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Wein v. Morris

November 21, 2006

HOWARD WEIN, PATRICK DELANEY, AND JEFFERY REALTY, INC., PLAINTIFFS-RESPONDENTS,
v.
JACK MORRIS, CHARLESTOWN CROSSING, INC., JSM AT TALLMADGE, LLC, JSM AT INMAN, LLC, JSM AT NEW DOVER, LLC, AND JSM AT MATAWAN, LLC., DEFENDANTS-APPELLANTS.



On appeal from the Superior Court of New Jersey, Law Division, Somerset County, Docket No. SOM-L-1864-98.

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

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Argued September 27, 2006

Before Judges Wefing, Parker and C.S. Fisher.

Nearly five years after this action was commenced, the trial judge sua sponte ordered the parties to abide by their contractual promise to arbitrate their disputes, thus compelling a sixteen-day arbitration proceeding. In this appeal, we consider: whether the trial judge erred in compelling arbitration; whether defendants waived their right to now complain of that order by neither appealing nor seeking leave to appeal then, or by thereafter engaging in arbitration; and whether the arbitrator exceeded his authority by modifying his award on other than clerical, typographical or computational grounds.

I.

In January 1996, plaintiffs Howard Wein, Patrick Delaney, and Jeffery Realty, Inc. (plaintiffs) approached defendant Jack Morris (Morris), touting their ability to find commercial tenants for properties owned by entities Morris controlled. Plaintiffs indicated they had relationships with national drugstore chains that might be interested in Morris's properties. Morris agreed that plaintiffs could pursue the marketing of properties on Stelton Road in Piscataway, on Inman Avenue in Edison and on Talmdage Road in Edison, and that a five per cent commission would be paid if plaintiffs were the procuring cause in bringing a national drugstore to any of the three properties.

Plaintiffs alleged that they engaged Rite Aid's interest in the Inman Avenue property and Walgreens' interest in the Stelton Road property. In March 1997, plaintiffs and Morris executed a lease commission agreement regarding the Inman Avenue property owned by defendant JSM Inman, LLC, and the Stelton Road property owned by defendant Charlestown Crossing, Inc. These agreements identified Jeffery Realty as the procuring broker and included the following arbitration provision:

Any controversy, dispute or claim between the parties relating to this agreement shall be resolved by binding arbitration in accordance with the rules of the American Arbitration Association in the county in which the property is located.

Frustrated by the slow progress of negotiations, Morris approached Rite Aid and, without plaintiffs' involvement, Rite Aid leased the Stelton Road property from Charlestown Crossing in September 1997. Within the month that followed, Morris terminated the lease commission agreements, pursued Walgreens, and, in April 1997, leased the Talmadge Road property to Walgreens.

II.

On November 5, 1998, plaintiffs filed this action against Morris and the other defendants alleging, among other things, that they breached the lease commission agreements and interfered with plaintiffs' relationships with the drug chains.

The exchange of discovery between the parties was closely monitored by the trial court. For example, on September 19, 2001, the trial judge entered an order that resolved a hotly contested discovery dispute as to which Morris unsuccessfully sought leave to appeal. The record on appeal also includes four case management orders that adjusted the discovery end date, the last directing that discovery be completed by January 30, 2002.

On May 2, 2002, long after the discovery period expired, Morris moved to compel arbitration. This motion, however, was withdrawn. Soon after withdrawing that motion, Morris moved for summary judgment; that motion was also withdrawn so that the parties could pursue yet additional discovery. Approximately one year later, Morris moved and plaintiffs cross-moved for summary judgment. Apparently due to the parties' voluminous submissions -- the statements of undisputed material facts consisted of more than 300 pages of text, and the related exhibits, according to plaintiffs, filled two bankers' boxes --the cross-motions were adjourned on a few occasions, and trial dates of May 27, 2003 and July 14, 2003 were also adjourned.

To the surprise of the parties, on August 22, 2003, the adjourned return date of the parties' cross-motions for summary judgment, the trial judge sua sponte concluded that the disputes were arbitrable. On August 28, 2003, he entered an order that denied the summary judgment motions as moot, compelled the arbitration of the disputes, and dismissed the complaint and all counterclaims and cross-claims.

Despite their mutual assertion that the right to compel arbitration had been waived,*fn1 no party then sought appellate review of the August 28, 2003 order but, instead, completed the steps necessary to obtain arbitration of their disputes. They selected a retired jurist to act as their arbitrator and presented sixteen days of testimony and argument. On December 8, 2004, the arbitrator rendered a decision that awarded plaintiff $1,076,769.11 plus prejudgment interest. This award did not allow for counsel fees and did not allow for additional damages based upon the possibility of future lease renewals. Instead, the arbitrator stated in his written decision that his award was "in full settlement of all claims and counterclaims" and that "[a]ll claims not expressly granted herein are hereby[] denied."

On December 9, 2004, plaintiffs asked the arbitrator to amend his award because it contained miscalculations and because it failed to include relief for commissions that might be generated by future lease renewals. Morris acknowledged that the arbitrator was empowered to correct miscalculations,*fn2 but objected to the issuance of relief based upon future lease renewals, arguing that this claim had already been denied and that the arbitrator did not have the authority to revisit his original award in that material respect.

On January 21, 2005, the arbitrator amended his award by recalculating the damages previously awarded, increasing the total award from $1,076,769.11 to $1,089,804.38. The arbitrator also granted future commissions in the event of lease renewals, which Morris asserts has the potential to result ...


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