The New Jersey Supreme Court has agreed to hear the appeals of two auto dealerships who claim that an appeals court wrongly decided that two dissatisfied customers did not have to arbitrate their claims.
The court agreed to hear the appeals filed by the dealerships—Foulke Management Corp., doing business as Cherry Hill Triplex and Cherry Hill Mitsubishi, and Mall Chevrolet, also in Cherry Hill—on Sept. 28.
A three-judge Appellate Division panel in April overturned two lower court rulings that said the customers could be compelled to arbitrate their disputes.
In a published opinion, the appeals court said the trial judges acted too hastily in granting the dealerships’ motion to dismiss the claims, which were filed by plaintiffs Sasha Robinson and Jannell Goffe after they canceled their respective automobile purchases.
Robinson had sued Mall Chevrolet after she returned a 2016 Chevrolet Malibu that she purchased in November 2016 for $23,620.
Goffe sued Foulke after returning a Buick Verano that she had purchased for $15,800 in October 2016.
The sales contracts, the defendants have argued, required all disputes to be arbitrated and those arbitration agreements were clear, concise and easily understandable.
Both lawsuits were filed in Camden County. Superior Court Judge Thomas Shusted Jr. granted Mall Chevrolet’s motion; Superior Court Judge Michael Kassel granted Foulke’s motion. Both women appealed.
The lawsuits allege the dealerships violated the state Consumer Fraud Act, the New Jersey Truth-in-Consumer Contract Warrant and Notice Act, the New Jersey Plain Language Act and the federal Truth-in-Lending Act.
Appellate Division Judge Clarkson Fisher Jr., writing for the panel, said there should be limited discovery and hearings to determine if the dealerships complied with the requirements of the statutes, such as providing the plaintiffs with copies of the sales agreements, even though judges noted that federal policy strongly favors arbitration as a means of settling disputes.
“The policy that favors arbitration does not exist in a vacuum,” Fisher said. Judges Douglas Fasciale and Thomas Sumners Jr. joined in the ruling.
“Parties must have agreed to arbitrate before a judge may compel them to arbitrate,” Fisher said. “[C]ourts do not offend the federal policy favoring [arbitration] when applying state contract principles.”
The appeals court noted that the two plaintiffs later signed agreements rescinding the original sales contracts and that those agreements contained no language compelling arbitration.
Factual disputes must be resolved by a judge before there can be any decision to compel arbitration, Fisher said.
“Any other approach risks a possibility that a CFA violator might receive the benefit of the very contract extracted in violation of the CFA,” Fisher said.
The plaintiffs are represented by Cherry Hill solo Charles Riley. He had no comment on the court’s decision to hear the dealerships’ appeal.
The dealerships are represented by Laura Ruccolo, of Capehart & Scatchard in Mount Laurel. She did not return a telephone call.