JAMES C. LAWRENCE VS. SKY ZONE FRANCHISE GROUP, LLC (L-2149-19, OCEAN COUNTY AND STATEWIDE) ( 2021 )


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  •                                 NOT FOR PUBLICATION WITHOUT THE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-3092-19
    JAMES C. LAWRENCE,
    Plaintiff-Respondent/
    Cross-Appellant,
    v.
    SKY ZONE, LLC, SKY ZONE
    FRANCHISE GROUP, LLC,
    CIRCUSTRIX HOLDINGS, LLC,
    BUCKINGHAM INVESTMENT
    GROUP, INC. d/b/a SKY ZONE
    LAKEWOOD, and RPSZ
    CONSTRUCTION, LLC,
    Defendants-Appellants/
    Cross-Respondents,
    and
    FUN SPOT MANUFACTURING,
    LLC, INTERNATIONAL
    ASSOCIATION OF TRAMPOLINE
    PARKS, INC. (Discovery Only),
    and AMERICAN SOCIETY FOR
    TESTING AND MATERIALS d/b/a
    ASTM INTERNATIONAL,
    (Discovery Only),
    Defendants.
    Submitted March 15, 2021 – Decided March 30, 2021
    Before Judges Fasciale and Mayer.
    On appeal from the Superior Court of New Jersey, Law
    Division, Ocean County, Docket No. L-2149-19.
    Chazen     &     Chazen,    LLC,  attorneys  for
    respondent/cross-appellant (David K. Chazen, of
    counsel and on the briefs).
    Wood Smith Henning & Berman, LLP, attorneys for
    appellants/cross-respondents (Kelly A. Waters, of
    counsel and on the briefs; Samuel G. John and Carolynn
    A. Mulder, on the briefs).
    Cohen, Placitella & Roth, P.C. attorneys for amicus
    curie New Jersey Association for Justice (Jared M.
    Placitella and Christopher M. Placitella, of counsel and
    on the briefs).
    PER CURIAM
    Sky Zone, LLC, Sky Zone Franchise Group, LLC, Circustrix Holdings,
    LLC, Buckingham Investment Group, Inc. (d/b/a Sky Zone Lakewood), and
    RPSZ Construction, LLC (collectively defendants), appeal from a March 30,
    2020 order denying reconsideration of a December 20, 2019 order denying their
    motion to dismiss plaintiff's first amended complaint and compel arbitration.
    The judge altered his earlier finding that the unavailability of JAMS rendered
    the agreement unenforceable but concluded that the agreement still lacked
    A-3092-19
    2
    mutual assent because it did not adequately explain what replaced a jury.
    Defendants generally maintain that the law only requires that plaintiff
    understand he waived a jury.
    Plaintiff cross-appeals from the March 30, 2020 order contending that the
    judge erroneously changed his mind about JAMS. Plaintiff primarily maintains
    that the agreement is unenforceable because, despite the designation that the
    arbitration would be administered by JAMS utilizing its rules, JAMS itself is an
    unavailable arbitration forum in New Jersey. Thus, plaintiff argues, there was
    no meeting of the minds. The New Jersey Association for Justice (NJAJ),
    participating as amici, also argues that there was no meeting of the minds.
    On these motions, the parties and the judge focused on whether the
    agreement adequately explained the ramifications of a jury waiver, particularly
    addressing whether it sufficiently referenced the rights that replaced the jury.
    That made sense because, at the time, they attempted to apply our decision in
    Flanzman.1 But since the issuance of the orders, the Supreme Court reversed
    1
    Flanzman v. Jenny Craig, Inc., 
    456 N.J. Super. 613
     (App. Div. 2018).
    A-3092-19
    3
    our opinion,2 which directly impacts our adjudication of the issues on appeal. 3
    The parties did not make arbitrating the dispute utilizing JAMS and its rules an
    integral term to the agreement, which contained a severability clause indicating
    that if one term is unenforceable, the rest of the agreement will not be affected.
