181 A.3d 1025
N.J. Super. Ct. App. Div.2018Background
- Parties (Robert and Debra Curran) agreed by consent order to binding economic arbitration under the New Jersey Arbitration Act for all matrimonial issues; the retainer and referral stated the award was final and only reviewable under the Act.
- A handwritten clause (paragraph 3A), inserted by Debra’s counsel and initialed by both parties, purported to preserve a direct appeal to the Appellate Division "as if the matter was determined by the trial court."
- The arbitrator issued a preliminary award, denied Robert’s reconsideration on most points, and entered a detailed final award; Robert then moved in the Law Division to modify the award, citing paragraph 3A.
- The trial judge found paragraph 3A unenforceable (parties cannot create subject-matter jurisdiction or direct appellate review by agreement), nevertheless performed a full merits review analogous to an appellate review, and confirmed the award.
- On appeal Robert argued paragraph 3A voided the entire arbitration agreement and the award should be vacated; he also raised substantive challenges to alimony and equitable distribution but did not claim fraud, corruption, or statutory vacatur grounds under N.J.S.A. 2A:23B-23.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether paragraph 3A (direct appeal to Appellate Division) is lawful | Paragraph 3A is illegal and, Robert contends, voids the arbitration agreement and proceedings | Debra concedes 3A is illegal but argues the remainder of the arbitration agreement stands | 3A is unenforceable; parties cannot create subject-matter jurisdiction or direct appeals by contract |
| Whether the illegal clause voids the entire arbitration agreement | 3A’s illegality renders the whole agreement and award void | The illegal clause is severable; the primary purpose (binding arbitration under the Act) remains intact | Court severed 3A and enforced the remainder; severance did not defeat the contract’s primary purpose |
| Whether the trial court properly reviewed and confirmed the arbitration award | Robert sought modification and relies on 3A; alternatively sought remand for an appellate-style record | Debra moved to confirm the award; trial judge conducted comprehensive review under the Act and confirmed | Trial judge’s review and confirmation were proper; review under the Act (trial-court forum) is the correct path |
| Whether award should be vacated or modified under the Act | Robert argued arbitrator’s legal errors warranted modification/vacatur | Debra argued no statutory grounds for vacatur and heavy presumption favors enforcement | No statutory vacatur or modification grounds proven; award confirmed |
Key Cases Cited
- Morgan v. Sanford Brown Inst., 225 N.J. 289 (de novo review of arbitration agreement)
- Jacob v. Norris, 128 N.J. 10 (severability test: strike illegal provision only if it defeats contract’s primary purpose)
- Minkowitz v. Israeli, 433 N.J. Super. 111 (strong public policy favoring arbitration and limited judicial intervention)
- Weinstock v. Weinstock, 377 N.J. Super. 182 (parties cannot create subject-matter jurisdiction by agreement)
- Fawzy v. Fawzy, 199 N.J. 456 (arbitration as effective alternative in family litigation)
