Court Opinion

ID: 4428386
Source: CourtListenerOpinion
Date Created: 2019-08-20 19:05:54.638252+00
Date Added: 2024-06-11T09:24:49.134560
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NOT FOR PUBLICATION WITHOUT THE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-1861-17T2

ALEXANDER DEFINA, A MINOR,
by his parents and guardians
ad litem, MICHAEL DEFINA and
DAHIANA DEFINA,

        Plaintiffs-Respondents,

v.

GO AHEAD AND JUMP 1, LLC,
d/b/a SKY ZONE INDOOR
TRAMPOLINE PARK, SKY ZONE,
LLC and SKY ZONE FRANCHISE GROUP,
LLC,

        Defendants-Appellants.

              Argued May 15, 2018 – Decided June 5, 2018

              Before Judges Yannotti and Carroll.

              On appeal from Superior Court of New Jersey,
              Law Division, Bergen County, Docket No.
              L-5751-15.

              Kelly A. Waters and Jose D. Roman argued the
              cause for appellants (Wood Smith Henning &
              Berman, LLP, attorneys for appellants Sky
              Zone, LLC and Sky Zone Franchise Group, LLC;
              Powell & Roman, LLC, attorneys for appellant
              Go Ahead and Jump 1, LLC, d/b/a Sky Zone Indoor
              Trampoline Park; Kelly A. Waters and Jose D.
              Roman, of counsel and on the joint briefs;
          Deborah J. Davison and Samuel G. John, on the
          joint briefs).

          David K. Chazen argued the cause for
          respondents (Chazen & Chazen, LLC, attorneys;
          David K. Chazen, on the brief).

PER CURIAM

     Sky Zone, LLC (Sky Zone) and Sky Zone Franchise Group, LLC

(Sky Zone Franchise) (collectively, the franchisor defendants)

appeal from a November 7, 2017 order denying their motion to compel

arbitration and stay further proceedings in this matter.1          We

affirm.

                                I.

     Alexander Defina, a minor, sustained a fractured ankle while

participating in a game of trampoline dodgeball at the Sky Zone

Indoor Trampoline Park (SZITP) in Pine Brook.       Before gaining

access to the trampoline facility, Alexander's father, Michael

Defina, was required to sign a document entitled, "Participation

Agreement, Release and Assumption of Risk" (the Agreement).

1
   The amended notice of appeal also designates defendant Go Ahead
and Jump 1, LLC (GAAJ) as an appellant. Such designation appears
erroneous, since the motion that resulted in the November 7, 2017
order was filed only by Sky Zone and Sky Zone Franchise, and GAAJ
did not seek any relief, nor was any relief sought or ordered
against GAAJ. Hence, for purposes of this opinion, all references
to defendants relate only to Sky Zone and Sky Zone Franchise unless
otherwise specified.

                                 2                          A-1861-17T2
    The   Agreement   provides   in   pertinent   part     that,    in

consideration of SZITP allowing participation

          in trampoline games or activities, I for
          myself and on behalf of my child(ren) and/or
          legal ward, heirs, administrators, personal
          representatives, or assigns, do agree to hold
          harmless, release and discharge SZITP of and
          from all claims, demands, causes of action,
          and legal liability, whether the same be known
          or unknown, anticipated or unanticipated, due
          to SZITP's ordinary negligence[;] and I, for
          myself and on behalf of my child(ren) and/or
          legal ward, heirs, administrators, personal
          representatives, or any assigns, further agree
          that except in the event of SZITP's gross
          negligence and willful and wanton misconduct,
          I shall not bring any claims, demands, legal
          actions and causes of action, against SZITP
          for any economic and non-economic losses due
          to bodily injury, death, property damage
          sustained by me and/or my minor child(ren)
          that are in any way associated with SZITP
          trampoline games or activities. Should SZITP
          or anyone acting on their behalf be required
          to incur attorney's fees and costs to enforce
          this Agreement, I for myself and on behalf of
          my child(ren), and/or legal ward, heirs,
          administrators, personal representatives or
          assigns, agree to indemnify and hold them
          harmless for all such fees and costs.

