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Griffin v. Burlington Volkswagen, Inc.

411 N.J. Super. 515, 988 A.2d 101 (App. Div. 2010)

CONTRACTS; ARBITRATION — Agreements to arbitrate must be read liberally in favor of arbitration and an arbitration agreement containing terms such as “arising out of” or “relating to,” reflects an indication of an agreement to arbitrate any dispute relating “in any way” to the contract.

A prospective buyer needed financing to purchase a car. The buyer claimed that, at the time of the sale, he was assured by the car salesperson that he had already been approved for financing. According to him, based on those statements, he signed a “retail order form” and took possession of the car. The form included an expansive arbitration clause under which the buyer agreed “to arbitrate any claim, dispute, or controversy … that may arise out of or relating to the purchase… identified in the motor vehicle retail order and the financing thereof.” It turned out that the lender changed its mind and the dealership attempted to repossess the car. The dealership also claimed the buyer forcibly removed the car from its premises. The buyer was arrested while driving the car and incarcerated overnight. He also had to respond to criminal charges that were subsequently dismissed. He then sued the dealership, asserting common law claims for false arrest, false imprisonment, malicious prosecution, abuse of process, and intentional infliction of emotional distress, and made a statutory claim under the New Jersey Civil Rights Act of 2004. The car dealership moved to dismiss on the grounds that the buyer was required to arbitrate his claims under the arbitration provision contained in the retail order form.

The lower court dismissed the complaint, ruling that the buyer should have brought all claims before an arbitrator as required by arbitration clause in the retail order form. The purchaser appealed.

On appeal, the Appellate Division affirmed, holding that the agreement to arbitrate had to be read liberally in favor of arbitration, saying that courts should decide these issues under a “presumption of arbitrability.” Courts have generally read the terms “arising out of” or “relating to” a contract as indicative of an extremely broad agreement to arbitrate any dispute relating “in any way” to the contract. Moreover, the Court ruled that arbitration provisions using such expansive language encompass a requirement to arbitrate statutory claims such as alleged civil rights violations and common law torts. It found that the retail order form had such an expansive form of arbitration clause and that the buyer’s claims “arose out of” and “related to” the actions that the dealership took after the buyer retained possession of the car. The Court believed those claims (including the tort claims), depended, at least in part, on a determination of the parties’ respective interests in the car under the retail order form. Accordingly, the claims were deemed to be subject to the arbitration clause contained in the retail order form.

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