Tuttle Yick attorney Alex Banzhaf recently prevailed in an appeal in the New Jersey Appellate Division. Tuttle Yick represents an architectural firm that was not fully paid for its work designing an over 11,000 square foot home. When Tuttle Yick’s client tried to collect, the homeowner filed a retaliatory lawsuit in New Jersey to avoid arbitration in New York as the parties’ contract provides. Tuttle Yick moved to dismiss, pointing to the arbitration clause. The homeowner misrepresented to the court that he was not aware of the arbitration clause when he signed the contract, and the court relied on the misrepresentation to deny the motion to dismiss.
Tuttle Yick filed an answer for its client and, no longer limited by the motion to dismiss standard of review, moved to compel arbitration with substantial evidence of the homeowner’s falsehoods. Based on evidence that the homeowner knew about and negotiated the arbitration clause, the court enforced the arbitration clause and dismissed the case in favor of arbitration. The homeowner appealed that order and argued the arbitration clause was unenforceable under New Jersey law. Following New Jersey’s court rules, the court stayed any arbitration between the parties pending the resolution of the appeal.
The appellate court affirmed. Tuttle Yick showed the appellate court the homeowner was fully aware of the arbitration clause and knowingly agreed to it. Tuttle Yick also persuaded the appellate court that the arbitration clause was enforceable under either New York or New Jersey law. In so doing, Tuttle Yick distinguished three New Jersey Supreme Court cases that require arbitration clauses in consumer contracts to contain an express waiver of the right to a jury trial. That requirement only applies to form contracts, not negotiated contracts.
Greg Tuttle and Alexa DePierro assisted with the successful briefing.