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N.J.S.A. 2A:23B-23(a)(4). SM Global filed a separate action seeking to confirm the award. SM Global
contended the award was within the scope of the parties' agreement and BSH was otherwise precluded
from seeking to vacate the award under principles of res judicata and waiver. The two actions were
consolidated in the trial court. "> Original Wordprocessor Version
(NOTE: The status of this decision is Unpublished.) Original Wordprocessor Version
(NOTE: The status of this decision is Unpublished.)
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1501-11T4
SM GLOBAL GROUP, L.L.C.,
Plaintiff-Appellant,
v.
BERGENFIELD SENIOR
HOUSING, L.L.C.,
Defendant-Respondent.
BERGENFIELD SENIOR
HOUSING, L.L.C.,
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Plaintiff-Respondent,
v.
SM GLOBAL GROUP, L.L.C.,
Defendant-Appellant.
January 22, 2013
Argued December 19, 2012 - Decided
Before Judges Ashrafi, Hayden and Lisa.
On appeal from the Superior Court of New Jersey, Law Division, Bergen County,
Docket Nos. L-6140-11 and L-6358-11.
Edward S. Kiel argued the cause for appellant  (Cole, Schotz, Meisel, Forman &
Leonard, attorneys; Mr. Kiel, of counsel and on the brief).
Scott  B.  Piekarsky  argued  the  cause  for  respondent                                                          (Piekarsky  & Associates,
L.L.C., attorneys; Mr. Piekarsky, of counsel and on the briefs).
PER CURIAM
In the course of litigation regarding a dispute arising out of the failure to consummate an agreement of
sale, the parties agreed to arbitrate, rather than continue the litigation. The arbitrator ultimately entered an
award  which  favored  the  buyer,  SM  Global  Group,  L.L.C.                                                     (SM  Global).  The  seller,  Bergenfield  Senior
Housing, L.L.C. (BSH), filed an action seeking to vacate the award. BSH contended the award was beyond
the scope of what the parties agreed to arbitrate, as a result of which the arbitrator exceeded his powers,
as prohibited by N.J.S.A. 2A:23B-23(a)(4). SM Global filed a separate action seeking to confirm the award.
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SM  Global contended the award  was within the scope of the parties' agreement  and   BSH    was   otherwise
precluded from seeking to vacate the award under principles of res judicata and waiver. The two   actions
were consolidated in the trial court.
The trial judge agreed with BSH and entered an order on September 23, 2011   in    the    consolidated   actions
that  (1) denied SM Global's request to confirm the award,  (2)   granted BSH's    request    to vacate   the    award,
and  (3) ordered the appointment of a new arbitrator.1 On November  9,  2011, the trial judge denied SM
Global's reconsideration motion.
SM Global appeals from these orders, presenting the same arguments before us as it presented to the trial
judge. We agree with SM Global that the award was within the scope of arbitration to which the parties
agreed and that BSH was barred from challenging the award because of the preclusive effect    of    the    final
judgment  ordering  arbitration  and  because  of  BSH's  full  participation  in  the  arbitration  proceedings.
Accordingly, we reverse.
I.
In December 2007, the parties entered into a written contract by which SM Global agreed to purchase from
BSH eighty-eight of the ninety units in a condominium complex owned by BSH for a total purchase price of
$18,600,000. BSH had previously sold two units to third parties. Pursuant to the agreement, SM Global paid
BSH $1,860,000 as a "non-refundable deposit except for willful default of [BSH]." The agreement provided
for closing on March 7, 2008.
Because of disputes regarding performance under the agreement of sale, closing never occurred. Instead,
litigation  ensued  between  the  parties,  each  asserting  various  claims  against  the  other.  An  order for
judgment was entered in that litigation (the prior litigation) on July 21, 2008. The judgment recited that SM
Global was in default under the agreement because it failed to come to closing at the required time    and
BSH was ready, willing and able to close. The judgment ordered that the agreement for the sale of the
eighty-eight  condominium units be  declared null  and  void  and  that  a hearing on the issue of damages
would be held on August 14, 2008.
In the year following that judgment, no damages hearing was conducted. The parties apparently continued
to engage in negotiations in an effort to resolve their differences. Finally, on September 8, 2009, the matter
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came before  a different judge, who we  will refer to  as the "settlement judge," for a damages   hearing.
Counsel and  the principals  for both parties were present, and,  over a two-day  period,  they engaged   in
extensive  negotiations,  which  included  the  assistance  of  the  settlement  judge. These  negotiations   were
fruitful and resulted in a settlement, the terms of which were orally placed on the record on September 9,
2009.  After  both counsel  laid out the terms  of the settlement,  both principals  expressed their    assent   to
those terms on the record.
The settlement reflected the continuing desire of both parties to see the sale consummated. In essence, the
settlement constituted a new agreement of sale, the previous written agreement of December 2007 having
been declared null and void. Under the terms of the new agreement, the purchase price for the eighty-eight
condominium units would remain $18,600,000, and the $1,860,000 previously paid by SM Global would be
credited toward the purchase price. There was no mention during the colloquy that the $1,860,000 deposit
would be characterized as "non-refundable." Further, the parties would enter into a lease for space in the
building  in  which  SM  Global  would  operate an  adult  daycare  center.  A  monthly  payment  schedule  was
placed on the record, and it was agreed that, if SM Global failed to make any of the payments when due,
the parties could "walk away" from the agreement, but BSH would be entitled to entry of    a judgment for
the sum of  $484,000 (or the balance of it that was not   paid   through the monthly payments referenced in
the settlement agreement) to compensate it for an amount due "under a prior court order."
Closing was contemplated in twelve months, with allowance for reasonable six-month extensions, bringing it
to  a total of twenty-four months after  the settlement was entered  into. The parties further   agreed   that
even if there was no closing, SM Global could continue with an initial five-year lease at the monthly rental
of  $24,000, and a second five-year term with rent to be increased   based    upon the    Consumer   Price Index.
