K.V.H. VS. W.S.H. (FM-07-0119-15, ESSEX COUNTY AND STATEWIDE) ( 2018 )


Menu:
  •                              NOT FOR PUBLICATION WITHOUT THE
    APPROVAL OF THE APPELLATE DIVISION
    This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
    internet, this opinion is binding only on the parties in the case and its use in other cases is limited . R. 1:36-3.
    SUPERIOR COURT OF NEW JERSEY
    APPELLATE DIVISION
    DOCKET NO. A-4194-16T1
    K.V.H.
    Plaintiff-Respondent,
    v.
    W.S.H,
    Defendant-Appellant.
    __________________________
    Argued September 12, 2018 – Decided September 27, 2018
    Before Judges Yannotti and Gilson.
    On appeal from Superior Court of New Jersey,
    Chancery Division, Family Part, Essex County, Docket
    No. FM-07-0119-15.
    W.S.H., appellant, argued the cause pro se.
    Peter G. Bracuti argued the cause for respondent
    (Gomperts Penza & McDermott, LLC, attorneys; Peter
    G. Bracuti, on the brief).
    PER CURIAM
    Defendant W.S.H.1 appeals from certain provisions of arbitration awards
    that were incorporated into an April 11, 2017 dual final judgment of divorce
    (Final Judgment). We dismiss the appeal because defendant did not seek to
    vacate, modify, or correct the arbitration awards in the trial court as required by
    the New Jersey Arbitration Act (Act), N.J.S.A. 2A:23B-1 to -32.
    I.
    Plaintiff and defendant were married in 1993, they are both attorneys, and
    they have three children. In July 2014, plaintiff filed a complaint for divorce.
    Defendant responded with an answer and a counterclaim.                 The parties,
    thereafter, filed a series of pretrial motions, engaged in discovery, and
    extensively litigated their disputes.
    On July 26, 2016, the parties entered into an arbitration agreement and a
    mediation agreement. The parties selected a retired Superior Court judge to
    serve as both the mediator and arbitrator and, in a separate written agreement,
    approved that dual role. When the parties entered into those agreements, they
    were each represented by their own legal counsel. The arbitration agreement
    provides that it is governed by the Act.
    1
    We use initials for the parties to protect their privacy interests. R. 1:38-3(d).
    A-4194-16T1
    2
    After entering into the agreements, the parties resolved certain issues
    through mediation.     They incorporated their mediated agreements into a
    "Binding Agreement," dated September 28, 2016 (the Binding Agreement).
    In January 2017, the parties began arbitrating other issues. Arbitration
    hearings were conducted and, on March 8, 2017, the arbitrator issued a written
    award resolving a number of issues related to the parties' divorce (the March
    2017 Arbitration Award).
    On April 4, 2017, the arbitrator issued a separate written decision
    addressing attorneys' fees and awarded plaintiff $22,000 in fees (the April 2017
    Fee Arbitration Award). That same day, the arbitrator confirmed that the parties
    had resolved disputes concerning the distribution of certain personal propert y.
    Thus, on April 4, 2017, the arbitrator also issued a written confirmation of that
    resolution.
    On April 11, 2017, the parties, with their attorneys, appeared in the Family
    Part. The court heard testimony from the parties and entered the Final Judgment.
    By consent of the parties, the March 2017 Arbitration Award was "confirmed
    and incorporated into" the Final Judgment.       The parties also consented to
    incorporate into the Final Judgment the Binding Agreement, the April 2017 Fee
    Arbitration Award, and the resolution of the distribution of personal property.
    A-4194-16T1
    3
    With regard to the resolution concerning the distribution of personal property,
    the parties agreed to some additional modifications. The Final Judgment then
    stated:
    The parties are directed to comply with the terms of the
    Arbitration Decision and the September 28, 2016
    Binding Agreement, with the understanding that the
    Court took no testimony as to the merits of the Binding
    Agreement and Arbitration Decision and makes no
    judgment with respect to it, except that the parties
    freely and voluntarily entered into arbitration, and that
    it is therefore binding and enforceable, with neither
    party waiving any and all remedies pursuant to the
    Arbitration Act [(N.J.S.A. 2A:23B-1 to -32)]; . . . .
    In connection with the entry of the Final Judgment, both parties were
    questioned about the Judgment and all of the incorporated awards and
    agreements. Under oath, both parties confirmed that (1) they had freely and
    knowingly entered into the arbitration agreement; (2) the March 2017
    Arbitration Award was being "confirmed and incorporated" into the Final
    Judgment; and (3) the April 2017 Fee Arbitration Award was being incorporated
