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NEW JERSEY'S CONSUMER FRAUD LAWYER IN BERGEN, PASSAIC AND MORRIS COUNTIES: THE ENFORCEABILITY OF AN ARBITRATION CLAUSE IN A CONSUMER FRAUD CASE

II. SEVERABILITY (2 of 3)

If a court concludes that an arbitration clause cannot extinguish a CFA claim, all issues and all claims made by the consumer must be adjudicated in the context of the lawsuit because a court should not fragment a case with two parallel proceedings that relate to the same factual and legal controversies.

The problem of fragmenting a legal contest through arbitration and litigation in the courts, where there is a commonality of factual and legal issues, has haunted the law for many years. The conundrum was finally resolved in Garfinkle where the court concluded that the arbitration clause, subject of that case, was not specific enough to require arbitration of a LAD claim made by the plaintiff. Since the LAD claim was associated with a number of common law claims asserted by plaintiff in that case, the court had to determine the procedural course to be taken by the litigation and addressed “the question of whether plaintiffs’ common law claims should be tried in the Law Division, along with the LAD Claim, or whether they should be resolved separately by arbitration.” In answering that question, the court concluded that:

In keeping with those principles, the Court assumes, without deciding, that plaintiff's common-law claims are subject to arbitration. The question, then, is whether notions of judicial economy dictate the joinder of those claims in a single Law Division action. The Court concludes that plaintiff's claims should be so joined. "Just as we view piecemeal litigation as anathema, we also look with disfavor upon the unnecessary bifurcation of disputes between judicial resolution and arbitration.(citations omitted). In view of our disposition in respect of plaintiff's LAD claim, the matter is remanded for resolution of all issues, including plaintiff's common-law allegations, in a single Law Division action.

The ruling in the Garfinkle case has been specifically applied in a CFA case.





Frank T. Luciano, Esq., is a trial lawyer in Bergen County,  Passaic County, Hudson County and Morris County, with over thirty years of experience, who specializes in complex civil litigation, including  legal malpractice, construction claims, wrongful death actions, wills and estate contests and liquor law liability cases. 

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