|
Default judgments are not available in non-binding court-annexed arbitration, the New Jersey Superior Court Appellate Division held. However, the opinion does not affect the enforceability of uncontested arbitration awards obtained in binding, contractual arbitration.
In Robinson v. Ocean Club Bar & Grille, LLC, No. L-702-03, 2006 WL 2660791 (N.J. Super. Ct. App. Div. Sept. 18, 2006), the arbitrator imposed no liability against the lone appearing defendant, Ocean Club Bar & Grille; but an award was issued against two defendants in default, Tozer and Sawyer. No party sought to review, or to confirm the award within the allotted time frames.
Robinson belatedly sought to confirm, in spite of questions regarding the validity of non-binding awards against defaulting parties. The trial court denied Robinson’s motion to confirm the award as untimely and Robinson unsuccessfully sought reconsideration.
The New Jersey Appellate Division considered the pivotal issue to be “whether the arbitrator had the authority to make an award against parties in default.” The Court concluded that, in a non-binding court-annexed arbitration, it is of primary importance that the defaulting parties receive notice. “These due process protections cannot be avoided through reliance on [award confirmation procedures] to secure a judgment.”
Thus, in court-annexed arbitrations where a party fails to appear, the appearing party should proceed under New Jersey’s general default judgment procedures, N.J. Court Rules 1:13-7(a) and 4:43-2(d), rather than by attempting to confirm an uncontested award obtained in court-annexed arbitration.
The Court held that the trial court erred in denying award confirmation for untimeliness, and that the court clerk should have issued a notice of dismissal after which Robinson could have moved for entry of judgment by default. Reversing and remanding the trial court’s judgment, the Court provided Robinson one more chance to receive his default judgment against Tozer and Sawyer.
Subscribe to a free weekly update on ADR case law and
legislation
|