Court Opinion

ID: 4182036
Source: CourtListenerOpinion
Date Created: 2017-06-29 14:10:48.869362+00
Date Added: 2024-06-11T14:39:01.254755
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NOT FOR PUBLICATION WITHOUT THE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-4692-14T3

TERENCE M. HAIGNEY,

        Plaintiff-Respondent,

v.

U-HAUL CO. OF NEW JERSEY, INC.;1
U-HAUL INTERNATIONAL, INC.,

     Defendants-Appellants.
____________________________

              Argued November 10, 2016 – Decided June 29, 2017

              Before Judges Simonelli, Carroll and Gooden
              Brown.

              On appeal from the Superior Court of New
              Jersey, Law Division, Monmouth County, Docket
              No. L-3542-14.

              Daniel P. Waxman (Bryan Cave LLP) of the New
              York bar, admitted pro hac vice, argued the
              cause for appellants (Mr. Waxman and Post &
              Schell, P.C., attorneys; Mr. Waxman and
              Jonathan E. Ginsberg (Bryan Cave LLP), on the
              briefs).

              David P. Corrigan argued the cause for
              respondent (Hobbie, Corrigan & Bertucio, P.C.,
              attorneys; Mr. Corrigan and Michael R. Hobbie,
              on the brief).

1
    Referenced in the record also as U-Haul of New Jersey, Inc.
PER CURIAM

       Defendants   U-Haul   Co.      of     New     Jersey,   Inc.   and    U-Haul

International, Inc. (collectively U-Haul) appeal from the May 13,

2015   Law   Division   order,        which    confirmed       a   June   19,   2014

arbitration award on liability in favor of plaintiff Terence M.

Haigney and dismissed U-Haul's counterclaim with prejudice.2                     For

the following reasons, we affirm.

                                        I.

       We derive the following facts from the record.                 Haigney was

a fencing contractor since 1995.            In his business, he often rented

trailers to transport bags of cement to his job sites using this

procedure: he would drive to the trailer supplier, the trailer

supplier would attach a trailer to his vehicle, and he would then

drive to the cement supplier and load bags of cement onto the

trailer and bring them to the job site.

       On November 4, 2011, Haigney rented a six-foot by twelve-foot

open   trailer   from   U-Haul.        He     went   to   U-Haul's    facility     in

Middletown, where U-Haul's employee, Thomas Bia, attached the

trailer to his vehicle.      Haigney drove from U-Haul's premises to

a local Home Depot, where he loaded twenty bags of cement weighing

2
    The arbitration was bifurcated, with the liability phase
proceeding first. Since this appeal only concerns the arbitrator's
award on liability, we do not address the damage award.

                                  2                                         A-4692-14T3
eighty pounds each into the trailer.     He then drove two miles to

a train station, where he picked up two day laborers.          At no time

did Haigney notice any problems with the trailer or feel the

trailer whip or sway while he was driving.

     While driving to his next destination, Haigney came to an

abrupt stop at a traffic light.        After the light changed, he

accelerated   to   approximately   thirty-five   miles   per    hour   and

proceeded downhill.     As he drove, his steering wheel started

shaking violently and the trailer started swaying from side to

side.   The trailer eventually disconnected and crashed into the

rear of his vehicle, punching a hole in the bumper and causing the

vehicle to flip over and the trailer to jackknife into a guardrail.

     Haigney sustained serious permanent injuries as a result of

the accident.      In a recorded statement given to an insurance

investigator from his hospital bed five days after the accident,

Haigney said that the trailer fishtailed uncontrollably, but he

had no idea why this happened.         He said "I've had numerous

trailers.     The guy put it on incorrectly or it was a faulty

trailer, I have no idea."    He also said that he loaded cement in

the trailer and evenly distributed the load.

     Haigney filed a complaint against U-Haul in the Law Division.

In lieu of filing an answer, U-Haul filed a motion to compel

binding arbitration pursuant to an arbitration agreement that

                              3                                   A-4692-14T3
compelled arbitration before a single arbitrator in accordance

with the commercial arbitration rules of the American Arbitration

Association (AAA).    The arbitration agreement was governed by the

Federal Arbitration Act (FAA), 9 U.S.C.A. § 1 to 307.                 The court

granted the motion.