    The Agreement includes an arbitration clause, which states:

          If there are any disputes regarding this
          agreement, I on behalf of myself and/or my
          child(ren) hereby waive any right I and/or my
          child(ren) may have to a trial and agree that
          such dispute shall be brought within one year
          of the date of this Agreement and will be
          determined by binding arbitration before one
          arbitrator to be administered by JAMS pursuant
          to its Comprehensive Arbitration Rules and
          Procedures.     I further agree that the

                                 3                           A-1861-17T2
          arbitration will take place solely in the
          state of Texas and that the substantive law
          of Texas shall apply.       If, despite the
          representations made in this agreement, I or
          anyone on behalf of myself and/or my
          child(ren) file or otherwise initiate a
          lawsuit against SZITP, in addition to my
          agreement to defend and indemnify SZITP, I
          agree to pay within [sixty] days liquidated
          damages in the amount of $5,000 to SZITP.
          Should I fail to pay this liquidated damages
          amount with the [sixty] day time period
          provided by this Agreement, I further agree
          to pay interest on the $5,000 amount
          calculated at 12% per annum.2

     In addition, the Agreement included the following statement,

which was printed in bold type:

          By signing this document, I acknowledge that
          if anyone is hurt or property is damaged
          during my participation in this activity, I
          may be found by a court of law to have waived
          my right to maintain a lawsuit against SZITP
          on the basis of any claim from which I have
          released them herein. I have had sufficient
          opportunity to read this entire document. I
          understand this Agreement and I voluntarily
          agree to be bound by its terms.

The Agreement also contains a severability clause, which states

that, "I agree that if any portion of this agreement is found to

2
   In the previous appeal we noted that GAAJ "had chosen not to
enforce the forum selection clause in the Agreement, and had agreed
that the arbitration could be conducted in New Jersey or New York,
with New Jersey choice of law and a New Jersey arbitrator." Defina
v. Go Ahead and Jump I, LLC, No. A-1371-15 (App. Div. July 12,
2016) (slip op. at 6). In their reply brief in the present appeal,
defendants take a similar position.

                                  4                         A-1861-17T2
be void or unenforceable, the remaining portions shall remain in

full force and effect."

      In June 2015, plaintiffs filed a complaint asserting claims

against GAAJ for simple negligence and gross negligence related

to   GAAJ's   operation   of   the   SZITP   facility    that   resulted    in

Alexander's injury.       The complaint also alleged that GAAJ's use

of the Agreement was an unconscionable commercial practice in

violation of the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -

184, and the New Jersey Truth in Consumer Contract, Warranty and

Notice Act (TCCWNA), N.J.S.A. 56:12-14 to -18.            Plaintiffs sought

an   award    of   compensatory      and   punitive     damages,   interest,

attorney's fees, and costs of suit.

      GAAJ filed a motion to compel arbitration and stay proceedings

in the lawsuit.     On October 23, 2015, the trial court granted the

motion, and ordered plaintiffs to submit any disputes with GAAJ

to arbitration.      On December 4, 2015, the trial court denied

plaintiffs' motion for reconsideration.

      Plaintiffs appealed the October 23, 2015 and December 4, 2015

orders.      Plaintiffs argued, among other things, that the trial

court erred by enforcing the arbitration clause in the agreement.

We agreed, and reversed the orders in an unpublished opinion.

Defina v. Go Ahead and Jump I, LLC, No. A-1371-15 (App. Div. July

12, 2016) (slip op. at 7, 12-13).          We explained:

                                      5                              A-1861-17T2
                   We are convinced that the arbitration
              clause at issue in this matter did not clearly
              and unambiguously inform plaintiff that he was
              giving up his right to bring claims arising
              out of the participation in activities at
              SZITP in a court of law and have a jury decide
              the case. The arbitration clause states that
              the person signing the agreement waives any
              right to a "trial" and agrees that any dispute
              shall be determined "by binding arbitration
              before one arbitrator to be administered by
              JAMS pursuant to its Comprehensive Arbitration
              Rules and Procedures."

