Opinion
DOCKET NO. A-3318-13T2
02-08-2016
SARAH B. BISER, Plaintiff-Appellant/Cross-Respondent, v. RICHARD L. LEVINE, Defendant-Respondent/Cross-Appellant.
Sarah B. Biser, appellant/cross-respondent pro se. Law Offices of Jill Anne LaZare, LLC, attorneys for respondent/cross-appellant (Jill Anne LaZare, on the briefs).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Reisner, Leone and Whipple. On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Union County, Docket No. FM-20-350-98. Sarah B. Biser, appellant/cross-respondent pro se. Law Offices of Jill Anne LaZare, LLC, attorneys for respondent/cross-appellant (Jill Anne LaZare, on the briefs). PER CURIAM
Plaintiff Sarah B. Biser and defendant Richard L. Levine agreed to arbitrate their divorce disputes. We affirm the trial court's order to the extent it confirms the arbitration decision, but we reverse its voiding of the arbitrator's order that defendant contribute to their daughter's graduate education, and its grant of counsel fees.
I.
Plaintiff and defendant are both attorneys. They married in 1984, and had three children: an older daughter in 1987; a son in 1989; and a younger daughter in 1992. Plaintiff filed for divorce in 1996. After a thirteen-day trial, a dual judgment of divorce was entered in 1999. Thereafter, the parties engaged in a high volume of litigation, resulting in thirty orders from eight different judges.
In 2007, the parties filed motions and cross-motions in the Family Part. In a consent order filed on February 10, 2009, the parties agreed to arbitrate their issues concerning alimony, child support, and "[a]llocation of expenses for college and graduate/professional school for the three children of the marriage."
The consent order detailed that the parties agreed to enter into arbitration under the New Jersey Uniform Arbitration Act (Act), N.J.S.A. 2A:23B-1 to -32. They agreed to appoint a retired trial judge as arbitrator. They also agreed that the arbitrator's decision would be reviewable by a retired Appellate Division judge. Subject to such review, the parties agreed that they would be bound by the arbitrator's decision.
The parties then engaged in over three years of arbitration from 2009 to 2012, during which the arbitrator issued more than ten letter opinions and five orders. The arbitrator held a plenary hearing on thirteen days between January to June 2010.
We acknowledge that the arbitrator's decisions were not judicial orders or opinions; we use the terms "letter opinion" and "order" only to reflect the titles in which the arbitrator gave those documents.
In his first order on July 21, 2009, the arbitrator decided that, pending the conclusion of the plenary hearing, "[e]ach party will be responsible for 50% of the college related costs" of the upcoming year of the son's college education and the older daughter's upcoming "first year in graduate school." The order required defendant to contribute to the "graduate school expenses" of the older daughter. The letter opinion also noted that "[d]efendant has acknowledged his obligation to contribute to his children's college (and possibly graduate school) expenses," and that he had "the ability to pay those expenses."
In a January 22, 2010 letter opinion, the arbitrator noted that the older daughter was almost twenty-three, was earning about $42,000 per year, and was not a full-time student. In a January 22, 2010 order, the arbitrator decided, without prejudice, that the older daughter "is currently emancipated" and "[c]hild support is hereby reduced by one-third[.]"
After the plenary hearing, the arbitrator issued his August 24, 2011 letter opinion, memorialized in an October 6, 2011 order. The arbitrator terminated defendant's alimony obligation effective July 1, 2007; ended defendant's life insurance obligation; and retroactively increased defendant's monthly child support obligation to $7500 per month, effective July 1, 2007.
Also in that August 24, 2011 letter opinion, the arbitrator noted that the older daughter became employed full-time in September 2009, and ruled that "[a]s a matter of fairness, [the older daughter] will be deemed emancipated effective October 1, 2009." The arbitrator ordered that child support would be reduced by one-third to $5000 per month "as of October 1, 2009 as the result of the emancipation of [the older daughter]." In the same letter opinion, the arbitrator ruled that "[d]efendant shall be responsible for 50% of the graduate school related expenses for [the older daughter] and [the son]." The arbitrator reasoned that, "[c]onsidering the graduate degrees that these parents have, their equal obligation to pay for the expenses directly related to graduate school will continue."
