Court Opinion

ID: 4429905
Source: CourtListenerOpinion
Date Created: 2019-08-20 19:32:20.769819+00
Date Added: 2024-06-11T14:50:53.457072
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NOT FOR PUBLICATION WITHOUT THE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-3219-17T3

FOULKE MANAGEMENT CORP.,

          Plaintiff-Respondent,

v.

DOMESTIC LINEN SUPPLY CO. INC.,

          Defendant-Appellant,

and

AMERICAN ARBITRATION
ASSOCIATION,

     Defendant.
_____________________________________

                    Submitted November 7, 2018 – Decided December 5, 2018

                    Before Judges Suter and Firko.

                    On appeal from Superior Court of New Jersey, Law
                    Division, Camden County, Docket Nos. L-2354-14 and
                    L-4057-13.

                    Burton Neil & Associates, PC, attorneys for appellant
                    (Joseph D. DiGuglielmo, of counsel and on the briefs).
            Capehart & Scatchard, attorneys for respondent (Laura
            D. Ruccolo, on the brief).

PER CURIAM

      This matter is before us for a second time. In our prior unpublished

opinion,1 we remanded and directed the trial court to resolve the dispute as to

whether Domestic Linen Supply Company, Inc., a Pennsylvania corporation

(Domestic PA) or Domestic Linen Supply Company, Inc., a New Jersey

corporation (Domestic NJ) was the contracting party to the rental agreements at

issue and stayed arbitration pending resolution of this factual dispute. On

remand, the trial judge did not comply with our directive and issued an order on

February 2, 2018, compelling a jury trial to determine the proper parties and

permitting substitution of Domestic PA for Domestic NJ if so found by the jury.

On March 15, 2018, the trial court denied defendants' motion for

reconsideration. Because our prior mandate did not direct a jury to decide

whether Domestic PA or Domestic NJ was the proper party, we vacate the

February 2, 2018 and March 15, 2018 orders, reverse, and remand to the t rial

court for further proceedings.

1
  Foulke Mgmt. Corp. v. Domestic Linen Supply Co., No. A-0752-14 (App.
Div. Mar. 14, 2016).
                                                                        A-3219-17T3
                                       2
                                        I.

      The underlying litigation is extensive and accompanied by a complex

procedural history, as set forth in our prior opinion. For purposes of this

opinion, we provide the core facts and procedural history leading to the entry of

the orders under review.

      Following remand, on May 20, 2016, the trial court notified the parties it

would dismiss the complaint for lack of prosecution. In response, plaintiff filed

a request to enter default against defendants for failing to plead or defend the

complaint that was entered on May 25, 2016. On June 13, 2016, defendants

filed an amended answer with affirmative defenses.

      Following defendants' failure to respond to discovery, an order was

entered compelling them to provide discovery and extending the discovery end

date until November 11, 2016. A motion for summary judgment was filed by

defendants on March 17, 2017, seeking a ruling that Domestic PA was the proper

party to the contracts, and declaring the arbitration clauses in the contracts

valid.2 In the alternative, defendants moved for leave to amend their answer to

2
   In our prior opinion, we noted that: "Our opinion is not to be construed as
suggesting the outcome of any issue concerning the parties, the validity of the
arbitration clauses, or whether discrete issues do not fall within the arbitration
clauses." Foulke, slip op. at 15. The parties were also restrained from pursuing

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                                        3
assert counterclaims against plaintiff. The motions were denied on May 12,

2017, and defendants' motion for reconsideration was denied on July 7, 2017.

        Thereafter, Domestic PA filed a complaint against plaintiff in the United

States District Court for the Eastern District of Pennsylvania for breach of

contract, and to compel arbitration, upon dissolution of our order. Plaintiff filed

a motion to dismiss, in lieu of an answer, on November 28, 2017, based upon

the "first filed rule" because "the issues are presently before the New Jersey

Superior Court and have been since 2013." 3

        On January 2, 2018, plaintiff filed a motion in this case to determine the

proper parties, and in the event a jury found Domestic PA to be the proper party,

a substitution be made. In contravention of our clear mandate, the judge entered

the following order:

              THIS MATTER having been opened to the court by
              Laura D. Ruccolo, Esq. of Capehart Scatchard, P.A.,
              attorneys for plaintiff in the above-entitled action, upon
              Notice of Motion for an Order compelling jury trial on
              factual issue of Plaintiff's contract defense and to
              substitute parties based on findings; and it appearing to
              the court after reviewing the moving papers that the

arbitration until the issue of identification of the proper party was resolved. We
also held that the first judge's ruling as to the validity of the arbitration clauses
was interlocutory and subject to reconsideration.
3
    The outcome of the motion to dismiss is not a part of this record.
                                                                             A-3219-17T3
                                          4
            requested relief should be granted, and for good cause
            shown;

            NOW THEREFORE, it is on this 2nd day of February
            2018,

            HEREBY ORDERED that (1) the instant matter be
            heard in the presence of a jury; and (2) be permitted to
            substitute parties based on findings.4

      On March 21, 2018, defendants appealed the February 2, 2018 order and

requested an adjournment of the March 26, 2018 trial date. The request was

granted, and trial was rescheduled for April 16, 2018. On March 28, 2018,

defendants filed a motion with the trial court seeking a bifurcation and

proceeding first with the party identification issue.

