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Connelly v. PNC Bank

May 27, 2008; as amended June 6, 2008


On appeal from the Superior Court of New Jersey, Law Division, Morris County, L-1989-06.

Per curiam.


Submitted September 18, 2007

Decided October 9, 2007

Remanded by Supreme Court April 15, 2008.

Resubmitted May 15, 2008

Before Judges Grall and Chambers.

This appeal of an order compelling arbitration comes before us on remand from the Supreme Court by order dated April 15, 2008, for reconsideration in light of Wein v. Morris, ___ N.J. ___ (2008).

When the appeal first came before this court on September 18, 2007, we dismissed it as interlocutory. In doing so, we relied on the rationale of Wein v. Morris, 388 N.J. Super. 640, 654 (App. Div. 2006), which stated that an order sending a dispute to arbitration is not final "because it inherently anticipates further proceedings prior to the ultimate entry of a final judgment." Wein v. Morris was appealed to the Supreme Court, which held that an order compelling arbitration ends the litigation in Superior Court and hence is appealable as a final judgment. Wein v. Morris, supra, ___ N.J. at ___ (slip op. at 13-16). While Wein v. Morris was decided under the old arbitration act, the Supreme Court recognized in that decision that the current Uniform Arbitration Act, N.J.S.A. 2A:23B-28, does not expressly list orders compelling arbitrations as appealable. Id. (slip op. at 17-18). Accordingly, the Court exercised its rulemaking authority to amend Rule 2:2-3(a) to provide that orders compelling arbitration are deemed final judgments for appeal purposes. Id. (slip op. at 18). The Supreme Court, however, expressly provided that this new rule is prospective only and was not applied to the parties in Wein v. Morris, who had already gone to arbitration. Id. (slip op. at 18-19).

Since the ruling in Wein v. Morris is prospective only and the order compelling arbitration in this case was entered before that decision, this appeal is interlocutory. When an appeal is interlocutory, a grant of leave to appeal is left to the discretion of this court, and that discretion is exercised sparingly and "in the interest of justice." R. 2:2-4; see State v. Reldan, 100 N.J. 187, 205 (1985); Janicky v. Point Bay Fuel, Inc., 396 N.J. Super. 545, 550 (App. Div. 2007). A grant of leave to appeal nunc pro tunc "is most extraordinary relief." Frantzen v. Howard, 132 N.J. Super. 226, 227-28 (App. Div. 1975). We have decided to exercise our discretion and entertain this interlocutory appeal. We do so because respondent has not objected to this appeal as interlocutory and a grant of leave to appeal is not inconsistent with the policy behind the Wein v. Morris decision. We thus now reach the merits of the appeal.

The dispute in this case arises out of an investment plaintiff Maryam Connelly*fn1 made with defendant Metlife Investors U.S.A. Insurance Corporation through defendant PNC Bank, N.A., its financial advisor defendant George Sepero, and PNC Investments. Connelly maintains that she and her husband approached PNC Bank requesting an investment with high liquidity for the sum of $400,000. She was referred to Sepero who arranged the investment for her in her name. She admits that she signed the documents he presented to her without reading them. She thereafter learned that the monies were placed in a long term investment. As a result, she incurred substantial penalties when she withdrew the funds prematurely.

The PNC account application that Connelly signed provided that any disputes must be submitted to binding arbitration. In addition, the account application contained in the block immediately above her signature the following notice with the reference to the arbitration provision in bold type:

To PNC Investments. In consideration of your accepting this account, I/we hereby acknowledge that I/we understand and agree to the terms and certification statements set forth in this application and agreement. (including the arbitration clause set forth in paragraph 10).

Connelly brought this suit in July 2006, suing defendants for rescission, fraud, unjust enrichment and consumer fraud. Defendants PNC Bank and PNC Investments moved to send the dispute to binding arbitration pursuant to the provisions of the investment agreement, and defendant Metlife Investors U.S.A. joined in the motion. The motion was granted, and by order dated October 26, 2006, the ...

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