Last year, in the Fawzy decision, the New Jersey Supreme Court put procedures in place approving parents’ ability to arbitrate child custody opinion. This specifics of this decision was the subject of a prior blog at the time of the decision. One of the procedural safeguards required by Fawzy was a verbatim record of the proceedings so that there could be meaningful review of the decision by a court. Yesterday, the Supreme Court revisited this issue in the case of Johnson v. Johnson. In May of this year, I previously blogged about this case though at that time, we all thought that the bigger issue for the court’s consideration was whether Fawzy could be retroactively applied.
In Johnson, there was no verbatim record as was required by Fawzy, for the simply reason that the parties had agreed that there was not going to be a verbatim record. They did, however, agree that the arbitrator would provide detailed findings of fact. In fact, the arbitrator did provide extremely detailed findings both in the initial opinion and upon a motion for reconsideration. After Fawzy was decided, an appeal ensued and the arbitration award was set aside for no verbatim record.
The Supreme Court in Johnson started by reminding us of what Fawzy requires with regard to an agreement to arbitrate:
must be in writing or recorded in accordance with the requirements of N.J.S.A. 2A:23B-1.
In addition, it must state in clear and unmistakable language: (1) that the parties
understand their entitlement to a judicial adjudication of their dispute and are
willing to waive that right; (2) that the parties are aware of the limited circumstances under which a challenge to the arbitration award may be advanced and agree
to those limitations; (3) that the parties have had sufficient time to consider the
implications of their decision to arbitrate; and (4) that the parties have entered into
the arbitration agreement freely and voluntarily, after due consideration of the
consequences of doing so.
The Court then discussed how the decision in Fawzy is supposed to work:
As a matter of practice, Fawzy plays out this way: When a child custody or parenting time arbitration award issues, one party will ordinarily move for confirmation. If there is no challenge, the award will be confirmed. If there is a challenge that does not implicate harm to the child, the award is subject to review under the limited standards in the relevant arbitration statute or as agreed by the parties. If a party advances the claim that the arbitration award will harm the child, the trial judge must determine whether a prima facie case has been established. In other words, is there evidence which if not controverted, would prove harm? If that question is answered in the negative, for example, where a claim of harm is insubstantial or frivolous (e.g., not enough summer vacation), the only review available will be that provided in the relevant arbitration act or as otherwise agreed. If, on the other hand,the claim is one that, if proved, would implicate harm to the child, the judge must determine if the arbitration record is an adequate basis for review. If it is, the judge will evaluate the harm claim and, if there is a finding of harm, the parents’ choice of arbitration will be overcome and it will fall to the judge to decide what is in the children’s best interests. If the arbitration record is insufficient, the judge will be required to conduct a plenary hearing. That is the backdrop for our inquiry.
In Johnson, the Supreme Court found that the detailed fact finding by the arbitrator, while not specifically a verbatim record, satisfied the standards of Fawzy because the decision allowed for meaningful review.
The Court next termed to the generalized claim of harm Ms. Johnson alleged in order to set aside the award. The Supreme Court, citing Fawzy reminded:
Mere disagreement with the arbitrator’s decision obviously will not satisfy the harm
standard. The threat of harm is a significantly higher burden than a best interests
analysis. Although each case is unique and fact intensive, by way of example, in a case of two fit parents, a party’s challenge to an arbitrator’s custody award because she would be “better” is not a claim of harm. Nor will the contention that a particular parenting-time schedule did not include enough summer vacation time be sufficient to pass muster. To the contrary, a party’s claim that the arbitrator granted custody to a parent with serious substance abuse issues or a debilitating mental illness could raise the specter of harm.
Obviously, evidential support establishing a prima facie case of harm will be required in
order to trigger a hearing. Where the hearing yields a finding of harm, the court must set aside the arbitration award and decide the case anew, using the best interests test.
Here, neither party claimed unfitness, just differences in parenting style. The Court found that this "did not approach" a showing of harm which would require judicial review.
This decision further strengthens litigants’ rights to alternate dispute resolution methods to resolve their disputes. While having a verbatim record is probably preferable, the cost could be prohibitive. The ability to arbitrate custody without a verbatim record, as long as the arbitrator makes detailed and painstaking fact findings, is a win for New Jersey litigants and parents.