Abe Cohen v. workshop/apd Architecture, D.P.C.

NOT FOR PUBLICATION WITHOUT THE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-0566-23

ABE COHEN,

Plaintiff-Appellant,

v.

WORKSHOP/APD

ARCHITECTURE, D.P.C.,

Defendant-Respondent.

__________________________

Argued April 16, 2024 – Decided July 24, 2024

Before Judges Gooden Brown and Puglisi.

On appeal from the Superior Court of New Jersey, Law

Division, Monmouth County, Docket No. L-3464-22.

Anthony Sango argued the cause for appellant (Ansell

Grimm & Aaron, PC, attorneys; Anthony Sango and

Anthony J. D'Artiglio, on the briefs).

Alexander C. Banzhaf (Tuttle Yick, LLC) argued the

cause for respondent (Alexander C. Banzhaf, attorney;

Alexander C. Banzhaf, on the brief).

PER CURIAM

Plaintiff Abe Cohen appeals from the September 11, 2023, Law Division

order granting defendant Workshop/APD Architecture, D.P.C.'s motion to compel

arbitration, and dismissing without prejudice plaintiff's complaint and defendant's

counterclaim. We affirm.

I.

We glean these facts from the motion record. In October 2018, plaintiff hired

defendant, a New York architectural firm "specializing in luxury homes, high-end

commercial development, and hospitality design," to perform professional services

in connection with the construction of his multi-million-dollar home in Long Branch,

New Jersey. Pursuant to the fourteen-page contract entered into and executed by

both parties on October 22, 2018, defendant "would be involved in the architectural

design, on-site construction supervision, and interior design and decoration . . . from

design through construction and installation."

The contract was comprised of eight phases with the first seven phases to be

invoiced based on a percentage of estimated construction costs, and the eighth phase

to be performed on an hourly basis. Two addenda followed the signature page.

Addendum two, labelled "Terms and Conditions," included a section titled

"Disputes," which provided in small font:

(18) DISPUTES [I]n the event of any dispute arising

out of the services in this [a]greement, the parties agree

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2

to arbitration, before one . . . arbitrator in the [c]ounty,

[c]ity, and State of New York, to resolve the dispute.

This [a]greement shall be governed by the laws of New

York. To the extent the dispute involves a payment

dispute, the prevailing party shall be entitled to recover

all associated costs, expenses, and fees, including

attorneys' fees from the other party. The arbitration

procedure shall be as follows:

a. The party bringing the [c]laim shall, in

writing, set forth the details of its [c]laim

and its desire to resolve the dispute in

accordance with this [s]ection.

b. The other party shall, within

ten . . . days of receipt of the written

demand, accept arbitration and set forth at

its option, in detail, any counterclaim of its

own.

c. [Plaintiff] and Workshop agree to the

joinder of any other parties separately

retained by [plaintiff] and Workshop

(collectively, the "[p]arties"), as a party to

any arbitration called for in this

[a]greement. [Plaintiff] shall provide for

the joinder of these [p]arties in the

applicable and respective agreements with

other such [p]arties[.]

d. Within twenty . . . days after joinder of

all parties, the parties shall agree upon a

sole arbiter . . . who shall hear any disputes

arising under this [a]rticle. If the parties

cannot agree on an [a]rbiter, they agree to

use American Arbitration Association

("AAA") rules to appoint an [a]rbiter. The

AAA shall make such appointment within

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3

ten . . . days of receipt of a written request

by either party. The parties agree to share

equally the costs of the [a]rbiter associated

with the resolution of any dispute.

e. Within ten . . . days of his/her

appointment, the [a]rbiter shall hold a

hearing, limited to no more than

two . . . days per party, which limit shall

not be exceeded except for unusual reasons

and/or by agreement of the [a]rbiter and the

parties.

f. The [a]rbiter shall render his/her written

decision within forty-eight . . . hours after

the close of the hearing. The decision shall

be in writing and may, at the [a]rbiter's

option, provide an explanation for such

decision.

g. The [a]rbiter's decision shall be final

and binding upon all parties and judgment

may be entered upon it in the appropriate

court in the Supreme Court of the State of

New York. If a challenge to the [a]rbiter's

decision is made by a party in the

applicable court and such challenge is

thereafter rejected by appeal or otherwise,

the prevailing party shall be entitled to its

reasonable attorney's fees and expenses for

such proceeding(s).

