SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
A-6882-99T2
ARTHUR YAROSHEFSKY and
CHERYL YAROSHEFSKY,
Plaintiffs-Appellants,
v.
ADM BUILDERS, INC.,
Defendant/Third Party
Plaintiff-Respondent,
v.
CHESTER LAKONY, JOSE BONZINHO,
BONZINHO CONSTRUCTION CORP., INC.
and KABLAN PLUMBING & HEATING, INC.,
Third Party Defendants,
and
BLACKSTONE COMPANY, INC.,
Third Party Defendant/
Fourth Party Plaintiff-
Respondent,
v.
MI HOME PRODUCTS, INC. and
WALTER STOPKA,
Fourth Party Defendants.
Argued October 16, 2001 - Decided March 5, 2002
Before Judges Stern, Eichen and Parker.
On appeal from the Superior Court of New
Jersey, Law Division, Passaic County,
Docket No. L-5711-97.
Philip Elberg argued the cause for appellants
(Medvin & Elberg, attorneys; Mr. Elberg and
Jeffrey M. Wactlar, on the brief).
Owen T. Hughes argued the cause for third party
plaintiff-respondent ADM Builders, Inc. (Mandelbaum,
Salsburg, Gold, Lazris, Discenza & Steinberg,
attorneys; Lawrence C. Weiner, on the brief).
William F. Mueller argued the cause for fourth party
plaintiff-respondent Firstsource Northeast Group, Inc.,
formerly known as Blackstone Company, Inc. (Clemente,
Mueller and Tobia, attorneys; Mr. Mueller, of
counsel; Lori Anne Fee and Matthew A. Schiappa, on
the brief).
The opinion of the court was delivered by
STERN, P.J.A.D.
Plaintiffs purchased a new home in Wayne from defendant ADM
Builders ("defendant" or "ADM"). Plaintiffs thereafter filed a
complaint for breach of warranty and consumer fraud against
defendant alleging that the house contained major defects
including improperly installed windows, faucets that emitted
brown water, depressions in the floor and cracks in the
foundation. Plaintiffs appeal the judgment of July 17, 2000
granting summary judgment to defendant and dismissing the
complaint "with prejudice" on the grounds that the New Home
Warranty and Builders' Registration Act ("Act"), N.J.S.A. 46:3B-1
to -20, barred plaintiffs' suit because they had previously
submitted their claims to arbitration.
Plaintiffs argue that submission of their claims to
arbitration did not constitute an "election of remedies" under
the Act, N.J.S.A. 46:3B-9, because they withdrew their claim and
did not sign the arbitrator's "Acceptance of Decision" form.
Plaintiffs further assert that their warranty did not clearly
indicate that the arbitration procedure was binding. Defendant
contends that the initiation of the arbitration proceeding bars
any further action irrespective of plaintiffs' withdrawal of the
claim or their refusal to sign the acceptance form, and that
plaintiffs' new home warranty adequately informed them that
initiation of an arbitration proceeding barred any later civil
suit.
Plaintiffs also contend that the judge failed to explain why
their submission of a claim to arbitration resulted in the
dismissal of their complaint which included an allegation under
the Consumer Fraud Act, N.J.S.A. 56:8-1 to -106. However, the
dismissal of that contention would necessarily flow if they made
an "election of remedies."
On March 17, 1995, plaintiffs and defendant entered into a Purchase Agreement for a new home located at 74 Andover Drive in Wayne, New Jersey. The Purchase Agreement, which plaintiffs negotiated with the assistance of an attorney, included the following warranty:
13. Seller's Warranty: The Seller agrees to give the Buyer certain warranties concerning construction of the Dwelling as follows:
(a) The Seller warrants the construction of the Dwelling in accordance with the provisions of the New Jersey Home Warranty and Builders' Registration Act, N.J.S.A. 46:3B-1 et seq. The Seller will enroll the Dwelling in an approved warranty security plan at or promptly after closing. The Seller will pay all requisite fees and premiums for enrollment and coverage, provided that the Buyer will be responsible for any deductibles which are a part of the warranty security plan.
