NJ Supreme Court refuses enforcement of arbitration clause - Kernahan v. Home Warranty

The company's compulsory arbitration  was
rejected as confusing by the New Jersey Supreme Court

The Supreme Court of New Jersey, affirming the decision below,  in Kernahan v. Home Warranty, refused to enforce a purported arbitration agreement.  The agreement was held to be confusing and unenforceable.  Writing for a unanimous court Associate Justice  Jaynee Lavecchia declared

[W]e conclude that the so-called “arbitration agreement” within this consumer contract fails to support a finding of mutuality of assent to form an agreement to arbitrate. The provision’s language is debatable, confusing, and contradictory -- and, in part, misleading. The “arbitration agreement” touted by defendants is also obscure when this consumer contract is viewed as a whole. The provision does not fairly convey to an ordinary person that arbitration would be the required method of dispute resolution.

The Court found it unnecessary to address the purported conflict with the U.S. Supreme Court in Kindred Nursing  Centers v. Clark (an argument defendant abandoned at oral argument).  Lavecchia  similarly found it unnecessary to reexamine its own precedents despite the New Jersey Business and Industry Association's vigorous argument that the New Jersey high court's foundational Atalese v. U.S. Legal Services Group, 219 N.J. 430 (2014) was ill founded, violating the Federal Arbitration Act.  Justice Albin would have reached that issue and rejected the argument of the NJB&IA.  

The New Jersey State Bar Association, which I represented, argued that the purported contractual waiver was confusing and therefore unenforceable, consistent with long standing New Jersey contract law principles. - gwc