Miller v. Miller ( 1993 )

FORD ELLIOTT, Judge:

This appeal is from the trial court’s entry of a marriage settlement agreement as an order of court and the striking of a provision in the agreement which called for binding arbitration in custody disputes.

The parties were married on October 4,1980. Two children were born of the marriage: Janell Miller, born June 30, 1983, and Justin Miller, born February 3, 1989. In May 1989 the parties separated but agreed Father should retain custody of the children. This agreement was reduced to writing on July 6, 1989. On April 4, 1990, the parties were divorced. At the time of the divorce, the parties entered into a Marriage Settlement Agreement which addressed property rights, support, custody, and other intra-family matters. This Marriage Settlement Agreement incorporated a Mediation/Arbitration Agreement signed by the parties. The Mediation/Arbitration Agreement provided that if a dispute, claim, or controversy is not resolved following mediation, resulting in a written agreement between the parties that they agree shall be final and binding upon them and which may be entered as a judgment by any court having competent jurisdiction, then a Board of Arbitrators shall arbitrate and decide all issues and render a written decision. This decision may be entered as a judgment by any court having competent jurisdiction. Father subsequently filed for child support. Mother responded by exercising the options provided by the Mediation/Arbitration agreement and submitted the custody matter to mediation. A mediation session was held in August of 1991 which failed to resolve the issue. The matter was then submitted to arbitration. A panel of three arbitrators decided the custody issue in favor of Mother. Father refused to relinquish custody.

Mother then sought to have the arbitrators’ decision enforced as a court order and filed a Petition to Enter the Marital Settlement Agreement as an order of court. On November 18, 1991, a hearing was held before the Honorable Susan Devlin Scott who entered the parties agreement which incorporated by reference the mediation/arbitration agreement as an order but struck the provisions of the two agreements calling for binding arbitration on the issue of custody and refused to enter the arbitrators’ award of custody. Mother appeals from that order.

On appeal, Mother argues the trial court erred in determining, as a matter of law, that the inclusion of a negotiated child custody non-judicial arbitration proceeding as a part of a marital settlement agreement is void as against public policy.¹

Citing the general principle of law favoring private nonjudicial mediation and arbitration of disputes, Mother argues that the Uniform Arbitration Act, Act of October 5, 1980, 42 Pa.C.S.A. § 7303² provides for the enforceability of a written agreement to submit a controversy to arbitration. Furthermore, a party who has submitted to a common law arbitration award, pursuant to the Uniform Arbitration Act, is bound thereby unless he can show that he was denied a hearing or that fraud, misconduct, corruption, or other irregularity caused an unjust, inequitable, or unconscionable award to be rendered. 42 Pa.C.S.A. § 7341.³ Thus, Mother contends since Father cannot claim he was denied a hearing or that fraud, misconduct, or corruption caused an unfair award, the arbitrators’ award of custody must stand.

While we agree generally with Mother’s statement of the law that parties are bound by an arbitration decision unless an arbitrators’ award was gotten by fraud or a party was denied a hearing, our review of relevant case law does not support a determination that courts will be bound by such decisions in custody cases nor that a court’s review will be limited necessarily by the arbitration provisions.

Mother and Father both refer to this court’s decision in Walker v. Walker, 308 Pa.Super. 280, 454 A.2d 130 (1982), for different propositions. In Walker, Husband and Wife executed a separation agreement which provided that both parties were to have joint custody of their two minor children, each parent having equal time with each child, and that Husband was to pay Wife $240 per month for the care, support, and maintenance of their children. The separation agreement also included a provision for the arbitration of any dispute relating to the custody and support provision. Problems developed when the children began to spend more than one-half of their time with their father. Husband paid Wife one-half of the $240 amount, for the month of December 1978, based on the average number of days the children had spent with her. Wife objected and the dispute, as per the separation agreement, was submitted to an arbitrator.

The following month, January 1979, the arbitrator rendered his decision in which he determined Husband should affirmatively encourage the children to spend an equal amount of time with both parents, and Husband should continue to make support payments in the amount of $240. Mother then filed a Petition to Confirm and Enforce the Arbitration Award, and a hearing was held in the Court of Common Pleas of Montgomery County on May 31, 1979. Prior to the hearing Husband filed Preliminary Objections challenging the jurisdiction of the court.

