Court Opinion

ID: 4431264
Source: CourtListenerOpinion
Date Created: 2019-08-20 19:54:44.075979+00
Date Added: 2024-06-11T14:51:06.656037
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NOT FOR PUBLICATION WITHOUT THE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-3992-16T2

VINCENZO GALLINA and
MARIA GALLINA,

        Plaintiffs-Appellants,

v.

ADRENALINE FAMILY ENTERTAINMENT,
INC., CLEMENTON LAKE OPERATIONS,
LLC, CLEMENTON LAKE MANAGEMENT,
LLC, CLEMENTON LAKE HOLDINGS, LLC,
CLEMENTON LAND, LLC, and
BOB'S SPACE RACERS, INC.,

     Defendants-Respondents.
___________________________________

              Argued April 12, 2018 – Decided June 6, 2018

              Before Judges Rothstadt and Gooden Brown.

              On appeal from Superior Court of New Jersey,
              Law Division, Camden County, Docket No. L-
              2764-12.

              Michael Confusione         argued the cause for
              appellants   (Hegge         &    Confusione, LLC,
              attorneys; Michael         Confusione, of counsel
              and on the brief).

              Charles C. Daley, Jr., argued the cause for
              respondents Adrenaline Family Entertainment
              and Clementon Lake (Barnaba & Marconi, LLP,
           attorneys; Dennis M. Marconi and Tyler L.
           Williams, on the brief).

           Law Office of Peter A. Callahan, attorneys
           for respondent Bob's Space Racers, Inc.,
           join in the brief of respondents Adrenaline
           Family Entertainment and Clementon Lake.

PER CURIAM

     Plaintiffs, Vincenzo Gallina and his wife Maria Gallina,

appeal from the       Law Division's April 28, 2017 order denying

their motion to reinstate their complaint against defendants,

Adrenaline    Family      Entertainment,        Inc.,      Clementon     Lake

Operations, LLC, Clementon Lake Management, LLC, Clementon Lake

Holdings, LLC, Clementon Land, LLC and Bob's Space Racers, Inc.

The complaint sought damages for injuries sustained by Vincenzo1

on   an   amusement    attraction,       allegedly   due    to   defendants'

negligence in their ownership or operation of the ride or park

at which the attraction was available to the public.

     After plaintiffs filed suit, the parties participated in an

arbitration of plaintiffs' claims that resulted in a "no cause"

determination and the dismissal of their complaint.              Plaintiffs

then filed a motion to reinstate their complaint, arguing that

they did not agree to waive their right to a trial in court

1
    We refer to plaintiffs by their first names to avoid any
confusion caused by their common last name.  No disrespect is
intended.

                                     2                              A-3992-16T2
before      a    judge   or    jury,    despite    their     participation    in   the

arbitration.          The motion judge denied the application without a

hearing, finding that, like a party who agreed to a bench trial

and after an unsatisfactory verdict demanded a new trial by

jury, plaintiffs were bound by the result of the arbitration

because they participated in it, without objection.

       On appeal, plaintiffs contend that the motion judge should

have conducted an evidentiary hearing before deciding whether

the agreement to arbitrate bound them in light of their claim

that they did not know they were waiving their right to a trial.

For the reasons that follow, we vacate the order and remand for

a hearing.

       The facts derived from the motion record are summarized as

follows.         Vincenzo sustained injuries at Clementon Park when he

fell   off       of   "The    Ladder    Climbing     Rope"    attraction.       After

plaintiffs        filed       their    complaint,    the     parties   engaged       in

discovery including depositions.                  Later, according to Vincenzo,

his attorney, Daniel B. Zonies, "told [him] we have to go to

arbitration," which the lawyer explained was being "in one room

with an arbitrator or retired judge" where "lawyers [and the

arbitrator] were going to ask [him] questions . . . ."

