United States District Court, D. New Jersey
MATTHEW S. WOLF, on behalf of himself and all others similarly situated, Plaintiff,
NISSAN MOTOR ACCEPTANCE CORPORATION, Defendant.
Michael John DeBenedictis, Esquire, DeBenedictus & DeBenedictis LLC, Haddonfield, New Jersey.
Thomas T. Booth, Jr., Esquire, Law Offices of Thomas T. Booth, Jr., LLC, Voorhees, New Jersey, Counsel for Plaintiff.
William H. Grae, Esquire, The Chartwell Law Offices, LLP, Millburn, New Jersey, Counsel for Defendant.
NOEL L. HILLMAN, District Judge.
The Court previously entered an Order staying the instant proceedings and referring the matter to arbitration. Presently before the Court is Plaintiff's letter motion [Doc. No. 27] seeking to lift the stay and reopen this case based upon the purported failure of Defendant, Nissan Motor Acceptance Corporation, to submit the proper arbitration fee, which resulted in the matter being withdrawn from arbitration. Defendant filed opposition to the letter motion, and Plaintiff has filed a reply. The Court has considered the submissions of the parties and decides this matter pursuant to Federal Rule of Civil Procedure 78. For the reasons that follow, Plaintiff's motion will be denied.
The Court exercises jurisdiction over Plaintiff's federal claim pursuant to 28 U.S.C. § 1331, and may exercise supplemental jurisdiction over Plaintiff's state law claim under 28 U.S.C. § 1367.
This case involves a putative class action suit in which Plaintiff alleges, inter alia, violations of the Servicemembers Civil Relief Act, 50 U.S.C. §§ 501 et seq. (hereafter, "SCRA"). In November 2006, Plaintiff entered into an agreement to lease a 2007 Nissan Infiniti G35 Sedan for thirty-nine months. (Op. [Doc. No. 15] 2, June 22, 2011.) At the inception of the lease, Plaintiff paid $595 in "Capitalized Cost Reduction" (hereafter, "CCR"), an advance toward the lease's rent. (Id. at 3.) He also prepaid for other items which he could instead have paid on a monthly basis. (Id.) During the lease term, Plaintiff entered into active military service, returned the leased vehicle to Nissan, and invoked the SCRA. (Id.) Plaintiff contends in the complaint that the SCRA entitles military service members, like himself, to a prorated refund of lease payments made in advance. (Id.) Defendant, however, refused to refund to Plaintiff any prorated CCR payments. (Id.) Plaintiff then filed a putative class action in this Court. (Id.)
Based on an optional arbitration clause contained in the lease agreement, Defendant filed a motion to stay the instant proceedings and compel arbitration. In opposition to the motion, Plaintiff raised a number of challenges, including that the arbitration clause is unconscionable because it included a class action waiver.
On June 22, 2011, this Court entered an Opinion and Order granting Defendant's motion. The Court upheld the class action waiver provision in the arbitration clause, finding that the provision was not precluded either by the SCRA or New Jersey law. The Court did, however, strike two provisions in the arbitration clause concerning the payment of arbitration fees. Specifically, the arbitration clause contained a fee-shifting provision and an appeals provision which could be construed so as to require Plaintiff to shoulder the entire financial burden of the arbitration and appeal of his claims, irrespective of the outcome. (Op. [Doc. No. 15] 18-19, June 22, 2011.) The Court thus severed these unconscionable provisions but nonetheless found the arbitration clause otherwise valid and enforceable. (Id. at 19.) As such, the Court stayed the case and referred the matter to arbitration. (Id.)
On October 22, 2012, counsel for Defendant wrote to Plaintiff's counsel in an effort to initiate the arbitration process. Because the arbitration provision in the lease agreement provided Plaintiff an opportunity to choose the arbitration forum, defense counsel sought input as to whether Plaintiff preferred to arbitrate the matter through the American Arbitration Association (hereafter, "AAA"), the National Arbitration Forum, or JAMS. (Def.'s Ltr. Br. dated May 16, 2014 (hereafter, "Def.'s Ltr. Br.") [Doc. No. 30], Ex. A.) After receiving no response from Plaintiff, Defendant decided to submit the case to the AAA. (Decl. of James R. Bruinsma, Esq. (hereafter, "Bruinsma Decl.") [Doc. No. 30-1] ¶¶ 9-13.)
Before filing any papers with the AAA, however, counsel for Defendant represents that he obtained advice from the AAA as to the appropriate method to initiate arbitration. (Id. ¶ 13.) According to counsel, he sought such advice because of the unusual procedural circumstance in that Defendant - although filing the claim to initiate arbitration - was not the party seeking payment and thus was not the "claimant." (Id.) Defense counsel was purportedly advised to utilize the AAA's standard form and attach thereto those documents that Defendant believed set forth the nature of the case and its status. (Id. ¶ 14.) In January 2013, Defendant completed the standard form and attached Plaintiff's complaint, this Court's Order referring the matter to arbitration, and the arbitration clause between the parties. (Def.'s Ltr. Br., Ex. B.) Defendant determined that the dollar amount of the claim would be $600, and that the arbitration fee would be $775 based upon the AAA fee schedule, which was the standard fee for claims up to $10, 000. (Bruinsma Decl. ¶¶ 15-17.) Defendant submitted the $775 fee with the standard form.
By letter dated February 7, 2013, Defendant wrote to the AAA case manager advising that it should be designated as the "Respondent" in the proceeding rather than as the "Claimant" because it was not the party seeking payment. The letter specifically noted that "[t]his is not a claim by NMAC to collect a consumer's debt; rather, it is a claim by a consumer against NMAC for damages and other relief as outlined in his complaint." (Def.'s Ltr. Br., Ex. C.) Defendant also requested through this letter an in-person hearing with an arbitrator. (Id.) The AAA sent an invoice for an additional ...