Law Stack Exchange is a question and answer site for legal professionals, students, and others with experience or interest in law. It only takes a minute to sign up.
Sign up to join this community
Appeals of an arbitration award are reviewed de novo. Does the same apply to the denial of a Motion to Compel Arbitration? In other words, if the trial court denied a motion to compel arbitration, is the appealing party entitled to ask the Appellate Division to review matters of fact or only matters of law?
Assuming it is reviewed de novo, is the appellant specifically required to ask for de novo review or it is done implicitly?
The appellate court reviews based upon the trial court record.
To the extent that it turns on questions of law, including interpretations of written documents whose authenticity is not in question, this review is de novo. Likewise, decisions on this issue made on a paper record and argument of counsel, without an evidentiary hearing that resolved material disputes of fact between the parties, are reviewed de novo. So are procedural question, like whether an evidentiary hearing should have been held.
But, in cases where there is a mixed issue of fact and law, the appellate court defers to all findings of fact made in the trial court from an evidentiary hearing held in the trial court that are supported by admissible evidence in the trial court record.
Since the material facts relating to the enforceability of arbitration are frequently not in dispute in a case like this and arbitration rulings are often made without evidentiary hearings, as for example, in this case and in this case, an appellate court often does engage in de novo review.
But, the appellate court is not permitted to re-weigh the credibility of witnesses, for example, in a manner contrary to the trial court's findings of fact supported by admissible evidence in the record, if an evidentiary hearing was held and this was necessary to resolve disputed issues of fact that were material to the question of whether arbitration could be compelled.
While what I have said above is somewhat different than the standards, for example, in New Jersey as stated in this document quoted below, this is to some extent a function of the facts of the referenced cases. None of which involve a refusal to compel arbitration following an evidentiary hearing involving disputed findings of fact.
Appellate courts "review de novo the trial court's judgment dismissing the complaint and compelling arbitration." Flanzman v. Jenny Craig, Inc., 244 N.J. 119, 131 (2020). See Skuse v. Pfizer, Inc., 244 N.J. 30, 46 (2020).
"Under N.J.S.A. 2A:24-7, either party may move to confirm an award within three months of the date of its delivery. Once confirmed, the award is as conclusive as a court judgment. N.J.S.A. 2A:24-10." Policeman's Benevolent Ass'n, Loc. 292 v. Borough of N. Haledon, 158 N.J. 392, 398 (1999).
N.J.S.A. 2A:24-8 provides a court may vacate an arbitration award for: 1) corruption, fraud or undue means; 2) evident partiality or corruption in the arbitrators; 3) misconduct in refusing to postpone the hearing, upon sufficient cause being shown, or in refusing to hear evidence, pertinent and material to the controversy, or of any other misbehaviors prejudicial to the rights of any party; or 4) the arbitrators exceeded or so imperfectly executed their powers that a mutual, final and definite award upon the subject matter submitted was not made.
"Judicial review of an arbitration award is very limited." Bound Brook Bd. of Educ. v. Ciripompa, 228 N.J. 4, 11 (2017) (quoting Linden Bd. of Educ. v. Linden Educ. Ass'n ex rel. Mizichko, 202 N.J. 268, 276 (2010)). "To foster finality and 'secure arbitration's speedy and inexpensive nature,' reviewing courts must give arbitration awards 'considerable deference.'" Borough of Carteret v. Firefighters Mut. Benevolent Ass'n, Loc. 67, 247 N.J. 202, 211 (2021) (quoting Borough of E. Rutherford v. E. Rutherford PBA Loc. 275, 213 N.J. 190, 201-02 (2013)). "[A]n arbitrator's award resolving a public sector dispute will be accepted so long as the award is 'reasonably debatable.'" Borough of Carteret v. Firefighters Mut. Benevolent Ass'n, Loc. 67, 247 N.J. 202, 211 (2021) (quoting Borough of E. Rutherford v. E. Rutherford PBA Loc. 275, 213 N.J. 190, 201 (2013)). "An arbitrator's award is not to be cast aside lightly. It is subject to being vacated only when it has been shown that a statutory basis justifies that action." Bound Brook Bd. of Educ. v. Ciripompa, 228 N.J. 4, 11 (2017) (quoting Kearny PBA Loc. # 21 v. Town of Kearny, 81 N.J. 208, 221 (1979)).
Certain statutes, including the Alternative Procedure for Dispute Resolution Act, N.J.S.A. 2A:23A-1 to -30, set "strict limits on the appeal of an arbitration award." Riverside Chiropractic Grp. v. Mercury Ins. Co., 404 N.J. Super. 228, 235 (App. Div. 2008).
In support of a contrary view that even the findings of fact of the trial court are subject to de novo review are statements like this one (from this case):
The existence of a valid and enforceable arbitration agreement poses a question of law, and as such, our standard of review of an order denying a motion to compel arbitration is de novo. Hirsch v. Amper Fin. Servs., L.L.C., 215 N.J. 174, 186 (2013); Frumer v. Nat'l Home Ins. Co., 420 N.J. Super. 7, 13 (App. Div. 2011).
But, the cited cases don't mean precisely what they are purported to say in the rare case where the decision rests, for example, on resolved a disputed credibility decision between two witnesses over whether the purported arbitration document is authentic in an evidentiary hearing. Those cases are merely dicta as applied to that fact pattern. The case containing this quote was decided at the trial court level on the pleadings alone without receiving any testimony or documents in an evidentiary hearing (see footnote 1 at page 2).
Hirsch was decided in motion practice without an evidentiary hearing (see page 184) and the case itself says (at page 186):
Orders compelling arbitration are deemed final for purposes of appeal. R. 2:2–3(a); GMAC v. Pittella, 205 N.J. 572, 587, 17 A.3d 177 (2011). We review those legal determinations de novo. See Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378, 658 A.2d 1230 (1995) (“A trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference.”).
The decision in Frummer was similarly qualified and also relied upon interpretation of written instruments whose execution was undisputed that was resolved in motion practice without any mention of an evidentiary hearing. The Court in Frummer said at page 13:
We review the denial of a request for arbitration de novo. See Alfano v. BDO Seidman, LLP, 393 N.J.Super. 560, 572-73, 925 A.2d 22 (App.Div. 2007). "A `trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference.'" Id. at 573, 925 A.2d 22 (quoting Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378, 658 A.2d 1230 (1995)).
See also this case stating that:
The existence of a valid and enforceable
arbitration agreement poses a question of law, and as such, our standard of review of an order denying a motion to compel arbitration is de novo. Hirsch v. Amper Fin. Servs., LLC,
215 N.J. 174, 186 (2013); Frumer v. Nat'l Home Ins. Co., 420 N.J. Super. 7, 13 (App. Div. 2011).
Again, however, I would question whether this holding is dicta because it involves the interpretation of written instruments whose authenticity is in doubt, and not, for example, a dispute over whether the person who signed the documents is the same person who is a party to this litigation and not someone else with a very similar name that was resolved in an evidentiary hearing.
