Mediation/Arbitration

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There is an old adage in litigation “know your judge.”  Essentially what that means is that you should find out as much as you can about the judge you are appearing in front of both so you can try to understand what the outcome might be but more importantly, so that you can may a presentation to the judge that she/he will respond positively to.  Some judges will let you go on an one.  Some judges have little patience and you have to get to the point.  With some judges, it seems like the last person to speak wins so you want to make sure you get the last word in.  Others sit there stone faced and say nothing at all.  Some are very interactive with settlement and others are not.  Some have substantial family law experience and others do not.  Some do little to settle and push cases to be tried and others don’t really want or believe that any cases should be tried.  To the extent possible, knowing your judge is an arrow in a lawyer’s quiver that helps them best represent their client.

Does the same thing apply to mediators?  The answer is yes and more importantly, in most cases, unlike the judge who gets assigned to a case, it is the lawyers that have to select and agree upon a mediator.  Of course, you want to select a mediator who you think will most favorably view your case, all things considered.  We had a recent matter where opposing counsel rejected upwards of 20 mediators that we suggested, many retired judges, and would only agree to one or two people that she suggested.  Our guess is that the lawyer perceived that all of the mediators who she had issues with also had issues with her.  That happens.

But aside from selecting a mediator that you think would be substantively/legally helpful, serious thought should go into selecting a mediator whose style and personality would be appealing to your client as well as the other party, to assist the parties to move toward settlement.  I recently had a situation where we selected a second mediator after the matter made little to no progress with the first mediator.  The first mediator was grandfatherly, soft spoken, knowledgeable, impeccably credentialed and had substantial gravitas.  The soft touch was appealing to one of the parties but totally ineffective with the other.  The second mediator had similar if not greater credentials and gravitas in some ways (but not in others), but was much more direct and blunt – and jumped right into the deep water as opposed to letting the process go on hours or multiple sessions.  The party that gelled with the soft spoken mediator was totally turned off by the direct approach and the other party more receptive.  Perhaps with these too, given their very different personalities, there would be no one mediator who checked all of the boxes and could reach both of them.

The point is that you have to know your client and know your mediator and try to agree on one that will be helpful substantively and also be able to develop a relationship of trust with both parties so as to be able to facilitate resolution, if one is possible.

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Eric S. Solotoff, Partner, Fox Rothschild LLPEric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Morristown, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973) 994-7501, or esolotoff@foxrothschild.com.

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In 2015, I wrote a post on this blog with the same title because seemingly, this issue has been resolved for some time.  All too often, parties would agree to mediate their disputes but would try to reserve a right to appeal, as of right, to the Appellate Division, as if the matter was tried by the family court.  Since the Hogoboom case in 2007, lawyers have should have known that this was a no-no.  In fact, in Hogoboom, the Appellate Division specifically held that:

“…Basically, arbitration awards may be vacated only for fraud, corruption, or similar wrongdoing on the part of the arbitrators. [They] can be corrected or modified only for very specifically defined mistakes as set forth in [N.J.S.A. 2A:24-9]. If the arbitrators decide a matter not even submitted to them, that matter can be excluded from the award. For those who think the parties are entitled to a greater share of justice, and that such justice exists only in the care of the court, I would hold that the parties are free to expand the scope of judicial review by providing for such expansion in their contract; that they may, for example, specifically provide that the arbitrators shall render their decision only in conformance with New Jersey law, and that such awards may be reversed either for mere errors of New Jersey law, substantial errors, or gross errors of New Jersey law and define therein what they mean by that.” … Here, the parties afforded themselves an expanded scope of review, as they were, by contract and by statute, permitted to do. The parties were not, however, entitled to create an avenue of direct appeal to this court. .. It is settled that consent of the parties does not create appellate jurisdiction.  … In our judgment, the parties must seek initial review of these awards in the trial court. The trial court is charged with employing the standard of review the parties contractually agreed upon in determining whether these awards, or either of them, should be vacated or modified. …

That seems clear enough, yet today, there was a reported (precedential) decision in Curran v. Curran that addressed this issue again.  In Curran, the parties agreed to arbitrate and entered into arbitration agreement which contained the very limited right to vacate an arbitration award per the New Jersey Arbitration Act.  However, the wife’s attorney wrote in the following sentence, “The parties reserve their rights to appeal the arbitrator’s award to the appellate division as if the matter was determined by the trial court.”  I guess they forgot about Hogoboom. If that was not bad enough, the parties signed the arbitrator’s retainer acknowledging that they were bound by the decision, except for the limited reasons under the act, and further, that they gave up their right of appeal.

