Court Opinion

ID: 2735926
Source: CourtListenerOpinion
Date Created: 2014-09-23 14:04:56.479028+00
Date Added: 2024-06-11T10:03:34.436124
License: Public Domain

SYLLABUS

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the
convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the
interest of brevity, portions of any opinion may not have been summarized).

                         Patricia Atalese v. U.S. Legal Servs. Grp., L.P. (A-64-12) (072314)

Argued April 9, 2014 -- Decided September 23, 2014

ALBIN, J., writing for a unanimous Court.

         In this appeal, the Court considers the enforceability of an arbitration agreement that did not provide notice
to the consumer that, by signing the agreement, she was giving up her right to seek relief in a judicial forum.

         Plaintiff, Patricia Atalese, entered into a service contract with defendant, U.S. Legal Services Group, L.P.
(USLSG), for debt-adjustment services. The contract contained an arbitration provision for the resolution of any
dispute between the parties. Plaintiff brought a lawsuit against USLSG in the Special Civil Part alleging violations
of the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -20, and the Truth-in-Consumer Contract, Warranty and
Notice Act (TCCWNA), N.J.S.A. 56:12-14 to -18. USLSG moved to compel arbitration based on the arbitration
provision in the service contract.

          The trial court granted USLSG’s motion to compel arbitration and dismissed the complaint without
prejudice. The court found the arbitration clause to be “minimally, barely . . . sufficient to put the [plaintiff] on
notice that if [the parties] have any sort of dispute arising out of [the] agreement, it’s going to be heard in
[a]rbitration.” The court also believed that the arbitration clause met the criteria outlined in Curtis v. Cellco
Partnership, 413 N.J. Super. 26, 33-37 (App. Div.), certif. denied, 203 N.J. 94 (2010), which held that an arbitration
provision will be enforced so long as it is “sufficiently clear, unambiguously worded, satisfactorily distinguished
from the other [a]greement terms, and . . . provide[s] a consumer with reasonable notice of the requirement to
arbitrate.” Relying on language in Curtis, the Appellate Division affirmed, finding that “the lack of express
reference to a waiver of the right to sue in court or to arbitration as the ‘exclusive’ remedy” did not bar enforcement
of the arbitration clause. The panel concluded that the arbitration clause gave the “parties reasonable notice of the
requirement to arbitrate all claims under the contract,” and that “a reasonable person, by signing the agreement,
[would have understood] that arbitration is the sole means of resolving contractual disputes.” The Court granted
plaintiff’s petition for certification. 214 N.J. 117 (2013).

HELD: An arbitration provision -- like any comparable contractual provision that provides for the surrendering of a
constitutional or statutory right -- must clearly and unambiguously notify the consumer that he or she is waiving the
right to seek relief in a court of law. The arbitration agreement in this case is unenforceable because it failed to
notify plaintiff that, by entering into the agreement, she was surrendering her right to seek relief in a judicial forum.

1. The Federal Arbitration Act (FAA), 9 U.S.C.A. §§ 1-16, and the nearly identical New Jersey Arbitration Act,
N.J.S.A. 2A:23B-1 to -32, enunciate policies favoring arbitration. Arbitration’s favored status, however, does not
mean that every arbitration clause will be enforceable. The FAA requires courts to “place arbitration agreements on
an equal footing with other contracts” and permits arbitration agreements “to be invalidated by ‘generally applicable
contract defenses.’” AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740, 1745-46 (2011) (citations omitted)
(quoting Doctor’s Assocs., Inc. v. Casarotto, 517 U.S. 681, 687 (1996)). 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.’” Martindale v. Sandvik, Inc., 173
N.J. 76, 85 (2002) (quoting 9 U.S.C.A. § 2). (pp. 8-11)

2. An agreement to arbitrate, like any other contract, “must be the product of mutual assent, as determined under
customary principles of contract law.” NAACP of Camden Cnty. E. v. Foulke Mgmt., 421 N.J. Super. 404, 424
(App. Div.), certif. granted, 209 N.J. 96 (2011), and appeal dismissed, 213 N.J. 47 (2013). Mutual assent requires
that the parties have an understanding of the terms to which they have agreed. “An effective waiver requires a party
to have full knowledge of his legal rights and intent to surrender those rights.” Knorr v. Smeal, 178 N.J. 169, 177

