Appellate Division Compels Arbitration of Consumer Fraud and TCCWNA Claims and Dismisses Class Claims

Adrienne C. Rogove

In Griffoul v. NRG Residential Solar Solutions, LLC and NRG Energy, Inc., the Appellate Division recently addressed the validity of an arbitration clause in a lease between the plaintiffs, residents of Elmwood Park and class representatives (“Plaintiffs”), and NRG Residential Solar Solutions (“NRG RSS”) doing business as NRG Home Solar (“NRG Residential”) and NRG Energy, Inc. (“NRG Energy”) (collectively, “Defendants”). A-5535-16T1 (App. Div. May 4, 2018). Plaintiffs filed a class action complaint against Defendants alleging violations of the New Jersey Consumer Fraud Act (“CFA”) and the Truth-in-Consumer Contract, Warranty and Notice Act (“TCCWNA”) based on particular provisions in the lease. The lease required NRG Residential to install solar systems on Plaintiffs’ properties, which would provide electricity to their homes, and which would be connected to the utility’s electrical transmission grid.

Defendants filed a motion to compel arbitration pursuant to an arbitration clause in the lease. In pertinent part, the lease provided:

“[A]ny dispute, disagreement or claim between you and NRG RSS arising out of or in connection with this Lease, or the Solar System…shall be submitted to final and binding arbitration…YOU AND NRG RSS AGREE THAT BY ENTERING INTO THIS LEASE, YOU AND WE ARE WAIVING THE RIGHT TO A JURY TRIAL. IN ADDITION, EACH PARTY MAY BRING CLAMS AGAINST THE OTHER PARTY ONLY IN ITS INDIVIDUAL CAPACITY AND NOT AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS OR REPRESENTATIVE PROCEEDING.”

Defendant NRG Energy also moved to dismiss the CFA claim for failure to plead it with particularity as required by Rule 4:5-8(a), and to dismiss the TCCWNA claim on the basis that NRG Energy was not a party to the lease agreement. Continue reading “Appellate Division Compels Arbitration of Consumer Fraud and TCCWNA Claims and Dismisses Class Claims”

Supreme Court Finds Waiver of Right to Arbitrate by Failure to Pay In Tahisha Roach v. BM Motoring, LLC

Bruce M. Gorman, Jr.

In Tahisha Roach v. BM Motoring, LLC (077125) (A-69-15), the New Jersey Supreme Court held that a used car dealership’s knowing refusal to cooperate with plaintiffs’ arbitration demands, filed in reasonable compliance with the parties’ agreement, amounts to a material breach, barring the breaching party from later compelling arbitration.

The decision stemmed from two separate litigations involving a used car dealership’s dispute resolution agreement (“DRA”). Plaintiffs had separately purchased used cars from two used car dealerships (operating under the same name), which turned out to be lemons. Plaintiffs’ respective efforts to file an arbitration before the AAA were met by the dealer’s refusal to advance its arbitration fees, and the AAA’s subsequent dismissal of the petition. Efforts to file in court were met by motions to dismiss in favor of arbitration, which the lower courts granted. Ultimately, a joint action was filed, and the lower court directed the plaintiffs to attempt to refile before the AAA, and dismissed their complaint with prejudice. An appeal was taken, and the Appellate Division affirmed. Continue reading “Supreme Court Finds Waiver of Right to Arbitrate by Failure to Pay In Tahisha Roach v. BM Motoring, LLC”