Of course, if closing were held, the lease would terminate because the leased space would belong to SM
Global.  The  agreement  also  provided  that,  if  requested  by  SM  Global,  BSH  would  take  back  a  second
mortgage in the amount of $3,000,000 for a five-year term with eight percent interest.
Both counsel and the settlement judge acknowledged that because this was a complicated transaction only
the broad terms of the settlement were placed on the record and that a detailed agreement of sale, lease,
and any other necessary documents would have to be prepared and signed by the parties. Both counsel
agreed to devote their best efforts to achieving this result.
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The settlement judge made it emphatically clear that the prior litigation would be dismissed with prejudice
and that this was a full and final settlement for which there would be no    recourse to the    court.   Everyone
agreed. It  was further  agreed that  a particular  retired  Superior Court  judge would be designated as   an
arbitrator to  resolve  any  disputes  between  the parties. This  retired  judge, who we  will refer to  as the
"arbitrator,"  had  served  as  a  mediator  for  the  parties  during  the  interim  one-year period  between  the
liability  judgment  and  the  damages  hearing.  Both  counsel  and  the  principals  for  both parties  were
comfortable with this individual as the arbitrator.
In placing the settlement terms on the record, BSH's attorney stated that "[t]he parties have agreed that it
would be done in a binding arbitration fashion, that it could be immediately reduced to judgment in the
Superior  Court."  BSH's  counsel  further  suggested  that  the  parties  would  consider  a  "baseball  type  of
arbitration, where essentially it  would be  formatted  with maybe  one  choice or another to  expedite the
process,  make  it  easy, and  not, maybe  leave us  with a remedy that  we  haven't  asked for." The   judge
interjected that binding arbitration can take various forms and the parties could choose whatever form they
wish. The judge commented:
If  there's  a  dispute  in  terms  of  money  and  you  both  agree  to   high-low,  the
arbitrator  has  the  freedom  to  pick  any  number  within  that  high-low or  the
baseball arbitration, which means both parties are obligated to present their best
argument  and  the  arbitrator  is  limited  to  choose  of  one  or  the  other, not  a
compromise, he has to pick the best figure.
The judge then emphasized that the arbitrator's decision would be binding, that the litigation was settled
with finality, and any disputes regarding the "wording of the agreement, or more importantly, the execution
of the terms,"  would go to  the arbitrator and  would not in any  manner "impact upon   the   finality   of  this
settlement." The judge concluded: "This case is settled. The matter is dismissed."
Thus, the parties left that hearing with the prior litigation having been dismissed with prejudice and with a
new agreement for the conveyance of the eighty-eight condominium units. Counsel were to collaborate in
drafting the necessary documents, which their clients would then sign in accordance with the terms outlined
on the record. If there were drafting disputes, the arbitrator was authorized to resolve them. If there were
disputes  in  the  "execution  of  the  terms"  of  the  agreement,  the  arbitrator  was  likewise  authorized  to
determine the consequences.
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Although a particular remedy was set forth in the event of a default by SM Global, no particular remedy was
set  forth  should  BSH  default.  However,  the  discussion  clearly  contemplated  that  any  dispute  regarding
money was subject to resolution by the arbitrator. This could be done in accordance with    any format    the
parties would choose, including, for example, a high-low-range format or a best-and-final-position format.
Thus,  it  was clearly  contemplated that  either party  could make  a monetary claim if it  asserted   that    the
other party materially defaulted in the execution of the terms of the agreement.
II.
Efforts to draft the necessary documents were met with disputes and delays. On October 26, 2009, counsel
for SM  Global wrote  to  the arbitrator seeking an  award  declaring BSH  in default for failure to  prepare
documents. Counsel requested that the agreement for the sale and purchase of the eighty-eight units   be
declared null and void and that BSH be required to refund to SM Global the    $1,860,000    security    deposit.
Counsel for BSH replied on November  16,  2009, arguing that SM Global's application    was premature, that
both counsel  were working on preparation  of the documents  and  they should  be permitted  to    continue
doing so. Counsel further contended that a refund of the deposit was never agreed upon as an authorized
remedy and that the sole remedy for a breach was that the parties would   walk   away    from   the    agreement
and that BSH would be entitled to a $484,000 (or balance due) judgment.
On December  22,  2009, the parties met with the arbitrator. He apparently told them that because there
was no written agreement appointing him arbitrator and because the settlement agreement   had not   been
reduced to  writing, he  was not in a position to  arbitrate their  competing claims. This resulted in   cross-
motions by the parties under the prior litigation docket. BSH filed its motion on January 6, 2010, seeking to
enforce the settlement agreement. BSH argued that issues raised by SM Global   were not   within the    scope
of arbitration because "the relief sought by [SM Global] was not contemplated by the    parties, was not   on
the record, not agreed to, etc." BSH expressed its position that either the    settled case should be enforced
or, if not, "we are entitled to relief for [SM Global]'s breach or just get a new trial date and try the case."
On January 28, 2010, SM Global filed its motion, seeking to compel arbitration. In a supporting certification,
SM Global's counsel described the ongoing efforts to draft the necessary documents, including the    recent
exchange of drafts and correspondence between counsel. The certification clearly expressed "SM Global's
position that BSH  [had] breached the settlement agreement and SM Global [was]    entitled    to the    return of
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its deposit. In accordance with the settlement agreement placed on the record, 'any and all disputes [were
to] be resolved by [the arbitrator], retired Judge of the Superior Court.'" (referencing    the    transcript of    the
September 9, 2009 hearing).