On July 3,1979, the trial court dismissed Husband’s preliminary objections and confirmed the arbitrator’s award and ordered the parties to formulate a schedule for custody per their separation agreement. Husband filed exceptions to the July 3rd order. What followed in Walker was a second trial court order being entered giving custody of the children to Husband which was in direct conflict with the July 3rd order awarding shared custody. On appeal, we were compelled to remand the matter.

Instantly, Mother argues based on Walker that the trial court erred in flatly rejecting the arbitrator’s decision. On the other hand, Father urges us to adhere to the language of the Walker court when it stated:

The court was, of course, not bound by the parties’ agreement with respect to custody. Contracts as to the custody of minor children are always subject to being set aside in the best interests of the child. Commonwealth ex rel. Children’s Society v. Gard, 362 Pa. 85, 66 A.2d 300 (1949); Commonwealth ex rel. Veihdeffer v. Veihdeffer, 235 Pa.Superior Ct. 447, 344 A.2d 613 (1975).

We remanded in Walker for the filing of a comprehensive trial court opinion. While we consider Walker to be instructive, we find that it did not resolve the issue of the enforceability of binding arbitration in a custody matter. What is instructive about Walker is that the court did not strike down the arbitration provision as being void as against public policy. Moreover, there did not appear to be any real issue presented in the Walker case that the arbitrator’s award was not in the best interest of the child on the custody matter.

Instantly, we agree with Mother that arbitration generally is a favored remedy as it permits parties to agree to resolve disputes outside the court system. See Children’s Hospital of Philadelphia v. American Arbitration Association, 231 Pa.Super. 230, 331 A.2d 848 (1974); Mendelson v. Shrager, 432 Pa. 383, 248 A.2d 234 (1968). Courts benefit from reduced congestion and parties benefit by having their disputes resolved in a private forum by self-chosen judges. We acknowledge arbitration has been used more frequently in other jurisdictions as a viable means of resolving domestic disputes that arise under separation agreements. See Comment, “The Enforceability of Arbitration Clauses in North Carolina Separation Agreements,” 15 Wake Forest L.Rev. 487 (1979). We agree that parties should be able to settle their domestic disputes out of court, and if the parties choose to arbitrate their domestic differences they should be permitted to do so. We concur in Mother’s contention that parties who have agreed to arbitrate should be bound by that decision and that arbitration provisions regarding custody are not, as determined by the trial court, void as against public policy. However, and most importantly, we do not agree that in the matter of child custody an arbitration award shall be binding on a court if such award is challenged by one of the parties as not being in the best interests of the child. As such, we decline to hold that the trial court is bound by the narrow scope of review set out in the Uniform Arbitration Act. An arbitration award on the issue of custody is subject to review by a court of competent jurisdiction based upon its responsibility to look to the best interests of the child.

In Witmayer v. Witmayer, 320 Pa.Super. 372, 467 A.2d 371 (1983), this court opined on the effect and importance of private custody agreements:

If informal custody agreements have no force and effect, then parents can engage in self-help, breach an agreement at will, and suffer no detriment. This would discourage orderly private settlements of disputes and potentially expose a child to greater instability, disruption and discord.

The law looks with favor upon resolutions of custody disputes that are settled privately. Warman v. Warman, 294 Pa.Super. 285, 439 A.2d 1203 (1982). It is desirable for divorcing parents to settle their differences without the intervention of the court system wherever possible. There are good reasons why these private agreements serve the best interests of the child:

First, most parents genuinely love their children, and it is reasonable to assume that the children’s welfare is a vital consideration in the parents’ decision to resolve their dispute by agreement. One major reason that parents agree on custody is to spare their children the trauma inherent in an adversarial hearing. Second, parents have a better informational base upon which to make a decision about custody. The adversarial process is an inadequate means to assemble sufficient ‘facts’ to resolve custodial disputes satisfactorily. Third, it is difficult to protect a child from the painful pull of divided loyalties when his parents fail to agree. Parental agreements help to preserve an atmosphere of at least superficial peace between parents and thereby facilitate a much easier and more meaningful future relationship between the child and the non-custodial parent. An unusually sensitive statement of these factors was offered by an Illinois court:

[T]he virtues of parental agreement are strong, and the law appreciates them____ The parents obviously know more about the family than a judge is likely to learn in a short, formal hearing. In a more or less amicable dissolution, the parents’ natural desire to do what is best for their children gives any agreement about custody great weight as an indicator of what is in the best interest of the children. Moreover, amicable settlement of custody arrangements is a good thing in itself, for peace between the parents must benefit the children; and a court will hesitate to tamper with what may be a fragile agreement, worked out only with difficulty.