After the arbitration, the husband filed a motion in court to vacate the award.  In refusing to vacate the award, the trial judge found the hand written addition preserving the right to appeal was unenforceable stating:

… that there was no provision under the Act to permit a direct appeal from an arbitrator’s decision to the Appellate Division. In addressing paragraph 3A, the judge stated: “The parties are not permitted to create subject matter jurisdiction by agreement which I think they tried to do here. The authority of a court to hear and determine certain classes of cases rests solely with the Constitution and the Legislature.” He concluded that paragraph 3A was unenforceable.

The trial judge did give a greater analysis of the matter than just permitted under the Act finding that that is what the parties had bargained for, and acted as “an Appellate Division of the arbitrator”  The Husband appealed asserting for the first time that the hand written addition preserving the right to appeal was illegal and voided the entire arbitration agreement and subsequent proceedings.

The Appellate Division disagreed and held that the unenforceable provision could be severed from the agreement.  The court held:

The primary purpose of the agreement was the resolution of the issues incident to the parties’ divorce through binding arbitration pursuant to the Act. This is evident from the contractual language stating: “The Parties having determined

that such issues be referred to binding Arbitration pursuant to the New Jersey Arbitration Act, N.J.S.A. 2A:23B-1 et. seq. . . . The parties shall attend binding Arbitration pursuant to the New Jersey Arbitration Act, N.J.S.A. 2A:23B-1 et. seq.” The parties attached an inclusive list to the agreement of all of the issues they intended the arbitrator to consider and resolve. The purpose of the agreement was for a final resolution of those issues. The arbitration agreement noted in multiple provisions that it was binding and not appealable, other than the limited grounds specified under the Act to modify or vacate an award.

Paragraph 3A did not defeat the parties’ intent to have their matrimonial litigation determined and considered by an arbitrator in an expeditious and comprehensive manner. After reviewing the parties’ submissions, the arbitrator rendered a preliminary award. Oral argument was heard on Robert’s application for reconsideration of the award. The arbitrator subsequently issued comprehensive findings of fact and conclusions of law, and a detailed final award. …

Severance of paragraph 3A does not defeat the primary purpose of the agreement. To the contrary, a revocation of the final award would only serve to frustrate the parties’ intent of reaching a final resolution to their matrimonial litigation and defeat the purpose of the arbitration agreement. The agreement is valid and enforceable.

As I noted in 2015, you can arbitrate and preserve a right of appeal.  Just like you can agree to arbitrate the initial determination of the issues, you can also agree to an appellate arbitration, as well.  I have had matters where our initial arbitration agreement called for the use of a panel of two retired appellate division judges (didn’t have to be – could have been anyone we agreed to be the appellate arbitrators), who would then decide the matter as if they were sitting as a regular appellate panel.  While in that case, you essentially lose the chance to appeal to the Supreme Court, you still have a body to review the matter if you think that the arbitrator got it wrong in the first case. The take away, however, is that your arbitration agreement must clearly spell out the scope of review and who will review the matter – taking into consideration what the court system can and cannot do with regard to an arbitration award.

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Eric S. Solotoff, Partner, Fox Rothschild LLPEric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Morristown, New Jersey office though he practices throughout New Jersey. You can reach Eric at (973) 994-7501, or esolotoff@foxrothschild.com.

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Ah, the 80s and MTV when bands still made music videos and we still cared to watch them.  Many of you may remember the video for the INXS song “Mediate” at the back end of the video for “Need You Tonight”, with the band holding a different sign for each word of the song until they all walk away from the camera during the sax solo.  Paying homage to a classic Bob Dylan song, Mediate is really one of the best videos from that time period with memorably cryptic lyrics that strangely came to mind while I was recently completing a weeks-long family law mediation course.

While some of the lyrics make absolutely no sense to this blogger, certain others work when talking about the benefits, harms, highs and lows of the mediation process.  For instance…