                                                           1
(2003) (citing W. Jersey Title & Guar. Co. v. Indus. Trust Co., 27 N.J. 144, 153 (1958)). A waiver of rights --
whether in an arbitration or other clause -- “must be clearly and unmistakably established.” Garfinkel v. Morristown
Obstetrics & Gynecology Assocs., 168 N.J. 124, 132 (2001) (citation and internal quotation marks 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.” Foulke, 421 N.J. Super. at 425. But an 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.
Therefore, an arbitration agreement must make clear to parties “that in electing arbitration as the exclusive remedy,
they are waiving their time-honored right to sue.” Garfinkel, 168 N.J. at 132. (quoting Marchak v. Claridge
Commons, Inc., 134 N.J. 275, 282 (1993)). (pp. 11-15)

3. No particular form of words is necessary to accomplish a clear and unambiguous waiver of rights. Arbitration
clauses -- and other contractual clauses -- will pass muster when phrased in plain language that is understandable to
the reasonable consumer. Our courts have upheld arbitration clauses phrased in various ways when those clauses
have explained that arbitration is a waiver of the right to bring suit in a judicial forum. For example, in Martindale,
this Court upheld an arbitration clause because it explained that the plaintiff agreed “to waive [her] right to a jury
trial” and that “all disputes relating to [her] employment . . . shall be decided by an arbitrator.” 173 N.J. at 81-82,
96. In Griffin v. Burlington Volkswagen, Inc., the Appellate Division upheld an arbitration clause that stated, “[b]y
agreeing to arbitration, the parties understand and agree that they are waiving their rights to maintain other available
resolution processes, such as a court action or administrative proceeding, to settle their disputes.” 411 N.J. Super.
515, 518 (App. Div. 2010). In Curtis, the Appellate Division upheld an arbitration agreement that provided:
“Instead of suing in court, we each agree to settle disputes (except certain small claims) only by arbitration. The
rules in arbitration are different. There’s no judge or jury, and review is limited, but an arbitrator can award the
same damages and relief, and must honor the same limitations stated in the agreement as a court would.” 413 N.J.
Super. at 31 (emphasis omitted). Martindale, Griffin, and Curtis show that, without difficulty and in different ways,
the point can be made that by choosing arbitration one gives up the “time-honored right to sue.” See Garfinkel, 168
N.J. at 135. The waiver-of-rights language must be clear and unambiguous -- that is, the parties must know that
there is a distinction between resolving a dispute in arbitration and in a judicial forum. (pp. 15-17)

4. The arbitration agreement in this case states that either party may submit any dispute to “binding arbitration,” that
“[t]he parties shall agree on a single arbitrator to resolve the dispute,” and that the arbitrator’s decision “shall be
final and may be entered into judgment in any court of competent jurisdiction.” The arbitration provision does not
explain that plaintiff is waiving her right to seek relief in court, what arbitration is, or how arbitration is different
from a proceeding in a court of law. Although an arbitration clause does not have to identify the specific
constitutional or statutory right guaranteeing a citizen access to the courts that is being waived, the clause, at least in
some general and sufficiently broad way, must explain that the plaintiff is giving up her right to bring her claims in
court or have a jury resolve the dispute. After all, “[a]n effective waiver requires a [consumer] to have full
knowledge of [her] legal rights” before she relinquishes them. Knorr v. Smeal, 178 N.J. 169, 177 (2003). The Court
emphasizes that no prescribed set of words must be included in an arbitration clause to accomplish a waiver of
rights. Whatever words compose an arbitration agreement, they must be clear and unambiguous that a consumer is
choosing to arbitrate disputes rather than resolve them in a court of law. The arbitration agreement here is
unenforceable because its wording did not clearly and unambiguously signal to plaintiff that, by entering the
agreement, she was surrendering her right to pursue her statutory claims in court. (pp. 17-21)

         The judgment of the Appellate Division is REVERSED, and the matter is REMANDED to the trial court
for proceedings consistent with the Court’s opinion.

       CHIEF JUSTICE RABNER; JUSTICES LaVECCHIA, PATTERSON, and FERNANDEZ-VINA;
and JUDGES RODRÍGUEZ and CUFF (both temporarily assigned) join in JUSTICE ALBIN’s opinion.

                                                            2
                                       SUPREME COURT OF NEW JERSEY
                                         A-64 September Term 2012
                                                  072314

PATRICIA ATALESE,

    Plaintiff-Appellant,

          v.

U.S. LEGAL SERVICES GROUP,
L.P.,

    Defendant-Respondent.

          Argued April 9, 2014 – Decided September 23, 2014

          On certification to the Superior Court,
          Appellate Division.

          William D. Wright argued the cause for
          appellant.

          Thomas M. Barron argued the cause for
          respondent.

          Jed L. Marcus submitted a brief on behalf of
          amicus curiae Pacific Legal Foundation
          (Bressler, Amery & Ross, attorneys; Mr.
          Marcus and Deborah J. La Fetra, a member of
          the California and Arizona bars, on the
          brief).

