Knight v. Vivint Solar Developer, LLC, ___ N.J. Super. ___ (App. Div. 2020). In Goffe v. Foulke Mangagement Corp., 238 N.J. 191 (2019), the Supreme Court ruled that threshold issues as to the validity of a contract that contained an arbitration clause were for the arbitrator to resolve. But as Judge Rose noted in her opinion for the Appellate Division in this case, Goffe did not involve a challenge to the arbitration clause itself, but only a claim that the overall agreement was procured by fraud.
Here, in contrast, plaintiff in this consumer fraud case contended that she never saw or agreed to an arbitration clause that the defense asserted was part of their contract for solar panel installation. Plaintiff alleged that she was required to, and did, sign on a signature line of an otherwise blank iPad screen proffered by the solar company’s representative.
The Law Division granted a defense motion to compel arbitration, finding this case indistinguishable from Goffe. Applying de novo review, Judge Rose disagreed.
Though there is a “strong preference to enforce arbitration agreements, both at the state and federal level,” arbitration agreements “must be the product of mutual assent.” Under Atalese v. U.S. Legal Servs. Grp., L.P., 219 N.J. 430 (2014), “parties must have full knowledge of their rights and shown an intent to surrender those rights” in order for an arbitration clause to be enforceable. Judge Rose stated that “[t]hat did not occur here.” She quoted the Law Division as noting that “there existed ‘a factual issue’ as to whether plaintiff checked” a box indicating consent to arbitration.
Judge Rose concluded that an arbitrator cannot “decide the validity of the [overall agreement], unless and until the trial court initially resolves the issues of fact pertaining to the formation of the arbitration provision, and determines the parties agreed to arbitrate their claims.” The panel reversed and remanded for the Law Division to consider those issues.