In the October 6, 2011 order, the arbitrator repeated that the older daughter was emancipated as of October 1, 2009. In the same order, the arbitrator ordered that "the plaintiff and the defendant shall each pay fifty (50%) percent of the expenses directly related to college and graduate school of the three (3) children of the marriage," retroactive to the first semesters in college of the older daughter and the son.
The arbitrator included a paragraph in both the August 24, 2011 letter opinion and the October 6, 2011 order, requiring the two daughters, who had no relationship with defendant, to communicate with defendant "[i]f they expect the defendant to contribute to their graduate school expenses." He included the same paragraph in the Final Order in Arbitration dated July 18, 2012 (arbitrator's final order), as Paragraph 19:
19. Both [the older daughter] and [the younger daughter] have an obligation to communicate with the defendant on some level to keep him informed of what is happening in their lives. If they expect the defendant to contribute to their graduate school expenses, the defendant is entitled to nothing less and in the future he is to be consulted in advance and not confronted with decisions already made.
In the arbitrator's final order, the arbitrator made clear that his prior orders remained in full force and effect and were incorporated therein. The arbitrator defined college and graduate school expenses; and reaffirmed defendant's obligation to pay 50% of graduate school expenses, even as he noted that the older daughter remained emancipated.
Both parties appealed the arbitrator's final order to the appellate arbitrator, a retired Appellate Division judge. In his eighty-page November 8, 2013 opinion, and in his December 17, 2013 Final Order On Arbitration Appeal (final arbitration award), the appellate arbitrator affirmed the arbitrator's final order in all respects except Paragraph 19. The appellate arbitrator struck Paragraph 19 from the order. In the final arbitration award, the appellate arbitrator also denied defendant's motion for reconsideration.
The day before the final arbitration award, defendant moved in the Family Part to emancipate the son and retroactively terminate child support for him. Plaintiff cross-moved to find defendant in violation of the final arbitration award because he had failed to pay his 50% share of the older daughter's first-term medical school expenses.
On January 10, 2014, the Family Part granted defendant's motion to emancipate the son as of August 1, 2013, by the consent of the parties, and ordered plaintiff to pay $672 in counsel fees for forcing defendant to file the motion. The court also ordered defendant to pay one half of the older daughter's medical school expenses. Defendant did not argue he should not be responsible for the older daughter's graduate school expenses because she was emancipated in 2009, but the court mentioned that issue.
Defendant moved for reconsideration, raising that issue for the first time. Meanwhile, plaintiff had moved to confirm the final arbitration award. On March 11, 2014, the Family Part, reconsidering its January 10 ruling, found "that the Arbitrator and Appellate Arbitrator exceeded their authority and violated public policy if they required the parties to pay for [the older daughter's] medical school expenses as [the older daughter] was emancipated in 2009." The court further vacated the final arbitration award to the extent it "could be interpreted to obligate the parties to pay higher education costs for an emancipated child." The court ordered that the final arbitration award be confirmed in all other respects. The court specifically rejected defendant's motion to reinstate Paragraph 19.
Plaintiff appealed the Family Part's orders of January 10, 2014, and March 11, 2014. Defendant cross-appealed the March 11, 2014 order.
II.
"The public policy of this State favors arbitration as a means of settling disputes that otherwise would be litigated in a court." Badiali v. N.J. Mfrs. Ins. Grp., 220 N.J. 544, 556 (2015). This "strong public policy favors . . . . using arbitration in family litigation." Minkowitz v. Israeli, 433 N.J. Super. 111, 131-32 (App. Div. 2013) (citing Faherty v. Faherty, 97 N.J. 99 (1984)). "'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 for litigation.'" Fawzy v. Fawzy, 199 N.J. 456, 468 (2009) (citation omitted).
Thus, "courts grant arbitration awards considerable deference." Borough of East Rutherford v. East Rutherford PBA Local 275, 213 N.J. 190, 201 (2013). "'[T]o ensure finality, as well as to secure arbitration's speedy and inexpensive nature, there exists a strong preference for judicial confirmation of arbitration awards.'" Ibid. (citation omitted). "'[A]rbitration should spell litigation's conclusion, rather than its beginning.'" Ibid. (citation omitted).