A separate provision immediately preceding the "Disputes" provision read:

"(17) APPLICABLE LAW This [a]greement shall be governed by and construed

A-0566-23

4

in accordance with the laws of the State of New York without reference to its

conflicts of laws principles."

Plaintiff hired a contractor in February 2020 to build the home using

defendant's designs. However, disputes arose between plaintiff and defendant

during the performance of the contract, largely related to billing and workmanship.

As a result, the contract was terminated in February 2021 while the construction of

the home was still in its infancy. In March 2021, after plaintiff refused to pay

defendant's outstanding fees, defendant filed a notice of unpaid balance and a

demand for arbitration for a New Jersey Construction Lien on the new home.

N.J.S.A. 2A:44A-20 "provides for the filing of a notice of unpaid balance (NUB) or

potential construction lien claim to provide notice to persons claiming title to . . .

real property of the anticipated filing of a lien claim, as well as an anticipatory

priority." Sovereign Bank v. Silverline Holdings Corp., 368 N.J. Super. 1, 3 (App.

Div. 2004).

On April 19, 2021, defendant obtained confirmation that it satisfied all

procedural requirements under the Construction Lien Law and had the right to a lien

for its unpaid services, which lien defendant promptly filed. On November 17, 2022,

defendant filed an order to show cause in the Supreme Court of New York under

N.Y. C.P.L.R. § 3102(c), seeking an order compelling plaintiff to produce pre-action

A-0566-23

5

discovery to aid arbitration in connection with the construction lien claim.

Defendant sought to compel plaintiff to disclose construction costs to allow

defendant to calculate its claim amount for outstanding fees. Plaintiff opposed the

order to show cause, arguing, among other things, that the arbitration provision in

the contract was unenforceable because of the small typeface, see N.Y. C.P.L.R. §

4544.1

While the New York action was pending,2 on December 16, 2022, plaintiff

filed a complaint against defendant in New Jersey asserting the following causes of

action: (1) lien discharge pursuant to N.J.S.A. 2A:44A-33 or N.J.S.A. 2A:44A-

1

N.Y. C.P.L.R. § 4544 provides:

The portion of any printed contract or agreement

involving a consumer transaction or a lease for space to

be occupied for residential purposes where the print is

not clear and legible or is less than eight points in depth

or five and one-half points in depth for upper case type

may not be received in evidence in any trial, hearing or

proceeding on behalf of the party who printed or

prepared such contract or agreement, or who caused

said agreement or contract to be printed or prepared.

As used in the immediately preceding sentence, the

term "consumer transaction" means a transaction

wherein the money, property or service which is the

subject of the transaction is primarily for personal,

family or household purposes.

2

Ultimately, on August 14, 2023, the New York Supreme Court denied

defendant's motion.

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6

21(b)(10); (2) breach of contract; (3) breach of the implied covenant of good faith

and fair dealing; (4) unjust enrichment; (5) professional negligence; and (6) violation

of the New Jersey Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -229. The

contract and the two addenda were attached to the complaint. Prior to filing an

answer, on February 24, 2023, defendant moved to dismiss plaintiff's complaint and

compel arbitration. In support, defendant relied on the arbitration provision in the

contract. Plaintiff opposed the motion, arguing that the arbitration provision was

unenforceable under both New York and New Jersey law.

As to New York law, according to plaintiff's counsel, because the contract fit

the definition of a consumer transaction and the font size was smaller than the

allowable size to be admitted into evidence under N.Y. C.P.L.R. § 4544, the

arbitration provision was unenforceable. As to New Jersey law, counsel asserted the

provision was unenforceable based on the font size, legibility, and location.

On June 9, 2023, following oral argument, the judge entered an order denying

defendant's motion. In an oral decision, the judge applied the standards articulated

in Rockel v. Cherry Hill Dodge, 368 N.J. Super. 577 (App. Div. 2004), and Atalese

v. U.S. Legal Services Group, L.P., 219 N.J. 430 (2014), and concluded the

arbitration provision "should not be enforced." Initially, the judge pointed out that

A-0566-23

7

he was adjudicating "a motion to dismiss" that was "limited to the pleadings" and

"the contract itself," and heard before any discovery was conducted by the parties.

