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Marini v. Quality Remodeling Co., Inc.

A-5511-04T3 (N.J. Super. App. Div. 2006) (Unpublished)

CONTRACTS; ESTOPPEL—When a person files a complaint with an administrative agency claiming to be a party to an agreement, that party cannot deny being a party to that agreement when the agreement benefits both the disclaiming party and his or her spouse and the agreement is signed by the disclaiming party’s spouse.

Homeowners retained a construction company to build a two-story addition to their home. The first page of the contract contained the following statement: “This contract includes the terms and provisions set forth herein, please read and sign.” The husband-homeowner, but not his spouse, initialed the first page of the contract immediately below that statement. The second page of the contract contained the “terms and provisions” including an obligation to use arbitration. Neither homeowner signed nor initialed the second page of the contract.

Approximately four months into the construction project, a dispute arose as to the progress and quality of work performed, and the homeowners ceased making payments. The construction company filed an arbitration claim. The homeowners did not respond to the claim, and the arbitrator entered an ex parte order which permitted the construction company to file a construction lien claim. The homeowners filed suit alleging, inter alia, that they never agreed to arbitration. The lower court ruled that the homeowners agreed to every provision in the contract, including the provision requiring arbitration.

During the suit, the wife-homeowner had moved to have the construction company’s third party complaint against her dismissed on the grounds she never signed the contract. While the lawsuit was pending, the homeowners filed a complaint with their county Department of Consumer Protection. The lower court, citing the wife’s complaint to the Department of Consumer Protection as evidence that she claimed to be a victim under the contract, estopped her from claiming that she was not bound by the contract.

The Appellate Division opined that the husband’s initials on the first page of the contract, directly below the phrase referencing the “terms and conditions,” bound him to the mandatory arbitration provision. Similarly, it upheld the lower court’s ruling which estopped the wife from claiming she was not a party to the contract. Thus, by her own actions, she was bound to the contract’s mandatory arbitration provision.

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