NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-0974-20
LAVEAU CERVALIN,
Plaintiff-Appellant,
v.
UNIVERSAL GLOBAL, INC.,
d/b/a METRO HONDA, and
TRUIST BANK, f/k/a BRANCH
BANKING AND TRUST
COMPANY,1
Defendants-Respondents.
___________________________
Submitted June 8, 2021 – Decided July 6, 2021
Before Judges Fisher, Gilson, and Gummer.
On appeal from the Superior Court of New Jersey, Law
Division, Hudson County, L-1085-20.
1
Plaintiff named as a defendant "Branch Banking and Trust Company a/k/a
BB&T." Truist Bank answered on behalf of that defendant, stating it was
formerly known as Branch Banking and Trust Company (BB&T) and had been
improperly pleaded as "Branch Banking and Trust Company a/k/a BB&T."
Based on that unchallenged representation, we amend the caption accordingly.
Houston & Totaro, attorneys for appellant (Madeline L.
Houston and Melissa J. Totaro, on the briefs).
Piro Zinna Cifelli Paris & Genitempo, LLC, attorneys
for respondent Universal Global, Inc., and co-counsel
for respondent Truist Bank; and Ballard Spahr, LLP,
co-counsel for respondent Truist Bank (Todd M.
Galante, Brian Frankoski, and William P. Reiley, on the
joint brief).
PER CURIAM
Plaintiff appeals an order compelling arbitration and dismissing with
prejudice his complaint. Because the language of the parties' agreements clearly
sets forth an intent to arbitrate, we affirm the aspect of the order compelling
arbitration. We reverse the aspect of the order dismissing the complaint with
prejudice because the appropriate procedural step was to stay the case pending
the arbitration, not to dismiss it with prejudice, and remand with a direction that
a new order be entered compelling arbitration and staying the action pending
conclusion of those proceedings.
I.
Plaintiff purchased a used 2016 Honda Pilot from defendant Universal
Global, Inc., d/b/a Metro Honda (Metro). As part of the transaction, plaintiff
and Metro entered into and executed two agreements, both of which had an
A-0974-20
2
arbitration clause. The Motor Vehicle Retail Order contained the following
arbitration clause:
AGREEMENT TO ARBITRATE ALL CLAIMS.
READ THE FOLLOWING ARBITRATION
PROVISION CAREFULLY, IT LIMITS YOUR
RIGHTS, AND WAIVES THE RIGHT TO
MAINTAIN A COURT ACTION, OR TO PURSUE A
CLASS ACTION IN COURT AND IN
ARBITRATION.
The parties to this agreement agree to arbitrate all
claims, disputes, or controversies, including all
statutory claims and any state or federal claims
("claims"), that may arise out of or relating to this
agreement and the sale or lease identified in this
agreement. By agreeing to arbitrate, the parties
understand and agree that they are giving up their rights
to use other available resolution processes, such as a
court action or administrative proceeding, to resolve
their disputes. Further, the parties understand that they
may not pursue any claim, even in arbitration, on behalf
of a class or to consolidate their claim with those of
other persons or entitles. Consumer Fraud, Used Car
Lemon Law, and Truth-in-Lending claims are just three
examples of the various types of statutory claims
subject to arbitration under this agreement. The
arbitration shall be administered by the American
Arbitration Association under its Consumer Arbitration
Rules, before a single arbitrator who shall be a retired
judge or an attorney. Dealership shall advance both
party's filing, service, administration, arbitrator,
hearing, and 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
A-0974-20
3
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 agreement
is found to be unenforceable for any reason, the
remaining provisions shall remain enforceable. In the
event that any claims are based on a lease, finance, or
other agreement between the parties related to this sale
or lease as well as this agreement, and if such lease,
finance or other agreement contains a provision for
arbitration of claims which conflicts with or is
inconsistent with this arbitration provision, the terms of
such other arbitration provision shall govern and
control. THIS ARBITRATION PROVISION LIMITS
YOUR RIGHTS, AND WAIVES THE RIGHT TO
MAINTAIN A COURT ACTION OR PURSUE A
CLASS ACTION IN COURT OR IN ARBITRATION.
