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Dhall v. 700 Grove Street Urban Renewal

June 15, 2010

RAJAT P. DHALL, PLAINTIFF-APPELLANT,
v.
700 GROVE STREET URBAN RENEWAL, L.L.C., DEFENDANT-RESPONDENT.



On appeal from the Superior Court of New Jersey, Law Division, Hudson County, L-6171-08.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued May 17, 2010

Before Judges Reisner and Yannotti.

Plaintiff Rajat P. Dhall (Dhall or plaintiff) appeals from a March 20, 2009 order compelling arbitration of his claims against defendant 700 Grove Street Urban Renewal, L.L.C., and dismissing his complaint. He also appeals from a May 26, 2009 order denying reconsideration. We affirm.

I.

These are the most pertinent facts. On July 16, 2005, Dhall signed a nine-page Subscription and Purchase Agreement (agreement) to buy a condominium, unit 2J, from defendant. The agreement included the following arbitration clause, which Dhall initialed in addition to signing the agreement:

ARBITRATION: Buyer, on behalf of Buyer and all permanent residents of the Unit, including minor children, hereby agrees that any and all disputes with Seller, Seller's parent company or their subsidiaries or affiliates whether statutory, contractual, or otherwise, including, but not limited to personal injuries and/or illness ("Claims"), shall be resolved by binding arbitration in accordance with the Supplementary Rules for Residential Construction or the Commercial Arbitration Rules and Mediation Procedures, as applicable, of the American Arbitration Association . . . . The provisions of this Section 13 shall be governed by the provisions of the Federal Arbitration Act, 9 U.S.C. §§ 1, et seq. and shall survive settlement.

EXCEPT AS MAY OTHERWISE BE PROVIDED IN AAA'S CONSUMER DUE PROCESS PROTOCOL THAT ALLOWS CONSUMERS TO FILE CERTAIN CLAIMS IN SMALL CLAIMS COURT, THE BUYER UNDERSTANDS THAT BY INITIALING THIS ARBITRATION PARAGRAPH, HE OR SHE IS GIVING UP HIS OR HER RIGHT TO A TRIAL IN COURT EITHER WITH OR WITHOUT A JURY. [Emphasis added.]

There was a considerable delay in preparing unit 2J for occupancy, and on March 14, 2008, the parties entered into a one-page "Endorsement to Subscription and Purchase Agreement" (endorsement) in which Dhall agreed to buy a different unit. The endorsement included the following clause incorporating the endorsement into the original purchase agreement:

THIS ENDORSEMENT Is Intended to be Incorporated into and made a part of the Agreement and all other terms and conditions contained in the Agreement, unless expressly modified herein, remain in full force and effect.

On December 5, 2008, Dhall filed suit seeking to void the purchase agreement and the endorsement and obtain the return of his security deposit. In his complaint, Dhall asserted that execution of the endorsement invalidated the original purchase agreement. In count one, he also alleged that the endorsement was deficient because it did not include a seven day cancellation notice as required by N.J.S.A. 45:22A-26 and N.J.A.C. 5:26-6.2, nor did it contain certain language mandated to be included in a contract for the sale of real estate. See N.J. State Bar Ass'n v. N.J. Ass'n of Realtors Bds., 93 N.J. 470, modified, 94 N.J. 449 (1983).*fn1 In count two, he contended that even if the endorsement was simply an amendment to the purchase agreement, "then it is still a material modification of the terms of the purchase agreement," and was deficient in the same respect as outlined in count one. He asserted that the endorsement was voidable because it was "an unconscionable adhesion contract." He further claimed that because the contract was void, he was entitled to a refund of his deposit monies.

According to an affidavit of service, defendant was served with the complaint on January 5, 2009. In lieu of filing an answer, defendant filed a motion on February 23, 2009, seeking to dismiss the complaint and compel arbitration. Thereafter, on March 9, 2009, plaintiff filed an application to enter default, while defendant's dismissal motion was pending. The clerk's office declined to enter default in light of defendant's pending motion.*fn2 In opposing the arbitration motion, plaintiff did not request that the case be stayed in lieu of dismissal if the court granted the motion.

In an oral opinion placed on the record on March 26, 2009, Judge Barbara Curran indicated that she would dismiss Dhall's complaint and compel arbitration. The judge reasoned that pursuant to Garfinkel v. Morristown Obstretrics & Gynecology Assocs., 168 N.J. 124 (2001), and Martindale v. Sandvik, Inc., 173 N.J. 76 (2002), the arbitration clause was unambiguous and sufficiently broad to cover the disputed claims. She found no evidence to suggest that the endorsement affected the validity of the terms of the arbitration provision. The judge likewise found no public policy basis to set aside the arbitration provision. She held that under Green Tree Fin. ...


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