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Chineida Wigfall v. Denholtz Associates

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


December 22, 2010

CHINEIDA WIGFALL, PLAINTIFF-APPELLANT,
v.
DENHOLTZ ASSOCIATES, INC.; DENHOLTZ MANAGEMENT CORP.; PARKSIDE PARTNERS, L.P.; MARK FLANNERY*FN1 ; JOSEPH MAYO; STEVEN CASSIDY; AND BRIAN MCMURRAY, DEFENDANTS-RESPONDENTS.

On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-4381-09.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted December 1, 2010 - Decided Before Judges R. B. Coleman and J. N. Harris.

Plaintiff Chineida Wigfall appeals from the dismissal of her civil rights and tort action in favor of having the dispute resolved in an agreed-upon arbitral forum. We affirm.

I.

On May 18, 2009, Wigfall filed a six-count complaint against Denholtz Associates, Inc.; Denholtz Management Corporation (Denholtz); Parkside Partners, L.P.;*fn2 and four individual co-workers: Mark Flannery, Joseph Mayo, Steven Cassidy, and Brian McMurray. The complaint alleged sexual harassment and racial discrimination in violation of the New Jersey Law Against Discrimination (NJLAD), N.J.S.A. 10:5-1 to -49; invasion of privacy; intentional infliction of emotional distress; premises liability; and civil conspiracy.

All defendants except Flannery and Mayo filed a motion to dismiss the complaint and compel arbitration on grounds that all of Wigfall's claims were subject to a valid and binding agreement to arbitrate contained in her application for employment with Denholtz.*fn3 On July 17, 2009, Judge Diane Pincus granted the motion to dismiss with prejudice and compelled arbitration. This appeal followed.

II.

We have gathered the following factual background from the pleadings and submissions of the parties in connection with the motion to dismiss the complaint and compel arbitration. In August 2006, Denholtz received Wigfall's resume and completed three-page application for employment. The application contained an arbitration provision on page three, which stated in relevant part:

As a condition of my consideration for and/or employment with Denholtz Associates and/or its affiliates collectively, ("the Company"), I agree to arbitrate any and all disputes relating in any way to, or arising out of, my application for employment with the Company, my employment with the Company, or the termination of my employment with the Company. In agreeing to arbitrate any and all disputes relating to or arising out of my application to or employment with the Company, I recognize, understand and acknowledge that I am waiving my right to an administrative proceeding or jury trial with respect to any such claim.

Wigfall's signature, on the same line as the date of "8-7-06," appears less than one inch below the arbitration provision. On September 11, 2006, Wigfall was officially extended an offer of employment with Denholtz where she served as an administrative assistant in the IT and construction departments until November 30, 2008.

According to the complaint, Wigfall was subjected to various acts of sexual and racial discrimination originating from her supervisors Flannery, Cassidy, and Mayo. When Wigfall reported the putative improper behavior to McMurray, who was Denholtz's head of human resources, he purportedly told her "that it was her responsibility to deal with the problems herself."

In the spring of 2008, Wigfall observed a small black object affixed to the ceiling of the first-floor women's restroom but was unable to identify what it was, and did not report it to any of her superiors. Then, on or around May 8, 2008, a fellow employee noticed the object and discovered that it was a video camera concealed in an altered ceiling tile, and aimed at a private location of the restroom. The employee attempted to remove the camera but was unable to do so. After reporting the camera to supervisors, the camera was spirited away by the time the employee returned to the restroom. A police investigation ensued.

Following this incident, Wigfall asserts that she utilized a gasoline station restroom located across the street for fear that she would be secretly videotaped in her employer's building. Wigfall also contends that she sought treatment from a psychiatrist who diagnosed her with "major depression disorder, post traumatic stress disorder and anxiety disorder." As a result of the conduct of defendants, Wigfall claims that she was unable to work, and took a temporary disability leave commencing on September 5, 2008. On November 20, 2008, Denholtz terminated Wigfall's employment.

Wigfall asserts that Judge Pincus's ruling, which validated the arbitration provision, should be reversed because the arbitration clause was obscure, ambiguous, not prominent, and within the context of an adhesion contract. We do not agree.