  • Mediate – Yes, mediate.  I have written many times about how mediation is not only a beneficial way in which to resolve your case without great expense and acrimony, but it also allows your matter to be privately and confidentially addressed through the use of a “neutral” whose entire role is to settle your case.  Mediation can occur either prior to or after commencing formal litigation, and in the course of litigation is a required part of the process because, ultimately, settling your case is almost always the best option.
  • Alleviate/Liberate – Resolving your case through mediation will not only ideally save you on further time and expense embroiled in your divorce matter, but it will also help alleviate emotional struggles that accompany the process.  Moving on with your life and into the post-divorce stage can only help your heart, mind and overall health (in addition to your financial well-being).
  • Try Not to Hate/Don’t Suffocate on Your Own Hate – So often, parties are blinded by hatred for the other party that it even colors the mediation process and any productivity realized therefrom.  Oftentimes, for worse, even the attorneys involved develop a dislike for the other lawyer or party that impacts negatively upon negotiations.  Going into mediation free of that mindset will aid your case in moving forward to a resolution.
  • Appreciate/Deliberate – Appreciate the mediation process and the mediator’s role in trying to reach a resolution.  So often parties (especially when accompanied by legal counsel), head into mediation with their feet dug as deeply as possible in the sand in an effort to get the other party to simply give in.  Such a strategy oftentimes fails, although one spouse usually believes that he or she will capitulate to the demands of the other simply to get a deal done.
  • Fabricate – A fundamental part of a productive mediation or settlement process is the provision of full and complete disclosure of all financials (income, assets and liabilities).  Concealing, misrepresenting, or lying about what exists can only lead to problems in the future should the other party learn the truth – especially when such disclosures are oftentimes made to the other party or the court under oath in the form of a signed Case Information Statement.
  • Guilt Debate – Oftentimes, the mediation process is colored by one party’s guilt for something he or she may have done.  Whether one spouse engaged in adultery, wrongfully spent down assets, or something worse, negotiations are sensitive to all facts and circumstances present in the parties’ lives.  Each party has to knowingly and voluntarily agree to the terms of settlement, and agreeing to terms that may not otherwise be deemed “fair and equitable” because of something that may have occurred during the marriage can potentially prove to a be a long-term mistake.
  • The Youth Irate – Resolving your case, whether in mediation or otherwise, not only acts to your benefit in allowing you to move on with your life, but also it allows your children to transition to a life without a divorce matter consuming their everyday existence.  No matter how hard parents may try (or not try) to avoid involving the children in the divorce matter, they oftentimes know what is going on, or simply feel the cloud of conflict hanging in the air.  While most parents say that the children are the highest priority in a case, oftentimes their own actions undermine what may be a very genuine sentiment.
  • Atomic Fate – A.K.A., “Trial”.  Not every case can settle in mediation or otherwise.  Sometimes, a case simply needs to go to trial so that a judge can make the final decisions on issues despite knowing very little about your life.  Whether it is a desire to be proven right, a preference for airing dirty laundry, or a fear of agreeing to something that may very well impact your life for decades to come, a resolution may not be possible.

On the heels of my last blog post regarding settlement, and many other posts on this blog about mediation and the settlement process, the above should not only be used as a reminder of a great 80s song, but also about how only you and your spouse can control how a case resolves.  Mediation is a great tool by which to achieve that goal, and hopefully give you What You Need….

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Robert A. EpsteinRobert Epstein is a partner in Fox Rothschild LLP’s Family Law Practice Group and practices throughout New Jersey.  He can be reached at (973) 994-7526, or repstein@foxrothschild.com.

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Arbitration – essentially, a private trial in which the parties hire a fact-finder who serves in lieu of a judge – has become an increasingly common means of resolving family law disputes.  Although an arbitration may be conducted with all the formalities of a trial, usually parties can agree to dispense with certain formalities, some of which can be costly for the parties.  Arbitration takes a trial out of the sometimes messy court system, usually guarantees a decision will be made in a timely manner, and ensures that the trial does not become a matter of public record.  In family law matters where the issues can be sensitive and the testimony potentially embarrassing to the parties, this may be preferred by the parties.

Another advantage to arbitration is that the litigants are not beholden to the deadlines of the Court system.  They can move on with their lives and even get divorced, while agreeing to defer certain issues to arbitration on a more relaxed timelines.  But sometimes this can backfire.

In a recent unpublished (non-precedential) decision, Shah v. Shah, the Appellate Division addressed the question:  “What happens to an agreement to arbitrate when nobody arbitrates?”

The answer given by the Appellate Division is an interesting one, especially in light of the facts of the Shah case.  In a nutshell, here they are:

  • The Shahs entered into an agreement resolving at least some of their issues in January 2003.  As to those issues that were not resolved (and there were a whopping seventeen of them), they agreed that they would proceed to arbitration.  They agreed on an arbitrator, paid his retainer, and set a date for arbitration.  However, the arbitration did not go forward and after several years passed, Arbitrator # 1 returned the retainer.
  • In 2008, the parties mutually agreed upon a new arbitrator, Arbitrator # 2.  However, neither of them took any steps to retain him.
  • In 2009, Mr. Shah filed a motion to compel the arbitration, expand the scope of the arbitration beyond the seventeen issues identified in the parties’ agreement, and appoint a new arbitrator.  The Court granted Mr. Shah’s motion and appointed Arbitrator # 3.  The Court also entered a discovery schedule, and entered an order directing the parties as to the manner in which Arbitrator # 3’s retainer would be paid.  Despite Mrs. Shah’s apparent attempts to move forward with Arbitrator # 3, Mr. Shah did nothing.  Eventually, Arbitrator # 3 wrote to the Court to, understandably, advise that he would not arbitrate until his retainer agreement was signed.  Neither party signed it.
  • In 2015 (now twelve years after the parties agreed to arbitrate), Mr. Shah once again asked the Court to compel the arbitration, this time asking that Arbitrator # 2 be appointed.  Mrs. Shah cross-moved.  Among other things, she asked the Court to terminate the parties’ obligation to arbitrate.  The Court granted Mrs. Shah’s request, reasoning that – twelve years later – the parties were in very different financial circumstances and could not be made to arbitrate at this point.  The Court also opined that the parties had waived their rights to arbitrate.
  • Mr. Shah moved for reconsideration of the Court’s Order, which the Court denied.

