Two Opinions by Judge Whipple

Grandvue Manor, LLC v. Cornerstone Contracting Corp., ___ N.J. Super. ___ (App. Div. 2022); Sullivan v. Board of Review, ___ N.J. Super. ___ (App. Div. 2022). Both of these opinions, issued yesterday, were authored by Judge Whipple. The former addressed an arbitration provision contained in a contract to construct a $10 million home in New York. The latter dealt with an attempt to assert an estoppel claim against the Board of Review, which had sought to recover payments wrongly made to petitioner Sullivan.

In Grandvue, the Appellate Division was first required to determine whether New Jersey or New York law applied. The Law Division had applied New Jersey law and had held that, under that law, defendant was entitled to dismissal of the case in favor of arbitration. Applying de novo review, Judge Whipple determined that New York law applied. “The contract contained a choice of law provision to govern by the law of the place where the project was located, excluding that jurisdiction’s choice of law rules, and if the parties selected arbitration as the method of binding dispute resolution, then the Federal Arbitration Act would govern. Thus, the parties selected the law of New York, the place of the project, to govern the contract.”

Judge Whipple observed that “[o]rdinarily, when parties to a contract have agreed to be governed by the laws of a particular state, New Jersey courts will uphold the contractual choice if it does not violate New Jersey’s public policy.” Here, “the parties clearly and unambiguously chose New York law, where the project is located.”

From there, it was easy. “[T]he parties [had] clearly and unambiguously agreed to submit ‘any claim’ not resolved by mediation to binding arbitration.” New York law, Judge Whipple said, would enforce this “any claim” clause. But the Appellate Division stated that dismissal was error. Plaintiff was entitled to request a stay of the lawsuit while the matter proceeded in arbitration. The panel modified the Law Division’s ruling to that extent, while otherwise affirming that ruling.

In Sullivan, petitioner had voluntarily left his job as a chef at a Montclair restaurant in October 2019. In April 2020, during the COVID-19 pandemic, he applied for unemployment benefits under the Coronavirus Aid, Relief, and Economic Security Act, 15 U.S.C. §§ 9001 to 9141 (“the CARES Act”). He received $5,584 in benefits.

But the Board of Review thereafter determined that petitioner was not entitled to those benefits. Leaving work voluntarily disqualified him. The Board demanded that he repay the $5,584.

Petitioner asserted that because the benefits had been paid to him and he had relied on them, the Board was estopped from seeking repayment. Judge Whipple did not agree. Petitioner “argument fails because the Division must seek repayment for improperly awarded benefits.”

Petitioner “did not demonstrate a ‘manifest injustice’ that would justify invoking equitable estoppel against the State. Although the Division erroneously granted petitioner benefits, the State, through the Division and appeals process, even-handedly and reasonably applied federal and State laws and regulations to seek a refund of those benefits.” The “arbitrary and capricious” standard of review applied, and there was nothing arbitrary or capricious here.