WARNING! Time to Appeal Orders Compelling or Denying Arbitration Is NOW

The Supreme Court of New Jersey recently delivered a clear message regarding the time within which to appeal decisions concerning arbitration: Any order compelling or denying arbitration is deemed final and appealable as of the date entered, even if the arbitration order is limited to some, but not all, claims and parties.

In GMAC v. Pittella, 205 N.J. 572 (2011), the court clarified any previous confusion regarding whether an order compelling arbitration as to one or more parties, but not all parties, is final for purposes of appeal. New Jersey's position on this issue is rather unique, as it joins Maryland as the only other state to decide definitively that orders affecting the rights of some parties or claims, but not all, are final for purposes of appeal. See Thompson v. Witherspoon, 12 A.3d 605 (Md. App. 2011).

Other Jurisdictions

Courts in other jurisdictions have found that orders compelling or denying arbitration are immediately appealable because the orders are deemed to be “final” or affect a “substantial right,” albeit not in the same context of whether an order compelling or denying arbitration as to some parties, but not all, is ripe for immediate appeal. See, e.g., Connecticut, Iowa, Louisiana, Mississippi, and Nebraska. Meanwhile, courts in some jurisdictions have held that an order compelling arbitration is interlocutory and not directly appealable at the time the order is entered. See, e.g., California.

The Case in New Jersey

In GMAC, Pittella entered into a contract with Pine Belt Enterprises to finance a car she purchased from the car dealer. Pittella also signed an arbitration agreement, affording either party the choice of having the dispute resolved through binding arbitration. The dealer assigned the contract to GMAC, which subsequently repossessed the car for non-payment. Thereafter, GMAC initiated a lawsuit against Pittella to recover the deficiency balance. Pittella filed an answer, counter-claim and a third-party complaint against the dealer. The dealer filed a motion for summary judgment to compel arbitration, which the trial court granted. Several months later, Pittella and GMAC resolved the dispute pending in state court and filed a stipulation of dismissal.

Pittella filed a notice of appeal within 45 days of the filing of the stipulation of dismissal. The dealer moved to dismiss the appeal as untimely, arguing that Pittella's time to appeal ran from the date the order compelling arbitration was entered, not from the date the state court action was resolved via her settlement with GMAC. Pittella maintained that her time to appeal did not run from the entry of the order compelling arbitration because that order did not dispose of all issues as to all parties, and therefore, was not final for purposes of appeal. The appeals court found in favor of Pittella, denying the dealer's motion to dismiss. The dealer then appealed to the Supreme Court of New Jersey.

The Appeal

The court decided to hear the appeal to determine whether orders compelling arbitration as to some, but not all parties, are excepted from the holding of Wein v. Morris, 194 N.J. 364 (2008), which stated that orders compelling arbitration are final and can be appealed immediately as of right. Specifically, in Wein, the court held that once a trial court compelled the parties to proceed in arbitration, that decision ended the litigation in the euperior court and was final because there was nothing left to decide between the parties. Pittella argued that Wein did not apply to her case because the order compelling her to arbitrate did not resolve all issues as to all parties ' GMAC's deficiency claim remained with the trial court. Conversely, Wein addressed arbitration orders resolving all of the issues as to all parties.

The GMAC court, citing the Uniform Arbitration Act's directives to promote uniformity and expeditious arbitrations, held that all orders compelling or denying arbitration are final orders for appeal purposes. The court added that a party must make a timely appeal from the entry of the order, rather than “await[ing] the results of the arbitration and gambl[ing] on the results.”

Fortunately for Pittella, the GMAC court found that prior to its decision, it was not clear whether an order compelling arbitration, which did not address all issues and all parties, was final for purposes of appeal. Thus, the Supreme Court affirmed the Appellate Division's judgment denying the dealer's motion to dismiss.

Conclusion

Litigants, however, will not be so lucky in the future. The GMAC court declared that: “[It is] now crystal clear: orders compelling or denying arbitration are deemed final and appealable as of right as of the date entered.” To dispel any doubt, the court also issued the following warning: “as of today, litigants and lawyers in New Jersey are on notice that all orders compelling and denying arbitration shall be deemed final for purposes of appeal, regardless of whether such orders dispose of all issues and all parties, and the time for appeal therefrom starts from the date of entry of that order.”

Litigants will no longer be permitted to participate in arbitration, and, if unsatisfied with the result, appeal the order that compelled arbitration. Going forward, litigants in New Jersey's state courts must file an appeal from any order compelling or denying arbitration within 45 days from the entry of that order, even if that order does not resolve all issues as to all parties.

Fernando M. Pinguelo, a partner at Norris, McLaughlin & Marcus, P.A. and co-chair of the Response to Electronic Discovery & Information Group at the firm, is a trial lawyer who devotes his practice to complex business lawsuits with an emphasis on how technology impacts them. Andrew D. Linden, an associate at the firm, practices in the Litigation and Appellate practice groups, representing corporate and individual clients in a wide range of commercial and business disputes. To learn more about the topic or the authors, e-mail [email protected] or visit www.NJLocalLaw.com.

