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NJ appellate court enforces arbitration clause
In Sugar v. Dombroff, the New Jersey Appellate Division affirmed a trial court order compelling arbitration of plaintiff’s claims arising from a real estate venture, based on an arbitration clause in a written Operating Agreement. The plaintiff invested $1.5 million and guaranteed additional financing for a joint real estate project, and later sued defendants for alleged fraud, deceptive conduct, and statutory violations. The Operating Agreement contained a broad clause requiring that “any dispute among the Members” be resolved by arbitration under the American Arbitration Association rules. The trial court compelled arbitration of all claims between the signatory parties, finding no prohibition under New Jersey law against arbitrating statutory claims and mutual assent to arbitrate. On appeal the Appellate Division held that the arbitration clause was valid and enforceable, and that its broad wording (“any dispute”) clearly and unmistakably encompassed statutory as well as contractual disputes. It further found that the Atalese standard for a consumer to waive its right to a trial by jury inapplicable, and that a separate provision of the operating agreement including a trial jury waiver. As a result, the court enforced the contractual agreement to arbitrate and rejected plaintiff’s arguments that he had not agreed to arbitrate statutory claims or waived trial rights.