Court Opinion

ID: 4431109
Source: CourtListenerOpinion
Date Created: 2019-08-20 19:52:18.964337+00
Date Added: 2024-06-11T14:51:04.659549
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NOT FOR PUBLICATION WITHOUT THE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-3388-16T2

VICTORY ENTERTAINMENT, INC.
and NICHOLAS PANACCIONE,

        Plaintiffs-Appellants,

v.

RICHARD D. SCHIBELL, LEONARD
CASIERO and THE DEN, INC.,

        Defendants-Respondents,

and

PAGIOTIS DRAGONAS, JOSEPH
FORSTER, SALVATORE SCHIBELL
and TERENCE MARTIN,

     Defendants.
______________________________

              Argued April 18, 2018 – Decided June 21, 2018

              Before Judges Nugent and Geiger.

              On appeal from Superior Court of New Jersey,
              Chancery Division, Middlesex County, Docket
              No. C-000046-15.

              Paul V. Fernicola argued the cause for
              appellants (Paul V. Fernicola & Associates,
              LLC and Eugene D. Roth, attorneys; Paul V.
              Fernicola, on the brief).
            Joseph B. Fiorenzo argued the cause for
            respondents Richard D. Schibell and Leonard
            Casiero (Sills Cummis & Gross, PC, attorneys;
            Joseph B. Fiorenzo, of counsel; Andrew W.
            Schwartz, on the brief).

            Wendy M. Crowther argued the cause for
            respondent The Den, Inc. (Schibell & Mennie,
            LLC, attorneys,    join in the brief of
            respondents Richard D. Schibell and Leonard
            Casiero).

PER CURIAM

       Plaintiffs Victory Entertainment, Inc. (VEI) and Nicholas

Panaccione appeal from a March 29, 2017 order dismissing their

complaint with prejudice, compelling the parties to arbitrate

their    dispute,    and    discharging     the   special    fiscal    agent     for

defendant The Den, Inc. and from a February 28, 2017 order sealing

the trial court record and deposition transcripts.               We affirm the

order dismissing the complaint and compelling the parties to

arbitrate their dispute and reverse the order sealing the record.

                                       I.

       We glean the following facts from the record.             Prior to 2012,

Joseph    Shamy     was    the   majority   owner   of   a   series    of     adult

entertainment clubs that operated under the trade name Delilah's

Den.

       Panaccione was the General Manager of several of Shamy's

clubs.       Defendant      Richard   D.    Schibell     began   his    business

relationship with Panaccione in 1997 or 1998.                    At that time,

                                        2                                   A-3388-16T2
Schibell was providing legal services to Shamy as he sought to

open a Delilah's Den in Toms River.           Shamy offered Schibell a

thirty-three percent interest in both Delilah's Den of Toms River

(DDTR), a real estate company, and 1640 Lakewood Road Associates

(1640 LRA), an operating company, for $150,000.            The business

opportunity interested Schibell but being an owner of record of

an adult entertainment club concerned him.         Due to his concern,

Schibell decided he would be a "passive owner," using Panaccione

as a nominee to hold his shares.             Panaccione agreed and, in

exchange for keeping Schibell's ownership interest confidential,

received a ten percent ownership interest in both DDTR and 1640

LRA.

       On December 13, 2002, after Schibell and Panaccione had

commenced their business relationship, VEI was formed.          Panaccione

received a 17.5 percent ownership interest in VEI.              VEI opened

another adult entertainment club in Sayreville, New Jersey, with

Shamy as its majority owner. The club operated under the alternate

name, Delilah's Den, consistent with Shamy's other clubs.

       On October 14, 2010, Panaccione was arrested for discharging

a gun in his home while his wife and children were present.               On

November   27,   2010,   Shamy   suspended   Panaccione   for    breaching

company policies.    Panaccione's misconduct included harassing the

entertainers and abusing drugs and alcohol.

                                    3                              A-3388-16T2
      As a result of Panaccione's erratic behavior, Shamy took

steps to separate his business interests from Panaccione.               This

culminated in a reorganization of ownership interests completed

on February 5, 2012.      The following individuals were parties to

the   reorganization     agreement:       Panagiotis    Dragonas,   Sherrie

Terrell,   Leonard     Casiero,   Panaccione,     and    Shamy.      Before

reorganization, the ownership interests in the various clubs were

as follows:

           VEI: Panaccione 17.5%, Shamy 67.5%, Terrell
           5%, and Dragonas 10%.

           DDTR: Panaccione, individually and as nominee,
           33.3%; Shamy 56.7%; Terrell 5%; and Margaret
           Angelo 5%.

           1640 LRA: Panaccione, individually and as
           nominee 33.3%; Shamy 56.7%; Terrell 5%; and
           Margaret Angelo 5%.

           Frank's of Millville, LLC: Casiero 10%,
           Panaccione 17.5%, Terrell 5%, and Shamy 67.5%.

           18-22 Washington Ave, LLC: Casiero 30.77%,
           Panaccione 53.85%, and Terrell 15.38%.

After reorganization, the ownership interests in the various clubs

were as follows:

           VEI: Panaccione 80%, individually and              as
           nominee; and Dragonas and Casiero 20%.

           DDTR: Shamy 85%, Terrell 10%, and Margaret
           Angelo 5%.