     During   discovery,    Haigney         advanced    several     theories    of

liability, including: (1) the ball clamp that held the trailer

onto the trailer hitch that was attached to his vehicle was

defective and fractured and disconnected the trailer; (2) the

trailer's brakes were inoperable because U-Haul failed to install

brake fluid; and (3) U-Haul's employee improperly attached the

trailer to his vehicle (the improper attachment theory).                 Haigney

asserted that after he left U-Haul's premises, the inoperable

brakes created pressure on the ball clamp and ball mount when he

braked.   This condition weakened the connection between the ball

clamp and ball mount, which was already weakened because the

trailer was attached improperly and the ball clamp was defective.

Consequently, the ball clamp detached and the trailer began to

sway, causing the crash.

     Haigney asserted the improper attachment theory several times

in his answers to U-Haul's interrogatories.               Although Haigney's

interrogatory   answers    were       not   presented    to   the   arbitrator,

retired Judge Marina Corodemus, they are in the record on appeal.

                                  4                                      A-4692-14T3
Nevertheless,   there   was   other     evidence   supporting     Haigney's

improper attachment theory.          Bia testified at his deposition,

without objection, about the procedure he used to attach a trailer

to a vehicle.   He testified that after connecting a trailer to a

vehicle, he would make sure it was properly attached by pushing

back on the ball clamp and listening for a click to make sure the

ball clamp was "all the way tight."        He also testified that making

sure the ball clamp was tight kept it from separating from the

trailer coupler while driving, and acknowledged that if the ball

clamp was installed too loosely, "[i]t would come off and screw

everything up[]" and "cause problems."          This deposition testimony

was read into the record during Haigney's case-in-chief without

objection.

     On direct examination during the arbitration hearing, U-

Haul's   representative   and       liability   expert,   James   D.     Fait,

testified about and demonstrated the proper method for attaching

a trailer.   On cross-examination, he testified, without objection,

that the person attaching the trailer must tighten the ball clamp

until it is tight and that listening for one click was "not the

proper procedure.   That's not what they are trained and that's not

the proper installation."       Fait agreed with Bia that if the ball

clamp was not properly tightened, the trailer coupler "could come

off the ball [clamp], if you hit a bump or something like this[.]"

                                5                                      A-4692-14T3
Fait also acknowledged that if the trailer was not secured properly

and disconnected, it could possibly cause a crash.

     In addition to this evidence, in his written summation on

liability, Haigney asserted, in part, that Bia's improper securing

of the ball clamp to the trailer coupler, which caused the ball

clamp to separate from the trailer coupler, was a proximate cause

of the accident.   In its written summation on liability, U-Haul

responded in a footnote that Haigney's experts did not present the

improper attachment theory.       However, U-Haul did not ask Judge

Corodemus to disregard or strike this theory; rather, U-Haul argued

that Fait had properly discredited it.

     U-Haul conceded that the trailer lacked operable brakes due

to a lack of brake fluid, but asserted this was not a proximate

cause of the accident.    Rather, U-Haul averred that Haigney's

improper loading of the cement bags onto the trailer with 100% of

the weight in front of the centerline was the sole proximate cause

of the accident. U-Haul concluded that the improper loading caused

a catastrophic loss of control as Haigney accelerated, and the

ball clamp fractured during the rollover of his vehicle, causing

the trailer to separate from the trailer coupler.

     At his deposition, Haigney testified that he knew the proper

requirements for loading a trailer. He testified that the majority

of the weight should be ahead of the wheels, and noted that the

                              6                             A-4692-14T3
U-Haul contract he signed stated "[y]ou should always . . . load

trailer heavier in the front[.]"           As to how he loaded the cement

bags in the trailer on the day of the accident, he testified that

"[y]ou start in the front and then you behind -- you know, one row

of them and then two, you know."            He did not recall whether he

loaded any of the bags to the rear of the centerline.