The cross-motions were argued before the settlement judge on February  5,  2010. BSH's attorney    argued
that  the  order  to  arbitrate  disputes  referred  only  to  the  drafting  of  the  documents  and  limited the
arbitrator's authority to "dot[ting] i's [and] cross[ing] t's" in the contract documents. BSH's attorney further
argued  that  the  arbitrator  was  "not  supposed  to  have  a  binding  arbitration,  win  or lose,  you  take  the
money, I take the money, this phase of it is to get these agreements finalized." BSH's counsel characterized
the arbitrator's role as being to resolve "the battle of the forms," and nothing more.
SM Global's counsel argued an opposite viewpoint:
What the contours of what  [the arbitrator] is to do, what his    powers    are, is    not
just to dot the i's and cross the t's. What the agreement was, and I'm    reading
from Page  11 of the settlement  -- of the transcript. It says, any  -- and this is
[BSH's attorney]'s words.
"Any  and  all  disputes  will  be  resolved  by  the  [arbitrator],  retired  judge,  in  a
simplified  expedited  form".  This  is  a  dispute  between  the  parties  about  this
agreement. Whether there's a breach or not. And it has to go to him and he has
the -- and he has the authority to say whether there's a breach or not, not just
cross  the  t's  and  dot  the  i's.  That's  it,  Your  Honor.  So  I  think  he  has that
authorization.
The settlement judge rejected BSH's argument and agreed with SM Global. He reiterated that this was a
settled case and the arbitrator's role was to resolve all disputes of any nature arising out of the settlement.
This included not only drafting of documents to complete the conveyance of the eighty-eight units but any
disputes that might arise. The settlement judge concluded "[his] view is to reaffirm that [the arbitrator] has
full authority to mediate and/or arbitrate any and all disputes arising from the settlement of the case."
The  settlement  judge  issued  an  order  on  February                                                                   5,   2010  granting  SM  Global's  motion  to  compel
arbitration,  ordering  the  parties  to  proceed  to  arbitrate  any  and  all  disputes  between  them  before  the
arbitrator,  and  ordering  that  the  arbitration  be  conducted  in  accordance  with the  procedures  deemed
appropriate by the arbitrator and that the arbitrator's decision would be "final and binding    on    the    parties."
The settlement judge endorsed the following handwritten provision on the order:
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As per  the settlement agreement, set forth on the record on  9/9/09, and  the
Court's ruling as to the breadth of the arbitrator's authority to resolve any and all
disputes  arising from the memorialization  and  execution of the settlement,   the
arbitrator selected by the parties, has full authority to resolve all disputed issues
of procedure and substance.
BSH did not appeal this order. Pursuant to the order, the parties proceeded to arbitration on the issue that
had been raised by SM Global but which the arbitrator had previously declined to address. That issue was
whether BSH  was in breach of the agreement because of its  failure to  draft or approve the necessary
transaction documents.
The arbitrator issued his decision on July  2,  2010. He found that both    sides had, to some    extent, delayed
and  been inattentive in the document preparation  process.  He  noted  that  progress had  been   made    and
directed the parties to continue the process with diligence and good faith in order to finalize the documents
and  have them  signed by the principals.  Accordingly, the arbitrator considered  but  rejected  SM   Global's
contention that BSH breached the agreement and that, as a result of the breach, SM Global was entitled to
a refund of the $1,860,000 deposit.
On February  7,  2011, SM Global's attorney wrote to the arbitrator. He described the ongoing    progress    of
the document preparation. He noted that the most recent version of the lease agreement was satisfactory.
However, he complained that modifications made to the most recent draft of the agreement of sale did not
comply with the terms  of the settlement agreement and  were not agreeable  to  SM   Global.  Counsel   also
urged that because of the delays in finalizing the settlement documents, monthly payments due should be
tolled for a specified period of time.
On  February                                                                                                        14,   2011,  BSH's  counsel  replied  that  the  changes  to  which  SM  Global objected  were
necessitated because
the  building  is  no  longer  a  condominium  building,  it  is  a  fee  simple  rental
property owned by our client. As part of refinancing, the bank required that our
client buy back the only two (2) units sold. It cost them $600,000.00. He cannot
now sever or partition them  off. He  cannot and  will not just give these  units
away.
On  April                                                                                                           4,    2011,  SM  Global's  attorney  wrote  to  the  arbitrator  and  asserted  that,  by converting  the
                                                                                                                          condominium complex to a fee simple rental property, BSH breached the agreement, which provided for the
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sale of eighty-eight condominium units. Counsel stated that "SM Global did not consent to nor was it aware
of BSH's intention to revoke the condominium status." SM Global requested that the    arbitrator   find BSH in
breach of the agreement and order it to refund the $1,860,000 deposit.
By letter to the arbitrator of April 28, 2011, SM Global's attorney made a formal request for arbitration. He
framed the issues to be addressed in the arbitration as follows:
The  issues  to  be  addressed  are                                                                                       (i)  whether   [BSH]  breached  the  settlement
agreement  between  the  parties  by  dissolving  the  condominium  regime at  the
property,  thereby  rendering  performance  under  the  settlement  agreement
impossible, (ii) alternatively, whether the impossibility of performance renders all
remaining obligations under the settlement null and void, and  (iii) whether SM
Global is entitled to the return of its deposit of $1,860,000.
BSH's  counsel  responded  to  the  arbitrator,  expressing  the  position  that  the  matter  had  already  been
arbitrated and he did not believe any further arbitration was necessary, but that BSH would "abide by [the
arbitrator]'s direction."2
The arbitrator sent an  e-mail  to  both counsel  on May  19,  2011. He stated that    he   concluded    from  both
attorneys'  letters  that  "(a)  both  parties  agree  that  the  forum  for  resolution  of  this  dispute  is  in  my
arbitrating the matter, and (b) the three issues to be addressed are set forth in the first paragraph of [SM
Global's  counsel's]  letter."  The  arbitrator  then  asked  the  attorneys  to  submit  dates  for  the arbitration
hearing. In subsequent e-mails and correspondence, the parties ultimately agreed that, due to scheduling
difficulties, the arbitrator was authorized to decide the issues before him on the papers.