           1640 LRA: Shamy 85%, Terrell 10%, and Margaret
           Angelo 5%.

                                      4                             A-3388-16T2
           Frank's of Millville,        LLC:   Shamy   90%   and
           Terrell 10%.

           18-22 Washington     Ave,    LLC:   Shamy   90%   and
           Terrell 10%.

Panaccione, Schibell, and Casiero essentially traded all of their

combined interests across the various clubs for a 100% interest

in VEI and, by extension, the club in Sayreville.1

     As   part   of   the   reorganization,    Schibell,     Casiero,   and

Panaccione agreed they would transfer ownership of the Sayreville

club to a new entity so that the owners of VEI would remain liable

for its prior debts and the new owners of the Sayerville club

would not be responsible.        On February 17, 2012, Casiero and

Pannaccione incorporated The Den, Inc. (The Den) to accomplish

that goal.   Casiero owned a twenty percent interest in The Den,

while Panaccione owned the remaining eighty percent, individually

and as a nominee.2

     The certificate of incorporation filed by Schibell authorized

the corporation to issue 2500 shares of stock without par value,

designated Panaccione as the sole director of the initial Board

of Directors, and named Panaccione as the corporation's registered

1
   Dragonas shared a twenty percent interest in VEI with Casiero.
Casiero acted as Dragonas's agent.
2
  Panaccione owned forty-nine percent outright, and Schibell owned
thirty-one percent.

                                    5                              A-3388-16T2
agent.     The shares were distributed to Joseph Forster, The Den's

manager.

     The parties never prepared or executed a formal plan of

reorganization.     However, at least Schibell and Casiero were under

the impression that, due to The Den's incorporation, the entity

had assumed all of VEI's interests and VEI was no longer an

operating entity or a viable company.

     In June 2014, Panaccione was hospitalized for mental health

issues.     During the period leading up to his hospitalization,

Panaccione    began      to    suffer    increasingly     frequent     delusions,

"accusing certain people of trying to kill him," which negatively

impacted     the   operation        of   The   Den.       During     Panaccione's

hospitalization, Schibell and Casiero took over management of The

Den and became aware of Panaccione's mismanagement.                       Schibell

certifies "[d]uring many spells of delusion, Panaccione would give

inconceivable      and    incomprehensible       orders    to      employees    and

entertainers, making them extremely uncomfortable in the workplace

environment."      Schibell further certifies Panaccione would often

"threaten    employees        and   entertainers,     brandishing     a   gun   and

otherwise making threats of physical harm against those who would

not accede to his ways."             Panaccione also allegedly refused to

follow standard record keeping practices, let several policies

                                          6                                A-3388-16T2
lapse,     converted      money,   failed      to   remit    payments     to    various

vendors, used narcotics, and sexually harassed the entertainers.

       Upon his release from the hospital, Panaccione sought to

resume management of The Den.                  Wary of allowing Panaccione to

reassume     his   role    as   manager,       Schibell     and   Casiero      informed

Panaccione he could not "come back to run the bar" "[u]ntil he got

better and got treatment."            To this end, several communications

were sent between the parties regarding Panaccione's role at The

Den.

       In August 2014, Schibell and Casiero met with Panaccione to

discuss conditions that would be "imposed if he were to come back

into the bar."3      During the meeting, Panaccione offered to buy out

Schibell's thirty-one percent interest in The Den for $900,000.

Panaccione also agreed to buy out Casiero's twenty percent interest

in The Den for $600,000.           Panaccione, Schibell, and Casiero agreed

to the buyout terms and shook hands on the deal.

       On September 4, 2014, Schibell wrote to Panaccione to remind

him the three men had agreed to a price for their combined

interests in The Den and confirmed the agreement with a handshake.

In   his   letter,     Schibell     also    suggested       Panaccione      retain     an

attorney     so    they    could     properly       document      their   agreement.

3
  Forster, Terence Martin, and John Catania, Schibell's driver,
also attended the meeting.

                                           7                                    A-3388-16T2
Panaccione consulted with several attorneys after the parties made

this agreement.

     Panaccione was unable to raise the funds necessary to complete

the purchase.     As a result, the parties agreed to negotiate a

revised agreement (the Sales Agreement) whereby Terence Martin,4

Panaccione's "trusted" associate, would serve as a nominee to

complete the purchase on behalf of Panaccione.

     As Panaccione described the arrangement to his then-wife,

Cindy Styron, "he was going to have [Terence Martin] buyout Lenny

[Casiero] and Richard [Schibell] and basically it was for him.            He

was going to end up with the whole 100 percent of the clubs using

[Terence]."   Styron also testified it was Panaccione's idea to use

Martin as the buyer.

     At    Panaccione's   insistence,   Schibell   and   Casiero     agreed

Panaccione would have a fifty percent interest in The Den as

opposed to the forty-nine percent interest he previously held.

However, this change had the potential to lead to deadlocks between

Panaccione on one side and Schibell and Casiero on the other.             To

resolve potential impasses, the parties agreed to negotiate a

separate    Shareholder/Stakeholder      (Deadlock)      Agreement     (the

Deadlock Agreement).

