumption does 

not apply until it is determined there is a "validly formed and enforceable 

arbitration agreement." Ibid. 

However, even when the presumption governs, state-law principles of 

contract interpretation still apply, albeit with "due regard" to pro-arbitration 

policy. See Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Junior Univ., 

489 U.S. 468, 476 (1989). The presumption does not override the parties' clear 

intent. Granite Rock Co., 561 U.S. at 301; see also Inetianbor v. CashCall, Inc., 

768 F.3d 1346, 1353 (11th Cir. 2014) (stating "the presumption in favor of 

arbitration" does not override "the intent of the parties as determined by the 

'objective meaning of the words used'") (citations omitted).
18 A-2619-17T4

1.

We turn first to whether enforcement of the 2017 Contract's provisions 

regarding the Westgate sale (requiring Segal to pay the $120,000 balance plus 

open credit cards) triggers the Westgate Agreement's arbitration provision. As 

noted, the 2017 Contract is silent on arbitration. However, an agreement to 

arbitrate may encompass disputes arising from a subsequent agreement, if the 

first is worded broadly enough or "the two agreements are merely interrelated 

contracts in an ongoing series of transactions." Int'l Ambassador Programs, Inc. 

v. Archexpo, 68 F.3d 337, 340 (9th Cir. 1995). "[W]here a later contract lacking 

an arbitration clause supplements an earlier 'umbrella' agreement containing 

such a clause, disputes under the later contract are arbitrable." Cornell Univ. v. 

UAW Local 2300, 942 F.2d 138, 140 (2d Cir. 1991).

On the other hand, if the agreements are independent of one another, the 

former's arbitration clause will not control the latter. Int'l Ambassador 

Programs, 68 F.3d at 340. "Where the arbitration clause is narrow, a collateral 

matter will generally be ruled beyond its purview." Louis Dreyfus Negoce S.A. 

v. Blystad Shipping & Trading, Inc., 252 F.3d 218, 224 (2d Cir. 2001). In 

addition, "an entirely superseding agreement renders a prior agreement's 

arbitration clause ineffective, even if the superseding agreement is silent on 
19 A-2619-17T4

arbitration." Dasher v. RBC Bank (USA), 745 F.3d 1111, 1122 (11th Cir. 2014). 

Whether an agreement is superseding is a question of state contract law, and the 

presumption of arbitration does not attach to its resolution. Id. at 1120-21.

As pertains to the Westgate transaction, the 2017 Contract may be a 

novation – an agreement that substitutes for, and discharges, a prior agreement. 

See Sixteenth Ward Bldg. & Loan Ass'n of Newark v. Reliable Loan, Mortg. & 

Sec. Co., 125 N.J. Eq. 340, 342 (E. & A. 1939). We recognize that a novation 

is never presumed and must be a product of the parties' "clear and definite 

intention." Tolland v. Lista, 46 N.J. Super. 272, 277 (App. Div. 1957). 

However, the 2017 Contract may have been intended as a complete substitute 

for the Westgate Agreement and would thus supersede the Westgate arbitration 

clause. The 2017 Contract appears to extinguish any claims by Segal to offset 

his obligation with pre-sale costs or for any other breach of the Westgate 

Agreement. It also addresses an entirely new issue involving credit card bills. 

Particularly since neither party raised the issue of novation, we remand to the 

trial court to determine whether the 2017 Contract was intended to supersede 

the Westgate Agreement. 
20 A-2619-17T4

2.

Turning to the Lakewood Assignment, and assuming for argument's sake 

that the trial court finds the arbitration clause in that agreement valid based on 

extrinsic evidence produced in discovery, the court must then decide whether 

the arbitration clause applies to Itzhakov's claims under the 2017 Contract.

On its face, the language of the Lakewood Assignment is ambiguous, as 

it is susceptible of two plausible interpretations. See Chubb Custom Ins. Co. v. 

Prudential Ins. Co. of Am., 195 N.J. 231, 238 (2008) (stating an ambiguity exists 

when the contractual terms "are susceptible to at least two reasonable alternative 

interpretations"). The document refers to arbitration issues "arising from this

transaction." This may refer only to disputes specifically involving the transfer 

of Yakubov's interests or Segal's employment – but not a dispute involving the 

sale of the business after Yakubov no longer had an interest in it. Alternatively, 

the provision could be more broadly understood to cover any dispute that would 

not exist but for the assignment – including issues of governance, distributions, 

and allocation of proceeds to company debts – all of which the agreement 

addresses. 

Because the scope of the clause is ambiguous, we apply the presumption 

of arbitrability and conclude that the provision's broad wording covers the 
21 A-2619-17T4

parties' dispute over the proceeds of the Refuah sale. We also note that the 

provisions regarding the Refuah sale do not appear to be a novation of the 

Lakewood Assignment. The provision regarding Refuah simply provided the 

amount each party would receive from the sale (plus Segal's $20,000 "good will" 

payment to Itzhakov). The provision neither referenced nor clearly modified 

any terms of the Lakewood Assignment, including the priority of allocating 

proceeds to outstanding debts. 

III.

In sum, the arbitration provision in the Lakewood Assignment on its face 

does not pass muster under Atalese. However, discovery may uncover extrinsic 

evidence of the parties' objective manifestations of intent to waive any resort to 

a judicial forum, thus satisfying Atalese. Upon such proofs, the arbitration 

provision would be valid and enforceable. Applying the presumption of 

arbitrability, the Lakewood Assignment's arbitration clause would also cover the 

parties' dispute over the distribution of the proceeds of the Refuah sale. 

The Westgate Agreement's arbitration clause satisfies Atalese. However, 

it may enmesh the court in questions of religious doctrine, unless Knopfler's 

testimony enables the court to apply neutral principles to the question of what 

issues are arbitrable. Additionally, the 2017 Contract may be a novation of the 
22 A-2619-17T4

Westgate Agreement and supersede its arbitration clause. Since the 

determination of a novation is subject to the parties' intention, we remand that 

issue to the trial court for its initial determination in light of the evidence. If the 

court finds no novation, it must then determine if Knopfler's interpretation will 

allow it to construe the arbitration clause using neutral principles. If it cannot 

do so, the arbitration clause cannot be enforced and Itzhakov's suit, as it relates 

to Westgate, must proceed in the trial court. 

Based on the foregoing analysis, we believe discovery should be limited 

to the issue of arbitration – namely, the validity of the Lakewood Assignment's 

arbitration clause and the scope and enforceability of the Westgate arbitration 

clause. See Guidotti v. Legal Helpers Debt Resolution, L.L.C., 716 F.3d 764, 

776 (3d Cir. 2013) (stating that when an agreement to arbitrate is in dispute, the 

parties should be entitled to limited discovery on that issue, after which "the 

court may entertain a renewed motion to compel arbitration"). To permit 

plenary discovery would undermine the parties' agreement – assuming such a 

valid agreement exists – to avoid judicial dispute resolution.

Affirmed in part, modified in part, and remanded. We do not retain 

jurisdiction.