PLEASE READ IT CAREFULLY, PRIOR TO
SIGNING.
Plaintiff signed directly below the arbitration.
Plaintiff and Metro also executed a document entitled "RETAIL
INSTALLMENT SALE CONTRACT – SIMPLE FINANCE CHARGE (WITH
ARBITRATION PROVISION)" (finance contract), which stated on the first
page, "[b]y signing this contract, you choose to buy the vehicle on credit under
the agreements in this contract." The finance contract contained the following
language on the first page directly above plaintiff's signature:
Agreement to Arbitrate: By signing below, you agree
that, pursuant to the Arbitration Provision on page 5 of
this contract, you or we may elect to resolve any dispute
A-0974-20
4
by neutral, binding arbitration and not by a court action.
See the Arbitration Provision for additional information
concerning the agreement to arbitrate.
The fifth page of that contract contained an arbitration clause, which provided
in part:
ARBITRATION PROVISION
PLEASE REVIEW – IMPORTANT – AFFECTS
YOUR LEGAL RIGHTS
1. EITHER YOU OR WE MAY CHOOSE TO HAVE
ANY DISPUTE BETWEEN US DECIDED BY
ARBITRATION AND NOT IN COURT OR BY JURY
TRIAL.
2. IF A DISPUTE IS ARBITRATED, YOU WILL
GIVE UP YOUR RIGHT TO PARTICIPATE AS A
CLASS REPRESENTATIVE OR CLASS MEMBER
ON ANY CLASS CLAIM YOU MAY HAVE
AGAINST US INCLUDING ANY RIGHT TO CLASS
ARBITRATION OR ANY CONSOLIDATION OF
INDIVIDUAL ARBITRATIONS.
3. DISCOVERY AND RIGHTS TO APPEAL IN
ARBITRATION ARE GENERALLY MORE
LIMITED THAN IN A LAWSUIT, AND OTHER
RIGHTS THAT YOU AND WE WOULD HAVE IN
COURT MAY NOT BE AVAILABLE IN
ARBITRATION.
Any claim or dispute, whether in contract, tort, statute
or otherwise (including the interpretation and scope of
this Arbitration Provision, and the arbitrability of the
claim or dispute), between you and us . . . , which arises
out of or relates to your credit application, purchase or
A-0974-20
5
condition of this vehicle, this contract or any resulting
transaction or relationship . . . shall, at your or our
election, be resolved by neutral, binding arbitration and
not by a court action. . . . Any claim or dispute is to be
arbitrated by a single arbitrator on an individual basis
and not as a class action. . . . You may choose the
American Arbitration Association, 1633 Broadway,
10th Floor, New York, New York 10019
(www.adr.org), or any other organization to conduct the
arbitration subject to our approval. You may get a copy
of the rules of an arbitration organization by contacting
the organization or visiting its website. Arbitrators
shall be attorneys or retired judges and shall be selected
pursuant to applicable rules. . . . Any arbitration under
this Arbitration Provision shall be governed by the
Federal Arbitration Act (9 U.S.C. § 1 et. seq.) and not
by any state law concerning arbitration. Any award by
the arbitrator shall be in writing and will be final and
binding on all parties, subject to any limited right to
appeal under the Federal Arbitration Act.
Plaintiff signed the bottom of the page containing the arbitration clause. Metro
subsequently assigned the finance contract to BB&T.
According to plaintiff, after he purchased the car, he discovered it "had
serious pre-existing and undisclosed physical damage." He reported the damage
to Metro, which "refused to repair the damage or offer any other type of relief
to plaintiff."
Plaintiff filed a complaint, naming Metro and BB&T as defendants.