       At the arbitration hearing, Haigney testified that he evenly

distributed the load of cement bags across the length of the

trailer bed. He explained that the trailer had to be loaded evenly

with about sixty percent of the weight loaded in the front half

and the remaining forty percent loaded behind the front half.               He

also explained how he loaded the cement bags on the day of the

accident: he started in the front and put a first row of three

bags approximately two feet from the front wall, then put the next

row of three bags approximately one foot behind the front row, and

then put the last two bags approximately one foot behind the second

row.    He then looked at the trailer from the side to make sure it

was level. He testified that he did not load all of the bags in

the    front   of   the   trailer,   and   that   such   loading   "would   be

completely unlevel[, and he] probably wouldn't have been able to

even get out of the [U-Haul] parking lot without [the trailer]

swaying all over the place."         He reviewed an exhibit that showed

the side of a similar open trailer attached to a similar vehicle

                                 7                                   A-4692-14T3
with twenty bags of cement all loaded in the front, and testified

that this was not the way his trailer looked from the side after

he loaded it.   He emphasized that the trailer depicted in the

exhibit was so off level that the back wheels were almost off the

ground and no one would ever drive the trailer that way.

     Antonio Sic, one of the day laborers, testified at the

arbitration hearing that prior to entering Haigney's vehicle, he

looked and saw that the cement bags were properly loaded on the

trailer and did not need to be fixed or rearranged.    He testified

that the trailer was level and the cement bags were not loaded

entirely in the front.    He also reviewed an exhibit showing twenty

cement bags all loaded up against the front wall of a similar

trailer, and testified this was not how the cement bags were loaded

in the subject trailer.

     Before the second day of the arbitration hearing, U-Haul

conducted additional testing by placing twenty cement bags in a

similar trailer in the manner in which Haigney had testified at

the arbitration hearing.     U-Haul took three photographs of the

trailer, which it sought to introduce into evidence to rebut

Haigney's arbitration testimony about how he loaded the cement

bags, which U-Haul asserted was diametrically different from his

deposition testimony.     Judge Corodemus declined to consider the

rebuttal evidence based on a lack of notice to Haigney, and because

                              8                              A-4692-14T3
the photographs were not offered for the truth of the matter

asserted and were merely illustrative.

     In a June 19, 2014 written liability award, Judge Corodemus

addressed the alleged inconsistency between Haigney's deposition

testimony    and    arbitration   testimony     about    how    he    loaded   the

trailer.    She found his arbitration testimony was consistent with

his statement to the insurance investigator and was corroborated

by Sic's testimony. She concluded that Haigney had properly loaded

the trailer.

     Judge    Corodemus    did    not    find   that    the    ball   clamp    was

defective; rather, she found it was damaged as a result of the

accident.     However, she found that U-Haul breached its duty to

Haigney by allowing him to leave its premises with a trailer that

had inoperable brakes, and by failing to properly attach the

trailer to his vehicle.       She concluded that these two conditions

were a proximate cause of the accident.             She also concluded that

Haigney's failure to confirm that the trailer was properly attached

was also a proximate cause of the accident.               Accordingly, Judge

Corodemus apportioned U-Haul's liability at eighty percent and

Haigney's at twenty percent.             In a September 11, 2014 written

damages    award,    she   awarded      plaintiff   $1,800,000,       molded    to

$1,440,000.

                                  9                                      A-4692-14T3
    Following U-Haul's failure to pay the damage award, Haigney

filed a verified complaint and order to show cause to confirm the

two arbitration awards.    U-Haul sought to vacate the awards,

arguing that Judge Corodemus exceeded her authority by finding

liability on the improper attachment theory, of which it had no

notice and which was not alleged by Haigney or supported by lay

or expert evidence.     U-Haul also argued that Judge Corodemus

exceeded her authority and violated due process by barring the

rebuttal photographs.