                   Although the clause refers to a "trial",
              there is no "clear and unambiguous statement
              that the person signing the Agreement is
              waiving [his] right to sue or go to court to
              secure relief." [Atalese v. U.S. Legal Servs.
              Grp., L.P., 219 N.J. 430, 446 (2014)].
              Indeed, there is no reference in the clause
              to a court or a jury. The Agreement also does
              not explain how arbitration differs from a
              proceeding in a court of law.      We conclude
              that the Agreement did not clearly and
              unambiguously inform Michael Defina that he
              was "giving up his right to bring [his] claims
              in court and have a jury resolve the dispute."
              Id. at 447 (footnote omitted).

              [Id. at 12.]

      After the matter was remanded to the trial court, plaintiffs

amended their complaint to add the franchisor defendants, Sky Zone

and Sky Zone Franchise. On May 15, 2017, the United States Supreme

Court issued its opinion in Kindred Nursing Centers Ltd. P'ship

v.   Clark,    137   S.   Ct.   1421,   1424,   1429   (2017),   holding   that

arbitration agreements governed by the Federal Arbitration Act

                                        6                             A-1861-17T2
(FAA), 9 U.S.C. §§ 1-16, must be placed "on equal footing with all

other contracts."

     In September 2017, the franchisor defendants filed a motion

to compel arbitration and stay the lawsuit.   They argued that our

July 12, 2016 decision in this matter was no longer valid because,

after Kindred Nursing, New Jersey courts could no longer rely upon

the reasoning in Atalese as a basis for refusing to enforce an

arbitration   agreement.    Alternatively,    they   contended   the

arbitration provision was enforceable even under the standard

established in Atalese, and that our prior holding to the contrary

was erroneous.

     The motion was assigned to a different judge, who rejected

the franchisor defendants' arguments.    In an oral opinion, the

judge explained:

          the Kindred Nursing Center Supreme Court
          decision . . . held unequivocally that, '[a]
          [c]ourt   may   invalidate   an   arbitration
          agreement based on generally applicable
          contract     defenses    like     fraud    or
          unconscionability but not on legal rules that
          apply only to arbitration and that derive
          their meaning from the fact that an agreement
          to arbitrate is at issue.

               This is not what happened in the Defina
          Appellate Division decision of July 12, 2016,
          and . . . that decision is not affected by the
          Kindred Nursing Center's [United States]
          Supreme Court decision because . . . Kindred
          Nursing . . . clearly and unequivocally
          reiterates [and] reinforces that the [c]ourt

                                7                           A-1861-17T2
           is to apply contract principles in reviewing
           these arbitration provisions, like any other
           contract, and should not give an arbitration
           provision a separate or higher standard for
           presentation and enforcement.

     The judge then reviewed our July 12, 2016 decision, and

similarly concluded the subject arbitration clause could not be

enforced because it failed to inform the person signing the

Agreement that he was waiving his right to proceed in court and

have a jury decide the case.   The judge entered an order denying

the motion on November 7, 2017.       This appeal followed.

                               II.

     We begin by reciting our standard of review.        The validity

of an arbitration agreement is a question of law; therefore, our

review of an order denying a motion to compel arbitration is de

novo.   Barr v. Bishop Rosen & Co., Inc., 442 N.J. Super. 599, 605

(App. Div. 2015) (citing Hirsch v. Amper Fin. Servs., LLC, 215

N.J. 174, 186 (2013)); see Atalese, 219 N.J. at 445-46 ("Our review

of a contract, generally, is de novo, and therefore we owe no

special deference to the trial court's . . . interpretation.          Our

approach in construing an arbitration provision of a contract is

governed by the same de novo standard of review."             (citations

omitted)).

