PATRICK TRAINOR VS. CHRYSLER CAPITAL (L-2473-19, BERGEN COUNTY AND STATEWIDE) ( 2021 )

NOT FOR PUBLICATION WITHOUT THE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-1997-19
PATRICK TRAINOR,
Plaintiff-Appellant,
v.
CHRYSLER CAPITAL,
SANTANDER CONSUMER USA
HOLDING, INC., TETERBORO
AUTOMALL, d/b/a TETERBORO
CHRYSLER JEEP, FCA US LLC,
GENERAL SALES MANAGER
TETERBORO CHRYSLER JEEP,
and SPECIAL FINANCE
MANAGER TETERBORO
CHRYSLER JEEP,
Defendants-Respondents.
______________________________
Submitted October 1, 2020 – Decided September 20, 2021
Before Judges Fuentes and Firko.
On appeal from the Superior Court of New Jersey, Law
Division, Bergen County, Docket No. L-2473-19.
Patrick Trainor, appellant pro se.
Fontana & Napolitano, LLP, attorneys for respondents
Santander Consumer USA Inc., d/b/a Chrysler Capital,
Santander Consumer USA Holdings Inc., and FCA US,
LLC (Ryan Napolitano, on the brief).
Breslin and Breslin, PA, attorneys for respondent
Teterboro Automall, Inc. (E. Carter Corriston, Jr., on
the brief).
The opinion of the court was delivered by
FUENTES, P.J.A.D.
On February 25, 2016, plaintiff Patrick Trainor purchased a new
Chrysler 200 Sedan from defendant Teterboro Chrysler Dodge Jeep and Ram
(Teterboro Automall) for the amount of $33,361.03. Plaintiff financed the
purchase through a retail installment contract offered by defendant Chrysler
Capital that charged an interest rate of 19.90%. The loan was payable over seven
years. Both the purchase contract and loan agreement include arbitration
provisions empowering either party to adjudicate any disputes that arise from
these contracts by an arbitrator selected by the American Arbitration
Association. The trial court granted defendants to enforce the arbitration
provisions. We affirm.
On March 20, 2019, plaintiff, who is an attorney licensed to practice in
this State, filed a civil action against defendants Teterboro Automall and
Chrysler Capital, alleging violations of the Consumer Fraud Act,
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N.J.S.A. 56:8-1 to -195 and the Truth in Consumer Contract, Warranty and
Notice Act, N.J.S.A. 56:12-14 to 18. After overcoming certain initial
difficulties involving service of process, defendants filed their responsive
pleadings.
Teterboro Automall moved before the Law Division to enforce the
purchase contract's arbitration provision and dismiss plaintiff's cause of action.
The matter came for oral argument before Judge Rachelle L. Harz on
August 23, 2019. Plaintiff argued against the motion. Judge Harz granted
Teterboro Automall's motion and entered an order that same day dismissing
plaintiff's complaint and referring the matter for resolution before an arbitrator.
Judge Harz found "the provision that contains the agreement to arbitrate
is clear in its language. It states that the consumer is agreeing to waive its right
to seek relief in the courts twice. The consumer is informed of the legal effect
of the arbitration agreement." She also noted that the contract urges the
consumer to "[r]ead the following arbitration provision carefully. It limits your
rights, including your right to maintain a court action."
In an order entered on December 6, 2019, Judge Harz also dismissed
plaintiff's claims against Chrysler Capital and referred the matter to arbitration.
The judge included a handwritten notation located below her signature that
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stated: "This entire case is referred to AAA. This case is dismissed. Oral
argument. [R]easons set forth on the record."
Before we review the validity of the arbitration clauses at issue here,
plaintiff must overcome a threshold jurisdictional impediment. The Notice of
Appeal (NOA) plaintiff filed on January 20, 2020, seeks appellate review of the
order entered by the court on December 6, 2019. In this order, Judge Harz
upheld only the arbitration provision in the Chrysler Capital loan agreement.
However, for the first time on appeal, plaintiff argues that both the
Teterboro and Chrysler arbitration provisions are inconsistent and conflict with
each other, thus nullifying any agreement to arbitrate. According to plaintiff,
the language in the Chrysler arbitration provision states that either party may
choose to have any dispute decided by an arbitrator. Judge Harz upheld the
validity of the arbitration provision in the Teterboro Automall purchase contract
in an order entered on August 23, 2019.
"A party's failure to seek review of cognizable trial court orders or
determinations - by identifying them in the notice of appeal . . . ." deprives this
court of jurisdiction over the omitted order. Park Crest Cleaners, LLC v. A Plus
Cleaners & Alterations, Corp., 458 N.J. Super. 465, 472 (App. Div. 2019); see
also 1266 Apartment Corp. v. New Horizon Deli, Inc., 368 N.J. Super. 456, 459
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(App. Div. 2004). Plaintiff's failure to include the August 23, 2019 order in the
NOA or to make any effort to amend the NOA to include this order leaves this
court without jurisdiction to review it.
The installment sales contract executed by plaintiff is entitled: "RETAIL
INSTALLMENT SALE CONTRACT – SIMPLE FINANCE CHARGE (WITH
ARBITRATION PROVISION)." On the bottom of the first page is a box, signed
by plaintiff, that states:
Agreement to Arbitrate: By signing below, you agree
that, pursuant to the Arbitration Provision on page 4 of
this contract, you or we may elect to resolve any dispute
by neutral, binding arbitration and not by a court action.
See the Arbitration Provision for additional information
concerning the agreement to arbitrate.
