Judge STERN (temporarily assigned) delivered the opinion of the Court.
We granted certification to decide whether an order compelling arbitration as to one or more, but not all, claims and parties is final for purposes of appeal. The Law Division compelled arbitration of the claims between defendant third-party plaintiff Rosanna Pittella and third-party defendant Pine Belt Enterprises, Inc. ("Pine Belt"), but allowed the complaint of plaintiff General Motors Acceptance Corporation (GMAC) against Pittella to proceed. When the litigation between GMAC and Pittella in the Law Division ended one year later, Pittella appealed the order compelling arbitration. The Appellate Division denied Pine Belt's motion to dismiss the appeal as untimely, and decided Pittella's appeal on its merits and in her favor. The Appellate Division considered the appeal timely because the matter did not result in a final judgment until it was resolved as to all claims and all parties. We now hold that any order compelling or denying arbitration shall be deemed final for purposes of appeal, but that the trial court shall retain jurisdiction to address other issues pending the appeal.
On February 27, 2003, Pittella entered into a "retail installment sale contract" with Pine Belt to finance the purchase of a car she bought at Pine Belt. Pittella simultaneously signed an arbitration agreement
Pine Belt assigned the contract to GMAC. On February 12, 2008, GMAC repossessed the car for non-payment and filed suit against Pittella in the Special Civil Part for a deficiency balance of $14,013.15.
On April 21, 2008, Pittella filed an answer, a counterclaim, and a third-party complaint against Pine Belt. The third-party complaint alleged violations of the New Jersey Consumer Fraud Act, N.J.S.A. 56:8-1 to -184, and "breach of contract, fraud and breach of implied covenant of good faith and fair dealing," including unconscionability under Section 302 of the Uniform Commercial Code, N.J.S.A. 12A:2-302. Pittella alleged that Pine Belt charged an excessive price for the extended warranty on the car, and that "the disclosures and representations regarding the cost of the extended warranty [were] false, inaccurate or misleading" because Pine Belt retained "a substantial percentage" of the $3,400 warranty purchase price as profit for itself. Pittella also asserted "class action allegations" against Pine Belt on behalf of a proposed class of individuals who had purchased similar extended warranty plans from Pine Belt during the previous six years. The action was transferred to the Law Division. In lieu of
On July 31, 2008, the trial court partially granted Pine Belt's motion and entered an order compelling "binding arbitration" of Pittella's individual claims against Pine Belt, but did not stay GMAC's claims pending the arbitration. The court initially denied the motion to dismiss Pittella's class action claim because it found the class action waiver clause unenforceable. However, Pine Belt moved for reconsideration and, on August 29, 2008, the Law Division reversed itself, dismissing Pittella's class action claim "with prejudice."
Pittella and GMAC subsequently resolved their dispute in the pending litigation and, on March 5, 2009, executed a "stipulation of dismissal with prejudice." Within forty-five days thereafter, on April 14, 2009, Pittella filed a notice of appeal from the July 31, 2008 and August 29, 2008 orders. Pine Belt moved to dismiss the appeal "as untimely," arguing that Pittella was required to file her appeal within forty-five days of the respective orders. Although the entire motion is not in the record before us, there is no dispute that Pine Belt argued that the challenge to the order compelling arbitration had to have been filed within the required forty-five days from the date of the entry of the order appealed from, in September 2008. Pittella countered that the orders did not dispose of all issues as to all parties, and therefore were not final judgments appealable as of right.
The Appellate Division denied Pine Belt's motion to dismiss the appeal as untimely and, in its subsequent opinion on the plenary appeal, again rejected the timeliness claim because Pine Belt raised it "without any substantive argument as to why [the panel] should not treat [the] prior order denying [Pine Belt's] motion to dismiss the appeal as the law of the case."
We granted Pine Belt's petition for certification, GMAC v. Pittella, 203 N.J. 606, 5 A.3d 797 (2010), which raised only one issue for consideration:
Pine Belt argues Pittella's appeal was not timely because all orders compelling arbitration are deemed final for appeal purposes under the express wording of Rule 2:2-3(a), including orders that do not dispose of all issues as to all parties. There is no dispute that the Rule was adopted under our Constitutional authority to promulgate rules governing "practice
Pittella defends her appeal as timely because the 2008 orders did not dispose of the entire litigation and, thus, were not final as to all claims and all parties. She further asserts that Wein is not applicable because in Wein the trial court compelled arbitration between the only two parties in that litigation and, thus, the order compelling arbitration disposed of all the issues as to all parties before the trial court. She also contends that if the Court decides to alter the rule of finality to read that all orders compelling arbitration are final regardless of whether some parties, issues or claims remain for resolution, that rule should be given only "purely prospective" effect; that Pine Belt has suffered no prejudice in this matter because little more than a year has elapsed between the filing of GMAC's complaint and Pittella's appeal; and that Pittella did not waive her right to appeal by proceeding to arbitration with Pine Belt.