      Defendants filed a joint motion for leave to appeal the February 2, 2018

order on April 9, 2018. The next day, they renewed their request to adjourn the

April 16, 2018 trial date arguing the appeal divested the trial court of

jurisdiction. On May 10, 2018, we granted defendants' motion for leave to

appeal.

      By proceeding in this manner, the trial court circumvented our directive.

In his oral decision denying defendants' motion for reconsideration, the judge

4
   The motion was granted as unopposed, despite efforts made by defendants to
file opposition papers that were rejected by the clerk's office. No oral argument
was conducted.
                                                                         A-3219-17T3
                                         5
improvidently found that the determination of the proper party was a "factual

issue that should be decided by a jury."

                                       II.

      Defendants raise the following arguments on appeal:

            A.    The Court should vacate the Trial Court's
                  February 2, 2018 Order compelling a jury trial on
                  Foulke's substantive claims.

                  1.    The Order compelling a jury trial on
                        Foulke's substantive claims violates the
                        contractual requirement of arbitration.

                  2.    The Order compelling a jury trial on
                        Foulke's substantive claims violates this
                        Court's March 24, 2016 Order requiring the
                        Trial Court to first determine whether
                        Foulke entered the Contracts with
                        Domestic NJ.

                  3.    The Trial Court lacks subject matter
                        jurisdiction over the case and has no power
                        to conduct a trial or substitute parties.

                  4.    The Order compelling a jury trial on
                        Foulke's substantive claims is unnecessary
                        because there are no factual questions for a
                        jury to decide.

                        a.     The plain language of the contracts
                               proves that Domestic PA is the party
                               to the contracts.

                                                                       A-3219-17T3
                                       6
                        b.    Domestic PA's invoices to Foulke
                              prove that Domestic PA is the party
                              to the contracts.

                        c.    Foulke's own business records prove
                              that Domestic PA is the party to the
                              contracts.

                        d.    Foulke's attorney's own pre-
                              litigation    communications     to
                              Domestic PA regarding the contracts
                              prove that Domestic PA is the party
                              to the contracts.

                        e.    The only "facts" Foulke presents to
                              show that Domestic NJ is the
                              contracting party are really questions
                              of law and/or inadmissible parol
                              evidence.

            B.    The Court should vacate the Trial Court's
                  February 2, 2018 Order permitting substitution of
                  Domestic PA as the defendant after trial.

                  1.    The Order permitting substitution of
                        Domestic PA as the defendant after trial
                        violates Rules 4:2-2, 4:4-4, and 4:9-1 by
                        allowing Foulke to serve a complaint
                        against Domestic PA.

                  2.    Foulke's claims against Domestic PA
                        should be heard as counterclaims in the
                        first-filed, prior-pending Federal Court
                        action.

      When an appellate court orders a remand "the trial court is under a

peremptory duty to obey the mandate of the appellate tribunal precisely as it is

                                                                        A-3219-17T3
                                       7
written." Flanigan v. McFeely, 20 N.J. 414, 420 (1956); see also Lowenstein v.

Newark Bd. of Educ., 35 N.J. 94, 116-17 (1961); State v. Kosch, 454 N.J. Super.

444 (App. Div. 2018); Henebema v. Raddi, 452 N.J. Super. 438 (App. Div.

2017), certif. denied, 233 N.J. 215 (2018). In fact, the "terms and scope of the

remand or specific instructions it has issued regarding the litigation bind[s] the

court below whether it agrees or not." Pressler & Verniero, Current N.J. Court

Rules, cmt. 2 on R. 2:9-1 (2019).

      "[T]he very essence of the appellate function is to direct conforming

judicial action. As such, the trial court has no discretion when a mandate issues

from an appellate court. It simply must comply." Tomaino v. Burman, 364 N.J.

Super. 224, 233 (App. Div. 2003) (citations omitted). The trial judge failed to

comply with these principles.

      Consequently, we direct that the trial court must:

            (1)   conduct a case management conference within
                  thirty days to ascertain if there are any
                  outstanding discovery issues relative to the
                  identification of the proper party (Domestic NJ or
                  Domestic PA).

            (2)   proceed with a hearing, without a jury, within
                  sixty days thereafter as to the identification issue.

            (3)   issue an opinion within thirty days after the
                  completion of the hearing as to the identification
                  issue only.

                                                                          A-3219-17T3
                                        8
Thereafter, the trial court must determine whether the matter will proce ed to

arbitration as previously ordered by the first judge, or if a motion for

reconsideration will be entertained as to whether arbitration is appropriate.

      We have considered defendants' other contentions in light of the record

and applicable legal principles and conclude that they are premature at this

juncture and without sufficient merit to warrant discussion in a written opinion.

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

      We reverse the February 2, 2018 and March 15, 2018 orders and remand

for further proceedings in conformity with our prior opinion as well as this

opinion.

      Reversed and remanded. We do not retain jurisdiction.

                                                                          A-3219-17T3
                                        9