The Family Part's "scope of review of an arbitration award is narrow." Fawzy, supra, 199 N.J. at 470. "[T]he matter is subject to review under the narrow provisions of New Jersey's version of the Uniform Arbitration Act." Id. at 462; see N.J.S.A. 2A:23B-23(a).
"'As the [Family Part's] decision to vacate an arbitration award is a decision of law, this court reviews the denial of a motion to vacate an arbitration award de novo.'" Minkowitz, supra, 433 N.J. Super. at 136 (citation omitted). We must hew to that standard of review.
III.
Plaintiff appeals the Family Part's decision vacating the final arbitration award to the extent the arbitrator ordered defendant to pay 50% of the graduate school expenses of the parties' children, including the older daughter, despite emancipation. We first address defendant's contention that the arbitrator did not issue such an order.
Defendant notes that the arbitrator initially ordered him to pay 50% of the older daughter's graduate school expenses on January 29, 2009, before she was emancipated. However, as set forth above, the arbitrator thereafter repeatedly ordered defendant to pay the graduate school expenses of all three children, including the older daughter, even though she had been emancipated.
Defendant argues that the arbitrator limited his obligation to contribute to graduate school for unemancipated children. Defendant cites the December 14, 2011 letter opinion, where the arbitrator expressed disappointment that the parties "continue their battles over how much each one is responsible to pay for the college expenses of their unemancipated children," and urged them to agree on a protocol. That phraseology simply addressed the issue at hand: the parties' inability to agree on college expenses of the parties' two unemancipated children "going forward." The arbitrator did not rule that defendant need not contribute to the older daughter's future graduate school expenses.
Defendant also contends that the arbitrator limited his obligation to contribute to graduate school expenses only of children for whom he was paying child support. Defendant cites the final arbitration award's ruling that items such as bar bills and clothing were not included in the definition of "college related expenses," and that defendant was "not required to contribute to them separately from his child support obligation." The arbitrator first made that ruling in his October 19, 2011 letter opinion, just after his October 6, 2011 order that defendant had to pay 50% of all three children's college expenses retroactively, dating back to when the older daughter entered college. Again, the arbitrator was addressing the issue at hand: the parties' bickering over what was included in those "college related expenses." That letter opinion did not mention graduate school expenses, let alone limit defendant's obligation to contribute to them. The final arbitration order's addition that "[t]he same definition applies to 'graduate school expenses'" appears to have been added to prevent the parties' bickering from spreading to contribution for graduate school expenses, rather than to curtail which children could receive such contributions.
Moreover, the Family Part believed that the final arbitration award "could be interpreted to obligate the parties to pay higher education costs for an emancipated child." Indeed, the court initially ordered defendant to pay 50% of the older daughter's medical school expenses. Thereafter, the court vacated that portion of the final arbitration award for three reasons: "the Arbitrator and Appellate Arbitrator exceeded their authority and violated public policy" and that such a ruling was "contrary to case law." Therefore, we reject defendant's argument that the arbitration did not order that defendant pay graduate school expenses for the older daughter despite her emancipation. We turn to examining the three reasons the Family Part gave for its decision to vacate that arbitration order.
A.
First, the Family Part ruled that the arbitrator and appellate arbitrator exceeded their authority. A party may seek to vacate an award if "an arbitrator exceeded the arbitrator's powers." N.J.S.A. 2A:23B-23(a)(4). This provision of the Act is essentially identical to the language in the earlier-enacted Arbitration Act, N.J.S.A. 2A:24-1 to -11, which provided that an arbitration award could be vacated "[w]here the arbitrators exceeded . . . their powers." N.J.S.A. 2A:24-8(d). Thus, the case law on the earlier act's language is pertinent, though the acts' provisions differ in other respects, see Kimm v. Blisset, LLC, 388 N.J. Super. 14, 31 (App. Div. 2006), certif. denied, 189 N.J. 428 (2007).
"The scope of an arbitrator's authority depends on the terms of the contract between the parties." Scotch Plains-Fanwood Bd. of Educ. v. Scotch Plains-Fanwood Educ. Ass'n, 139 N.J. 141, 149 (1995). "[A]n arbitrator may not exercise greater authority than the contract confers." Ibid. Thus, "an arbitrator exceeds his or her 'authority by disregarding the terms of the parties' agreement,'" Borough of East Rutherford, supra, 213 N.J. at 203 (citation omitted), "rewrit[ing] the contract for the parties," Cty. Coll. of Morris Staff Ass'n. v. Cty. Coll. of Morris, 100 N.J. 383, 391 (1985), or "'decid[ing] a matter not even submitted to'" the arbitrator by the parties, Tretina Printing, Inc. v. Fitzpatrick & Assocs., 135 N.J. 349, 358 (1994) (citation omitted).