In Wein v. Morris, 388 N.J.Super. 640, 909 A.2d 1186 (App.Div.2006), aff'd in part and rev'd in part, 194 N.J. 364, 944 A.2d 642 (2008), the Appellate Division dealt with two parties who entered into an agreement that contained an arbitration clause. Id. at 646-47, 909 A.2d 1186. Both parties moved for summary judgment, but the trial court, on its own motion, "entered an order that denied the summary judgment motions as moot, compelled the arbitration of the disputes, and dismissed the complaint and all counterclaims and cross-claims." Id. at 647-48, 909 A.2d 1186.
After the plaintiff prevailed in the arbitration and the Law Division confirmed the award, the defendant appealed and challenged the order to arbitrate, as well as the confirmation of the award. Id. at 649, 909 A.2d 1186. The plaintiff responded, in part, by arguing that appellate review of the order compelling arbitration was procedurally barred because it was "a final order" when entered and, thus, the defendant's appeal was untimely as beyond the forty-five day time limit provided by Rule 2:4-1(a). Id. at 651, 909 A.2d 1186.
The Appellate Division noted that, "at first blush, the ... order appears to be a final order" because the trial court "dismissed the complaint, the counterclaim and all cross-claims, thereby ostensibly suggesting that all issues as to all parties had been adjudicated." Id. at 652, 909 A.2d 1186. However, the panel also noted that "the order also contains the judge's direction that the disputes be arbitrated and, undoubtedly, the judge and the parties anticipated further proceedings in the trial court upon the completion of arbitration such as the filing of motions seeking confirmation or vacation of the arbitrator's award." Ibid. The panel ultimately concluded that the order was not final because, "although the order may appear to be a final order, it did not finally dispose of all issues as to all parties because additional proceedings loomed in the future." Ibid.
The panel also rejected the plaintiff's argument that the order was final because the trial court "dismissed," rather than "stayed," the litigation pending arbitration because (1) the trial court was only "empowered" by the New Jersey Arbitration
On certification, we reversed that part of the Appellate Division opinion dealing with the finality of the order compelling arbitration, found "it appropriate to deem an order compelling arbitration a final judgment appealable as of right," and held that "whether the [trial] court in compelling arbitration dismisses the action as part of a final order or stays the matter, the order will be deemed final and appealable as of right." Wein v. Morris, 194 N.J. 364, 380, 944 A.2d 642 (2008). In so holding, we observed (1) that other jurisdictions are split on whether such orders are final, see David B. Harrison, Annotation, Appealability of State Court's Order or Decree Compelling or Refusing to Compel Arbitration, 6 A.L.R. 4th 652, § 3(a)-(b) (Supp. 2007) (collecting cases), and (2) that the United States Supreme Court had "concluded that when the trial court orders `the parties to proceed to arbitration' and dismisses `all the claims before it, that decision is `final' within the meaning of [the Federal Arbitration Act (FAA), 9 U.S.C.A. § 16(a)(3)], and therefore appealable'" because § 16(a)(3) of the FAA "`preserves immediate appeal of any final decision with respect to an arbitration, regardless of whether the decision is favorable or hostile to arbitration,' and that a `final decision' is a `decision that ends the litigation on the merits and leaves nothing more for the court to do but execute the judgment.'" Wein, supra, 194 N.J. at 378-79, 944 A.2d 642 (citing Green Tree Financial Corp. v. Randolph, 531 U.S. 79, 86, 88-89, 121 S.Ct. 513, 519-21, 148 L.Ed.2d 373, 380-82 (2000)) (internal quotations omitted).
