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Tuesday, September 14, 2010

ESTATE OF ANNA RUSZALA BY MARIE MIZERAK, (Executrix) V. BROOKDALE LIVING COMMUNITIES, ET AL. IDA AZZARO, As Proposed Administrator Ad Prosequendum

ESTATE OF ANNA RUSZALA BY MARIE MIZERAK, (Executrix)

V. BROOKDALE LIVING COMMUNITIES, ET AL.

IDA AZZARO, As Proposed Administrator Ad Prosequendum

for the Estate of Pasquale Azzaro V. BROOKDALE LIVING

COMMUNITIES, ET AL.

A-4403-08T1/A-4404-08T1 08-10-10 (consolidated)

In these consolidated appeals we must decide whether § 2 of

the Federal Arbitration Act (FAA), 9 U.S.C.A. § 2, preempts the

public policy expressed in N.J.S.A. 30:13-8.1. We reverse the

court's finding that the FAA is inapplicable. We affirm,

however, the trial court's determination that these residency

agreements were contracts of adhesion. Under the doctrine of

substantive unconscionability, we strike as unenforceable the

provisions in the arbitration clause that restrict discovery,

limit compensation for non-economic damages, and outright

preclude punitive damages. Finally, we remand the Azzaro matter

to the trial court to determine whether a valid contract was

formed between the parties.