III.

Arbitration is a highly favored dispute resolution method. Wein v. Morris, 194 N.J. 364, 375-76 (2008); Martindale v. Sandvik, Inc., 173 N.J. 76, 92 (2002); Barcon Assocs., Inc. v. Tri-County Asphalt Corp., 86 N.J. 179, 186 (1981). The New Jersey Supreme Court has clearly stated its respect for arbitral fora on many occasions. See generally Muhammad v. Cnty Bank of Rehoboth Beach, 189 N.J. 1, 23 (2006), cert. denied, 549 U.S. 1338, 127 S. Ct. 2032, 167 L. Ed. 2d 763 (2007); Garfinkel v. Morristown Obstetrics & Gynecology Assocs., 168 N.J. 124, 132-33 (2001); Marchak v. Claridge Commons, Inc., 134 N.J. 275, 282 (1993).

Notwithstanding this State's strong policy in favor of arbitration, an arbitration provision is only enforceable if it "constitutes a valid contract to arbitrate." Martindale, supra, 173 N.J. at 86; see also Lederman v. Prudential Life Ins. Co. of Am., Inc., 385 N.J. Super. 324, 337-38 (App. Div.), certif. denied, 188 N.J. 353 (2006). In making this determination, ordinary contract principles apply. Singer v. Commodities Corp., 292 N.J. Super. 391, 402 (App. Div. 1996).

In Garfinkel, the Court sustained the plaintiff's right to file a civil action alleging employment discrimination, even though he had signed an agreement to arbitrate claims against his employer. The arbitration clause provided that "any controversy or claim arising out of, or relating to, this Agreement or the breach thereof, shall be settled by arbitration." Garfinkel, supra, 168 N.J. at 127. The Court held that "because of its ambiguity[,] the language contained in the arbitration clause does not constitute an enforceable waiver of plaintiff's statutory rights under the LAD." Ibid. However, the Court also found no bar to an employee waiving the right to trial of NJLAD claims, in favor of arbitration, so long as the waiver is voluntary, clear, and unambiguous:

In respect of specific contractual language, "[a] clause depriving a citizen of access to the courts should clearly state its purpose.

The point is to assure that the parties know that in electing arbitration as the exclusive remedy, they are waiving their time-honored right to sue." As we have stressed in other contexts, a party's waiver of statutory rights "must be clearly and unmistakably established, and contractual language alleged to constitute a waiver will not be read expansively." [Id. at 132 (citations omitted).]

In Garfinkel, the language of the arbitration clause suggested that the plaintiff only waived a trial on disputes "involving a contract term, a condition of employment, or some other element of the contract itself." Id. at 134. "Moreover, the language does not mention, either expressly or by general reference, statutory claims redressable by the LAD." Ibid.

One year later, in Martindale, supra, the Court concluded that the following arbitration clause, set forth in an employment application, was enforceable:

AS A CONDITION OF MY EMPLOYMENT, I AGREE TO WAIVE MY RIGHT TO A JURY TRIAL IN ANY ACTION OR PROCEEDING RELATED TO MY EMPLOYMENT WITH SANDVIK.

I UNDERSTAND THAT I AM WAIVING MY RIGHT TO A JURY TRIAL VOLUNTARILY AND KNOWINGLY, AND FREE FROM DURESS OR COERCION.

I UNDERSTAND THAT I HAVE A RIGHT TO CONSULT WITH A PERSON OF MY CHOOSING, INCLUDING AN ATTORNEY, BEFORE SIGNING THIS DOCUMENT.

I AGREE THAT ALL DISPUTES RELATING TO MY EMPLOYMENT WITH SANDVIK OR TERMINATION THEREOF SHALL BE DECIDED BY AN ARBITRATOR THROUGH THE LABOR RELATIONS SECTION OF THE AMERICAN ARBITRATION ASSOCIATION. [Martindale, supra, 173 N.J. at 81-82.]

