Appealing an Arbitration Award in a Divorce in Arizona
Arbitration can be a useful strategy to use in your family law case. When used appropriately, it can provide a cost-effective and speedy resolution to a dispute. What happens, however, if one of the parties is disappointed with an arbitrator’s decision? That is what the Arizona Court of Appeals had to examine in its published decision in Chang v. Siu, 234 Ariz. 442 (App. 2014).
Siu involved a divorce between a Husband and Wife. Prior to their marriage, Husband owned various securities that he ultimately deposited into a new brokerage account containing community funds. One of the disputes was over what portion of the brokerage accounts was community property.
The parties agreed to binding arbitration pursuant to A.R.S. 12-3001 et seq. Their stipulation for arbitration authorized the arbitrator to hold hearings and issue binding Arbitration Awards on all issued raised in the parties’ divorce action.
Furthermore, each party waived their right to a trial before a Maricopa County Superior Court Judge and preserved their right to appeal a final Arbitration Award to the Arizona Court of Appeals.
After nine days of hearings, the Arbitrator issued a 34-page ruling. The ruling found that all the assets of the brokerage accounts were community property and ordered them to be divided equally between the parties.
Husband, in disagreement with the ruling, filed a motion requesting that the Arbitrator amend and correct the characterization of the brokerage accounts. The Arbitrator denied Husband’s Motion concluding that it involved an inappropriate challenge to the merits of the award.
The Superior Court entered a judgment and decree of dissolution incorporating the Arbitration ruling and Husband appealed.
The Basis to Vacate an Arbitration Award in a Divorce in Arizona
In its review, the Court of Appeals found that an aggrieved party may move the superior court to vacate an arbitration award under A.R.S. §12-3023 in the following circumstances:
- The award was procured by corruption, fraud or other undue means.
- There was either:
(a) Evident partiality by an arbitrator appointed as a neutral arbitrator.
(b) Corruption by an arbitrator.
(c) Misconduct by an arbitrator prejudicing the rights of a party to the arbitration proceeding.
- An arbitrator refused to postpone the hearing on a showing of sufficient cause for postponement, refused to consider evidence material to the controversy or otherwise conducted the hearing contrary to § 12-3015, so as to prejudice substantially the rights of a party to the arbitration proceeding.
- An arbitrator exceeded the arbitrator’s powers.
- There was no agreement to arbitrate unless the person participated in the arbitration proceeding without raising the objection under § 12-3015, subsection not later than the beginning of the arbitration hearing.
- The arbitration was conducted without proper notice of the initiation of an arbitration as required in § 12-3009 so as to prejudice substantially the rights of a party to the arbitration proceeding.
Due to the parties’ arbitration agreement, Husband did not move to vacate the award before the Superior Court nor did he ask the Superior Court to rule on any of the legal and factual issues contained in the Arbitration Award.
You Cannot Create a Right to Appeal in an Arbitration Agreement
The Court of Appeals held that the parties, through their stipulation for arbitration, could not by agreement create appellate jurisdiction where it would otherwise not exist. The Court of Appeals was therefore limited to reviewing whether the Arbitration Award was within the scope of the parties’ agreement.
Husband argued that the parties’ agreement to preserve their right to appeal to the Arizona Court of Appeals allowed the Court of Appeals to review the Arbitration Award on the merits.
The Court of Appeals disagreed, citing that a “mere reference” to a right to appeal does not prove that the parties intended to grant the Court of Appeals power to review the merits of the Arbitration Award since Arizona law already grants the Court of Appeals jurisdiction to review (albeit in a limited manner) arbitration awards.
Finding that the Arbitrator was within the bounds of his authority in issuing the Arbitration Award, the Court of Appeals affirmed the Superior Court and ruled in favor of Mother.
More Articles About Divorce and Family Law in Arizona
- Are You Preparing for Divorce Mediation: Here is What to Do
- Asking Your Spouse For a Divorce: 5 Things You Need to Know
- What Happens During a Divorce in Arizona
- Moving Out of the House During a Divorce in Arizona
- Protect Yourself During a Divorce in Arizona
- What is Alternative Dispute Resolution in Arizona
- Reimbursement for Paying Bills in an Arizona Divorce
- Filing an Affidavit of Financial Information in Arizona
- Divorce Sucks: Deciding to Divorce in Arizona
- Residency Requirements for a Divorce in Arizona
- Can You Lodge a Consent Decree in Arizona