By Michael S. Karpoff, Esq.
A recent decision by the Appellate Division of New Jersey’s Superior Court demonstrates the need for precision in defining what method of alternative dispute resolution (ADR) an association utilizes or agrees to. Carelessly referring to the ADR procedure as an arbitration can make the ultimate decision binding upon the parties, even if one of the parties had something else in mind.
Attorneys’ Communications Outweighed Asserted Intent
In Marano v. The Hills Highlands Master Association, Inc., which was decided on November 16, 2017, the Court rejected the Association’s argument that it was not bound by an arbitration award because the procedure it had used was intended to be a mediation. The Court found that plaintiff’s counsel had repeatedly referred to the procedure as an arbitration and the hearing officer as the arbitrator without objection by the Association’s attorney, and, in fact, the Association’s attorney had referred on at least one occasion to the hearing officer as “the arbitrator.” The hearing officer submitted to the attorneys an agreement to mediate, which they signed; however, she apparently understood her role as being an arbitrator because she later issued an “Award in Arbitration.”