DAVID JOHNSON V. MOLLY V.G.B. JOHNSON, 199 N.J. Super. 456 (App. Div. 2009), A-0704-08, December 21, 2009:

[NOTE: N.J. Supreme Court appeal pending: A-91-09]

For more than twenty-five years, the parties to a divorce proceeding in New Jersey have been able to resolve domestic disputes through arbitration and have the resulting arbitration awards enforced by the court. Faherty v. Faherty, 97 N.J. 99 (1984). There, the Supreme Court held that spouses are free to arbitrate family issues, noting that “[i]n this sensitive and intensely private area of domestic disputes, arbitration expressly contracted for by the spouses is highly desirable.” Id. at 108. The Court approved the arbitration of alimony and child-support disputes, but as to the latter, observed that “the courts have a nondelegable, special supervisory function in the area of child support that may be exercised upon review of an arbitrator’s award.” Id. at 109. As a result, it held

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.[2] Second, the courts 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.

[Id. at 109-10.]

The Court deferred extending its decision to child-custody and parenting-time issues, noting that with the development of a fair and workable mediation or arbitration process, id. at 110, “it may become evident that a child’s best interests are as well protected by an arbitrator as by a judge.” Id. at 111.

Three years after the Faherty decision, the Legislature enacted the New Jersey Alternative Procedure for Dispute Resolution Act (APDRA), N.J.S.A. 2A:23A-1 to -30. It, too, provided for vacation and modification of awards:

c. The award shall be vacated on the application of a party who either participated in the alternative resolution proceeding or was served with a notice of intention to have alternative resolution if the court finds that the rights of that party were prejudiced by:
(1) Corruption, fraud or misconduct in procuring the award;
(2) Partiality of an umpire appointed as a neutral;
(3) In making the award, the umpire’s exceeding their power or so imperfectly executing that power that a final and definite award was not made;
(4) Failure to follow the procedures set forth in this act, unless the party applying to vacate the award continued with the proceeding with notice of the defect and without objection; or
(5) The umpire’s committing prejudicial error by erroneously applying law to the issues and facts presented for alternative resolution.
. . . .
e. The court shall modify the award if:
(1) There was a miscalculation of figures or a mistake in the description of any person, thing or property referred to in the award;
(2) The umpire has made an award based on a matter not submitted to them and the award may be corrected without affecting the merits of the decision upon the issues submitted;
(3) The award is imperfect in a matter of form, not affecting the merits of the controversy; or
(4) The rights of the party applying for the modification were prejudiced by the umpire erroneously applying law to the issues and facts presented for alternative resolution.

[N.J.S.A. 2A:23A-13.]

As to erroneous applications of the law, APDRA provides:

Whenever it appears to the court to which application is made, pursuant to this section, either to vacate or modify the award because the umpire committed prejudicial error in applying applicable law to the issues and facts presented for alternative resolution, the court shall, after vacating or modifying the erroneous determination of the umpire, appropriately set forth the applicable law and arrive at an appropriae determination under the applicable facts determined by the umpire. The court shall then confirm the award as modified.

[N.J.S.A. 2A:23A-13(f).]

When the Appellate Deivision’s decision in Fawzy v. Fawzy, 199 N.J. 456 (2009) reached the Supreme Court, the Court expanded its holding in Faherty. The Court observed that the case was “really about the intersection between parents’ fundamental liberty interest in the care, custody, and control of their children, and the state’s interest in the protection of those children.” Fawzy, supra, 199 N.J. at 472-73. The Court held that “the constitutionally protected right to parental autonomy includes the right to submit any family controversy, including one regarding child custody and parenting time, to a decision maker chosen by the parents.” Id. at 477. It further held, “the bundle of rights that the notion of parental autonomy sweeps in includes the right to decide how issues of custody and parenting time will be resolved,” including by arbitration.
Ibid.

The Court then considered “the standard of review of a child-custody arbitration award.” Ibid. It held, “where no harm to the child is threatened, there is no justification for the infringement on the parents’ choice to be bound by the arbitrator’s decision. In the absence of a claim of harm, the parties are limited to the remedies provided in the Arbitration Act.” Id. at 478. A finding of harm will overcome “the presumption in favor of the parents’ choice of arbitration.” Id. at 479. However, because “an empty arbitration record can[not] supply any basis on which to evaluate a party’s claim that the award threatens harm to the child,” the Court required that more of a record be created during the arbitration “to avoid a complete replay of the arbitration proceedings.” Id. at 480.

We therefore direct that when parties in a dissolution proceeding agree to arbitrate their dispute, the general rules governing the conduct of arbitration shall apply, N.J.S.A. 2A:23B-1 to -32. However, in respect of child-custody and parentingtime issues only, a record of all documentary evidence shall be kept; all testimony shall be recorded verbatim; and the arbitrator shall state in writing or otherwise record his or her findings of fact and conclusions of law with a focus on the bestinterests standard. It is only upon such a record that an evaluation of the threat of harm can take place without an entirely new trial. Any arbitration award regarding child-custody and parenting-time issues that results from procedures other than those that we have mandated will be subject to vacation upon motion.

[Id. at 480-81.]

Thus, courts will enforce arbitration decisions relating to custody and parenting-time only if the arbitration meets these standards.

These requirements obviously state a new rule of law as neither APDRA nor the Uniform Arbitration Act as adopted in New Jersey require a record to be made of the proceedings.

Here, the arbitration proceedings did not meet the guidelines set forth in Fawzy. In this case, the arbitration agreement states: “There shall be no transcript proceedings at ADR, the detailed findings of the Arbitrator[] shall constitute the record, as supplemented by the written certified statement submitted by the parties in advance of the ADR proceedings.” Thus, there is no record of the testimony, as Fawzy requires. Fawzy, supra, 199 N.J. at 480. Neither does the court have a record of all documentary evidence considered, if any. Without an adequate record, the Family Part judge here could not evaluate the threat of harm to the children, id. at 480-81, and could not confirm the award.

Custody and parenting time clearly implicate public policies that require more expansive review than N.J.S.A. 2A:23A-13 allows.

See related Blog Post, published in the New Jersey Family Law blog.

See my prior Blog Post: Child custody and visitation disputes can be resolved through arbitration

NOTE: My legal services include family law, divorce, child support, litigation, arbitration, mediation, child custody and visitation, alimony, equitable distribution, separation agreements, palimony, PSA, property settlement agreement, premarital and prenuptial agreements, midmarriage and marital agreements.

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