Opinion
DOCKET NO. A-0946-15T1
04-29-2016
JACQUELINE PALLADINO Plaintiff-Appellant, v. MICHAEL HEGARTY FUNERAL HOME, INC., SCI MANAGEMENT, d/b/a DIGNITY MEMORIAL, and McCRACKEN FUNERAL HOME, Defendants-Respondents.
Daniel B. Needle argued the cause for appellant (Kohn, Needle & Silverman, attorneys; Mr. Needle, on the brief). Meredith Kaplan Stoma argued the cause for respondents (Morgan Melhuish Abrutyn, attorneys; Ms. Kaplan Stoma, of counsel; Ms. Stoma and Petar Kuridza, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Reisner, Hoffman and Whipple. On appeal from the Superior Court of New Jersey, Law Division, Union County, Docket No. L-1859-15. Daniel B. Needle argued the cause for appellant (Kohn, Needle & Silverman, attorneys; Mr. Needle, on the brief). Meredith Kaplan Stoma argued the cause for respondents (Morgan Melhuish Abrutyn, attorneys; Ms. Kaplan Stoma, of counsel; Ms. Stoma and Petar Kuridza, on the brief). PER CURIAM
Plaintiff Jacqueline Palladino appeals from an October 26, 2015 order granting a motion to compel arbitration, filed by defendants Michael Hegarty Funeral Home, SCI New Jersey Funeral Services LLC, and McCracken Funeral Home. We affirm.
The record reflects that SCI New Jersey Funeral Services, LLC (SCI) does business as McCracken Funeral Home and Michael Hegarty Funeral Home. The complaint incorrectly named SCI as "SCI Management d/b/a Dignity Memorial."
I
These are the most pertinent facts. On May 26, 2015, plaintiff filed a complaint against defendants alleging that "[o]n or about May 28, 2013" plaintiff arranged with defendants for her mother's funeral, but defendants "failed to properly prepare the Decedent for viewing and burial." Defendants filed a motion to compel arbitration. The motion admitted that the parties entered into a contract for services on May 28, 2013, and defendants provided the court with a copy of the document. Defendants pointed out that the contract contained an arbitration clause that was set forth "in bold type and capital letters just above the signature line" and was also repeated in the terms and conditions on the back of the signature page.
In the alternative, the motion sought dismissal of the complaint pursuant to a contract clause shortening the statute of limitations to one year. The judge denied that portion of the motion, ruling that the limitations issue would be submitted to the arbitrator. Defendants have not cross-appealed, and we do not address the validity of that clause.
Plaintiff opposed the motion, claiming that on May 24, 2013, she had signed a handwritten one page "Statement of Funeral Goods and Services Selected," which she claimed was an enforceable contract which did not contain an arbitration clause. According to plaintiff's certification, she returned to the funeral home on May 28, 2013 to attend the wake, "arriving early at [defendant's] request to finalize the paperwork." Plaintiff attested that a funeral director presented her with a multi-page document, which he told her "reflect[ed] the terms agreed to on the handwritten statement, only with updated prices." Although her brief argued that plaintiff was "defrauded" into signing the agreement, plaintiff's certification did not state: that she was not given an opportunity to read the document, that she did not read it, that she did not understand the arbitration clause, or that she would not have signed the document had she known that it contained an arbitration clause.
In her certification, plaintiff also asserted that she contracted for the funeral services with Michael Hegarty Funeral Home, but that Hegarty subcontracted some of the work to McCracken Funeral Home, which did a substandard job of preparing her mother's body for burial.
The one-page document dated May 24, 2013, which plaintiff submitted with her motion opposition, was captioned "Statement of Funeral Goods and Services Selected." It had no contract number, although there was a blank space for the number. It had handwritten notations of the proposed prices for various funeral services. At the bottom, the funeral director's signature followed a statement that he had "prepared the above Statement of Funeral Goods and Services Selected" (the Statement). Above plaintiff's signature was a printed acknowledgement that she had "read and received a copy of the Statement."
The documents plaintiff signed on May 28, 2013 were considerably more formal. The Statement listed more services, and the prices were typed rather than handwritten. The contract number was filled in at the top of the Statement, along with a case number.
