                                 NOT FOR PUBLICATION WITHOUT THE
                                APPROVAL OF THE APPELLATE DIVISION
        This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
     internet, this opinion is binding only on the parties in the case and its use in other cases is limited . R. 1:36-3.




                                                         SUPERIOR COURT OF NEW JERSEY
                                                         APPELLATE DIVISION
                                                         DOCKET NO. A-2619-17T4

MAYA ITZHAKOV,

          Plaintiff-Respondent,

v.

DAVID SEGAL,

     Defendant-Appellant.
_____________________________

                   Argued October 24, 2018 – Decided August 28, 2019

                   Before Judges Koblitz, Ostrer and Currier.

                   On appeal from the Superior Court of New Jersey, Law
                   Division, Ocean County, Docket No. L-3022-17.

                   Shalom D. Stone argued the cause for appellant (Stone
                   Conroy LLC, attorneys; Shalom D. Stone, on the
                   briefs).

                   Jonathan R. Mehl argued the cause for respondent.

PER CURIAM

          Plaintiff Maya Itzhakov sued defendant David Segal for breach of a 2017

contract (2017 Contract) that she alleged required him to pay her for her interest
in two pharmacies in Lakewood.        Segal contends a religious court should

arbitrate the dispute. Although the 2017 Contract says nothing about arbitration,

Segal argues that arbitration provisions in two earlier contracts are valid and

cover Itzhakov's claims.

      The trial judge denied without prejudice Segal's motion to stay Itzhakov's

breach-of-contract suit and to compel arbitration before the Badatz Rabbinical

Court of Lakewood. Citing Atalese v. U.S. Legal Services Group, L.P., 219 N.J.

430 (2014), the trial judge concluded that the provisions upon which Segal relied

did not, with sufficient clarity, convey that disputes must be resolved in

arbitration and not in a judicial forum. The judge ordered defendant to file an

answer and the parties to conduct plenary discovery. The judge stated that if

defendant could present evidence that the parties understood their agreements to

require arbitration and bar judicial resolution, defendant could renew his motion.

      Segal appeals, contending that Atalese does not govern the parties'

commercial contract; Itzhakov's claims fall within the scope of the arbitration

provisions in the parties' earlier contracts; and discovery is unnecessary. In the

alternative, Segal argues that discovery should be limited to the validity and

scope of the arbitration agreements. We agree with Segal's alternative argument

and modify the court's order accordingly.


                                                                          A-2619-17T4
                                        2
                                         I.

       At various times, both Itzhakov and Segal held interests in the Refuah and

Westgate pharmacies in Lakewood. On November 29, 2015, Itzhakov sold to

Segal her twenty-five percent interest in Westgate Pharmacy LLC, which

operated the pharmacy by the same name. Written in Hebrew, their agreement

obliged Segal to pay Itzhakov $150,000 – $10,000 upon signing; $4000 on

January 1, 2016; and $4000 a month for the following thirty-four months. 1

Itzhakov remained responsible for certain costs incurred before the sale, which

Segal could deduct from his payments.

       The Westgate agreement includes two dispute resolution provisions. The

first pertains to issues of contract interpretation. It states, "This document shall

be interpreted only and exclusively by the document's drafter, Mr. Yisroel

Knopfler, and we accept his interpretation as if it were one hundred valid and

credible witnesses." The second pertains to relevant "questions of Jewish law."

It states:

             It is hereby agreed between us that any questions of
             Jewish law that are relevant to this sale and to this
             document shall be decided by the Lakewood Rabbinical
             Court, and we are required to do as they decide, and

1
    We granted Segal's motion to supplement the record with an English
translation of the agreement. Itzhakov has not identified any alleged errors in
the translation.
                                                                            A-2619-17T4
                                         3
            signing this document constitutes an acceptance of
            everything in the arbitration agreement that the said
            court regularly uses, and under no circumstances shall
            any dispute between us come to the civil courts, G-d
            forbid.

      Over five years earlier, Segal acquired a ten-percent interest in Lakewood

Pharmacy LLC (Lakewood LLC), which operated the Refuah Pharmacy.