    JUSTICE ALBIN delivered the opinion of the Court.

    Arbitration provisions are now commonplace in consumer

contracts.   Consumers can choose to pursue arbitration and waive

their right to sue in court, but should know that they are

making that choice.   An arbitration clause, like any contractual

clause providing for the waiver of a constitutional or statutory

                                1
right, must state its purpose clearly and unambiguously.    In

choosing arbitration, consumers must have a basic understanding

that they are giving up their right to seek relief in a judicial

forum.

    Here, plaintiff, Patricia Atalese, contracted with

defendant, U.S. Legal Services Group, L.P. (USLSG), for debt-

adjustment services.   The contract contained an arbitration

provision for the resolution of any dispute between the parties,

but the provision made no mention that plaintiff waived her

right to seek relief in court.   Plaintiff brought a lawsuit

against USLSG in the Special Civil Part alleging violations of

two consumer-protection statutes.

    The trial court granted USLSG’s motion to compel

arbitration pursuant to the service contract.   The Appellate

Division affirmed, finding that “the lack of express reference

to a waiver of the right to sue in court” did not bar

enforcement of the arbitration clause.

    We now reverse.    The absence of any language in the

arbitration provision that plaintiff was waiving her statutory

right to seek relief in a court of law renders the provision

unenforceable.   An arbitration provision -- like any comparable

contractual provision that provides for the surrendering of a

constitutional or statutory right -- must be sufficiently clear

to a reasonable consumer.   The provision here does not pass that

                                 2
test.   We therefore vacate the judgment of the Appellate

Division and remand to the Special Civil Part for proceedings

consistent with this opinion.

                                  I.

                                  A.

    This case arises from a civil complaint filed in the

Special Civil Part.    Plaintiff alleged that defendant violated

the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -20, and the

Truth-in-Consumer Contract, Warranty and Notice Act (TCCWNA),

N.J.S.A. 56:12-14 to -18.     She sought treble damages, statutory

penalties, and attorney’s fees.

    The trial court’s decision to compel arbitration was based

on the pleadings.     See R. 4:46-2(c).   We briefly review those

pleadings.

                                  B.

    Plaintiff entered into a service contract with USLSG, which

promised to provide debt-adjustment services.     For those

services, she paid USLSG approximately $5000, which included

$4083.55 in legal fees, $940 in supplemental legal fees, and

$107.50 in other fees.    Plaintiff alleged that USLSG

misrepresented that the monies were spent on numerous attorneys

negotiating with creditors on her behalf.     She maintained that

the only work done by an attorney was the preparation of a

single one-page answer for a collection action in which she

                                  3
represented herself.   Plaintiff also alleged that USLSG settled

only a single debt for her and “knowingly omitted” that it was

not a licensed debt adjuster in New Jersey.   Last, plaintiff

contended that USLSG violated New Jersey’s usury law.

    USLSG denied the allegations in the complaint.

                                C.

    USLSG moved to compel arbitration based on an arbitration

provision in the twenty-three-page service contract.    The

arbitration provision is located on page nine, paragraph

sixteen, of the contract and states:

         Arbitration:   In the event of any claim or
         dispute between Client and the USLSG related
         to   this   Agreement   or  related   to   any
         performance of any services related to this
         Agreement, the claim or dispute shall be
         submitted to binding arbitration upon the
         request of either party upon the service of
         that request on the other party. The parties
         shall agree on a single arbitrator to resolve
         the dispute.    The matter may be arbitrated
         either by the Judicial Arbitration Mediation
         Service or American Arbitration Association,
         as mutually agreed upon by the parties or
         selected by the party filing the claim. The
         arbitration shall be conducted in either the
         county in which Client resides, or the closest
         metropolitan county.     Any decision of the
         arbitrator shall be final and may be entered
         into any judgment in any court of competent
         jurisdiction. The conduct of the arbitration
         shall be subject to the then current rules of
         the arbitration service.       The costs of
         arbitration, excluding legal fees, will be
         split equally or be born by the losing party,
         as determined by the arbitrator. The parties
         shall bear their own legal fees.

                                4
    The trial court granted USLSG’s motion to compel

arbitration and dismissed the complaint without prejudice.      The

court found the arbitration clause to be “minimally, barely . .