       It       was   undisputed       that    plaintiffs      never   signed      any

agreement to arbitrate.               The only document indicating that there

                                           3                                 A-3992-16T2
would be arbitration was the arbitrator's retainer letter that

stated counsel "agreed to retain [the arbitrator] to conduct a

binding arbitration . . . ."                After setting forth the details

about the location, cost, timing for a decision and payment by

counsel, the letter concluded with a statement signed by counsel

that read "We agree to the terms and conditions set forth above

and understand that this agreement is made between and among the

[a]rbitrator and the attorneys and not the [a]rbitrator and the

parties."

      Although there was no written agreement, Clementon Park's

attorney,     Kathi       Peisner,       certified     that       "[c]ounsel       for   all

parties     entered       into    a   binding     [a]rbitration          [a]greement[.]"

Additionally, counsel stated that many letters were exchanged

"between     and    among      counsel     and    [the      arbitrator.]"           Counsel

averred, "[t]here [could] be NO doubt that plaintiffs' original

attorney knew the arbitration was binding."

      Vincenzo claimed that he "never personally understood that

[he   was   giving]       up     [his]   right    to   go    before       judges    or   [a]

jury[.]"     Maria, too, asserted that Zonies never told her that

she was giving up her rights by going to arbitration.

      Before       the    arbitration,          counsel     for    the     parties       made

submissions    to        the   arbitrator.         Plaintiffs       and    the     parties'

attorneys appeared for the arbitration on September 28, 2016 and

                                            4                                      A-3992-16T2
December 21, 2016.           According to Peisner, on the first day of

the     arbitration      hearing,      "plaintiffs           appeared        with        their

attorney, . . . an          interpreter,        and    [their]      relatives[,]"          and

the arbitrator explained "to all that the arbitration was on

consent and binding."           Further, the arbitrator asked "plaintiffs

through their counsel if they knew that arbitration was INSTEAD

of a trial and that he would be deciding the case instead of a

jury,    and   if   they    were    ready      to     proceed."        Peisner      stated,

"[p]laintiffs expressed an understanding, and consent, and their

attorney stated that plaintiffs understood the consequences."

      On January 4, 2017, the arbitrator entered an award in

favor of defendants, finding no cause for the action.                                A week

later,    Zonies      advised      Vincenzo         that    "the     arbitrator          ruled

against    [him,]     and    that   [he]       was    not    going     to    receive       any

damages for [his] injuries," or be able to "continue with [his]

claims    in    court . . . ."             Vincenzo         asserted        that    he     was

"shocked" as he "never agreed to such an arrangement[,]" or to

"give up [his] right to [his] court case."

      After plaintiffs filed their motion to reinstate and the

parties made written submissions, the motion judge considered

counsels'      oral    argument       on       April       28,     2017,     and      denied

plaintiffs'     motion      without    a       plenary      hearing.         In    an     oral

                                           5                                        A-3992-16T2
decision placed on the record on that date, the judge explained

why he believed an evidentiary hearing was not necessary.

    In his decision, the judge stated that if he ordered a

hearing    he    would     "have      to        assume    that    [he]    might     actually

believe    the   plaintiff[s]             and    believe    that    they       truly     didn't

think they were waiving anything, Zonies didn't explain it to

them[,]    and    they     had       no    idea      as    to    what    was     going      on."

Regardless of his beliefs about the plaintiffs' assertions, the

judge     concluded      that    Zonies'            agreement      to    arbitrate        bound

plaintiffs to the same agreement.                        The judge stated that if he

questioned whether plaintiffs understood the agreement, it would

"substantially undercut[] the efficient working of the [c]ourt

system where when the attorney, on behalf of the client signs a

document agreeing to go to binding arbitration, it's enforced."

    While the judge was satisfied that at a hearing, if the

arbitrator      testified       in    accordance          with   the     facts    stated       in

Peisner's certification, plaintiffs would lose, the judge made

clear that his ruling was not based upon whether the arbitrator

explained to plaintiffs anything about the arbitration before it

began,    but    rather,    upon          his    finding    that    the    situation         was

similar to a litigant who was not happy with a result after a

bench trial.      The judge explained:

                                                6                                      A-3992-16T2
            The important thing here is that unlike the
            settlement that was not authorized, [where]
            a plaintiff who won't sign a release, it's a
            different plaintiff than a plaintiff that
            proceeded to binding arbitration, lost and
            now wants their case heard before a jury.
            Those are apples and oranges.