4
   Martin's first name is spelled "Terence" in the documents but
"Terrance" in the transcripts.

                                   8                               A-3388-16T2
     Ultimately, the parties agreed to the terms of the Sales

Agreement and Deadlock Agreement.        On November 7, 2014, Panaccione

and Martin appeared together at Schibell's home.                 Panaccione

brought a folder containing the agreements, which the parties

signed that day.

     Following the meeting at Schibell's home, Panaccione and

Martin went to The Den and informed Forster they "just bought out

Richard [Schibell] and Lenny [Casiero]."             Later that night, the

parties   signed   additional   copies    of   the    Sales   Agreement   and

Deadlock Agreement.     All interested parties were present.              The

parties also signed stock certificates, and Panaccione and Martin

executed new shares in The Den. The shares in The Den are expressly

subject to the terms and conditions of the Sales Agreement and the

Deadlock Agreement.

     The parties to the Sales Agreement are Schibell, Casiero, and

Martin.     The Sales Agreement requires Martin to remit payment of

the purchase price plus interest over a ten-year term.           It further

provides:

                 3. It is further agreed and understood
            that unless the sums provided for within; to
            wit, $1.5 Million, have been fully and timely
            paid, Buyer shall nominate and irrevocably
            appoint Richard D. Schibell and Lenny Casiero
            as   its/his   appointees    under   separate
            "deadlock/voting" agreement.

                                   9                                 A-3388-16T2
    The   parties   to    the   Deadlock   Agreement   are   Martin   and

Panaccione.   The agreement identifies the relevant entity as "The

Den, Inc." and provides in relevant part:

               WHEREAS, the parties hereto have agreed
          to a workout agreement wherein stock ownership
          and voting rights have been established to
          avoid issues of deadlock; and

               WHEREAS, the parties hereto have had
          opportunity to consult with independent legal
          counsel and fully understand the terms and
          conditions hereafter set forth;

                BE IT RESOLVED AND AGREED, AS FOLLOWS:

               1. Nicholas Panaccione agrees that his
          shareholder interest [in] The Den . . . shall
          be set at and deemed to be 50% . . . ;

               2.    Terence Martin agrees that his
          shareholder interest in The Den . . . shall
          be set and deemed to be 50% . . . ;

               3. So as to avoid deadlock, it is agreed
          and understood that . . . Martin shall
          nominate two nominees who shall vote on any
          and all issues in the ordinary course or
          otherwise, with any two of the three assignees
          constituting a majority or quorum for voting
          purposes, i.e., . . . Panaccione with one of
          the Martin nominees, or two of the Martin
          nominees constituting a majority or quorum for
          voting purposes. . . .

               4. It is further agreed and understood
          that the aforesaid mechanism is to break
          deadlock by virtue of the even split of share
          hold interest.

                . . . .

                                   10                            A-3388-16T2
               7. It is expressly agreed and understood
          that the within voting process shall apply to
          any expenditure in excess of $200 and any and
          all other matters in the extraordinary and
          ordinary course of conduct of the within
          business.   By way of illustration and not
          limitation: hiring and firing of employees,
          setting standards in operation, modality of
          operation, opening bank accounts, signing
          checks, making deposits.

               . . . .

               10. It is further agreed and understood
          that the within writing shall be governed in
          accordance with the laws obtaining in the
          State of New Jersey and that should there be
          any dispute hereunder, the same shall be
          submitted to binding arbitration wherein . .
          . Panaccione and . . . Martin may select
          arbitrators of their own designation within
          two weeks of the demand thereof, which
          arbitrators in turn shall select a third, or
          neutral,   arbitrator  within   thirty  days
          thereafter.               Agreement       by
          shareholder/shareholders representatives two
          of three shall be binding and not subject to
          arbitration; only when two of three cannot
          agree is this clause operable.

Casiero testified he discussed the arbitration provision with

Panaccione who did not object to its inclusion, agreeing they did

not "want their dirty laundry out there."

     After the execution of the agreements, Panaccione resumed a

limited role at The Den with Martin still operating the bar.

However, Panaccione quickly began causing problems again – "the

same issues that were [occurring] prior to [the parties] signing

[the] agreement."   As a result, in January 2015, Schibell and

                               11                         A-3388-16T2
Casiero exercised their authority and removed Panaccione from all

dealings with The Den until he could demonstrate he had the

capacity to properly manage the business.

       After   being   removed    from       management          because    of    his

misconduct, Panaccione commenced this civil action in March 2015.

In the complaint, Panaccione alleged Schibell had all of The Den's

mail   "'forwarded'    to   himself   so     as    to    seize    control    of   all

accounting functions . . . , and otherwise engaged in conduct to

frustrate Panaccione's ability to enjoy the fruits of The Den's

business, including distribution of profits and monies due and

owing to Panaccione for services provided."                       Panaccione also

claimed Schibell removed funds from The Den's bank accounts,

transferred The Den's funds to his own trust account, determined

when to make distributions, otherwise made unilateral decisions

to pay invoices, and gifted certain of The Den's assets to "loyal"

employees.      Panaccione    further       alleged      Schibell     "advised      in

certain correspondence that he considered Panaccione's interest

in The Den to somehow be less than a majority at fifty (50%)

percent."

