Capparelli v. Lopatin

212 A.3d 979, 459 N.J. Super. 584
CourtNew Jersey Superior Court Appellate Division
DecidedJune 25, 2019
DocketDOCKET NO. A-1948-17T4
StatusPublished
Cited by33 cases

This text of 212 A.3d 979 (Capparelli v. Lopatin) is published on Counsel Stack Legal Research, covering New Jersey Superior Court Appellate Division primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Capparelli v. Lopatin, 212 A.3d 979, 459 N.J. Super. 584 (N.J. Ct. App. 2019).

Opinion

GOODEN BROWN, J.A.D.

*592Plaintiff and defendant are former business partners. When their business relationship deteriorated amidst dueling accusations *593of misconduct, they engaged in extensive litigation in Florida and New Jersey related to winding down their companies, Direct Wholesale, Inc.1 and Unlimited Pins, LLC2 (the companies).3 On May 2, 2013, they entered into a global settlement agreement (May 2013 agreement) that settled the pending lawsuits and established a mediation/arbitration mechanism to resolve any disputes encountered during the parties' wind-down4 efforts. Under the mediation/arbitration mechanism, disputes would first be submitted for informal mediation to Michael Marotte, Esq., who had served as the companies' corporate counsel for about ten years. If Marotte was unable to resolve the dispute, then the dispute would be submitted for *985binding arbitration to a panel of three arbitrators (the three-person panel).

The three-person panel consisted of one arbitrator chosen by each party and Marotte, who served as the neutral arbitrator. In this role, Marotte could withdraw at any time and was subject to dismissal by either party in the party's sole discretion. In that event, a replacement neutral third arbitrator would be selected by the two remaining arbitrators. The parties executed an arbitration agreement on August 8, 2013, and a superseding agreement on March 16, 2015 (collectively, arbitration agreement), to ratify and effectuate the May 2013 agreement. The arbitration agreement, among other things, specified that the arbitration procedure was governed by the New Jersey Uniform Arbitration Act (the Act), N.J.S.A. 2A:23B-1 to -32. The arbitration agreement also waived *594the provision of the Act prohibiting an individual with a "known, existing, and substantial relationship with a party" from serving as a neutral arbitrator, N.J.S.A. 2A:23B-11(b), and permitted each arbitrator to bill for services at an hourly rate of $ 600.

Over time, the mediation/arbitration mechanism proved expensive and posed numerous scheduling difficulties for the three-person panel. As a result, on May 28, 2015, the parties entered into another settlement agreement (May 2015 agreement), naming Marotte as the sole decision maker responsible for resolving disputes between the parties related to the collection of outstanding debts owed to the companies. Thereafter, on July 23, 2017, plaintiff dismissed Marotte as the neutral arbitrator on the three-person panel as permitted under the May 2013 agreement. The following month, Marotte's partner informed the parties that Marotte could no longer serve as the decision maker under the May 2015 agreement.

When the parties were unable to agree on a replacement for Marotte, in September 2017, plaintiff filed an order to show cause and verified complaint against defendant, seeking to compel the appointment of a replacement for Marotte to adjudicate the collection disputes pursuant to the May 2015 agreement. Defendant filed a contesting answer and asserted various affirmative defenses, including invoking "the doctrines of frustration of purpose and impossibility" in order to void the May 2015 agreement. Defendant's pleading also included a counterclaim for declaratory judgment, requiring the two remaining arbitrators on the three-person panel to select a replacement for Marotte in accordance with the May 2013 agreement, or, in the alternative, requiring the court to select a replacement to resolve the remaining wind-down disputes.

After granting plaintiff's motion to proceed as a summary proceeding pursuant to N.J.S.A. 2A:23B-7 and Rule 4:67-1(a),5 the trial judge conducted a plenary hearing "on the sole issue of the parties' state of mind and intention when they entered into the *595May 2015 [a]greement and selected ... Marotte to resolve the outstanding collection disputes[.]" During the hearing, the judge heard testimony from the parties, but refused to hear testimony from Marotte. On December 8, 2017, the judge entered an order, declaring the May 2015 agreement "null and void[,]" relegating the parties to the arbitration agreement to resolve the remaining disputes, and dismissing the complaint and counterclaim without prejudice.