Here, the parties' contract — the consent order — specifically authorized the arbitrator to decide the "[a]llocation of expenses for college and graduate/professional school for the three children." Nothing in the consent order hinged the arbitrability of that issue on whether the children were emancipated or unemancipated. Thus, neither the arbitrator nor the appellate arbitrator exceeded his authority or power by issuing an award requiring defendant to pay 50% of the children's graduate school expenses for the older daughter and the other children.
B.
Second, the Family Part ruled that the arbitrator and appellate arbitrator "violated public policy" by finding that defendant was obligated to pay the graduate school expenses for an emancipated child. No such ground for vacating an award appears in N.J.S.A. 2A:23B-23, or in N.J.S.A. 2A:24-8 of the earlier-enacted Arbitration Act. However, under the earlier act, courts have ruled that in addition to the statutory grounds, "'a court may vacate an arbitration award for public-policy reasons.'" Weiss v. Carpenter, Bennett & Morrissey, 143 N.J. 420, 430 (1996) (citation omitted). The same public policy exception applies under the Uniform Arbitration Act. See Minkowitz, supra, 433 N.J. Super. at 135 n.2 (citing Weiss, supra, 143 N.J. at 443).
Under the public policy exception, a court may vacate an award only if it "plainly violates a clear mandate of public policy." N.J. Tpk. Auth. v. Local 196, 190 N.J. 283, 294 (2007) (citing Weiss, supra, 143 N.J. at 443). "[R]eflecting the narrowness of the public policy exception, that standard for vacation will be met only in rare circumstances." Borough of East Rutherford, supra, 213 N.J. at 202. "[E]ven when the award implicates a clear mandate of public policy, the deferential 'reasonably debatable' standard still governs. Thus, '[i]f the correctness of the award, including its resolution of the public-policy question, is reasonably debatable, judicial intervention is unwarranted.'" Id. at 203 (citations omitted). The "'[p]ublic policy sufficient to vacate an award must be embodied in legislative enactments, administrative regulations, or legal precedents, rather than based on amorphous considerations of the common weal.'" Borough of Glassboro v. Fraternal Order of Police, Lodge No. 108, 197 N.J. 1, 10 (2008) (citation omitted).
For example, the Supreme Court in Faherty "concluded that a combination of public-policy reasons and a mistake of law warranted judicial vacation of the arbitration award . . . . because it granted one spouse alimony after she had remarried." Tretina, supra, 135 N.J. at 365 (discussing Faherty, supra, 97 N.J. at 112-13). N.J.S.A. 2A:34-25 provided that "[i]f after the judgment of divorce or dissolution a former spouse shall remarry . . . , permanent and limited duration alimony shall terminate as of the date of remarriage[.]" "In enacting that basis or condition for discontinuing alimony, the Legislature articulated a public policy that the legal obligation of the supporting spouse is superseded and ends on the remarriage of the dependent spouse." Konzelman v. Konzelman, 158 N.J. 185, 195 (1999).
By contrast, defendant is unable to cite any statute, regulation, or binding New Jersey precedent establishing a clear mandate of public policy against ordering a parent to support a child. See Faherty, supra, 97 N.J. at 109-10 (ruling that "it is always in the child's best interest to have as much support as possible").
Indeed, under Newburgh v. Arrigo, 88 N.J. 529 (1982), "New Jersey has a strong public policy, expressed in legislation, N.J.S.A. 2A:34-23a(5), and in the common law, favoring parental responsibility for the reasonable costs of appropriate higher education, irrespective of the child's having reached the legal age of majority." Philipp v. Stahl, 344 N.J. Super. 262, 293 (App. Div. 2001) (Wecker, J., dissenting), rev'd on dissent, 172 N.J. 293 (2002). In Newburgh, our Supreme Court held that, "in appropriate circumstances, the privilege of parenthood carries with it the duty to assure a necessary education for children." Newburgh, supra, 88 N.J. at 543. The Court added that "[i]n general, financially capable parents should contribute to the higher education of children who are qualified students. In appropriate circumstances, parental responsibility includes the duty to assure children of a college and even of a postgraduate education such as law school." Id. at 544.