Pleading common-law fraud and violations of the New Jersey Consumer Fraud
Act, N.J.S.A. 56:8-1 to -226 (CFA), and the Magnuson-Moss Warranty —
A-0974-20
6
Federal Trade Commission Improvement Act, 15 U.S.C. §§ 2301 to 2312
(MMWA), plaintiff alleged Metro: (1) sold him the car at a higher price than
advertised; (2) orally agreed to one price but included additional charges
improperly or unbeknownst to him; and (3) made misrepresentations in regard
to the car's condition and history of damage and whether it qualified as a Honda
certified pre-owned vehicle. After filing answers, defendants moved to compel
arbitration and stay the case. Plaintiff opposed the motion, arguing the
arbitration clauses were unenforceable because they contained conflicting and
unclear provisions and were displayed in an inconspicuous manner and that,
even if the motion judge found the clauses to be enforceable, the MMWA claim
was not subject to arbitration.
In a written order and opinion, the motion judge granted the aspect of
defendants' motion seeking to compel arbitration and dismissed the complaint
with prejudice. The motion judge found "the two arbitration provisions are clear
and unambiguous waivers of right to seek judicial remedy and therefore are
enforceable" and any differences in the arbitration clauses were resolved by the
supersession clause of the Retail Order, which provided that if a finance
agreement "contain[ed] a provision for arbitration of claims which conflicts with
or is inconsistent with this arbitration provision, the terms of such other
A-0974-20
7
arbitration provision shall govern and control." The motion judge rejected
plaintiff's argument that the MMWA claim could not be compelled to binding
arbitration, citing Davis v. S. Energy Homes, Inc., 305 F.3d 1268 (11th Cir.
2002). The motion judge noted defendants had requested a stay pending
arbitration but "dismisse[d] this action in recognizing that the arbitration is
binding." Plaintiff appeals that decision, making the same arguments he made
to the motion judge and asserting the Retail Order's supersession clause does not
resolve the differences between the arbitration clauses.
II.
We review de novo an order compelling arbitration. Skuse v. Pfizer, Inc.,
244 N.J. 30, 46 (2020); see also Kernahan v. Home Warranty Adm'r of Fla., Inc.,
236 N.J. 301, 316 (2019) ("Whether a contractual arbitration provision is
enforceable is a question of law, and we need not defer to the interpretative
analysis of the trial . . . court[] unless we find it persuasive."). When reviewing
orders about arbitration, we recognize arbitration is a "favored means of dispute
resolution," Hojnowski v. Vans Skate Park, 187 N.J. 323, 342 (2006), and "are
mindful of the strong preference to enforce arbitration agreements, both at the
state and federal level." Hirsch v. Amper Fin. Servs., LLC, 215 N.J. 174, 186
A-0974-20
8
(2013); see also Flanzman v. Jenny Craig, Inc., 244 N.J. 119, 133 (2020)
(recognizing federal and state policy favoring arbitration).
The Retail Order states it is governed by New Jersey law; the arbitration
provision in the finance contract states it is governed by the Federal Arbitration
Act, 9 U.S.C. §§ 1 to 16 (FAA). Under either law, we apply New Jersey
contract-law principles. Under the FAA, arbitration is a creature of contract. 9
U.S.C. § 2; Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63, 67 (2010); see also
Hirsch, 215 N.J. at 187 (explaining that under New Jersey law, arbitration is also
a creature of contract). "[T]he FAA 'permits states to regulate . . . arbitration
agreements under general contract principles,' and a court may invalidate an
arbitration clause 'upon such grounds as exist at law or in equity for the
revocation of any contract.'" Atalese v. U.S. Legal Servs. Grp., L.P., 219 N.J.
430, 441 (2014) (quoting Martindale v. Sandvik, Inc., 173 N.J. 76, 85 (2002)).
In determining whether a valid agreement to arbitrate exists, we apply
"state contract-law principles." Hojnowski, 187 N.J. at 342; see also Kernahan,
236 N.J. at 317-18. Under those principles, "[a]n arbitration agreement is valid
only if the parties intended to arbitrate because parties are not required 'to
arbitrate when they have not agreed to do so.'" Kernahan, 236 N.J. at 317
(quoting Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Junior Univ.,
A-0974-20
9
489 U.S. 468, 478 (1989)). Thus, our first inquiry is whether the parties
actually and knowingly agreed to arbitrate their dispute. Ibid.; see also Atalese,
219 N.J. at 442.
That inquiry begins with the language of the arbitration clauses. To reflect
mutual assent to arbitrate, the terms must be "sufficiently clear to place a
consumer on notice that he or she is waiving a constitutional or statutory right."