Sharp, Modification of Agreement—Based Custody Decrees: Unitary or Dual Standard?, 68 Va.L.Rev. 1263, 1280 (1982) (footnotes omitted).

Divorced or separated parents usually differ on questions relating to their children. For those parents to work out a mechanism themselves whereby they resolve those conflicts privately is to be encouraged. Such a mechanism, once forged, may set a pattern for resolution of later disputes as they arise. Such resolutions frequently result in informal agreements. This is not to deny that many divorced or separated parents will not be able to settle their differences without the intervention of the court system. The law should not impede, however, those parents who are able to forge a mechanism for private dispute resolution.

Id. at 379-380, 467 A.2d at 374-375. Other jurisdictions have also looked favorably upon private mediation and arbitration agreements to initially resolve custody disputes. Flaherty v. Flaherty, 97 N.J. 99, 477 A.2d 1257 (N.J.1984); Sheets v. Sheets, 22 A.D.2d 176, 254 N.Y.S.2d 320 (1964). Cf. Nestel v. Nestel, 38 A.D.2d 942, 331 N.Y.S.2d 241 (1972).

While we encourage parties to resolve their disputes amicably and without court intervention, if possible, we cannot ignore our duty to protect the rights and interests of children once called upon to do so. Therefore, while arbitration proceedings in custody disputes are not void as against public policy, the question of the enforceability of arbitration awards in this context is a very different matter. Thus while agreements entered into between parties are binding as between the parties, they may not bind the court once its jurisdiction is invoked.⁴ It follows necessarily that an award rendered by an arbitration panel would be subject to the supervisory power of the court in its parens patriae capacity in a proceeding to determine the best interests of the child. It has long been recognized by the courts that it is the Commonwealth who is charged with the duty of protecting the rights and interests of children. In Re: William L., 477 Pa. 322, 383 A.2d 1228 (1978).

Our case law is clear with respect to the authority of courts in consideration of child custody issues. In Mumma v. Mumma, 380 Pa.Super. 18, 550 A.2d 1341 (1988), appeal denied, 524 Pa. 629, 574 A.2d 70 (1989), the trial court declined to follow a shared custody arrangement which had been agreed to by the parties. This court held: “The trial court was not bound by the parties’ agreement with respect to Bo’s [their son] custody. A contract pertaining to the custody of a minor child is always subject to being set aside in the best interest of the child.” Id. 380 A.2d at 22, 550 A.2d at 1343. “No parental agreement, of course, can permanently determine the custody of children.... The best interests of the child determine custody, and a court with proper jurisdiction has power to redetermine the best interest where circumstances change, (citations omitted)” Hattoum v. Hattoum, 295 Pa.Super. 169, 178, 441 A.2d 403, 407 (1982).

In Warman v. Warman, 294 Pa.Super. 285, 304, 439 A.2d 1203, 1213 (1982), this court stated: “A child cannot be a piece of property to be disposed of in a Separation Agreement, In re Rosenthal v. Rosenthal, 103 Pa.Super. 27, 157 A. 342 (1931), although the courts do encourage sensible private solutions to custodial problems where possible.”

We find agreements by parents concerning their children, while encouraged, will always be subject to close scrutiny by a court and are subject to being set aside as courts will not be bound by such agreements. Our supreme court recently addressed the issue of agreements between parents in the context of child support payments. The court stated:

Parties to a divorce action may bargain between themselves and structure their agreement as best serves their interests, Brown v. Hall, 495 Pa. 635, 435 A.2d 859 (1981). They have no power, however, to bargain away the rights of their children, Sonder v. Sonder, [378 Pa.Super. 474, 549 A.2d 155] supra [1988] Their right to bargain for themselves is their own business. They cannot in that process set a standard that will leave their children short. Their bargain may be eminently fair, give all that the children might require and be enforceable because it is fair. When it gives less than required or less than can be given to provide for the best interest of the children, it falls under the jurisdiction of the court’s wide and necessary powers to provide for that best interest. Id. It is at best advisory to the court and swings on the tides of the necessity that the children be provided. To which the inter se rights of the parties must yield as the occasion requires.