    The automatic application of the New Jersey Arbitration Act (NJAA)4 supplies
    the missing terms about the arbitration process, as does the Federal Arbitration
    Act (FAA),5 which the agreement generally references.6 We therefore reverse.
    I.
    Before entering the indoor trampoline facility, plaintiff was required to
    execute a six-page release agreement entitled "Participation Agreement, Release
    and Assumption of Risk" (Release Agreement).              The Release Agreement
    generally required him to release the facility from liability, assume the risk of
    using the trampolines and other equipment, and waive certain rights, such as his
    2
    Flanzman v. Jenny Craig, Inc., 
    244 N.J. 119
     (2020).
    3
    The parties and amici submitted supplemental briefs since the Court rendered
    its decision in Flanzman.
    4
    New Jersey Arbitration Act, N.J.S.A. 2A:23B-1 to -36.
    5
    Federal Arbitration Act, 
    9 U.S.C. §§1-16
    .
    6
    See e.g., 
    9 U.S.C. § 5
     (providing for the appointment of an arbitrator), 
    id.
     § 7
    (addressing witnesses, documents, fees, and the power to issue a summons).
    A-3092-19
    4
    right to a jury trial by agreeing to arbitrate covered disputes. The Release
    Agreement reads as follows:
    ARBITRATION OF DISPUTES; TIME LIMIT TO
    BRING CLAIM
    I understand that by agreeing to arbitrate any dispute as
    set forth in this section, I am waiving my right, and the
    right(s) of the minor child(ren) above, to maintain a
    lawsuit against SZ and the other Releasees for any and
    all claims covered by this Agreement. By agreeing to
    arbitrate, I understand that I will NOT have the right to
    have my claim determined by a jury, and the minor
    child(ren) above will NOT have the right to have
    claim(s) determined by a jury. Reciprocally, SZ and the
    other Releasees waive their right to maintain a lawsuit
    against me and the minor child(ren) above for any and
    all claims covered by this Agreement, and they will not
    have the right to have their claim(s) determined by a
    jury.          ANY       DISPUTE,       CLAIM        OR
    CONTROVERSY ARISING OUT OF OR
    RELATING TO MY OR THE CHILD'S ACCESS
    TO AND/OR USE OF THE SKY ZONE PREMISES
    AND/OR ITS EQUIPMENT, INCLUDING THE
    DETERMINATION OF THE SCOPE OR
    APPLICABILITY OF THIS AGREEMENT TO
    ARBITRATE, SHALL BE BROUGHT WITHIN
    ONE YEAR OF ITS ACCRUAL (i.e., the date of the
    alleged injury) FOR AN ADULT AND WITHIN
    THE APPLICABLE STATUTE OF LIMITATIONS
    FOR A MINOR AND BE DETERMINED BY
    ARBITRATION IN THE COUNTY OF THE SKY
    ZONE FACILITY, NEW JERSEY, BEFORE ONE
    ARBITRATOR. THE ARBITRATION SHALL BE
    ADMINISTERED BY JAMS PURSUANT TO ITS
    RULE 16.1 EXPEDITED ARBITRATION RULES
    AND PROCEDURES. JUDGMENT ON THE
    A-3092-19
    5
    AWARD MAY BE ENTERED IN ANY COURT
    HAVING JURISDICTION.               THIS CLAUSE
    SHALL NOT PRECLUDE PARTIES FROM
    SEEKING PROVISIONAL REMEDIES IN AID OF
    ARBITRATION          FROM       A     COURT       OF
    APPROPRIATE JURISDICTION. This Agreement
    shall be governed by, construed and interpreted in
    accordance with the laws of the State of New Jersey,
    without regard to choice of law principles.
    Notwithstanding the provision with respect to the
    applicable substantive law, any arbitration conducted
    pursuant to the terms of this Agreement shall be
    governed by the [FAA] (9 U.S.C., Sec. 1-16). I
    understand and acknowledge that the JAMS Arbitration
    Rules to which I agree are available online for my
    review at jamsadr.com, and include JAMS
    Comprehensive Arbitration Rules & Procedures; Rule
    16.1 Expedited Procedures; and, Policy On Consumer
    Minimum Standards of Procedural Fairness.