. sufficient to put the [plaintiff] on notice that if [the

parties] have any sort of dispute arising out of [the]

agreement, it’s going to be heard in [a]rbitration.”     The court

also believed that the arbitration clause met the criteria

outlined in Curtis v. Cellco Partnership, 413 N.J. Super. 26,

33-37 (App. Div.), certif. denied, 203 N.J. 94 (2010).     There,

the Appellate Division held that an arbitration provision will

be enforced so long as it is “sufficiently clear, unambiguously

worded, satisfactorily distinguished from the other [a]greement

terms, and . . . provide[s] a consumer with reasonable notice of

the requirement to arbitrate.”   Id. at 33.   The trial court

concluded that although upholding the arbitration provision was

not “a slam dunk,” the policy favoring arbitration compelled the

outcome.

    Plaintiff appealed.

                                 II.

    In an unpublished opinion, the Appellate Division affirmed

the trial court’s order compelling arbitration, relying heavily

on language in Curtis, supra, 413 N.J. Super. at 33, in reaching

that conclusion.   The panel held that “the lack of express

reference to a waiver of the right to sue in court or to

                                 5
arbitration as the ‘exclusive’ remedy” did not bar enforcement

of the arbitration clause.   The panel stated that while the

arbitration clause “did not explicitly state that plaintiff

agreed to waive her right to try her dispute in court, it

clearly and unambiguously stated that . . . any dispute relating

to the underlying agreement shall be submitted to arbitration

and the resolution of that forum shall be binding and final.”

It noted that other appellate panels had upheld arbitration

provisions that did not have explicit waiver-of-rights language.

(Citing Griffin v. Burlington Volkswagen, Inc., 411 N.J. Super.
515, 518 (App. Div. 2010); EPIX Holdings Corp. v. Marsh &

McLennan Cos., 410 N.J. Super. 453, 476 (App. Div. 2009),

overruled in part on other grounds by Hirsch v. Amper Fin.

Servs., LLC, 215 N.J. 174, 192-93 (2013)).

    The panel concluded that the language of the arbitration

clause gave the “parties reasonable notice of the requirement to

arbitrate all claims under the contract,” and that “a reasonable

person, by signing the agreement, [would have understood] that

arbitration is the sole means of resolving contractual

disputes.”

    We granted plaintiff’s petition for certification.      Atalese

v. U.S. Legal Servs. Grp., L.P., 214 N.J. 117 (2013).    We also

granted Pacific Legal Foundation’s request to participate as

amicus curiae, limited to the filing of a brief.

                                6
                               III.

                                A.

    Plaintiff contends that the arbitration clause does not

comply with New Jersey law, specifically Curtis and our decision

in Marchak v. Claridge Commons, Inc., 134 N.J. 275, 281 (1993),

because it “does not clearly and unequivocally state its purpose

in depriving [plaintiff] of her time-honored right to sue.”      She

asserts that New Jersey courts do not uphold “arbitration

provisions that fail to:   (1) indicate that the parties waive

their right to sue; or (2) indicate that arbitration is the

parties’ exclusive remedy.”   Plaintiff does not suggest that an

incantation of “magic words” is necessary for a waiver of rights

but does assert that the language for such a waiver must be

clear and unequivocal.

                                B.

    USLSG contends that the term “arbitration” is universally

understood and that “[n]o reasonable consumer could have any

doubt that arbitration is different than litigation.”   USLSG

emphasizes that the Federal Arbitration Act (FAA) reflects a

“liberal federal policy favoring arbitration” and requires

courts to “place arbitration agreements on an equal footing with

other contracts and enforce them according to their terms.”

(Citations and internal quotation marks omitted) (quoting AT&T

Mobility LLC v. Concepcion, 563 U.S. ___, ___, 131 S. Ct. 1740,

                                7
1745-46, 179 L. Ed. 2d 742, 751 (2011)).    It argues that the

language in Marchak, supra -- that an arbitration “clause

depriving a citizen of access to the courts should clearly state

its purpose,” 134 N.J. at 282 -- as construed by plaintiff, is

in conflict with Concepcion and New Jersey case law.    Last,

USLSG submits that the arbitration clause is sufficiently clear

and “adequately advised” plaintiff that her lawsuit would be

resolved “in an arbitral forum.”

                                 C.

    Pacific Legal Foundation, participating as amicus curiae,

urges this Court to affirm the Appellate Division and enforce

the arbitration agreement.   Amicus emphasizes that arbitration

provisions in contracts must be viewed with favor, consistent

with the dictates of federal and state law, and not with

“suspicion or hostility.”    Amicus maintains that consumers

entering into contracts with arbitration clauses are “presumed”

to be sufficiently competent to understand what they are signing

and that “the law does not require invocation of particular

terms of art to create an enforceable arbitration contract.”      In

short, amicus insists that plaintiff signed an arbitration

agreement “written in standard form and simple language” and

should be bound by it.