       The complaint primarily sought to compel Schibell and Casiero

"to sell at fair value their membership interests, if any, in

Victory   Entertainment     and/or    The    Den    to    plaintiffs       [VEI   and

Panaccione]."     Among the causes of action in the complaint,

                                      12                                     A-3388-16T2
Panaccione alleges: minority oppression in violation of N.J.S.A.

14A:12-7 (count one), fraudulent conveyance of assets (count two),

tortious interference with prospective economic advantage (count

three), and breach of fiduciary duty (count five).                 Notably, each

of the alleged supporting facts postdate the execution of the

Deadlock Agreement.

     On May 26, 2015, the trial court dismissed the complaint and

ordered    "all    claims   between    and    among    all    parties"     to    be

arbitrated.       Panaccione appealed.        We found several factual and

corresponding       legal   issues    remained       unresolved.          Victory

Entertainment, Inc. v. Schibell, No. A-4334-14 (App. Div. July 28,

2016).      Specifically,     we     raised    the    following      issues     for

consideration by the trial court on remand: (1) the transfer of

interest   in     the   Sayerville    club    from    VEI    to   The   Den,    (2)

Panaccione's knowledge of the Sales Agreement, (3) Schibell and

Casiero's designation as agents of Martin and/or as third-party

beneficiaries under the Deadlock Agreement, and (4) the nature of

allegations pre- and post-Deadlock Agreement and whether they are

within the scope of the arbitration provision.                    We vacated the

dismissal of the complaint in favor of arbitration and remanded

for further proceedings.           Id. (slip op. at 19).                We added,

"[s]hould defendants file a formal motion to dismiss the complaint

and compel arbitration, we leave to the trial court, in the

                                      13                                  A-3388-16T2
exercise of its discretion, whether to conduct a hearing to make

an appropriate record."         Ibid.

     On September 14, 2016, defendants renewed their motion to

dismiss the complaint and compel arbitration.                  In February and

March 2017, the trial court held a six-day plenary hearing to

address the issues on remand.                During the hearing, defendants

presented the testimony of six witnesses:                Schibell, Casiero,

Panaccione, Styron, Forster, and Dan Silva, a friend Panaccione

had attempted to borrow money from in order to purchase the shares

for The Den.    Plaintiffs presented one witness: Martin.             The judge

found Panaccione to not be credible, stating, "Mr. Panaccione's

testimony      was    replete    with        inconsistencies    and       numerous

falsehoods."     In contrast, the judge found Schibell and Casiero's

testimony "were consistent with each other, the documentation,

evidence, and other witnesses who testified at the haring – Mr.

Forster, Mr. Panaccione's former wife (Cindy [Styron]) and Mr.

Silva."

     The judge determined, after the 2012 reorganization, "Mr.

Panaccione, Mr. Schibell and Mr. Casiero were left with 100%

ownership of The Den, Inc."        The judge found Martin, Schibell, and

Casiero executed the Sales Agreement, by which Schibell and Casiero

agreed    to   sell   their   fifty     percent    interest    in   the    Den    to

Panaccione through his nominee, Martin.               The judge also found

                                        14                                 A-3388-16T2
Martin and Panaccione signed a Deadlock Agreement, under which

Schibell and Casiero were appointed as Martin's nominees.

      The judge held the Deadlock Agreement and Sales Agreement

arose from a single transaction because they were executed on the

same day, pertain to the control and management of the same

company, and contain numerous cross-references.         As a result, the

judge held Schibell and Casiero, as parties to the Sales Agreement,

have standing to enforce the arbitration clause.             Moreover, the

judge found the Deadlock Agreement was designed, in part, to

protect the interest of Schibell and Casiero pending the completion

of the sale of their interest to Panaccione (using Martin as a

nominee).      The judge also determined Schibell and Casiero could

enforce     the   arbitration      provision   either   as     third-party

beneficiaries or Martin's agents.

      Finally, the judge held plaintiffs' claims were within the

scope of the arbitration provision.            He concluded plaintiffs'

claims either implicate the Deadlock Agreement explicitly or, to

the   extent   plaintiffs   seek   compensatory   damages,    the   alleged

conduct occurred after the parties signed the Deadlock Agreement

or related to the execution of the Deadlock Agreement.

      The judge dismissed the complaint and ordered plaintiffs to

arbitrate their claims against defendants.        This appeal followed.

      On appeal, plaintiffs raise the following points:

                                     15                             A-3388-16T2
           POINT I

           THE PRIOR RULING BY THE APPELLATE DIVISION IN
           THIS MATTER CONFIRMS APPELLANTS' CLAIMS ARE
           NOT SUBJECT TO ARBITRATION

           POINT II

           THE   TRIAL      COURT   ERRED   IN   DISMISSING
           APPELLANTS'      CLAIMS   WITH   PREJUDICE   AND
           COMPELLING      THE   PARTIES  TO   PROCEED   TO
           ARBITRATION

           POINT III

           THE TRIAL COURT ERRED IN SEALING THE TRIAL
           COURT RECORD

                                      II.