On July 24, 1995, plaintiffs received a "Certificate of Participation" in a "New Home Warranty Plan" ("the policy") administered by the Home Buyers Warranty Corporation ("HBW"). The policy became effective on October 13, 1995, the date of closing. Attached to the "Certificate of Participation" was a letter which stated that the policy was "in compliance with the New Jersey New Home Warranty and Builders' and Registration Act, N.J.S.A. 46:3B-10 et seq. [sic]." The policy included a provision setting forth the procedure the plaintiffs should follow in the event that they discovered defects in the home. It provided:
IV. Conciliation and Arbitration
. . . .
If the Homeowner(s) and Builder do not reach an agreement, if the [B]uilder does not make the repairs promptly or if the Homeowner is not satisfied with any repair of defects made by the [B]uilder, either the Builder or Homeowner(s) may request an impartial third- party arbitration with a Home Buyer Warranty approved arbitration service which will be conducted in accordance with their rules and regulations. The forms for requesting arbitration will be provided by the Home Buyers Warranty Service Office. In accordance with the Act and the Regulations, the Homeowner(s) has the right to pursue remedies other than conciliation and arbitration; however, election of other remedies shall bar the Homeowner(s) from pursuing the same claim under this warranty. (Emphasis added.)
After discovery of the alleged defects and defendant's failure or refusal to correct the defects, plaintiffs hired a plumber who discovered that the brown water was caused by nails left in pipes during construction. They also alleged "numerous [other] construction defects associated with the house."
On June 2, 1996, plaintiffs filed a complaint with HBW, which scheduled an arbitration for August 6, 1996 at plaintiffs' home. On that date, the arbitrator, plaintiffs, plaintiffs' attorney, ADM's President Alex Horowitz, and plaintiffs' expert, Paul Rusianiak, a former Wayne Building Inspector, appeared for the hearing.See footnote 11
The circumstances surrounding the arbitration hearing are in dispute. In a certification, plaintiffs' counsel states that the arbitrator advised plaintiffs that "the arbitration procedure did not provide a remedy for the most egregious defects in the home . . . and that he did not have the ability to order complete relief." Counsel further certified that the arbitrator advised him to file a complaint "in Court." Prior to announcing the intention to withdraw the request for arbitration and file a lawsuit, plaintiffs' counsel stated that he discussed the issue with the arbitrator, Horowitz, and ADM's lawyer, and that everyone understood the withdrawal was "without prejudice."
In a certification submitted in support of ADM's motion to dismiss the complaint, Horowitz stated that the hearing began with the arbitrator inspecting the first few items on plaintiffs' list of defects. Thereafter, plaintiffs "announced that they were withdrawing their Demand for Arbitration" and were filing a lawsuit.
Plaintiffs filed a "Withdrawal Notice" dated August 6, 1996. On August 15, 1996, the arbitrator issued an arbitration "Award" in which he concluded that ADM was not responsible for repairing any defects because plaintiffs "with[drew]" the demand for arbitration.
On August 1, 1997, plaintiffs filed their complaint in the Law Division. On November 13, 1997, ADM filed an answer generally denying the allegations in the complaint and asserting six affirmative defenses, including that plaintiffs' claim was "barred by their election of remedy under the Builders['] Warrantee Program."
ADM filed a motion to dismiss plaintiffs' complaint on the grounds that plaintiffs' initiation of arbitration proceedings precluded a subsequent action in the Law Division, notwithstanding the withdrawal of the arbitration complaint. Plaintiffs claimed that arbitration was not binding, however, because (1) the word "binding" did not appear in the policy; (2) the policy allowed the plaintiff to accept or reject an arbitrator's award; and (3) the policy language did not state that the decision to initiate arbitration prohibited a lawsuit, but only stated that if plaintiffs filed a lawsuit they were barred from seeking arbitration.
