Court Opinion

ID: 4430829
Source: CourtListenerOpinion
Date Created: 2019-08-20 19:47:53.137498+00
Date Added: 2024-06-11T14:50:51.316243
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NOT FOR PUBLICATION WITHOUT THE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-3344-16T2

CHEVRA LOMDEI TORAH and
ELIYAOU LEVINE,

        Plaintiffs-Appellants,

v.

LIBA ARYEH and MOSHE ARYEH,

        Defendants-Respondents,

and

ELIZABETH INDERRIEDEN and
YEHOSHUA FRANKEL,

     Defendants.
______________________________

              Argued telephonically April 12, 2018 –
              Decided July 23, 2018

              Before Judges Nugent and Geiger.

              On appeal from Superior Court of New Jersey,
              Chancery Division, Ocean County, Docket No.
              C-000234-10.

              Lawrence H. Shapiro argued the cause for
              appellants   (Ansell   Grimm & Aaron, PC,
              attorneys; Lawrence H. Shapiro and Nicole
              Miller, on the brief).
          Sterling   Rauf         argued    the    cause    for
          respondents.

PER CURIAM

     This appeal arises out of two rounds of binding arbitration

by two different Rabbinical courts of a dispute over the right of

first refusal to purchase adjoining property under Jewish law.1

Plaintiffs appeal from an April 5, 2017 order, which confirmed a

March 3, 2017 Chancery Division order: (1) terminating a May 13,

2013 arbitration agreement to submit the dispute to a second

Rabbinical court; and (2) granting defendant's motion to enforce

the trial court's September 16, 2016 order, which enforced the

ruling of the second Rabbinical court, compelling plaintiffs to

comply with its earlier rulings or else have its earlier rulings,

which entitled plaintiffs to buy the disputed property, reversed

and vacated.     Because we find the trial court erred by denying

defendants' motion to vacate the first arbitration award and

plaintiffs'    application   to   confirm   that   award   without    making

adequate factual findings and conclusions of law, we vacate the

two inconsistent June 15, 2012 orders and remand.

1
   Absent an enforceable option to purchase, the common law and
statutes of this State do not recognize a right of first refusal
to purchase adjoining property.

                                     2                               A-3344-16T2
      We glean the following facts from the record.              Plaintiffs

Chevra Lomdei Torah and Eliyaou Levine own property in Lakewood,

New Jersey.     Defendants Liba Aryeh and Moshe Aryeh own adjoining

property (the Property), which they attempted to sell to third

parties.      Under Judaic law, an adjoining property owner has a

right    of    first   refusal   to   purchase    neighboring     property.

Plaintiffs sought to enforce the right to purchase the Property

from defendants.2      In December 2010, plaintiffs filed suit against

defendants in the Chancery Division.3

      In April 2011, the parties entered into a consent order to

submit their dispute to a Rabbinical court in accordance with

Judaic law.      In August 2011, the parties entered into a second

consent order that provided the decision rendered by the Badatz

of Kollel Averichum and Yeshiva (the First Rabbinical Court) shall

be docketed in the Superior Court of New Jersey as an arbitration

award enforceable in the courts of this State.

      On September 6, 2011, the First Rabbinical Court ruled in

favor   of    plaintiffs,   confirming    their   right   to   purchase   the

Property.      On September 27, 2011, the First Rabbinical Court

2
    Elizabeth Inderrieden, Edward B. Inderrieden, and Yehoshua
Frankel were also named as defendants. The claims against them
were subsequently dismissed by plaintiffs and they are not
participating in the appeal.
3
    The record does not contain the complaint or defendants' answer.

                                      3                              A-3344-16T2
further ruled defendants were to deed the Property to plaintiffs

upon payment of $310,000.           This amount was later revised to

$285,000, payable to defendants, with the remaining $25,000 to be

placed in escrow with the First Rabbinical Court.