                                IV.

                                 A.

                                 8
    The Federal Arbitration Act (FAA), 9 U.S.C.A. §§ 1-16, and

the nearly identical New Jersey Arbitration Act, N.J.S.A.

2A:23B-1 to -32, enunciate federal and state policies favoring

arbitration.   Concepcion, supra, 563 U.S. at ___, 131 S. Ct. at

1745, 179 L. Ed. 2d at 751 (describing Section 2 of FAA as

reflecting “a ‘liberal federal policy favoring arbitration’”

(quoting Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460
U.S. 1, 24, 103 S. Ct. 927, 941, 74 L. Ed. 2d 765, 785 (1983)));

Hojnowski v. Vans Skate Park, 187 N.J. 323, 342 (2006) (noting

that Legislature, in enacting New Jersey’s Arbitration Act,

codified existing judicial policy favoring arbitration as “means

of dispute resolution”); Martindale v. Sandvik, Inc., 173 N.J.
76, 92 (2002) (“[T]he affirmative policy of this State, both

legislative and judicial, favors arbitration as a mechanism of

resolving disputes.”).

    Section 2 of the FAA provides that

         [a] written provision in . . . a contract
         evidencing a transaction involving commerce to
         settle by arbitration a controversy thereafter
         arising out of such contract or transaction .
         . . shall be valid, irrevocable, and
         enforceable, save upon such grounds as exist
         at law or in equity for the revocation of any
         contract.

         [9 U.S.C.A. § 2.]

The FAA requires courts to “place arbitration agreements on an

equal footing with other contracts and enforce them according to

                                 9
their terms.”   Concepcion, supra, 563 U.S. at ___, 131 S. Ct. at

1745-46, 179 L. Ed. 2d at 751 (citations omitted).    Thus, “a

state cannot subject an arbitration agreement to more burdensome

requirements than” other contractual provisions.     Leodori v.

CIGNA Corp., 175 N.J. 293, 302, cert. denied, 540 U.S. 938, 124
S. Ct. 74, 157 L. Ed. 2d 250 (2003).    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.”    Concepcion, supra, 563

U.S. at ___, 131 S. Ct. at 1746, 179 L. Ed. 2d at 751.

    Arbitration’s favored status does not mean that every

arbitration clause, however phrased, will be enforceable.       See

Hirsch, supra, 215 N.J. at 187 (“[T]he preference for

arbitration ‘is not without limits.’”   (quoting Garfinkel v.

Morristown Obstetrics & Gynecology Assocs., 168 N.J. 124, 132

(2001))).   Section 2 of the FAA “permits agreements to arbitrate

to be invalidated by ‘generally applicable contract defenses.’”

Concepcion, supra, 563 U.S. at ___, 131 S. Ct. at 1746, 179 L.

Ed. 2d at 751 (emphasis added) (quoting Doctor’s Assocs., Inc.

v. Casarotto, 517 U.S. 681, 687, 116 S. Ct. 1652, 1656, 134 L.

Ed. 2d 902, 909 (1996)).   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

                                10
revocation of any contract.’”   Martindale, supra, 173 N.J. at 85

(quoting 9 U.S.C.A. § 2); see First Options of Chi., Inc. v.

Kaplan, 514 U.S. 938, 944, 115 S. Ct. 1920, 1924, 131 L. Ed. 2d
985, 993 (1995) (“When deciding whether the parties agreed to

arbitrate a certain matter . . . , courts generally . . . should

apply ordinary state-law principles that govern the formation of

contracts.”); Hojnowski, supra, 187 N.J. at 342 (“[S]tate

contract-law principles generally govern a determination whether

a valid agreement to arbitrate exists.”    (citing First Options,

supra, 514 U.S. at 944, 115 S. Ct. at 1924, 131 L. Ed. 2d at

993)).

                                 B.

    An agreement to arbitrate, like any other contract, “must

be the product of mutual assent, as determined under customary

principles of contract law.”    NAACP of Camden Cnty. E. v. Foulke

Mgmt., 421 N.J. Super. 404, 424 (App. Div.), certif. granted,

209 N.J. 96 (2011), and appeal dismissed, 213 N.J. 47 (2013).       A

legally enforceable agreement requires “a meeting of the minds.”

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

Parties are not required “to arbitrate when they have not agreed

to do so.”   Volt Info. Scis. v. Bd. of Trs. of Leland Stanford

Jr. Univ., 489 U.S. 468, 478, 109 S. Ct. 1248, 1255, 103 L. Ed.
2d 488, 499 (1989); see Garfinkel, supra, 168 N.J. at 132

(“‘[O]nly those issues may be arbitrated which the parties have

                                 11
agreed shall be.’”   (quoting In re Arbitration Between Grover &

Universal Underwriters Ins. Co., 80 N.J. 221, 228 (1979))).

