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Blatterfein v. Larken Associates

July 15, 1999

LAWRENCE BLATTERFEIN, GRACE BLATTERFEIN, PETER BRONSTEEN, ALISSA BRONSTEEN, THOMAS DEGAGLIA, JOANN DEGAGLIA, CHRIS SHUSTER, BARBARA SHUSTER, NICHOLAS FRANZI AND BRENDA FRANZI, PLAINTIFFS-RESPONDENTS,
v.
LARKEN ASSOCIATES, LAWRENCE W. GARDNER, DAVID B. GARDNER, CAROL L. GARDNER, KENNETH SCHWARTZ, BETTY JO BRECHKA, G.A.F. CORPORATION, COOL-O-MATIC, INC., RE/MAX, MEYER & DEPEW COMPANY, ARZEE SUPPLY CORPORATION, K&M GENERAL CONTRACTORS, M.A.K. CONSTRUCTION, KLM ZARILLO BROTHERS CONSTRUCTION, PHILIPS CONCRETE, AVENEL CORPORATION, FINDERNE EXCAVATING, CLAYTON BLOCK, ARTHUR MATTES, MIRON LUMBER, J&M FLOORING, VICAR CONSTRUCTION, MORRIS LUMBER & BRICK, CHURCH BRICK COMPANY, CONTINENTAL DECORATORS, COASTAL INSULATION, ATS INSULATION, F.M. ROJECK, MATAWAN BUILDING SUPPLIES, APOLLO WINDOW AND DOOR, SKYLINED DRYWALL, MUNROE ELECTRIC, COBRA PLUMBING AND HEATING, PETER KOCUBINSKI, STEVE WHITE, JIM MCCODE, FERNANDO BICA, JOHN GREGORIO, G & P CONSTRUCTION, AND CORBETT CONSTRUCTION, DEFENDANTS, AND MARK YARRINGTON, DEFENDANT-APPELLANT, AND THE BLACKSTONE COMPANY, DEFENDANT-RESPONDENT.



Judges Long, Kestin and Wefing.

The opinion of the court was delivered by: Kestin, J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

On appeal from the Superior Court of New Jersey, Law Division, Civil Part, Somerset County.

Defendant Mark Yarrington (Yarrington) appeals on leave granted from the trial court's order denying his motion for summary judgment. Defendant The Blackstone Company (Blackstone), nominally a respondent on appeal, whose own motion for leave to appeal was denied as untimely, supports Yarrington's position on issues of common concern. An untimely motion for leave to appeal filed by defendant Larken Associates and its principals (the Larken defendants) was also denied. The Larken defendants have not participated in this appeal.

After we granted Yarrington's motion for leave to appeal, the trial court granted his motion for a stay of all litigation at the trial level. We now affirm the denial of summary judgment and remand for further proceedings.

Plaintiffs are five families who, in 1988 and early 1989, purchased homes in a Montgomery Township development from Larken Associates, a builder/developer, at contract prices ranging from $330,000 to $430,000. Two of the contracts specified a model by name; three specified an area size by square footage, with either "custom" or "architectural" design. Plaintiffs allege that, after taking possession, they discovered serious structural, functional and aesthetic defects in their homes. When repeated requests to correct the problems went unanswered, plaintiffs, in the fall of 1990, sued the Larken defendants; Yarrington, the architect; Blackstone, a manufacturer and installer of windows; other subcontractors and suppliers; and Re/Max Preferred Professionals, the realtor for all of the transactions. The complaint was subsequently amended to add other subcontractors and suppliers. The claims against all defendants alleged breach of warranty, common law fraud, violations of the Consumer Fraud Act (N.J.S.A. 56:8-1 to -91) and the Magnuson-Moss Act of 1975 (Pub. L. No. 93-637, 88 Stat. 2183 (codified as amended in scattered sections of 15 U.S.C.)), and civil RICO (18 U.S.C. § 1964(c) (Supp. 1999)) causes of action. Against the Larken defendants alone, plaintiffs alleged breach of contract also.

The Larken defendants moved to stay all proceedings on the basis of an arbitration provision in the plaintiffs' contracts. In March 1991, the trial court granted the motion to stay pending arbitration as to all plaintiffs except the Franzis, presumably because their contract with Larken Associates contained no arbitration clause. Subsequently, in September 1991, the trial court denied the Larken defendants' motion to restrain the plaintiffs from proceeding in a single arbitration, required all the claims to proceed before a single American Arbitration Association panel, and ordered that, in accordance with the parties' recent agreement, the Franzi claims would also be arbitrated in the same proceeding. In an order entered in November 1991, the trial court stayed all proceedings in this matter in respect of all defendants pending the outcome of the arbitration.

Almost six years passed before the arbitration concluded after about one hundred separate hearing days. During its pendency, a request for general discovery was denied by the arbitrators. The award was entered on February 27, 1997. The Larken defendants were ordered to pay the plaintiffs as follows:

Blatterfein - 71,100

Bronsteen - 60,000

DeGaglia - 125,600

Shuster - 91,300

Franzi - 116,400

The award also allocated the parties' responsibilities for fees and expenses.

Before the award was rendered, the Larken defendants requested that the arbitrators make findings itemizing individual defects and define the scope of the work necessary to repair those defects. Plaintiffs objected on the grounds that the request sought a remedy available under the New Home Warranty and Builder's Registration Act (HOW), N.J.S.A. 46:3B-1 to -12; that their arbitration was contractual, not under HOW auspices; and that plaintiffs were entitled to a monetary award. In their award, the arbitrators expressly denied the Larken defendants' "request that any award against them be in the form of a builder's remedy rather than a monetary award."

Plaintiffs moved before the trial court to confirm the arbitration award against the Larken defendants and to reactivate the civil action so that plaintiffs could proceed to litigate their remaining claims against all defendants. Larken argued, inter alia, that litigation of related claims not embraced in the contractual issues which had been arbitrated was barred by the entire controversy doctrine. On May 19, 1997, the trial court granted the motion to confirm the award and entered judgment against the Larken defendants for the amounts ordered plus $8,519.96 for ...


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