     Plaintiffs contend we previously ruled their claims are not

subject to arbitration.        Plaintiffs base this claim on our not

addressing whether the arbitration clause "is part of a unitary

agreement to which they are signatories."                 Plaintiffs further

claim we previously determined an agency relationship did not

exist   between    Schibell,   Casiero,      and    Martin.      Additionally,

plaintiffs argue defendants did not provide the trial court with

sufficient    evidence    regarding    Schibell     and   Casiero's     role    as

Martin's agent.     In light of the record created during the plenary

hearing on remand, we are unpersuaded by these arguments.

     In   our     prior   opinion,    we    reviewed      an   order    granting

defendants'     motion    to   dismiss      the    complaint    in     favor    of

arbitration.    The trial court entered the order without conducting

                                      16                                 A-3388-16T2
an evidentiary hearing despite there being disputed facts.                   We

stated we were unable to discern from the "somewhat sparse" motion

record "whether an enforceable arbitration agreement existed among

the parties as to the issues raised in the complaint."             Victory

Entertainment, slip op. at 2, 14.        We noted "there is no evidence

in the record Pannaccione was aware of the Sales Agreement, let

alone that he assented to its terms."        Id. at 16.      We also noted

"the trial court did not address the argument that Schibell and

Casiero were third-party beneficiaries of the Deadlock Agreement."

Id. at 18.     As a result, we vacated "those parts of the orders

dismissing the complaint in favor of arbitration" and remanded for

further proceedings consistent with the opinion.            Id. at 19.       We

contemplated defendants might renew their motion to dismiss. Ibid.

     On remand, the trial court conducted a lengthy plenary hearing

following defendants' renewed motion to dismiss the complaint and

compel   arbitration.      The   judge    heard   testimony    from     seven

witnesses,    considered   the   exhibits   admitted   in   evidence,      and

issued a comprehensive ten-page written opinion.            Based on this

greatly expanded record, we consider the issues presented in this

matter anew.

     "Final determinations made by the trial court sitting in a

non-jury case are subject to a limited and well-established scope

of review."     D'Agostino v. Maldonado, 216 N.J. 168, 182 (2013)

                                   17                                 A-3388-16T2
(quoting Seidman v. Clifton Sav. Bank, SLA, 205 N.J. 150, 169

(2011)).       Although our review of legal determinations made by the

trial court is de novo, we do not disturb the factual findings of

the    trial    court    "unless    we   are       convinced    that    they   are    so

manifestly       unsupported       by[,]      or     inconsistent       with[,]      the

competent, relevant[,] and reasonably credible evidence as to

offend the interests of justice."                   Ibid. (quoting Seidman, 205

N.J.   at    169).      Additionally,      we      defer   to   the    trial   court's

credibility determinations because it "'hears the case, sees and

observes the witnesses, and hears them testify,' affording it 'a

better      perspective    than    a   reviewing      court     in    evaluating     the

veracity of a witness.'"           Gnall v. Gnall, 222 N.J. 414, 428 (2015)

(quoting Cesare v. Cesare, 154 N.J. 394, 412 (1998)).

       Plaintiffs argue the arbitration clause is unenforceable

because it does not contain a recitation of the rights being waived

or    outline    an     understanding      that      rights     are    being   waived.

Plaintiffs further argue Panaccione did not agree to waive his

right to trial with respect to Schibell and Casiero and they should

not be permitted to enforce an arbitration clause contained in a

contract to which they are not parties.                    We are unpersuaded by

these arguments.

       In our prior opinion, we found "the record is devoid of

evidence of any corporate action taken by directors, officers, or

                                         18                                    A-3388-16T2
shareholders resulting in a change of ownership – from one legal

entity to a separate legal entity – of assets and operations of a

viable   business,    namely     the      gentleman's   club."         Victory

Entertainment, slip op. at 15.            After considering the extensive

record of the plenary hearing following remand, the judge rejected

plaintiffs' argument that VEI owned the Sayerville club through

The Den as a subsidiary, finding it was directly refuted by the

Deadlock Agreement, which Panaccione signed.

     While a formal plan of reorganization was never executed, the

record   plainly   establishes      The    Den   acquired   VEI's    ownership

interest in the Sayerville club.           Panaccione's contends The Den

is a wholly owned subsidiary of VEI. The judge found this argument

to be "directly refuted by the Deadlock Agreement."                 The record

amply supports this conclusion, as Panaccione's position is wholly

inconsistent   with   the   terms    of    the   Deadlock   Agreement     which

provides Panaccione owned fifty percent of The Den's stock, with

Martin owning the remaining fifty percent.              The record further

demonstrates VEI has never owned any of The Den's stock.

     We next address the enforceability of the arbitration clause.

"Because of the favored status afforded to arbitration, '[a]n

agreement to arbitrate should be read liberally in favor of

arbitration.'"     Griffin v. Burlington Volkswagen, Inc., 411 N.J.

Super. 515, 518 (App. Div. 2010) (quoting Garfinkel v. Morristown

                                     19                                 A-3388-16T2
Obstetrics    &   Gynecology    Assoc.,   168   N.J.   124,   132   (2001)).

Accordingly, courts apply a 'presumption of arbitrability' unless

it is clear "that the arbitration clause is not susceptible of an

interpretation that covers the asserted dispute." Curtis v. Cellco

P'ship, 413 N.J. Super. 26, 34 (App. Div. 2010) (quoting Epix

Holdings Corp. v. Marsh & McLennan Cos., 410 N.J. Super. 453, 471

(App. Div. 2009), overruled in part on other grounds, Hirsch v.