     Defendant   moved     to   vacate   the   First   Rabbinical   Court's

ruling,   claiming   the    First    Rabbinical    court   suffered     from

conflicts and engaged in inappropriate activities.4            Based on a

letter under the five-day rule, plaintiffs sought to enter the

First Rabbinical Court's ruling as a judgment.          While defendant's

motion was pending, the trial court sua sponte requested Rabbi

Yisroel Belsky, "as a friend of the court," to "review the facts

of the case and provide the [c]ourt with [his] opinion as to

whether the [First Rabbinical Court's] decision was correct under

Halakhah, Jewish law," due to the "very sensitive religious issues"

with which the court was "not completely familiar."

     In a June 7, 2012 letter to the court, which neither party

received, Rabbi Belsky concluded the First Rabbinical Court's

ruling "had no grounds upon which to stand, and was not viable

under Halakhah,"and opined "it would be a serious miscarriage of

justice for any [c]ourt to enforce the decision."            Rabbi Belsky

4
  The record does not include the motion papers filed by defendant.
Consequently, the record does not indicate the circumstances
surrounding the alleged conflicts of interest or inappropriate
activities.

                                     4                              A-3344-16T2
offered "to further enumerate [his] reasoning," but there is no

indication he provided any additional reasoning.

      Plaintiffs argued Rabbi Belsky had no authority to provide

such an opinion.        The trial court disagreed, indicating it had

given authority to Rabbi Belsky to do so.           The trial court also

stated Rabbi Belsky "was the one who would normally oversee" the

First Rabbinical Court, without explaining in what capacity or

under what authority.

      On June 15, 2012, the trial court denied defendant's motion

to vacate the First Rabbinical Court's ruling and refused to enter

the ruling as a judgment.       The trial court expressed three reasons

for   not   enforcing    the   ruling.   First,    it   found   plaintiffs'

application    procedurally      deficient   and   untimely.       Second,

plaintiffs did not formally move to enter the ruling as a judgment.

Third, the trial court accepted Rabbi Belsky's opinion that a

conflict of interest existed, stating:

            [I]n addition, . . . based on what I've seen
            so far before the file, I'm more inclined to
            believe that Rabbi Belsky was supposed to
            review this by the parties. But it doesn't
            matter whether they agreed to or not. . . . I
            believe, based on what I heard, that I would
            never let an arbitrator sit like that as a
            lead    arbitrator   under    any   set    of
            circumstances. I would remove a lawyer from
            an arbitrat[ion] if he was representing the
            party itself.   It's fundamentally unfair to
            do that.

                                     5                              A-3344-16T2
                 . . . I have great respect for the
           [Rabbinical court], . . . [and] I am satisfied
           the parties did agree to go to the Rabbinical
           court, but I am not going to enforce this
           Rabbinical court's ruling.      It is highly
           suspect before me.     The letter from Rabbi
           Belsky is very persuasive before me. I am not
           going to preside over a miscarriage of justice
           under any set of circumstances, procedural or
           otherwise. I will agree the matter can go to
           a [Rabbinical court] that will be agreed upon
           by the parties.    But if the parties do not
           agree to a specific [Rabbinical court], then
           I will seek out names of [Rabbinical courts]
           that the matter be referred to myself. [B]ut
           I would prefer that the parties agree to it.

                   . . . .

                Counsel, I am not going to preside over
           what appears to me to be a miscarriage of
           justice. There was apparent conflicts, there
           were allegations made, I am not comfortable
           with the way this was handled at all. . . .

                   . . . .

                . . . I believe the matter belongs before
           the Rabbinical court.    I think the parties
           need to select the Rabbinical court before
           whom it goes.

     The   trial    court    stated   it   would   not   enforce   the     First

Rabbinical Court's ruling in light of Rabbi Belsky's letter.                  The

trial court did not identify the individual or individuals having

a conflict of interest or state the nature of their purported

conflicts.   Additionally, the trial court did not consider the

ruling to be a final decision, noting only one of the three Rabbis

approved the ruling.        Despite these reasons for not confirming the

                                      6                                  A-3344-16T2
award, the trial court declined to vacate the ruling without

further explanation.