The judge also posited:

At the heart of all of it, despite a lot of the repartee back

and forth about the sophistication or relative

sophistication of [plaintiff], the nature of this

transaction, the size of the font, [and] which law should

apply, the underlying legal theory here really concerns

whether or not either of those provisions were accepted

as part of a contract knowingly.

In describing the contract, the judge commented that "[n]one of the things

contained within the written portion of what [he] would consider the binding

contract reference anything about arbitration, about alternate means of resolving

disputes outside of trial, [or] about waiving a statutory right." In addition,

according to the judge, the addendum containing the arbitration provision

followed the signature page, and was not labeled "arbitration provision" for

clarity, but was "ambiguous[ly]" labelled "[t]erms and conditions."

The judge expounded:

Regardless of the size of the font, . . . . [i]t does not

anywhere specifically say that [plaintiff's] right to a

trial is waived, that there's any statutory restrictions on

[plaintiff's] right to recover, nor does it specifically set

forth in a straightforward way the nature and extent or

powers of the arbitrator or how the arbitration would

proceed. It fails on a number of points . . . .

A-0566-23

8

Accordingly, the judge concluded that "there[ was] no proof on the documents

presented that there was a knowing . . . determination on behalf of [plaintiff] to

consent to arbitration as the sole remedy."

As to the choice-of-law provision, the judge continued:

My finding regarding choice of law is that New

Jersey certainly has a significant interest and nexus to

this litigation. The home involved is a New Jersey

home. [Plaintiff] is a New Jersey resident. All the work

that was performed by . . . defendant essentially ended

up actually being performed in New Jersey. The lien in

this matter is also in New Jersey.

. . . . I find here the choice-of-law provision is

buried in the same attachment that . . . follows the

signatures. And there is a denial here that there was a

knowing voluntary acceptance of that choice of law.

That being the case, based on the pleadings,

which is what I[ am] limited to [hear] in a motion to

dismiss, I find that there[ is] no knowing choice of law

at this point that I am aware of. And, therefore, New

Jersey law applies.

Thereafter, on June 26, 2023, defendant filed a contesting answer, affirmative

defenses, and a counterclaim. In the counterclaim, defendant asserted breach of

contract and sought a judgment of foreclosure on the construction lien claim. On

July 7, 2023, defendant again filed a motion to compel arbitration. In support,

defendant submitted a certification by Jonah Kaplan, defendant's Director of

Business Development and Communication, along with numerous e-mail chains

A-0566-23

9

showing that the terms of the October 22, 2018, contract were negotiated and

finalized after over a month of communications between the parties during

September and October of 2018.

In the certification, Kaplan, who "personally negotiated" with plaintiff on

defendant's behalf, averred that on September 7, 2018, he emailed plaintiff the

initial contract proposal. After a phone conversation with plaintiff, a few days

later, on September 12, 2018, Kaplan sent plaintiff another copy of the proposal

as a Word document "with [t]rack [c]hanges turned on" so plaintiff could modify

the language. On September 14, 2018, plaintiff e-mailed Kaplan a "redlined

proposed contract" with "some changes" made by Emily Rokeach, plaintiff's

"corporate [g]eneral [c]ounsel who reviewed [the proposal] with [plaintiff]."

According to the certification, the September 14 redline contract included

several proposed changes to the entire contract, including revisions to the

arbitration provision contained in paragraph eighteen. Specifically, the fee-

shifting portion of the arbitration provision was modified to read:

To the extent the dispute involves a payment dispute,

the prevailing party shall be entitled to recover all

associated costs, expenses, and fees, including

attorneys' fees from the other party.

[(Emphasis added).]

A-0566-23

10

Plaintiff also submitted a minor modification to paragraph seventeen.3

Kaplan certified that on September 21, 2018, plaintiff emailed defendant "an

updated redlined proposed contract," reflecting the parties' discussions about further

changes to various provisions of the contract. However, there were no further

modifications to the arbitration provision. The negotiations continued through

September into October 2018, with further changes to various terms unrelated to the

arbitration provision. Finally, on October 22, 2018, plaintiff emailed Kaplan "the

final executed [c]ontract," writing that he and his wife "[were] excited to share the

fully executed agreement."