Defendant, like the Family Part, cites Gac v. Gac, 186 N.J. 535 (2006). Gac reiterated that "[i]n general, a parent's responsibility to pay child support terminates when the child is emancipated." Id. at 542 (citing Newburgh, supra, 88 N.J. at 542-43). However, Gac did not hold that it violates a clear mandate of public policy to order a parent to contribute to the graduate school expenses of an emancipated child.
Further, "nothing in the law, and no principle of public policy prevents a parent from freely undertaking to support a child beyond the presumptive legal limits of parental responsibility." Dolce v. Dolce, 383 N.J. Super. 11, 18 (App. Div. 2006). "When one or both parents have agreed to undertakings advantageous to a child beyond that minimally required, the public policy favoring stability of arrangements usually counsels against modification." J.B. v. W.B., 215 N.J. 305, 327 (2013) (citing Dolce, supra, 383 N.J. Super. at 20, and Smith v. Smith, 72 N.J. 350, 360 (1977)). Here, the parties agreed in the consent order that the arbitrator should decide the "[a]llocation of expenses for . . . graduate/professional school for the three children." Though the parties did not expressly agree whether that would include emancipated children, the parties' broad agreement cautions against finding that the arbitrator violated public policy.
We draw further caution from the fact that the arbitrator's January 22, 2010 and August 24, 2011 orders emancipating the older daughter were decided in the context of ending defendant's monthly child support payments to plaintiff. A parent may be required to contribute to a child's higher education expenses even if the parent is no longer obligated to make monthly child support payments to the other parent. See Jacoby v. Jacoby, 427 N.J. Super. 109, 118-19 (App. Div. 2012). Moreover, an order emancipating a child does not necessarily bar a subsequent order requiring parental contribution to higher education. See Wanner v. Litvak, 179 N.J. Super. 607, 612 (App. Div. 1981) (citing Sakovits v. Sakovits, 178 N.J. Super. 623 (Ch. Div. 1981)).
The same was true of the arbitrator's discussion in his December 14, 2011 letter opinion about plaintiff's premature request to "unemancipate" the older daughter so defendant would have to resume paying child support for the older daughter if she became a full-time graduate student. The arbitrator took "no position on that issue at this time" because he "consider[ed] the issue to be premature."
Finally, defendant does not claim he will be unduly burdened financially if he is required to contribute to the older daughter's graduate school expenses. Indeed, he expressly acknowledged that he had the ability to pay those expenses.
In any event, we need not and do not rule that a court may order a parent to contribute to the graduate school expenses of an emancipated child. Nor need we agree with the arbitrator's ruling. See Weiss, supra, 143 N.J. at 443. Because the arbitrator's award "is reasonably debatable, judicial intervention is unwarranted." Ibid.
C.
Third, the Family Part ruled that obligating defendant to pay the graduate school expenses for an emancipated child was "contrary to case law." Normally, "unless agreed by the parties," in a private-sector arbitration such as this, "the appropriate judicial scope of review does not encompass errors of law." Empire Fire & Marine Ins. Co. v. GSA Ins. Co., 354 N.J. Super. 415, 421 (App. Div. 2002). "Thus, even assuming [the arbitrator] made a mistake of law," it "would provide no basis to overturn or modify his award." Cap City Prods. Co., Inc. v. Louriero, 332 N.J. Super. 499, 504 (App. Div. 2000).
Nonetheless, "parties may agree to a broader review than provided for by the default provisions in the . . . Act." Minkowitz, supra, 433 N.J. Super. at 135 (quoting Fawzy, supra, 199 N.J. at 482 n.5). Indeed, N.J.S.A. 2A:23B-4(c) provides that "nothing in this act shall preclude the parties from expanding the scope of judicial review of an award by expressly providing for such expansion in a record." "This language was included in the statute to incorporate the principles enunciated in Tretina[.]" Hogoboom v. Hogoboom, 393 N.J. Super. 509, 514-15 (App. Div. 2007). In Tretina, our Supreme Court adopted the principles expressed by Chief Justice Wilentz 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.However, the parties' "agreement must 'accurately reflect the circumstances under which a party may challenge the award and the level of review agreed upon.'" Minkowitz, supra, 433 N.J. Super. at 135 (quoting Fawzy, supra, 199 N.J. at 482 n.5).