That brings us to Mr. Shah’s appeal.  In pertinent part, Mr. Shah argued that the decision of the lower court should be reversed because the judge incorrectly concluded that the parties had waived their rights to arbitrate due, essentially, to the passage of time.

The Appellate Division agreed with the judge below and concluded that the parties had waived their rights to arbitrate.  This is an interesting conclusion in light of the definition of a waiver:

Waiver is the voluntary and intentional relinquishment of a known right. The intent to waive need not be stated expressly, provided the circumstances clearly show that the party knew of the right and then abandoned it, either by design or indifference. [internal citations omitted].

Indeed, under the facts of the Shah case, there was no question that the parties had unduly delayed in proceeding to arbitration.  Mr. Shah apparently admitted to the Court that he was unhappy with Arbitrator # 3’s fee and therefore did nothing to move forward with the court-appointed arbitrator he had asked for in the first place.

At the same time, there were efforts over the years to move forward with the arbitration.  The major consideration the Appellate Division seems to have made was the amount of time that had passed, regardless of the fact that the parties had – at various points over that time period – made efforts to move forward with the arbitration.  One can imagine that this could be a closer call under even a slightly different set of facts.  For example, what if the facts were identical, but had occurred over the course of five years instead of twelve?

What is clear is that at some point, if parties do not arbitrate then the right to do so is waived, even if the parties have an agreement in place to proceed to arbitration, and one of them wants to enforce it.

headshot_diamond_jessicaJessica C. Diamond is an associate in the firm’s Family Law Practice, resident in the Morristown, NJ, office. You can reach Jessica at (973) 994.7517 or jdiamond@foxrothschild.com.

As a matrimonial litigant, you never want to feel that your lawyer does not know how best to take you through the divorce or post-divorce process.  After spending substantial sums of money on an advocate to aid you through a difficult and emotional process, let’s just say that “the blind leading the blind” is not the vibe that you want to be left walking away with.

Unfortunately, however, it happens way too often and I cannot tell you how many times I have had consults with potential clients during which I am told about how disappointed he or she was with prior counsel.  I have had several recent cases where I am left baffled and scratching my head at the inability of a matter to move forward to a trial or settlement – not because of difficult parties or issues of complicated substance, but, rather, a lawyer on the other side who simply does not seem to know what he or she is doing.

The experiences to which I allude are all the more reason to heed the following points when selecting your divorce lawyer:

  • Does the lawyer practice exclusively in the area of matrimonial law? You want a lawyer who knows the law, right?  You also want a lawyer who knows how the law has been applied, how it fits to the facts of your case, and how and when it may be changing.  While no lawyer is going to concede to you that he or she does not know the law, or that acting on your behalf will be a new experience, always do your due diligence before meeting with the attorney to see what you are really dealing with.  Aside from discussing with your referral source, perhaps review the attorney’s online profile to see what articles he or she has written, or what presentations he or she has given on family law topics.
  • Is your lawyer familiar with the judges, lawyers, mediators and experts who may be involved in your matter? This point coincides with the first point.  A lawyer who is well versed in or only practices in the area of family law will more likely be familiar with the people you will come across in the course of your matter.  Knowing how your spouse’s lawyer operates, knowing which mediator may be good or bad for your case, and knowing which expert can best address your financial or custodial needs is of great importance in properly presenting and proceeding in your case.
  • Do you feel comfortable in communicating with your advocate about the law and the facts of your case? You are going to get to know your lawyer very well.  You want to be able to confide in that person all of the good and the bad that may have happened during your marriage, as well as anything that may impact upon your divorce proceeding.  Providing your lawyer with such information and allowing him or her to best address such issues is one of the reasons why you retained that lawyer in the first place.
  • Do you strategize with your lawyer in a way that addresses many different potential approaches while also taking litigation costs into consideration? There are many, many…many different types of divorce lawyers.  There are lawyers who prefer the path of least resistance to get you to a resolution, lawyers who are always aggressive, and so many others in between.  The lawyer you retain should fit your goals and motivations of what you want or believe your divorce matter should be.
  • Is your lawyer responsive to your needs? Responsiveness is one of the issues that I hear about most often from clients who have had prior counsel.  You want to ensure that your attorney gets back to you in a reasonable time to address any issues that you may have.

These are just a few of the critical points that you should consider in retaining matrimonial counsel.  Every lawyer is different, as is every client.  Finding the right match for you is not a decision to be taken lightly, and should be based on a consideration of several factors.  Your attorney is someone who you are going to confide in more than most other people in your life, including, on occasion, your family and friends.  Trust and comfort in your lawyer’s ability to advocate on your behalf is a critical, if not the most critical decision that you may make during the entire divorce process.