    [Emphasis in original.]
    It is undisputed that JAMS could not administer the arbitration proceeding.
    Consequently, that part of the agreement was unenforceable. The severance
    provision provides that
    [i]f any term or provision of this Release shall be
    illegal, unenforceable, or in conflict with any law
    governing this Release[,] the validity of the remaining
    portions shall not be affected thereby.
    In entering the orders under review, and guided by our Flanzman decision, the
    judge concluded the agreement was unenforceable for lack of mutual assent
    because the parties did not fully understand what rights replaced the jury .
    A-3092-19
    6
    II.
    On appeal, defendants raise the following arguments, which we have re -
    numbered, for our consideration:
    [POINT I]
    THE [MOTION JUDGE] ERRED IN HOLDING
    THAT      THE ARBITRATION CLAUSE   IS
    UNENFORCEABLE BECAUSE IT DOES NOT
    EXPLAIN OR SUMMARIZE THE ARBITRATION
    RULES.[7]
    [POINT II]
    THE [MOTION JUDGE] CORRECTLY HELD THAT
    THE UNAVILABILITY OF JAMS IS IMMATERIAL
    TO    THE  ENFORECEABILITY     OF   THE
    ARBITRATION PROVISION.
    A. FEDERAL LAW PROVIDES FOR
    COURT APPOINTMENT OF AN
    ARBITRATOR AND PREEMPTS ANY
    CONTRARY STATE LAW.
    B. NEW JERSEY LAW PROVIDES FOR
    COURT APPOINTMENT OF AN
    ARBITRATOR.
    C. THE ARBITRATION AGREEMENT
    AT    ISSUE   HERE   REQUIRES
    7
    We need not reach this contention because JAMS itself was unavailable to
    administer the arbitration. Whether plaintiff had the opportunity to read the
    JAMS rules, therefore, is academic: JAMS could not arbitrate the dispute
    regardless.
    A-3092-19
    7
    ARBITRATION EVEN IF JAMS IS
    UNAVAILABLE.
    [POINT III]
    THE [MOTION JUDGE] ERRED IN HOLDING
    THAT ARBITRATION AGREEMENTS MUST
    SUMMARIZE OR PROVIDE A COPY OF THE
    ARBITRATION RULES.
    [POINT IV]
    PLAINTIFF'S SUBSTANTIVE OBJECTIONS TO
    THE JAMS RULES LACK MERIT AND ARE
    IMMATERIAL TO THE ENFORCEABILITY OF
    THE ARBITRATION CLAUSE. (Not Ruled on
    Below).
    A. PARTIES MAY AGREE TO LIMIT
    DISCOVERY      AND     OTHER
    PROCEDURES       IN     THEIR
    ARBITRATION AGREEMENT.
    B. LIKE THE NEW JERSEY COURT
    RULES, THE JAMS RULES CONTAIN
    APPROPRIATE SAFEGUARDS AND
    FLEXIBILITY.
    C. EVEN IF PLAINTIFF'S OBJECTIONS
    TO THE JAMS RULES HAD MERIT,
    THEY ARE IMMATERIAL BECAUSE
    ARBITRATION      CLAUSES      ARE
    SEVERABLE AS A MATTER OF LAW.
    [POINT V]
    THE [MOTION JUDGE] CORRECTLY HELD THAT
    THE UNAVAILABILITY OF JAMS DOES NOT
    A-3092-19
    8
    AFFECT THE VALIDITY OF THE ARBITRATION
    CLAUSE BECAUSE JAMS IS NOT INTEGRAL TO
    THE AGREEMENT TO ARBITRATE.
    A. NEW JERSEY LAW REQUIRES
    COURT-APPOINTMENT   OF   AN
    ARBITRATOR EVEN THOUGH JAMS
    IS UNAVAILABLE.
