Court Opinion

ID: 4468142
Source: CourtListenerOpinion
Date Created: 2019-12-30 15:06:57.241464+00
Date Added: 2024-06-11T08:48:40.982578
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NOT FOR PUBLICATION WITHOUT THE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-3551-18T2

LAURA HANNEN,

          Plaintiff-Appellant,

v.

GROUP ONE AUTOMOTIVE, INC.,
BMW OF ATLANTIC CITY, KERRY
LAWS, and THOMAS ALFINITO,

     Defendants-Respondents.
_______________________________

                    Submitted December 11, 2019 – Decided December 30, 2019

                    Before Judges Mayer and Enright.

                    On appeal from the Superior Court of New Jersey, Law
                    Division, Ocean County, Docket No. L-0148-19.

                    Castronovo & McKinney, LLC, attorneys for appellant
                    (Thomas A. McKinney, of counsel and on the briefs;
                    Megan Frese Porio, on the briefs).

                    Cozen O'Connor, attorneys for respondents (George A.
                    Voegele, Jr., and Steven D. Millman, on the brief).

PER CURIAM
      Plaintiff appeals from an April 12, 2019 order dismissing her complaint

with prejudice and compelling arbitration. We affirm the order compelling

arbitration.   However, we remand the matter to the trial court to enter an

amended order staying the case pending arbitration.

      For ten years, plaintiff worked as a human resources manager for

defendant Group One Automotive, Inc. 1 When she began her employment,

plaintiff signed an "Employee Acknowledgement and Agreement."             Section

three of the Employee Acknowledgement and Agreement included an

"Arbitration Agreement," setting forth detailed information related to plaintiff's

rights.

      Upon signing the Arbitration Agreement, plaintiff acknowledged she

"under[stood] that by agreeing to submit covered claims 2 to arbitration, both the

company and I give up our rights to a jury trial." The Arbitration Agreement

provided "the arbitrator selected by me and the Company to arbitrate any and all

1
  Defendant BMW of Atlantic City is wholly owned by Group One Automotive,
Inc. Defendant Kerry Lewis was plaintiff's supervisor. Defendant Thomas
Alfinito was the general manager of another dealership wholly owned by Group
One Automotive, Inc. We shall refer to these parties collectively as
"defendants."
2
  The term "covered claims" included "claims, disputes, and/or controversies
including but not limited to claims related to harassment, discrimination, and
wrongful discharge . . . ."
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covered claims shall be a retired federal or state court judge." In addition, the

Arbitration Agreement stated the arbitrator was bound by the rules "applicable

in civil actions in United States District Courts."     Immediately above the

signature line on the Employee Acknowledgement and Agreement was the

following language:

            MY SIGNATURE BELOW ATTESTS TO THE FACT
            THAT I HAVE READ, UNDERSTAND, AND
            AGREE TO BE LEGALLY BOUND TO ALL OF THE
            ABOVE TERMS. MY SIGNATURE FURTHER
            ACKNOWLEDGES THAT I HAVE HAD THE
            OPPORTUNITY TO ASK QUESTIONS ABOUT THE
            TERMS OF THIS AGREEMENT.

       On November 12, 2018, plaintiff learned her job was being eliminated.

The next day, plaintiff was terminated. She was over sixty years old at the time.

According to plaintiff, defendants replaced her with an individual in his early

thirties.

       Plaintiff filed a complaint in the Superior Court, alleging age

discrimination and other causes of action under the New Jersey Law Against

Discrimination (LAD), N.J.S.A. 10:5-1 to -49. In response, defendants filed a

motion to dismiss her complaint and compel arbitration in accordance with the

Arbitration Agreement.     Plaintiff opposed defendants' motion, arguing the

Arbitration Agreement failed to identify a valid forum for conducting

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arbitration.    Plaintiff further argued the Arbitration Agreement was

unenforceable because it failed to identify who would pay the fees and costs for

arbitration.

      In an oral decision on April 12, 2019, the judge determined that in the

absence of an express provision in an arbitration agreement governing payment

of the arbitrator's fees, "there's an implied agreement to share the cost of

arbitration" and "arbitration contracts that divide the [costs] of arb itration are

proper and enforceable." The judge expressly stated, "the arbitration clause is

not unconscionable" because "the provisions of the [A]rbitration [A]greement

would only require plaintiff to pay [her] portion of the arbitration fees."

      On the failure to specify a forum, the judge concluded the document "set

forth a basic method for choosing the arbitrator. It sets forth basi c rules that

should apply to the arbitrator . . . ." He also rejected plaintiff's argument that

the holding in Flanzman v. Jenny Craig, Inc., 456 N.J. Super. 613 (App. Div.

2018), certif. granted, 237 N.J. 310 (2019), rendered the Arbitration Agreement

void for lack of a forum. Unlike the agreement in Flanzman, the judge found

the Arbitration Agreement "sets forth the arbitrator will be a retired judge. More

importantly, it set forth the rules for the arbitration. . . . The agreement in this

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matter explains exactly what rules are to be used for the arbitration and what

arbitrator will be arbitrating the case."

      On appeal, plaintiff argues the Arbitration Agreement is void for lack of

mutual assent because it failed to set forth a valid forum. She also contends the

failure to establish who pays the arbitrator's fees and costs rendered the

Arbitration Agreement unenforceable.

