                                                                                                                           Opinions of the United
2004 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


10-20-2004

NJ Sch Bd Assn Ins v. Druz
Precedential or Non-Precedential: Non-Precedential

Docket No. 03-4304




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"NJ Sch Bd Assn Ins v. Druz" (2004). 2004 Decisions. Paper 205.
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                                                              NOT PRECEDENTIAL

                     UNITED STATES COURT OF APPEALS
                          FOR THE THIRD CIRCUIT

                                    No: 03-4304

                       NEW JERSEY SCHOOL BOARDS
                      ASSOCIATION INSURANCE GROUP,

                                    v.
                        DEAN WITTER REYNOLDS INC.;
                             DANIEL A. DRUZ

                             Daniel A. Druz, Appellant


                   On Appeal from the United States District Court
                          for the District of New Jersey
                            (Civil Action No. 88-5584)
                       District Judge: Hon. John W. Bissell

                            Argued: September 22, 2004

                         Before: McKEE, Circuit Judges,
                     ROSENN and WEIS, Senior Circuit Judges.

                          (Opinion filed: October 20, 2004)

DAN A. DRUZ, ESQ. (Argued)
Suite 1000
291 East Main Street
Manasquan, NJ 08060

EDWARD S. NATHAN (Argued)
Stern & Kilcullen
75 Livingston Avenue
Roseland, NJ 07068
Attorney for Dean Witter Reynolds

                                     OPINION
McKEE, Circuit Judge.

       Appellant Dan A. Druz, argues that the District Court abused its discretion in

denying his motion to lift a stay of arbitration that had been imposed in 1995. For the

reasons that follow, we agree and we will vacate the judgment of the District Court and

remand with instruction to lift the 1995 stay and refer the matter to arbitration before the

NYSE.

       Because the facts and procedural history are not in dispute and known to the

parties, we need not reiterate them except insofar as maybe helpful to our brief

discussion.

       Judge Barry explained the reason for imposing the 1995 stay as follows:

               it being the opinion of the court that given Druz’s
       representation that what he is seeking to arbitrate before the
       NYSE is a separate and independent action for malicious
       prosecution “concerning [the New Jersey] indictment” (and
       wholly apart from whether the parties have agreed to arbitrate
       such a dispute, an issue as to which this court has grave doubts),
       his claim is, at best, premature in that forum and in this or any
       other forum, it being undisputed that, among other requisites,
       termination of the criminal prosecution favorable to Druz is
       required for a malicious prosecution action to accrue; and
               it being the opinion of the court that, although the State of
       New Jersey has not – or has not yet – intervened in this matter,
       proceeding with arbitration on the malicious prosecution claim
       would unduly interfere with an ongoing state criminal
       proceeding.

Id.

       It is therefore clear that Judge Barry originally imposed the 1995 stay in



                                           2
order to ensure that the NYSE arbitration did not proceed until after the conclusion

of the criminal proceedings and related ethical investigation that had been initiated

against Druz. However, those proceedings have now concluded in Druz’s favor.

Based on the record before us it appears that Druz is not now the subject of any

pending criminal or ethical investigation.

       Since the 1995 stay was imposed in order to avoid any conflict with the then

pending criminal and ethical investigations, the stay no longer serves its original

purpose. Accordingly, we conclude that the District Court erred in denying Druz’s

motion to lift the 1995 stay of arbitration before the NYSE.1

       Therefore, we will vacate the judgment of the District Court and remand so

that the court may lift the 1995-court-imposed stay and refer the matter to

arbitration.2




   1
    The parties have focused our attention on whether the District Court’s ruling was
contrary to Howsam v. Dean Witter, 537 U.S. 70 (2002). However, since the NYSE
arbitration will proceed, issues such as laches, estoppel and delay can now best be
addressed within the arbitration process.
   2
   See United States v. Swift & Co., 286 U.S. 106 (1932) and Republic of Philippines v.
Westinghouse Electric Co., 43F3d65, (3d Cir., 1994).

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