Atalese, 219 N.J. at 443. "No particular form of words is necessary to
accomplish a clear and unambiguous waiver of rights." Id. at 444; see also
Flanzman, 244 N.J. at 137. If "at least in some general and sufficiently broad
way" the language of the clause conveys that arbitration is a waiver of the right
to bring suit in a judicial forum, the clause will be enforced. Id. at 447; see also
Arafa v. Health Express Corp., 243 N.J 147, 172 (2020) (finding jury trial waiver
"was knowing and voluntary in light of . . . broad agreement to resolve 'all
disputes' between the parties through binding arbitration").
Applying those principles to the arbitration clauses at issue, we agree with
the motion judge that the two arbitration provisions are clear and unambiguous
waivers of the right to seek judicial remedy and are enforceable. The arbitration
clause in the Retail Order begins in capital letters, telling the buyer to read the
arbitration provision "CAREFULLY" and advising "IT LIMITS YOUR
A-0974-20
10
RIGHTS, AND WAIVES THE RIGHT TO MAINTAIN A COURT ACTION."
It goes on to state the parties "agree to arbitrate all claims, disputes, or
controversies, including all statutory claims and any state or federal claims
("claims"), that may arise out of or relating to this agreement and the sale or
lease identified in this agreement."
The arbitration clause of the finance contract also contains sufficiently
broadly-worded and clear language regarding the waiver of a right to proceed in
court. It asks the buyer to "PLEASE REVIEW" the clause, saying it is
"IMPORTANT" and "AFFECTS YOUR LEGAL RIGHTS." It explains the
clause means "ANY DISPUTE" will be "DECIDED BY ARBITRATION AND
NOT IN COURT OR BY JURY TRIAL." Plaintiff faults the language of the
finance contract for not being sufficiently absolute, claiming by saying
"EITHER YOU OR WE MAY CHOOSE" arbitration, the provision is somehow
vague. We find that argument unpersuasive, especially when it disregards
additional language in the clause stating any claim or dispute "shall" be resolved
"by neutral, binding arbitration and not by a court action" if arbitration is elected
by either party. Plaintiff's additional arguments faulting the finance contract's
arbitration clause are equally unpersuasive and do nothing to diminish the clear
language waiving the right to seek a judicial remedy.
A-0974-20
11
Plaintiff criticizes the two clauses for being inconsistent. Any
inconsistencies are of no consequence, especially considering that plaintiff in
opposing defendants' motion certified he had made no effort to read the
arbitration clauses. See Roman v. Bergen Logistics, LLC, 456 N.J. Super. 157,
175 (App. Div. 2018) (finding "unavailing" the plaintiff's claims "she was
unable to read or understand" an agreement containing an arbitration clause she
had executed). Moreover, any inconsistencies are resolved by the supersession
clause contained in the Retail Order:
In the event that any claims are based on a lease,
finance, or other agreement between the parties related
to this sale or lease as well as this agreement, and if
such lease, finance or other agreement contains a
provision for arbitration of claims which conflicts with
or is inconsistent with this arbitration provision, the
terms of such other arbitration provision shall govern
and control.
The supersession clause directly precedes the following language:
THIS ARBITRATION PROVISION LIMITS YOUR
RIGHTS, AND WAIVES THE RIGHT TO
MAINTAIN A COURT ACTION OR PURSUE A
CLASS ACTION IN COURT OR IN ARBITRATION.
PLEASE READ IT CAREFULLY, PRIOR TO
SIGNING.
Plaintiff executed the document just below that language. The purpose of the
supersession clause is to resolve inconsistencies, and its meaning is clear: if a
A-0974-20
12
claim is "based on" the Retail Order and another agreement, and those
agreements contain arbitration clauses that differ, the provisions of the other
agreement will govern. A reasonable consumer reading each document would
have a clear understanding of which provision applied. Plaintiff attempts to
create an ambiguity out of the clause's use of the phrase "based on," but we see
no ambiguity in that simple language.
