Court Opinion

ID: 9919083
Source: CourtListenerOpinion
Date Created: 2024-01-17 15:07:21.979723+00
Date Added: 2024-06-11T08:03:52.731305
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE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.

                                                        SUPERIOR COURT OF NEW JERSEY
                                                        APPELLATE DIVISION
                                                        DOCKET NO. A-1788-22

56 EASTON REDEV LLC,

          Plaintiff-Respondent,

v.

DR. RASIK JIVANI, M.D.,
NIRAJ JIVANI, and
STEAK SHACK LLC,

     Defendants-Appellants.
___________________________

                   Submitted October 17, 2023 – Decided January 17, 2024

                   Before Judges Sumners and Smith.

                   On appeal from the Superior Court of New Jersey,
                   Chancery Division, Middlesex County, Docket No.
                   C-000112-22.

                   Blick Law LLC, attorneys for appellants (Charles D.
                   Whelan, III, and Shaun I. Blick, on the briefs).

                   Kelso and Burgess, attorneys for respondent (Kurt J.
                   Trinter, on the brief).

PER CURIAM
      In this commercial tenancy dispute, plaintiff, owner of 56B Easton Ave.

in New Brunswick (the property), filed a verified complaint and order to show

cause in the Chancery Division against its tenants, defendants Dr. Rasik Jivani,

M.D., Niraj Jivani, and Steak Shack LLC. Plaintiff alleged multiple violations

of the parties' lease agreement and sought temporary restraints, a declaratory

judgment for an order of possession, and damages for nonpayment of rent, lease

violations, breach of the covenant of good faith and fair dealing, fraud, and

unjust enrichment.

      Defendants moved to dismiss the complaint, contending the parties' lease

agreement mandated that the dispute be resolved through arbitration.           In

interlocutory and reconsideration orders, Judge Thomas D. McCloskey denied

the request and ordered the dispute be resolved by the court. We conclude there

is no basis to disturb the orders and affirm substantially for the reasons

expressed by the judge in his comprehensive and cogent oral decision.

      Before the current dispute, the prior property owner filed three lawsuits

against defendants leading to appeals to this court; two culminated in

unpublished decisions by this court and the other resulted in a settlement and

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voluntary dismissal.1   Although those actions may provide some relevant

background to the present litigation, we need not discuss them. We also need

not detail the procedural history in this lawsuit regarding the judge's orders

issuing temporary restraints against defendants; granting preliminary relief and

final injunctive relief to plaintiff; awarding compensatory damages to plaintiff;

allowing plaintiff to seek additional compensatory damages upon inspection of

the property for any physical damage caused by defendants; and granting

plaintiff's motion to strike defendants' answer. Rather, we limit our discussion

to the sole issue appealed: whether the lease agreement requires arbitration.

      As a preliminary matter, we reject plaintiff's contention that the order

denying defendants' motion to dismiss was interlocutory and therefore not

appealable without leave of this court because they did not move to compel

arbitration. Although defendants did not file a motion to compel arbitration with

their motion to dismiss, Judge McCloskey properly inferred defendants' motion

to dismiss based on the lease agreement's arbitration provision was effectively

a motion to dismiss for lack of subject matter jurisdiction under Rule 4:6-2(a).

1
  Unpublished opinions: Fernandes v. Jivani, No. A-3404-16 (App. Div. Apr.
30, 2018) and Fernandes v. Jivani, No. A-3560-17 (App. Div. Jan. 8, 2020);
Dismissal: Fernandes v. Jivani, No. A-003121-19.

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The judge dismissed defendants' contention that the court did not have subject

matter jurisdiction over plaintiff's claims, determining the lease agreement's

arbitration provision was not enforceable, and then adjudicated the merits of

those claims. There was nothing erroneous with the judge's issuance of an

interlocutory order denying arbitration and deciding the case. See GMAC v.

Pittella, 205 N.J. 572, 575 (2011) ("[A]ny order compelling or denying

arbitration shall be deemed final for purposes of appeal, but that the trial court

shall retain jurisdiction to address other issues pending the appeal."). Because

the order denied the request to compel arbitration, it is appealable as of right

under Rule 2:2-3(b)(8).

      Turning to the merits, defendants argue the judge erred in not enforcing

the lease agreement's arbitration provision. Based on our de novo review of the

judge's denial of defendants' motion to dismiss, Int'l Bhd. of Elec. Workers Loc.