Lakewood LLC was then owned by Itzhakov, Dora Yakubov and Isaac

Shimunov.     Segal acquired his interest in the company by an assignment

agreement (Lakewood Assignment), apparently solely from Yakubov's share.

      A rider to the assignment consisted of two sections. The first contained

various representations of the "Assignor," including that Itzhakov consented to

the assignment and waived her "right of first refusal to purchase Assignor's

membership interests." The second section – consisting of ten subsections –

addressed the LLC's future governance. The subsections covered Segal's option

to purchase, with Itzhakov's consent, an additional ten percent interest; terms of

Segal's employment by the pharmacy; Yakubov's and Shimunov's agreement to

train Segal; Segal's agreement not to compete with Yakubov's or Shimunov's

other ventures; members' voting rights; and right of first refusal if Segal decided

to sell his interest.      Another subsection stated, "All income[] from




                                                                           A-2619-17T4
                                        4
sale/income/refinance/otherwise to be disbursed proportionate to ownership

interest after first paying all outstanding business expenses."

      The eighth subsection, entitled, "Dispute Resolution – Beth Din," stated,

"All disputes arising from this transaction shall be decided solely by the Badatz

Rabbinical Court of Lakewood . . . in accordance with the standard arbitration

agreement of the Rabbinical Court, which is hereby incorporated into this

agreement."

      In the years that followed, Yakubov and Shimunov divested their

remaining interests, leaving Segal and Itzhakov as equal owners of Lakewood

LLC. Then, in 2017, Lakewood LLC sold its interest in Refuah Pharmacy and

its inventory to third parties.

      Itzhakov alleged that she and Segal entered into the 2017 Contract, which

governed distribution of the proceeds as well as Segal's outstanding obligations

from his purchase of the Westgate pharmacy. The alleged contract begins as if

it were the Refuah sale agreement – although the buyers were not signatories. It

states:

              AGREEMENT made this 5 rd [sic] day of May, 2017 by
              and between (i) Lakewood Pharmacy LLC d/b/a Refuah
              Pharmacy, a New Jersey limited liability company . . .
              (hereinafter referred to as the "Owner"), David Segal,
              an individual . . . and Maya Itzhakov, an individual . . .
              and (ii) Refuah RX LLC, a New Jersey limited liability

                                                                           A-2619-17T4
                                          5
              company . . . (hereinafter referred to as the
              "Pharmacy").     Agreed to sell above mentioned
              pharmacy to: Rachel Brach, an individual . . . and Gitel
              Mann, an individual . . . (Rachel Brach and Gitel Mann
              are hereinafter collectively referred to as the
              "Purchaser's Members") . . . for ONE MILLION TWO
              HUNDRED          THOUSAND           US      DOLLARS
              ($1,200,000.00).    Which is SEVEN HUNDRED
              THOUSAND US DOLLARS ($700,000.00) for
              purchase of Pharmacy, and FIVE HUNDRED
              THOUSAND US DOLLARS ($500,000.00) for
              Inventory.[2]

        The 2017 Contract goes on to address distribution of the proceeds of the

sale:

              David Segal and Maya Itzhakov are equal partners of
              50% each for Lakewood Pharmacy, LLC DBA Refuah
              Pharmacy . . . agree to receive SIX HUNDRED
              THOUSAND US DOLLARS ($600,000.00) each
              during closing. Also as a good will David Segal agrees
              to give Maya Itzhakov additional TWENTY
              THOUSAND US DOLLARS ($20,000.00). All three
              check will be paid in form of CERTIFIED CHECKS
              made out to MAYA ITZHAKOV $360,000.00 plus
              another check of $240,000.00, plus $20,000.00; and
              David for $600,000.00.

Apparently, Segal was still in the process of paying Itzhakov and Yakubov for

transfers of interest previously made, as the agreement also states, "David Segal




2
  For the reader's convenience, we have removed bold type where it appears in
the agreement.
                                                                         A-2619-17T4
                                         6
agrees to continue any payments do [sic] to Maya Itzhakov and Dora Yakubov

for MAY of 2017, and further if closing takes longer then [sic] expected."

