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Rhonda Massa v. Mcguire Buick-Pontiac-Gmc


October 25, 2011


On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-2507-09.

Per curiam.


Argued September 27, 2011

Before Judges Yannotti and Espinosa.

Plaintiff Rhonda Massa appeals from an order entered by the Law Division on September 16, 2010, dismissing her complaint. We affirm.

This appeal arises from the following facts. On March 31, 2008, plaintiff entered into an agreement with defendant McGuire Buick-Pontiac-GMC (McGuire) under which she returned her previously-leased 2004 Buick Century and leased a 2008 Pontiac sedan. In furtherance of the agreement, plaintiff signed various documents including a "Motor Vehicle Retail Order," which provided that the parties to the agreement agreed to arbitrate any claim arising from the sale or lease involved, including all statutory claims and any state or federal claims.

On May 7, 2009, plaintiff filed a complaint in the Law Division against McGuire, McGuire's salesperson Peter Tourso (Tourso) and GMAC.*fn1 She alleged that the 2008 Pontiac lacked certain features that were on her previously-leased vehicle, contrary to certain representations and promises that defendants made to her. Plaintiff further alleged that McGuire had agreed it would pay the last two payments on the existing lease but failed to provide notice of the agreement to GMAC, thereby resulting in demands by GMAC for additional payments.

Based on these facts, plaintiff asserted claims against defendants for breach of contract, breach of the covenant of good faith and fair dealing, fraud, and violations of the Consumer Fraud Act, N.J.S.A. 56:8-1 to -20 (CFA). McGuire and Tourso filed an answer dated June 16, 2009, and an amended answer dated July 21, 2009, in which they asserted as a separate defense that the "matter is subject to an arbitration agreement.

On August 10, 2009, defendants filed a motion to dismiss the complaint on the ground that plaintiff was required by the "Motor Vehicle Retail Order" to arbitrate the claims in the complaint. The court found that it did not have sufficient facts to determine whether plaintiff had actual knowledge of the arbitration agreement and understood its terms and conditions. The court accordingly entered an order dated September 16, 2009, denying defendants' motion without prejudice.

Thereafter, plaintiff and Tourso were deposed on May 27, 2010. During the depositions, counsel for the parties discussed whether and when defendants would file a second motion to dismiss on the basis of the arbitration agreement. Plaintiff's attorney noted that the matter was scheduled for court arbitration on June 1, 2009.*fn2 Defendants' attorney said that the motion would be filed the following week.

In her deposition, plaintiff testified that she was employed as a teacher and had worked as a teacher for thirty-one years. She has a master's degree. Plaintiff conceded that when she leased the 2008 Pontiac, she signed various documents, including the "Motor Vehicle Retail Order" which contained the arbitration agreement. Plaintiff testified that she did not review the arbitration agreement before she signed it. Plaintiff conceded, however, that she was given an opportunity to review the document before she signed it.

Plaintiff further testified that she understood the arbitration agreement. She said that the agreement indicated that, if she had a problem, she would have to go to arbitration. Plaintiff conceded that that the agreement was "pretty clear." She stated, however, that Tourso never told her she would be giving up her right to sue. Plaintiff testified that, because Tourso subsequently told that she should "take" defendants to court, she did not know she had signed a document precluding her from doing so.

The matter was submitted to court arbitration on July 1, 2010. The arbitrator awarded plaintiff $2,549.95, exclusive of attorneys' fees. Defendants filed their second motion to dismiss on July 21, 2010. The court considered the motion on September 16, 2010, and placed its decision on the record on that date. The court found that the arbitration clause in the "Motor Vehicle Retail Order" was clear and unambiguous and required plaintiff to submit her claims to arbitration.

The court noted that plaintiff is a "highly educated woman" who understood that there was an arbitration clause in the contract. The court rejected plaintiff's contention that defendants waived their right to enforce the arbitration agreement by waiting too long to re-file their motion to dismiss. The court entered an order dated September 16, 2010, dismissing the complaint with prejudice. This appeal followed.

Plaintiff argues that the trial court erred by granting defendants' motion to dismiss because: 1) the court failed to recognize that the motion to dismiss was converted under Rule 4:6-2(e) to a Rule 4:46-2 summary judgment motion; 2) the court did not weigh the policies under the CFA against the policy in favor of arbitration; and 3) defendants expressly waived the right to enforce the arbitration agreement through their acts and omissions.

We have carefully considered these contentions and conclude that plaintiff's arguments are without sufficient merit to warrant extended discussion in a written opinion. R. 2:11-3(e)(1)(E). We add the following comments.

"[A]rbitration is a favored form of relief." Marchak v. Claridge Commons, Inc., 134 N.J. 275, 281 (1993). Indeed, "the Legislature has authorized persons to enter binding agreements to arbitrate and to accept the arbitrator's award." Ibid. (citing N.J.S.A. 2A:24-2). Generally, courts should enforce the agreements made by the parties, including arbitration agreements. Ibid. (citing Vasquez v. Glassboro Serv. Ass'n, 83 N.J. 86, 101 (1980)). Moreover, "[a]n agreement to arbitrate should be read liberally in favor of arbitration." Id. at 282 (citing J. Baranello & Sons, Inc. v. Davidson & Howard Plumbing & Heating, Inc., 168 N.J. Super. 502, 507 (App. Div.), certif. denied, 81 N.J. 340 (1979)).