The arbitration provision further states:
PLEASE REVIEW – IMPORTANT – ; AFFECTS
YOUR LEGAL RIGHTS
1. EITHER YOU OR WE MAY CHOOSE TO
HAVE ANY DISPUTE BETWEEN US DECIDED
BY ARBITRATION AND NOT IN COURT OR BY
JURY TRIAL.
2. IF A DISPUTE IS ARBITRATED, YOU WILL
GIVE UP YOUR RIGHT TO PARTICIPATE AS A
CLASS REPRESENTATIVE OR CLASS
MEMBER ON ANY CLASS CLAIM YOU MAY
HAVE AGAINST US INCLUDING ANY RIGHT
TO CLASS ARBITRATION OR ANY
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CONSOLIDATION OF INDIVIDUAL
ARBITRATIONS.
3. DISCOVERY AND RIGHTS TO APPEAL IN
ARBITRATION ARE GENERALLY MORE
LIMITED THAN IN A LAWSUIT, AND OTHER
RIGHTS THAT YOU AND WE WOULD HAVE IN
COURT MAY NOT BE AVAILABLE IN
ARBITRATION.
Any claim or dispute, whether in contract, tort, statute
or otherwise (including the interpretation and scope of
this Arbitration Provision, and the arbitrability of the
claim or dispute), between you and us or our
employees, agents, successors or assigns, which arises
out of or relates to your credit application, purchase or
condition of this vehicle, this contract or any resulting
transaction or relationship (including any such
relationship with third parties who do not sign this
contract) shall, at your or our election, be resolved by
neutral, binding arbitration and not by a court action. If
federal law provides that a claim or dispute is not
subject to binding arbitration, this Arbitration Provision
shall not apply to such claim or dispute. Any claim or
dispute is to be arbitrated by a single arbitrator on an
individual basis and not as a class action. You
expressly waive any right you may have to arbitrate a
class action. You may choose the American Arbitration
Association, 1633 Broadway, 10th Floor, New York,
New York 10019 (www.adr.org), or any other
organization to conduct the arbitration subject to our
approval. You may get a copy of the rules of an
arbitration organization by contacting the organization
or visiting its website.
Arbitrators shall be attorneys or retired judges and shall
be selected pursuant to the applicable rules. The
arbitrator shall apply governing substantive law and the
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applicable statute of limitations. The arbitration
hearing shall be conducted in the federal district in
which you reside unless the Seller-Creditor is a party to
the claim or dispute, in which case the hearing will be
held in the federal district where this contract was
executed. We will pay your filing, administration,
service or case management fee and your arbitrator or
hearing fee all up to a maximum of $5000, unless the
law or the rules of the chosen arbitration organization
require us to pay more. The amount we pay may be
reimbursed in whole or in part by decision of the
arbitrator if the arbitrator finds that any of your claims
is frivolous under applicable law. Each party shall be
responsible for its own attorney, expert and other fees,
unless awarded by the arbitrator under applicable law.
If the chosen arbitration organization's rules conflict
with this Arbitration Provision, then the provisions of
this Arbitration Provision shall control. Any arbitration
under this Arbitration Provision shall be governed by
the Federal Arbitration Act (9 U.S.C. § 1 et. seq.) and
not by any state law concerning arbitration. Any award
by the arbitrator shall be in writing and will be final and
binding on all parties, subject to any limited right to
appeal under the Federal Arbitration Act. 1
The trial court's decision to enforce an arbitration provision is a question
of law. We thus review the court's analysis and ultimate conclusion de novo.
Goffe v. Foulke Mgmt. Corp., 238 N.J. 191, 207 (2019). However, we are also
mindful that both state and federal law favors the enforceability of arbitrati on
1
Although not relevant here, the arbitration provision allows either party "to
seek remedies in small claims court for disputes or claims within that court's
jurisdiction, unless such action is transferred, removed or appealed to a different
court."
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provisions. Hojnowski v. Vans Skate Park, 187 N.J. 323, 341-42 (2006). Our
State Constitution provides that "[t]he right to trial by jury shall remain inviolate
. . . ." N.J. Const. art I, § 9; see also U.S. Const. amend. VII. Our State's
constitutional right to a jury trial is nevertheless tempered by the Federal
Arbitration Act (FAA), which provides:
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 in law or
in equity for the revocation of any contract.
9 U.S.C.A. § 2.
Consistent with the federal public policy codified by Congress in the FAA,
a provision compelling arbitration should be upheld unless it falls afoul of an
established contractual rule that compels a court to strike down a contractual
clause. Leodori v. CIGNA Corp., 175 N.J. 293, 302 (2003) ("[A] state cannot
subject an arbitration agreement to more burdensome requirements than those
governing the formation of other contracts.") Any contractual term that waives
a signor's statutory or constitutional right must reflect that the party waiving this
right "has agreed clearly and unambiguously" to its terms. Ibid.A-1997-19
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In Atalese v. U.S. Legal Serv. Group, our Supreme Court definitively
established the standard for determining the enforceability of an arbitration
provision:
An agreement to arbitrate, like any other contract,
"must be the product of mutual assent, as determined
under customary principles of contract law." A legally
enforceable agreement requires "a meeting of the
minds." Parties are not required "to arbitrate when they
have not agreed to do so."
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." "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." 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."
[219 N.J. 430, 442 (2014), (internal citations omitted)].
Here, the language used in the arbitration provision puts the ordinary
consumer on notice of the rights he or she is waiving by signing the installment
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loan agreement. We discern no legal basis to disturb Judge Harz's December 6,
2019 order enforcing this arbitration provision.
Affirmed.
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