NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ."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-1788-22
56 EASTON REDEV LLC,
Plaintiff-Respondent,
v.
DR. RASIK JIVANI, M.D., NIRAJ JIVANI, and STEAK SHACK LLC,
Defendants-Appellants. ___________________________
Submitted October 17, 2023 – Decided January 17, 2024
Before Judges Sumners and Smith.
On appeal from the Superior Court of New Jersey, Chancery Division, Middlesex County, Docket No. C-000112-22.
Blick Law LLC, attorneys for appellants (Charles D. Whelan, III, and Shaun I. Blick, on the briefs).
Kelso and Burgess, attorneys for respondent (Kurt J. Trinter, on the brief).
PER CURIAM In this commercial tenancy dispute, plaintiff, owner of 56B Easton Ave.
in New Brunswick (the property), filed a verified complaint and order to show
cause in the Chancery Division against its tenants, defendants Dr. Rasik Jivani,
M.D., Niraj Jivani, and Steak Shack LLC. Plaintiff alleged multiple violations
of the parties' lease agreement and sought temporary restraints, a declaratory
judgment for an order of possession, and damages for nonpayment of rent, lease
violations, breach of the covenant of good faith and fair dealing, fraud, and
unjust enrichment.
Defendants moved to dismiss the complaint, contending the parties' lease
agreement mandated that the dispute be resolved through arbitration. In
interlocutory and reconsideration orders, Judge Thomas D. McCloskey denied
the request and ordered the dispute be resolved by the court. We conclude there
is no basis to disturb the orders and affirm substantially for the reasons
expressed by the judge in his comprehensive and cogent oral decision.
Before the current dispute, the prior property owner filed three lawsuits
against defendants leading to appeals to this court; two culminated in
unpublished decisions by this court and the other resulted in a settlement and
A-1788-22 2 voluntary dismissal.1 Although those actions may provide some relevant
background to the present litigation, we need not discuss them. We also need
not detail the procedural history in this lawsuit regarding the judge's orders
issuing temporary restraints against defendants; granting preliminary relief and
final injunctive relief to plaintiff; awarding compensatory damages to plaintiff;
allowing plaintiff to seek additional compensatory damages upon inspection of
the property for any physical damage caused by defendants; and granting
plaintiff's motion to strike defendants' answer. Rather, we limit our discussion
to the sole issue appealed: whether the lease agreement requires arbitration.
As a preliminary matter, we reject plaintiff's contention that the order
denying defendants' motion to dismiss was interlocutory and therefore not
appealable without leave of this court because they did not move to compel
arbitration. Although defendants did not file a motion to compel arbitration with
their motion to dismiss, Judge McCloskey properly inferred defendants' motion
to dismiss based on the lease agreement's arbitration provision was effectively
a motion to dismiss for lack of subject matter jurisdiction under Rule 4:6-2(a).
1 Unpublished opinions: Fernandes v. Jivani, No. A-3404-16 (App. Div. Apr. 30, 2018) and Fernandes v. Jivani, No. A-3560-17 (App. Div. Jan. 8, 2020); Dismissal: Fernandes v. Jivani, No. A-003121-19.
A-1788-22 3 The judge dismissed defendants' contention that the court did not have subject
matter jurisdiction over plaintiff's claims, determining the lease agreement's
arbitration provision was not enforceable, and then adjudicated the merits of
those claims. There was nothing erroneous with the judge's issuance of an
interlocutory order denying arbitration and deciding the case. See GMAC v.
Pittella, 205 N.J. 572, 575 (2011) ("[A]ny order compelling or denying
arbitration shall be deemed final for purposes of appeal, but that the trial court
shall retain jurisdiction to address other issues pending the appeal."). Because
the order denied the request to compel arbitration, it is appealable as of right
under Rule 2:2-3(b)(8).
Turning to the merits, defendants argue the judge erred in not enforcing
the lease agreement's arbitration provision. Based on our de novo review of the
judge's denial of defendants' motion to dismiss, Int'l Bhd. of Elec. Workers Loc.
400 v. Borough of Tinton Falls, 468 N.J. Super. 214, 223 (App. Div. 2021), we
disagree.
The parties were both assignees of the lease agreement and stepped into
the shoes of the original signatories. Thus, they are equally bound by its terms.
See Satellite Gateway Commc'ns, Inc. v. Musi Dining Car Co., 110 N.J. 280,
287 (1988). Article 34 of the lease states tenants "waive[] all right to trial by
A-1788-22 4 jury in any action or summary or other judicial proceeding hereafter instituted
by [l]andlord against [them] in respect to the demised premises." Article 38
provides "[a]ny controversy arising under, out of, in connection with, or relating
to this [l]ease or the breach hereof, shall be determined and settled by arbitration
held in Newark, New Jersey, in accordance with the rules of the American
Arbitration Association." It further sets forth the proper procedures to obtain
relief through arbitration and states "[a]ny award rendered thereunder shall be
final and binding upon all parties and judgment may be entered thereon in any
court having jurisdiction."