Plaintiff now appeals from the December 8, 2017 order, raising the following points for our consideration:6

*986POINT I - THE TRIAL [JUDGE] ERRED IN PREVENTING MICHAEL MAROTTE, ESQ. FROM TESTIFYING DURING THE HEARING AS TO HIS KNOWLEDGE OF THE PARTIES' INTENT IN ENTERING THE [MAY] 2015 AGREEMENT[.]
POINT II - THE TRIAL JUDGE ERRED IN VOIDING THE ENTIRE [MAY] 2015 ... AGREEMENT BASED UPON THE LANGUAGE OF THE AGREEMENT ITSELF[.]
POINT III - THE TRIAL JUDGE ERRED IN VOIDING THE ENTIRE [MAY] 2015 ARBITRATION AGREEMENT BASED UPON THE NEW JERSEY [UNIFORM] ARBITRATION ACT, N.J.S.A. 2A:23B-1 [TO -32.]
POINT IV - THE DOCUMENTARY EVIDENCE DEMONSTRATES DEFENDANT ... CAUSED MULTIPLE DELAYS IN WINDING DOWN THE CORPORATIONS AND IS THUS GUILTY OF COMING TO THE COURT WITH UNCLEAN HANDS[.]
POINT V - THE TRIAL [JUDGE] SHOULD HAVE DENIED [DEFENDANT'S] REQUESTED RELIEF AS THERE WAS NO CONTROVERSY YET BETWEEN THE PARTIES AS TO THE MAY [ ] 2013 SETTLEMENT AGREEMENT[.]

Having considered the arguments and applicable law, we affirm.

The focus of the plenary hearing was the May 2015 agreement, which was entitled "settlement agreement" and established a mechanism by which the parties would select a "dispute," defined as "the net total of all debts and obligations collectively owed by a single debtor" to the companies, for which plaintiff or defendant "[would] be primarily responsible as the 'Responsible Collector.' " The " 'Responsible Collector' ... [would] devote all reasonably *596necessary time and efforts towards collection of the amounts owed for the matters for which he [was] responsible." Under the May 2015 agreement, "[a]ll offers of settlement of any such dispute for less than immediate payment of the full amount owed" had to be approved by both parties. If the parties could not agree, "then the dispute [would] be submitted to [Marotte] for final binding decision."

Further, pursuant to the May 2015 agreement, for debts exceeding $ 5000, "the Responsible Collector ... [would] receive as a commission ... 15% of the net amount received," less fees, costs, and offsetting payments, and Marotte would decide "through a final binding decision" any commission-related disputes.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

George Haffert v. Bell Tower Condominium Association
New Jersey Superior Court App Division, 2026
In the Matter of the Estate of Nunzio Cirella
New Jersey Superior Court App Division, 2026
David Ruiz v. Maribel Cintron
New Jersey Superior Court App Division, 2026
Jon Musco v. Smgr Holdings LLC
New Jersey Superior Court App Division, 2026
Pamela Herbert, Etc. v. Oceanfirst Bank
New Jersey Superior Court App Division, 2026
C.V.O., III v. D.A.O.
New Jersey Superior Court App Division, 2026
Dedes Realty, LLC v. Union Plaza Diner Corp.
New Jersey Superior Court App Division, 2025
White Oak Funding, Inc. v. Twin Industries
New Jersey Superior Court App Division, 2025
Villas at Manville LLC v. Brooks Townhouses LLC
New Jersey Superior Court App Division, 2025
Jzs Madison, LLC v. D3n7, LLC
New Jersey Superior Court App Division, 2025
Walter Cabezas, Etc. v. Penske Truck Leasing Co., Lp
New Jersey Superior Court App Division, 2025
In the Matter of the Estate of Fania Hartman
New Jersey Superior Court App Division, 2025
Route 22 Nissan, Inc. v. European Auto Expo, LLC
New Jersey Superior Court App Division, 2025
Buggelli v. Buggeli
Connecticut Appellate Court, 2025
Parag Mehta v. Ashok Mishra
New Jersey Superior Court App Division, 2025
Magyar Bank v. Mauro Motors, Inc.
New Jersey Superior Court App Division, 2025
Linda K. Hird v. Jonathan A. Hirst
New Jersey Superior Court App Division, 2025
Jersey City Municipal Utilities Authority v. Town of Dover
New Jersey Superior Court App Division, 2025
David J. Singer, Etc. v. Maureen E. Vella
New Jersey Superior Court App Division, 2024
Liberty & Prosperity 1776 Inc. v. City of Atlantic City
New Jersey Superior Court App Division, 2024

Cite This Page — Counsel Stack

Bluebook (online)
212 A.3d 979, 459 N.J. Super. 584, Counsel Stack Legal Research, https://law.counselstack.com/opinion/capparelli-v-lopatin-njsuperctappdiv-2019.