VINCENZO GALLINA VS. ADRENALINE FAMILY ENTERTAINMENT, INC. (L-2764-12, CAMDEN COUNTY AND STATEWIDE)

• Court: New Jersey Superior Court Appellate Division
• Decided: June 6, 2018
• Docket: A-3992-16T2
• Status: Unpublished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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court."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-3992-16T2

VINCENZO GALLINA and MARIA GALLINA,

Plaintiffs-Appellants,

v.

ADRENALINE FAMILY ENTERTAINMENT, INC., CLEMENTON LAKE OPERATIONS, LLC, CLEMENTON LAKE MANAGEMENT, LLC, CLEMENTON LAKE HOLDINGS, LLC, CLEMENTON LAND, LLC, and BOB'S SPACE RACERS, INC.,

Defendants-Respondents. ___________________________________

Argued April 12, 2018 – Decided June 6, 2018

Before Judges Rothstadt and Gooden Brown.

On appeal from Superior Court of New Jersey, Law Division, Camden County, Docket No. L- 2764-12.

Michael Confusione argued the cause for appellants (Hegge & Confusione, LLC, attorneys; Michael Confusione, of counsel and on the brief).

Charles C. Daley, Jr., argued the cause for respondents Adrenaline Family Entertainment and Clementon Lake (Barnaba & Marconi, LLP, attorneys; Dennis M. Marconi and Tyler L. Williams, on the brief).

Law Office of Peter A. Callahan, attorneys for respondent Bob's Space Racers, Inc., join in the brief of respondents Adrenaline Family Entertainment and Clementon Lake.

PER CURIAM

Plaintiffs, Vincenzo Gallina and his wife Maria Gallina,

appeal from the Law Division's April 28, 2017 order denying

their motion to reinstate their complaint against defendants,

Adrenaline Family Entertainment, Inc., Clementon Lake

Operations, LLC, Clementon Lake Management, LLC, Clementon Lake

Holdings, LLC, Clementon Land, LLC and Bob's Space Racers, Inc.

The complaint sought damages for injuries sustained by Vincenzo1

on an amusement attraction, allegedly due to defendants'

negligence in their ownership or operation of the ride or park

at which the attraction was available to the public.

After plaintiffs filed suit, the parties participated in an

arbitration of plaintiffs' claims that resulted in a "no cause"

determination and the dismissal of their complaint. Plaintiffs

then filed a motion to reinstate their complaint, arguing that

they did not agree to waive their right to a trial in court

1 We refer to plaintiffs by their first names to avoid any confusion caused by their common last name. No disrespect is intended.

2 A-3992-16T2 before a judge or jury, despite their participation in the

arbitration. The motion judge denied the application without a

hearing, finding that, like a party who agreed to a bench trial

and after an unsatisfactory verdict demanded a new trial by

jury, plaintiffs were bound by the result of the arbitration

because they participated in it, without objection.

On appeal, plaintiffs contend that the motion judge should

have conducted an evidentiary hearing before deciding whether

the agreement to arbitrate bound them in light of their claim

that they did not know they were waiving their right to a trial.

For the reasons that follow, we vacate the order and remand for

a hearing.

The facts derived from the motion record are summarized as

follows. Vincenzo sustained injuries at Clementon Park when he

fell off of "The Ladder Climbing Rope" attraction. After

plaintiffs filed their complaint, the parties engaged in

discovery including depositions. Later, according to Vincenzo,

his attorney, Daniel B. Zonies, "told [him] we have to go to

arbitration," which the lawyer explained was being "in one room

with an arbitrator or retired judge" where "lawyers [and the

arbitrator] were going to ask [him] questions . . . ."

It was undisputed that plaintiffs never signed any

agreement to arbitrate. The only document indicating that there

3 A-3992-16T2 would be arbitration was the arbitrator's retainer letter that

stated counsel "agreed to retain [the arbitrator] to conduct a

binding arbitration . . . ." After setting forth the details

about the location, cost, timing for a decision and payment by

counsel, the letter concluded with a statement signed by counsel

that read "We agree to the terms and conditions set forth above

and understand that this agreement is made between and among the

[a]rbitrator and the attorneys and not the [a]rbitrator and the

parties."

Although there was no written agreement, Clementon Park's

attorney, Kathi Peisner, certified that "[c]ounsel for all

parties entered into a binding [a]rbitration [a]greement[.]"

Additionally, counsel stated that many letters were exchanged

"between and among counsel and [the arbitrator.]" Counsel

averred, "[t]here [could] be NO doubt that plaintiffs' original

attorney knew the arbitration was binding."

Vincenzo claimed that he "never personally understood that

[he was giving] up [his] right to go before judges or [a]

jury[.]" Maria, too, asserted that Zonies never told her that

she was giving up her rights by going to arbitration.