Given these provisions, the judge ruled the lease did not contain a clear
and unambiguous waiver of the parties' right to pursue a claim in court, as
required by Flanzman v. Jenny Craig, Inc., 244 N.J. 119, 137 (2020) (citing
Atalese v. U.S. Legal Servs. Grp., L.P., 219 N.J. 430, 443 (2014)). The judge
reasoned:
[T]he language of the arbitration provision . . . contains no such articulation of the difference between the civil litigation proceeding or arbitration. And, frankly, it's certainly contemplated that there would be litigation pursuant to the provisions of Article 34 if the landlord undertook action to seek possession of the premises in respect of which the tenant would waive a right to a jury trial. That's what that says in that paragraph.
A-1788-22 5 The judge further cited Dispenziere v. Kushner Cos., where this court
concluded "[a] clause depriving a citizen of access to the courts should clearly
state its purpose." 438 N.J. Super. 11, 17 (App. Div. 2014) (quoting Atalese,
219 N.J. at 444). In turn, the judge reasoned the arbitration provision was
unenforceable because it "does not explain what arbitration is" or "indicate how
arbitration is different from a proceeding in a court of law." Id. at 18 (quoting
Atalese, 219 N.J. at 446-47). Having made this finding, the judge next
determined that Article 34's waiver of jury trial rights did not sufficiently create
an enforceable arbitration right encompassing the entire lease.
In addition, even if the arbitration provision was enforceable, the judge
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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-1788-22
56 EASTON REDEV LLC,
Plaintiff-Respondent,
v.
DR. RASIK JIVANI, M.D., NIRAJ JIVANI, and STEAK SHACK LLC,
Defendants-Appellants. ___________________________
Submitted October 17, 2023 – Decided January 17, 2024
Before Judges Sumners and Smith.
On appeal from the Superior Court of New Jersey, Chancery Division, Middlesex County, Docket No. C-000112-22.
Blick Law LLC, attorneys for appellants (Charles D. Whelan, III, and Shaun I. Blick, on the briefs).
Kelso and Burgess, attorneys for respondent (Kurt J. Trinter, on the brief).
PER CURIAM In this commercial tenancy dispute, plaintiff, owner of 56B Easton Ave.
in New Brunswick (the property), filed a verified complaint and order to show
cause in the Chancery Division against its tenants, defendants Dr. Rasik Jivani,
M.D., Niraj Jivani, and Steak Shack LLC. Plaintiff alleged multiple violations
of the parties' lease agreement and sought temporary restraints, a declaratory
judgment for an order of possession, and damages for nonpayment of rent, lease
violations, breach of the covenant of good faith and fair dealing, fraud, and
unjust enrichment.
Defendants moved to dismiss the complaint, contending the parties' lease
agreement mandated that the dispute be resolved through arbitration. In
interlocutory and reconsideration orders, Judge Thomas D. McCloskey denied
the request and ordered the dispute be resolved by the court. We conclude there
is no basis to disturb the orders and affirm substantially for the reasons
expressed by the judge in his comprehensive and cogent oral decision.
Before the current dispute, the prior property owner filed three lawsuits
against defendants leading to appeals to this court; two culminated in
unpublished decisions by this court and the other resulted in a settlement and
A-1788-22 2 voluntary dismissal.1 Although those actions may provide some relevant
background to the present litigation, we need not discuss them. We also need
not detail the procedural history in this lawsuit regarding the judge's orders
issuing temporary restraints against defendants; granting preliminary relief and
final injunctive relief to plaintiff; awarding compensatory damages to plaintiff;
allowing plaintiff to seek additional compensatory damages upon inspection of
the property for any physical damage caused by defendants; and granting
plaintiff's motion to strike defendants' answer. Rather, we limit our discussion
to the sole issue appealed: whether the lease agreement requires arbitration.
As a preliminary matter, we reject plaintiff's contention that the order
denying defendants' motion to dismiss was interlocutory and therefore not
appealable without leave of this court because they did not move to compel
arbitration. Although defendants did not file a motion to compel arbitration with
their motion to dismiss, Judge McCloskey properly inferred defendants' motion
to dismiss based on the lease agreement's arbitration provision was effectively
a motion to dismiss for lack of subject matter jurisdiction under Rule 4:6-2(a).
1 Unpublished opinions: Fernandes v. Jivani, No. A-3404-16 (App. Div. Apr. 30, 2018) and Fernandes v. Jivani, No. A-3560-17 (App. Div. Jan. 8, 2020); Dismissal: Fernandes v. Jivani, No. A-003121-19.
A-1788-22 3 The judge dismissed defendants' contention that the court did not have subject
matter jurisdiction over plaintiff's claims, determining the lease agreement's
arbitration provision was not enforceable, and then adjudicated the merits of
those claims. There was nothing erroneous with the judge's issuance of an
interlocutory order denying arbitration and deciding the case. See GMAC v.