On August 6, 1999, the Law Division determined that plaintiffs' initiation of arbitration proceedings was an election of remedies under the Act which barred the common law action. However, the judge concluded that plaintiffs' case should be remanded back to the arbitrator to give plaintiffs the right to complete the remedy they initially pursued:
This court does not wish to effectuate a harsh remedy with regard to this homeowner[;] however this court does wish to honor and enforce the spirit and the intent of the statute which is to provide the home - the homeowner with their choice of a forum to present their claims and to utilize arbitration and mediation to preserve judicial time and economy.
For this reason the court is going to leave open plaintiff[s'] complaint that has been filed in the Law Division, remand this matter to arbitration and reserve for final hearing in this matter those claims of the homeowner that the arbitrator determines are not the subject of the homeowner warranty.
The judgment of August 6, 1999 provided:
This matter is remanded back to the
Arbitrator for a complete hearing on the
merits and for a final decision on the claims
listed in [plaintiffs'] Schedule of
Construction Defects in their Demand for
Arbitration.
Plaintiffs did not appeal or seek leave to appeal this ruling.
The second arbitration proceeding took place on December 8,
1999. At the hearing, the arbitrator heard testimony from
plaintiffs, Horowitz, and third party defendant Chester Lakony,
the framing subcontractor. The arbitrator also reviewed pictures
and videotapes submitted by plaintiffs. An inspection of the
house was conducted on April 6, 2000. On April 13, 2000, the
arbitrator issued an award in which he concluded that ADM was
responsible only for reinstalling the windows in the master
bedroom, center rear bedroom and rear right bedroom. The
arbitrator determined that ADM was not responsible for the
remainder of the claimed defects because plaintiffs' alteration
or additions to the home were excluded under the policy, which
provided, in section VI paragraph (J), that the warranty does not
apply to "[c]hanges, alterations, or additions made to the home
by anyone after initial occupancy, except those performed by the
builder as his obligation under this program." The plaintiffs
made repairs to the house pending resolution of their claims.
The arbitration service mailed plaintiffs an "Acceptance of
Arbitrator's Award" form, but they declined to execute it. On
May 23, 2000, plaintiffs filed a motion to restore their
complaint to the active trial calendar, and defendant cross-moved
for an order dismissing the complaint with prejudice.
Plaintiffs argued that they never had an arbitration on the
merits and that the arbitrator never addressed their claims
because he concluded that plaintiffs' repairs fell within the
policy exclusions. Plaintiffs also repeated their previous
argument that the initiation and withdrawal of the arbitration
complaint did not constitute an election of remedies which would
bar a subsequent suit. Defendant argued that the plaintiffs made
a binding decision to arbitrate their complaints and should not
be allowed to proceed in the Law Division simply because they
were unhappy with the result.
The Law Division ruled for defendant:
Dissatisfaction with an arbitration award is
not grounds for litigation. Under the
statutory directives and the cases that have
enforced the concept of arbitration there has
to be fraud, mistake of law or some other
gross error on the part of the arbitrators .
. . as grounds for having judicial review of
an arbitration award.
This court made it very pla[i]n in its August
[6,] 1999 decision that arbitration was the
proper forum. Plaintiffs have - plaintiffs
could have elected to have appealed this
court's decision in August of 1999. To come
back now and seek reconsideration is
inappropriate and not consistent with our
court rules.
As noted, the judgment dismissing plaintiffs' complaint "with
prejudice" was entered on July 17, 2000.