    In a May 13, 2015 oral opinion, Judge Jamie S. Perri confirmed

the arbitration awards.   Judge Perri found that Judge Corodemus

did not exceed her authority by finding negligence based on

improper attachment, reasoning as follows:

         [Judge Corodemus'] decision was based on the
         submissions and testimony presented in the
         arbitration hearing. Her decision was in the
         scope of [the] submissions because she relied
         on the evidence to determine that each party
         acted negligently.   This did not delve into
         an area of law foreign to the evidence or the
         arguments presented by either side.

              [Haigney] originally sought to prove [U-
         Haul's] liability through allegations of
         negligence in maintenance and inspection.
         Broadly construed, Judge Corodemus' decision
         was based on the theory that the U-Haul
         employee   who  attached   the  trailer   was
         negligent in maintaining the trailer coupler
         and hitch and failing to inspect the coupler
         and hitch to insure it was properly attached.

                            10                            A-4692-14T3
     Here, Judge Corodemus was presented with
a set of facts and was obligated to determine
whether, based upon those facts, U-Haul owed
a duty to Haigney, the violation of which
proximately caused his injures.     A careful
review of the arbitration record discloses
that in September 2013, Haigney stated in
response to U-Haul's interrogatories, that
damages were being sought on the basis that
"the U-Haul employee improperly connected and
improperly maintained [the] trailer to [his
vehicle]."

     . . . .

Fait demonstrated the proper method for
attaching the coupler and ball mount on the
date of the accident.

     . . . .

     As such the evidence presented to Judge
Corodemus during the course of the hearing
established the proper method for securing the
trailer to the vehicle, a method that U-Haul
. . . allegedly taught to its affiliates
through   training   sessions    and   videos.
Evidence was also produced that Bia, a U-Haul
. . . employee had not properly secured the
trailer to the vehicle before it left the U-
Haul facility, and that he was of the belief
that "a click" was sufficient to secure the
trailer.

     [U-Haul] . . . cannot claim surprise in
this regard since [it was] already in
possession of Bia's testimony and knew or
should have known of their own procedures and
instructions for inspecting the trailer and
securing it to the vehicle before releasing
it to the customer.

     . . . .

     Judge   Corodemus'  conclusions   were
supported by the law and the factual record
                  11                             A-4692-14T3
         developed during the arbitration hearing. No
         expert was required to add to Haigney's
         position that Bia's negligence in failing to
         properly secure the trailer was a proximate
         cause of the accident.   And Judge Corodemus
         did not exceed her authority in rendering her
         final decision and allocating negligence[.]

              . . . .

         [T]he issue presented to Judge Corodemus was
         whether U-Haul was negligent and whether its
         negligence was a proximate casue of the
         accident.    The fact that she based her
         decision on evidence developed during the
         arbitration    hearing     which   indicated
         negligence for reasons other than those
         originally embraced by [Haigney], does not
         render her decision unenforceable.

              Simply stated, Judge Corodemus was asked
         to render decisions on liability and damages
         based upon the evidence presented to her. She
         carefully considered the evidence and came to
         a reasonable conclusion that coincided with
         the credible evidence regarding the cause of
         the accident.

              She assessed liability and apportioned it
         between the parties. She did not exceed her
         authority and did not consider or rule on
         issues that were not properly before her.

    Addressing whether Judge Corodemus exceeded her authority and

violated due process by barring rebuttal evidence, Judge Perri

found as follows:

         U-Haul . . . attempts to equate evidentiary
         decisions to misconduct under 9 [U.S.C.A. §]
         10(a)(3).   And argues that Judge Corodemus
         denied U-Haul a fair hearing because she would
         not consider rebuttal evidence regarding the
         loading of the trailer. . . .

                           12                             A-4692-14T3
                This argument is simply without merit.
           As previously noted U-Haul's defense was based
           upon its claim that Haigney improperly loaded
           the trailer and that this was the sole
           proximate cause of the accident. During the
           course of the arbitration U-Haul offered
           extensive evidence on this issue and had the
           opportunity to cross examine Haigney.

