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Medford Township School District v. Schneider Electric Buildings Americas, Inc.

Superior Court of New Jersey, Appellate Division

April 26, 2019

MEDFORD TOWNSHIP SCHOOL DISTRICT, Plaintiff-Respondent,
v.
SCHNEIDER ELECTRIC BUILDINGS AMERICAS, INC., Defendant-Appellant.

          Argued April 1, 2019

          On appeal from Superior Court of New Jersey, Law Division, Burlington County, Docket No. L-0787-18.

          Mark A. Rosen argued the cause for appellant (McElroy, Deutsch, Mulvaney & Carpenter, LLP, attorneys; Mark A. Rosen, of counsel and on the briefs).

          Richard W. Hunt argued the cause for respondent (Parker McCay PA, attorneys; Richard W. Hunt and John Neckonchuk, on the brief).

          Before Judges Messano, Fasciale and Rose.

          OPINION

          ROSE, J.A.D.

          Defendant Schneider Electric Buildings Americas, Inc. (Schneider) appeals from a July 3, 2018 Law Division order enjoining and dismissing arbitration proceedings filed against plaintiff Medford Township School District (District).[1] We affirm.

         I.

         The dispute arises from the implementation of an energy savings improvement program (ESIP), N.J.S.A. 18A:18A-4.6, under which the District contracted with Schneider to design and implement upgrades to several of the District's schools and its transportation and operations center. Initially, the parties executed the Performance Assurance Support Services Agreement (PASS Agreement), requiring the District to monitor the ESIP's actual energy savings and guaranteeing the District a certain level of monetary savings. The PASS Agreement did not contain an arbitration provision. Instead, its governing law clause provided, in pertinent part (emphasis added):

This PASS Agreement will be governed, interpreted and construed by, under and in accordance with the laws, statutes and decisions of the state in which the [s]ervices are to be performed, without regard to its choice of law provisions. Venue shall be in the federal, state or municipal courts serving the county in which the [s]ervices are performed.

         Thereafter, the District issued a request for proposals (RFP), seeking a qualified energy services company (ESC) to perform the services of a general contractor for its ESIP. Among other things, the RFP outlined the terms of the ESIP Agreement, including development and implementation of an energy savings plan. Paragraph 30 of the RFP contained a governing law clause, which stated verbatim (emphasis added):

The ESIP Agreement shall be governed by the laws of the State of New Jersey. The successful [ESC] shall agree that any action or proceeding that arises in any manner out of performance of the RFP or ESIP Agreement, shall be litigated in the Superior Court of New Jersey, Burlington County, State of New Jersey, and the [ESC] shall consent and submit to the jurisdiction of the Superior Court.

         After Schneider was awarded the project, the parties executed the Energy Services Construction Contract (ESCC).[2] Under the terms of the ESCC, the parties agreed that Schneider would be paid $2, 494, 575 for performing energy conservation measures, including lighting upgrades and building automation systems throughout the District.

         Article 5 of the ESCC contained a dispute resolution provision, which stated (emphasis added):

5.1 To the extent allowed by applicable law, any controversy or claim arising out of or relating to this [c]ontract, or [c]ontract [d]ocuments, or any breach thereof, may be settled by binding arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association [(AAA)], and judgment upon the award ...

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