    Mutual assent requires that the parties have an

understanding of the terms to which they have agreed.     “An

effective waiver requires a party to have full knowledge of his

legal rights and intent to surrender those rights.”     Knorr v.

Smeal, 178 N.J. 169, 177 (2003) (citing W. Jersey Title & Guar.

Co. v. Indus. Trust Co., 27 N.J. 144, 153 (1958)).    “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.”

Foulke, supra, 421 N.J. Super. at 425.   But an 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.

    Moreover, 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.”   Ibid.

    The 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

                                 12
party] has agreed clearly and unambiguously” to its terms.

Leodori, supra, 175 N.J. at 302; see, e.g., Dixon v. Rutgers,

the State Univ. of N.J., 110 N.J. 432, 460-61 (1988) (holding

that collective bargaining agreement cannot deprive one of

statutory rights to evidentiary materials in anti-discrimination

case because “[u]nder New Jersey law[,] for a waiver of rights

to be effective it must be plainly expressed”); Red Bank Reg’l

Educ. Ass’n v. Red Bank Reg’l High Sch. Bd. of Educ., 78 N.J.
122, 140 (1978) (explaining, in public-employment labor-

relations context, that any waiver of statutory right to file

grievances “must be clearly and unmistakably established”); W.

Jersey Title & Guar. Co., supra, 27 N.J. at 152-53 (“It is

requisite to waiver of a legal right that there be a clear,

unequivocal, and decisive act of the party . . . .   Waiver

presupposes a full knowledge of the right and an intentional

surrender . . . .”   (citations and internal quotation marks

omitted)); Christ Hosp. v. Dep’t of Health & Senior Servs., 330
N.J. Super. 55, 63-64 (App. Div. 2000) (requiring “clear and

unmistakable waiver” of statutory right to hearing following

refusal to renew license); Franklin Twp. Bd. of Educ. v.

Quakertown Educ. Ass’n, 274 N.J. Super. 47, 53 (App. Div. 1994)

(holding that waiver of court-ordered, strike-related expenses

must be “clear and unmistakable” (citation and internal

quotation marks omitted)); Otis Elevator Co. v. Stafford, 95

                                13
N.J.L. 79, 82 (Sup. Ct. 1920) (“Clear and unmistakable evidence

is necessary to hold that the right to file a [mechanics’] lien

has been waived.”); Amir v. D’Agostino, 328 N.J. Super. 141, 160

(Ch. Div. 1998) (holding that waiver of statutory rights under

Condominium Act requires that party “kn[ow] that there [i]s a

statutory protection available and then elect[] to waive it”

because “conduct that purports to constitute a waiver must be

clear and unmistakable”), aff’d o.b., 328 N.J. Super. 103, 105

(App. Div. 2000); cf. Wright v. Universal Mar. Serv. Corp., 525
U.S. 70, 80, 119 S. Ct. 391, 396, 142 L. Ed. 2d 361, 371 (1998)

(holding that “union-negotiated waiver of employees’ statutory

right to a judicial forum for claims of employment

discrimination” must be “clear and unmistakable”).

    Arbitration 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.”

Garfinkel, supra, 168 N.J. at 132 (citation and internal

quotation marks omitted).   Thus, a “clause depriving a citizen

of access to the courts should clearly state its purpose.”

Ibid. (quoting Marchak, supra, 134 N.J. at 282).     We have

repeatedly stated that “[t]he point is to assure that the

parties know that in electing arbitration as the exclusive

                                14
remedy, they are waiving their time-honored right to sue.”

Ibid. (quoting Marchak, supra, 134 N.J. at 282); Hirsch, supra,

215 N.J. at 187 (same).

    No particular form of words is necessary to accomplish a

clear and unambiguous waiver of rights.     It is worth

remembering, however, that every “consumer contract” in New

Jersey must “be written in a simple, clear, understandable and

easily readable way.”   N.J.S.A. 56:12-2.   Arbitration clauses --

and other contractual clauses -- will pass muster when phrased

in plain language that is understandable to the reasonable

consumer.

    Our courts have upheld arbitration clauses phrased in

various ways when those clauses have explained that arbitration

is a waiver of the right to bring suit in a judicial forum.     For

example, in Martindale, supra, we upheld an arbitration clause

because it explained that the plaintiff agreed “to waive [her]

right to a jury trial” and that “all disputes relating to [her]

employment . . . shall be decided by an arbitrator.” 173 N.J.

at 81-82, 96 (stating that “arbitration agreement not only was

clear and unambiguous, it was also sufficiently broad to

encompass reasonably plaintiff’s statutory causes of action”).