The Act requires all new home builders to register with the Department of Community Affairs. N.J.S.A. 46:3B-5. In order to register, the builder must participate in the Department's Warranty Security Fund or an alternate warranty security program approved by the Department. Ibid. Both are designed to protect new home buyers by providing a means to correct deficiencies by builders. N.J.S.A. 46:3B-7. The Act contains an election of remedies provision, N.J.S.A. 46:3B-9, which provides:
Nothing contained herein shall affect other rights and remedies available to the owner. The owner shall have the opportunity to pursue any remedy legally available to the owner. However, initiation of procedures to enforce a remedy shall constitute an election which shall bar the owner from all other remedies. Nothing contained herein shall be deemed to limit the owner's right of appeal as applicable to the remedy elected.
The Act's implementing regulations state:
Pursuant to New Home Warranty and Builders'
Registration Act (P.L. 1977, c.467) the
filing of a claim against the warranty
specified by this subchapter shall constitute
the election of a remedy and shall bar the
owner from all other remedies. Nothing
herein shall be deemed to limit the owner's
right to elect other remedies except that
such election shall bar the owner from
pursuing the same claim under the warranty
specified in this subchapter and in
accordance with the procedures related
hereto. For the purpose of this section,
election of other remedies shall mean the
filing of a complaint, counter-claim, cross-
claim or third party complaint in any court
that alleges matters covered by the warranty
in particular or unworkmanlike construction
in general.
[N.J.A.C. 5:25-3.10.]
Thus, under the Act, a new home buyer may seek recovery through
one of two "mutually exclusive" mechanisms, either (1)
conciliation or arbitration, or (2) filing a lawsuit. Marchak v.
Claridge Commons, Inc.,
134 N.J. 275, 280 (1993).
In Konieczny v. Micciche,
305 N.J. Super. 375, 378 (App.
Div. 1997), plaintiffs purchased a new home from the contractor.See footnote 22
Approximately six months later, plaintiffs requested that
defendant repair several defects in the home pursuant to their
new homeowners' warranty. Ibid. Dissatisfied with defendant's
response to their request, plaintiffs requested "dispute
settlement" with the Department of Community Affairs. Ibid. The
Department sent plaintiffs a "Consent to Formal Dispute
Settlement" form which advised plaintiffs that, upon consent of
the parties, the dispute settler would issue a binding decision.
Ibid. The parties agreed to this arrangement. Ibid. Four days
after the dispute settler issued his decision, plaintiffs
"attempted to withdraw from the arbitration proceedings." Id. at
379. Thereafter, plaintiffs filed a suit in the Law Division
against the builders, asserting claims for breach of contract,
fraud, and violations of the Consumer Fraud Act. Ibid. The
trial court awarded summary judgment to defendant because
plaintiffs' initiation of arbitration proceedings constituted an
election of remedy under the Act. Id. at 380.
On appeal, the plaintiffs argued that the agreement to
arbitrate was merely a choice of forum, and since defendant made
no repairs, they never received a remedy under the Act which
would bar a future suit. Id. at 381. Judge Havey, writing for
this court, held that, under N.J.S.A. 46:3B-9 and principles of
res judicata, plaintiffs' decision to begin arbitration
proceedings barred the filing of a subsequent civil suit for
damages resulting from defects presented to the arbitrator, or
those that could have been submitted to the arbitrator. Id. at
380. Judge Havey's opinion also concluded that plaintiffs'
election of a remedy also "subsumed all of their claims for
damages . . ., including common law fraud and alleged violations
of the Consumer Fraud Act." Ibid. The court found that the
language of N.J.S.A. 46:3B-9, which states that "initiation of
procedures to enforce a remedy shall constitute an election which
shall bar the owner from all other remedies," and N.J.A.C. 5:25-
3.10, which provides that "the filing of a claim against the
warranty specified by this subchapter shall constitute the
election of a remedy and shall bar the owner from all other
remedies," "must mean that when a homeowner 'initiates' a binding
arbitration proceeding . . . the homeowner has elected the
administrative procedure to 'enforce a remedy' relating to
defects in new home construction." Id. at 381 (emphasis in
original).See footnote 33 Finally, Judge Havey wrote:
Plaintiffs' interpretation [of the Act] is
incompatible with the legislative purpose of
the election of remedy provision: the waiver
of any judicial remedy upon election of a
prompt, convenient and cost-saving means of
resolving disputes concerning construction
defects. Under plaintiffs' reading of the
statute, the homeowner would have it both
ways. He or she could initiate binding
arbitration and, if dissatisfied with the
arbitration award, or even if during the
proceedings there is a sense that the
arbitrator will probably reject the claims,
he or she could simply "withdraw" from the
proceedings and file for damages in the Law
Division because the homeowner had not yet
"garnered the benefits" of the award. To
permit such unilateral action undercuts the
salutary purposes of the election of remedy
and procedural bar provision of the Act. A
homeowner should not be allowed to avail
himself or herself of the arbitration
proceeding and unilaterally abort that
proceeding in the face of an adverse
determination.
