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Maldanis v. B.G. Pools

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


November 14, 2007

RICHARD J. MALDANIS, PLAINTIFF-APPELLANT,
v.
B.G. POOLS, INC., T/A DOVER POOLS & SUPPLIES, DEFENDANT/THIRD-PARTY PLAINTIFF-RESPONDENT,
v.
MIKE COTTRELL, THIRD-PARTY DEFENDANT.

On appeal from the Superior Court of New Jersey, Law Division, Ocean County, L-3380-06.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted November 5, 2007

Before Judges Lintner and Graves.

Plaintiff, Richard Maldanis, appeals from an order dismissing his complaint alleging violation of the Consumer Fraud Act, N.J.S.A. 56:8-1 to -135 (CFA), against defendant, B.G. Pools, Inc., trading as Dover Pools & Supplies. The motion judge found that the Law Division lacked jurisdiction based upon an arbitration clause in the contract between the parties. Plaintiff filed this appeal following denial of his motion for reconsideration. We now reverse and remand.

On April 6, 2003, plaintiff went to defendant's store to discuss the purchase and installation of an in-ground swimming pool at his home. According to plaintiff, Jeffrey O'Biso, an employee of defendant, represented that the pool would be installed by Mike Cottrell, a man with many years of experience, and defendant would obtain and satisfy the municipal permits and requirements, with construction commencing thirty days after issuance of the permit and completed by June 1, 2003. Plaintiff claimed that, based upon those representations, he signed a contract with defendant on April 6, 2003.

The contract consisted of a pre-printed form with blanks for addresses, prices, details of construction, and dates to be filled in by the employee making the contract on behalf of defendant. The contract contained a "Terms and Conditions Section" on the reverse side of the one-page document. The terms and conditions were printed in numbered paragraphs, with bold print descriptive headings. The arbitration clause was printed in an unnumbered paragraph, across the bottom of the page. It provided in pertinent part:

CAUTION: . . . Any controversy or claim out of or relating to this contract, (including the warranties extended hereunder) or breach thereof shall be settled without charge to Buyer by arbitration with the rules of the Better Business Bureau and [judgment] upon the award rendered by the arbitrators may be entered in any court having jurisdiction.

Plaintiff alleged that defendant did not obtain a permit from the municipality, leaving him to make the necessary arrangements. He claimed that once the permit was obtained, construction did not begin on the specified date and neither Mike Cottrell nor a person of similar background and experience was sent to install the pool. Instead, according to plaintiff, persons with less experience than the promised builder were sent to construct the pool, allegedly resulting in substandard and defective construction.

In Rockel v. Cherry Hill Dodge, 368 N.J. Super. 577, 580 (App. Div.), certif. denied, 181 N.J. 545 (2004), we discussed the tension between public policy favoring liberal construction of contracts in favor of arbitration and the policy behind the CFA to root out consumer fraud. Because these two policies were considered by us to be in "equipoise," we held that enforcement of arbitration clauses as against a consumer's rights under the CFA must be determined "on a case-by-case basis" by examining the specific arbitration provision to determine whether it "contain[s] the appropriate attributes" to enforce it or disregard it. Ibid.

In Garfinkel v. Morristown Obstetrics & Gynecology Associates, 168 N.J. 124, 134 (2001), the Court discussed whether an arbitration clause was sufficient to constitute a waiver of a plaintiff's right to proceed in court under the statutory right to seek a remedy under the Law Against Discrimination, N.J.S.A. 10:5-1 to -42 (LAD). The Court explained that language that merely states "that 'any controversy or claim' that arises from the agreement or its breach shall be settled by arbitration . . . suggests that the parties intended to arbitrate only those disputes involving a contract term . . . or some other element of the contract itself" rather than statutory claims. Id. at 134. Accordingly, it held that a waiver of statutory claims must be set forth in "unambiguous terms." Id. at 135. "To pass muster . . . a waiver-of-rights provision [in an arbitration clause] should at least provide that the employee agrees to arbitrate all statutory claims arising out of the employment relationship or its termination." Ibid. (emphasis added).

In Gras v. Associates First Capital Corp., 346 N.J. Super. 42, 45 (App. Div. 2001), certif. denied, 171 N.J. 445 (2002), we determined that wording in an arbitration clause stating that it applies "'any claim or dispute based on a federal or state statute'" was sufficient to enforce arbitration of the plaintiff's CFA claims. Although an arbitration clause "need not specifically refer to the LAD or list every imaginable statute," it must at the very least indicate that the parties agree to arbitrate all statutory claims. Id. at 56.

The language at issue here, "[a]ny controversy or claim out of or relating to this contract, (including the warranties extended hereunder) or breach thereof shall be settled . . . by arbitration," is similar to that found to be wanting in Garfield and Rockel; see also Martindale v. Sandvik, Inc., 173 N.J. 76, 96 (2002). It does not comport with the language found to be acceptable in Gras. Accordingly, the motion judge mistakenly determined that the court did not have jurisdiction to consider plaintiff's claim that defendant violated the CFA.

Reversed and remanded.

20071114

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