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Steven Cozzolino v. Michael Cozzolino

December 10, 2012

STEVEN COZZOLINO, PLAINTIFF-RESPONDENT,
v.
MICHAEL COZZOLINO, DEFENDANT-APPELLANT.



On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-10417-10.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued April 24, 2012

Before Judges Baxter, Nugent and Carchman.

Defendant Michael Cozzolino appeals from the Law Division order that granted relief to his brother, plaintiff Steven Cozzolino, entered judgment on a third supplemental arbitration award, and denied Michael's*fn1 application to vacate that award. Michael contends the arbitrator exceeded his authority when he determined that a lease involving the parties' businesses was not "triple net," despite having made that determination in his initial award; and by ordering that the new lease include renewal options and a purchase option. The trial court rejected Michael's arguments and confirmed the award. Having considered Michael's arguments in view of the record, we conclude that the arbitrator acted within his powers. We further conclude that Michael waived his right to seek appellate review of the arbitrator's decision. Accordingly, we dismiss his appeal.

I.

Steven and Michael co-owned three businesses: Cozzolino Furniture Design, Inc. (Cozzolino Furniture), COR Products, Inc. (COR), and 20 Standish, LLC (Standish). In June 2005, COR and Cozzolino Furniture entered into separate leases with Standish for commercial space to conduct their businesses. Approximately one and one-half years later, in November 2006, Cozzolino Furniture filed a Chapter 11 bankruptcy petition. The bankruptcy proceedings had not concluded by May 2008, at which time Cozzolino Furniture remained a debtor-in-possession under its lease with Standish. During that month, Steven and Michael agreed to arbitrate disputes that had arisen between them concerning their businesses. They also agreed to give the arbitrator full authority to decide all their disputes. Because Michael now challenges the scope of the arbitrator's authority, we recount the parties' discussions and written agreements concerning the scope of the arbitrator's powers.

After Steven and Michael decided to arbitrate their disputes, their attorneys made the following representations to the bankruptcy court before that court approved Cozzolino Furniture's reorganization plan.

THE COURT: . . . [I]s it fair to say, and I would ask this both of [Steven's counsel] Mr. Sirota and [Michael's counsel] Mr. Lodge, I think we have some agreement that there's an intent to arbitrate. I think what our disagreement is[,] is what that means?

MR. SIROTA: I think that if I read the opposition correctly, we don't even have a disagreement as to what that means. I would suggest, Judge, that the parties appear, once and for all have agreed to arbitrate, give [the arbitrator] carte blanche. . . .

[W]e're prepared to give [the arbitrator] carte blanche so that he can determine, in fact, whether there was a settlement, as well, since he's deciding everything else.

MR. LODGE: . . . We agree. We don't have any objection to an adjournment of the confirmation hearing. I spoke with [the arbitrator's] office this morning and June 16th and the 23rd are reserved for us, and so we're prepared to go forward. Now, I understand that we, both parties, Steven and Michael, are agreeing on the record here that we're giving [the arbitrator] carte blanche authority as to all issues. And --THE COURT: Okay. And I think that's the effect of your revised order, isn't it?

MR. LODGE: It is.

THE COURT: Yes.

MR. LODGE: It is. And so, I wouldn't say we necessarily need an order, but we don't have an objection to the entry of the order that we proposed, or we're happy to stand on the representations of the parties before this Court that both parties are giving [the arbitrator] carte blanche authority. [(emphasis added).]

Commenting on the need for an order, the judge stated, "to the extent that the order embodies also this Court's belief that the arbitration is an important prerequisite to this Court's ability to confirm a [reorganization] plan, then I think it's a good idea . . . ."

Four days later, Michael's attorney submitted a proposed order to the judge in an email stating, "[a]ttached is a proposed Order . . . . Counsel for Steven Cozzolino has agreed to the form of this order." The order provided in pertinent part:

2. [The arbitrator] is vested with full and complete discretion to render a decision that he, in his sole discretion, finds to be fair and equitable. The parties further agree that [the arbitrator] may render a decision that: (i) adopts one of the parties' positions, (ii) that is a variation on one of the parties' positions, (iii) that is a combination of both parties' positions, or (iv) that [the arbitrator] comes up with on his own.

3. [The arbitrator] is vested with full and complete discretion to decide all scheduling and discovery issues relating to the Arbitration.

4. The parties waive any and all rights of appeal or to in any way challenge [the arbitrator's] decision, which shall be conclusive and final in all respects; provided nothing herein shall not [sic] preclude [the arbitrator] ...


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