[Id. at 382.]
Defendant relies on Konieczny which appears to support the
trial judge's conclusion here that plaintiffs' initiation of, and
subsequent withdrawal from, arbitration constitutes an election
of remedies under the Act. However, Konieczny deals with an
arbitration under the State Plan and not under the warranty
provided by an approved private plan authorized by the statute.
The "request for dispute settlement" was filed with the
Department of Community Affairs, the parties "agreed to binding
arbitration," and the Department assigned a "dispute settler" to
the matter, who inspected the dwelling and rendered a decision.
Id. at 378-79.
In Oak Trail Road Homeowners Assoc. v. The Royal Mile Corp.,
246 N.J. Super. 590, 592-93 (App. Div. 1991), the homeowners had
received an alternate warranty from defendant Home Owners
Warranty Corporation ("HOW"), and the homeowners had filed a
complaint in the Law Division to enforce the warranty. HOW moved
for summary judgment raising the election of remedies provision
of the warranty policy. Id. at 592.
Under the HOW policy, in the event of a dispute between the
builder and the owner, the owner was to file a "Request for
Warranty Performance" with HOW. The policy provided:
If your Builder disagrees with your
complaint, HOW will arrange for informal
dispute settlement between you and your
Builder by a neutral third party. Your
builder will be bound by such third-party
decision upon HOW's receipt of your
"Acceptance of Decision" (see below).
. . . .
Acceptance of Decision. You must sign and
return to HOW at the mailing address shown on
the Declarations page within 45 days after
the date of decision an "Acceptance of
Decision" form by which you agree to accept
the decision as to those matters decided in
your favor. Your builder will then be bound
to perform as required in the decision.
Neither HOWIC nor your Builder is responsible
for damages caused or made worse by your
delay in accepting the decision.
. . . .
Under the Magnuson-Moss Warranty Act and
under this Warranty, you may not file suit
against your Builder until your claim has
been submitted to informal dispute settlement
and a decision has been reached or you have
waited 40 days for a decision following your
submission of a Request for Warranty
Performance, whichever comes first. State or
federal laws may permit you to file suit
without waiting, despite this paragraph.
[Oak Trail, supra, at 594-95.]
The court explained that under this provision, "a homeowner
may invoke the HOW warranty and, if dissatisfied with the result,
may thereafter institute litigation against the builder." Oak
Trail, supra, at 595. Judge (now Justice) Long specifically
pointed out, that "[t]his scheme differs from N.J.S.A. 46:3B-9,
[and the regulations under N.J.A.C. 5:25-3.10] which govern[] the
state plan and which provide[] that the invocation of a remedy
bars the homeowner from all other remedies." Id. at 595
(emphasis added).
Oak Trail must be understood in context because the HOW plan
was approved by the Commissioner of Insurance prior to the
adoption of the Act, and "any conflict between the policy and the
statute had to be resolved by resort to the grandfather clause in
the statute," id. at 595, which provides:
[A]ny new home warranty insurance program
approved by the Commissioner of Insurance
prior to the adoption of this act shall: (1)
Constitute an approved alternate new home
warranty security program and shall be deemed
in accordance with this section and in
compliance with this act in the form and
substance heretofore approved by the
Commissioner of Insurance, (2) not be subject
to any rules and regulations adopted by the
Commissioner of the Department of Community
Affairs pursuant to this act when such rules
and regulations are in conflict with said
previously approved new home warranty
program.
