The opinion of the court was delivered by: Pisano, District Judge.
This action is brought by petitioners Toll Brothers, Inc. ("Toll Brothers") and Toll NJ, LP ("Toll NJ" and, together with Toll Brothers, "Petitioners") against respondent Tracy Fields ("Respondent"). Presently before the Court is a motion by Petitioners to vacate an arbitration award entered on June 5, 2010 (the "Arbitration Award"). Respondent opposes the motion. Oral argument was held on January 6, 2011. For the reasons set forth herein, the Court denies Petitioners' motion to vacate.
Respondent and Toll NJ entered into an Agreement of Sale for the purchase, construction and sale of a Hampton Traditional style home located in Farmingdale, New Jersey on February 24, 2006 (the "Purchase Agreement"). (Jeffrey K. Newman Certification ("Newman Cert."), Exhibit A). In connection with her execution of the Purchase Agreement, Respondent provided cash deposits to Toll NJ totaling $62,630.00 and executed a Note in favor of Toll NJ in the amount of $52,397.00. (Richard A. Bokma Certification ("Bokma Cert."), Exhibit 16; Newman Cert., Exhibit A).
The Purchase Agreement contains several provisions that are relevant to the underlying dispute. Section 3 of the Purchase Agreement, the Mortgage Application provision, outlines the rights and obligations of the parties with respect to Respondent's mortgage application in connection with the purchase of the home. (Newman Cert., Exhibit A, Section 3). However, the Purchase Agreement also includes the following endorsement, which expressly replaces the Mortgage Application clause of the Purchase Agreement in its entirety:
Buyer acknowledges that this Agreement is not contingent upon the Buyer obtaining financing for the purchase of the subject premises, and that Buyer shall seek financing through Buyer's own sources. Buyer agrees and understands that failure to secure financing for the purchase of the subject premises shall in no way release Buyer from Buyer's obligations under this Agreement (the "Cash Sale Endorsement"). (Newman Cert., Exhibit A).
Finally, the Purchase Agreement contains a Default provision, which gives Toll NJ the right to retain all cash deposits upon an uncured default by Respondent. (Newman Cert., Exhibit A, Section 5).
The initial transaction closing date was set for December 20, 2006. (Newman Cert., Exhibit C). For various reasons, the parties rescheduled the closing date to January 2, 2007 and, again, to January 4, 2007. (Newman Cert., Exhibits D and E). However, Respondent was unable to secure financing to complete the transaction and, on January 5, 2007, Toll Brothers notified Respondent that she was in default under the Purchase Agreement. (Newman Cert., Exhibit F). After continued communication between the parties, Respondent and Toll NJ reconfirmed the terms of the Purchase Agreement on March 30, 2007. (Newman Cert., Exhibit B). Pursuant to the terms of such reconfirmation, Respondent provided an additional, nonrefundable cash deposit of $10,000.00 to Toll NJ, with a new closing date scheduled for April 11, 2007. (Newman Cert., Exhibit B; Bokma Cert., Exhibit 16). Respondent was, again, unable to secure financing for the purchase of the home by the scheduled closing date. (Bokma Cert., Exhibit 15). As a result, the parties failed to close the transaction.
Respondent filed for arbitration against Toll Brothers, arguing that the cash deposits made in connection with the Purchase Agreement should be returned to her. (Newman Cert., Exhibit G). Arbitration proceedings were held before arbitrator Richard H. Steen, Esq. ("Arbitrator Steen") on May 10, 2010, and the Arbitration Award was entered in Respondent's favor in the amount of $62,630.00 on June 5, 2010. (Newman Cert., Exhibit H).
Petitioners filed this action on September 7, 2010, asking the Court to vacate the Arbitration Award. Petitioners argue that the Arbitration Award directly contradicts the express language of the Purchase Agreement, which entitles Toll NJ to retain cash deposits upon Respondent's default. Petitioners also argue that the Arbitration Award should be vacated because the award is entered against Toll Brothers, the parent company of Toll NJ and a non-party to the Purchase Agreement.
The Federal Arbitration Act (the "FAA") creates a strong presumption in favor of enforcing arbitration awards. New Jersey Carpenters Funds v. Professional Furniture Services, 2009 WL 483849 at *2 (D.N.J. February 25, 2009) (citing Brentwood Medical Associates v. United Mine Workers of America, 396 F.3d 237, 241 (3d Cir. 2005)). Pursuant to the FAA, a district court may vacate an arbitration award only under a limited set of circumstances including: "(1) where the award was procured by corruption, fraud, or undue means; (2) where there was evident partiality or corruption in the arbitrators, or either of them; (3) where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced; or (4) where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made." 9 U.S.C. § 10(a)(1)-(4).
The general rule is that, "[a]s long as the arbitrator's award 'draws its essence from the . agreement," and is not merely 'his own brand of industrial justice,' the award is legitimate." United Paperworks Int'l Union v. Misco, Inc., 484 U.S. 29, 36, 108 S.Ct. 364, 98 L.Ed.2d 286 (1987) (quoting Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593, 597, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (1960)). Thus, if an "'arbitrator is even arguably construing or applying the contract and acting within the scope of his authority,' the fact that 'a court is convinced he committed serious error does not suffice to overturn his decision.'" Eastern Associated Coal Corp. v. United Mine Workers of America, District 17, 531 U.S. 57, 62, 121 S.Ct. 462, 466, 148 L.Ed.2d 354 (2000) (citing United Paperworks, 484 U.S. at 38). "Neither a court's disagreement with the arbitrator's construction of a contract nor its belief that its interpretation of a contract is better justifies a court overruling the arbitrator." Exxon Corp. v. Local Union 877, Intern. Broth. of Teamsters, Chauffeurs, Warehousemen and Helpers of America, 980 F.Supp. 752, 760 (D.N.J. 1997) (citing News America Publications, Inc. Daily Racing Form Div. v. Newark Typographical Union, Local 103,918 F.2d 21, 24 (3d Cir. 1990)).However, a district court may vacate an arbitration award where ...