Plaintiff's reliance on Rockel v. Cherry Hill Dodge, 368 N.J. Super. 577
(App. Div. 2004), which was decided before Atalese, is misplaced. Rockel
involved a car sale with two contracts containing arbitration clauses. The
arbitration clause in the retail order in that case was only fifty-five words long
and contained no clear reference to a waiver of the right to maintain a court
action. The finance contract in that case was "far more expansive," even
extending the right to compel arbitration to non-parties. Id. at 582. Those
differences are not present here. The minor differences that may exist are
resolved by the supersession clause and are not sufficient to overcome the clear
language waiving the right to sue.
We now turn to plaintiff's MMWA claims. Plaintiff faults the motion
judge for "defer[ing] to the Davis [c]ourt's findings that MMWA claims may be
subject to binding arbitration." Defendants tell us we need not decide if the
A-0974-20
13
MMWA claims are subject to arbitration because the arbitration clauses delegate
to the arbitrator the authority to make that decision. In reply, plaintiff asserts
both parties briefed the delegation issue and the motion judge "decided" the
issue in plaintiff's favor.
We don't have copies of those briefs,2 but here's what we know: the
motion judge determined the MMWA-claim arbitrability issue, thereby
effectively rejecting any argument that the arbitrability decision was delegated
to the arbitrator. Defendant did not cross-appeal the motion judge's decision to
decide that issue. Accordingly, we decline to address the delegation issue.
Reich v. Borough of Fort Lee Zoning Bd. of Adjustment, 414 N.J. Super. 483,
499 n.9 (App. Div. 2010) (finding "a respondent must cross-appeal to obtain
relief"). Instead, we assume – without deciding – that the judge held the
arbitrability of the MMWA was a matter for the court to decide.
2
The motion judge summarized defendant's response to plaintiff's MMWA
argument as "cit[ing]" Davis, 305 F.3d 1268, and Walton v. Rose Mobile Homes
LLC, 298 F.3d 470, 475 (5th Cir. 2002). The judge made no mention of any
argument based on a delegation of the issue to the arbitrator. See Morgan v.
Sanford Brown Inst., 225 N.J. 289, 306 (2016) (noting defendants had not
argued to the motion court "it lacked jurisdiction to decide whether the parties
agreed to arbitration because that role was for the arbitrator alone" but instead
filed a brief seeking an order compelling arbitration).
A-0974-20
14
On the issue of whether the MMWA claim is subject to arbitration, we
agree with the motion judge's decision to follow Davis, 305 F.3d 1268, which is
one of the vast majority of cases finding MMWA claims to be arbitrable
compared to the handful of cases finding them to be not arbitrable. Compare id.
at 1280; Walton, 298 F.3d 470; Krusch v. TAMKO Bldg. Prods., Inc., 34 F.
Supp. 3d 584, 594-95 (M.D.N.C. 2014); In re Apple iPhone 3G Prods. Liab.
Litig., 859 F. Supp. 2d 1084, 1090-91 (N.D. Ca. 2012); Jones v. Gen. Motors
Corp., 640 F. Supp. 2d 1124, 1135-44 (D. Ariz. 2009); Patriot Mfg., Inc. v.
Dixon, 399 F. Supp. 2d 1298, 1306-07 (S.D. Ala. 2005); Dombrowski v. Gen.
Motors Corp., 318 F. Supp. 2d 850, 850-51 (D. Ariz. 2004); Pack v. Damon
Corp., 320 F. Supp. 2d 545, 558 (E.D. Mich. 2004), rev'd in part on other
grounds, 434 F.3d 810 (6th Cir. 2006); Patriot Mfg., Inc. v. Jackson, 929 So. 2d
997, 1005-06 (Ala. 2005); S. Energy Homes, Inc. v. Ard, 772 So. 2d 1131, 1135
(Ala. 2000); Results Oriented, Inc. v. Crawford, 538 S.E.2d 73, 81 (Ga. Ct. App.