[N.J.S.A. 46:3B-8.]
As a result of this statutory provision, Judge Long concluded
that "to the extent that this case presents an issue with respect
to which the HOW policy differs from the statute, it is the HOW
policy which governs the rights of the parties." Oak Trail,
supra, at 596.
However, in Postizzi v. Leisure & Technology, Inc.,
235 N.J.
Super. 285, 289-90 (App. Div. 1989), discussed in Oak Trail,
supra, at 596, the homeowners, after participating in an informal
dispute settlement under their alternate warranty policy, brought
an action for breach of their warranty policy against HOW, also
the administrator of the warranty in that case. The Law Division
granted summary judgment to HOW, finding that the homeowner's
action was barred under N.J.S.A. 46:3B-9, the Act's election of
remedies provision. Postizzi, supra, at 286.
On appeal, we held that the homeowners' action was not
barred under N.J.S.A. 46:3B-9 because the homeowners "had good
reason to believe that participation in the informal conciliation
proceeding conducted by the dispute settler did not foreclose
them from further civil proceedings if they were displeased with
any of his findings." Id. at 289. First, the informal
conciliation rules "furnished to the [homeowners] by the builder
plainly advised them that they may pursue other legal remedies
for those items which the dispute settler found were not the
builder's responsibility." Ibid.See footnote 44 Second, the warranty provided
in italics as follows:
Under the Magnuson-Moss Warranty Act and
under this Limited Warranty, suit may not be
filed against the Builder until the claim has
been submitted to informal dispute settlement
and a decision has been reached or a . . .
decision following the submission of a
Request for Performance, which ever comes
first. State or federal laws may permit
filing of suit without waiting, despite this
paragraph.
[Ibid. (emphasis added).]
As a result of these provisions, we noted that "[n]owhere does
the warranty policy suggest that N.J.S.A. 46:3B-9 and N.J.A.C.
5:25-3.10 will bar a subsequent civil action by a homeowner who
disagrees with the conclusions of the dispute settler." Ibid.
As such, HOW "may not renounce the very language of their
insurance contract advising plaintiffs of their right to bring a
civil action if dissatisfied with the findings of the dispute
settler." Ibid. Judge Stein explained that in order for the
policy to have triggered the election of remedies provisions of
N.J.S.A. 46:3B-9 and the regulation thereunder, N.J.A.C. 5:25-
3.10, which deem it an election upon the filing of any claim
against the warranty, there had to have been a "reference [to
such provisions] in the HOW warranty." Id. at 290. Therefore,
the court declined to
rescue its warranty program from its
misleading language by incorporating
inferentially the provisions of N.J.S.A.
46:3B-9 and N.J.A.C. 5:25-3.10 into its
warranty policy. We refuse to reshape this
square peg to fit into a round hole. This is
a contract of insurance required by statute
and designed to protect new homeowners. It
should not be construed to deprive an
unwitting new home purchaser of the right to
elect between seeking relief under the New
Home Warranty program or bringing an
independent civil action.
[Id. at 290-91.]
See also Haberman v. West Saddle Dev. Corp.,
236 N.J. Super. 542
(App. Div. 1989).