Plaintiff opposed the motion to compel arbitration but did not file a responding

certification. During oral argument conducted on August 25, 2023, the judge

confirmed that plaintiff did not submit a certification "in opposition to the allegations

made . . . regarding his involvement in the redaction and/or modification of the

arbitration clause and the choice of law clause."

Following oral argument, the judge granted defendant's motion to compel

arbitration. In an oral decision, the judge stressed that "the crux" of plaintiff's

3

The word "reference" in paragraph seventeen was modified as follows: "(17)

APPLICABLE LAW This Agreement shall be governed by and construed in

accordance with the laws of the State of New York without reference to its

conflicts of laws principles." (Emphasis added).

A-0566-23

11

argument during the prior motion was that plaintiff had no "knowledge,

understanding, [or] belief that there was an arbitration provision attached in any way

to th[e] contract." The judge expounded that:

[Plaintiff] clearly claimed that he was an unknowing

participant to an arbitration provision that he did not

know existed and/or would not understand and/or . . .

would have not agreed to, including the choice of law

provision.

I find, based upon a review of all the documents

provided, including the documents provided under the

. . . certification of . . . Kaplan, which is unrefuted, that

those arguments are false, that [plaintiff] did know

there was an arbitration provision, that the reason I do[

not] see a certification of [plaintiff] is because he knew

it.

He negotiated it and he fully understood the

implication of it. He is not an unsophisticated

homeowner. . . . [A]nd even if he was, the fact that he

engaged counsel to help negotiate a provision that

would allow for . . . mutual fee responsibility for the

arbitration clause clearly shows a . . . very good

understanding of what an arbitration means and what

the ramifications of losing or winning an arbitration

would mean.

As to the choice of law provision, the judge found that it was "made

knowingly" and "[would] be adhered to." As a result, according to the judge,

"New York law will apply to th[e] case." The judge further noted that under

either New York or New Jersey law, "knowing" and "understanding . . . the

A-0566-23

12

existence of the arbitration provision will result in an enforceable arbitration

provision." The judge also determined that N.Y. C.P.L.R. § 4544 was

"inapplicable" because "not only was the text readable," but plaintiff was able

to "read[]," "redact[]," "change[]," and "modif[y]" the arbitration provision.

The judge explained his reason for reaching a different result from his prior

decision as follows:

[I]t is true that the initial motion was a motion to

dismiss based solely on the pleadings.

This is not that. An answer was filed. This is a

substantive motion and I can consider the certification

which w[as] provided and the lack of a certification

provided in response and I am.

The judge concluded:

[Plaintiff] knew what he was negotiating away with this

arbitration agreement. He had an attorney help him

decide to sign the arbitration agreement and it[ is] also

clear that not only did he know about it, he decided to

sign the contract despite it, understanding it was there.

There can be no doubt about that at this point.

On September 11, 2023, the judge entered a memorializing order granting

defendant's motion to dismiss without prejudice plaintiff's complaint and defendant's

counterclaim in favor of arbitration. The judge also determined that bifurcation of

the construction lien action was not warranted because "all of the damages in th[e]

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13

case do result directly from the contract," making it appropriate to adjudicate all the

issues at the arbitration at the same time. This appeal followed.

On appeal, plaintiff raises the following issues for our consideration:

I. THE TRIAL COURT ERRONEOUSLY

RECONSIDERED ITS PRIOR HOLDING THAT THE

ARBITRATION PROVISION AND CHOICE OF

LAW PROVISION WERE UNENFORCEABLE AS A

MATTER OF LAW[.]

II. THE TRIAL COURT ERRONEOUSLY APPLIED

THE CHOICE OF LAW PROVISION AND NEW

YORK LAW[.]

III. THE TRIAL COURT ERRONEOUSLY

ENFORCED THE ARBITRATION PROVISION BY

MISAPPLYING THE PAROL EVIDENCE RULE[.]

A. The Trial Court Expanded The Parol

Evidence Rule Beyond Its Long-

Established Construction[.]

B. This Court Must Preclude The Use Of

Parol Evidence To Alter The Facially

Unenforceable Arbitration Provision[.]