         The 2017 Contract also separately states the balance then due from the

Westgate sale, and adds that Segal would pay amounts charged to certain credit

cards:

               David Segal agrees to pay for Westgate Pharmacy, LLC
               . . . the balance of $120,000.00 owed to Maya Itzhakov,
               plus all open Chase Master credit cards in full in
               amount of EIGHTY TWO THOUSAND SIX
               HUNDRED SIX US DOLLARS AND SEVENTY
               NINE CENTS, ($82,606.79) and THIRTY FOUR
               THOUSAND SEVEN HUNDRED SEVENTEEN US
               DOLLARS AND SIXTY CENTS ($34,717.60) plus all
               the interest and extra charges may be prior closing [sic]
               or after.

         Though the contract states that it was signed on May 5, 2017, Segal

maintains that only he signed it. He asserts he forwarded it to Itzhakov, who

never signed it.3 The 2017 Contract includes no provision on arbitration or

dispute resolution.

         In her Superior Court complaint, Itzhakov alleged that the 2017 Contract

was binding, and Segal had breached it by failing to make any of the payments

due. Segal responded, in support of his motion to stay the contract action and


3
    The record before us does not include a fully executed copy of the contract.


                                                                           A-2619-17T4
                                          7
to refer the dispute to the Rabbinical Court, that the dispute resolution provisions

in the Lakewood Assignment and Westgate Agreement governed.4

      In denying Segal's motion, the trial judge left open the possibility of

referring the matter to the Rabbinical Court if discovery established that the

parties understood they were required to arbitrate before that forum and barred

from litigating in civil court. However, the court did not limit discovery to the

issues of the validity and scope of the arbitration provisions.

      This appeal followed.

                                        II.

      Segal contends that the arbitration provisions in the Lakewood

Assignment and the Westgate Agreement are valid contractual obligations that

cover Itzhakov's claims, notwithstanding that she alleges breach only of the

2017 Contract.




4
   In his supporting certification, Segal also addressed the merits of Itzhakov's
claim. He alleged the 2017 agreement was not binding because Itzhakov never
signed it. He asserted that an attorney for Itzhakov drafted an initial version;
Segal made changes to the draft, thus constituting a counter-offer; and Itzhakov
never accepted the changes by signing it. Segal also alleged the sale did not
yield $1.2 million because Refuah's debts offset sale proceeds, and the inventory
was stale and did not sell for $500,000. He contended that Itzhakov's initial
proposal required him to guarantee the buyers' payments, but he altered that
provision in his revised draft.
                                                                            A-2619-17T4
                                         8
                                      A.

      We consider first the validity and enforceability of the arbitration

agreements. We review that issue de novo, owing no deference to the trial court.

Morgan v. Sanford Brown Inst., 225 N.J. 289, 302-03 (2016). "[A]rbitration is

a matter of contract and a party cannot be required to submit to arbitration any

dispute which he has not agreed so to submit." AT&T Techs., Inc. v. Commc'ns

Workers of Am., 475 U.S. 643, 648 (1986) (citation omitted); see also Atalese,

219 N.J. at 441. We apply state contract-law principles, placing arbitration

agreements "on an equal footing with other contracts." Morgan, 225 N.J. at 303

(quoting Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63, 67 (2010)).

      Like any contract, an arbitration agreement "must be the product of mutual

assent," which "requires that the parties have an understanding of the terms to

which they have agreed." Atalese, 219 N.J. at 442 (quoting NAACP of Camden

Cty. E. v. Foulke Mgmt., 421 N.J. Super. 404, 424 (App. Div. 2011)). In

particular, a contractual waiver of the right to pursue a claim in court must be

"clearly and unmistakably established."     Id. at 444 (quoting Garfinkel v.

Morristown Obstetrics & Gynecology Assocs., P.A., 168 N.J. 124, 132 (2001)).

The waiver provision must "in some general and sufficiently broad way . . .




                                                                        A-2619-17T4
                                       9
explain that the plaintiff is giving up her right to bring her claims in court or

have a jury resolve the dispute." Id. at 447.