    into the Final Judgment.
    In that regard, defendant testified:
    [Defense Counsel]: Okay. And now I'm going to show
    you Exhibit C, which is the arbitration decision, and the
    arbitration decision came about after numerous
    appearances before [the arbitrator] for arbitration;
    correct?
    A-4194-16T1
    4
    [Defendant]: Correct.
    [Defense Counsel]: Okay. And this agree - - this
    arbitration decision, today, is being confirmed today,
    and incorporated into the judgment of divorce, but by
    doing so, you're aware that you're not waiving any
    rights and remedies that you have under the arbitration
    act, you're aware of that?
    [Defendant]: Yes.
    ….
    [Defense Counsel]: okay. And attached as Exhibit E is
    the fee decision that is also being incorporated into the
    judgment of divorce that's being entered today. You're
    aware of that?
    [Defendant]: Yes.
    [Defense Counsel]: And by it being incorporated
    you're not waiving your right under the Arbitration Act
    to appeal or move for reconsideration - - or whatever
    your rights may be under that act, you're not waiving
    them by that being included in here. You're aware of
    that?
    [Defendant]: Yes.
    Defendant was then questioned by the court:
    [The Court]: Mr. - - Mr. [W.S.H], do you understand
    that the Court has not read the agreement, and is not
    going to make any ruling on the substance of the
    agreements, but is only going to look to determine
    whether or not you believe them to be fair and
    equitable, and whether you entered them knowingly,
    freely, and voluntarily. Do you understand that?
    A-4194-16T1
    5
    [Defendant]: Yes, I understand that, Your Honor.
    [The Court]: Okay. Do - - do you believe the
    agreements to be fair and equitable to you?
    [Defendant]: Yes.
    [The Court]: Did you enter them knowingly, freely and
    voluntarily?
    [Defendant]: Yes.
    [The Court]: Okay. Did anyone threaten or coerce you
    into entering the agreements?
    [Defendant]: No.
    [The Court]: Okay. And do you agree to be bound by
    the agreements?
    [Defendant]: Yes.
    [The Court]: And do you understand that agreements
    that are incorporated into the final judgment of divorce
    will be enforceable as court orders?
    [Defendant]: Yes.
    [The Court]: Okay. Do you have any questions for the
    Court?
    [Defendant]: No, Your Honor.
    Based on the testimony of both parties, the family judge found that both
    plaintiff and defendant entered into the arbitration agreement knowingly, freely
    and voluntarily. The judge then entered the Final Judgment, which incorporated
    A-4194-16T1
    6
    the March 2017 Arbitration Award and the April 2017 Fee Arbitration Award.
    In so doing, the court noted defendant's "reservations of right of - - of the
    defendant with respect to any rights he has under the arbitration statute or not -
    - are not waived."
    At no time during the proceedings leading up to the entry of the Final
    Judgment did either party raise with the court any objection to the arbitration
    awards. Accordingly, neither plaintiff nor defendant asked the family court to
    vacate, modify, or correct any of the arbitration awards. The only reservation
    was that "neither party [is] waiving any and all remedies pursuant to the
    Arbitration Act[.]"
    On May 3, 2017, plaintiff filed a motion to enforce the fee award. On
    May 26, 2017, defendant filed notice of this appeal. While this appeal was
    pending, on June 6, 2017, defendant filed a cross-motion to vacate the fee award.
    The Family Part, however, refused to rule on that motion because this appeal
    was pending. On August 11, 2017, the Family Part did enter an order directing
    defendant to pay plaintiff the fee award and denied a stay of enforcement.
    II.
    On this appeal, defendant seeks to vacate the March 2017 Arbitration
    Award and the April 2017 Fee Arbitration Award. He contends that the March
    A-4194-16T1
    7
    2017 Arbitration Award should be vacated because the arbitrator exhibited
    "partiality and bias" in favor of plaintiff.    Defendant also asserts that the
    arbitrator engaged in an ex parte communication with him. In challenging the
    April 2017 Fee Arbitration Award, defendant contends that (1) there was no
    evidence supporting the award, (2) the arbitrator refused to consider relevant
    evidence, (3) the arbitrator did not allow defendant to be heard, present
    evidence, or engage in cross-examination, and (4) the fee was not supported by
    the record. Thus, defendant requests that we vacate both arbitration awards,
    select a new arbitrator, and remand for further proceedings.
    We lack jurisdiction to hear this appeal and, therefore, we dismiss the
    appeal. See N.J.S.A. 2A:23B-28; Hogoboom v. Hogoboom (n/k/a Grimsley),
    