       On    February   4,    2013,     the    trial    court     entered     an     order

referring the parties to a second Rabbinical court to hear the

matter, without consideration of the First Rabbinical Court's

rulings.       The   order     directed       the    parties    to    enter   into        an

arbitration agreement upon penalty of dismissal or suppression of

their pleadings if they failed to do so within thirty days.                             The

court further ordered plaintiffs to deposit $310,000 in escrow

with their attorney and defendants to provide a deed conveying the

Property to their attorney.

       On April 11, 2013, the trial court entered a third consent

order providing the parties would submit the matter to Bais Din

Bais Yoseph, also known as the Rabbinical Court of Boro Park (the

Second Rabbinical Court).             On May 13, 2013, the parties entered

into    an    arbitration      agreement       (the     Arbitration        Agreement),

referring the controversy to the Second Rabbinical Court for a

final   and    binding       decision    on    all     disputes      and   matters        in

controversy.

       In    March   2014,    the     Second    Rabbinical      Court      ruled:       (1)

plaintiffs were entitled to purchase the Property for $305,000 and

requisite fees within thirty-five days; (2) defendants were to

                                          7                                        A-3344-16T2
convey title by a "CVG deed;"5 (3) all other claims were deferred;

and (4) any doubt about its ruling or enforcement of the issues

would be decided only by the Second Rabbinical Court.

       On     June   18,   2014,   plaintiffs        wrote    to    the    trial     court

describing numerous attempts to obtain a proper deed in accordance

with    the    Arbitration     Agreement       and   Second     Rabbinical        Court's

ruling and seeking enforcement.            On July 16, 2014, the trial court

entered a fourth consent order specifying details of the closing

for the Property, which provided, if closing did not take place

by August 14, 2014, either party could seek sanctions through the

court.      The Second Rabbinical Court issued a ruling on August 14,

2014,    regarding      financial    liabilities        for    the       Property.        On

September 16, 2016, the trial court stated: "On August 19, 2014,

the    purchase      price   was   paid   to    defendants         and    title    to   the

[P]roperty was transferred to the plaintiffs."

       On June 14, 2015, the Second Rabbinical Court issued a ruling

in favor of defendants in the amount of $9,724.50 for additional

expenses caused by the delay in closing.                      It also directed the

parties to return to the Second Rabbinical Court for a ruling on

defendants' claim for additional expenses totaling $54,717.

5
   A CVG deed contains a covenant against grantor's acts and is
commonly referred to as a bargain and sale deed.

                                          8                                        A-3344-16T2
     On February 16, 2016, the Second Rabbinical Court issued a

Disobedience Letter to plaintiff Levine indicating he was in

violation of Jewish law.      The Second Rabbinical Court issued

another ruling on June 23, 2016, compelling plaintiffs to appear

within thirty days and comply with its previous rulings. It warned

defendants could apply for enforcement if plaintiffs failed to

comply.

     Defendants moved to enforce the Second Rabbinical Court's

ruling.   Plaintiffs opposed the motion and applied for declaratory

judgment seeking to terminate the arbitration based upon the July

2014 consent order. On September 16, 2016, the trial court entered

two orders.   One order granted defendants' motion to enforce and

awarded defendant's counsel fees and costs for the motion.       The

second order set forth various requirements pertaining to the sale

of the Property and directed closing take place by August 14,

2016, and, if it did not, either party could apply for sanctions.

The trial court determined the Second Rabbinical Court should

decide any dispute over closing charges.     The trial court also

denied plaintiffs' motion for a declaratory judgment.6

     Plaintiffs moved for reconsideration, which the court heard

on December 16, 2016.      At the hearing, plaintiffs introduced

6
    The record does not contain the order denying declaratory
judgment.

                                 9                          A-3344-16T2
evidence that the translation of the 2014 Ruling was incorrect.

The translation stated: "All other parties' claims were deferred."