     On appeal, defendants renew their argument that the trial

court's decision should be reversed because it relied on Atalese,

                                  8                              A-1861-17T2
which defendants maintain has been abrogated by Kindred Nursing.

Defendants   contend   Atalese   established   a   standard    that   was

arbitration-specific and thus violates Kindred Nursing, which

precludes a state from disfavoring arbitration agreements, or

imposing rules on arbitration agreements that do not apply to

contracts    generally.    Alternatively,      defendants     argue   the

arbitration clause is valid and enforceable because it clearly

instructs the only way for the parties to resolve all claims and

disputes is through arbitration.

     In Kindred Nursing, the United States Supreme Court reviewed

a decision of the Kentucky Supreme Court that invalidated clauses

in agreements a wife and daughter entered into with an entity that

operated nursing homes, using powers of attorney they obtained

from family members, which required that claims or controversies

be submitted to binding arbitration.    Kindred Nursing, 137 S. Ct.

at 1425.     In reversing, the Court found the Kentucky Supreme

Court's decision violated the FAA by singling out arbitration

agreements for disfavored treatment.     Id. at 1426-29.        Thus, in

ruling that a person holding a general power of attorney was not

allowed to enter into an arbitration agreement for the person

granting the power unless the representative possessed specific

authority to waive his principal's rights under the Kentucky

Constitution to access the courts and to trial by jury, the

                                  9                              A-1861-17T2
Kentucky    Supreme   Court     flouted    the    FAA's   mandate      to     place

arbitration    agreements     on    an   equal    footing   with    all       other

contracts.    Ibid.

     Contrary to defendants' argument, we conclude Kindred Nursing

does not abrogate Atalese, upon which our July 12, 2016 decision

and the trial court relied.          Rather, in Atalese, the New Jersey

Supreme    Court   explicitly      recognized    that   "[t]he   FAA   requires

courts to 'place arbitration agreements on an equal footing with

other contracts and enforce them according to their terms.'"

Atalese, 219 N.J. at 441 (quoting AT&T Mobility v. Concepcion, 563

U.S. 333, 339 (2011)).

            Thus, "a state cannot subject an arbitration
            agreement to more burdensome requirements
            than" other contractual provisions.        An
            arbitration clause cannot be invalidated by
            state-law "defenses that apply only to
            arbitration or that derive their meaning from
            the fact that an agreement to arbitrate is at
            issue."

                 Arbitration's favored status does not
            mean that every arbitration clause, however
            phrased, will be enforceable . . . . Section
            2 of the FAA "permits agreements to arbitrate
            to be invalidated by 'generally applicable
            contract defenses.'"    Accordingly, the FAA
            "permits states to regulate . . . arbitration
            agreements     under     general     contract
            principles," and a court may invalidate an
            arbitration clause "'upon such grounds as
            exist at law or in equity for the revocation
            of any contract.'"

            [Ibid. (citations omitted).]

                                      10                                    A-1861-17T2
     In Atalese, the Court concluded that

          [t]he requirement that a contractual provision
          be sufficiently clear to place a consumer on
          notice   that  he   or   she   is  waiving   a
          constitutional or statutory right is not
          specific to arbitration provisions. Rather,
          under New Jersey law, any contractual "waiver
          of rights provision must reflect that [the
          party] has agreed clearly and unambiguously"
          to its terms.

          [Id. at 443 (citations omitted).]

The Court emphasized that "[a]rbitration clauses are not singled

out for more burdensome treatment than other waiver-of-rights

clauses under state law.   Our jurisprudence has stressed that when

a contract contains a waiver of rights – whether in an arbitration

or other clause – the waiver 'must be clearly and unmistakably

established.'"   Id. at 444 (citation omitted).

     Having concluded that Atalese is not abrogated by Kindred

Nursing, we find no basis to revisit or depart from our July 12,

2016 decision invalidating the arbitration clause at issue in the

present case.    As noted, we previously determined the subject

arbitration clause does not clearly and unmistakably inform the

party signing it that he or she is agreeing to waive their right

to be heard in court or their constitutional right to a trial by

jury.   Nor does the clause explain what arbitration is or how it

differs from bringing a claim in court.     Guided by Atalese, our

                                11                          A-1861-17T2
July 12, 2016 ruling retains the same validity today as it did

when it was decided.

    Affirmed.

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