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Robert A. EpsteinRobert Epstein is a partner in Fox Rothschild LLP’s Family Law Practice Group and practices throughout New Jersey.  He can be reached at (973) 994-7526, or repstein@foxrothschild.com.

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Ah, that unforgettable line uttered by Veruca Salt in Willy Wonka and the Chocolate Factory.  As a matrimonial attorney, this is what it feels like we deal with quite often.  But I am not referring to people just being demanding, I am talking about people making unreasonable demands, with no apparent justification in law or in fact.  In fact, I have had enough of “my client just wants”, “that’s not enough” and “I know that a court would never do that but my client insists” over the last several months to last me a career.

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Some examples have been, in no particular order, demands for child support that exceed what the Guidelines would require by 7 to 10 times; demands for combined alimony and child support representing 60% or more of pre-tax income; demands for a buy out on the house for higher than the agreed upon value less the agreed upon mortgage; demands to share in exempt inheritances, trusts or family gifts that were never commingled; demands that one party get most of the marital assets because they were held in her name, though not exempt; demands for more than half of the assets, or 100% of the house free and clear of the substantial mortgage debt “because you caused the divorce.”

It is bad enough when an a litigant, who is uneducated about the law makes these demands.  That is to be expected because of ignorance of the law or raw emotions clouding judgment or both.  It is quite another thing when the client’s lawyer makes the demand, knowing that there is no rational or legal basis for the request.  As a younger lawyer, I remember incredulously asking an adversary, “Is your client really seeking 80% of the assets and 90% of my client’s net income?” to which the answer was yes.  Inevitably, when they are called on it, they sell their client out, saying how unreasonable they are, but they are just doing what they have been instructed to do.  Is that response good enough?  First, you wonder if they ever actually educated their client on the law (or whether they know it themselves).  If they have educated the client, is it proper to make a demand that is unreasonable, if not bad faith?

On the other side of the equation there may be the litigant that is willing to negotiate a reasonable resolution within the expected settlement parameters based upon the facts of the case (though often, water finds is level and where there is one unreasonable party, their spouse may be their mirror image in that regard.)  But what is the reasonable litigant to do?  They are often left with having to make the  “Hobson’s choice” of capitulating to the unreasonable party, or incurring the cost of litigation.  Worse yet, I have seen mediators, early settlement panelists, and even judges, try to pressure the reasonable party to settle because the other party wont budge, or split differences between the reasonable proposal and the unreasonable demand resulting in a slightly less unreasonable proposed resolution.  That said, I have seen these same judges, mediators or panelists use the threat that the unreasonable party may be required to pay the other party’s counsel fees as an effective deterrent.  Unfortunately, usually by that time, a lot of money has already been spent for something that should probably have been nipped in the bud from day one.

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Eric SolotoffEric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Roseland and Morristown, New Jersey offices though he practices throughout New Jersey. You can reach Eric at (973)994-7501, or esolotoff@foxrothschild.com.

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The recent Appellate Division case of Sirigotis v. Sirigotis, although unpublished (non- precedential), provides a great reminder of how important it is to know the “rules of engagement”.

In Sirigotis, the parties were able to resolve a majority of their issues by consent but agreed to submit the remaining unresolved issues to “final and binding” arbitration to be conduct by a retired judge. The parties provided the arbitrator a list of open issues that were to be decided.

The parties agreed to the appropriate amount of base alimony but a remaining open issue was that wife had an additional claim for alimony should husband’s income rise over a certain level as well as the inclusion of specific language in the award regarding plaintiff not being able to maintain the standard of living Crews v. Crews. Husband had objected to both of these requests.   During one of many arbitration sessions, the arbitrator had initially indicated that “all Crews [language] is out” because the issue of the determination of the marital lifestyle was not “before him”. Notwithstanding, in a later submission from wife, she again raised the issue of additional alimony on the grounds that the base alimony would not neither meet her needs or the marital lifestyle.  Husband’s submission argued that no additional alimony should be paid as the base alimony would “without question” meet wife’s needs and exceeds the marital lifestyle. Moreover, Husband requested that language be inserted that specifically indicated that both parties would be able to maintain a lifestyle reasonably comparable to that enjoyed during the marriage.

The reasons the parties were at odds over this language is because the standard of living and the likelihood that each party can maintain a reasonably comparable standard of living is a factor that must be considered when awarding alimony. This factor is of import because it serves as the touchstone for the initial alimony award and for adjudicating later motions for modification of the alimony award when ‘changed circumstances’ are asserted.

Ultimately, the arbitrator denied wife’s request to predicate more alimony based on a “future event” (increased income) and left wife to make an application to the Court in the future if necessary. The arbitrator also agreed with the husband that wife could maintain the standard of living.