In addition to the typed Statement, plaintiff signed a document captioned "Purchase Agreement" (agreement) which set forth the total price for the funeral, "Payment Terms," and a several-paragraph "Acknowledgement of Disclosures/Disclaimer." The agreement also featured a prominent arbitration clause set forth in bold, capital letters just above the purchaser's signature line: "BY SIGNING THIS AGREEMENT, YOU ARE AGREEING THAT ANY CLAIM YOU MAY HAVE AGAINST THE SELLER SHALL BE RESOLVED BY ARBITRATION AND YOU ARE GIVING UP YOUR RIGHT TO A COURT OR JURY TRIAL AS WELL AS YOUR RIGHT OF APPEAL." The agreement also advised the purchaser to read the other side of the document because it contained additional terms and conditions that were part of the contract, and stated, "DO NOT SIGN THIS AGREEMENT BEFORE YOU READ IT."
Plaintiff does not challenge the validity of the arbitration clause language. --------
The reverse side set forth an additional explanation of the arbitration clause, in bold type and capital letters. That arbitration paragraph specifically made the arbitration agreement applicable to any of the seller's employees or agents, and to the seller's parent, subsidiary or affiliate corporations and any of their employees or agents.
The terms and conditions page also contained an integration clause headed "ENTIRE AGREEMENT," which stated, in pertinent part: "This Agreement contains all terms which have been agreed upon by you and us relating to the goods and services listed in the Statement . . . . This Agreement replaces all other discussions and agreements, whether oral or written, relating to those goods and services."
In an oral agreement set forth on the record on October 26, 2015, Judge Thomas J. Walsh noted the strong public policy favoring arbitration, and concluded that the arbitration clause was enforceable. He found "no evidence" that the initial, handwritten document signed on May 24, 2013 was a contract. He found that it was simply a statement of services. Instead, he concluded that the formal purchase order signed on May 28 was the contract. The judge found that the May 28 contract had a prominent arbitration clause, just above plaintiff's signature. He found that "no evidence has been submitted substantiating plaintiff's claims that she was defrauded in any way into signing the contract or that there was not mutual assent to the terms."
II
"When a trial court's decision turns on its construction of a contract," we review that determination de novo. Manahawkin Convalescent v. O'Neill, 217 N.J. 99, 115 (2014). "Appellate courts give 'no special deference to the trial court's interpretation and look at the contract with fresh eyes.'" Ibid. (quoting Kieffer v. Best Buy, 205 N.J. 213, 223 (2011)). "New Jersey's public policy . . . favors enforcement of valid agreements to arbitrate." Delta Funding Corp. v. Harris, 189 N.J. 28, 39 (2006). However, "[g]enerally recognized contract defenses, such as duress, fraud, and unconscionability, can justify judicial refusal to enforce an arbitration agreement." Ibid.
On this appeal, plaintiff raises the following arguments:
I. THE LOWER COURT ERRED IN FAILING TO FIND THAT THE PARTIES ENTERED IN TO [SIC] A CONTRACT ON MAY 24, 2013.
A. THE PARTIES REACHED [AN] AGREEMENT ON MAY 24, 2013.
B. THE PARTIES' BEHAVIOR INDICATED THAT THEY HAD REACHED [AN] AGREEMENT ON MAY 24, 2013.
C. THE MAY 28, 2013 "AGREEMENT" WAS NOT THE CONTRACT.
i. EVEN IF THE PARTIES CONTEMPLATED SIGNING A MORE FORMAL CONTRACT, THE TERMS OF THE ORIGINAL CONTRACT CONTROL.
ii. PERFORMANCE BY HEGARTY PRIOR TO THE 5/28/13 "AGREEMENT" INDICATES THE PARTIES HAD A CONTRACT FROM 5/24/13.