Subsequently in Marchak v. Claridge Commons, Inc., supra, a
case involving "an alternative program approved pursuant to
N.J.S.A. 46:3B-8," the Supreme Court held that under the Act "[a]
buyer may submit a claim to litigation or arbitration, but not
both." 134 N.J. at 280. The Court noted, however, that
"[n]otwithstanding the Act's recognition of the owner's right to
pursue either remedy, [the] parties remain free to limit those
remedies by mutual agreement." Id. at 281. However, the Court
made clear that a clause which provides for arbitration "as the
exclusive remedy" and deprives a homeowner of "access to the
courts" must clearly and unequivocally do so. Id. at 282. See
also Spolitback v. Cyr Corp.,
295 N.J. Super. 264, 270 (App.
Div. 1996) (election of remedies clause did not preclude
homeowners from litigating claims unknown to them at the time
they submitted the matter to arbitration).
We read the cases to provide that the policy language, under
a private plan, controls, and the language in this policy does
not make clear that a common law action could not be commenced
after an arbitration was initiated and withdrawn.
Here, the policy provides that "[i]n accordance with the Act
and the Regulations, the Homeowner(s) has the right to pursue
remedies other than conciliation and arbitration; however
election of other remedies shall bar the Homeowner(s)from
pursuing the same claim under this warranty." (Emphasis added.)
Defendants argue that this language incorporates N.J.S.A. 46:3B-9
and pertinent regulations which have been interpreted to bar a
Law Division action after an arbitrator has issued an award
despite the homeowner's decision not to accept it. Plaintiffs,
on the other hand, argue that there is nothing in the policy that
suggests that their participation in the arbitration would bar
further Law Division action. We agree with plaintiffs.
N.J.A.C. 5:25-4.2, the regulation governing "private
alternate new home warranty security plans," requires that:
Private plans shall provide for written
notice to the owner concerning warranty
coverage and the claims and dispute
settlement procedures utilized, expressing in
plain language the scope, applicability and
standards for the warranty and the forms,
procedures and processes involved in making a
claim under the warranty. The form and
content of the written notice shall be
approved by the Department.
[N.J.A.C. 5:25-4.2(f), (emphasis added).]
The language in the warranty in this case is at best unclear, and
could be read by plaintiffs to bar an arbitration after
commencement of a common law action, but not vice versa. Our
Supreme Court has recently emphasized that statutory rights
cannot be waived by agreements to arbitrate unless the agreement
to do so is clear and unambiguous. Garfinkel v. Morristown
Obstetrics & Gynecology Assoc.,
168 N.J. 124, 132 (2001). The
same principle is applicable here.
Moreover, there was no suggestion when the matter was
remanded for arbitration that plaintiffs could not pursue
whatever remedies they had after the arbitration was completed.
The complaint was not dismissed by the order of August 6, 1999.
Rather, the matter was "remanded back" to the arbitrator, and the
judge expressly stated she was "going to leave open plaintiffs'
complaint" and "reserve for final hearing" claims the arbitrator
determined were not covered by the warranty. See also N.J.A.C.
5:25-4.2(3) which requires notice of the right to appeal
following the arbitration under a private plan. Accordingly, the
August 6, 1999 order did not constitute a final judgment
requiring plaintiffs to appeal from the determination of that day
to the effect that plaintiffs elected to arbitrate the dispute.
The judgment is reversed and the matter is remanded for
further proceedings in the Law Division not inconsistent with
this opinion.
Footnote: 1 1In a certification submitted in opposition to defendant's first motion to dismiss the complaint, plaintiffs' counsel states that ADM's attorney was not physically present at the arbitration, but that he and Horowitz communicated with him by telephone. Footnote: 2 2The home inspector was also a defendant. The plaintiffs were permitted to pursue their Law Division action based on the negligent inspection except to the extent barred by collateral estoppel based on the arbitration. Footnote: 3 3We compared this language with the New Jersey Law Against Discrimination ("LAD"), N.J.S.A. 10:5-13 and -27, which provides an administrative and Superior Court remedy, with the choice between the two becoming binding only when a "final determination" is rendered by the chosen forum. Ibid. Footnote: 4 4The rules provided "[t]he homeowner may have, and wish to exercise other legal remedies on those items where the builder was not found responsible under the Limited Warranty." Id. at 288.