2000), aff'd, Crawford v. Results Oriented, Inc., 548 S.E.2d 342 (Ga. 2001);
Borowiec v. Gateway 2000, Inc., 808 N.E.2d 957, 970 (Ill. 2004); Walker v.
DaimlerChrysler Corp., 856 N.E.2d 90, 93 (Ind. Ct. App. 2006); Hemphill v.
Ford Motor Co., 206 P.3d 1, 12 (Kan. Ct. App. 2009); Howell v. Cappaert
Manufactured Hous., Inc., 819 So. 2d 461, 464 (La. Ct. App. 2002); Abela v.
A-0974-20
15
Gen. Motors Corp., 677 N.W.2d 325, 327-28 (Mich. 2004); and In re Am.
Homestar of Lancaster, Inc., 50 S.W.3d 480, 492 (Tex. 2001), with Rickard v.
Teynor's Homes, Inc., 279 F. Supp. 2d 910 (N.D. Ohio 2003); Browne v. Kline
Tysons Imps., Inc., 190 F. Supp. 2d 827 (E.D. Va. 2002); Pitchford v. Oakwood
Mobile Homes, Inc., 124 F. Supp. 2d 958 (W.D. Va. 2000); Raesly v. Grand
Hous., Inc., 105 F. Supp. 2d 562, 573 (S.D. Miss. 2000); Wilson v. Waverlee
Homes, Inc., 954 F. Supp. 1530 (M.D. Ala. 1997); Koons Ford of Baltimore,
Inc. v. Lobach, 919 A.2d 722 (Md. 2007); and Parkerson v. Smith, 817 So. 2d
529 (Miss. 2002). 3
We do not follow the majority blindly or just because it is the majority.
We follow the majority because we agree that (1) "the text, legislative history,
and purpose of the MMWA do not evince a congressional intent to bar
arbitration of MMWA written warranty claims," Walton, 298 F.3d at 478; and
(2) we are not bound by the "unreasonable" interpretation of the MMWA by the
Federal Trade Commission (FTC), Davis, 305 F.3d at 1280, which reflects the
FTC's "skepticism" toward arbitration, Jones, 640 F. Supp. 2d at 1141, and is
3
We do not include in this list unpublished cases, R. 1:36-3, or Kolev v.
Euromotors West/The Auto Gallery, 658 F.3d 1024 (9th Cir. 2011), withdrawn,
676 F.3d 867 (9th Cir. 2012), on which plaintiff relies even though it was
expressly withdrawn by the Ninth Circuit.
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16
counter to federal policy favoring arbitration. See id. at 1141-42 ("The Supreme
Court has been quite clear that such innate suspicion of arbitration is not
sufficient to render arbitration agreements unenforceable") (citing
Shearson/American Express Inc. v. McMahon, 482 U.S. 220, 226 (1987))
("[W]e are well past the time when judicial suspicion of the desirability of
arbitration and of the competence of arbitral tribunals should inhi bit the
enforcement of the [FAA] in controversies based on statutes"); see also
Flanzman, 244 N.J. at 133 (finding "the federal policy expressed by Congress in
the FAA" and the legislative and judicial policy of our state favor arbitration).
To the extent we do not address any other arguments made by plaintiff, it
is because we find insufficient merit in them to warrant discussion in a written
opinion. See R. 2:11-3(e)(1)(E).
III.
We affirm the aspect of the order compelling arbitration. We reverse the
aspect of the order dismissing the case with prejudice. See N.J.S.A. 2A:23B-
7(g) (stating "[i]f the court orders arbitration, the court on just terms shall stay
any judicial proceeding that involves a claim subject to the arbitration."); see
also 9 U.S.C. § 3 (stating a court action should be stayed if the action involves
"any issue referable to arbitration"). We remand for entry of a new order and
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17
direct that the new order compel arbitration and stay the civil action pending
those proceedings.
Affirmed in part, reversed in part, and remanded. We do not retain
jurisdiction.
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