    B. EVEN IF PLAINTIFF'S POSITION
    REGARDING NEW JERSEY LAW
    WERE CORRECT, FEDERAL LAW
    WOULD PREEMPT NEW JERSEY LAW
    AND      REQUIRES       COURT-
    APPOINTMENT OF AN ARBITRATOR.
    [POINT VI]
    PLAINTIFF'S RELIANCE ON UNREPORTED
    DECISIONS    IS    UNAVAILING  AND
    PROCEDURALLY IMPROPER.
    [POINT VII]
    PLAINTIFF'S ARGUMENT REGARDING THE
    TRUTH-IN-CONSUMER        CONTRACTS,
    WARRANTY, AND NOTICE ACT IS WITHOUT
    MERIT.
    [POINT VIII]
    PLAINTIFF'S ARGUMENT REGARDING NON-
    SIGNATORIES IS WITHOUT MERIT.
    [POINT IX]
    A-3092-19
    9
    THE ALLEGED FAILURE TO EXPLAIN THE JAMS
    RULES HAS NO EFFECT ON THE ARBITRATION
    AGREEMENT'S VALIDITY.
    [POINT X]
    THE UNAVAILABILITY OF JAMS HAS NO
    EFFECT ON THE ARBITRATION AGREEMENT'S
    VALIDITY.
    [POINT XI]
    NJAJ IMPROPERLY RELIES ON IMMATERIAL
    AND UNSUPPORTED ARGUMENTS THAT WERE
    NOT RAISED BELOW.
    [PONT XII]
    IN SKUSE,[8] THE NEW JERSEY SUPREME COURT
    REAFFIRMED THE FAA'S EQUAL-FOOTING
    PRINCIPLE AND APPLIED GENERAL CONTRACT
    LAW.
    [POINT VIII]
    IN SKUSE, THE NEW JERSEY SUPREME COURT
    HELD THAT PLAINTIFFS BEAR THE BURDEN OF
    OBTAINING AND REVIEWING AVAILABLE
    INFORMATION.
    On his cross-appeal, plaintiff raises the following contentions, which we
    have re-numbered:
    [POINT I]
    8
    Skuse v. Pfizer, Inc., 
    244 N.J. 30
     (2020).
    A-3092-19
    10
    THE [MOTION JUDGE] CORRECTLY HELD THE
    ARBITRATION      PROVISION    TO     BE
    UNENFORCEABLE BECAUSE THE JAMS RULES
    WERE "UNACCESSIBLE[,]" THE ARBITRATION
    PROVISION "DOES NOT EXPLAIN THE RULES[,]"
    AND "BECAUSE IT LACKS A MEETING OF THE
    MINDS.["]
    [POINT II]
    THE [MOTION JUDGE] HELD CORRECTLY THAT
    THE DESIGNATION OF JAMS AS THE
    EXCLUSIVE ARBITRAL FORUM AND ITS
    UNAVAILABILITY MEANT THAT THERE WAS
    NO MEETING OF THE MINDS BETWEEN THE
    PARTIES AND THE ARBITRATION CLAUSE IS
    UNENFORCEABLE[;] THE [MOTION JUDGE]
    ERRED UPON RECONSIDERATION IN HOLDING
    THAT THE UNAVAILABILITY OF JAMS WAS
    NOT SO INTEGRAL TO THE ARBITRATION
    CLAUSE TO RENDER IT UNENFORCEABLE.
    [POINT III]
    DIVERGENT COURT OPINIONS HAVE LEFT THE
    VALIDITY OF THE SKY ZONE ARBITRATION
    CLAUSE UNSETTLED.
    [POINT VI]
    DISMISSAL  OF  THE   FIRST   AMENDED
    COMPLAINT WOULD BE IMPROPER BECAUSE
    NON-SIGNATORIES TO THE AGREEMENT
    CANNOT BE COMPELLED TO ARBITRATE.
