What Types of Relief Can an Divorce Arbitrator Award?
Section 6 of the Act provides that an agreement to arbitrate “any existing or subsequent controversy arising between the parties to an agreement is valid, enforceable and irrevocable except upon a ground that exists at law or in equity for the revocation of a contract.” Accordingly, an arbitrator has the authority to decide all issues submitted by the parties in a matrimonial matter, including alimony, child support, equitable distribution, college and graduate school costs, medical expenses, counsel fees and tax-related issues.
Section 21 of the Act provides that an arbitrator may award punitive damages or other exemplary relief if authorized by law in a civil action, as well as reasonable attorneys fees and costs. An arbitrator may also award additional remedies, as may be considered “just and appropriate under the circumstances of the Arbitration proceeding,” even if such remedies could not or would not be granted by the court. An arbitrator may not, however, decide issues that have not been agreed upon by the parties to be submitted to the arbitrator.
Concerning the issues of custody, parenting, removal, and even child support, some jurisdictions have taken the position that it is against public policy to arbitrate such matters. George K. Walker, Arbitrating Family Law Cases by Agreement, 18 Journal of the American Academy of Matrimonial Lawyers, (2003) 429.
In Faherty v. Faherty, 97 N.J. 99 (1984) the issue before the New Jersey Supreme Court was whether an arbitrator’s award as to child support was enforceable. In affirming both the Trial Court and the Appellate Division, the Supreme Court held that child support can definitely be determined by an arbitrator. The New Jersey Supreme Court, although recognizing a growing tendency to recognize Arbitration in child support cases, indicated that they do not agree with those who fear, that by allowing parents to agree to arbitrate child support, they are somehow interfering with the judicial protection of the best interests of the child. The Court indicated that they saw no valid reason why the Arbitration process should not be available in the area of child support, stating that the advantages of Arbitration in domestic disputes outweigh any disadvantages.
The New Jersey Supreme Court went on to indicate: “Nevertheless, we recognize that the courts have a non-delegable, special supervisory function in the area of child support that may be exercised upon review of an arbitrator’s award. We therefore hold that whenever the validity of an arbitration award affecting child support is questioned on the grounds that it does not provide adequate protection for the child, the trial court should conduct a special review of the award. This review should consist of a two step analysis. First, as with all arbitration awards, the Courts should review child support awards as provided by N.J.S.A. 2A:24-8. Second, the court should conduct a de novo review unless it is clear on the face of the award that the award could not adversely affect the substantial best interests of the child.”
The Court opined that an Arbitrator’s Award, which granted all the requested child support, would generally satisfy the second test stated above, because it is always in the child’s best interest to have as much support as possible.
The Court continued: “We do not reach the question of whether arbitration of child custody and visitation rights is enforceable since that issue is not before us. However, we note that the development of a fair and workable mediation or arbitration process to resolve these issues may be more beneficial to the children of this state than the present system of courtroom confrontation (citations omitted). Accordingly, the policy reason for our holding today with respect to child support may be equally applicable to child custody and visitation cases.”
What Right of Review Exists as to the NJ Divorce Arbitrator’s Decision?
N.J.S.A. 2A:23 B-4 provides that a party to an agreement to arbitrate or to an New Jersey arbitration proceeding may waive, or the parties may vary the affect of the requirements of the statute, to the extent permitted by law. Section c. clearly states “…that nothing in this act shall preclude the parties from expanding the scope of judicial review of an award by expressly providing for such expansion in a record.”
It is therefore clear that the parties to an arbitration are free to provide, in the actual agreement to arbitrate, the scope of judicial review of an award. Presumably, the parties can likewise specify the scope of the arbitrator’s ability to correct or modify an award, in the event that reconsideration is deemed appropriate after the decision is rendered.
Absent the parties agreeing to an expanded review in their arbitration agreement, N.J.S.A. 2A:23 B-20 states that an arbitrator may modify or correct an award if the arbitrator has not made a final and definite award, upon a claim submitted by the parties to the arbitration proceeding, or to clarify the award, or as set forth in N.J.S.A. 2A:23 B-24 that there was an evident mathematical miscalculation, or an evident mistake in the description of a person, thing or property referred to in the award, or that the award was imperfect in a matter of form, not affecting the merits of the decision on the claims submitted.
In Kimm v. Blisset, LLC, 388 N.J. Super. 14 (App. Div. 2006), the determination of the trial judge was affirmed, indicating that the arbitrator lacked the authority to act, once his original award had been issued. Therefore, a supplemental award was vacated. The court indicated that arbitration in New Jersey is clearly a favored remedy. However, it is in fact a creature of contract. Accordingly, the arbitrator’s powers are limited by the agreement of the parties and an arbitrator may not exceed the scope of the powers granted to him or her by the parties.
The court further stated that, in the absence of an express agreement by the parties about the scope of the arbitrator’s duties, ordinarily the arbitrator is limited to resolving the dispute in question. The court stated that, if they have not agreed in advance, then the parties cannot force an arbitrator to give reasons for an award or write a decision explaining his or her view of the facts. Nor can they appeal from the award, as they could if they had opted to litigate their matter in court. The court specifically stated, “Rather, the rights of the parties following issuance of an award, and the absence of an agreement to the contrary, are entirely governed by statute.”