Once the final arbitration award was issued, the wife moved to vacate the arbitration award in the trial court asserting that the arbitrator exceeded his authority by addressing the standard of living issue. Although the trial court found that the arbitrator had the authority to address the issue, the court ultimately vacated the arbitrator’s Crews finding and remanded for further proceedings, finding that plaintiff did not have the opportunity to give all her proofs on the issue.  Both parties appealed.

The Appellate Division found the trial court erred in vacating the Crews finding and reversed and remanded to the trial court to confirm the arbitrator’s award. In doing so, it reminded us that arbitration awards are given considerable deference therefore the party seeking to vacate it bears a heavy burden, with the scope of review being narrow.

While arbitration is ‘creature of contract’ and an arbitrator exceeds his or her authority if they decide something outside the scope, the Appellate Division found that be virtue of the issues raised by the wife herself, the Crews issue had to be decided. Moreover, the Appellate Division found that the wife had ample time and ability to present evidence on this issue and indeed did so by virtue of oral testimony, written submissions and voluminous exhibits.

The take away from this case is regardless of whether you decide to mediate, arbitrate or litigate, some or all of your divorce, it is important to know the “rules of engagement”. It is imperative to engage an experienced professional to help guide you through the ins-and-outs. You do not want to find yourself at a disadvantage simply because you were not aware of the rules.

You hear people talk all the time these days that mediation and arbitration, or quite frankly, any alternate dispute resolution (ADR) methods are the best things since sliced bread.  They may very well be in the right case – which these days may be most of them given judicial backlogs, and other factors making presenting cases to a court undesirable.  They may not be the panacea that people think they are, especially when you don’t frame what you want the arbitrator to do or how you want them to do it, correctly.  In fact, I have previously blogged that the right to appeal is not automatic unless you contract for it.

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The issue of a less than ideal arbitration agreement coming back to bite a litigant in the behind was exemplified again yesterday in the unreported (non-precedential) Appellate Division case of Little v. Little.  In that case, the parties agreed to arbitrate a Tevis claim seeking damages for alleged spousal abuse and battered woman’s syndrome before a retired judge. Rather than a full blown arbitration agreement, spelling out all of the desired standards, a right of appeal, etc., the agreement to arbitration was only memorialized in an order, which stated in total:

ORDERED, that the matter is hereby dismissed as the parties have agreed to submit to binding arbitration with a retired judge agreed on between the parties, which arbitration shall take place on or before February 15, 2013, the costs of which will be shared equally by the parties.

After the arbitration took place, the arbitrator issued a two-page written arbitration decision that awarded plaintiff $125,000 “for the physical and mental injuries sustained by her during her marriage…” The award did not set forth any findings of fact or conclusions of law.  Thereafter, the plaintiff moved to confirm the award and the defendant moved to vacate the award, both because of the lack of findings of fact and the reliance on a letter produced after the close of discovery.  The cross motion was denied and the arbitration award confirmed, leading to an appeal.

Defendant appealed claiming that  (1) the arbitration award was against public policy and should be vacated because without findings of fact and conclusions of law it cannot be determined if the award was procured by corruption, fraud or other undue means; and (2) the arbitrator’s reliance on the letterproduced after the close of discovery in constituted undue means.  The Appellate Division rejected both of those arguments.

As to the lack of fact finding, the Court specifically noted:

The scope of arbitration and the requirements of an arbitrator are controlled by contract. Minkowitz v. Israeli, 433 N.J. Super. 111, 132-33 (App. Div. 2013). If the arbitration agreement does not require the arbitrator to make specific factual findings or follow particular procedures, the arbitrator is free to make an award in a manner consistent with the Arbitration Act. N.J.S.A. 2A:23B-4. The Arbitration Act only requires the arbitrator to “make a record of an award.” N.J.S.A. 2A:23B-19(a). Moreover, the arbitration award provides that an arbitrator may conduct an arbitration in any manner that the arbitrator considers appropriate, with the goal of disposing of the matter fairly and expeditiously. N.J.S.A. 2A:23B-15(a). Accordingly, we have previously explained:

[W]ithout an agreement to the contrary, the power of the arbitrator is simply to issue an award that resolves a dispute. If they have not agreed in advance, the parties cannot, for example, force an arbitrator to give reasons for an award or to write a decision explaining his or her view of the facts. Neither can they appeal from the award as they could if they had proceeded to litigate their matter in court. Rather, the rights of the parties following issuance of an award, in the absence of an agreement to the contrary, are entirely governed by statute. (internal citation omitted).

As to the reliance on the letter produced after the close of discovery:

Arbitrators are not bound by the rules of evidence, and instead may determine the admissibility, relevance, materiality and weight of any evidence. N.J.S.A. 2A:23B-15(a). Additionally, an arbitrator may permit any discovery that he or she determines to be appropriate, taking into account the goal of making the proceeding fair, expeditious, and cost-effective. N.J.S.A. 2A:23B-17(c).