      Whether there was mutual assent depends not on the parties' "real intent

but [on] the intent expressed or apparent in the writing," Leodori v. CIGNA

Corp., 175 N.J. 293, 300 (2003) (quoting Garfinkel, 168 N.J. at 135),

considering "the contractual terms, the surrounding circumstances, and the

purpose of the contract," Marchak v. Claridge Commons, Inc., 134 N.J. 275, 282

(1993). This is consistent with our long-standing precedent governing contract

interpretation in general. See Friedman v. Tappan Dev. Corp., 22 N.J. 523, 531

(1956); see also Nester v. O'Donnell, 301 N.J. Super. 198, 210 (App. Div. 1997)

(stating that the meaning of a contract's terms is determined by looking to "the

objective manifestations of the parties' intent"). "Evidence of the circumstances

is always admissible in aid of the interpretation . . . even when the contract on

its face is free from ambiguity." Atl. N. Airlines, Inc. v. Schwimmer, 12 N.J.

293, 301 (1953). Such extrinsic evidence is considered not to vary or contradict

the writing but to illuminate it. Id. at 301-02.

      In Atalese, the Court invalidated an arbitration agreement in a contract for

debt-adjustment services between an individual consumer and a firm. 249 N.J.

at 446. The agreement empowered the parties to submit a dispute to an arbitrator


                                                                          A-2619-17T4
                                       10
whose decision would be final. Ibid. The Court focused on the fact that the

contract did not explain what arbitration was or how it varied from judicial

dispute resolution; nor did the contract clearly and unambiguously state that

plaintiff was waiving her right to sue in court. Ibid.

      Segal contends that the rule of Atalese applies only to consumer and

employment contracts. We are unpersuaded. No doubt, the Court in Atalese

focused on consumers. But the principle that a person must knowingly waive

the right to sue in court applies to any contracting party, whatever the contract's

purpose. The "average member of the public" to whom the Court refers may

enter into a contract on behalf of his or her business, or to secure a consumer

product or service. See id. at 442. In either case, the person must understand

that arbitration precludes the right to sue. Ibid.

      A party's sophistication may certainly bear on whether he or she

knowingly and voluntarily agreed to a contract's terms. See McMahon v. City

of Newark, 195 N.J. 526, 546 (2008) (determining to enforce a contract between

"obviously sophisticated parties"); Van Duren v. Rzasa-Ormes, 394 N.J. Super.

254, 265 (App. Div. 2007) (noting that contracting parties were "highly

sophisticated businesspeople of relatively equal bargaining position"), aff'd o.b.,

195 N.J. 230 (2008). However, even a sophisticated party, or one represented


                                                                           A-2619-17T4
                                        11
by counsel, will not be deemed to waive his or her rights – whether

constitutional, statutory, or common-law – without clear and unambiguous

language. See Garfinkel, 168 N.J. at 136 (rejecting the suggestion "that the

Court should focus predominately on the plaintiff's level of sophistication to

ensure that he acted of his own volition," because "the Court must be convinced

that he actually intended to waive his statutory rights" through "[a]n

unambiguous writing"); see also Dispenziere v. Kushner Cos., 438 N.J. Super.

11, 18-20 (App. Div. 2014).

                                        1.

      Applying the foregoing principles, we affirm the trial court's conclusion

that, on its face, the Lakewood Assignment does not explain with sufficient

clarity that the parties waived their right to sue in civil court by submitting to

dispute resolution by the Lakewood Rabbinical Court; nor does it clearly

contrast arbitration with litigation. The Lakewood Assignment simply states

that "[a]ll disputes arising from this transaction shall be decided solely by the