IV. THE TRIAL COURT ERRONEOUSLY FOUND

THAT THE ARBITRATION PROVISION IS

ENFORCEABLE UNDER NEW YORK LAW[.]

II.

The enforceability of an arbitration agreement is a question of law, which

we review de novo. Skuse v. Pfizer, Inc., 244 N.J. 30, 46 (2020). "Similarly,

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14

the issue of whether parties have agreed to arbitrate is a question of law that is

reviewed de novo." Jaworski v. Ernst & Young U.S. LLP., 441 N.J. Super. 464,

472 (App. Div. 2015). Likewise, we review de novo choice-of-law

determinations. Cont'l Ins. Co. v. Honeywell Int'l., Inc., 234 N.J. 23, 46 (2018).

Thus, we exercise de novo review of a trial court's order compelling arbitration,

Goffe v. Foulke Mgmt. Corp., 238 N.J. 191, 207 (2019), and "[i]n reviewing

such orders, we are mindful of the strong preference to enforce arbitration

agreements, both at the state and federal level," Hirsch v. Amper Fin. Servs.,

LLC, 215 N.J. 174, 186 (2013). That preference, "however, is not without

limits." Garfinkel v. Morristown Obstetrics & Gynecology Assocs., P.A., 168

N.J. 124, 132 (2001).

Arbitration agreements are subject to customary contract law principles.

Atalese, 219 N.J. at 442. Under our State's defined contract-law principles, a

valid and enforceable agreement requires: (1) consideration; (2) a meeting of

the minds based on a common understanding of the contract terms; and (3)

unambiguous assent. Id. at 442-45. Consequently, to be enforceable, the terms

of an arbitration agreement must be clear, and any legal rights being waived

must be identified. Id. at 442-43; see also Kernahan v. Home Warranty Adm'r

of Fla., Inc., 236 N.J. 301, 319-20 (2019). "No particular form of words is

A-0566-23

15

necessary to accomplish a clear and unambiguous waiver of rights." Atalese,

219 N.J. at 444. If, "at least in some general and sufficiently broad way," the

language of the clause conveys that arbitration is a waiver of the right to bring

suit in a judicial forum, the clause will be enforced. Id. at 447; see also Morgan

v. Sanford Brown Inst., 225 N.J. 289, 309 (2016) ("No magical language is

required to accomplish a waiver of rights in an arbitration agreement.").

Here, we agree with the judge that the arbitration provision conformed to

the dictates of Atalese, satisfied the elements necessary for the formation of a

contract, and was therefore enforceable. Plaintiff argues "the [a]rbitration

[p]rovision is ambiguous, lacking an explanation, and inconspicuously sized and

positioned within the [c]ontract." However, plaintiff's claims are undermined

by the fact that the overwhelming and undisputed evidence in the record clearly

establishes that plaintiff was aware of, understood, knowingly assented to, and

even negotiated terms in the arbitration provision.

"An arbitration agreement is valid only if the parties intended to arbitrate

because parties are not required 'to arbitrate when they have not agreed to do

so.'" Kernahan, 236 N.J. at 317 (quoting Volt Info. Scis., Inc. v. Bd. of Trs.,

489 U.S. 468, 478 (1989)). As such, "[a] court's objective in construing a

contract is to determine the intent of the parties," and, in that quest, "'the court

A-0566-23

16

must consider the relations of the parties, the attendant circumstances, and the

objects they were trying to attain.'" Id. at 320-21 (quoting Tessmar v. Grosner,

23 N.J. 193, 201 (1957)).

In County of Passaic v. Horizon Healthcare Services, Inc., 474 N.J. Super.

498, 501 (App. Div. 2023), where the parties were a county and a health

insurance company with a longstanding contractual relationship involving the

management of the County's self-funded health benefit plan, we rejected the

County's assertion that the arbitration provision in dispute was "unenforceable

because it lack[ed] the explicit waiver of access to the courts prominently

featured" in Atalese. We reasoned that "even though the arbitration provision

does lack such an explicit waiver, the County is a sophisticated contracting party

and is not – as in Atalese and other authorities – an employee or consumer

lacking sufficient bargaining power to resist the extraction of an agreement to

arbitrate." Ibid.