    393 N.J. Super. 509
    , 515 (App. Div. 2007).
    The parties here agreed that their arbitration was governed by the Act.
    The Act encourages arbitration and when, as here, the parties agree to binding
    arbitration, the Act limits judicial review. See Fawzy v. Fawzy, 
    199 N.J. 456
    ,
    468 (2009) ("Arbitration can attain its goal of providing final, speedy and
    inexpensive settlement of disputes only if judicial interference with the process
    is minimized; it is, after all, meant to be a substitute for and not a springboard
    A-4194-16T1
    8
    for litigation." (quoting Barcon Assocs., Inc. v. Tri-County Asphalt Corp., 
    86 N.J. 179
    , 187 (1981))).
    Following a decision by an arbitrator, the Act allows for three types of
    review by a court: (1) confirmation, N.J.S.A. 2A:23B-22; (2) vacation, N.J.S.A.
    2A:23B-23; or (3) modification or correction, N.J.S.A. 2A:23B-24. There is
    also a right to appeal, but such appeals are only from "an order or a judgment in
    a civil action." N.J.S.A. 2A:23B-28.
    To confirm, vacate, modify, or correct an arbitration award, a party must
    file a summary action in the trial court or already have a pending court action.
    N.J.S.A. 2A:23B-5. It is only when a party has an order or judgment from the
    trial court either confirming, vacating, modifying, or correcting an arbitration
    award, that the party can seek appellate review. N.J.S.A. 2A:23B-28. In that
    regard, section 5 of the Act states:
    Except as otherwise provided in section 28 of this act,
    an application for judicial relief pursuant to this act
    shall be made upon commencement of a summary
    action with the court and heard in the matter provided
    for in such matters by the applicable court rules.
    [N.J.S.A. 2A:23B-5.]
    Section 28, which addresses appeals, states:
    a.     An appeal may be taken from:
    A-4194-16T1
    9
    (1) an order denying a summary
    action to compel arbitration;
    (2) an order granting a summary
    action to stay arbitration;
    (3) an order confirming or
    denying confirmation of an award;
    (4) an order modifying              or
    correcting an award;
    (5) an order vacating an award
    without directing a rehearing; or
    (6) a final judgment          entered
    pursuant to this act.
    b.    An appeal pursuant to this section
    shall be taken as from an order or a
    judgment in a civil action.
    [N.J.S.A. 2A:23B-28.]
    Defendant argues that he did not waive any of his remedies under the Act
    and he, therefore, has the right to file this appeal. He relies on the language in
    the Final Judgment that states "neither party [is] waiving any and all remedies
    pursuant to the Arbitration Act[.]" That language, however, simply reserved
    whatever rights defendant had under the Act. That language did not, and could
    not, create a right to file an appeal seeking to vacate an arbitration award when
    defendant had failed to challenge the award in the trial court.
    A-4194-16T1
    10
    Indeed, here the parties "confirmed" the March 2017 Arbitration Award
    in the Final Judgment. While defendant could appeal from that Final Judgment,
    he cannot raise a challenge to the arbitration award for the first time on appeal.
    If defendant wanted to preserve a right to appeal based on a challenge to the
    arbitration award, he should have first raised that challenge in the trial court.
    The Act itself makes this point clear. Section 4 of the Act states that a
    party to an arbitration agreement may not waive or vary certain sections of the
    Act, including the sections dealing with confirmation of awards, vacating
    awards, and modifying or correcting awards. N.J.S.A. 2A:23B-4(c). Moreover,
    we have expressly held that parties are not "entitled to create an avenue of direct
    appeal to this court" from an arbitration award when the parties have failed to
    challenge the award in the trial court. Hogoboom, 
    393 N.J. Super. at 515
    .
    Defendant contends that Hogoboom is distinguishable from the procedure
    of this case. He points to the fact that Hogoboom dealt with a post-judgment
    arbitration, while his arbitration was conducted before, and was then
    incorporated into, the Final Judgment.        That procedural difference is not
    material. The material fact is that both Hogoboom and this case deal with an
    attempt to appeal an arbitration award without first challenging the award in the
    A-4194-16T1
    11
    trial court.   Consequently, the holding in Hogoboom directly applies and
    controls the outcome here.
    Finally, defendant argues that the Final Judgment was entered with both
    the court and plaintiff understanding that an appeal would be filed. The record
    does not support that argument.       While plaintiff and the court both made
    reference to the language that the parties were not waiving any and all remedies
    pursuant to the Act, there was no discussion of an appeal. Indeed, the family
    judge simply acknowledged that the reservation language was in the Final
    Judgment, but the judge did not attempt to interpret that language. As both the
    Act and our holding in Hogoboom make clear, whatever defendant intended, he
    did not have the ability to create a direct right of appeal.
    The appeal is dismissed.
    A-4194-16T1
    12
    

Document Info

Docket Number: A-4194-16T1

Filed Date: 9/27/2018

Precedential Status: Non-Precedential

Modified Date: 8/20/2019