What is the takeaway here?  If you want the rules of evidence to apply, put that in your arbitration agreement.  If you want findings of fact and conclusions of law, put that in your arbitration agreement.  If you want a right of review greater than the very limited right of review contained in the arbitration statute, put it in your arbitration agreement.  Otherwise, you can be left with very little remedies if you disagree with a decision, and like the litigant in this case, very little ability to determine what the decision was actually based upon.

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Eric SolotoffEric Solotoff is the editor of the New Jersey Family Legal Blog and the Co-Chair of the Family Law Practice Group of Fox Rothschild LLP. Certified by the Supreme Court of New Jersey as a Matrimonial Lawyer and a Fellow of the American Academy of Matrimonial Attorneys, Eric is resident in Fox Rothschild’s Roseland and Morristown, New Jersey offices though he practices throughout New Jersey. You can reach Eric at (973)994-7501, or esolotoff@foxrothschild.com. Connect with Eric: Twitter_64 Linkedin

Photo credit:  Copyright: <a href=’http://www.123rf.com/profile_zetwe’>zetwe / 123RF Stock Photo</a>

As a lover of all things Coldplay, I was sad to hear that lead singer Chris Martin and his wife of more than 10 years, Gwyneth Paltrow, were divorcing. Gwyneth Paltrow announced the separation on her website Goop.com and used the term “conscious uncoupling” to describe their approach to divorce.  Although the term had been originally coined by marriage and family therapist, Katherine Woodward Thomas, as with anything else endorsed by celebrities, the phrase went viral after her post.  It was of particular interest to me personally given my chosen profession as a divorce lawyer.

As professionals, especially ones whose practice is client-centric, we are always striving for better ways to do our jobs.  In my case, that means getting clients their desired result in the most effective and streamlined way possible. After practicing for several years, experience has shown me time and time again, that people going through divorce are most satisfied with the process when they feel they have control over it (i.e., are “conscious[ly] uncoupling”) and can proceed with a form of alternative dispute resolution (such as mediation) rather than traditional, costly, protracted litigation.

Even as American culture has become more progressive and accepting, divorce is still considered taboo and is almost always surrounded by extreme negativity and hostility.  Even if the couple themselves wants to proceed amicably, they are unfortunately often allowing others in their life (parents, siblings, friends, new boyfriend or girlfriend) to control the dialogue and encourage them to dig in their heels.

Once people “dig in”, it is often impossible to “dig out”.  Protracted litigation only intensifies negativity and hostility. The idea that divorce has to be a negative experience then becomes a self-fulfilling prophecy, in which divorcing parties behavior, is influenced by their expectation that divorce must be awful.  I believe if you change the conversation surrounding divorce and allow yourself to “consciously uncouple” you will have much more satisfying experience surrounding your divorce.

I recently completed a 40-hour divorce mediation training program. This program has only solidified my beliefs that in many cases, a mediated divorce, is a better divorce. That is not to say that litigation is never necessary. There are some circumstances that cannot be mediated and some people that simply cannot effectively participate in mediation. That said though, divorce is multi-dimensional: it is legal, it is financial, and it is emotional. The great thing about mediation is that it can effectively address each of those dimensions.

(1) LEGALLY

Whether you litigate or mediate, you achieve the same end result: a legal divorce.  A mediated divorce however is often faster, less adversarial and provides more flexible and creative resolutions, narrowly tailored to your specific family dynamic.  It also allows for a more confidential process than airing out your dirty laundry in a series of public court filings and appearances.

(2) FINANCIALLY

I will never say “always” or “never” because I’ve come to learn that nothing is absolute.  A mediated divorce however, can certainly be more cost effective. Spending less to uncouple leaves more to be divided between the parties and therefore places both parties in a better position to maintain financial independence and stability post-divorce.

(3) EMOTIONALLY

Although emotions can run high during mediation, there is a much more focused approach on compromise and collaboration rather than “winning” as is seen in litigation. When people feel their spouse is negotiating in good faith and trying to be part of the solution, rather than part of the problem (i.e., zealously litigating over the smallest of disputes), they walk away feeling better about uncoupling, which leads to healthier relationships with themselves, their ex-spouse, and future romantic partners.

The takeaway from all of this is that choosing to uncouple, does not always have to be adversarial, financially draining and emotionally damaging. Take control of your divorce and find avenues in which to minimize the long-term effects.  Before deciding to wage war against your spouse, consult with an experienced and trained family law mediator to see how mediation can work for you.

