09-2-3554 Kernahan v. Home Warranty Admin. of Fla., Inc., N.J. Super. App. Div. (per curiam) (9 pp.) Plaintiff purchased service agreement from defendants for the repair or replacement of home appliances and systems. Plaintiff cancelled the first contract and received a full refund of the purchase price, but submitted claims and received benefits of over $3000 on the second agreement. Plaintiff subsequently filed a class action complaint alleging that the agreements misrepresented the term of the contracts, and alleged violations of the Consumer Fraud Act and the Truth in Consumer Contract, Warranty, and Notice Act, and breach of the implied covenant of good faith and fair dealing. Plaintiff further argued that the agreement's mediation section failed to advise her that she was waiving her right to a jury trial or remedies of treble damages, punitive damages, attorney's fees, and costs. Defendants moved to dismiss or compel arbitration pursuant to the mediation provision. The trial court denied the motion, finding that plaintiff adequately pleaded her causes of action and that the arbitration provision failed to advise plaintiff she was waiving her rights. On appeal, defendants argued that the arbitration provision in the parties' agreement was enforceable. The court affirmed the trial court's decision, first noting that a waiver of trial rights in an arbitration provision had to be “clearly and unmistakable established,” sufficient to convey that the parties were giving up their rights to bring their claims in court or in front of a jury. The court found that defendants' agreements did not contain any waiver language at all, and therefore failed to clearly inform plaintiff she was giving up her trial rights. The court held that stating that arbitration was an “exclusive” remedy was insufficient.

11-2-3555 Glamorous, Inc. v. Angel Tips, Inc., N.J. Super. App. Div. (per curiam) (6 pp.) Plaintiff appealed from the trial court's order enforcing an arbitration provision contained in the franchise agreement between plaintiff and defendant, a franchisor of nail salons. The arbitration provision required arbitration of “all controversies, disputes, or claims” between the parties in New York, but provided exceptions for claims made by defendant against plaintiff for money. When the parties renewed the franchise agreement in 2014, they discussed the need for a redesign of plaintiff's salon, and the following year defendant demanded plaintiff commence a redesign. However, due to the cost plaintiff ceased the redesign and filed suit against defendant. In opposition to defendant's motion to compel arbitration, plaintiff argued that defendant's demand for plaintiff to redesign its salon was in fact a claim for money owed, and therefore not arbitrable. In response, defendant argued that it was only demanding enforcement of plaintiff's contractual promise to renovate its salon. The trial court agreed with defendant's characterization of its action and granted the motion to compel arbitration. On appeal, the court affirmed the trial court's ruling, first holding that the enforceability of the arbitration provision was governed not by the New Jersey Franchise Protection Act, but by the Federal Arbitration Act, which the court noted highly favored enforcement of arbitration without regard to state law pursuant to supremacy of federal law. The court further ruled that plaintiff's argument that New York law required a determination that the franchise agreement was void had been waived for plaintiff's failure to raise the argument below. The court noted that New York law would only go to the merits of the claim and not its arbitrability. Finally, the court rejected plaintiff's assertion that the trial court “rewrote” the parties' arbitration provision, noting that the provision called for arbitration of all disputes between the parties with certain narrow exception.

12-2-3590 Bruder v. Hillman, N.J. Super. App. Div. (per curiam) (10 pp.) Plaintiffs appealed the grant of summary judgment to defendants and the dismissal of their complaint in their action to unwind the conversion of a limited partnership to an LLC and to review the books and records of the LLC. Plaintiffs were the limited partners of a limited partnership and defendant was the general partner. In 2007, general partner directed that partnership be converted into an LLC as part of a strategy to refinance loans. Plaintiffs alleged they did not learn of the conversion until 2012 and in 2013, filed their action requesting a declaratory judgment that defendant's dissolution of the partnership was unlawful and void and seeking an accounting. The trial court found that the conversion was proper, that plaintiffs received notice and the statute of limitations barred the complaint. The court agreed with the trial court that laches barred plaintiffs' complaint because plaintiffs had received K-1s with the LLC's name on it since 2008 and distributions, were sent notice of the conversion in 2006 and had full access to an electronic portal for information on the entity's activities.