Badatz Rabbinical Court of Lakewood . . . in accordance with the standard

arbitration agreement of the Rabbinical Court, which is hereby incorporated into




                                                                          A-2619-17T4
                                       12
this agreement." Yet, there is no evidence that the parties were provided, or

understood the terms of that "standard arbitration agreement." 5

        On the other hand, discovery may disclose extrinsic evidence that

illuminates the meaning of the arbitration provision. In particular, in the years

since the Lakewood Assignment was executed, the parties may have referred

matters to the Rabbinical Court and demonstrated an awareness that resort to a

judicial forum was barred. See Michaels v. Brookchester, Inc., 26 N.J. 379, 388

(1958) (stating that "subsequent conduct of the parties in the performance of the

agreement may serve to reveal their original understanding"); see also

Restatement (Second) of Contracts § 202 cmt. g (Am. Law Inst. 1981) (stating

that "[t]he parties to an agreement know best what they meant, and their action

under it is often the strongest evidence of their meaning"). Furthermore, it may

conceivably be demonstrated that within the Orthodox Jewish community, a

provision that calls for dispute resolution by a Rabbinical Court is clearly

understood to preclude resort to civil courts. See Meshel v. Ohev Sholom

Talmud Torah, 869 A.2d 343, 348 (Md. 2005) (noting the view that "under

Jewish law disputes between Jews are, to the extent possible, to be decided by

other Jews through the mechanism of a Beth Din," or rabbinical court). The


5
    The "standard arbitration agreement" is not included in the record before us.
                                                                          A-2619-17T4
                                        13
"vocabulary of a particular place," see Restatement (Second) of Contracts § 202

cmt. f – in this case, the Orthodox Jewish community – may be relevant in

interpreting the arbitration provision of the Lakewood Assignment.

                                        2.

      The Westgate Agreement does not suffer from the same lack of clarity

regarding the waiver of judicial dispute resolution. That agreement obliges the

parties to refer to the Rabbinical Court all "questions of Jewish law that are

relevant to this sale and to this document" and specifically provides that "under

no circumstances shall any dispute between [the parties] come to the civil

courts."   Consistent with Atalese, this provision clearly and unmistakably

conveys that the parties waive resort to a judicial forum to resolve relevant

questions of Jewish law.

      On the other hand, the reference of interpretative questions to Yisroel

Knopfler does not necessarily preclude judicial resolution of disputes

implicating such questions.     It simply requires the parties to "accept his

interpretation" of the language he drafted. Under the agreement, Knopfler's

interpretation could be offered before the Rabbinical Court, if it is adjudicating

a relevant question of Jewish law, or it could be offered before the civil court,

if it is adjudicating some other question. The parties have simply consented to


                                                                          A-2619-17T4
                                       14
Knopfler's interpretation. That does not make Knopfler an arbitrator.           See

Capparelli v. Lopatin, ___ N.J. Super. ___, ___ (App. Div. 2019) (slip op. at 29)

(concluding that parties' referral of certain issues to their corporation's former

counsel for his "final and binding determination" was not an arbitrati on

agreement).

      The Westgate Agreement's arbitration clause is problematic, nonetheless.

That is because it raises a question of religious doctrine that may render the

clause unenforceable by a civil court.        Arbitrability under the Westgate

Agreement depends on a finding that the dispute raises "questions of Jewish law

that are relevant to this sale and to this document."

      "[T]the law presumes that a court, not an arbitrator, decides any issue

concerning arbitrability," unless there is "clea[r] and unmistakabl[e]" contrary

evidence. Morgan, 225 N.J. at 304 (citation omitted). As the agreement did not

expressly assign to the Rabbinical Court the task of determining what qualifies

as an issue of Jewish law – as distinct from the task of resolving such issues – it

is the court's presumptive responsibility to decide whether an issue is arbitrable.

      However, defining what constitutes an issue of Jewish law must be

decided according to "neutral principles," that is, objective secular principles

that do not require a court to intrude into religious questions.      See Elmora


                                                                           A-2619-17T4
                                       15
Hebrew Ctr, Inc. v. Fishman, 125 N.J. 404, 414-15 (1991) (stating that a court

may resolve a dispute involving an ecclesiastical body by applying neutral, but

not religious, principles); Meshel, 869 A.2d at 354, 363 (compelling arbitration

by rabbinical court, consistent with neutral principles, where synagogue's

bylaws required arbitration of members' claims against the congregation).

Deciding what constitutes a "question of Jewish law" would unavoidably

entangle the court in religious matters. The only possible means of resolution

by neutral principles may be by accepting Knopfler's interpretation of the

agreement, including his definition of "questions of Jewish law that are relevant

to this sale and to this document."