Similarly, in Grandvue Manor, LLC v. Cornerstone Contracting Corp.,

471 N.J. Super. 135 (App. Div. 2022), we deemed the contractor corporation

and couple who, through an LLC, contracted for construction of a $10 million

home, "sophisticated parties who elected arbitration clearly and

unambiguously." Id. at 139-40, 146. As a result, we upheld the arbitration

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17

clause which clearly delineated that the parties had a choice between arbitration

or "'[l]itigation in a court of competent jurisdiction.'" Id. at 140.

Here, there was no contract of adhesion or unequal bargaining relationship

between the contracting parties. Unlike a form consumer contract, this contract,

including the arbitration provision, was individually negotiated by plaintiff who

was assisted by counsel and "versed in the meaning of law-imbued terminology

about procedures." Kernahan, 236 N.J. at 319. Accordingly, despite the absence

of an explicit waiver of access to the courts, this is a setting where plaintiff is

"presumed to understand . . . what was being agreed to," including the

provision's terms and legal effect. Id. at 320-21.

Plaintiff argues that "to overcome" the deficiencies in the arbitration

provision, the judge erroneously considered "parol evidence which, as a matter

of law, cannot alter the substance or meaning of the [a]rbitration [p]rovision."

"In general, the parol evidence rule prohibits the introduction of evidence that

tends to alter an integrated written document." Conway v. 287 Corp. Ctr.

Assocs., 187 N.J. 259, 268 (2006) (citing Restatement (Second) of Conts. § 213

(Am. L. Inst. 1981)). It "is a rule of substantive law, not a rule of evidence."

Ibid.

As such, in Conway, our Supreme Court explained:

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18

[W]e permit a broad use of extrinsic evidence to

achieve the ultimate goal of discovering the intent of

the parties. Extrinsic evidence may be used to uncover

the true meaning of contractual terms. It is only after

the meaning of the contract is discerned that the parol

evidence rule comes into play to prohibit the

introduction of extrinsic evidence to vary the terms of

the contract.

[Id. at 270.]

Here, the judge did not rely on parol evidence to alter the terms of an

integrated contract. Instead, the judge considered Kaplan's certification and

email attachments as relevant to the circumstances in which the contract was

entered, which he was permitted to do. See Atl. N. Airlines, Inc. v. Schwimmer,

12 N.J. 293, 301 (1953) ("Evidence of the circumstances is always admissible

in aid of the interpretation of an integrated agreement.").

Plaintiff also argues the judge erred in reversing his "prior determination"

when he adjudicated the first motion "without conducting the required analysis

for reconsideration of interlocutory orders" under Rule 4:42-2. "Under Rule

4:42-2, interlocutory orders are 'subject to revision at any time before the entry

of final judgment in the sound discretion of the court in the interest of justice.'"

In re Est. of Jones, 477 N.J. Super. 203, 216-17 (App. Div. 2023) (quoting

Lawson v. Dewar, 468 N.J. Super. 128, 134 (App. Div. 2021)).

"Reconsideration under this rule offers a 'far more liberal approach' than Rule

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19

4:49-2, governing reconsideration of a final order." JPC Merger Sub LLC v.

Tricon Enters., Inc., 474 N.J. Super. 145, 160 (App. Div. 2022) (quoting

Lawson, 468 N.J. Super. at 134).

"Interlocutory orders are always subject to revision in the interests of

justice" and a trial court "'may revise them when it would be consonant with the

interests of justice to do so.'" Lombardi v. Masso, 207 N.J. 517, 536 (2011)

(quoting Ford v. Weisman, 188 N.J. Super. 614, 619 (App. Div. 1983)). Indeed,

where "the judge later sees or hears something that convinces him[ or her] that

a prior ruling is not consonant with the interests of justice, he[ or she] is not

required to sit idly by and permit injustice to prevail" but "is empowered to

revisit the prior ruling and right the proverbial ship." Id. at 537.