Both  parties  briefed  the  substantive  issues.  SM  Global  persisted  in  its  position  that  BSH breached  the
agreement by dissolving the condominium regime and requested as a remedy the return of the $1,860,000
deposit. BSH  argued  that  dissolution of the condominium regime did  not constitute a breach   and   that    it
could substantially comply with the agreement by conveying title to the project in its fee simple form. It
urged  the  arbitrator  to  order  SM  Global  to  begin  making  payments  as  required  by  the  settlement
agreement.
In continuing efforts to arrive at a mutually convenient arbitration date, before the parties finally agreed to
authorize the arbitrator to decide the issues on the papers, BSH's counsel e-mailed the arbitrator   on    July
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13, 2011. After noting that the parties continued to be unable to resolve the matter on their own, he said:
"We are agreeable with your Honor deciding the matter based on the last set of submissions, etc."
On July 15, 2011, the arbitrator issued his decision. He agreed with SM Global's position that, because the
agreement  required  the  sale  and  purchase  of  eighty-eight  condominium  units,  the  unwinding  of  the
condominium regime rendered it  impossible to  convey  those units. The arbitrator further  reasoned that
"[i]ndividual units as a portion of a whole property of rental units is not the same as condominium    units,
title to which condominium unit renders each able to be conveyed, mortgaged, etc., as an individual unit."
The arbitrator noted that the ability of a purchaser to obtain financing as well as the value of the property
would be adversely affected by this change. The arbitrator concluded:
The court could not write a contract for the parties different from that for which
the parties bargained. The contract bargained for in the settlement put on the
record involved condominium units. There are no more condominium units.
Accordingly                                                                                                            [BSH]  is  deemed  to  have  anticipatorily  breached  the settlement
agreement. The transaction is at an end. The deposit should be returned.
After SM Global and BSH filed their summary actions seeking, respectively, to confirm or vacate the award,
the matter came before the initial trial judge (not the settlement judge) on September 12, 2011. He agreed
with BSH that the settlement contemplated consummation of the new agreement of sale and the arbitrator's
authority  was  limited  to  assisting  or  directing  the  parties  toward  that  end.  He  was  of  the  view that
determination of a breach and remedy were not contemplated and not authorized as part of the arbitrator's
authority.  Further,  the  judge  did  not  deem  dispositive  that  BSH  had  consented  to  arbitrate  the  issues
specified  in  the  exchanges  of  correspondence  and  e-mails                                                        (which  included  breach  and  remedy).  He
reasoned that the arbitrator's authority was limited to that which was set forth in    the    September 9, 2009
transcript of the settlement. And, as we have stated, he read that authority as narrowly circumscribed and
limited to any actions by the arbitrator directed toward having the transaction completed.
Accordingly, the trial judge issued an order on September 23, 2011 denying SM Global's request to confirm
the  award  and  granting  BSH's  request  to  vacate  it.  The  order  also  required  the  parties to  continue
arbitration with a new arbitrator. On November 9, 2011, the trial judge issued an order denying SM Global's
reconsideration motion.
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III.
On appeal, SM Global argues that the trial judge erred in vacating the award for three reasons: (1) Because
the  settlement  judge's  order  of  February                                                                             5,   2010  determined  that  the  arbitrator's  scope of  authority
included the power to determine whether there was a breach of the settlement agreement and, if so,    to
grant  appropriate  relief,  the  doctrine  of  issue  preclusion  barred  BSH  from  subsequently  challenging  the
award on the ground that those issues were not arbitrable. (2) The scope of arbitration, as determined by
the  colloquy  in  the  record  before  the  settlement  judge  and  the  orders  issued  by  the  settlement  judge
authorized the arbitrator to award the relief that he did. (3) BSH waived its right to object to the arbitration
award on jurisdictional grounds because it fully participated in the arbitration proceeding.
"The judicial power to set aside an arbitration    award is    limited." Block v. Plosia, 390 N.J. Super. 543,  552
(App. Div.  2007). We review a trial court's decision to vacate an arbitration award de novo. Del Piano v.
Merrill Lynch, Pierce, Fenner & Smith Inc., 372 N.J. Super. 503, 507 (App. Div. 2004), certif. granted, 183
N.J. 218, certif. dismissed as improvidently granted, 195 N.J. 512 (2005).
We conclude that each of the three arguments advanced by SM Global, individually, compel reversal of the
orders before us. For the sake of completeness, we discuss all three arguments.
A.
We  first  address  issue  preclusion.  SM  Global  argues  that  a  prior  court  ruling  had  determined   that   the
arbitrator was authorized to resolve "any and all disputes" between the parties, and, more specifically, that
the prior ruling determined that the scope of the arbitrator's authority included the power both to determine
whether the settlement agreement had been breached and, if so, to grant an appropriate remedy. Thus, it
argues, BSH was precluded from relitigating this issue.
Issue preclusion is an equitable doctrine that arises whenever an issue of law is litigated and results in    a
valid,  final  judgment  and  provides  that  such  a  determination  shall  be  considered  conclusive  in any
"subsequent action between the parties, whether on the same or a different claim."  Hernandez v. Region
Nine Hous. Corp., 146 N.J.  645, 659  (1996)  (quoting Restatement  (Second) of Judgments  §  27  (1982)).
The party asserting issue preclusion must establish that
(1)  the  issue  to  be  precluded  is  identical  to  the  issue  decided  in  the  prior
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proceeding;  (2) the issue was actually litigated in the prior proceeding; (3) the
court  in  the  prior  proceeding  issued  a  final  judgment  on  the  merits; (4)  the
determination of the issue was essential to the prior judgment; and (5) the party
against whom the doctrine is asserted was a party to or in privity with a party to
the earlier proceeding.