      We cannot decide, on this record, whether hearing from Knopfler will be

sufficient to enable the trial court to decide the arbitrability of Westgate -related

issues applying neutral principles. As Segal filed his motion in lieu of an

answer, we do not know what questions or defenses he may raise relating to

Westgate. We know only that he contends the 2017 Contract is not binding at

all because Itzhakov did not sign it. It is unclear whether the necessity of a

signature raises "a question of Jewish law," or whether Knopfler's interpretation

will enable the court to determine that threshold question according to neutral

principles.


                                                                             A-2619-17T4
                                        16
                                       B.

      Even if an arbitration agreement is valid and enforceable, the court must

ascertain whether a dispute falls within its scope.       A court must resolve

ambiguities about the scope of an arbitration in favor of arbitration. See, e.g.,

Lamps Plus, Inc. v. Varela, ___ U.S. ___, ___, 139 S. Ct. 1407, 1418 (2019).

The "presumption of arbitrability" applies "only where a validly formed and

enforceable arbitration agreement is ambiguous about whether it covers the

dispute at hand . . . [and] where the presumption is not rebutted." Granite Rock

Co. v. Int'l Bhd. of Teamsters, 561 U.S. 287, 301 (2010). The presumption does

not apply until it is determined there is a "validly formed and enforceable

arbitration agreement." Ibid.

      However, even when the presumption governs, state-law principles of

contract interpretation still apply, albeit with "due regard" to pro-arbitration

policy. See Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Junior Univ.,

489 U.S. 468, 476 (1989). The presumption does not override the parties' clear

intent. Granite Rock Co., 561 U.S. at 301; see also Inetianbor v. CashCall, Inc.,

768 F.3d 1346, 1353 (11th Cir. 2014) (stating "the presumption in favor of

arbitration" does not override "the intent of the parties as determined by the

'objective meaning of the words used'") (citations omitted).


                                                                          A-2619-17T4
                                       17
                                        1.

      We turn first to whether enforcement of the 2017 Contract's provisions

regarding the Westgate sale (requiring Segal to pay the $120,000 balance plus

open credit cards) triggers the Westgate Agreement's arbitration provision. As

noted, the 2017 Contract is silent on arbitration. However, an agreement to

arbitrate may encompass disputes arising from a subsequent agreement, if the

first is worded broadly enough or "the two agreements are merely interrelated

contracts in an ongoing series of transactions." Int'l Ambassador Programs, Inc.

v. Archexpo, 68 F.3d 337, 340 (9th Cir. 1995). "[W]here a later contract lacking

an arbitration clause supplements an earlier 'umbrella' agreement containing

such a clause, disputes under the later contract are arbitrable." Cornell Univ. v.

UAW Local 2300, 942 F.2d 138, 140 (2d Cir. 1991).

      On the other hand, if the agreements are independent of one another, the

former's arbitration clause will not control the latter.       Int'l Ambassador

Programs, 68 F.3d at 340. "Where the arbitration clause is narrow, a collateral

matter will generally be ruled beyond its purview." Louis Dreyfus Negoce S.A.

v. Blystad Shipping & Trading, Inc., 252 F.3d 218, 224 (2d Cir. 2001). In

addition, "an entirely superseding agreement renders a prior agreement's

arbitration clause ineffective, even if the superseding agreement is silent on


                                                                          A-2619-17T4
                                       18
arbitration." Dasher v. RBC Bank (USA), 745 F.3d 1111, 1122 (11th Cir. 2014).

Whether an agreement is superseding is a question of state contract law, and the

presumption of arbitration does not attach to its resolution. Id. at 1120-21.

      As pertains to the Westgate transaction, the 2017 Contract may be a

novation – an agreement that substitutes for, and discharges, a prior agreement.

See Sixteenth Ward Bldg. & Loan Ass'n of Newark v. Reliable Loan, Mortg. &

Sec. Co., 125 N.J. Eq. 340, 342 (E. & A. 1939). We recognize that a novation

is never presumed and must be a product of the parties' "clear and definite

intention."   Tolland v. Lista, 46 N.J. Super. 272, 277 (App. Div. 1957).