In holding that this clause was broad enough to require arbitration of the plaintiff's LAD claim, the Court refined its holding in Garfinkel concerning the enforceability of such arbitration clauses:

In so holding, we stated: "The Court will not assume that employees intend to waive [their statutory rights] unless their agreements so provide in unambiguous terms." Id. at 135. However, we did not require a party to "refer specifically to the LAD or list every imaginable statute by name to effectuate a knowing and voluntary waiver of rights." Ibid. Instead, we instructed that "a waiver-of-rights provision should at least provide that the employee agrees to arbitrate all statutory claims arising out of the employment relationship or its termination." Ibid. [Martindale, supra, 173 N.J. at 95 (quoting Garfinkel, supra, 168 N.J. at 135).]

Comparing the arbitration provision in this case to those considered in Garfinkel and Martindale, we conclude that the language here qualifies as a waiver of Wigfall's statutory right to a judicial forum pursuant to the LAD. Wigfall's tort claims are likewise readily embraced within the instant arbitration provision. Although the arbitration language does not explicitly refer to claimed violations of statutory rights, it uses sweeping and unambiguous language to include "any and all disputes relating to or arising out of my application to or employment with the Company, [and] waiv[es] my right to an administrative proceeding or jury trial with respect to any such claim." These words are substantively similar to the language that was endorsed in Martindale.

Additionally, well-developed principles of contract interpretation support this position. "'[C]courts have generally read the terms "arising out of" or "relating to" [in] a contract as indicative of an "extremely broad" agreement to arbitrate any dispute relating in any way to the contract.'" Curtis v. Cellco P'ship, 413 N.J. Super. 26, 37-38 (App. Div.) (quoting Griffin v. Burlington Volkswagen, Inc., 411 N.J. Super. 515, 518 (App. Div. 2010)), certif. denied, 203 N.J. 94 (2010).

Unlike in Garfinkel, the arbitration provision in this case was not limited to disputes arising out of the employment agreement itself. It explicitly covered "all disputes relating in any way to, or arising out of, my application for employment with the Company, my employment with the Company, or the termination of my employment with the Company." Moreover, the clause contained affirmative language waiving Wigfall's right to a jury trial, which bolsters a finding that an employee was on notice that all claims would be resolved through arbitration. Martindale, supra, 173 N.J. at 96.

Wigfall further insists that the arbitration clause should not be enforced because it was obscured in the context of the employment application, and because the language was not sufficiently "clear, distinct, prominent and easy to read." The entire employment application was reproduced in Wigfall's appellate appendix, and we have had an opportunity to inspect it. From our viewpoint we cannot agree with Wigfall's assessment of the clause.

Citing to Rockel v. Cherry Hill Dodge, 368 N.J. Super 577, 587 (App. Div.), certif. denied, 181 N.J. 545 (2004), Wigfall suggests that the paragraph was not sufficiently set apart by typeface, size, and spacing. She further submits that the arbitration clause is not effectively distinguished from other information in the paragraph, such as Denholtz's right to conduct a background investigation. As a result, Wigfall claims that she did not knowingly "sign[] away" certain statutory and constitutional rights.

In Rockel, the court acknowledged that "the size of the print," and the location of the provision, especially within a contract of adhesion, are significant factors in "any determination to compel arbitration." Id. at 585. In that case, the court found the arbitration provision to be "difficult to locate and, once found, onerous to read in light of the small size of the print." Id. at 586. Apart from the location and typeface of the arbitration language, the court also determined the agreement to be "highly ambiguous" due to the execution of two separate documents, each containing "separate and somewhat disparate arbitration clauses." Id. at 581. The existence of "two conflicting . . . provisions," which the court held "confound[ed] any clear understanding of the parties' undertaking," was "fatal to the compelling of the arbitration of plaintiff's [statutory] claims." Id. at 581, 583.

The circumstances present in Rockel are simply not present here. The Law Division found the arbitration provision in Wigfall's employment application to be sufficiently clear and prominent, such that she understood her obligation to arbitrate, stating:

First, the language appears directly above the signature line. Therefore plaintiff's eyes would naturally have to read through it in order to reach the line for her signature.