However, a contractual provision in which a consumer agrees that arbitration is the exclusive remedy must "be read in light of its effect on the consumer's right to sue." Ibid. The clause must "clearly state its purpose." Ibid. The parties must "know that in electing arbitration as the exclusive remedy, they are waiving their time-honored right to sue." Ibid.

Here, plaintiff signed an agreement, which included the following provision:


The parties to this agreement agree to arbitrate any claim, dispute or controversy, including all statutory claims and any state or federal claims, that may arise out of or relating to the sale or lease identified in this agreement. By agreeing to arbitration, the parties understand and agree that they are waiving their rights to maintain other available resolution processes, such as a court action or administrative proceeding, to settle their disputes. Consumer Fraud, Used Car Lemon Law, and Truth-in-Lending claims are just three examples of the various types of claims subject to arbitration under this agreement. The parties also agree to (i) waive any right to pursue any claims arising under this agreement including statutory, state or federal claims, as a class action arbitration, or (ii) to have an arbitration under this agreement consolidated with any other arbitration or proceeding. The arbitration shall be conducted in accordance with the rules of the American Arbitration Association before a single arbitrator, who shall be a retired judge or an attorney. Dealership shall advance both [parties] filing, service, administration, arbitrator, hearing, or other fees, subject to reimbursement by decision of the arbitrator. Each party shall bear his or her own attorney, expert, and other fees and costs, except when awarded by the arbitrator under applicable law. The arbitration shall take place in New Jersey at a mutually convenient place agreed upon by the parties or selected by the arbitrator. The decision of the arbitrator shall be binding upon the parties. Any further relief sought by either party will be subject to the decision of the arbitrator. If any part of this arbitration clause, other than waivers of class action rights, is found to be unenforceable for any reason, the remaining provisions shall remain enforceable. If a waiver of class action and consolidation rights is found unenforceable in any action in which class action remedies have been sought, this entire arbitration clause shall be deemed unenforceable, it being the intention and agreement of the parties not to arbitrate class actions or in consolidated proceedings. In the event that any subsequent lease, finance, or other agreement between the parties contains a provision for arbitration of claims which conflicts with or is inconsistent with this arbitration provision, the terms of such subsequent arbitration provision shall govern and control to the extent of such conflict or inconsistency. THIS ARBITRATION PROVISION LIMITS YOUR RIGHTS, INCLUDING YOUR RIGHT TO MAINTAIN A COURT ACTION. PLEASE READ IT CAREFULLY, PRIOR TO SIGNING.

This agreement is clear and unambiguous. It states that any and all claims arising from the sale or lease identified therein must be submitted to arbitration. It also states that, by agreeing to arbitration, "the parties understand and agree that they are waiving their rights to maintain other available resolution processes, such as a court action or administrative proceeding, to settle their disputes."

Furthermore, as the court noted in its decision on the record, plaintiff is a well-educated individual who teaches in an elementary school. She testified at her deposition that she was given an opportunity to review the arbitration agreement and no one prevented her from doing so. The record shows that plaintiff entered into the agreement knowingly and willingly. We are satisfied that plaintiff was bound by her agreement to arbitrate the claims arising from the lease of the 2008 Pontiac.

Plaintiff nevertheless argues that the trial court erred by failing to weigh the policies of the CFA against the policies that favor arbitration. We disagree. "There is no inherent conflict between arbitration and the underlying purposes of the CFA." Gras v. Assocs. First Capital Corp., 346 N.J. Super. 42, 49, 52 (App. Div. 2001). Indeed, claims brought under the CFA may be resolved through arbitration. Id. at 52 (citing Cybul v. Atrium Palace Syndicate, 272 N.J. Super. 330, 335 (App. Div.), certif. denied, 137 N.J. 311 (1994)).

While the courts will enforce an agreement to arbitrate claims under the CFA, such an agreement must be expressed in unambiguous terms. Rockel v. Cherry Hill Dodge, 368 N.J. Super. 577, 583 (App. Div.), certif. denied, 181 N.J. 545 (2004)). Here, the arbitration agreement is clear and unambiguous. Furthermore, the agreement expressly covers all statutory claims including claims under the CFA.

Plaintiff additionally argues that the trial court's order should be reversed because defendants waived their right to enforce the arbitration agreement. Plaintiff contends that defendants failed to invoke the arbitration agreement within a reasonable time. We are satisfied, however, that defendants did not waive their right to seek enforcement of the arbitration agreement.

In their answer, defendants raised the arbitration agreement as a separate defense. Defendants made clear when they filed their first motion to dismiss that they were pursuing this issue. The motion was denied without prejudice. At plaintiff's deposition, she was questioned about the arbitration agreement and defendants' attorney stated that he was going to file another motion to dismiss on the basis of that agreement.

Even though the motion was filed after the matter was submitted to the court's arbitration process, defendants never indicated that they were waiving their right to seek contractual arbitration. In addition, the record does not support plaintiff's assertion that defendants were merely attempting to get another "bite at the apple" by seeking to compel plaintiff to submit her claims to contractual arbitration.


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