Before the arbitration, counsel for the parties made

submissions to the arbitrator. Plaintiffs and the parties'

attorneys appeared for the arbitration on September 28, 2016 and

4 A-3992-16T2 December 21, 2016. According to Peisner, on the first day of

the arbitration hearing, "plaintiffs appeared with their

attorney, . . . an interpreter, and [their] relatives[,]" and

the arbitrator explained "to all that the arbitration was on

consent and binding." Further, the arbitrator asked "plaintiffs

through their counsel if they knew that arbitration was INSTEAD

of a trial and that he would be deciding the case instead of a

jury, and if they were ready to proceed." Peisner stated,

"[p]laintiffs expressed an understanding, and consent, and their

attorney stated that plaintiffs understood the consequences."

On January 4, 2017, the arbitrator entered an award in

favor of defendants, finding no cause for the action. A week

later, Zonies advised Vincenzo that "the arbitrator ruled

against [him,] and that [he] was not going to receive any

damages for [his] injuries," or be able to "continue with [his]

claims in court . . . ." Vincenzo asserted that he was

"shocked" as he "never agreed to such an arrangement[,]" or to

"give up [his] right to [his] court case."

After plaintiffs filed their motion to reinstate and the

parties made written submissions, the motion judge considered

counsels' oral argument on April 28, 2017, and denied

plaintiffs' motion without a plenary hearing. In an oral

5 A-3992-16T2 decision placed on the record on that date, the judge explained

why he believed an evidentiary hearing was not necessary.

In his decision, the judge stated that if he ordered a

hearing he would "have to assume that [he] might actually

believe the plaintiff[s] and believe that they truly didn't

think they were waiving anything, Zonies didn't explain it to

them[,] and they had no idea as to what was going on."

Regardless of his beliefs about the plaintiffs' assertions, the

judge concluded that Zonies' agreement to arbitrate bound

plaintiffs to the same agreement. The judge stated that if he

questioned whether plaintiffs understood the agreement, it would

"substantially undercut[] the efficient working of the [c]ourt

system where when the attorney, on behalf of the client signs a

document agreeing to go to binding arbitration, it's enforced."

While the judge was satisfied that at a hearing, if the

arbitrator testified in accordance with the facts stated in

Peisner's certification, plaintiffs would lose, the judge made

clear that his ruling was not based upon whether the arbitrator

explained to plaintiffs anything about the arbitration before it

began, but rather, upon his finding that the situation was

similar to a litigant who was not happy with a result after a

bench trial. The judge explained:

6 A-3992-16T2 The important thing here is that unlike the settlement that was not authorized, [where] a plaintiff who won't sign a release, it's a different plaintiff than a plaintiff that proceeded to binding arbitration, lost and now wants their case heard before a jury. Those are apples and oranges.

And I think this case is closer to the . . . bench trial situation . . . because no plaintiff could plausibly say in [c]ourt when their case is tried before a judge, gee, I thought we were [going to] get another trial a year later before a jury.

The motion judge ultimately found that to allow a

dissatisfied plaintiff to raise an objection to the arbitration

after it was completed would cause havoc in litigation. He

stated that at a hearing, "if I believe the plaintiffs and said

basically their no-cause at binding arbitration is worthless, is

meaningless, that [would be] the precedent I don't want to

establish." This appeal followed.

A trial court confronted with a motion to reinstate a

complaint must determine whether good cause has been shown

warranting that the "order dismissing [the] matter . . . be set

aside and the case restored[.]" ASHI-GTO Assocs. v. Irvington

Pediatrics, PA, 414 N.J. Super. 351, 359 (App. Div. 2010).

"Whether to grant or deny a motion to reinstate a complaint lies

within the sound discretion of the trial court." Sullivan v.

Coverings & Installation, Inc., 403 N.J. Super. 86, 93 (App.

7 A-3992-16T2 Div. 2008). "We will 'decline to interfere with [such] matters

of discretion unless it appears that an injustice has been

done.'" Ibid. (quoting Cooper v. Consol. Rail Corp., 391 N.J.

Super. 17, 23 (App. Div. 2007)). While the "'abuse of

discretion' standard defies precise definition," we may find an

abuse of discretion "when a decision is 'made without a rational

explanation, . . . rest[s] on an impermissible basis[,]'" or was

"an arbitrary, capricious, whimsical, or manifestly unreasonable

judgment." Flagg v. Essex Cty. Prosecutor, 171 N.J. 561, 571

(2002) (citations omitted).

To the extent the trial court's decision involves, as here,

a decision regarding the validity of an arbitration agreement,

our review is de novo. Atalese v. U.S. Legal Servs. Grp., 219

N.J. 430, 445-46 (2014).