The Supreme Court of New Jersey recently delivered a clear message regarding the time within which to appeal decisions concerning arbitration: Any order compelling or denying arbitration is deemed final and appealable as of the date entered, even if the arbitration order is limited to some, but not all, claims and parties.

In GMAC v. Pittella , 205 N.J. 572 (2011), the court clarified any previous confusion regarding whether an order compelling arbitration as to one or more parties, but not all parties, is final for purposes of appeal. New Jersey's position on this issue is rather unique, as it joins Maryland as the only other state to decide definitively that orders affecting the rights of some parties or claims, but not all, are final for purposes of appeal. See Thompson v. Witherspoon , 12 A.3d 605 (Md. App. 2011).

Other Jurisdictions

Courts in other jurisdictions have found that orders compelling or denying arbitration are immediately appealable because the orders are deemed to be “final” or affect a “substantial right,” albeit not in the same context of whether an order compelling or denying arbitration as to some parties, but not all, is ripe for immediate appeal. See, e.g., Connecticut, Iowa, Louisiana, Mississippi, and Nebraska. Meanwhile, courts in some jurisdictions have held that an order compelling arbitration is interlocutory and not directly appealable at the time the order is entered. See, e.g., California.

The Case in New Jersey

In GMAC, Pittella entered into a contract with Pine Belt Enterprises to finance a car she purchased from the car dealer. Pittella also signed an arbitration agreement, affording either party the choice of having the dispute resolved through binding arbitration. The dealer assigned the contract to GMAC, which subsequently repossessed the car for non-payment. Thereafter, GMAC initiated a lawsuit against Pittella to recover the deficiency balance. Pittella filed an answer, counter-claim and a third-party complaint against the dealer. The dealer filed a motion for summary judgment to compel arbitration, which the trial court granted. Several months later, Pittella and GMAC resolved the dispute pending in state court and filed a stipulation of dismissal.

Pittella filed a notice of appeal within 45 days of the filing of the stipulation of dismissal. The dealer moved to dismiss the appeal as untimely, arguing that Pittella's time to appeal ran from the date the order compelling arbitration was entered, not from the date the state court action was resolved via her settlement with GMAC. Pittella maintained that her time to appeal did not run from the entry of the order compelling arbitration because that order did not dispose of all issues as to all parties, and therefore, was not final for purposes of appeal. The appeals court found in favor of Pittella, denying the dealer's motion to dismiss. The dealer then appealed to the Supreme Court of New Jersey.

The Appeal

The court decided to hear the appeal to determine whether orders compelling arbitration as to some, but not all parties, are excepted from the holding of Wein v. Morris , 194 N.J. 364 (2008), which stated that orders compelling arbitration are final and can be appealed immediately as of right. Specifically, in Wein, the court held that once a trial court compelled the parties to proceed in arbitration, that decision ended the litigation in the euperior court and was final because there was nothing left to decide between the parties. Pittella argued that Wein did not apply to her case because the order compelling her to arbitrate did not resolve all issues as to all parties ' GMAC's deficiency claim remained with the trial court. Conversely, Wein addressed arbitration orders resolving all of the issues as to all parties.

The GMAC court, citing the Uniform Arbitration Act's directives to promote uniformity and expeditious arbitrations, held that all orders compelling or denying arbitration are final orders for appeal purposes. The court added that a party must make a timely appeal from the entry of the order, rather than “await[ing] the results of the arbitration and gambl[ing] on the results.”

Fortunately for Pittella, the GMAC court found that prior to its decision, it was not clear whether an order compelling arbitration, which did not address all issues and all parties, was final for purposes of appeal. Thus, the Supreme Court affirmed the Appellate Division's judgment denying the dealer's motion to dismiss.

Conclusion

Litigants, however, will not be so lucky in the future. The GMAC court declared that: “[It is] now crystal clear: orders compelling or denying arbitration are deemed final and appealable as of right as of the date entered.” To dispel any doubt, the court also issued the following warning: “as of today, litigants and lawyers in New Jersey are on notice that all orders compelling and denying arbitration shall be deemed final for purposes of appeal, regardless of whether such orders dispose of all issues and all parties, and the time for appeal therefrom starts from the date of entry of that order.”

Litigants will no longer be permitted to participate in arbitration, and, if unsatisfied with the result, appeal the order that compelled arbitration. Going forward, litigants in New Jersey's state courts must file an appeal from any order compelling or denying arbitration within 45 days from the entry of that order, even if that order does not resolve all issues as to all parties.

Fernando M. Pinguelo, a partner at Norris, McLaughlin & Marcus, P.A. and co-chair of the Response to Electronic Discovery & Information Group at the firm, is a trial lawyer who devotes his practice to complex business lawsuits with an emphasis on how technology impacts them. Andrew D. Linden, an associate at the firm, practices in the Litigation and Appellate practice groups, representing corporate and individual clients in a wide range of commercial and business disputes. To learn more about the topic or the authors, e-mail [email protected] or visit www.NJLocalLaw.com.