[Tretina, supra, 135 N.J. at 358 (quoting Perini Corp. v. Greate Bay Hotel & Casino, Inc., 129 N.J. 479, 548-49 (1992) (Wilentz, C.J., concurring).]
Here, the parties agreed in the consent order that "[t]he arbitrator's award shall be made pursuant to the laws of the State of New Jersey." Thus, the consent order specified the law to be applied by the arbitrator. However, the consent order was "entirely silent" regarding the standard by which the courts should review the award. See High Voltage Eng'g Corp. v. Pride Solvents & Chem. Co. of N.J., Inc., 326 N.J. Super. 356, 363 (App. Div. 1999). Nowhere did the parties agree that the arbitrator's award "may be reversed [by a court] for mere errors of New Jersey law." Tretina, supra, 135 N.J. at 358 (quoting Perini, supra, 129 N.J. at 549 (Wilentz, C.J., concurring)). Clearly, "the Chief Justice contemplated that to expand appealable arbitration issues would require more specific language than the parties used in this dispute" to determine the judicial standard of review. See Allstate Ins. Co. v. Universal Underwriters Ins. Co., 330 N.J. Super. 628, 632, 634 (App. Div. 2000).
Absent an agreement by the parties to an expanded standard of judicial review, courts must apply the standard of judicial review normally applicable to private arbitration, under which a court may "not vacate an award even though it might be based on a mistake of law." See Tretina, supra, 135 N.J. at 357. Thus, it was inappropriate for the Family Part to vacate the final arbitration award because it was "contrary to case law." See also Perini, supra, 129 N.J. at 542 (Wilentz, C.J., concurring); ("'undue means' has nothing to do with errors of law"); cf. Minkowitz, supra, 433 N.J. Super. at 150.
Because we reject all three reasons given by the Family Part, we reverse its March 11, 2004 order to the extent that it vacated the final arbitration award's requirement that defendant pay 50% of the graduate school expenses of the parties' three children. Therefore, we remand to that court for the sole purpose of entering an order requiring defendant to pay his 50% share of the older daughter's "graduate school expenses" as sought in plaintiff's motion and as defined in the final arbitration award.
As a result, we need not reach plaintiff's argument that defendant waived this issue by not raising it before the arbitrator or appellate arbitrator.
IV.
Defendant claims the trial court erred in confirming the final arbitration award because the appellate arbitrator removed Paragraph 19 from the arbitrator's final order.
Defendant argued to the arbitrator that, in determining defendant's obligations to contribute to higher education, he should take into account that the two daughters had no relationship with him. However, when it became clear that the children would have to testify if defendant pursued that argument, he agreed to drop that argument.
In a March 19, 2010 letter opinion, the arbitrator, quoting Newburgh, supra, 88 N.J. at 545, acknowledged that "'the child's relationship to the paying parent . . .' was a relevant factor in evaluating the claim for contribution toward the cost of higher education." However, because defendant had agreed that such issues "will not be considered in determining his responsibility for college costs," the arbitrator ruled that "the children will not testify (or be interviewed by [the arbitrator]) and no other witnesses (including [plaintiff]) will testify about these issues."
In his August 24, 2011 letter opinion, the arbitrator reiterated, as a result of this earlier "stipulation[,]" that "[d]efendant's relationship with the children" was not relevant and "has not been considered by me in my determination of any of the issues discussed in this letter." In that same letter opinion, the arbitrator included a paragraph requiring the daughters "to communicate with defendant on some level to keep him informed of what is happening in their lives" if "they expect the defendant to contribute to their graduate school expenses." That paragraph was repeated as Paragraph 19 in the arbitrator's final order.
The appellate arbitrator struck Paragraph 19 from the arbitrator's final order because: the relationship issue had been removed from the case by defendant's stipulation; based on that stipulation, plaintiff had foregone presenting the children's testimony; and requiring communication was unfair to the children, who were not represented at the arbitration proceedings.