Amer. Fin. Servs., LLC, 215 N.J. 174, 193 (2013)).

     When    evaluating   an    arbitration     agreement,    a   court   must

undertake a two-pronged analysis: First, the court must determine

whether the parties have entered into a valid and enforceable

agreement to arbitrate disputes.          Martindale v. Sandvick, Inc.,

173 N.J. 76, 86 (2002).        Second, the court must determine whether

the dispute falls within the scope of the agreement.              Id. at 92.

     Plaintiffs argue, to be enforceable, an arbitration agreement

must state in "clear and unmistakable language:"

            (1)   that   the   parties    understand   their
            entitlement to a judicial adjudication of
            their dispute and are willing to waive that
            right; (2) that the parties are aware of the
            limited circumstances under which a challenge
            to the arbitration award may be advanced and
            agree to those limitations; (3) that the
            parties have had sufficient time to consider
            the   implications   of    their   decision   to
            arbitrate; and (4) that the parties have
            entered into the arbitration agreement freely
            and voluntarily, after due consideration of
            the consequences of doing so.

                                     20                               A-3388-16T2
           [Fawzy v. Fawzy, 199 N.J. 456, 482 (2009).]

      Plaintiffs' reliance on Fawzy is misplaced.         The requirements

stated in Fawzy were intended for – and have only been applied to

– arbitration provisions related to child custody issues.                 See

Johnson v. Johnson, 204 N.J. 529, 533 (2010) (holding Fawzy set

forth "the prerequisites for an enforceable arbitration agreement

and the methodology by which an arbitration award in the child

custody setting may be judicially reviewed").

      Plaintiffs also argue all arbitration clauses must contain

an express waiver of the right to trial, citing Atalese v. U.S.

Legal Serv. Group, 219 N.J. 430 (2014).        However, Atalese involved

a   "consumer   contract"    and   not   a   commercial   contract     among

businessmen.    Id. at 444.    Atalese did not extend the requirement

of an express waiver of the right to pursue a claim in court to

commercial contracts.       See id. at 447     ("Whatever words compose

an arbitration agreement, they must be clear and unambiguous that

a consumer is choosing to arbitrate disputes rather than have them

resolved in a court of law. In this way, the agreement will assure

reasonable notice to the consumer." (emphasis added)); see also

Van Duren v. Rzasa-Ormes, 394 N.J. Super. 254, 257 (App. Div.

2007)   (enforcing    an      arbitration     agreement     "between      two

                                    21                               A-3388-16T2
sophisticated business parties, each represented by counsel"),

aff'd o.b., 195 N.J. 230 (2008).

     Additionally, plaintiffs did not waive their right to pursue

statutory claims in court.     Cf. Atalese (waiver of right to pursue

claims under the Consumer Fraud Act, N.J.S.A. 56:8-1 to -20 and

the Truth-in-Lending Contract, Warranty and Notice Act, N.J.S.A.

56:12-14 to -18, in court); Garfinkel, 168 N.J. at 135 (waiver of

right to pursue claims under Law Against Discrimination, N.J.S.A.

10:5-1 to -42, in court).

     To    determine   arbitrability,   "[a]   court   must   first    apply

'state contract-law principles . . . [to determine] whether a

valid agreement to arbitrate exists.'"         Hirsch, 215 N.J. at 187

(second alteration in original) (quoting Hojnowski v. Vans Skate

Park, 187 N.J. 323, 342 (2006)).         Fundamentally, a court must

determine a party agreed to submit to arbitration.             Ibid.     "In

evaluating the existence of an agreement to arbitrate a court

'consider[s] the contractual terms, the surrounding circumstances,

and the purpose of the contract.'"         Id. at 188 (alteration in

original) (quoting Marchak v. Claridge Commons, Inc., 134 N.J.

275, 282 (1993) (citation omitted)).

     Here, the Deadlock Agreement arose from a lengthy negotiation

process.    Unlike the plaintiff in Atalese, plaintiffs were not

"average member[s] of the public."      Atalese, 219 N.J. at 442.       VEI

                                  22                              A-3388-16T2
is a corporation and Pannaccione is an experienced businessman

with interests in several commercial operations.             He negotiated

the terms of the Deadlock Agreement with the advice of counsel.

The agreement clearly and unambiguously indicates the intention

of the parties to submit any disputes regarding The Den to binding

arbitration.   For these reasons, the arbitration clause is valid,

binding, and enforceable.       See Van Duren, 394 N.J. Super. at 257.

     With regard to whether there are issues that predate the

Deadlock   Agreement    and,    as   such,   would   not    be   subject    to

arbitration,   the     record   amply     supports    the   trial   court's

determination that the issues raised by plaintiffs post-date the

Deadlock Agreement and are within the scope of the arbitration

provision.

     The principle relief sought by plaintiffs is the forced sale

of the interests of Schibell and Casiero to obtain                  complete

ownership of The Den. The underlying dispute falls squarely within

the scope of the arbitration provision.              Additionally, it was

Schibell and Casiero's exercise of authority, removing Panaccione

from the Sayerville club after his inappropriate behavior, which

triggered the filing of the complaint.        Because these issues arose

after execution of the Deadlock Agreement, they fall within the

scope of the arbitration provision.

