The opinion of the court was delivered by: Hillman, District Judge
In a case involving the propriety of the appraisal for the value of fifty-percent interest in a terminated business venture, presently before the Court is the motion of defendant Wealth and Tax Advisory Services, Inc. (WTAS) for summary judgment on plaintiff Jon N. Nistad's claims against it. Defendant argues that plaintiff's claims are barred by the doctrine of collateral estoppel, as the issues presented in plaintiff's complaint have already been fully litigated in prior state court proceedings. For the reasons expressed below, defendant's motion will be granted.
Nistad and his business partner agreed to terminate their joint business venture, and litigation concerning that termination commenced in New Jersey state court in May 2001. After three years of litigation, the parties agreed to settle several aspects of their dispute. Part of that settlement agreement included the mutual selection of an independent, neutral appraiser to determine the value of a fifty-percent interest in the shared business. The parties selected WTAS as the appraiser, and in accordance with the settlement agreement, they agreed that (1) WTAS would not see any prior appraisals performed by other appraisers, (2) the appraisal would be placed under seal for review by the arbitrator only and not be released to the parties until after an award had been rendered, and (3) WTAS's appraisal and the arbitrator's decision would be binding and not subject to appeal.
After WTAS issued its appraisal to the arbitrator in September 2007, the arbitrator issued his decision the next month. The arbitrator noted that WTAS valued the fifty-percent interest at $140,000, and after subtracting various offsets and credits, the arbitrator found that Nistad was to pay his former business partner approximately $66,000. Along with a copy of his decision, the arbitrator provided WTAS's appraisal to the parties.
Despite the fact that Nistad agreed to be bound by WTAS's appraisal, Nistad hired another appraisal firm, which criticized WTAS's appraisal. Nistad forwarded this new appraisal to the arbitrator, and demanded that WTAS correct its valuation. The arbitrator refused Nistad's request to reconsider his decision, stating that "[e]ven if the parties had stipulated to the use of an appeal process, which they did not, a unilateral critique would not be deemed objective or acceptable." (Def. Ex. H.)
When Nistad's business partner moved before the Chancery Division of the New Jersey Superior Court to confirm the arbitration award, Nistad opposed the confirmation and sought to vacate the arbitration award. Nistad argued that the appraisal did not comply with the settlement agreement because it did not employ a "fair market value" standard of valuation as required by the agreement since it did not consider minority or marketability discounts or the business partner's specific interest. Presiding Judge Neil H. Shuster of the Chancery Division rejected all of Nistad's arguments in a 22-page opinion. Nistad appealed to the Appellate Division, which, after oral argument, summarily affirmed Judge Shuster for the reasons expressed in his opinion.
Nistad then filed a complaint against WTAS in New Jersey Superior Court, Law Division alleging that WTAS breached its contract with Nistad and his former business partner, as well as committed negligence and violated New Jersey's Consumer Fraud Act, because it failed to use the proper fair market value analysis.
WTAS removed Nistad's complaint to this Court, and following the conclusion of discovery, WTAS has filed the instant motion for summary judgment on the basis of issue preclusion.*fn1 Nistad has opposed WTAS's motion.
This Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332 because there is complete diversity of citizenship between the parties and the amount in controversy exceeds $75,000.
B. Summary Judgment Standard
Summary judgment is appropriate where the Court is satisfied that "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of ...