Faherty v. Faherty – Divorce Settlement – Arbitration
Faherty v. Faherty, 477 A.2d 1257 (N.J. 1984).
NATURE OF THE CASE: This case involved a legal dispute over an arbitration provision in a divorce settlement.
FACTS: Susan (W) and Roger (H) Faherty had four dependent children at the time of their divorce in 1977. Prior to the divorce they executed a property settlement agreement that was incorporated into the divorce decree. The agreement had an arbitration clause pursuant to the American Arbitration Association rules that provided that the outcome was binding on the parties. Arbitration was a condition precedent to access to the courts to resolve any problems.
W moved in Chancery court for an order regarding past due alimony and child support. W claimed H was in arrears for $24,500 in support payments and had defaulted on an equitable distribution promissory note in the amount of $25,000. H cross entered a cross motion to compel arbitration and the Chancery court issued an order to compel arbitration. The parties selected an arbitrator and submitted their respective claims. The arbitrator found for W and W moved in Chancery to confirm her awards in arbitration. H cross moved to vacate the arbitrator’s award and for court hearings to modify his prior and future payments due to changed circumstances. The court confirmed the award and denied H relief and H appealed.
ISSUE: Are mandatory arbitration clauses in connection with divorce disputes and divorce settlement agreement disputes void per se?
RULE OF LAW: No. Mandatory arbitration clauses in connection with divorce disputes and divorce settlement agreement disputes are not void per se.
HOLDING AND DECISION: Arbitration is a favored remedy and a court generally will enforce an arbitration agreement unless it violates public policy. Since parties may settle spousal support rights and obligations by contract there is no public policy reason to prohibit them from submitting disputes arising out of such contracts to binding arbitration. However, we recognize that the courts have a non-delegable supervisory function in the area of child support that may be exercised upon review of an arbitrator’s award.
If an arbitrator’s award affecting child support is questioned in that it does not provide adequate protection for the child, the trial court should conduct a special review of that award. H claims that the arbitrator failed to weigh evidence of his income and if he had considered the evidence he could not have made the award that he made. H has failed in his burden in that he has provided no record to support this contention other than the final decision of the arbitrator.
DISPOSITION: Affirmed.