[In re Estate of Dawson, 136 N.J. 1, 20 (1994) (citations omitted).]
Even if these requirements are satisfied, however, the doctrine "will not be applied when it is unfair to do
so." Pace v. Kuchinsky, 347 N.J. Super. 202, 215 (App. Div. 2002). The judicial considerations underpinning
issue  preclusion  include  "finality  and  repose;  prevention  of  needless  litigation; avoidance  of  duplication;
reduction of unnecessary burdens of time and expenses; elimination of conflicts, confusion and uncertainty;
and basic fairness." City of Hackensack v. Winner, 82 N.J. 1, 32-33 (1980).
"In deciding the similarity of issues," a court may consider "whether there is substantial overlap of evidence
or argument," whether the same rule of law applies, and "whether the claims asserted in    the    two   actions
are closely related."  First  Union Nat'l Bank v. Penn  Salem Marina,  Inc.,  190  N.J.  342,                            353  (2007). On
February  5,  2010, in the prior litigation, the settlement judge was presented with    the    following issues: (1)
whether the arbitrator's scope of authority  authorized  him  to  determine  whether one of the   parties   had
breached  the  settlement  agreement,  and  (2)  whether  that  authority  included  the  power  to fashion  an
appropriate remedy. In this proceeding, on September  12,  2011, the trial judge was confronted with the
same questions  concerning breach and  remedy. Therefore, in issuing  the orders now before   us,  the   trial
judge considered issues identical to those considered by the settlement judge on February 5, 2010; the law
to  be  applied  and  the  evidence  to  be  heard  in  the  two  proceedings  substantially  overlapped. Both
proceedings dealt with same issue of law, namely, the scope of arbitrability, and both proceedings relied on
the same evidence, namely, the transcript of the settlement proceeding.
The second Dawson factor considers whether the issues were actually litigated and whether the parties had
ample  opportunity  to  contest  the issues. Penn  Salem Marina,  supra,  190  N.J.  at  354.  The  record fully
supports the conclusion that  this  factor was satisfied. BSH  submitted a letter brief in the prior   litigation
arguing that the arbitrator was not authorized to find a breach of the settlement because doing   so    would
effectively  void  the  settlement,  not  enforce  it.  This  argument  is  identical  to  the  argument  that  BSH
advanced  in  this  proceeding.  Further,  both  parties  presented  oral  arguments  at  the motion  hearing  on
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February 5, 2010, regarding the breadth of the arbitrator's scope of authority.
As  to  the  third  factor,  the  settlement  judge's  order  of  February                                              5,   2010,  compelling  arbitration  of all
disputed  issues of form and  substance,  was a final judgment  on the merits, appealable as   of  right.  See
Wein v. Morris, 194 N.J. 364, 380 (2008); see also R. 2:2-3(a). BSH did not appeal this order.
The settlement judge's order compelling arbitration hinged on a determination that the issues submitted for
arbitration were within the arbitrator's scope of authority. Therefore, the scope-of-authority determination
was essential to the order compelling arbitration, and the fourth factor is satisfied.
There can be  no dispute  regarding the fifth  factor because BSH, the party against which  the   doctrine    is
asserted, was a party in the prior litigation.
Finally,  we  see  nothing  unfair  in  applying  the  issue  preclusion  doctrine  here.  This  was a  substantial
commercial transaction. Both parties were well represented by counsel, had equal bargaining power, and
operated on an equal footing.
We therefore conclude that the settlement judge's order of February  5,  2010 in the    prior    litigation, which
determined that the scope of the arbitrator's authority included the authority both to determine whether
BSH  breached the settlement agreement and,  if so, to  grant  an  appropriate remedy, should have been
considered conclusive in the subsequent proceeding before the trial judge which resulted in the orders now
before us. BSH chose not to appeal the February 5, 2010 order, which was a final judgment appealable as
of right. BSH should not have been permitted to relitigate the same issue.
B.
We  next  consider  whether,  alternatively,  even  if  the  issue  preclusion  doctrine  were  not controlling,  the
parties' agreement to arbitrate authorized the arbitrator to award the relief he did. Stated differently, we
consider whether the arbitrator exceeded the scope of authority delegated to him. We conclude he did not.
As applicable here, arbitration is the substitution of tribunals by consent. State v. Int'l Fed'n of Prof'l
& Technical Eng'rs, Local 195, 169 N.J.  505, 513  (2001). Under the New Jersey Arbitration Act, N.J.S.A.
2A:23B-1 to -32, an arbitration award may be vacated if the arbitrator exceeds his or her powers. N.J.S.A.
2A:23B-23(a)(4).  An  arbitrator  exceeds  his  or  her  authority  "by  disregarding  the  terms  of  the parties'
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agreement." State, Office of Emp. Relations v. Commc'ns Workers of Am., 154 N.J. 98, 112 (1998). This is
premised on the notion  that  an  arbitrator's authority  is circumscribed by  contract.  Commc'ns Workers of
Am.,  Local                                                                                                              1087  v.  Monmouth  Cnty.  Bd.  of  Soc.  Servs,  96  N.J.  442,   448  (1984).  "The  polestar  of
construction of a contract is to discover the intention of the parties." Kearny PBA Local  #  21 v. Town of
Kearny, 81 N.J.  208, 221  (1979). The parties' "intent may not be disregarded to create a new or better
contract or to add to, subtract from, modify, or alter any terms of the agreement." Monmouth Cnty. Bd. of
Soc. Servs., supra, 96 N.J. at 452.
On  the other  hand, "[a]n agreement to  arbitrate should  be  read liberally  in favor of arbitration."