That is exactly what occurred here. Relying on the arbitration provision

in the parties' agreement, defendant moved pre-answer to compel arbitration and

the judge denied the motion, limiting his findings of fact and conclusions of law

to the pleadings and the contract itself. After defendant moved post-answer to

compel arbitration and submitted a supporting certification, sufficient evidence

existed in the motion record to support the judge's findings that plaintiff assented

to the arbitration and choice of law provisions based on his counseled

negotiations with defendant prior to executing the agreement. Therefore, based

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20

on the newly adduced evidence, the judge revised his decision consonant with

the interests of justice. See R. 4:6-2(a) (permitting defense to move to dismiss

complaint for lack of jurisdiction, which permits consideration of matters

outside the pleadings without converting the motion to one for summary

judgment); cf. R. 4:6-2(e) (permitting defense to move to dismiss complaint for

"failure to state a claim upon which relief can be granted," which requires

converting the motion to one for summary judgment if matters beyond the

pleadings are presented).

Plaintiff also asserts that the judge "conducted an inadequate choice of

law analysis" "to determine which states['] law should apply," "rendering the

entirety of [his] decision to compel arbitration a nullity." Even if the judge was

correct in applying New York law, defendant argues he erred in finding the

arbitration provision enforceable under New York law.

"Ordinarily, when parties to a contract have agreed to

be governed by the laws of a particular state, New

Jersey courts will uphold the contractual choice if it

does not violate New Jersey's public policy."

[Instructional Sys., Inc. v. Comput. Curriculum Corp.,

130 N.J. 324, 341 (1992)].

[T]he law of the state chosen by the

parties will apply, unless either:

(a) the chosen state has no

substantial relationship to the parties or the

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21

transaction and there is no other reasonable

basis for the parties' choice, or

(b) application of the law of the

chosen state would be contrary to a

fundamental policy of a state which has a

materially greater interest than the chosen

state in the determination of the particular

issue and which would be the state of the

applicable law in the absence of an

effective choice of law by the parties.

[Id. at 342.]

[Grandvue Manor, LLC, 471 N.J. Super. at 142 (second

alteration in original).]

Here, the parties clearly and unambiguously chose to be governed by New

York law. Defendant is a New York company and several planning meetings

between the parties occurred in New York. We conclude that New York has

sufficient contacts with the parties to make the choice of law governing the

arbitration clause "a reasonable contractual term, not offensive to any previously

enunciated or presently viable public policy of this forum," Kalman Floor Co.

v. Jos. L. Muscarelle, Inc., 196 N.J. Super. 16, 22 (App. Div. 1984), and we

discern no principled basis in law or fact why the law of the state chosen by the

parties should not apply.

Next, we consider whether the arbitration provision would be enforceable

under New York law. New York law regarding the enforceability of contractual

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22

arbitration provisions is not unlike New Jersey law, and New Jersey courts are

not unfamiliar with New York law. In Grandvue, we explained:

[W]ith respect to the effect of an arbitration agreement,

New York law provides:

A written agreement to submit any

controversy thereafter arising or any

existing controversy to arbitration is

enforceable without regard to the

justiciable character of the controversy and

confers jurisdiction on the courts of the

state to enforce it and to enter judgment on

an award. In determining any matter

arising under this article, the court shall not

consider whether the claim with respect to

which arbitration is sought is tenable, or

otherwise pass upon the merits of the

dispute.

[N.Y. C.P.L.R. § 7501 (2021).]

The New York Court of Appeals elaborated as follows:

[T]he announced policy of [the State

of New York] favors and encourages

arbitration as a means of conserving the

time and resources of the courts and the

contracting parties. "One way to

encourage the use of the arbitration forum"

we recently noted "would be to prevent

parties to such agreements from using the

courts as a vehicle to protract litigation.

This conduct has the effect of frustrating

both the initial intent of the parties as well

as legislative policy[.]" Matter of Weinrott

(Carp), 32 N.Y.2d 190, 199 (1973). To this

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end the Legislature has assigned the courts

a minimal role in supervising arbitration

practice and procedures.

Generally it is for the courts to make

the initial determination as to whether the

dispute is arbitrable, that is "whether the

parties have agreed to arbitrate the

particular dispute." Steelworkers v. Am.

Mfg. Co., 363 U.S. 564, 570-71 (1960).

The ultimate disposition of the merits is of

course reserved for the arbitrators and the

courts are expressly prohibited from

considering "whether the claim with

respect to which arbitration is sought is

tenable, or otherwise pass(ing) upon the

merits of the dispute[.]" C.P.L.R. § 7501.

