GABRIELLA FALZO VS. GREEN JUMPERS SOUTH PLAINFIELD, LLC (L-4497-19, MIDDLESEX…

                                NOT FOR PUBLICATION WITHOUT THE
                               APPROVAL OF THE APPELLATE DIVISION
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                                                        SUPERIOR COURT OF NEW JERSEY
                                                        APPELLATE DIVISION
                                                        DOCKET NO. A-2134-19T2

GABRIELLA FALZO,

          Plaintiff-Respondent,

v.

GREENE JUMPERS SOUTH
PLAINFIELD, LLC, RPSZ
CONSTRUCTION, LLC, SKY
ZONE FRANCHISE GROUP, LLC,
SKY ZONE, LLC and SKYZONE
SOUTH PLAINFIELD,

          Defendants,

and

EVERMORE FITNESS, LLC,

     Defendant-Appellant.
______________________________

                   Argued telephonically August 4, 2020 –
                   Decided October 7, 2020

                   Before Judges Rothstadt and Firko.

                   On appeal from the Superior Court of New Jersey, Law
                   Division, Middlesex County, Docket No. L-4497-19.
            Samuel G. John argued the cause for appellant (Wood
            Smith Henning & Berman, LLP, attorneys; Kelly A.
            Waters, of counsel and on the briefs; Jill A. Mucerino
            and Samuel G. John, on the briefs).

            Corey A. Dietz argued the cause for respondent (Brach
            Eichler, LLC, attorneys; Corey A. Dietz, on the brief).

PER CURIAM

      Defendant Evermore Fitness, LLC, the owner and operator of Sky Zone,

an indoor trampoline park, appeals from the Law Division's October 9, 2019

order denying defendant's Rule 4:6-2(e) motion to dismiss and to compel

arbitration, and from the court's December 24, 2019 order denying defendant's

motion for reconsideration. Through its motions, defendant sought to dismiss

plaintiff Gabriella Falzo's complaint for damages relating to the personal

injuries she sustained while a patron at defendant's facility on January 12, 2019,

and to enforce an arbitration clause in a "Participant" agreement signed by

plaintiff prior to her entry to the trampoline park.

      The arbitration clause, which was by its terms to be governed by New

Jersey law, stated, among other things, that the parties would arbitrate "any

dispute, claim or controversy arising out of or relating to [plaintiff's] use of the

Sky Zone premises . . . ." The provision also stated that the arbitration would

be conducted in the county where the Sky Zone facility was located, and any


                                                                            A-2134-19T2
                                         2
dispute would be determined by one arbitrator. The arbitration was to "be

administered by JAMS [formerly known as the Judicial Arbitration and

Mediation Service] pursuant to its Rule 16:1 expedited arbitration rules and

procedures." Also, the clause contained an acknowledgment by plaintiff that

she knew that the "JAMS Arbitration Rules [were] available online for [her]

review[.]"    However, two years prior to the date that plaintiff signed the

agreement, on May 1, 2017, JAMS became ineligible for providing services in

New Jersey.

      On June 14, 2019, plaintiff filed her complaint alleging negligence and

challenging the enforceability of the Participant agreement.             Defendant

responded by filing its Rule 4:6-2(e) motion to dismiss and to compel

arbitration. In opposition, plaintiff argued that the arbitration clause was invalid

and impossible to perform because JAMS was barred from participating in an

arbitration in New Jersey.

      The motion judge heard oral argument on defendant's motion and, on

October 9, 2019, he entered an order denying the motion and issued a

comprehensive written decision setting forth his reasons. After citing to the

Court's opinion in Atalese v. U.S. Legal Services Group, L.P., 219 N.J. 430

(2014) and Kernahan v. Home Warranty Administrator of Florida., Inc., 236 N.J.


                                                                            A-2134-19T2
                                         3
301 (2019), the motion judge concluded that the arbitration clause was invalid

"because there was no meeting of minds between plaintiff and defendant[] when

plaintiff signed the Agreement."        The judge concluded that "[s]ince the

Agreement expressly provide[d] for JAMS to be the forum for all disputes and

since JAMS is not authorized to practice law in New Jersey, there was no

meeting of the minds between the parties as to the forum in which the parties

agreed to arbitrate." In support of his conclusion, the motion judge cited to our

holding in Kleine v. Emeritus at Emerson, 445 N.J. Super. 545 (App. Div. 2016)

and found, like the facts of the present case, the parties in Kleine had agreed

upon a "forum for arbitration [that] was no longer available," which therefore

warranted the reversal of an order compelling arbitration.