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Lauren K. Beaver is a contributor to the New Jersey Family Law Blog and an attorney in Fox Rothschild LLP’s Family Law Practice Group. Lauren practices out of the firm’s Princeton, New Jersey office representing clients on issues relating to divorce, support, equitable distribution, custody, and parenting time.  Lauren also offers mediation services to those looking to procure a more amicable divorce. Lauren can be reached at (609) 844-3027 or lbeaver@foxrothschild.com.

In the recent matter of Perreault v. Perreault, P.P. and R.P. were divorced in 1996, after 22 years of marriage. Following a hearing, the Court ordered R.P. to pay permanent alimony in the amount of $500.00 per week. Neither the April 29, 1996 Final Judgment of Divorce, nor the August 7, 1996 Order provided that alimony would beof limited duration or would terminate upon R.P.’s retirement. P.P. also received $28,239.48 or 50% of the marital share of R.P.’s federal pension.

At the time of the divorce, R.P. was employed by the Veterans Administration Hospital and earned approximately $118,000.00 per year. At the age of 55, he retired from this job and began collecting his federal pension. After R.P.’s retirement, he continued working for other companies and in 2007 he began a consulting business with his current wife. In November 2013, he retired at the age of 65.

In April 2014, R.P. filed a motion to terminate his alimony obligation to P.P. based upon his retirement, or in the alternative, to reduce his alimony obligation. R.P. certified that he had gross income in 2013 of $96,985 derived solely from his pension, and from that amount, $28,239.48 was paid to P.P. pursuant to the Court’s August 7, 1996 Order. R.P. argued that only $25,000.00 of the remaining amount, $68,745.52 ($96,985.00-$28,239.48 = $68,745.52), could be considered for alimony purposes, and this amount was insufficient to justify an alimony award. Additionally, R.P.’s Case Information Statement showed that he had no debt, $9,891 in monthly expenses (although slightly reduced by the trial Court) and $823,000 in assets.

The trial Court determined that R.P.’s income had decreased, but that he had accumulated substantial post-judgment assets separate from his current wife from which he could pay alimony. Of the $823,000 in assets listed on R.P.’s Case Information Statement, the trial Court reduced this number by more than one-half to account for joint ownership with his current wife. The trial Court also recognized that with regard to R.P.’s pension, $40,505.04 was representative of the non-marital portion, not $25,000.00 as set forth by R.P. Additionally, the trial Court noted that R.P.’s future social security payments and his current wife’s income would assist him in paying his expenses, thereby increasing his ability to pay alimony. In contrast, P.P. would be in “dire straits” without alimony. In conclusion, the trial Court reduced R.P.’s alimony from $500.00 per week to $375.00 per week. Both R.P. and P.P. appealed.

R.P. asserted that the trial Court erred by ordering alimony in the amount of $375.00 per week because the non-marital portion of his pension, which he argues is $25,000.00, does not justify an alimony obligation and the Court erred by including his assets in determining his ability to pay alimony.

With regard to R.P.’s pension, “when a share of a retirement benefit is treated as an asset for purposes of equitable distribution, the trial court shall not consider income generated thereafter by that share for purposes of determining alimony.” Innes v. Innes, 117 N.J. 496, 505 (1990) (emphasis added). “Conversely, the rule does not bar counting as income for determining alimony, that portion of the former spouses’ pension attributable to post-divorce employment, and therefore not subject to division as marital property at the time of divorce.” Steneken v. Steneken, 367 N.J. Super. 427, 437-38 (App. Div. 2004)(emphasis added).

What does this mean? It means that retirement assets that were equitably divided in a divorce (and other assets for that matter), cannot later be considered available for purposes of alimony post-judgment. In this case, since R.P.’s pension was equitably divided in 1996 when the parties divorced, the share that was equitably divided is not available for to consider his present alimony obligation.

However, any money contributed to his pension after the parties divorced, can be considered for purposes of alimony to the extent the post-divorce earnings enhance the value of the asset.

In order to determine the non-marital portion of the pension, the trial Court added P.P.’s 50% share to R.P.’s share of the same amount to determine that the martial portion was $56,478.96. The Court then subtracted this amount from the present value of $96,984.00 to calculate a non-marital portion of $40,505.04. The Appellate Division affirmed this calculation.

In addition, the non-marital portion of R.P.’s pension, the Court must then consider whether R.P. had other sources of income that justified the reduced alimony amount. To do this, a Court may consider the income generated by supporting spouse’s assets, but not the total value of the asset itself, when determining the supporting spouses ability to pay alimony. See Miller v. Miller, 160 N.J. 408 (1999). Here, the trial court erred by considering the total value of R.P.’s assets, and the matter was remanded for further proceedings.

Although not discussed in Perreault, a litigant who wants to terminate or modify their alimony obligation based upon retirement must begin their analysis with  N.J.S.A. 2A:34-23(j), one of the recent amendments to the alimony statute, which discusses how alimony may be modified or terminated upon the prospective or actual retirement of the obligor.