Applying these standards, we conclude that it was a

mistaken exercise of the judge's discretion to decide

plaintiff's motion without a plenary hearing in light of the

conflicting certifications presented to the judge concerning

plaintiffs' alleged agreement to waive their right to a trial in

court.

At the outset, we acknowledge that our State's public

policy favors the resolution of disputes through arbitration.

Id. at 440. The strong "public policy of this State favors

8 A-3992-16T2 arbitration as a means of settling disputes that otherwise would

be litigated in a court." Badiali v. N.J. Mfrs. Ins. Grp., 220

N.J. 544, 556 (2015). The preference for arbitration is not

without limits. Atalese, 219 N.J. at 441. For example, "[a]n

agreement to arbitrate, like any other contract, 'must be the

product of mutual assent, as determined under customary

principles of contract law.'" Id. at 442 (citation omitted).

"Mutual assent requires that the parties have an understanding

of the terms to which they have agreed." Ibid.

"Our state-law jurisprudence makes clear 'that when a

contract contains a waiver of rights - whether in an arbitration

or other clause - the waiver "must be clearly and unmistakably

established."'" Morgan v. Sanford Brown Inst., 225 N.J. 289,

308-09 (2016) (quoting Atalese, 219 N.J. at 444). When the

agreement is written, "[n]o magical language is required to

accomplish a waiver of rights in an arbitration agreement." Id.

at 309. Because arbitration involves a waiver of the right to

pursue a case in a judicial forum, courts take particular care

"in assuring the knowing assent of both parties to arbitrate,

and a clear mutual understanding of the ramifications of that

assent." NAACP of Camden Cty. E. v. Foulke Mgmt. Corp., 421

N.J. Super. 404, 425 (App. Div. 2011), appeal dismissed, 213

N.J. 47 (2013).

9 A-3992-16T2 "This requirement of a 'consensual understanding' about the

rights of access to the courts that are waived in the agreement

has led our courts to hold that clarity is required." Moore v.

Woman to Woman Obstetrics & Gynecology, LLC, 416 N.J. Super. 30,

37 (App. Div. 2010) (citation omitted). "By its very nature, an

agreement to arbitrate involves a waiver of a party's right to

have her claims and defenses litigated in court." Atalese, 219

N.J. at 442 (citation omitted). Any contractual waiver-of-

rights provision must reflect that the party has agreed "clearly

and unambiguously" to its terms. Leodori v. Cigna Corp., 175

N.J. 293, 302 (2003), cert. denied, 540 U.S. 938 (2003). "[A]n

average member of the public may not know — without some

explanatory comment — that arbitration is a substitute for the

right to have one's claim adjudicated in a court of law."

Atalese, 219 N.J. at 442.

The need for clarity about the rights being waived in an

arbitration agreement does not mean that it must be in writing.

An agreement to arbitrate in lieu of litigation "do[es] not need

to be in writing to be enforceable." Leodori, 175 N.J. at 305

(addressing an employee's agreement to arbitrate absent a

written agreement with his employer). There must be, however,

evidence that "otherwise explicitly indicate his or her

agreement to" arbitrate, id. at 306, including "some other

10 A-3992-16T2 unmistakable indication that [a litigant] affirmatively had

agreed to arbitrate his claims," id. at 307, and waived his

right to trial, Atalese, 219 N.J. at 442.

Here, the only evidence of plaintiffs' decision to waive

their right to a trial that was presented to the motion judge

was the undisputed fact that the parties participated in the

arbitration and their conflicting certifications. Plaintiffs

contended they did not understand that participating in the

arbitration meant there would be no trial. Peisner's

certification relied upon her hearsay statement about what the

arbitrator allegedly explained to plaintiffs and her unqualified

conclusion that plaintiffs understood what they were told. In

addition, the one written agreement presented to the court – the

arbitrator's retainer agreement was signed only by counsel, and

did not mention a waiver of plaintiffs' right to trial. There

was no certification from the arbitrator explaining what he said

to plaintiffs or even from their former attorney refuting

Vincenzo's description of what he was told. And, there was no

certification from the interpreter who assisted at the

arbitration.

While we share the motion judge's concern about the need

for courts to be able to rely on counsels' agreement to

arbitrate, and the impact upon litigation of allowing

11 A-3992-16T2 dissatisfied litigants to reopen cases after they participated

in an arbitration that does not go well for them, we believe

under the unique circumstances of this case, that there was

insufficient evidence for the motion judge to have decided the

issue presented, without a hearing. See Lederman v. Prudential

Life Ins. Co. of Am., Inc., 385 N.J. Super. 324, 347 (App. Div.

2006).

The order under review is vacated and the matter remanded

for a plenary hearing as to whether plaintiffs knowingly waived

their right to trial by a judge or jury.

Vacated and remanded for further proceedings consistent

with this opinion. We do not retain jurisdiction.

12 A-3992-16T2