A court may vacate or modify an award upon the filing of a summary action to either confirm or vacate an award where:
The award was procured by corruption, fraud or undue means;
The court finds evident partiality by an arbitrator, or corruption, or misconduct by an arbitrator, which prejudices the rights of a party to the arbitration proceeding;
The arbitrator refused to postpone the hearing, upon a showing of sufficient cause;
The arbitrator exceeded his or her powers;
There was no agreement to arbitrate and/or;
The arbitration was conducted without proper notice, as required. N.J.S.A. 2A:23 B-23.
In Kimm, the Appellate Division goes on to state: “Notwithstanding the apparently broad scope of the court’s powers to alter an arbitrator’s award as described in the statutory language, our courts have not traditionally interpreted the statutory language broadly.” See, e.q., Tretina Printing, Inc. v. Fitzpatrick & Assocs., Inc., 135 N.J. 349, 355 (1994); High Voltage, supra, 326 N.J. Super. at 362. Perhaps because arbitration is indeed a favored remedy, and perhaps because the essential purpose of arbitration is to offer a swift and efficient alternative to traditional litigation, courts have been relatively reluctant to interfere with arbitration awards and have understood their powers to do so, as represented by the statutory language to be narrow.
In Wein v. Morris, 388 N.J. Super. 640 (App. Div. 2006), the court cited Kimm, holding that, where the arbitrator had resolved all of the claims asserted in the original award, he was thereafter empowered only to modify the award for “clerical, typographical or computational errors.” The court indicated that the arbitrator exceeded that authority and acted contrary to the functus officio doctrine, when he modified his award to include additional relief.
It is therefore incumbent upon the New Jersey Family Law Attorneys for the parties to an arbitration to agree, in advance, as to whether they desire a quick and efficient determination without appeal, subject to the terms of the statute, or instead, whether they desire to preserve the rights of judicial appeal, or to grant any additional authority to the arbitrator to correct or modify an award based upon a post award application, or both.
Based upon currently existing legislation and the additional legislation being considered, it is clear that New Jersey favors Alternative Dispute Resolution (ADR) procedures, of which arbitration is one of the primary tools for resolving disputes. As of September 1, 2006, the New Jersey Rules of Court have been amended, so that Rule 5:4-2 provides that, not only is an attorney required to advise clients as to the availability of Complimentary Dispute Resolution (CDR) programs in matrimonial matters, but they must also provide descriptive literature regarding available dispute resolution alternatives (ADR). New Jersey Family Lawyers must be aware of all of the options available to their clients in successfully resolving their NJ Divorce and Child Custody Disputes.
Is Discovery Permitted in NJ Divorce Arbitration?
Section 17 of the Act provides that an arbitrator may permit whatever discovery is deemed appropriate, considering the circumstances and the needs of the parties and other affected persons, as well as “the desirability of making the proceedings fair, expeditious and cost effective.”
The Act specifically provides for and contemplates depositions, issuance and enforcement of subpoenas by the arbitrator for witnesses and whatever other discovery Orders are necessary. The arbitrator may issue Protective Orders regarding privileged and confidential information and trade secrets to the same extent as a court could in a civil proceeding.
Can a NJ Divorce Arbitrator Grant Pre-Hearing Relief?
The Act provides in Section 8 for provisional remedies and gives to an arbitrator the authority to issue Orders granting provisional remedies and interim awards, as are determined to be “necessary to protect the effectiveness of the Arbitration proceeding and to promote the fair and expeditious resolution of the controversy…”
Section 18 of the Act provides that, if the arbitrator makes a pre-award ruling, a party may request that the ruling be incorporated into an award, which may be presented in a summary manner to a court for confirmation.
It is apparently clear that, when parties enter into arbitration early on, they may obtain the equivalent of pendente lite relief from the arbitrator, which can then be confirmed by a court if necessary.
Do the Rules of Evidence Apply to NJ Divorce Arbitration?
Section 15 of the Act provides: “An arbitrator may conduct an arbitration in such manner as the arbitrator considers appropriate for a fair and expeditious disposition of the proceeding. The authority conferred upon the arbitrator includes the power to hold conferences with the parties to the arbitration proceeding before the hearing and, among other matters, determine the admissibility, relevance, materiality, and weight of the evidence.” N.J.S.A. 2A:23 B-15 a.
Accordingly, there is no specific requirement that the New Jersey Rules of Evidence apply to a New Jersey Divorce Arbitration. The parties can likewise modify, and they can in fact agree that the New Jersey Rules of Evidence shall apply to their NJ Divorce Arbitration. Under N.J.S.A. 2A:23 A-11 of the New Jersey Alternative Procedure for Dispute Resolution Act, Section d. specifically states that, in alternative resolution proceedings under that Act, the parties shall not be bound by the statutory and common law rules of evidence, except as provided for conduct of contested cases under the Administrative Procedure Act, provided, however, that all statutes and common law rules relating to privilege remain in effect.