NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1766-07T11766-07T1

THE BIBER PARTNERSHIP, P.C.,

Plaintiff-Appellant,

v.

DIAMOND HILL JOINT VENTURE,

LLC and McMANUS DESIGN GROUP,

INC.,

Defendants-Respondents.

__________________________________________________

Argued October 21, 2008 - Decided

Before Judges Skillman, Graves and Grall.

On appeal from Superior Court of New Jersey, Chancery Division, Union County, Docket No. C-120-07.

Richard L. Zucker argued the cause for appellant (Lasser Hochman, L.L.C., attorneys; Mr. Zucker and Bruce H. Snyder, on the briefs).

Fred R. Gruen argued the cause for respondent Diamond Hill Joint Venture, LLC (Gruen & Goldstein, attorneys; Mr. Gruen, on the brief).

Walter F. Kawalec, III argued the cause for respondent McManus Design Group, Inc. (Marshall, Dennehey, Warner, Coleman & Goggin, attorneys; Mr. Kawalec, on the brief).

The opinion of the court was delivered by

SKILLMAN, P.J.A.D.

In 2003, the Legislature enacted a modified version of the Uniform Arbitration Act of 2000 recommended by the National Conference of Commissioners on Uniform State Laws.

L. 2003, c. 95 (codified at N.J.S.A. 2A:23B-1 to -32). One section of this new law provides the first statutory authorization in New Jersey for consolidation of separate arbitration proceedings. N.J.S.A. 2A:23B-10. This appeal provides the first occasion for us to interpret that section.

Plaintiff Biber Partnership is an architectural firm. Defendant McManus Group is a structural engineering firm. Biber contracted with McManus to act as structural engineering consultant in connection with four construction projects for which Biber was the architect. The contract between Biber and McManus did not contain any provision for arbitration of disputes.

One of the construction projects for which Biber provided architectural services involved additions and alterations to a building in Berkeley Heights owned by defendant Diamond Hill Joint Venture. The contract Biber entered into with Diamond Hill contained a provision for arbitration of disputes. This provision stated that any such arbitration would be conducted before a panel of three arbitrators and would be governed by the Construction Industry Arbitration Rules of the American Arbitration Association.

At some point in 2005, Diamond Hill terminated Biber's services as the architect on its construction project. Disputes then arose between Biber and McManus regarding Biber's payments for McManus' services, and McManus filed construction lien claims in September 2005 on three projects for which it had provided structural engineering services. In November 2005, Biber filed an action in the Law Division seeking discharge of the construction lien claims and other relief against McManus.

In January 2006, Biber and McManus entered into a settlement agreement under which the parties agreed to submit their disputes to arbitration. This agreement specified that the arbitration would be conducted before retired Judge John M. Boyle and would be governed by the Construction Industry Arbitration Rules attached to the agreement.

Shortly before entering into this settlement agreement, in December 2005, Biber made a demand for arbitration of its disputes with Diamond Hill in accordance with the arbitration provision of their contract. For the next twenty months, arbitration of the disputes between Biber and McManus before Judge Boyle and arbitration of the disputes between Biber and Diamond Hill before three arbitrators selected by those parties proceeded separately without any attempt to consolidate.

The hearings on the arbitration between Biber and Diamond Hill were scheduled to start on September 10, 2007. However, on that same day, Biber filed this action seeking consolidation of its arbitration proceedings against McManus with its arbitration proceedings against Diamond Hill. Biber proposed that the consolidated arbitration be held before the three arbitrator panel selected under its contract with Diamond Hill. Both McManus and Diamond Hill opposed the consolidation. As a result of the filing of this action, the scheduled hearing in the arbitration proceeding between Biber and Diamond Hill was adjourned.

The trial court rejected Biber's application for consolidation, stating in the course of its oral opinion:

I think what is significant in the consideration of this application is the manner in which McManus comes before the court as a party to arbitration.

. . . .

The consent order in 2006 put McManus in arbitration . . . . [D]espite the fact that the Diamond Hill arbitration existed at that time there was no request of McManus to not only consent, but to consent to participate in the already existing other arbitration. The terms of their consent are specific. What did they consent to?

. . . [A] single arbiter, Judge Boyle and their claims specifically with respect to Biber without regard to whatever else might be going on in the Diamond Hill-Biber arbitration.

. . . .

[T]he overwhelming prejudice [that would] be suffered by McManus [by] putting [it] into an arbitration proceeding [it] never agreed to anyway . . . far outweighs any prejudice that may be suffered by [Biber in] having to proceed as [it has] been proceeding for the last year and a half in separate forums.

Biber appeals from the order memorializing this ruling. The trial court granted Biber's motion for a stay of both arbitrations pending the outcome of the appeal.

Before enactment of N.J.S.A. 2A:23B-10 as part of the new Uniform Arbitration Act, there was no statutory authorization in New Jersey for consolidation of arbitration proceedings. However, there was some authority for the view that courts have inherent power to order consolidation of arbitration proceedings even in the absence of express statutory authorization. See, e.g., Kalman Floor Co. v. Jos. L. Muscarelle, Inc., 196 N.J. Super. 16, 31-33 (App. Div. 1984), aff'd o.b. 98 N.J. 266 (1985); Wm. C. Blanchard Co. v. Beach Concrete Co., 150 N.J. Super. 277, 300-01 (App. Div.), certif. denied, 75 N.J. 528 (1977).

In any event, consolidation of separate arbitration proceedings is now authorized by N.J.S.A. 2A:23B-10, which provides:

a. Except as otherwise provided in subsection c. of this section, upon application of a party to an agreement to arbitrate or to an arbitration proceeding, the court may order consolidation of separate arbitration proceedings as to all or some of the claims if:

(1) there are separate agreements to arbitrate or separate arbitration proceedings between the same persons or one of them is a party to a separate agreement to arbitrate or a separate arbitration proceeding with a third person;

(2) the claims subject to the agreements to arbitrate arise in substantial part from the same transaction or series of related transactions;

(3) the existence of a common issue of law or fact creates the possibility of conflicting decisions in the separate arbitration proceedings; and

(4) prejudice resulting from a failure to consolidate is not outweighed by the risk of undue delay or prejudice to the rights or hardship to parties opposing consolidation.

b. The court may order consolidation of separate arbitration proceedings as to some claims and allow other claims to be resolved in separate arbitration proceedings.

c. The court may not order consolidation of the claims of a party to an agreement to arbitrate if the agreement prohibits consolidation.

The sponsor's statement to the Senate bill enacted as the New Jersey version of the Uniform Arbitration Act states that, except where otherwise noted, "the sponsor of the bill endorses the content of the Uniform Act's Official Comments." S-514, Statement, State of New Jersey 210th Legislature, at 17-19 (2002) (Senate Sponsor's Statement), available at

http://www.njleg.state.nj.us/2002/Bills/S1000/514_I1.pdf.

Those comments state that section 10 "embodies the fundamental principle of judicial respect for the preservation and enforcement of the terms of agreements to arbitrate." Unif. Arbitration Act, comment 3 on