Plaintiffs claimed it should have stated all other claims were

"denied."     The trial court denied reconsideration and awarded

defendants counsel fees and costs for the motion. The court noted,

"by continuing to return to the arbitrators," plaintiffs' behavior

was inconsistent with its new argument regarding the alleged

mistranslation.

     Defendants filed two subsequent motions for enforcement.       The

second was granted on March 3, 2017.      The trial court stayed the

proceedings    pending   appeal   but   terminated   the   Arbitration

Agreement.    On April 5, 2017, the trial court entered the "Final

Order Amending Order of March 3, 2017," which confirmed the March

3, 2017 termination of the Arbitration Agreement.          This appeal

followed.

     On appeal, plaintiffs raise the following points:

            POINT I

            THE 2012 DENIAL OF JUDGMENT ORDER WAS BEYOND
            THE SCOPE PERMITTED BY N.J.S.A. 2A:23B-23.

            POINT II

            THE MARCH 2014 RABBINICAL RULING DID NOT
            EXTEND   THE   SECOND   RABBINICAL  COURT'S
            JURISDICTION AND/OR AUTHORITY TO ALL CLAIMS
            AND/OR    ISSUES   BETWEEN    THE   PARTIES
            INDEFINITELY.

                                  10                           A-3344-16T2
           POINT III

           THE SECOND RABBINICAL COURT ACTED EX-OFFICIO
           SUBSEQUENT TO THE 2014 CONSENT ORDER.

                   a.   The Second Arbitration Agreement
                   limited the jurisdiction of the Second
                   Rabbinical Court to the issues listed
                   therein and terminated upon entry of the
                   2014 Consent Order.

                   b.   The    Second   Rabbinical   Court
                   exceeded the scope of the authority and
                   jurisdiction granted to it via the 2014
                   Consent Order, in its [August 14, 2014]
                   Ruling.

                   c.   The Second Rabbinical Court did not
                   have jurisdiction over the parties or the
                   dispute at the time it issued the June
                   2015 Rabbinical Ruling and June 2016
                   Rabbinical Ruling.

           POINT IV

           THE TRIAL COURT ERRED IN ENTERING             THE
           ENFORCEMENT AND RECONSIDERATION ORDERS.

      The governing principles for the enforceability or vacation

of   arbitration    awards   are   well-settled.   Our   public    policy

"encourages the 'use of arbitration proceedings as an alternative

forum.'"   Wein v. Morris, 194 N.J. 364, 375-76 (2008) (quoting

Perini Corp. v. Greate Bay Hotel & Casino, Inc., 129 N.J. 479, 489

(1992)).   "In promoting a sense of finality, there is 'a strong

preference for judicial confirmation of arbitration awards.'"

Linden Bd. of Educ. v. Linden Educ. Ass'n, 202 N.J. 268, 276 (2010)

(quoting Middletown Twp. PBA Local 124 v. Twp. of Middletown, 193

                                    11                            A-3344-16T2
N.J.   1,   10   (2007)).        "Accordingly,    judicial    review    of    an

arbitrator's     decision   is    very     limited,   and   the   arbitrator's

decision is not to be cast aside lightly."            Bd. of Educ. of Borough

of Alpha, Warren Cty. v. Alpha Educ. Ass'n, 190 N.J. 34, 42 (2006)

(citing Barcon Assocs., Inc. v. Tri-County Asphalt Corp., 86 N.J.

179, 187 (1981)).     "[A]n arbitrator's award will be confirmed so

long as the award is reasonably debatable." Policemen's Benevolent

Ass'n v. City of Trenton, 205 N.J. 422, 429 (2011) (citations

omitted) (quoting Linden, 202 N.J. at 276).