            And I think this case is closer to the . . .
            bench   trial    situation . . . because  no
            plaintiff could plausibly say in [c]ourt
            when their case is tried before a judge,
            gee, I thought we were [going to] get
            another trial a year later before a jury.

    The     motion     judge      ultimately        found     that        to   allow       a

dissatisfied plaintiff to raise an objection to the arbitration

after it was completed would cause havoc in litigation.                                   He

stated that at a hearing, "if I believe the plaintiffs and said

basically their no-cause at binding arbitration is worthless, is

meaningless,    that     [would    be]   the    precedent        I    don't    want       to

establish."     This appeal followed.

    A   trial    court      confronted       with   a   motion       to    reinstate       a

complaint   must      determine    whether      good    cause        has   been      shown

warranting that the "order dismissing [the] matter . . . be set

aside and the case restored[.]"               ASHI-GTO Assocs. v. Irvington

Pediatrics,     PA,   414   N.J.   Super.      351,     359   (App.        Div.     2010).

"Whether to grant or deny a motion to reinstate a complaint lies

within the sound discretion of the trial court."                           Sullivan v.

Coverings & Installation, Inc., 403 N.J. Super. 86, 93 (App.

                                         7                                        A-3992-16T2
Div. 2008).      "We will 'decline to interfere with [such] matters

of   discretion       unless    it    appears    that      an   injustice      has     been

done.'"     Ibid. (quoting Cooper v. Consol. Rail Corp., 391 N.J.

Super.     17,   23    (App.     Div.      2007)).         While      the    "'abuse      of

discretion' standard defies precise definition," we may find an

abuse of discretion "when a decision is 'made without a rational

explanation, . . . rest[s] on an impermissible basis[,]'" or was

"an arbitrary, capricious, whimsical, or manifestly unreasonable

judgment."       Flagg v. Essex Cty. Prosecutor, 171 N.J. 561, 571

(2002) (citations omitted).

      To the extent the trial court's decision involves, as here,

a decision regarding the validity of an arbitration agreement,

our review is de novo.               Atalese v. U.S. Legal Servs. Grp., 219

N.J. 430, 445-46 (2014).

      Applying     these       standards,       we   conclude         that   it     was    a

mistaken     exercise      of        the    judge's        discretion        to     decide

plaintiff's motion without a plenary hearing in light of the

conflicting      certifications         presented     to    the    judge      concerning

plaintiffs' alleged agreement to waive their right to a trial in

court.

      At   the   outset,       we    acknowledge      that      our    State's      public

policy favors the resolution of disputes through arbitration.

Id. at 440.        The strong "public policy of this State favors

                                           8                                      A-3992-16T2
arbitration as a means of settling disputes that otherwise would

be litigated in a court."       Badiali v. N.J. Mfrs. Ins. Grp., 220

N.J. 544, 556 (2015).         The preference for arbitration is not

without limits.      Atalese, 219 N.J. at 441.          For example, "[a]n

agreement to arbitrate, like any other contract, 'must be the

product     of    mutual   assent,   as    determined       under   customary

principles of contract law.'"            Id. at 442 (citation omitted).

"Mutual assent requires that the parties have an understanding

of the terms to which they have agreed."            Ibid.