However, the 2017 Contract may have been intended as a complete substitute

for the Westgate Agreement and would thus supersede the Westgate arbitration

clause. The 2017 Contract appears to extinguish any claims by Segal to offset

his obligation with pre-sale costs or for any other breach of the Westgate

Agreement. It also addresses an entirely new issue involving credit card bills.

Particularly since neither party raised the issue of novation, we remand to the

trial court to determine whether the 2017 Contract was intended to supersede

the Westgate Agreement.




                                                                          A-2619-17T4
                                      19
                                        2.

      Turning to the Lakewood Assignment, and assuming for argument's sake

that the trial court finds the arbitration clause in that agreement valid based on

extrinsic evidence produced in discovery, the court must then decide whether

the arbitration clause applies to Itzhakov's claims under the 2017 Contract.

      On its face, the language of the Lakewood Assignment is ambiguous, as

it is susceptible of two plausible interpretations. See Chubb Custom Ins. Co. v.

Prudential Ins. Co. of Am., 195 N.J. 231, 238 (2008) (stating an ambiguity exists

when the contractual terms "are susceptible to at least two reasonable alternative

interpretations"). The document refers to arbitration issues "arising from this

transaction." This may refer only to disputes specifically involving the transfer

of Yakubov's interests or Segal's employment – but not a dispute involving the

sale of the business after Yakubov no longer had an interest in it. Alternatively,

the provision could be more broadly understood to cover any dispute that would

not exist but for the assignment – including issues of governance, distributions,

and allocation of proceeds to company debts – all of which the agreement

addresses.

      Because the scope of the clause is ambiguous, we apply the presumption

of arbitrability and conclude that the provision's broad wording covers the


                                                                          A-2619-17T4
                                       20
parties' dispute over the proceeds of the Refuah sale. We also note that the

provisions regarding the Refuah sale do not appear to be a novation of the

Lakewood Assignment. The provision regarding Refuah simply provided the

amount each party would receive from the sale (plus Segal's $20,000 "good will"

payment to Itzhakov). The provision neither referenced nor clearly modified

any terms of the Lakewood Assignment, including the priority of allocating

proceeds to outstanding debts.

                                       III.

      In sum, the arbitration provision in the Lakewood Assignment on its face

does not pass muster under Atalese. However, discovery may uncover extrinsic

evidence of the parties' objective manifestations of intent to waive any resort to

a judicial forum, thus satisfying Atalese. Upon such proofs, the arbitration

provision would be valid and enforceable.         Applying the presumption of

arbitrability, the Lakewood Assignment's arbitration clause would also cover the

parties' dispute over the distribution of the proceeds of the Refuah sale.

      The Westgate Agreement's arbitration clause satisfies Atalese. However,

it may enmesh the court in questions of religious doctrine, unless Knopfler's

testimony enables the court to apply neutral principles to the question of what

issues are arbitrable. Additionally, the 2017 Contract may be a novation of the


                                                                             A-2619-17T4
                                       21
Westgate Agreement and supersede its arbitration clause.                   Since the

determination of a novation is subject to the parties' intention, we remand that

issue to the trial court for its initial determination in light of the evidence. If the

court finds no novation, it must then determine if Knopfler's interpretation will

allow it to construe the arbitration clause using neutral principles. If it cannot

do so, the arbitration clause cannot be enforced and Itzhakov's suit, as it relates

to Westgate, must proceed in the trial court.

      Based on the foregoing analysis, we believe discovery should be limited

to the issue of arbitration – namely, the validity of the Lakewood Assignment's

arbitration clause and the scope and enforceability of the Westgate arbitration

clause. See Guidotti v. Legal Helpers Debt Resolution, L.L.C., 716 F.3d 764,

776 (3d Cir. 2013) (stating that when an agreement to arbitrate is in dispute, the

parties should be entitled to limited discovery on that issue, after which "the

court may entertain a renewed motion to compel arbitration").              To permit

plenary discovery would undermine the parties' agreement – assuming such a

valid agreement exists – to avoid judicial dispute resolution.

      Affirmed in part, modified in part, and remanded. We do not retain

jurisdiction.




                                                                               A-2619-17T4
                                         22