Marchak  v. Claridge  Commons, Inc.,  134  N.J.  275,  282  (1993).  This  is  because  "public policy  strongly
favors  arbitration." J. Baranello  & Sons, Inc.  v. City of Paterson, 168  N.J.  Super.  502,  506  (App.  Div.),
certif. denied, 81 N.J. 340 (1979). It is well settled that the object of arbitration
is the final disposition, in a speedy, inexpensive,  expeditious and  perhaps   less
formal manner, of the controversial differences between the parties. Arbitration
can  attain  its  goal  of  providing  final,  speedy  and  inexpensive  settlement  of
disputes only if judicial interference with the process is minimized; it is, after all,
meant to be a substitute for and not a springboard for litigation.
[Fawzy v. Fawzy, 199 N.J. 456, 468 (2009) (quoting Barcon Assocs., Inc. v. Tri-
Cnty.  Asphalt Corp.,  86  N.J.  179,  187                                                                               (1981)  (quotation  marks  and citations
omitted)).]
Our analysis of the scope-of-authority issue requires consideration of two components. The first is whether
the agreement authorized determination of a breach of the settlement agreement. Second, if    so,    we must
determine  whether the arbitrator was also authorized  to  fashion remedies  that  were not specifically  set
forth in the agreement.
In  general  and  consistent  with  New  Jersey's  strong  policy  encouraging  arbitration, courts  "should  favor
arbitration  where  parties  have  clearly  expressed  by  contract  an  intention  that  certain  of their  disputes
should be resolved by arbitration but have ambiguously or less clearly identified those issues which    need
not be so resolved." Yale Materials Handling Corp. v. White Storage & Retrieval Sys., Inc., 240 N.J. Super.
370, 375  (App. Div.  1990). More specifically, arbitration provisions incorporating phrases such as "arising
out  of"  or  "relating  to"  in  defining  which  disputes  are  subject  to  arbitration  have  been interpreted  as
"indicative of an 'extremely broad' agreement to arbitrate any dispute relating in any way to the contract."
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Griffin v. Burlington Volkswagen, Inc., 411 N.J. Super.  515, 518  (App. Div.  2010)  (citations omitted). See
EPIX Holdings Corp. v. Marsh &    McLennan Cos., 410 N.J. Super.  453, 472  (App. Div.  2009)  (quoting with
approval the Seventh Circuit's "expansive interpretation" of the arbitration provision found in Sweet Dreams
Unlimited,  Inc.  v.  Dial-A-Mattress  Int'l, Ltd.,  1  F.3d  639                                                         (7th  Cir.   1993),  which  interpreted  the phrase
"arising out of the agreement" as encompassing "any dispute between the contracting parties that [was] in
any way connected with their contract").
In the face of disputes regarding scope of arbitration, a presumption of arbitrability exists, which will not be
overcome "unless it may be said with positive assurance" that the arbitration agreement "is not susceptible
of an interpretation that covers the asserted dispute." Marsh & McLennan, supra, 410 N.J. Super. at  471.
Doubts  regarding  the  scope  of  arbitrable  issues  should  be  resolved  in  favor  of arbitration,  rather  than
litigation. Id. at  471-72. Because of the presumption of validity, the party seeking to vacate   an arbitration
award bears a heavy burden. Del Piano, supra, 372 N.J. Super. at 510.
Applying these principles, we reject BSH's contention that the arbitrator's authority was limited to dotting
the  i's  and  crossing  the  t's  in  the  documents  to  be  prepared  in  connection  with  the contemplated
transaction.  The  parties  settled  the  prior  litigation  with  the  intention  and  expectation  that  they would
proceed to consummation of the sale of the eighty-eight condominium units. That, of course, required a
new agreement of sale, setting forth the new terms. It also required    a lease for the    adult daycare center.
Other documents were also contemplated.
However, the fact that the parties anticipated completion of the transaction does not necessarily mean that,
if the documents were all prepared to both parties' satisfaction and signed by the principals, final    closing
would  actually  occur.  The  prior  history,  which  led  to  the  prior  litigation,  was certainly  indicative  that
disputes and problems might arise. Thus, after the scope-of-authority issue was fully litigated before the
settlement  judge,  he  made  clear  that  he  rejected  the  limited  scope  urged  by  BSH  pertaining  only  to
document preparation. He  included in his order the provision  that  the arbitrator possessed authority    "to
resolve any and all disputes arising from the memorialization and execution of the settlement. . . [with] full
authority to resolve all disputed issues of procedure and substance."
"Memorialization" referred to preparation of the documents needed for the settlement. "Execution" referred
to performance of those terms by the parties. This is reflected in the    settlement judge's comments    at    the
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September 9, 2009 hearing, when the settlement was placed on the record. He said: "So if there are issues
that come up regarding the -- in my view the wording of the agreement, or more importantly, the execution
of the terms, those  -- those disputes will go to  [the arbitrator]. In no way will    any of    these issues impact
upon the finality of this settlement." Thus, the judge distinguished between two   aspects    of    the    arbitrator's
authority,  document  preparation  and  execution  of  the  terms  of  the  agreement  once preparation  was
complete.  As  used  here,  "execution"  did  not  refer  to  signing  documents  but  to  performing  the  terms
prescribed in the anticipated documents.
In vacating the award, the trial judge reasoned that breach was not considered by    the    parties when they
discussed settlement before  the settlement judge, that  no one  anticipated  a breach, and  therefore the
parties  did  not  intend  to  authorize  the  arbitrator  to  deal  with  a  breach.  In  denying SM  Global's
reconsideration motion, the trial judge amplified his reasoning by stating that the arbitrator's authority "was
to make it a settled matter," but that, instead, the arbitrator "just took the settlement and threw it away."
