May 27, 2008; as amended June 6, 2008
MARYAM CONNELLY AND WILLIAM CONNELLY, PLAINTIFFS-APPELLANTS,
PNC BANK, N.A., PNC INVESTMENTS AND METLIFE INVESTORS U.S.A. INSURANCE CORP., DEFENDANTS-RESPONDENTS, AND
GEORGE SEPERO, DEFENDANT.
On appeal from the Superior Court of New Jersey, Law Division, Morris County, L-1989-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
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 dispute was referred to arbitration, and the case was dismissed without prejudice. This appeal followed.
On appeal, Connelly raises the following arguments:
THE TRIAL COURT DID NOT EMPLOY THE MUHAMMAD TEST WHICH COULD ONLY LEAD TO ONE CONCLUSION, THE UNENFORCEABILITY OF THE ARBITRATION PROVISION.
THE TRIAL COURT DISREGARDED THE RECORD WHICH ESTABLISHED THAT THERE WAS NO MUTUAL AGREEMENT TO ARBITRATE.
After careful review of the record and the arguments presented in the briefs, we find that the issues raised in this appeal are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). We add only the following comments.
The fact that Connelly did not read the document that she signed does not relieve her of its provisions. Absent fraud, a person is bound by a contract she signs even though she chooses not to read it. Silvestri v. S. Orange Storage Corp., 14 N.J. Super. 205, 212 (App. Div. 1951); see Dancy v. Popp, 114 N.J. 570, 572 (1989) ("Absent 'evidence of fraud or other legal excuse which would have relieved the [party] of the duty to read the disclosure statement' on a policy, the party is bound."); Young v. Prudential Ins. Co. of Am., 297 N.J. Super. 605, 619 (App. Div.) ("Failing to read a contract does not excuse performance unless fraud or misconduct by the other party prevented one from reading."), certif. denied, 149 N.J. 408 (1997). While in this case Connelly alleges fraud, the alleged fraud relates to the terms of the investment and not the arbitration provisions or the fact that she was entering into a contract. Since any fraudulent provisions are severable from the contract, the arbitration provision may be enforced. See Muhammad v. County Bank of Rehoboth Beach, 189 N.J. 1, 26 (2006) ("[I]f a contract contains an illegal provision and such provision is severable, courts will enforce the remainder of the contract after excising the illegal portion, so long as the prohibited and valid provisions are severable." (quoting Schuran, Inc. v. Walnut Hill Assocs., 256 N.J. Super. 228, 233 (Law Div. 1991))), cert. denied, ___ U.S. ___, 127 S. Ct. 2032, 167 L. Ed. 2d 763 (2007). Arbitration is a favored mechanism to resolve disputes, and arbitration clauses are enforced. See Littman v. Morgan Stanley Dean Witter, 337 N.J. Super. 134, 149 (App. Div. 2001).
Connelly further alleges procedural unconscionability in the formation of the contract, including the contention that the arbitration provision was not explained to her or called to her attention. However, a party to a contract is bound by its arbitration provision even if that provision was not specifically called to the party's attention. Young v. Prudential Ins. Co. of Am., supra, 297 N.J. Super. at 619 (noting that a party was bound by an arbitration provision in the document he signed even though he was never advised or alerted to the fact that the document contained an arbitration provision). Similarly, Connelly's argument that enforcement of the arbitration provision in the contract is unconscionable because she was unaware of the ten day rescission period fails, since once again she was unaware of this provision because she voluntarily failed to read the contract.
Given the strong public policy in favor of arbitration provisions and the fact that Connelly was unaware of the provision due to her voluntary choice to sign the document without reading it, the provision was properly enforced by the trial judge.