400 v. Borough of Tinton Falls, 468 N.J. Super. 214, 223 (App. Div. 2021), we

disagree.

      The parties were both assignees of the lease agreement and stepped into

the shoes of the original signatories. Thus, they are equally bound by its terms.

See Satellite Gateway Commc'ns, Inc. v. Musi Dining Car Co., 110 N.J. 280,

287 (1988). Article 34 of the lease states tenants "waive[] all right to trial by

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jury in any action or summary or other judicial proceeding hereafter instituted

by [l]andlord against [them] in respect to the demised premises." Article 38

provides "[a]ny controversy arising under, out of, in connection with, or relating

to this [l]ease or the breach hereof, shall be determined and settled by arbitration

held in Newark, New Jersey, in accordance with the rules of the American

Arbitration Association." It further sets forth the proper procedures to obtain

relief through arbitration and states "[a]ny award rendered thereunder shall be

final and binding upon all parties and judgment may be entered thereon in any

court having jurisdiction."

      Given these provisions, the judge ruled the lease did not contain a clear

and unambiguous waiver of the parties' right to pursue a claim in court, as

required by Flanzman v. Jenny Craig, Inc., 244 N.J. 119, 137 (2020) (citing

Atalese v. U.S. Legal Servs. Grp., L.P., 219 N.J. 430, 443 (2014)). The judge

reasoned:

            [T]he language of the arbitration provision . . . contains
            no such articulation of the difference between the civil
            litigation proceeding or arbitration. And, frankly, it's
            certainly contemplated that there would be litigation
            pursuant to the provisions of Article 34 if the landlord
            undertook action to seek possession of the premises in
            respect of which the tenant would waive a right to a jury
            trial. That's what that says in that paragraph.

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      The judge further cited Dispenziere v. Kushner Cos., where this court

concluded "[a] clause depriving a citizen of access to the courts should clearly

state its purpose." 438 N.J. Super. 11, 17 (App. Div. 2014) (quoting Atalese,

219 N.J. at 444). In turn, the judge reasoned the arbitration provision was

unenforceable because it "does not explain what arbitration is" or "indicate how

arbitration is different from a proceeding in a court of law." Id. at 18 (quoting

Atalese, 219 N.J. at 446-47).       Having made this finding, the judge next

determined that Article 34's waiver of jury trial rights did not sufficiently create

an enforceable arbitration right encompassing the entire lease.

      In addition, even if the arbitration provision was enforceable, the judge

determined defendants' failure to raise it in the prior litigation seeking to enforce

the lease agreement terms constituted a waiver of their arbitration rights. In

finding waiver, the judge relied upon Cole v. Jersey City Med. Ctr., 215 N.J.

265, 283 (2013), where the Court reasoned:

             [The defendant] waived its right to arbitrate during the
             course of litigation. [The defendant] engaged in all of
             the usual litigation procedures for twenty-one months
             and, only on the eve of trial, invoked its right to
             arbitrate. Such conduct undermines the fundamental
             principles underlying arbitration and is strongly
             discouraged in our state.

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      Defendants sat on their purported arbitration rights much longer than the

defendant in Cole, not seeking to compel arbitration in three separate lawsuits.

We note the first suit, Fernandes, No. A-3404-16, was filed by the previous

landlord about ten years before the present action.

      Finally, because defendants did not brief the argument regarding the

judge's denial of their reconsideration motion, that argument is deemed waived.

See 539 Absecon Blvd., L.L.C. v. Shan Enters. Ltd. P'ship, 406 N.J. Super. 242,

272 n.10 (App. Div. 2009); Pressler & Verniero, Current N.J. Court Rules, cmt.

5 on R. 2:6-2 (2024) (noting "an issue not briefed is deemed waived"); N.J. Dep't

of Env't Prot. v. Alloway Township, 438 N.J. Super. 501, 505 n.2 (App. Div.

2015).    Nevertheless, the trial judge denied defendants' motion for

reconsideration on the same grounds it denied their motion to dismiss, which we

now affirm.

      To the extent we have not specifically addressed any of plaintiff's

arguments, we conclude they lack sufficient merit to warrant discussion in a

written opinion. R. 2:11-3(e)(1)(E).

      Affirmed.

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