This reasoning is flawed for two reasons. First, it is inconsistent with the broad language employed by the
settlement judge on September 9, 2009 and February 5, 2010, authorizing arbitration regarding any and all
disputes. That language expressly dealt with not only preparation of documents but also    execution    of    the
terms of those documents. The parties agreed to those terms and the settlement judge approved them. By
failing to appeal the February  5,  2010 order clarifying any possible misunderstanding about the scope of
authority in those broad terms, BSH acquiesced in their applicability and enforceability. The second flaw is
that, in order for the prior litigation to have been concluded by an absolutely final settlement on September
9,                                                                                                                        2009,  any  and  all  subsequent  disputes  would  have  to  be  resolved  through arbitration.  Otherwise,
because the prior litigation was dismissed with prejudice and with the clear directive that the dispute could
not return to the court, the parties would be left without a forum to resolve any disputes if final closing was
not achieved for any reason.
We therefore conclude  that  the presumption of arbitrability  was not overcome, and  the broad language
setting forth the scope of the arbitrator's authority included determination of a breach in the performance of
the terms of the contract. We cannot say with positive assurance that the arbitration agreement was not
susceptible  of  an  interpretation  covering  the  issue  of  breach  within its  scope. See Marsh  & McLennan,
supra, 410 N.J. Super. at 471. We note that, in denying SM Global's reconsideration motion, the trial judge
said as much. After acknowledging that the argument advanced by SM Global's counsel was "a    very good
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argument," he said:
I read [the settlement judge's decision] a couple times. More than once. I -- one
time I said I agree with [counsel for SM Global] and the next time I said I agree
with  what  I  did                                                                                                   [in  denying  SM  Global's  request  to  confirm  the award  and
granting BSH's request to  vacate the award] and  I  -- I make  the final call. I
agree with what I said. Though I found the argument to be valid. It's not just
made  up.  It's  not  one  of  these  stretches.  You  know,  you                                                    --  there may  be
somebody else whose going to have to decide this case.
Having  concluded  that  the  scope  of  authority  authorized  determination  of  whether  a  breach  of the
settlement agreement occurred, we now move on to the other scope-of-authority component, whether the
arbitrator  was  authorized  to  fashion  a  remedy  that  was  not  specifically  set  forth  in the  settlement
agreement.
We  begin  by  noting  that  the  settlement  agreement  expressly  granted  the  arbitrator  the  authority  to
determine disputes regarding execution  (i.e. performance) of the terms of the agreement. We could end
our  analysis  here  with  the  conclusion  that  this  language  necessarily  embraced  granting  an  appropriate
remedy for damages caused by the breach. But we will analyze the issue more extensively.
BSH's argument is that the sole remedy provided for in the settlement agreement   was the    so    called "walk
away" provision. Under that provision, if the closing were not consummated because of SM Global's failure
to make the required monthly payments, the parties could walk away    from   the    agreement   and BSH would
be entitled to judgment for $484,000 (or the balance due on that sum). To accept this argument, we would
have to conclude that the settlement agreement afforded BSH a remedy for breach    by    SM Global,    but SM
Global would have no remedy in case of a breach by BSH. We cannot accept that the parties contemplated
such a disparate arrangement.
In general, arbitrators are not limited to the remedies specifically enumerated in an arbitration agreement.
Local No.  153, Office & Prof'l Emps. Int'l Union v. Trust Co. of N.J., 105 N.J.  442, 452  (1987); see Int'l
Fed'n. of Prof'l & Technical Eng'rs, supra, 169 N.J. at  521  ("To restrict arbitrators to remedies specifically
set forth in the contract  would negate  arbitration as a method of dispute  settlement or would result   in
cluttering contracts with numerous liquidated damages provisions that would invite more trouble than they
could prevent." (quoting Frank Elkouri & Edna Asper Elkouri, How Arbitration Works 579-80 (Marlin M. Volz
& Edward P. Goggin eds., 5th ed. (1985))).
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The purpose of arbitration "is to get away from the judiciary, to get away from the strictures and
limitations  of  law."  Commerce  Bank,  N.A.  v.  DiMaria  Constr.,  Inc.,                                         300  N.J.  Super.  9,  18  (App.  Div.)
(quoting Perini  Corp.  v.  Greate  Bay  Hotel  & Casino,  Inc.,  129  N.J.  479,  542-43                           (1992)  (Wilentz, C.J.,
concurring)), certif. denied, 151 N.J. 73 (1997), cert. denied, 522 U.S. 1116, 118 S. Ct. 1053, 140 L. Ed.2d
116 (1998). Equity is encouraged and arbitration awards should achieve "just and equitable" results. Greate
Bay Hotel & Casino, supra, 129 N.J. at 543. Accordingly, if an arbitrator finds that there has been a breach,
the arbitrator must then fashion an "appropriate remedy" in order to make the harmed    party "whole   as a
result of the breach." High Voltage Eng'g Corp. v. Pride Solvents & Chem. Co. of N.J., 326 N.J. Super. 356,
363 (App. Div. 1999).
Applying these  principles,  we  conclude  that  the arbitrator, possessing the authority  to  determine
whether  there  was  a  breach,  also  possessed  the  authority  to  fashion  whatever  remedy  he deemed
appropriate to achieve a fair and just result.
C.
Finally, we consider SM Global's argument that, if the issue preclusion doctrine does not control the
outcome  of  the  case  and  if  the  arbitrator  exceeded  the  scope  of  authority  provided  by  the parties'
settlement agreement, BSH nevertheless waived its right to object to the arbitrator's jurisdiction because it
participated fully in the arbitration.
The trial judge did not clearly articulate his reasons for rejecting SM Global's waiver argument.   We
surmise  that  he  accepted  BSH's  argument  that  the  scope  of  the  arbitrator's  authority  was narrowly
circumscribed to preparation of documents, that the parties could not expand that scope by    their conduct
or future agreements as the arbitration progressed, and that only the settlement judge could pronounce an
expansion  of  the  limited  scope  of  authority  BSH  contends  was  originally  authorized.  We find  these
arguments unpersuasive.