II. THE LOWER COURT ERRED IN FINDING THAT THE ARBITRATION CLAUSE WAS ENFORCEABLE.
A. THE MAY 28, 2013 CONTRACT WAS A CONTRACT OF ADHESION (AT LEAST IN PART).
B. THE CONTRACT OF MAY 28, 2013 WAS NEITHER A NOVATION NOR A MODIFICATION OF THE MAY 24, 2013 AGREEMENT.
i. THE "AGREEMENT" IS NOT A MODIFICATION OF THE "STATEMENT."
ii. THE "AGREEMENT" IS NOT A NOVATION OF THE "STATEMENT."
iii. THE "AGREEMENT" UNILATERALLY ADDED TERMS WHICH CANNOT BE ENFORCED.
III. THE LOWER COURT ERRED IN RELYING ON PERSONAL KNOWLEDGE IN FAILING TO SCRUTINIZE THE DEALINGS OF THE PARTIES.
IV. THE LOWER COURT ERRED IN APPLYING THE ARBITRATION CLAUSE TO SCI AND McCRACKEN.
Plaintiff did not argue to the trial court that the agreement was a contract of adhesion, and we decline to consider the argument for the first time on appeal. See Zaman v. Felton, 219 N.J. 199, 226-27 (2014); Nieder v. Royal Indem. Ins. Co., Inc., 62 N.J. 229, 234 (1973). Having reviewed the record in light of the applicable law, we find no merit in plaintiff's remaining arguments, most of which are without sufficient merit to warrant discussion. See R. 2:11-3(e)(1)(E).
We agree with the trial judge that the May 24 statement was not a contract. As the judge implicitly recognized, a funeral home cannot lawfully begin its relationship with a potential client by offering a contract. Instead, before it can enter into a contract, a funeral home must provide the prospective client with a written statement of services offered. Those principles are set forth in consumer protection regulations adopted by the New Jersey Board of Mortuary Science. See N.J.A.C. 13:36-1.9 and -9.8(a).
Specifically, N.J.A.C. 13:36-9.8 requires funeral homes to "provide a Statement of Funeral Goods and Services Selected . . . to each person who arranges a funeral or other disposition of human remains, at the conclusion of the discussion of arrangements." N.J.A.C. 13:36-9.8(a). This section further states that the "Statement of Funeral Goods and Services Selected shall conform to the requirements of N.J.A.C. 13:36-1.9." Ibid.
In addition to listing the required contents that belong in the Statement, N.J.A.C. 13:36-1.9 expressly provides that no contract shall be included in the Statement. N.J.A.C. 13:36-1.9(b) ("Promissory notes, contracts, payment terms, and other non-related items shall not be included on the Statement of Funeral Goods and Services Selected."). In Menorah Chapels at Millburn v. Needle, 386 N.J. Super. 100 (App. Div.), certif. denied, 188 N.J. 489 (2006), we acknowledged that both the Mortuary Board's regulations and the rules of the Federal Trade Commission require that consumers be given a "written statement of the full costs of the arrangements desired before entering into any contract with the funeral director." Id. at 111 (emphasis added) (citation omitted). Therefore, as a matter of law, the May 24 Statement could not serve as a contract.
As required by law, the May 24 Statement contained all of the price and service information required by section 1.9, and it did not include any contract language. Instead, on May 28, defendants provided plaintiff with a separate contract, consisting of a formal, typed version of the Statement, plus a formal purchase agreement. Moreover, the May 28 agreement contained an integration clause unambiguously stating that the agreement "replaces all other discussions and agreements, whether oral or written, relating to those goods and services." That clause further precludes plaintiff's argument that the May 24 document was an enforceable contract.
The May 28 agreement also included a clear and conspicuous arbitration clause. On this appeal, plaintiff does not challenge the validity of the clause in terms of its language or its prominence in the agreement. We agree with the trial court that plaintiff produced no legally competent evidence that she was defrauded into signing the document. Her fraud allegation warrants no further discussion here. R. 2:11-3(e)(1)(E).
Finally, we agree with the trial court that all of the defendants were entitled to invoke the arbitration clause. By its terms, the clause applied to parent companies, subsidiaries, and agents. That language is broad enough to encompass SCI, McCracken, and Hegarty as parent corporation and subsidiaries. It would also apply to McCracken as Hegarty's agent if, as plaintiff alleges, Hegarty subcontracted to McCracken the work of preparing the body.
Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION