In a divorce, arbitration can be an efficient and effective way to narrow and resolve the many issues that may arise. But what happens when a party disputes the outcome of an arbitrator’s award or the scope of an arbitrator’s power? In the unpublished decision of Sirigotis v. Sirigotis, the Appellate Division reiterated the Court’s limited power to review or vacate arbitrators’ awards under New Jersey’s version of the Uniform Arbitration Act.
In Sirigotis, the parties resolved the bulk of issues related to their dissolution action by Marital Settlement Agreement (MSA) and agreed to submit the remaining unresolved issues to final and binding arbitration. The MSA provided that the husband would pay $250,000 annually in alimony but enumerated unresolved issues related to alimony, including the wife’s request for future additional alimony in excess of $800,000. Specifically, the wife proposed language in the MSA asserting that while she would not be able to maintain the marital standard of living based on the assets and support received under the MSA, she accepted the MSA as fair and reasonable. The husband objected to her requests, asserting that the $250,000 annual alimony met the marital standard of living as set forth in Crews v. Crews and that future additional alimony should be denied.
The arbitrator ultimately rejected the wife’s requests pertaining to “the Crews issue” and made a determination on whether the award met the marital standard of living. The arbitrator reasoned that it was within his power to issue such a ruling because (1) the husband’s objection to the wife’s proposed language put the issue before him; (2) the trial court would be expected to make such a ruling and the parties had granted the arbitrator the same powers as a Family Part judge; (3) a ruling on the Crews issue was necessary to avoid sowing the seeds of future litigation; and (4) if the partial MSA was ambiguous, he had the authority to resolve the ambiguity. The proposed judgment of divorce included the arbitrator’s Crews finding that the award (consisting of alimony, imputed income and equitable distribution) enabled the wife to maintain the marital standard of living.
The wife moved in the Family Part to vacate the arbitrator’s award. In rejecting the wife’s argument, the trial court found that the arbitrator had the power to issue a ruling on the Crews issue but nonetheless vacated the award, finding that the wife did not have adequate opportunity to present proofs on the issue at arbitration.
The Appellate Division affirmed that the arbitrator had the authority to issue a ruling on the Crews issue, finding that the wife had put the Crews issue before the arbitrator by proposing language related to the adequacy of alimony to satisfy the marital standard of living. At a minimum, the Court held, whether the Crews issue was before the arbitrator was ambiguous and it was within the scope of the arbitrator’s power to decide the issue.
The Appellate Court discussed the trial court’s power to vacate an arbitrator’s award, noting that the State preference for alternative dispute resolution and the express language of the arbitration statute enumerates specific grounds upon which the court can vacate an award, which were not present here. Moreover, the Appellate Court admonished the trial court for faulting the arbitrator for addressing the Crews issue in a summary fashion. The Appellate Court made clear that the arbitrator is not compelled to provide an explanation of an award absent a contractual obligation with the parties to do so. To require such an explanation, the Court opined, would thwart the expedient nature of arbitration and undermine confidence in the arbitrator’s abilities. The Court further reiterated that arbitration awards cannot be vacated due to an error of law; there must be a statutory ground, such as fraud or acting beyond the scope of contractual duties.
Ultimately, the Appellate Division reversed and remanded the decision of the trial court to reinstate the arbitrator’s award, finding that the plaintiff had the opportunity to present proofs on the Crews issue at arbitration. This decision reinforces the court’s reluctance to interfere with the arbitration process. Sirigotis also reminds parties to carefully consider the powers they confer to arbitrators in arbitration agreements and to also be cognizant of the issues they place before the arbitrator during the arbitration process.
Katherine A. Nunziata is an associate in the Family Law Practice Group of Riker Danzig Scherer Hyland & Perretti LLP and a contributor to the Riker Danzig Family Law Blog. Katherine’s interest in family law stems from a desire to help others while navigating a difficult process, and she brings a high level of compassion and zeal to her practice. Katherine is a resident in the Morristown, New Jersey office and can be reached at 973-451-8445 or firstname.lastname@example.org.