       We apply a de novo standard of review when construing an arbitration

provision in a contract. Atalese v. U.S. Legal Servs. Grp., L.P., 219 N.J. 430,

446 (2014). We apply the same de novo review when deciding whether a valid

and enforceable arbitration agreement exists. Barr v. Bishop Rosen & Co., 442

N.J. Super. 599, 605 (App. Div. 2015) (citing Hirsch v. Amper Fin. Servs., LLC,

215 N.J. 174, 186 (2013)).       We owe "no special deference to the judge's

determination of [the enforceability of an arbitration agreement]." Flanzman,

456 N.J. Super. at 619.

      Here, both federal and state laws governing arbitration agreements are

applicable. The Federal Arbitration Act, 9 U.S.C. §§ 1 to 16, and the Uniform

Arbitration Act, N.J.S.A. 2A:23B-1 to -32, favor arbitration of disputes. KPMG

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LLP v. Cocchi, 565 U.S. 18, 21 (2011); Roach v. BM Motoring, LLC, 228 N.J.

163, 173 (2017).3

      "[A]n agreement to arbitrate, like any other contract, 'must be the product

of mutual assent, as determined under customary principles of contract law.'"

Atalese, 219 N.J. at 442 (citing NAACP of Camden Cty. E. v. Foulke Mgmt.

Corp., 421 N.J. Super. 404, 424 (App. Div. 2011)). "Mutual assent requires that

the parties have an understanding of the terms to which they have agreed." Ibid.

A legally enforceable agreement requires a "meeting of the minds." Ibid. (citing

Morton v. 4 Orchard Land Tr., 180 N.J. 118, 120 (2004)).

      Having reviewed the record, the Arbitration Agreement is valid because

it clearly and unambiguously informed plaintiff that she waived her right to

assert a claim in a judicial forum and agreed to submit her claims to binding

arbitration. By signing the Arbitration Agreement, plaintiff acknowledged her

understanding of its terms and assented to those terms. Therefore, there was a

"meeting of the minds" to establish a valid and enforceable agreement to

arbitrate.

3
   Plaintiff cites N.J.S.A. 10:5-12.7 in claiming the Arbitration Agreement is
void and unenforceable. However, she concedes the statute is inapplicable
because the law applies prospectively to agreements after March 18, 2019, and
the Arbitration Agreement was signed in March 2009.
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      We next consider whether the Arbitration Agreement was void because it

failed to list a proper forum. An arbitral forum is defined "as the mechanism –

or setting – that parties utilize to arbitrate their dispute." Flanzman, 456 N.J.

Super. at 623. If the parties "agree that a dispute would be arbitrated by an

arbitral institution, or an arbitrator or arbitrators, then that is the agreed upon

forum." Ibid. The failure to identify a specific arbitrator does not "render[] the

agreement unenforceable." Ibid.

      Here, unlike the agreement in Flanzman that omitted any reference to an

arbitral forum, the Arbitration Agreement specified the mechanism replacing

plaintiff's right to pursue her claims in a court of law.         The Arbitration

Agreement specified that arbitration would follow the rules and procedures

applicable to civil actions in the United States District Court and stated the

arbitrator shall be a retired federal or state court judge.       By signing the

Arbitration Agreement, plaintiff agreed to the forum as specified. There is no

need to identify the arbitrator by name or state where and how the arbitration

would be conducted to find the Arbitration Agreement set forth a valid forum.

Id. at 625-27.

      We next consider plaintiff's claim that the Arbitration Agreement is

unenforceable because defendant failed to assume all costs associated with the

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arbitration and any apportionment of the "extremely high" costs associated with

arbitration would "effectively prevent [p]laintiff from vindicating her statutory

LAD claims."

      "[A]n arbitration agreement's silence with respect to [arbitration costs and

fees] does not render the agreement unenforceable." Green Tree Fin. Corp.-

Alabama v. Randolph, 531 U.S. 79, 82; 92 (2000).            As the United States

Supreme Court held, "the 'risk' that [the plaintiff] will be saddled with

prohibitive costs is too speculative to justify the invalidation of an arbitration

agreement." Id. at 91.

      There is nothing in the Arbitration Agreement suggesting plaintiff would

be responsible to pay the entire cost of arbitration. See Jaworski v. Ernst &

Young U.S. LLP, 441 N.J. Super. 464, 481-82 (App. Div. 2015) (upholding an

arbitration agreement that "does not provide for the potential shifting of the

entire cost of arbitrating to a non-prevailing party."). An employee's payment

of a portion of the arbitration fees and costs are "limited by substantive law and

arbitration rules." Id. at 482.    N.J.S.A. 2A:23B-21(d) allows an arbitrator's

expenses and fees to "be paid as provided in the [arbitration] award." Consistent

with this statute, the Legislature vested the arbitrator with the discretion to

allocate his or her arbitration fees and costs among the parties to the arbitration.

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                                         8
      Applying these principles, we reject the argument that the costs of

arbitration that may be borne by plaintiff are prohibitive. Here, there is no

punitive measure contained in the Arbitration Agreement that would shift the

entire financial cost of arbitration to plaintiff in the event she did not prevail.

Further, N.J.S.A. 2A:23B-21(d) authorizes the arbitrator to allocate his or her

expenses and fees as part of any arbitration award.

      While we affirm the order compelling arbitration of plaintiff's claims, the

judge improvidently dismissed plaintiff's complaint with prejudice. See GMAC

v. Pittella, 205 N.J. 572, 582 n.6 (2011) (citing N.J.S.A. 2A:23B-7(g)). The

Uniform Arbitration Act provides for stays, rather than dismissals, of matters

pending arbitration. Ibid. Therefore, we remand the matter to the trial court to

enter an amended order staying the action pending arbitration.

      Affirmed as to compelling arbitration. Remanded for the entry of an

amended order consistent with this opinion. We do not retain jurisdiction.

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