Second, the print is in bold. Finally, the size of the print is roughly the same as that found throughout the application.

We agree with this reasonable assessment. Furthermore, in contrast to the arbitration provision in Rockel, the instant clause was not "difficult to locate" or otherwise confounded by the execution of more than one agreement. Id. at 586. Rather, the paragraph at issue was the only part of the employment application containing affirmative statements by the employer, and not blank spaces to be completed by the applicant.

Wigfall further submits that reversal is in order because the arbitration clause was contained in a contract of adhesion. In support of her position, Wigfall points to the unequal bargaining power between the parties and the compelling public interests affected by the contract, namely the statutory rights protected under the NJLAD. We remain unpersuaded by this argument.

A contract of adhesion is one "'presented on a take-it-or-leave-it basis, commonly in a standardized printed form, without opportunity of the "adhering party" to negotiate except perhaps on a few particulars.'" Martindale, supra, 173 N.J. at 89 (quoting Rudbart v. N. Jersey Dist. Water Supply Comm'n., 127 N.J. 344, 353, cert. denied, 506 U.S. 871, 113 S. Ct. 203, 121 L. Ed. 2d 145 (1992)). Importantly, classifying an agreement as such has no bearing on its enforceability. Martindale, supra, 173 N.J. at 89. Instead, courts must conduct a fact-sensitive analysis in which they consider the standardized nature and subject matter of the particular contract, the relative bargaining power of the parties, "'the degree of economic compulsion motivating the adhering party,'" and the public interests affected by the contract in determining whether to enforce a contract of adhesion. Id. at 90 (quoting Rudbart, supra, 173 N.J. at 356); Muhammad v. Cnty. Bank of Rehoboth Beach, 379 N.J. Super. 222, 237 (App. Div. 2005) ("[A] finding that a contract is one of adhesion is the 'beginning, not the end, of the inquiry.'").

In Martindale, the court did not find "determinative the fact that plaintiff was required to sign an employment application containing an arbitration agreement in order to be considered for employment." Martindale, supra, 173 N.J. at 91.

Likewise here, Denholtz cannot be faulted for failing to ask Wigfall if she understood the plain words of the agreement or if she desired to take it home for further inspection. Young v. Prudential Ins. Co. of Am., Inc., 297 N.J. Super. 605, 619 (App. Div.) (holding that defendant had "[n]o . . . obligation [to alert plaintiff to an arbitration clause in a contract] . . . where the provision is not hidden"), certif. denied, 149 N.J. 408 (1997). As the motion court noted, nothing prevented Wigfall from requesting an explanation of the provision -- she simply declined to do so. Nor is there any indication that she was prevented from taking the application home to review it further or that Denholtz would have refused to hire her if she objected to the terms presented to her. See Martindale, supra, 173 N.J. at 91. As in Martindale, Wigfall was an educated individual pursuing a career in business. See ibid. Therefore, absent a showing of fraud, coercion, or other oppressive conduct, the agreement should be enforced as written.

Finally, Wigfall contests the Law Division's consideration of her educational background in finding that she was capable of understanding the nature and terms of the agreement. In particular, she submits that her level of education should not have been considered because the provision was ambiguous. See Garfinkel, supra, 168 N.J. at 136.

In rendering its decision, the trial court noted that at the time she applied for a position with defendants, Wigfall had a college degree and was pursuing an M.B.A. in Finance from Seton Hall University. Although a plaintiff's intent must be unambiguously reflected in the plain language of the agreement, courts have frequently considered the circumstances surrounding the execution of a contract in determining that it was entered into knowingly and voluntarily. See Martindale, supra, 173 N.J. at 91, 96-97; Raroha v. Earle Fin. Corp., 47 N.J. 229, 234 (1966); Bancredit, Inc. v. Bethea, 65 N.J. Super. 538, 544-45 (1961). Accordingly, it was not improper for the motion court to consider Wigfall's educational background in determining that she was capable of reading and comprehending the agreement.

To the extent that we have not expressly explicated and addressed any of Wigfall's remaining contentions, we have not done so because they are meritless and do not warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).

Affirmed.


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