    "Our     state-law     jurisprudence    makes    clear    'that    when     a

contract contains a waiver of rights - whether in an arbitration

or other clause - the waiver "must be clearly and unmistakably

established."'"       Morgan v. Sanford Brown Inst., 225 N.J. 289,

308-09 (2016) (quoting Atalese, 219 N.J. at 444).                     When the

agreement    is   written,   "[n]o   magical   language      is   required     to

accomplish a waiver of rights in an arbitration agreement."                  Id.

at 309.     Because arbitration involves a waiver of the right to

pursue a case in a judicial forum, courts take particular care

"in assuring the knowing assent of both parties to arbitrate,

and a clear mutual understanding of the ramifications of that

assent."     NAACP of Camden Cty. E. v. Foulke Mgmt. Corp., 421

N.J. Super. 404, 425 (App. Div. 2011), appeal dismissed, 213

N.J. 47 (2013).

                                     9                                 A-3992-16T2
       "This requirement of a 'consensual understanding' about the

rights of access to the courts that are waived in the agreement

has led our courts to hold that clarity is required."                               Moore v.

Woman to Woman Obstetrics & Gynecology, LLC, 416 N.J. Super. 30,

37 (App. Div. 2010) (citation omitted).                      "By its very nature, an

agreement to arbitrate involves a waiver of a party's right to

have her claims and defenses litigated in court."                             Atalese, 219

N.J.    at    442    (citation       omitted).        Any    contractual          waiver-of-

rights provision must reflect that the party has agreed "clearly

and unambiguously" to its terms.                    Leodori v. Cigna Corp., 175

N.J. 293, 302 (2003), cert. denied, 540 U.S. 938 (2003).                                  "[A]n

average       member      of   the   public     may   not        know     —   without      some

explanatory comment — that arbitration is a substitute for the

right    to    have      one's   claim   adjudicated             in   a   court     of    law."

Atalese, 219 N.J. at 442.

       The need for clarity about the rights being waived in an

arbitration agreement does not mean that it must be in writing.

An agreement to arbitrate in lieu of litigation "do[es] not need

to be in writing to be enforceable."                    Leodori, 175 N.J. at 305

(addressing         an    employee's     agreement          to    arbitrate         absent     a

written agreement with his employer).                       There must be, however,

evidence       that       "otherwise     explicitly          indicate         his    or      her

agreement      to"       arbitrate,    id.     at   306,     including        "some       other

                                          10                                         A-3992-16T2
unmistakable    indication            that    [a     litigant]        affirmatively        had

agreed to arbitrate his claims," id. at 307, and waived his

right to trial, Atalese, 219 N.J. at 442.

       Here, the only evidence of plaintiffs' decision to waive

their right to a trial that was presented to the motion judge

was the undisputed fact that the parties participated in the

arbitration and their conflicting certifications.                                  Plaintiffs

contended    they    did    not       understand         that      participating      in   the

arbitration     meant       there       would        be       no     trial.         Peisner's

certification relied upon her hearsay statement about what the

arbitrator allegedly explained to plaintiffs and her unqualified

conclusion that plaintiffs understood what they were told.                                   In

addition, the one written agreement presented to the court – the

arbitrator's retainer agreement was signed only by counsel, and

did not mention a waiver of plaintiffs' right to trial.                                   There

was no certification from the arbitrator explaining what he said

to    plaintiffs     or    even       from    their       former      attorney      refuting

Vincenzo's description of what he was told.                            And, there was no

certification       from        the    interpreter             who    assisted       at    the

arbitration.

       While we share the motion judge's concern about the need

for   courts   to     be    able       to    rely        on    counsels'      agreement      to

arbitrate,     and        the     impact          upon        litigation      of    allowing

                                             11                                      A-3992-16T2
dissatisfied litigants to reopen cases after they participated

in an arbitration that does not go well for them, we believe

under the unique circumstances of this case,           that there was

insufficient evidence for the motion judge to have decided the

issue presented, without a hearing.        See Lederman v. Prudential

Life Ins. Co. of Am., Inc., 385 N.J. Super. 324, 347 (App. Div.

2006).

    The order under review is vacated and the matter remanded

for a plenary hearing as to whether plaintiffs knowingly waived

their right to trial by a judge or jury.

    Vacated   and    remanded   for   further   proceedings   consistent

with this opinion.    We do not retain jurisdiction.

                                 12                             A-3992-16T2