On appeal from an interlocutory order of the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-6214-10.
The opinion of the court was delivered by: Simonelli, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Cuff, Sapp-Peterson and Simonelli.
The opinion of the court was delivered by SIMONELLI, J.A.D.
Plaintiffs Alon Frumer and Michelle Berliner Frumer purchased a new home that was covered by a new home buyer's warranty issued by a private plan approved pursuant to the New Home Warranty and Builders' Registration Act (the Act), N.J.S.A. 46:3B-1 to -20. The question presented in this case is whether arbitration is the exclusive remedy available to plaintiffs in their dispute with defendants National Home Insurance Company (NHIC) and Home Buyers Warranty Corporation (HBW). By leave granted, NHIC appeals from the denial of its motion to compel arbitration. For the reasons that follow, we reverse.
In April 2008, plaintiffs purchased a newly-constructed home in Englewood for $997,000. They executed a "Certificate of Participation In New Home Warranty Plan Of 2-10 Home Buyers Warranty" (Certificate). The Certificate identifies NHIC as the warranty guarantor and states that the warranty is offered by HBW as administrator for NHIC. In executing the Certificate, plaintiffs acknowledged receipt of the Certificate and the Home Buyers Warranty Booklet Workmanship/Systems and Structural Limited Warranty Coverage (Booklet).
The Booklet identifies limited warranty coverage for workmanship/systems defects and major structural defects. The Booklet sets forth the method for resolving a dispute over a workmanship/systems defect claim, in part, as follows:
For purposes of these procedures the term "arbitration" means a formal hearing arranged and conducted through an arbitration service designated by the Warranty Administrator in which an arbitrator will make final and binding decisions that may be entered as a judgment in any [c]court of competent jurisdiction. The decision of the arbitrator is reviewable only under such circumstances and to such an extent as is available pursuant to the New Jersey Arbitration Act.
Any and all disputes between the Homeowner and Builder, arising from or relating to the Warranty shall be submitted to binding arbitration. Pursuant to the New Jersey New Home Warranty and Builder[s'] Registration Act (P.L. 1977, C. 467) the filing of a claim against this limited Warranty shall constitute the election of remedy and shall bar the Homeowner from all other remedies.
Nothing herein shall be deemed to limit the Homeowner's right to elect other remedies except that such election shall bar the Homeowner from pursuing the same claim under this limited Warranty and in accordance with the procedures related hereto. Election of other remedies shall mean the filing of a complaint, counter-claim, cross-claim or third party complaint in any court that alleges matters covered by this limited Warranty in particular or unworkmanlike construction in general. [(Second and third emphasis added).]
Accordingly, the homeowner can either file a claim for workmanship/systems defects or pursue other remedies; however, once the homeowner files a claim with HBW, binding arbitration is the exclusive remedy for a dispute over the claim.
The Booklet also states that binding arbitration is the exclusive remedy for a dispute over a ...