      Defendant then filed its motion for reconsideration. Defendant's primary

argument was that the motion judge erred in concluding that there was no mutual

assent to the terms of the arbitration clause. Relying on the Federal Arbitration

Act (FAA), 9 U.S.C. §§ 1 to 16, the New Jersey Arbitration Act (NJAA),

N.J.S.A. 2A:23B-1 to -32 and our opinion in Flanzman, defendant argued that

the unavailability of the arbitral forum identified in the arbitration clause did not

nullify the parties' obligation to arbitrate claims.




                                                                             A-2134-19T2
                                          4
      The motion judge considered the parties' oral arguments and, on

December 24, 2019, he entered an order—supported by another written

statement of reasons—denying defendant's motion for reconsideration. In his

written decision, the judge reiterated his denial of the motion to dismiss, finding

again that there was no mutual assent to the terms of the arbitration clause. In

doing so, the judge specifically addressed defendant's reliance on our opinion in

Flanzman, the FAA, the NJAA, and the Third Circuit's opinion in Khan v. Dell

Inc., 669 F. 3d 350 (3rd Cir. 2012). The judge also discussed defendant's

argument that the facts in this case were distinguishable from those in Kleine.

      Responding to defendant's contentions, the motion judge again turned to

our holding in Kleine and the Court's opinion in Atalese regarding the creation

of binding agreements to arbitrate and concluded again that this matter was

"analogous to Kleine." The court further noted that defendant's reliance on the

arbitrator selection processes in the FAA and NJAA to cure the failure to

designate an arbitral forum was "misplaced," as was its reliance on our opinion

in Flanzman, because here the parties' agreement "recognize[d] the principle that

the arbitral forum defines the parties' rights at arbitration" and "[s]ince the

arbitral forum agreed to by the parties [was] unavailable, the rights that replace




                                                                           A-2134-19T2
                                        5
the rights to a jury trial are unknown and there could be no meeting of the

minds." This appeal followed.

      On appeal, defendant argues that "the unavailability of JAMS is

immaterial to the enforceability of the arbitration provision because federal law

and New Jersey law require court appointment of an arbitrator" and that "there

are no public policy concerns regarding the agreement."

      After the parties fully briefed their positions before us, and after we

considered their oral arguments, on September 11, 2020, the Supreme Court

reversed our holding in Flanzman. See Flanzman v. Jenny Craig, Inc., __ N.J.

__ (2020).1 In doing so, the Court discussed the distinction between Flanzman

and Kleine and described the benefits of parties "identify[ing] a specific

arbitrator or arbitrators or agree[ing] to retain an arbitrator affiliated with a given

arbitration organization who will apply that organization's rules ." Id. at ___

(slip op. at 25).

      As it is apparent to us that the motion judge and the parties here relied

upon our opinions in Flanzman and Kleine, we conclude that the best course is



1
  Also, after our oral argument in this matter, but prior to the Court issuing its
opinion in Flanzman, on August 18, 2020, the Court issued an opinion reversing
our holding in Skuse v. Pfizer, Inc., 457 N.J. Super. 539 (App. Div. 2019), rev'd,
__ N.J. __ (2020), another case cited to by the motion judge here.
                                                                               A-2134-19T2
                                          6
to remand this matter to the motion judge for reconsideration of his orders in

light of the Supreme Court's recently issued opinion. The remand should be

completed within thirty days and the motion judge shall give the parties the

opportunity to file written submissions setting forth their positions on the impact

of the Court's opinion in Flanzman, and, if requested, to present oral argument.

      By remanding, we do not suggest what the outcome of the remand should

be, only that we believe that the parties' and the motion judge's consideration of

the issues presented would benefit from the additional guidance provided by the

Supreme Court.

      Vacated and remanded for further proceedings consistent with our

opinion. We do not retain jurisdiction.




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