"[A]  party  can waive,  by conduct or otherwise,  any  objection" that  he  or she "might have to    an
arbitrator's jurisdiction." Highgate Dev. Corp. v. Kirsh, 224 N.J. Super. 328, 332  (App. Div.  1988). Courts
must "consider the totality of circumstances to evaluate whether a party has waived the right to object to
arbitration after the matter has been ordered to arbitration and arbitration is held." Morris, supra, 194 N.J.
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at 383.
Some  of  the  factors  to  be  considered  in  determining  the  waiver  issue  are
whether the party  sought to  enjoin  arbitration or sought interlocutory review,
whether the party challenged the jurisdiction of the arbitrator in the arbitration
proceeding,  and  whether  the  party  included  a  claim  or  cross-claim  in the
arbitration proceeding that was fully adjudicated.
[Id. at 383-84.]
A party's "participation in the arbitration does not dictate a finding of waiver." Kirsh, supra, 224 N.J.
Super. at 333. "The relevant question here is not only whether the objecting party intentionally relinquished
his objection to the arbitration, but whether he so conducted himself that he should be held to have made
a binding election." Id. at 333-34.
The principle of waiver is invoked to assure that a party may not get two bites of
the  apple:  if  he  chooses  to  submit  to  the  authority  and  jurisdiction  of  an
arbitrator, he  may not disavow that  forum upon the return  of an  unfavorable
award.  That  important  policy  would  be  subverted  if  a  party  could  enter  a
nominal  objection  to  the  arbitrator's  jurisdiction,  submit  himself  fully  to the
arbitration and still retain the option to demand a new hearing if he does not like
the outcome of the arbitration.
[Id. at 333.]
Applying these principles, we consider what happened in this case. On April 28, 2011, SM Global's attorney
wrote  to  the arbitrator and  BSH's attorney, formally demanding  arbitration and  expressly  identifying   the
issues to be arbitrated:
The  issues  to  be  addressed  are                                                                                (i)  whether   [BSH]  breached  the  settlement
agreement between the parties by dissolving the condominium regime  . . .,    (ii)
alternatively,  whether  the  impossibility  of  performance  renders  all remaining
obligations under the settlement null  and  void, and  (iii)  whether SM  Global is
entitled to the return of its deposit of $1,860,000.
On May 4, 2011, BSH's counsel responded as follows:
I thought we had already arbitrated the matter.
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We believe a further hearing is not necessary but will abide by [the arbitrator]'s
direction.
After  receiving  this  letter,  SM  Global's  attorney  sent  an  email  to  the  arbitrator,  with  a  copy to  BSH's
attorney, stating:
It's rather unclear whether BSH objects to your authority to decide the issues set
forth in my prior letter . . .                                                                                            . However, BSH's position that it will "abide" by your
direction, appears to be tacit consent to proceed with the arbitration.
[Emphasis added.]
The  arbitrator  shared  SM  Global's  conclusion  that  BSH  consented  to  arbitrate  the  specified  issues,  as
evidenced by the arbitrator's reply to both parties:
I  conclude  from  the  two  letters                                                                                      (a)  both  parties  agree  that  the  forum  for
resolution of this dispute is my arbitrating the matter, and (b) the three issues to
be addressed are [those] set forth in [SM Global's attorney's] letter.
I would like tentatively to schedule the hearing itself for Tuesday, June 28.
[Emphasis added.]
BSH's attorney responded: "June 28 is good for me." He did not object to the arbitrator's jurisdiction,
nor did he correct the arbitrator's conclusions.
Moreover, BSH's arbitration statement, dated June 17,  2011, did not object to the    arbitrator's jurisdiction.
Instead, the brief contested the merits of SM  Global's claims and  asked that  SM   Global  be   compelled   to
start making immediate payments. The same is true of BSH's reply brief, dated June 24, 2011.
On  June  29,  2011, BSH's attorney advised  the arbitrator that  the parties were   attempting   to    resolve    the
dispute on their own. However, on July  13,  2011, BSH's attorney sent a follow-up email to the    arbitrator,
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explaining:
We  are  unable  to  resolve  on  our  own. We  are  agreeable  with  your  Honor
deciding the matter based on the last set of submissions, etc.
[Emphasis added.]
Against the backdrop of these facts, BSH contends that, although it argued in the arbitration proceeding
against a finding of breach and  against the return  of the deposit, the scope of  the   arbitrator's   authority
never changed. It argues that the record evidence does not demonstrate that it clearly and unequivocally
relinquished its right to object to the arbitrator's jurisdiction. We do not agree.
The  exchange  of  communications  leading  up  to  the  arbitration  constitutes  an  express and  unequivocal
assent by BSH to the authority of the arbitrator to decide the three specified issues. BSH did not object to
the  arbitrator's  authority,  did  not  seek  to  enjoin  the  arbitration,  and  did  not  return  to  court  to  seek
clarification  of the scope of authority. Further,  BSH  included in its  arbitration submissions an   affirmative
claim of its own. This course of conduct firmly established BSH's submission to the authority and jurisdiction
of the arbitrator to decide the three specified issues. It also established an intentional relinquishment of any
objection it might have to the arbitrator's jurisdiction over those issues.
IV.
For the reasons we have expressed, the trial court orders of September 23, 2011 and November 9, 2011
are reversed. The matter is remanded to the Law Division for entry of an order confirming the arbitration
award and dismissing BSH's complaint, which requested vacation of the award.
1  At  oral  argument,  counsel  advised  that  a  new  arbitrator  has  been  selected  and  has  met with  both
counsel. However, no substantive proceedings have occurred and no rulings have been made.
2 Although the letter is dated April  18,  2011, it expressly responded to the April  28,  2011   letter   from   SM
Global's attorney. The letter was apparently transmitted by e-mail on May 4, 2011.
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