Pittella, 205 N.J. 572, 575 (2011) ("[A]ny order compelling or denying
arbitration shall be deemed final for purposes of appeal, but that the trial court
shall retain jurisdiction to address other issues pending the appeal."). Because
the order denied the request to compel arbitration, it is appealable as of right
under Rule 2:2-3(b)(8).
Turning to the merits, defendants argue the judge erred in not enforcing
the lease agreement's arbitration provision. Based on our de novo review of the
judge's denial of defendants' motion to dismiss, Int'l Bhd. of Elec. Workers Loc.
400 v. Borough of Tinton Falls, 468 N.J. Super. 214, 223 (App. Div. 2021), we
disagree.
The parties were both assignees of the lease agreement and stepped into
the shoes of the original signatories. Thus, they are equally bound by its terms.
See Satellite Gateway Commc'ns, Inc. v. Musi Dining Car Co., 110 N.J. 280,
287 (1988). Article 34 of the lease states tenants "waive[] all right to trial by
A-1788-22 4 jury in any action or summary or other judicial proceeding hereafter instituted
by [l]andlord against [them] in respect to the demised premises." Article 38
provides "[a]ny controversy arising under, out of, in connection with, or relating
to this [l]ease or the breach hereof, shall be determined and settled by arbitration
held in Newark, New Jersey, in accordance with the rules of the American
Arbitration Association." It further sets forth the proper procedures to obtain
relief through arbitration and states "[a]ny award rendered thereunder shall be
final and binding upon all parties and judgment may be entered thereon in any
court having jurisdiction."
Given these provisions, the judge ruled the lease did not contain a clear
and unambiguous waiver of the parties' right to pursue a claim in court, as
required by Flanzman v. Jenny Craig, Inc., 244 N.J. 119, 137 (2020) (citing
Atalese v. U.S. Legal Servs. Grp., L.P., 219 N.J. 430, 443 (2014)). The judge
reasoned:
[T]he language of the arbitration provision . . . contains no such articulation of the difference between the civil litigation proceeding or arbitration. And, frankly, it's certainly contemplated that there would be litigation pursuant to the provisions of Article 34 if the landlord undertook action to seek possession of the premises in respect of which the tenant would waive a right to a jury trial. That's what that says in that paragraph.
A-1788-22 5 The judge further cited Dispenziere v. Kushner Cos., where this court
concluded "[a] clause depriving a citizen of access to the courts should clearly
state its purpose." 438 N.J. Super. 11, 17 (App. Div. 2014) (quoting Atalese,
219 N.J. at 444). In turn, the judge reasoned the arbitration provision was
unenforceable because it "does not explain what arbitration is" or "indicate how
arbitration is different from a proceeding in a court of law." Id. at 18 (quoting
Atalese, 219 N.J. at 446-47). Having made this finding, the judge next
determined that Article 34's waiver of jury trial rights did not sufficiently create
an enforceable arbitration right encompassing the entire lease.
In addition, even if the arbitration provision was enforceable, the judge
determined defendants' failure to raise it in the prior litigation seeking to enforce
the lease agreement terms constituted a waiver of their arbitration rights. In
finding waiver, the judge relied upon Cole v. Jersey City Med. Ctr., 215 N.J.
265, 283 (2013), where the Court reasoned:
[The defendant] waived its right to arbitrate during the course of litigation. [The defendant] engaged in all of the usual litigation procedures for twenty-one months and, only on the eve of trial, invoked its right to arbitrate. Such conduct undermines the fundamental principles underlying arbitration and is strongly discouraged in our state.
A-1788-22 6 Defendants sat on their purported arbitration rights much longer than the
defendant in Cole, not seeking to compel arbitration in three separate lawsuits.
We note the first suit, Fernandes, No. A-3404-16, was filed by the previous
landlord about ten years before the present action.
Finally, because defendants did not brief the argument regarding the
judge's denial of their reconsideration motion, that argument is deemed waived.
See 539 Absecon Blvd., L.L.C. v. Shan Enters. Ltd. P'ship, 406 N.J. Super. 242,
272 n.10 (App. Div. 2009); Pressler & Verniero, Current N.J. Court Rules, cmt.
5 on R. 2:6-2 (2024) (noting "an issue not briefed is deemed waived"); N.J. Dep't
of Env't Prot. v. Alloway Township, 438 N.J. Super. 501, 505 n.2 (App. Div.
2015). Nevertheless, the trial judge denied defendants' motion for
reconsideration on the same grounds it denied their motion to dismiss, which we
now affirm.
To the extent we have not specifically addressed any of plaintiff's
arguments, we conclude they lack sufficient merit to warrant discussion in a
written opinion. R. 2:11-3(e)(1)(E).
Affirmed.
A-1788-22 7