                                     23                              A-3388-16T2
     Plaintiffs   further   contend   Schibell   and   Casiero   are   not

entitled to enforce the arbitration clause because they are not

parties to the agreement.    For several reasons, we disagree.

     The trial court determined the Deadlock Agreement and the

Sales Agreement are a unitary agreement.         Where "two documents

were separate pieces of paper but it was obvious . . . that they

were interrelated parts of a single transaction," the documents

are treated as a unitary contract.      Gen. Inv. Corp. v. Angelini,

58 N.J. 396, 400 (1971); accord In re Resnick, 284 N.J. Super. 47,

60 (App. Div. 1995) (explaining because decedent's will and its

attendant contract refer to one another and are closely related,

the two documents "must be read in pari materia"); James Talcott,

Inc. v. Roto American Corp., 123 N.J. Super. 183, 210 (Ch. Div.

1973) (stating "a binding contract may be gathered from separate

writings where 'the writings are so interrelated that they may be

fairly considered to constitute collectively the material and

essential elements of the final bargain'"); Sampson v. Pierson,

140 N.J. Eq. 524, 527 (Ch. 1947) (holding "a complete contract .

. . may be gathered from letters between the parties relating to

the subject-matter and substantive terms, where the writings are

so interrelated that they may be fairly considered to constitute

collectively the material and essential elements of the final

bargain").

                                 24                              A-3388-16T2
       The record demonstrates Panaccione purchased the interests

of Schibell and Casiero through his nominee, Martin.        Panaccione

was fully aware of, and helped to orchestrate, the Sales Agreement.

Not only was Panaccione present at the execution of the agreement,

but he was also the true purchaser. In order to protect themselves

during the period while the purchase was pending, the parties also

agreed to a Deadlock Agreement, whereby Schibell and Casiero would

be designated as Martin's representatives to manage The Den. Thus,

the Deadlock Agreement was constructed as a safeguard; the two

agreements were dependent on each other.       As noted by the trial

court, because the two agreements "were executed on the same day,

pertain to the control and management of the same company, and

contain . . . cross-references, the two agreements" should be

considered "part and parcel of the same transaction."

       The record amply supports the judge's conclusion that the

Sales Agreement and the Deadlock Agreement "were interrelated

parts of a single transaction" and should be treated as a unitary

contract.     Angellini, 58 N.J. at 400.     Therefore, Schibell and

Casiero are entitled to enforce the arbitration clause.

       Alternatively, the trial court held Schibell and Casiero are

able    to   enforce   the   arbitration   provision   as   third-party

beneficiaries or as Martin's agents under the Deadlock Agreement.

The record supports these additional bases for enforceability.

                                  25                            A-3388-16T2
     Typically a non-party to an agreement lacks standing to compel

arbitration of claims.     Garfinkel v. Morristown Obstetrics &

Gynecology Assoc., 333 N.J. Super 291, 308 (App. Div. 2000), rev'd

on other grounds, 168 N.J. 124 (2001).   However, "[n]onsignatories

of a contract . . . may compel arbitration or be subject to

arbitration if the nonparty is an agent of a party or a third

party beneficiary to the contract."      Ibid. (first alteration in

original) (quoting Mutual Benefit Life Ins. Co. v. Zimmerman, 783

F.Supp. 853, 865-66 (D.N.J.), aff'd, 970 F.2d 899 (3d Cir. 1992)).

     We apply the following test to determine whether an individual

is a third-party beneficiary of a contract:

               When a court determines the existence of
          "third-party beneficiary" status, the inquiry
          "focuses on whether the parties to the
          contract intended others to benefit from the
          existence of the contract, or whether the
          benefit so derived arises merely as an
          unintended   incident   of   the   agreement."
          Broadway Maint. Corp. v. Rutgers, 90 N.J. 253,
          259 (1982); see also Rieder Cmtys. v. Twp. of
          N. Brunswick, 227 N.J. Super. 214, 222 (App.
          Div. 1988). As the former Court of Errors and
          Appeals stated,

               [t]he determining factor as to the
               rights of a third party beneficiary
               is the intention of the parties who
               actually made the contract.     They
               are the persons who agree upon the
               promises,    the   covenants,    the
               guarantees; they are the persons who
               create the rights and obligations
               which flow from the contract. . . .
               Thus, the real test is whether the

                               26                           A-3388-16T2
                   contracting parties intended that a
                   third party should receive a benefit
                   which might be enforced in the
                   courts; and the fact that such a
                   benefit exists, or that the third
                   party is named, is merely evidence
                   of this intention.

                   [Borough of Brooklawn v. Brooklawn
                   Hous. Corp., 124 N.J.L. 73, 76-77
                   (E. & A. 1940).]

                If there is no intent to recognize the
           third party's right to contract performance,
           "then the third person is only an incidental
           beneficiary, having no contractual standing."
           Broadway Maint., 90 N.J. at 259 (citing
           Standard Gas Power Corp. v. New England Cas.
           Co., 90 N.J.L. 570, 573-74 (E. & A. 1917)).

           [Ross v. Lowitz, 222 N.J. 494, 513 (2015)
           (alteration in original).]