We "agree[d] with the reasoning of Green Tree" and held that, "once the trial court ordered the parties to proceed in arbitration and dismissed the complaint, that decision ended the litigation in the Superior Court" and was, therefore, final because "[t]here was nothing left for the trial court to decide between the parties," id. at 379, 944 A.2d 642, irrespective of whether the Law Division's order was called a "stay" or "dismissal." However, Green Tree stated that, "[h]ad the District Court entered a stay instead of a dismissal in this case, that order would not be appealable." Green Tree, supra, 531 U.S. at 87 n. 2, 121 S.Ct. at 520 n. 2, 148 L.Ed.2d at 381 n. 2 (citing 9 U.S.C.A. § 16(b)(1)). Although we agreed that orders that stayed actions pending arbitration were technically not final under the Rules as they then read, Wein, supra, 194 N.J. at 379, 944 A.2d 642, we held that such orders should nevertheless be deemed final for appeal purposes. Justice Wallace explained:
Moreover, while Green Tree read the FAA as providing for appeals from "a final decision with respect to an arbitration that is subject to this title," 9 U.S.C.A. § 16(a)(3), to include trial court orders directing the parties to arbitration and dismissing all claims before them, Green Tree, supra, 531 U.S. at 89, 121 S.Ct. at 521, 148 L.Ed.2d at 382, we did not read New Jersey's newly enacted version of the Revised Uniform Arbitration Act of 2000 ("Uniform Arbitration Act"), N.J.S.A. 2A:23B-1 to -32,
Rule 2:2-3(a) governs the right to appeal to the Appellate Division from final judgments and also delineates various orders that, although interlocutory, are deemed final for purposes of taking an appeal as of right. The Civil Practice Committee drafted a recommended amendment to the Rule to implement Wein, and in July 2010, we adopted the amendment, which became effective on
As noted earlier, Wein involved an order that compelled arbitration of all issues and all parties. Wein, supra, 194 N.J. at 369-70, 944 A.2d 642. The same is not true of the order that compelled arbitration between defendant third-party plaintiff and third-party defendant in the present case. Here, more remained before the trial court than the mere return of the parties for finalization of the arbitrator's award: the trial court still had to decide GMAC's deficiency claim against Pittella.
This case is governed by the Uniform Arbitration Act because the agreements were executed after January 1, 2003. See N.J.S.A. 2A:23B-3 (describing when Act applies). The Act directs that, "[i]n applying and construing this uniform act, consideration shall be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it." N.J.S.A. 2A:23B-29. To date, twelve states, including New Jersey, and the District of Columbia have adopted some version of the Revised Uniform Arbitration Act of 2000.
At present, appellate courts should, and do, review interlocutory orders when a litigant shows a meritorious basis for so doing. See R. 2:2-2; R. 2:2-4; R. 2:5-6(a); R. 2:8-1. Moreover, Rule 2:2-3(a) invokes public policy considerations warranting review of interlocutory orders without the need for leave granted, to avoid "situations in which a party will be substantially prejudiced if an immediate appeal is not allowed." Moon v. Warren Haven Nursing Home, 182 N.J. 507, 517, 867 A.2d 1174 (2005). Those same considerations animated our decision in Wein, which amended Rule 2:2-3(a) to include orders that compel arbitration. It did so because interlocutory review, when appropriate, assists in the speedy resolution of disputes and would expeditiously decide, with finality, whether a dispute is arbitrable, to be decided outside the court system. See Wein, supra, 194 N.J. at 380, 944 A.2d 642. A reference to arbitration, unlike most interlocutory orders, terminates the role of the court altogether. The policy behind Wein applies irrespective of whether other claims or parties remain in the trial court, and—as already noted—the Uniform Act expressly permits appeals from orders denying arbitration.
We, therefore, now hold that Rule 2:2-3(a) be further amended to permit appeals as of right from all orders permitting or denying arbitration. Because the order shall be deemed final, a
Our holding, however, cannot be made in a vacuum. We further order that the Rules and administrative practice within the Appellate Division also be amended to require the expeditious processing of these appeals similar to those on discretionary interlocutory review.
We refer the matter to the Civil Practice Committee to again revisit Rule 2:2-3(a) and consider amendments to Rule 2:9-1 and other rules to implement this decision.
Because it addressed less than all issues as to all parties, it was not clear that the order compelling arbitration of Pittella's claims against Pine Belt was final under Rule 2:2-3(a) and Wein. That question and its resolution are now crystal clear: orders compelling or denying arbitration are deemed final and appealable as of right as of the date entered. Based on the prior lack of clarity, we affirm that portion of the Appellate Division decision denying the motion to dismiss the appeal from the final judgment.
As modified, the judgment of the Appellate Division is affirmed.
Opposed—None.