    [POINT V]
    A-3092-19
    11
    THE SKY ZONE ARBITRATION AGREEMENT
    CONTAINS    MATERIAL     DISCREPANCIES
    ESSENTIAL TO A CONSUMER WAIVER-OF-
    RIGHTS NEGATING A MEETING OF THE MINDS.
    [POINT VI]
    SKY ZONE CLAIMS SUBJECT TO ARBITRATION
    UNDER THE JAMS RULE 16.1 EXPEDITED
    PROCEDURES AND RULES ARE AN EXAMPLE
    OF   INDUSTRY-WIDE    CONTRACTS     OF
    [9]
    ADHESION.
    [POINT VII]
    FLANZMAN HOLDS THAT THE NJAA PROVIDES
    A DEFAULT PROCEDURE WHEN PARTIES OMIT
    THE TERMS FOR SELECTION OF THE
    ARBITRATOR     AND    THE  ARBITRATION
    PROCESS—BUT DISTINGUISHES THE HOLDING
    IN KLEINE WHERE THE PARTIES AGREE TO A
    SPECIFIC ARBITRATION ORGANIZATION AS AN
    ESSENTIAL    TERM    AND   RENDER     IT
    UNENFORCEABLE WHEN THE ARBITRATION
    ORGANIZATION WAS UNAVAILABLE AT THE
    TIME THE CONTRACT WAS EXECUTED—AS
    ESSENTIAL TO A CONSUMER WAIVER-OF-
    RIGHTS AND NEGATING A MEETING OF THE
    MINDS.
    A. SKY ZONE SELECTED JAMS AS
    THE  EXCLUSIVE   ARBITRATION
    ORGANIZATION AND KNEW OR
    9
    There is insufficient information on this record for us to adjudicate this
    contention, which was not explicitly addressed by the judge, either by way of
    findings of fact or conclusions of law.
    A-3092-19
    12
    SHOULD HAVE KNOWN JAMS WAS
    UNAVAILABLE.
    B. THE SKY ZONE ARBITRATION
    CLAUSE VIOLATES THE PLAIN
    LANGUAGE ACT AND THE TRUTH-
    IN-CONSUMER       CONTRACT,
    WARRANTY AND NOTICE ACT.
    C. SKY ZONE'S SELECTION OF JAMS
    WAS    AN   ESSENTIAL/INTEGRAL
    CONTRACT TERM.
    NJAJ, as amici, raise the following points, which we have re-numbered:
    [POINT I]
    THERE WAS NO ASSENT BY [PLAINTIFF] TO
    WAIVE HIS RIGHT TO A JURY TRIAL SO THE
    [MOTION JUDGE] CORRECTLY HELD THAT HE
    CANNOT BE COMPELLED TO ARBITRATION.
    A. THE ARBITRATION AGREEMENT
    HERE FAILS TO EXPLAIN TO THE
    CONSUMER THE RAMIFICATIONS OF
    SURRENDERING                HIS
    CONSTITUTIONAL RIGHT TO A JURY
    TRIAL.
    B. THE ARBITRATION AGREEMENT
    FAILED TO PROVIDE AND EXPLAIN
    THE JAMS EXPEDITED ARBITRATION
    RULES, AND ITS MERE REFERENCE
    TO      THOSE      PROCEDURES
    PREVENTED ANY MEETING OF THE
    MINDS.
    A-3092-19
    13
    C. THE ARBITRATION AGREEMENT
    IS CONTRADICTORY, CONFUSING
    AND VIOLATES NEW JERSEY'S PLAIN
    LANGUAGE ACT.
    [POINT II]
    THE [MOTION JUDGE] ERRED IN [HIS] DICTUM
    STATEMENT THAT [HE] COULD APPOINT AN
    ARBITRAL FORUM NOT CONTEMPLATED BY
    THE PARTIES BECAUSE THAT WOULD
    INAPPROPRIATELY RE-WRITE THE PARTIES'
    AGREEMENT.