In Griffin, supra, the Appellate Division upheld an arbitration

clause, which expressed that “[b]y agreeing to arbitration, the

parties understand and agree that they are waiving their rights

                                15
to maintain other available resolution processes, such as a

court action or administrative proceeding, to settle their

disputes.” 411 N.J. Super. at 518.   In Curtis, supra, the

Appellate Division found the arbitration provisions were

“sufficiently clear, unambiguously worded, satisfactorily

distinguished from the other [a]greement terms, and drawn in

suitably broad language to provide a consumer with reasonable

notice of the requirement to arbitrate.” 413 N.J. Super. at 33.

The arbitration agreement in Curtis stated:

          Instead of suing in court, we each agree to
          settle disputes (except certain small claims)
          only by arbitration. The rules in arbitration
          are different. There’s no judge or jury, and
          review is limited, but an arbitrator can award
          the same damages and relief, and must honor
          the same limitations stated in the agreement
          as a court would.

          [Id. at 31 (emphasis omitted).]

     Martindale, Griffin, and Curtis show that, without

difficulty and in different ways, the point can be made that by

choosing arbitration one gives up the “time-honored right to

sue.”   See Garfinkel, supra, 168 N.J. at 135 (declining to

“suggest that a party need refer specifically to the [Law

Against Discrimination] or list every imaginable statute by name

to effectuate a knowing and voluntary waiver of rights”).      The

waiver-of-rights language, however, must be clear and

unambiguous -- that is, the parties must know that there is a

                                16
distinction between resolving a dispute in arbitration and in a

judicial forum.

       With those principles in mind, we turn to the arbitration

provision before us.

                                 V.

       Our review of a contract, generally, is de novo, and

therefore we owe no special deference to the trial court’s or

Appellate Division’s interpretation.    Kieffer v. Best Buy

Stores, L.P., 205 N.J. 213, 222-23 (2011).    Our approach in

construing an arbitration provision of a contract is governed by

the same de novo standard of review.    Hirsch, supra, 215 N.J. at

186.

       The arbitration clause at issue appears on page nine of a

twenty-three-page contract between plaintiff and USLSG.       Under

the terms of the agreement, USLSG promised to provide plaintiff

with debt-adjustment services.    In her civil complaint,

plaintiff alleged that USLSG failed to deliver the services

promised, misrepresented that various attorneys were working on

her case, and knowingly omitted that it was not a licensed debt

adjuster in this State.    Plaintiff asserted that USLSG violated

two consumer-protection statutes, the CFA and the TCCWNA, both

of which explicitly provide remedies in a court of law.       See

N.J.S.A. 56:8-19 (“Any person who suffers any ascertainable loss

. . . may bring an action or assert a counterclaim therefor in

                                 17
any court of competent jurisdiction.”); N.J.S.A. 56:12-17 (“A

consumer also shall have the right to petition the court to

terminate a contract which violates the provisions of section 2

of [the TCCWNA] and the court in its discretion may void the

contract.”).

    Nowhere in the arbitration clause is there any explanation

that plaintiff is waiving her right to seek relief in court for

a breach of her statutory rights.    The contract states that

either party may submit any dispute to “binding arbitration,”

that “[t]he parties shall agree on a single arbitrator to

resolve the dispute,” and that the arbitrator’s decision “shall

be final and may be entered into judgment in any court of

competent jurisdiction.”   The provision does not explain what

arbitration is, nor does it indicate how arbitration is

different from a proceeding in a court of law.    Nor is it

written in plain language that would be clear and understandable

to the average consumer that she is waiving statutory rights.

The clause here has none of the language our courts have found

satisfactory in upholding arbitration provisions -- clear and

unambiguous language that the plaintiff is waiving her right to

sue or go to court to secure relief.    We do not suggest that the

arbitration clause has to identify the specific constitutional

or statutory right guaranteeing a citizen access to the courts

that is waived by agreeing to arbitration.    But the clause, at

                                18
least in some general and sufficiently broad way, must explain

that the plaintiff is giving up her right to bring her claims in

court or have a jury resolve the dispute.1   Mutual assent to an

agreement requires mutual understanding of its terms.    After

all, “[a]n effective waiver requires a [consumer] to have full

knowledge of [her] legal rights” before she relinquishes them.

See Knorr, supra, 178 N.J. at 177.