Knorr v. Knorr, 527 Pa. 83, 86, 588 A.2d 503, 505 (1991).

We acknowledge the supreme court had before it a provision of a separation agreement concerning child support payments. However, we consider its determinations of the court’s role in enforcing such agreements equally applicable to custody matters. Hence, we find the trial court was not bound to confirm the arbitration award that was being challenged by Father. The limited review set out in 42 Pa.C.S.A. § 7341 will not bind the court in custody matters. Rather, the trial court must view the decision of the arbitrators in light of the best interests of the child. However, if the court following its review finds that the arbitrators’ award is in the bests interests of the child, the court may adopt the decision as its own.

Accordingly, though we find that the trial court erred in striking the arbitration provisions as being void as against public policy,⁵ we agree with the trial court generally on the enforceability of such provisions. We further agree that the trial court was not required to confirm the arbitration award under the constraints of the Uniform Arbitration Act. Thus, the order striking the binding arbitration provision from the Marital Settlement Agreement is vacated. Case remanded for a determination as to whether the decision of the arbitrators is unenforceable as being adverse to the best interests of the children in this action.

JOHNSON, J., files a dissenting opinion.

1 . Mother presents two issues:

a. Whether the trial court erred in refusing to enter an Order confirming the August 15, 1991 award of the arbitration board which had been convened at the parties' request; and in finding that, as a matter of public policy, the calling for binding arbitration on the issue of custody/visitation was void.

b. Whether the trial court erred in entering as an Order the parties’ marital settlement agreement, excluding the portion thereof pertaining to determination of child custody.

However, in effect, both issues present the same question: the validity and enforceability of binding arbitration provisions in child custody disputes.

2 . 42 Pa.C.S.A. § 7303 provides:

§ 7303. Validity of agreement to arbitrate

A written agreement to subject any existing controversy to arbitration or a provision in a written agreement to submit to arbitration any controversy thereafter arising between the parties is valid, enforceable and irrevocable, save upon such grounds as exist at law or in equity relating to the validity, enforceability or revocation of any contract.

1980, Oct. 5, P.L. 693, No. 142, § 501(a), effective in 60 days.

3 . 42 Pa.C.S.A. § 7341 provides:

§ 7341. Common law arbitration

The award of an arbitrator in a nonjudicial arbitration which is not subject to Subchapter A (relating to statutory arbitration) or a similar statute regulating nonjudicial arbitration proceedings is binding and may not be vacated or modified unless it is clearly shown that a party was denied a hearing or that fraud, misconduct, corruption or other irregularity caused the rendition of an unjust, inequitable or unconscionable award.

1976, July 9, P.L. 586, No. 142, § 2, effective June 27, 1978. As amended 1980, Oct. 5, P.L. 693, no. 142 § 501(a), effective in 60 days.

4 . The distinction is addressed by the New York, Supreme Court Appellate Division in Sheets, supra.

Thus, the best interest of the child is assured protection by this omnipresent judicial check against arbitration awards in custody matters attaining the unassailable finality of awards in other arbitrations. Nor could any such award in a custody matter be given any res judicata consequences against the child, who was not a party to the arbitration. However, such an award would effectively bind the parents of the child to the extent that it settled their disputes, but only insofar as the award did not adversely affect the substantial interest of the child.

Hence, upon any showing that a provision of an award might be adverse to the best interest of a child, the Court could take such action that was necessary for the best interest of the child. Once the court’s paternal jurisdiction is invoked, it would examine into the matter, de novo, and in doing so could utilize the proof adduced before the arbitration tribunal, could call for new proof, or could employ a combination of both. The Court could then determine what was necessary for the best interest of the child.

However, the award could not be effectively attacked by a dissatisfied parent merely because it affected the child. Obviously every such award will have that effect. What must be shown to evoke judicial intervention is that the award adversely affects the welfare and best interest of the child—clearly a much narrower issue.

5 . We note that the trial court in its opinion stated that it viewed mediation as valuable in that it fosters parental agreement and may even serve to reduce animosity between the parties. It was only the arbitration provision that was struck by the trial court.