      Here, Schibell and Casiero agreed to sell their aggregate

fifty   percent    interest   in   The    Den   to   Pannaccione.      Because

Pannaccione owned the other fifty percent of The Den, the potential

for an impasse existed.       In order to both protect their respective

interests during the pendency of the sale and to create a mechanism

to resolve deadlocks, the parties negotiated and executed the

Deadlock Agreement.       In case of an impasse or disagreement, Martin

would appoint Schibell and Casiero as his nominees under the

Deadlock Agreement.       Given the purpose of the Deadlock Agreement

and   Panaccione    and   Martin's   agreement       to   this   assignment    of

authority in the event of an impasse, Schibell and Casiero are

                                     27                                 A-3388-16T2
third-party beneficiaries of the Deadlock Agreement.                    For this

additional reason, they have standing to compel arbitration.

       Schibell and Casiero can also compel arbitration under the

agency exception.        "An agency relationship is created 'when one

person (a principal) manifests assent to another person (an agent)

that the agent shall act on the principal's behalf and subject to

the    principal's     control,   and    the       agent   manifests   assent    or

otherwise consents so to act.'"              N.J. Lawyers' Fund for Client

Protection v. Stewart Title Guaranty Co., 203 N.J. 208, 220 (2010)

(quoting Restatement (Third) Agency, § 101 cmt. f(1) (Am. Law.

Inst. 2006).      In our prior opinion, we noted there was no evidence

Schibell and Casiero, when acting in their capacities as nominees,

were subject to Martin's control.                 However, direct control over

an agent by the principal is not necessary to establish an agency

relationship.      See Sears Mortgage Corp. v. Rose, 134 N.J. 326, 338

(1993).   In fact, the principal can be said to still have "control

even if the principal has previously agreed with the agent that

the principal will not give interim instructions to the agent or

will    not     otherwise   interfere        in    the     agent's   exercise    of

discretion."      Restatement (Third) Agency, § 101 cmt. f(1).

       Martin appointed Schibell and Casiero as his nominees/agents.

Because Schibell and Casiero would only act on Martin's behalf,

subject    to    the   Deadlock   Agreement,        albeit    within   their    own

                                        28                                A-3388-16T2
discretion, Schibell and Casiero are deemed to be Martin's agents

and subject to the exception whereby nonsignatories may enforce

an arbitration provision.

                                  III.

       Finally, we address plaintiffs' argument that the trial court

erred by sealing the record and deposition transcripts. Plaintiffs

contend the trial court made no factual findings or conclusions

of law that defendants met the "good cause" standard imposed by

Rule 1:38-11(b).    Specifically, plaintiffs contend the trial court

did not address whether allowing public access to the trial record

would cause a "clearly defined and serious injury" to Schibell and

that    his   interest   "in   privacy   substantially   outweighs   the

presumption that all court . . . records are open for public

inspection."    R. 1:38-11(b).

       Plaintiffs further contend the motion to seal the record was

procedurally deficient, having been filed nearly two years into

the litigation.    Plaintiffs allege Schibell violated the order to

seal the record by "divulging verbatim a portion of the trial

court's March 29, 2017 written opinion" in his April 5, 2017 letter

to the owner of the property on which the Sayerville club is

                                   29                           A-3388-16T2
located.5   Plaintiffs also contend defendants had the trial record

sealed for "nefarious reasons."

     There is a presumption of public access to documents and

materials filed in a civil action.   Hammock by Hammock v. Hoffman-

Laroche, 142 N.J. 356, 375 (1995).   The presumption of access may

be rebutted by showing "society's interest in secrecy outweighs

the need for access."   Spinks v. Twp. of Clinton, 402 N.J. Super.

454, 460 (App. Div. 2008).     However, "[a] personal interest in

privacy and freedom from annoyance and harassment, while important

to the litigant, will not outweigh the presumption of open judicial

proceedings even in relatively uncomplicated and non-notorious

civil litigation."   Verni v. Lanzaro, 404 N.J. Super. 16, 24 (App.

Div. 2008).

     The sealing of documents is "addressed to the trial court's

discretion," but "that discretion must be structured."    Hammock,

142 N.J. at 380.     A court must state, with particularity, the

facts that "currently persuade the court to seal the document[s]."

Id. at 382.    The court must "examine each document individually

and make factual findings" with regard to why the interest in

5
     The letter stated the trial judge found Pannaccione's
"fraudulent allegations untruthful and dismissed his case." It
also disclosed the trial court stated "Pannaccione's testimony was
replete with inconsistencies and numerous falsehoods.".

                                30                          A-3388-16T2
public access is outweighed by the interest in nondisclosure.

Keddie v. Rutgers, 148 N.J. 36, 54 (1997).

    Here, the judge did not provide a particularized factual

basis for sealing the record.    He simply stated it is "in the

interest of all the parties" because "[t]heir reputations are

important."   He did not provide any further reasons nor did he

include an event-by-event or document-by-document review.

    Defendants have not demonstrated sufficient cause for sealing

the trial record and deposition transcripts.      Their personal

interest in privacy does not outweigh the presumption of public

access.   Accordingly, we reverse the February 28, 2017 order and

direct the trial court to unseal the record.

    Affirmed in part and reversed in part.

                                31                          A-3388-16T2