    [POINT III]
    THE [MOTION JUDGE] CORRECTLY HELD THAT
    [PLAINTIFF] CANNOT BE COMPELLED TO
    ARBITRATION    BECAUSE   [SKY   ZONE'S]
    AGREEMENT FAILS TO CLEARLY AND
    UNMISTAKABLY EXPLAIN THAT HE WAS
    SURRENDERING HIS RIGHT TO A JURY TRIAL
    AND THE RAMIFICATIONS FOR DOING SO.
    [POINT IV]
    THE [MOTION JUDGE] CORRECTLY HELD THAT
    [PLAINTIFF] CANNOT BE COMPELLED TO
    ARBITRATE BECAUSE THE CONFUSING AND
    CONTRADICTORY LANGUAGE OF [SKY ZONE'S]
    AGREEMENT FAILED TO ASSURE HIS MUTUAL
    ASSENT.
    [POINT V]
    FLANZMAN REQUIRES THAT ARBITRATION
    CANNOT BE COMPELLED HERE BECAUSE SKY
    ZONE LLC'S SELECTED ARBITRAL FORUM AND
    A-3092-19
    14
    PROCESS WAS NEVER AVAILABLE TO THE
    PARTIES AND THUS THERE WAS NO MUTUAL
    ASSENT TO ARBITRATE.
    III.
    We begin by addressing the judge's conclusion that the agreement was
    unenforceable for lack of mutual assent. The judge undertook a careful analysis
    of whether there existed a meeting of the minds; specifically, whether the parties
    understood what rights replaced the jury.
    The judge reached his conclusion by relying on our appellate opinion in
    Flanzman, where we quoted both Atalese v. U.S. Legal Serv. Group, L.P., 
    219 N.J. 430
    , 443-45 (2014) and NAACP of Camden Cty. E. v. Foulke Mgmt., 
    421 N.J. Super. 404
    , 425 (App. Div. 2011), explaining that " [judges] take particular
    care in assuring the knowing assent of both parties to arbitrate, and a clear
    mutual understanding of the ramifications of that assent." Flanzman, 456 N.J.
    Super at 621. And like us, the judge cited Kleine v. Emeritus at Emerson, 
    445 N.J. Super. 545
    , 552-53 (App. Div. 2016), where this court determined that to
    clearly understand the ramifications of waiving a jury, a party "must be able to
    understand—from clear and unambiguous language—both the rights that have
    been waived and the rights that have taken their place." Flanzman, 456 N.J.
    Super. at 622 (citing Kleine, 445 N.J. Super. at 552-53). That is because the
    A-3092-19
    15
    Supreme Court explained that the word "arbitration" is not self-defining. See
    Kernahan v. Home Warranty Admin., 
    236 N.J. 308
    , 332-33 (2019); Morgan v.
    Sanford Brown Inst., 
    225 N.J. 289
    , 308 (2016); Atalese, 219 N.J. at 442. We
    understood "ramifications of the assent" to mean not just the rights parties gave
    up but also the rights the parties received in their place. The Supreme Court
    disagreed with our understanding and clarified that "ramifications" referred only
    to waiving a jury, rather than also understanding what replaced the jury.
    Unlike Flanzman, where the parties omitted any reference to what
    replaced the jury, the parties' agreement here incorporated that information.
    Even if they had not, the Court has since explained a general reference to the
    arbitration process governing the dispute is not a material term; failure to
    reference it does not impact enforceability; and instead, the NJAA will fill in
    the missing information. Flanzman, 244 N.J. at 136-39. The Court agreed—to
    add clarity—it would be advantageous, sound, and practical for parties to
    "designate in their agreement an arbitral organization" and "an alternative
    method of choosing an organization" should the parties' primary choice be
    unavailable. Id. at 140. By doing so, the parties would then understand what to
    expect during the arbitration. But the Court concluded the information was not
    essential to the arbitration agreement.
    A-3092-19
    16
    The judge determined that the agreement was unenforceable for lack of
    mutual assent because what the parties had contracted for—JAMS arbitrating
    the dispute—could not occur. He found, therefore, that they did not reach a
    meeting of the minds about what replaced the jury. Applying the Court's
    decision in Flanzman, and Arafa v. Health Express Corp., 
    243 N.J. 147
     (2020),10
    we reach a different conclusion.