The parties agreed in the consent order that "[t]he Arbitrator's decision, both as to Findings of Facts and Conclusions of Law, shall be reviewable by" the appellate arbitrator, who would enter a "confirmed, modified, or vacated Award." Because the appellate arbitrator was another arbitrator to whom parties gave the power to review the facts and the law, defendant must show that the appellate arbitrator's deletion of Paragraph 19 can be vacated pursuant to one of the limited grounds in N.J.S.A. 2A:23B-23(a).
Defendant argues that the appellate arbitrator exceeded his authority because a court reviewing an arbitration award may vacate an arbitration award only where there has been fraud or similar wrongdoing. However, the appellate arbitrator was not a court. Nothing in the consent order, including the provision that "the Arbitrator's award shall be made pursuant to the law of the State of New Jersey," imposed on the appellate arbitrator the restrictive standard preventing courts from vacating an arbitrator's decision only for "corruption, fraud, or other undue means." N.J.S.A. 2A:23B-23(a)(1). Rather, the appellate arbitrator reasonably applied the standards of review under New Jersey law of an appellate court reviewing a Family Part judge's discretionary, factual, and legal decisions.
Defendant argues that the appellate arbitrator failed to realize that the arbitrator intended to remove the relationship issue only for college costs. However, the arbitrator stated that, based on defendant's stipulation to avoid testimony on the issue, he was not considering the girls' relationship with defendant in any of his decisions in his August 24, 2011 letter opinion, which addressed graduate school.
Although "the child's relationship to the paying parent" is one of the "relevant factors" in "evaluating the claim for contribution toward the cost of higher education," Newburgh, supra, 88 N.J. at 545 (emphasis added), a "relationship between a non-custodial parent and a child is not required," Gac, supra, 186 N.J. at 546.
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Defendant also argues that Paragraph 19 merely imposed a reasonable communication requirement. However, binding precedent does not require that the child communicate with the parent. Rather, "the parent or child should communicate with the other parent concerning the many issues inherent in selecting a college. At a minimum, a parent or child seeking contribution should initiate the application to the court before the expenses are incurred." Gac, supra, 186 N.J. at 546-47 (emphasis added).
In any event, defendant has failed to meet N.J.S.A. 2A:23B-23(a)'s stringent standards for judicial intervention to overturn the final arbitration award. Defendant cannot meet those standards by arguing the reasonableness of the arbitrator's decision to include Paragraph 19, the incorrectness of its removal by the appellate arbitrator, or the equity of requiring efforts at reconciliation from a child seeking a parent's financial assistance, see Black v. Black, 436 N.J. Super. 130, 140-48 (Ch. Div. 2013). Thus, the Family Part properly upheld the final arbitration award despite the appellate arbitrator's removal of Paragraph 19.
V.
Defendant argues that the Family Part abused its discretion in denying his requests that (1) plaintiff reimburse him for his alleged $8752.20 overpayment for higher education costs, and (2) he be furnished with information on any offsets by scholarships, loans, or work programs reducing the costs of the children's higher education. Defendant's arguments are without sufficient merit to warrant discussion. R. 2:11-3(e)(1)(E). Also, defendant withdrew his appeal of the court's confirmation of the final arbitration award's increase in child support.
VI.
Finally, plaintiff challenges the Family Part's award of counsel fees. "Under Rule 5:3-5(c), the trial judge, in her discretion, may award counsel fees in a matrimonial action." J.E.V. v. K.V., 426 N.J. Super. 475, 492 (App. Div. 2012). "An appellate court will disturb a trial court's determination on counsel fees only on the 'rarest occasions, and then only because of a clear abuse of discretion.'" Ibid. (quoting Rendine v. Pantzer, 141 N.J. 292, 317 (1995)).
The Family Part awarded counsel fees because plaintiff declined to sign a consent order emancipating the son, forcing defendant to file a motion that she then did not oppose. The court ordered plaintiff to pay $672 — 20% of defendant's request for $3360 in counsel fees — to defendant's counsel Jill Anne LaZare, who is also defendant's wife.
