Rockel v. Cherry Hill Dodge, 368 N.J.Super. 577 (App.Div 2004)(consumer fraud and arbitration agreements)

Arbitration Agreements Are Enforceable For Consumer Fraud Act Claims

Most formal arbitration agreements have pre-printed arbitration agreements forcing all claims between the parties to avoid the court system and go to binding arbitration

In Rockel, the Court analyzed the conflicting arbitration clauses and determined that the placement of the arbitration clause, combined with the conflicting provisions, warranted a denial of the motion because it was not clear that the party drafting the agreements, the dealership, intended to use the arbitration clause. In the present case there is a buyer’s order with no agreement and a retail order with an agreement. Had the defendant intended to rely upon the arbitration agreement there would have been one placed in the final agreement, the retail order which was the last agreement signed between the parties.

This case dealt with arbitration and a contract to buy a car. There were multiple arbitration agreements across multiple documents on a single transaction. The defendant asserted that the multiple arbitration agreements meant that the defendant intended to have arbitration. The court did not agree with the defendant's position. The court held that you have multiple arbitration agreements that conflicted with each other both internally and in other ways there could be no intent to rely upon arbitration. The court held that the drafter of the agreement must be clear to establish their intent to go to arbitration. Multiple agreements did not mean there was intent. If there are multiple agreements they have to be consistent and not contradictory. The rules and procedures must be the same. The conditions must be the same and other significant factors must be the same to enforce the arbitration agreement. Again, it is not enough that there are multiple arbitration agreements but there must be commonality in typicality amongst those agreements. If the agreements are different in any significant fashion the court will assume that there is no intent to enforce the arbitration agreement and will force the parties to go to court, or deny their request to the arbitration pursuant to the Uniform Arbitration Act.

The court would take the first step to determine what arbitration agreements exist. After the court determined which arbitration agreements that exist they would need to determine if the dispute was within the scope of the arbitration agreements.

In the first at the court needs to determine if the arbitration agreements clear improperly discloses all the terms and conditions of the arbitration agreement. The court would look at many factors including placement of the arbitration clause clearance of the arbitration clause, including but not limited to where the arbitration clause is located, the nature of the type print and other factors including where within the document the arbitration clause was located. These are all relevant considerations when the court determines to enforce an arbitration agreement.

Courts have determined that the repossession practices post transaction could be included in an arbitration agreement entered into between the parties at the time of the transaction. Courts have determined that if there is a delegation clause in the Arbitration Agreement the arbitration form will decide if the arbitration agreement is enforceable.

What this means is, if there is an arbitration agreement that says the American Arbitration Association determines if the agreement is enforceable the parties would go to American Arbitration Association and have an arbitrator determine if the agreement is enforceable.

This would be pursuant to an agreement between the parties. If the American Arbitration Association arbitrator determine that the agreement was not enforceable then the parties would return to Superior Court. If the American Arbitration Association arbitrator determine that the agreement was unenforceable that the parties will continue with the proceedings and arbitration. The concept is that arbitration should be reasonable, cheap and affordable. However, forcing arbitrator to determine if the agreement is enforceable is neither timely nor inexpensive in theory. However, many dealerships drafter arbitration agreement in this way. They want the arbitrator determine if the arbitration agreement is enforceable.

Many litigants have challenged the enforceability of arbitration agreements. Many experienced attorneys have asserted that the consumer fraud act claims should not be subject to arbitration. Most have lost. Courts have determined that Consumer Fraud Act claims can go to arbitration and is not inconsistent with public policy. Courts have held that public policy determines that the enforceability of arbitration agreements is favored and that alternative resolution of disputes outside the court system is also favored if agreed upon by the parties.