    IV.
    We conclude the agreement meets the requirements established in Atalese,
    and therefore there exists mutual assent to arbitrate.      The parties clearly
    understood the ramifications of such assent because the agreement itself
    explains that the parties have waived a jury. The unavailability of JAMS is not
    fatal to the enforceability of the agreement, especially because the agreement
    contains a severability clause. And even without the severability clause, under
    Flanzman and Arafa, the NJAA will fill in the arbitration process details.
    As evidence that the parties did not make JAMS integral to the arbitration
    process, we turn to the language of the agreement that identified the NJAA and
    FAA.
    10
    The orders under review were issued before the Court rendered its opinion in
    Arafa.
    A-3092-19
    17
    This Agreement shall be governed by, construed and
    interpreted in accordance with the laws of the State of
    New Jersey, without regard to choice of law principles.
    Notwithstanding the provision with respect to the
    applicable substantive law, any arbitration conducted
    pursuant to the terms of this Agreement shall be
    governed by the [FAA] (9 U.S.C., Sec. 1-16).
    The parties' agreement did not make arbitration solely dependent on the
    availability of JAMS. Instead, it included a severability clause and specifically
    identified the NJAA and FAA.
    In 2002, our Legislature enacted the NJAA to advance arbitration as an
    alternative to litigation and to clarify arbitration procedures. Flanzman, 214 N.J.
    at 133-34. The NJAA is a modified version of the Uniform Act, 11 which itself
    is a default statute, meaning that statutory provisions can be varied or waived
    by contract. Indeed, the NJAA is a modified default statute, as reflected by its
    legislative history. See Assemb. Judiciary Comm. Statement to S. 514 1 (stating
    that "[t]his bill is a modified version of the Uniform Arbitration Act of 2000
    . . . as proposed by the National Conference of Commissioners on Uniform State
    Laws").
    11
    The Revised Uniform Arbitration Act, Rev. Unif. Arb. Act §§ 1-31 (2000),
    updated and modified the Uniform Arbitration Act, Unif. Arb. Act §§ 1 -25
    (1955).
    A-3092-19
    18
    In Flanzman, the automatic application of the NJAA permitted the
    appointment of an arbitrator, Flanzman, 224 N.J. at 141 (citing N.J.S.A.
    2A:23B-11(a)),12 and provided the general framework of the arbitration process,
    ibid. (citing N.J.S.A. 2A:23B-15). As to these two points, the same is true here.
    Flanzman is not the first instance where the Supreme Court utilized the NJAA
    to fill in missing terms in arbitration agreements. In July of last year, the Court
    decided Arafa, a case in which the parties identified in their agreement the FAA
    as the governing law, then later discovered that the FAA could not control. 243
    N.J. at 166 (noting that "it is undisputed that Section 1 [of the FAA] applies" to
    Arafa, which exempts employees and independent contractors involved in
    interstate commerce from the FAA). The Court applied the NJAA and filled in
    the missing terms addressing the arbitration process. Id. at 167. In Arafa, the
    Court concluded that the NJAA applies automatically, as it does here.
    To summarize: the arbitration agreement satisfies Atalese; the provision
    that JAMS arbitrate the dispute is unenforceable because JAMS is not available;
    the severability clause renders the rest of the agreement enforceable; and the
    NJAA will fill in the missing term as to the arbitration process. We therefore
    12
    The FAA has a similar provision. See 
    9 U.S.C. § 5
    .
    A-3092-19
    19
    reverse and remand, directing the parties to the arbitration agreement proceed to
    arbitration.
    Reversed and remanded. We do not retain jurisdiction.
    A-3092-19
    20
    

Document Info

Docket Number: A-3092-19

Filed Date: 3/30/2021

Precedential Status: Non-Precedential

Modified Date: 3/30/2021