Plaintiff argues that awarding fees to a party's attorney-spouse violates the principles set forth in Segal v. Lynch, 211 N.J. 230 (2012). In Segal, our Supreme Court reversed an award of counsel fees under Rule 5:3-5(c) to an attorney who represented herself. Id. at 264. The Court found such denial of fees "is consistent with our broader approach to the treatment of those who represent themselves": "We see no basis in this record on which to advantage . . . the self-represented attorney, by permitting her to be compensated for her time expended in securing relief when others who represent themselves would be precluded from being compensated for their time." Ibid. However, LaZare is a non-party representing defendant.
Our Supreme Court in Segal found "the reasoning of those precedents that reject counsel fee awards to attorneys who represent themselves to be persuasive." Id. at 264. The Court cited the United States Supreme Court, which had "concluded that an attorney representing himself or herself cannot claim" counsel fees, primarily to "encourage[e] all litigants to engage the services of independent counsel" who can "'mak[e] sure that reason, rather than emotion, dictates the proper tactical response.'" Id. at 263 (quoting Kay v. Erhler, 499 U.S. 432, 437-38, 111 S. Ct. 1435, 1437, 113 L. Ed. 2d 486, 492-93 (1991)). However, "[t]he courts to have addressed this question, though few in number, have uniformly held that Kay should not be extended to attorney-spouses." Rickley v. Cty. of L.A., 654 F.3d 950, 956 (9th Cir. 2011). We agree that there is "no reason to presume that plaintiffs who are represented by their attorney-spouses will be 'deprived of the judgment of an independent third party.'" Ibid. (quoting Kay, supra, 499 U.S. at 437, 111 S. Ct. at 1438, 113 L. Ed. 2d at 492-93).
However, we are persuaded that another of Segal's rationales applies here. Our Supreme Court cited our decision holding "that counsel proceeding pro se cannot recover attorney's fees for frivolous litigation because Rule 1:4-8 'specifically permits only the reimbursement of attorneys' fees and expenses incurred by a party. It does not permit the reimbursement of a party's loss of income in dealing with frivolous litigation.'" Segal, supra, 211 N.J. at 262 (quoting Alpert, Goldberg, Butler, Norton & Weiss, P.C. v. Quinn, 410 N.J. Super. 510, 545 (App. Div. 2009), certif. denied, 203 N.J. 93 (2010)).
Rule 5:3-5(c) simply states that "the court in its discretion may make an allowance" of fees. However, Rule 5:3-5(c) requires the court to consider:
(1) the financial circumstances of the parties; (2) the ability of the parties to pay their own fees or to contribute to the fees of the other party; (3) the reasonableness and good faith of the positions advanced by the parties both during and prior to trial; (4) the extent of the fees incurred by both parties; (5) any fees previously awarded; (6) the amount of fees previously paid to counsel by each party; (7) the results obtained; (8) the degree to which fees were incurred to enforce existing orders or to compel
discovery; and (9) any other factor bearing on the fairness of an award.
[Ibid. (emphasis added).]
Thus, the majority of the factors examine what fees have been "incurred," the amount of those fees a party has "paid" and has the ability "to pay," and the financial resources to pay such fees. Ibid. Nothing in Rule 5:3-5(c) suggests that a party may be recompensed for imagined "fees" that have not been incurred, or supposed "fees" that there is no actual obligation to pay. See Alpert, supra, 410 N.J. Super. at 545 (fees are "incurred" if there is an obligation to pay).
Here, defendant does not claim that he had paid fees, or incurred an obligation to pay fees, to LaZare. The court was sure defendant was not paying LaZare. Defendant cannot recover "'fees that [he] is not obligated to pay,'" that he has not paid, and that he will never pay. See ibid. (citation omitted).
The Family Part and LaZare imputed fees based on the income LaZare lost because she could have spent her time working for other clients instead. However, like Rule 1:4-8, nothing in Rule 5:3-5(c) permits the reimbursement of loss of income. See Alpert, supra, 410 N.J. Super. at 545. Under the common-sense reading of that rule, a party "is not entitled to fees unless they are actually incurred as opposed to imputed." See id. at 547. Thus, we reverse the Family Part's award of counsel fees.
Affirmed in part, reversed in part, and remanded to the trial court for the sole purpose of entering an amended order confirming the arbitration award in its entirety and vacating the grant of counsel fees. We do not retain jurisdiction. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION