Previous blogs on this site have dealt with arbitration of various aspects of matrimonial disputes. N.H. v. H.H. is another in the developing law of arbitration of family law issues.   This article will deal with the subject of arbitration in the context of children issues, as the financial issues raised on appeal are less timely and more routine (as the law is well-developed in this area) as the issues relating to the children.

By way of background, the parties’ agreement in this case provided that they would be bound by the recommendations of an appointed psychologist who had been retained by them to conduct a custody evaluation and to render written report. Their agreement articulated that they desired this procedure in order to avoid “ . . . lengthy, protracted and divisive litigation over custody and parenting time issues . . .” In such posture, they agreed “. . . to be bound and to abide by the recommendations set forth in [the psychologist’s] report and to implement said recommendations immediately upon receipt of [the] report.”

The foregoing agreement came about in the context of the alternative dispute resolution method known as mediation in which the parties had first engaged the services of an extraordinarily well-respected former judge who had extensive experience in both the Family Part and the Appellate Division in reconciliation, but then switched his role to one of mediator.

After his investigation, the psychologist rendered a ninety-three page evaluation. In viewing the report, the Appellate Division went on for pages to describe in excruciating detail the methodology employed by the psychologist. The parties, the mediator, and the psychologist thereafter met to discuss the report. During that meeting, additional events concerning the issue of the wife’s consumption of alcohol in front of the children came to light. Thereafter, the psychologist supplemented his report in which he opined that the wife was in need of inpatient treatment, and recommended supervised parenting time with the children.

In response, the wife sought a judicial determination whereby the court would adopt the psychologist’s initial report, but reject the supplemental report. That application was denied by the court, effectively leaving both reports intact. Thereafter, the husband requested a determination that the agreement was enforceable and sought economic relief, and the wife cross-moved for various forms of relief including setting aside the agreement. Upon consideration, the court denied her application relative to the economic aspects of the agreement, but granted her request to set aside the custody and parenting provisions.

Both parties filed motions for reconsideration. The court denied reconsideration of the original decisions regarding financial matters, but determined that the provisions whereby the parties agreed to be bound by the psychologist recommendations was enforceable.

At the final hearing on the divorce, the wife testified that she did not realize the binding nature of that provision, and had she been aware of it, she would have never agreed, and that the agreement was neither fair nor reasonable.   Over that testimony, the court again determined the agreement to be enforceable, and found that it was entered voluntarily. The appeal followed.

The appellate court initially focused on an issue which has been discussed in prior articles on this blog, that is, to what extent is a new rule of law retroactive, particularly, to pending cases (commonly referred to as “pipeline” retroactivity)? Previously, we reported that the Supreme Court’s decision in Fawzy v. Fawzy allowed the process of arbitration to be used in custody matters where certain specified procedures were adopted. In the subsequent case of Johnson v. Johnson, the Appellate Division held that the principles of Fawzy would be applied retroactivity such that currently pending cases would be covered by its holding. Thus, for the case now being discussed, since it was pending at the time Fawzy was rendered, arbitration (as so provided by the parties in this case) would be deemed an acceptable alternative to judicial determination of children issues. The question on appeal thus is framed as to whether the Family Part was correct in enforcing the agreement relating to the employment of a psychologist as an arbitrator even though the word “arbitration” was not articulated in the agreement.

Aware that the recent case of Manger v. Manger held that absent a designation in an agreement as to which of two arbitration statutes would apply, the court would apply the New Jersey Arbitration Act, the court noted that the agreement in N.H. did not neatly fit into either statutory frame.   However, upon review of the language of the agreement, the court found that it recognized arbitration as an alternative to litigation, and further evinced the parents’ choice to minimize the impact of litigation on the children. It thus provided for specific procedures and actual implementation. The court determined that the psychologist’s work satisfied the spirit of the Fawzy and Johnson requirements and constituted ‘. . . an acceptable substitute for punctilious adherence to the procedural niceties sketched out in those opinions.”

The case therefore stands for the principle that in providing for arbitration of children issues, the strict dictates of the law will bend to accommodate fairly expressed intentions of the parties. The practical lesson to be learned is that in order to avoid costly and protracted litigation over whether the parties intended to arbitrate (and thus be bound) by a procedure alternate to litigation, an agreement should be clear, unequivocal and detailed as to the parties’ intent and non-litigation procedures. In this regard, the Supreme Court in Fawzy charged its Family Practice Committee with drafting forms of arbitration agreements. Hopefully, those will be part of our rules of court at the next rules cycle beginning in September of this year.

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