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Mt. Hope Development Associates v. Mt. Hope Waterpower Project

June 02, 1998

MT. HOPE DEVELOPMENT ASSOCIATES, EAJ, INC., AND HUNDAL CORPORATION, PLAINTIFFS-APPELLANTS,
v.
MT. HOPE WATERPOWER PROJECT, L.P., MT. HOPE MINING COMPANY, INC., HALECREST COMPANY, MT. HOPE HYDRO INC., MT. HOPE PROPERTIES, INC., KVAERNER HYDRO POWER, INC. AND PAUL RODZIANKO, DEFENDANTS-RESPONDENTS, AND ATTORNEY GENERAL OF NEW JERSEY, INTERVENOR-RESPONDENT, AND ABB GENERATION, INC. AND JOHN DOE CORP., NOS. 1 THROUGH 10, DEFENDANTS, AND ANGELO CALI, ASHFAQ AHMAD AND IQBAL AHMAD, ADDITIONAL DEFENDANTS ON THE COUNTERCLAIM.



Chief Justice Poritz and Justices Handler, Pollock, O'hern, and Coleman join in Justice GARIBALDI's opinion. Justice Stein has filed a separate Concurring opinion.

The opinion of the court was delivered by: Garibaldi, J.

Argued February 2, 1998

On certification to the Superior Court, Appellate Division.

At issue in this case is whether the Alternative Procedure for Dispute Resolution Act (the "APDRA"), N.J.S.A. 2A:23A-1 to -19, infringes on an individual's constitutional right to appeal and on this Court's constitutional rulemaking authority. The issue arises in the context of an umpire's award in a complex real estate contract dispute. The Chancery Division confirmed that award. The Appellate Division dismissed plaintiffs' appeal, as barred by the APDRA. We granted certification, 151 N.J. 71 (1997), and now affirm the Appellate Division.

I.

The subject matter of the dispute concerns a 1280 acre tract of land in Rockaway Township, Morris County, owned by the Mount Hope Mining Company (MHMC). In October 1985, the parties to this action, through a number of different entities, entered into a joint venture agreement to develop simultaneously two separate projects on the site: a hydroelectric project and a residential project. The contract for the residential project required MHMC to convey title to the site to a joint venture entity that was to be formed, which entity became the Mt. Hope Development Associates (MHDA). Both projects required many approvals from various federal, state, and local agencies. The approval process took place between October 1985 and October 1994.

Shortly after embarking on the joint venture, the parties had a major falling-out. Throughout their attempts to complete both projects, the parties spent a great deal of time and money litigating various disputes. In connection with one of those disputes, on February 27, 1989, the parties entered into a settlement agreement, which was embodied in a consent judgment. Paragraph 13 of that consent judgment stated:

The parties agree to submit any dispute as to the rights and obligations of the respective parties for resolution under the New Jersey Alternative Dispute Resolution Act, 2A-23A-1 et seq. The parties agree that the umpire shall be entitled to award damages and/or reasonable attorney's fees to the prevailing party in such proceeding.

Following that settlement, the relationship between the parties did not improve. On November 12, 1990, the parties executed another agreement that they hoped would be a comprehensive settlement. Nevertheless, the relationship between the parties continued to deteriorate. On December 3, 1992, MHDA filed suit in the Chancery Division, Morris County, against several of the parties involved in both projects. Defendants moved to compel alternative dispute resolution based on the February 27, 1989 consent judgment. On June 17, 1993, the court entered a consent order staying the action and compelling APDRA proceedings. Subsequently, by mutual agreement, the parties chose Harvey Smith, a retired Superior Court Judge, to be the umpire. In that proceeding, the parties made cross-allegations of breach of contract, conspiracy, tortious interference with contract, and fraud. Both sides also sought accountings.

The APDRA proceedings began in April 1994. The proceedings consisted of twenty days of testimonial hearings, including the testimony of twenty-one individuals and over 330 exhibits. Over the course of the APDRA proceedings, Umpire Smith made several interim and final written awards and orders. The umpire rendered a written award for defendants dated November 21, 1994. That award was modified on January 17, 1996. In addition, on April 24, 1996, the umpire directed the execution of a limited partnership agreement. On July 3, 1996, the umpire entered a "Summary of Disposition of Claims," which tracked the award to the various corresponding claims in the pleadings. In his award, the umpire made findings of facts and Conclusions of law.

On June 6, 1996, MHDA filed a motion in the Superior Court, Chancery Division, to vacate or modify the award. Defendants moved to confirm the award. On October 17, 1996, the Chancery Division confirmed the award. MHDA filed an appeal with the Appellate Division. Defendants moved to dismiss the appeal on the grounds that under the APDRA, plaintiffs waived their right to appeal. On January 27, 1997, the Appellate Division granted defendants' motion to dismiss.

II.

A.

The Alternative Procedure for Dispute Resolution Act was enacted in 1987 to:

create a new procedure for dispute resolution which would be an alternative to the present civil Justice system and arbitration system of settling disputes. It is intended to provide a speedier and less expensive process for resolution of disputes than traditional civil litigation and would provide parties with rights that are not currently available under New Jersey's Arbitration Act.

[Governor's Reconsideration and Recommendation Statement to Assembly Bill No. 296, at 1 (Jan. 7, 1987), reprinted at N.J.S.A. 2A:23A-1.]

See also Draftsman's Legislative History, reprinted at N.J.S.A. 2A:23A-1 ("It is hoped that through the enactment of the NJADR Act those parties that want a formal method of resolving disputes with predictable rules, procedures, and results but without the costs and delays associated with traditional litigation can be accommodated.").

The APDRA is a voluntary procedure for alternative dispute resolution that is only operative when parties to a contract agree to be governed by it. N.J.S.A. 2A:23A-2; see also John v. O'Hara, The New Jersey Alternative Procedure for Dispute Resolution Act: Vanguard of a "Better Way?", 136 U. Pa. L. Rev. 1723, 1752 n.176 (1988) (stating APDRA "is entirely voluntary and must be designated by the parties as the source of rules governing dispute resolution"). For parties to be bound by the APDRA, it is "sufficient that [they] signify their intention to resolve their dispute by reference in the agreement to 'The New Jersey Alternative Procedure for Dispute Resolution Act.'" N.J.S.A. 2A:23A-2(a). The APDRA may be invoked to settle any controversy arising out of a contract, and parties to an existing controversy may agree to have their controversy resolved under the APDRA. Ibid.

Parties to an APDRA proceeding are entitled to discovery. N.J.S.A. 2A:23A-10. The dispute is heard by an umpire, N.J.S.A. 2A:23A-9, who is required to make an "award on all issues submitted for alternative resolution in accordance with applicable principles of substantive law." N.J.S.A. 2A:23A-12(e). That award must be acknowledged and in writing, and must "state findings of all relevant material facts, and make all applicable determinations of law." N.J.S.A. 2A:23A-12(a). Within ...


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