Ideally then the courts should confine

themselves to the arbitration clause and

leave the overall contract to the arbitrators.

This, of course, is facilitated when the

arbitration clause specifies the issues

which are subject to arbitration and those

which are not.

....

. . . . Basically the courts perform the

initial screening process designed to

determine in general terms whether the

parties have agreed that the subject matter

under dispute should be submitted to

arbitration. Once it appears that there is, or

is not a reasonable relationship between the

subject matter of the dispute and the

general subject matter of the underlying

contract, the court's inquiry is ended.

Penetrating definitive analysis of the scope

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of the agreement must be left to the

arbitrators whenever the parties have

broadly agreed that any dispute involving

the interpretation and meaning of the

agreement should be submitted to

arbitration[.] See, e.g., Matter of

Exercycle Corp. (Maratta), 9 N.Y.2d 329,

334 (1961).

[Nationwide Gen. Ins. Co. v. Invs. Ins. Co.

of Am., 332 N.E.2d 333, 335 (N.Y. 1975).]

Thus, New York law instructs that courts perform

an initial screening "to determine in general terms

whether the parties have agreed that the subject matter

under dispute should be submitted to arbitration."

[Ibid.]

[Grandvue, 471 N.J. Super. at 143-44 (all but first and

last alteration in original).]

Here, the parties clearly and unambiguously agreed to submit to

arbitration "any dispute arising out of the services in this [a]greement." Because

the dispute arose out of the services in the agreement and plaintiff never

questioned the scope of the arbitration agreement, we conclude a New York

court would likely enforce the arbitration provision. See Singer v. Jefferies &

Co., 575 N.E.2d 98, 99-101 (N.Y. 1991) (upholding an arbitration provision

covering "any controversy arising out of the business of the employer"); Atlas

Drywall Corp. v. Dist. Council of N.Y.C. & Vicinity of United Brotherhood of

Carpenters & Joiners, 576 N.Y.S.2d 319, 320-21 (App. Div. 1991) (upholding

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an arbitration provision covering "'all disputes between [the parties], both within

and without the agreement'" (alteration in original) (emphasis omitted)).

Plaintiff reprises his argument that the arbitration provision would be

unenforceable under New York law because the provision would be

inadmissible under N.Y. C.P.L.R. § 4544, "prohibit[ing] the admission of

exhibits with text that is not clear and legible or is smaller than eight-point font"

in disputes involving a consumer transaction or a residential lease.

In Drelich v. Kenlyn Homes, Inc., 446 N.Y.S.2d 408, 409 (App. Div.

1982), the court interpreted a "consumer transaction" within the meaning of the

statute as follows:

Pursuant to the provisions of [N.Y. C.P.L.R. § 4544], a

"'consumer transaction'" is one "wherein the money,

property or service which is the subject of the

transaction is primarily for personal, family or

household purposes". If, in fact, the subject written

contract was part of a consumer transaction as so

defined and the print size failed to comply with the

minimum requirements set forth in the statute, then the

contract may not be received in evidence upon behalf

of defendant.

The Drelich court concluded that the contract at issue in the case, which

involved the sale and construction of a home, did not qualify as a consumer

transaction under the statute. Id. at 410. The court explained:

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The express terms of the statute in question establish

that it is applicable first to consumer transactions for

goods, property and services, and second, to leases for

residential property. The statute reflects the legislative

intent to regulate transactions for such property and

services which are primarily personal in nature in order

to protect the unwary consumer from the sharp

practices of various dubious business enterprises which

deal in such services and goods which are attractive to

consumers. In addition to these personal transactions,

the statute is also made applicable to leases for

residential property, which, as chattels real, constitute

personal property. To extend the statute so as to make

it applicable to a contract for the construction and sale

of a one-family dwelling would require a strained

reading of the express language of the statute and would

require that such meaning be determined by

implication. This we decline to do, and we determine

that such a contract is not within the scope of a

consumer transaction since it is not included in the

express terms of the statute in question.

[Ibid.]

For the same reasons, we are satisfied that N.Y. C.P.L.R. § 4544 does not

apply to the transaction here. Designing a home and building it are part and

parcel of the same process. To extend the statute to encompass a contract

regulating the former would likewise require a strained reading of the statute's

express language.

Affirmed.

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