                It was unquestionably within Judge
           Corodemus' discretion to rule on evidence
           issues such as denying [U-Haul's] application
           to bar [Haigney's] expert witnesses, or in
           declining to permit as rebuttal tests that
           were   performed   by   [U-Haul]  while   the
           arbitration hearing was ongoing.     The fact
           that U-Haul was not given leave to present
           further cumulative evidence on the issue, did
           not deprive it of a fair hearing. And cannot
           even remotely be considered misconduct on the
           part of [Judge Corodemus]. . . . U-Haul . . .
           [has] not shown that such decisions were
           without basis or that they rise to the level
           of   warranting  the   invalidation   of  the
           arbitration award.

This appeal followed.

    Because a trial court's decision regarding an arbitration

award is a decision of law, our review is de novo, but with a

recognition of the wide authority bestowed upon the arbitrator by

statute.   Minkowitz v. Israeli, 433 N.J. Super. 111, 136 (App.

Div. 2013) (citations omitted); Manger v. Manger, 417 N.J. Super.
370, 376 (App. Div. 2010); see also Metromedia Energy, Inc. v.

Enserch Energy Servs., 409 F.3d 574, 578 (3d Cir. 2005) (applying

the de novo standard of review to an arbitration award), cert.

denied, 546 U.S. 1089, 126 S. Ct. 1021, 163 L. Ed. 2d 852 (2006).

                             13                             A-4692-14T3
Essentially, we must determine whether the arbitrator and the

trial   court    have     each    adhered      to    the    requirements    of    the

controlling statute.          Minkowitz, supra, 433 N.J. Super. at 136.

     The   FAA    is    the    controlling      statute       here.     "Review    of

arbitration     awards    under    the   FAA    is       'extremely   deferential.'

Vacatur    is     appropriate           only        in     'exceedingly     narrow'

circumstances[.]"        Metromedia Energy, Inc., supra, 409 F.3d at 578

(citations omitted).          Under the FAA, a binding arbitration award

may only be vacated :

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

           (2) where there was evident partiality or
           corruption in the arbitrators, or either of
           them;

           (3) where the arbitrators were guilty of
           misconduct in refusing to postpone the
           hearing, upon sufficient cause shown, or in
           refusing to hear evidence pertinent and
           material to the controversy; or of any other
           misbehavior by which the rights of any party
           have been prejudiced; or

           (4) where the arbitrators exceeded their
           powers, or so imperfectly executed them that
           a mutual, final, and definite award upon the
           subject matter submitted was not made.

           [9 U.S.C.A. § 10(a).]

     Prior to Hall Street Associates, LLC v. Mattel, Inc., 552
U.S. 576, 128 S. Ct. 1396, 170 L. Ed. 2d 254 (2008), it was widely

accepted that a court could also vacate an award if the arbitrator

                                   14                                       A-4692-14T3
showed a manifest disregard for the law.        Ludwig Honold Mfg. Co.

v. Fletcher, 405 F.2d 1123, 1128 (3d Cir. 1969). Post-Hall Street,

the Supreme Court and Third Circuit case law left open the question

of whether the manifest disregard standard still applies.            In any

event, even if it does apply, to demonstrate manifest disregard,

the party seeking to vacate an award must show that the arbitrator

acknowledged   and    subsequently    disregarded   an   explicit,    well-

settled, and clearly applicable legal rule in making her decision.

Paul Green Sch. of Rock Music Franchising, LLC. v. Smith, 389 F.

App'x 172, 177 (3d Cir. 2010).

     "Likewise,      an   arbitrator's    'improvident,     even     silly,

factfinding' does not provide a basis for a reviewing court to

refuse to enforce the award."       Metromedia Energy, Inc., supra, 409

F.3d at 578 (citation omitted). In reviewing an arbitration award,

courts do not consider claims of factual or legal error by an

arbitrator.    Major League Umpire Ass'n v. Am. League of Prof'l

Baseball Clubs, 357 F.3d 272, 279-80 (3d Cir. 2004), cert. denied,

543 U.S. 1049, 125 S. Ct. 861, 160 L. Ed. 2d 769 (2005).           "[T]here

must be absolutely no support at all in the record justifying the

arbitrator's determinations for a court to deny enforcement of an

award."   News Am. Publ'ns, Inc. Daily Racing Form Div. v. Newark

Typographical Union, Local 103, 918 F.2d 21, 24 (3d Cir. 1990)

(internal citations omitted).