       In the employment setting, we have stated that we would

“not assume that employees intend to waive [their rights under

the Law Against Discrimination] unless their agreements so

provide in unambiguous terms.”    Garfinkel, supra, 168 N.J. at

135.   We indicated that although a waiver-of-rights provision

need not “list every imaginable statute by name to effectuate a

knowing and voluntary waiver of rights,” employees should at

least know that they have “agree[d] to arbitrate all statutory

claims arising out of the employment relationship or its

termination.”   Ibid.

       We emphasize that no prescribed set of words must be

included in an arbitration clause to accomplish a waiver of

rights.    Whatever words compose an arbitration agreement, they

1 Article I, Paragraph 9 of the 1947 New Jersey Constitution
guarantees that “[t]he right of trial by jury shall remain
inviolate.” That guarantee has appeared in every New Jersey
Constitution. See N.J. Const. of 1776 art. XXII; N.J. Const. of
1844 art. I, § 7.

                                 19
must be clear and unambiguous that a consumer is choosing to

arbitrate disputes rather than have them resolved in a court of

law.2    In this way, the agreement will assure reasonable notice

to the consumer.    To be clear, under our state contract law, we

impose no greater burden on an arbitration agreement than on any

other agreement waiving constitutional or statutory rights.

        In the matter before us, the wording of the service

agreement did not clearly and unambiguously signal to plaintiff

that she was surrendering her right to pursue her statutory

claims in court.     That deficiency renders the arbitration

agreement unenforceable.3

2 Both plaintiff and USLSG reference EPIX Holdings, supra, 410
N.J. Super. 453, in their briefs. There, a panel of the
Appellate Division enforced an arbitration provision that stated
that “[a]ny other unresolved dispute arising out of this
Agreement must be submitted to arbitration,” and that “the
arbitrators would have ‘exclusive jurisdiction over the entire
matter in dispute, including any question as to arbitrability.’”
Id. at 461, 482. The parties in EPIX Holdings did not challenge
whether that language satisfied the standard for a waiver of
rights. We find that the language there is not sufficient to
constitute a clear and unambiguous waiver of a consumer’s right
to sue in court.

3 Our opinion should not be read to approve that part of the
arbitration clause that states: “The costs of arbitration,
excluding legal fees, will be split equally or born by the
losing party, as determined by the arbitrator. The parties
shall bear their own legal fees.” See Delta Funding Corp. v.
Harris, 189 N.J. 28, 44 (2006) (stating that “defendant [] may
not limit a consumer’s ability to pursue the statutory remedy of
attorney’s fees and costs when it is available to prevailing
parties” and explaining that “[b]y agreeing to arbitrate a
statutory claim, a party does not forgo the substantive rights
afforded by the statute; it only submits to their resolution in
                                  20
                               VI.

    The judgment of the Appellate Division is reversed.   We

remand to the trial court for proceedings consistent with this

opinion.

     CHIEF JUSTICE RABNER; JUSTICES LaVECCHIA, PATTERSON, and
FERNANDEZ-VINA; and JUDGES RODRÍGUEZ and CUFF (both temporarily
assigned) join in JUSTICE ALBIN’s opinion.

an arbitral[,] rather than a judicial forum.”) (internal
quotation marks omitted); see also N.J.S.A. 56:12-16 (stating
that under TCCWNA “[n]o consumer contract . . . shall contain
any provision by which the consumer waives his rights under this
act”); N.J.S.A. 56:8-19 (“In all actions under [the CFA], . . .
the court shall also award reasonable attorneys’ fees, filing
fees and reasonable costs of suit.”).
                                2
               SUPREME COURT OF NEW JERSEY

NO.    A-64                                     SEPTEMBER TERM 2012

ON CERTIFICATION TO               Appellate Division, Superior Court

PATRICIA ATALESE,

      Plaintiff-Appellant,

              v.

U.S. LEGAL SERVICES GROUP,
L.P.,

      Defendant-Respondent.

DECIDED               September 23, 2014
                Chief Justice Rabner                          PRESIDING
OPINION BY                   Justice Albin
CONCURRING/DISSENTING OPINIONS BY
DISSENTING OPINION BY

                                        REVERSE AND
  CHECKLIST
                                          REMAND
  CHIEF JUSTICE RABNER                       X
  JUSTICE LaVECCHIA                          X
  JUSTICE ALBIN                              X
  JUSTICE PATTERSON                          X
  JUSTICE FERNANDEZ-VINA                     X
  JUDGE RODRÍGUEZ (t/a)                      X
  JUDGE CUFF (t/a)                           X
  TOTALS                                     7

                                                     1