            From the judiciary's perspective, once parties
            contract for binding arbitration, all that
            remains is the possible need to: enforce
            orders   or   subpoena[s]    issued   by   the
            arbitrator, which have been ignored, N.J.S.A.
            2A:23B-17(g); confirm the arbitration award,
            N.J.S.A. 2A:23B-22; correct or modify an
            award, N.J.S.A. 2A:23B-24[;] and in very
            limited circumstances, vacate an award[,]
            N.J.S.A. 2A:23B-23.

            [Minkowitz v. Israeli, 433 N.J. Super. 111,
            134 (App. Div. 2013).]

       The Uniform Arbitration Act (the Act), N.J.S.A. 2A:23B-1 to

-32, states the court shall vacate an arbitration award if:

                 (1) the award was procured by corruption,
            fraud, or other undue means;

                 (2) the court finds evident partiality
            by an arbitrator; corruption by an arbitrator;
            or misconduct by an arbitrator prejudicing the
            rights of a party to the arbitration
            proceeding;

                                      12                               A-3344-16T2
               (3) an arbitrator refused to postpone the
          hearing upon showing of sufficient cause for
          postponement, refused to consider evidence
          material to the controversy, or otherwise
          conducted the hearing contrary to section 15
          of this act, so as to substantially prejudice
          the rights of a party to the arbitration
          proceeding;

               (4)   an    arbitrator    exceeded      the
          arbitrator's powers;

               (5) there was no agreement to arbitrate,
          unless   the  person   participated   in   the
          arbitration proceeding without raising the
          objection pursuant to subsection c. of section
          15 of this act not later than the beginning
          of the arbitration hearing; or

               (6) the arbitration was conducted without
          proper notice . . . .

          [N.J.S.A. 2A:23B-23(a).]

     The Act further provides:

               If the court vacates an award on a ground
          other than that set forth in paragraph (5) of
          subsection a. of this section, it may order a
          rehearing. If the award is vacated on a ground
          stated in paragraph (1) or (2) of subsection
          a. of this section, the rehearing shall be
          before a new arbitrator.

          [N.J.S.A. 2A:23B-23(c).]

     The Act also states: "If the court denies an application to

vacate an award, it shall confirm the award unless an application

to modify or correct the award is pending."         N.J.S.A. 2A:23B-

23(d). Here, there was no pending application to modify or correct

the award.

                                 13                          A-3344-16T2
     The "party seeking to vacate an arbitration award bears the

burden of demonstrating 'fraud, corruption, or similar wrongdoing

on the part of the arbitrator[].'"    Minkowitz, 433 N.J. Super. at

136 (alteration in original) (quoting Tretina v. Fitzpatrick &

Assocs., 135 N.J. 349, 357 (1994)).     "As the decision to vacate

an arbitration award is a decision of law, this court reviews the

denial of a motion to vacate an arbitration award de novo."     Ibid.

(quoting Manger v. Manger, 417 N.J. Super. 370, 376 (App. Div.

2010)).

     Here, despite concluding it would not "enforce" the First

Rabbinical Court's ruling because only one of the three Rabbis

signed the award and enforcing it would result in a "miscarriage

of justice," the trial court denied defendants' motion to vacate

the arbitration award and, contrary to N.J.S.A. 2A:23B-23(d), also

denied plaintiffs' informal application to confirm the award.

Unfortunately, the trial court did not state its factual findings

or analysis leading to its conclusion.    In particular, the trial

court did not render findings with respect to any conflict of

interest, "evident partiality," or "corruption" by a member of the

First Rabbinical Court.    N.J.S.A. 2A:23B-23(c).     Instead, the

trial court stated it was relying on Rabbi Belsky's conclusory

letter, which was not provided to the parties prior to oral

argument.

                               14                             A-3344-16T2
     A   trial    court   must   state   the   reasons   for   its     legal

conclusions.     Ribner v. Ribner, 290 N.J. Super. 66, 76 (App. Div.

