FOULKE MANAGEMENT CORPORATION VS. DOMESTIC LINEN SUPPLY CO., INC. (L-4057-13 AND L-2354-14, CAMDEN COUNTY AND STATEWIDE)

New Jersey Superior Court Appellate Division·Decided March 5, 2020·No. A-4725-18T2·Unpublished

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court."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-4725-18T2

FOULKE MANAGEMENT CORPORATION,

Plaintiff-Appellant,

v.

DOMESTIC LINEN SUPPLY CO., INC., a New Jersey Corporation,

Defendant-Respondent.

FOULKE MANANGEMENT CORPORATION,

Plaintiff,

v.

DOMESTIC LINEN SUPPLY CO., INC., a Pennsylvania Corporation, and AMERICAN ARBITRATION ASSOCIATION,

Defendants.

Argued January 28, 2020 – Decided March 5, 2020

Before Judges Yannotti and Firko.

On appeal from the Superior Court of New Jersey, Law Division, Camden County, Docket Nos. L-4057-13 and L-2354-14.

Laura D. Ruccolo argued the cause for appellant (Capehart & Scatchard PA, attorneys; Laura D.

Ruccolo and Laura M. Danks, on the briefs).

Joseph D. Di Guglielmo argued the cause for respondent (Burton Neil & Associates, and Joseph D.

Di Guglielmo, attorneys; Joseph D. Di Guglielmo, of counsel and on the brief).

PER CURIAM This matter is before us for the third time. Plaintiff Foulke Management Corporation (Foulke) appeals from an order entered by the trial court on March 25, 2019 finding Foulke entered into contracts with Domestic Linen Supply Co., Inc. (Domestic PA) and an order entered on June 19, 2019, which compelled Foulke to arbitrate its dispute with defendant, Domestic PA. We affirm both orders.

I.

We derive the following facts from the parties' motion papers and the facts established at the evidentiary hearing. There are two businesses with the name Domestic Linen Supply Co., Inc. One of those businesses is a New Jersey

A-4725-18T2

corporation, Domestic Linen NJ, and the other is a Pennsylvania corporation that is authorized to conduct business in New Jersey, Domestic Linen PA.

Foulke engaged in three automobile dealerships known as Cherry Hill Triplex, Cherry Hill Dodge, and Cherry Hill Mitsubishi. In March of 2010, Foulke entered into three uniform supply service contracts with an entity called Domestic Linen Supply Co., Inc. to rent uniforms for its businesses. All three contracts list Domestic PA's address as Philadelphia, Pennsylvania, and require arbitration of disputes when the amount in controversy exceeds $10,000. The contracts state that they should be construed in accordance with Pennsylvania law, and notices should be sent to the company's manager in Philadelphia.

In 2013, Foulke filed a complaint against Domestic Linen NJ, in which it asserted claims of breach of contract, common law fraud, and violations of the New Jersey Consumer Fraud Act.1 Domestic Linen NJ filed a motion to dismiss the complaint, arguing that Foulke entered into the contracts with Domestic Linen PA, not Domestic Linen NJ. The prior trial judge did not rule on that issue and ordered Foulke to arbitrate the dispute, as required by the agreements set forth in the contracts.

1 N.J.S.A. 56:8-1 to -210.

A-4725-18T2

Domestic Linen PA then filed a demand for arbitration, asserting it was the party that entered into the subject contracts with Foulke. In response, Foulke filed an action to enjoin the arbitration proceeding on the ground that another trial judge had ruled that Domestic Linen NJ was the proper contracting party. The prior trial judge restrained Domestic Linen PA from proceeding with the arbitration. Domestic Linen PA appealed that decision.

We reversed both orders, consolidated the cases, and remanded to the trial court for an evidentiary hearing to determine whether Domestic Linen PA or Domestic Linen NJ was the party with whom Foulke had entered into the contracts. Foulke Mgmt. Corp. v. Domestic Linen Supply Co., No. A-0752-14 (App. Div. Mar. 14, 2016).

On remand, the prior trial judge did not comply with our mandate and issued an order on February 2, 2018, compelling a jury trial to determine the proper parties. He also denied Domestic NJ's motion for reconsideration on March 15, 2018. We reversed and vacated the February 2, 2018 and March 15, 2018 orders and remanded to the trial court for a non-jury evidentiary hearing on the issue as to which defendant was the party to the contract with Foulke. Foulke Mgmt. Corp. v. Domestic Linen Supply Co., No. A-3219-17 (App. Div. Dec. 5, 2018).

A-4725-18T2

On the second remand, a different trial judge conducted an evidentiary hearing on February 22, 2019. In a March 22, 2019 oral opinion, the trial judge found that Foulke's service manager, Joe Scicili, now deceased, negotiated three uniform rental agreements with Domestic PA's service manager, Lawrence Messineo. The trial court also found that William Kopp, Foulke's general manager and representative, "signed each agreement but never read page [two] which contains both a choice of law clause (Pennsylvania) and arbitration clause." In conclusion, the judge found Foulke entered into the contracts with Domestic PA.

In an April 18, 2019 order, the trial judge permitted Foulke to file a motion for leave to file and serve an amended complaint to bring its claims against Domestic PA applying retroactively to the initial filing date of the complaint in 2013. The motion was granted, and Foulke filed its amended complaint on April 2, 2019. Domestic PA then moved to dismiss the complaint and compel arbitration as per the arbitration provisions set forth in the contracts. On June 19, 2019, the trial judge ordered the parties to arbitrate their dispute and dismissed the complaint.

The contracts include an arbitration clause at paragraph fifteen, which states:

A-4725-18T2

In the event of any controversy or claim in excess of $10,000.00 arising out of or relating to this agreement, including but not limited to questions regarding the authority of the persons who have executed this agreement, the question, controversy or dispute shall be submitted to and settled by arbitration to be held in the city closest to the city in which the branch office of the [c]ompany which serves the [c]ustomer is located. Said arbitration shall be held in accordance with the then prevailing commercial arbitration rules of the American Arbitration Association [(AAA)] except any rules which require the parties to use the [AAA] as their sole [a]rbitration [a]dministrator. Judgment upon and award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The filing party may use either court or arbitration where the claim is less than $10,000.00. Venue for any court proceeding shall be in the county of the [c]ompany's branch office servicing the [c]ustomer. The judge or arbitrator shall include as part of the award all costs including reasonable attorney fees and arbitration fees of the nonbreaching party where it is determined that one of the parties has breached the agreement.

Foulke argued that it was not made aware of these terms and signed the contracts, but Kopp, its signatory, did not read the second page where the arbitration clause was printed. Additionally, Foulke argued that the arbitration clause was unconscionable and lacked mutual assent. Domestic argued that both the Federal Arbitration Act (FAA), 9 U.S.C. §§ 1 to 16, and the New Jersey Arbitration Act, N.J.S.A. 2A:23B-1 to -32. controlled, thus the arbitration agreement here was enforceable.

A-4725-18T2

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FOULKE MANAGEMENT CORPORATION VS. DOMESTIC LINEN SUPPLY CO., INC. (L-4057-13 AND L-2354-14, CAMDEN COUNTY AND STATEWIDE), (N.J. Ct. App. 2020).

FOULKE MANAGEMENT CORPORATION VS. DOMESTIC LINEN SUPPLY CO., INC. (L-4057-13 AND L-2354-14, CAMDEN COUNTY AND STATEWIDE) (FOULKE MANAGEMENT CORPORATION VS. DOMESTIC LINEN SUPPLY CO., INC. (L-4057-13 AND L-2354-14, CAMDEN COUNTY AND STATEWIDE)) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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