                               15                                   A-4692-14T3
      Further, 9 U.S.C.A. § 10(a)(3) cannot be read "to intend that

every failure to receive relevant evidence constitutes misconduct

which   will   require     the   vacation     of    an   arbitrator's   award."

Sherrock Bros. v. DaimlerChrysler Motors Co., LLC, 260 F. App'x
497, 501 (3d Cir. 2008) (quoting Newark Stereotypers' Union No.

18 v. Newark Morning Ledger Co., 397 F.2d 594, 599 (3d Cir. 1968)).

9 U.S.C.A. § 10(a)(3) does not require arbitrators to hear all

evidence proffered to them; an arbitrator is only required to

provide parties with "an adequate opportunity to present its

evidence and argument."          Tempo Shain Corp. v. Bertek, Inc., 120
F.3d 16, 20 (2d Cir. 1997).         Misconduct under 9 U.S.C.A. 10(a)(3)

"will not be found 'unless the aggrieved party was denied a

fundamentally fair hearing.'"          Vitarroz Corp. v. G. Willi Food

Int'l Ltd., 637 F. Supp. 2d 238, 248 (D.N.J. 2009) (quoting

Sherrock Bros., supra, 260 F. App'x at 501).

      On appeal, U-Haul does not allege that the liability award

was procured by corruption, fraud, or undue means, or that there

was evident partiality or corruption.              9 U.S.C.A. § 10(a)(1)-(2).

Rather, U-Haul argues that Judge Perri erred in confirming the

arbitration award because Judge Corodemus exceeded her authority

and showed a manifest disregard for the law by finding liability

on an issue not advanced by Haigney, for which it had no notice;

and   Judge    Corodemus    exceeded    her    authority     and   engaged     in

                                  16                                    A-4692-14T3
misconduct in refusing to hear evidence pertinent and material to

the controversy.

       We find no merit in U-Haul's argument.                  The sole issue in

this case was negligence, and that was the only issue Judge

Corodemus       decided.         Haigney     consistently      asserted       U-Haul's

negligence      based      on    deficient    maintenance,          inspection,     and

operation of the ball clamp and ball mount.                        Haigney relied in

part, on the improper attachment theory, and advanced this theory

of liability well before the arbitration hearing in his discovery

responses, placing U-Haul on notice it was an issue in this case.

Further, the parties presented the improper attachment theory

during    the     arbitration       hearing     and     in    their       post-hearing

submissions without objection.               We agree with Judge Perri that

Judge    Corodemus'     reliance      on     evidence    developed         during   the

arbitration hearing which indicated negligence for reasons other

than    those    Haigney        originally    advanced       did    not    render   the

liability award unenforceable.                 We are satisfied that Judge

Corodemus did not consider or rule on issues that were not

properly before her or show a manifest disregard for the law.                       She

properly ruled on the sole issue – negligence.

       Nor did Judge Corodemus exceed her authority or engage in

misconduct in refusing to hear evidence pertinent and material to

the controversy.        Haigney did not change his testimony at the

                                     17                                        A-4692-14T3
arbitration hearing.    He did not testify at his deposition that

he loaded the trailer unevenly, and he never deviated from his

statement to the insurance investigator that he evenly distributed

the load of cement bags.     His arbitration testimony was consistent

that he had evenly loaded the trailer, and was corroborated by

Sic's testimony.

     In any event, AAA R-34 gave Judge Corodemus broad discretion

to admit or bar evidence: "The arbitrator shall determine the

admissibility, relevance, and materiality of the evidence offered

and may exclude evidence deemed by the arbitrator to be cumulative

or irrelevant."    During the arbitration hearing, U-Haul presented

extensive   evidence   and   had    the   opportunity   to   cross-examine

Haigney on how he loaded the trailer.             The fact that Judge

Corodemus declined to consider the three photographs did not

deprive U-Haul of an adequate opportunity to present its evidence

and argument, or deny it a fair hearing.

     Affirmed.

                               18                                  A-4692-14T3