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Weinstock v. Weinstock

377 N.J. Super. 182, 871 A.2d 776 (App. Div. 2005)

ARBITRATION — Under the New Jersey Alternative Procedure for Dispute Resolution Act and the New Jersey Arbitration Act, a party may not appeal the decision of an arbitrator directly to the Appellate Division.

Two brothers jointly owned three corporations, one partnership, and real estate. They had a disagreement as to the affairs of the corporations, and one brother sued the other seeking an accounting, dissolution, and division of the assets. He also sought appointment of a fiscal agent. The lower court issued an order for discovery and binding arbitration. The lower court’s order provided that the parties waived their right to appeal from the arbitrator’s decision, except with respect to conclusions of law. It further provided that all appeals were to be made to the Appellate Division pursuant to the New Jersey Alternate Dispute Resolution Act. A special fiscal agent was then appointed. The agent issued a ruling which modified the lower court’s order. It gave the parties the right to appeal all factual and legal arbitrated issues directly to the Appellate Division. Shortly thereafter, the arbitrator held several hearings on the matter, after which he issued a written opinion. The parties then appeared before the lower court regarding the arbitrator’s opinion. The parties asserted that they had a right to appeal the opinion directly to the Appellate Division pursuant to the fiscal agent’s ruling. The lower court remanded the matter to the arbitrator to determine the appropriate method of appeal. The arbitrator concluded that he had no power to modify the lower court’s prior determination regarding the right to appeal, and therefore the parties were confined to appealing only conclusions of law to the Appellate Division. The lower court affirmed the arbitrator’s determination, and the parties appealed raising several issues regarding the arbitrator’s factual and legal findings.

The Appellate Division affirmed the lower court’s ruling. It held that it had no jurisdiction over the matter because arbitration appeals must be made to the lower court by statute. The Court held that the lower court had the power to confirm, modify or vacate the arbitration award under either the New Jersey Alternative Procedure for Dispute Resolution Act (APDRA) or the New Jersey Arbitration Act. The APDRA provides a voluntary set of procedures that parties can elect to follow to resolve a dispute. If the parties agree to these procedures, they automatically waive their right to a jury trial. Under the APDRA, the parties submit their dispute to an arbitrator who conducts hearings on the facts of the case, after which the arbitrator issues a formal opinion. The parties may not appeal the arbitrator’s opinion unless the arbitrator committed a prejudicial error that resulted in an erroneous application of the law to the facts and issues of the case. If the parties can demonstrate that the arbitrator committed such an error, they may file an appeal with the Supreme Court Chancery Division. The lower court then determines whether the arbitrator made a prejudicial error in applying the law. If a prejudicial error is discovered, the Chancery Division must set forth the applicable law and enter a judgment based on the facts of the case. This judgment is binding and may not be appealed to the Appellate Division. As a result, the Court concluded that the APDRA does not permit a party to appeal an arbitrator’s award to the Appellate Division. It further found that the Arbitration Act does not authorize appeals to the Appellate Division. Accordingly, it held that the parties had to appeal the arbitration award directly to the Chancery Division, which had jurisdiction under the APDRA and the Arbitration Act.


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