1996); R. 1:7-4.     As we explained in Ribner:

               The trial court must clearly state its
          factual findings and correlate them with
          relevant legal conclusions, so that parties
          and the appellate courts may be informed of
          the rationale underlying the conclusion.
          Without the benefit of such findings, it is
          impossible for an appellate court to perform
          its   function  of   deciding   whether  the
          determination   below    is   supported   by
          substantial credible proof on the whole
          record.

          [290 N.J. Super. at 77 (citations omitted);]

accord Ricci v. Ricci, 448 N.J. Super. 546, 574-75 (App. Div. 2017);

Filippone v. Lee, 304 N.J. Super. 301, 306 (App. Div. 1997).

     Here, the trial court did not make findings of fact and correlate

those findings with its conclusions of law as part of its decision

to not vacate or confirm the First Rabbinical Court's award.             As a

result, we are unable to perform our review function to determine

whether there were grounds to vacate the award.

     Additionally, notwithstanding its decision to not vacate the

award, the trial court ordered the parties to enter into an

arbitration agreement for a second rabbinical court to hear the

matter, over plaintiffs objection, upon penalty of dismissal or

suppression of their pleadings if they failed to do so within

thirty days.

                                   15                                A-3344-16T2
     "Although arbitration is traditionally described as a favored

remedy, it is, at its heart, a creature of contract."       Fawzy v.

Fawzy, 199 N.J. 456, 469 (2009) (quoting Kimm v. Blisset, LLC, 388

N.J. Super. 14, 25 (App. Div. 2006)). The scope of an arbitrator's

authority is based on the terms of the contract between the

parties. Cty. Coll. of Morris Staff Ass'n v. Cty. Coll. of Morris,

100 N.J. 383, 391 (1985) (citations omitted).       "It is for that

reason that binding arbitration cannot be imposed by judicial

fiat."     Fawzy, 199 N.J. at 469.    Absent a vacation of the award

pursuant to paragraphs (1) or (2) of N.J.S.A. 2A:23B-23(a), the

trial court was without authority to compel the parties to undergo

a second round of arbitration under subsection (c).

     We recognize plaintiffs entered into an April 11, 2013 consent

order and a May 13, 2013 arbitration agreement providing for

submission of their disputes to the Second Rabbinical Court.

However, plaintiffs were compelled to do so or face dismissal of

their complaint with prejudice pursuant to the February 4, 2013

order, despite plaintiffs' protests during the June 15, 2012 motion

hearing.    Just as "courts should never work to coerce or compel a

litigant to make a settlement," absent statutory authority, courts

should never coerce or compel a litigant to submit to binding

arbitration.    All Modes Transport, Inc. v. Hecksteden, 389 N.J.

Super. 462, 469 (App. Div. 2006) (quoting Peskin v. Peskin, 271

                                 16                          A-3344-16T2
N.J. Super. 261, 275 (App. Div. 1994)).          In particular, courts

should not use undue pressure or the threat of sanctions to force

parties into binding arbitration.

     Because the trial court declined to vacate the award, it

lacked authority under N.J.S.A. 2A:23B-23(c) to compel a second

round of arbitration.   Therefore, the April 11, 2013 consent order

and the May 13, 2013 arbitration agreement were enforceable only

if they were entered into voluntarily, without force or coercion.

Plaintiffs can hardly be said to have voluntarily agreed to the

second round of arbitration.

     We are constrained to vacate the June 15, 2012 orders denying

defendant's motion to vacate the award and plaintiff's application

to confirm the award; the February 4, 2013 order directing the

parties to enter into an arbitration agreement for the second

round of arbitration; and each subsequent order.        We remand for

the trial court to reconsider the applications to vacate and

confirm the first award and make findings and conclusions of law.

We leave to the sound discretion of the trial court whether to

conduct a plenary hearing on remand.

     Vacated and remanded for further proceedings consistent with

this opinion.   We do not retain jurisdiction.

                                 17                            A-3344-16T2