49 A.D.2d 254 | N.Y. App. Div. | 1975
This appeal presents the question of the authority of an arbitrator to reduce appellant husband’s alimony obligation provided for the respondent wife in a separation agreément. The husband appeals from two orders, the first of which vacated and remitted for rehearing an arbitration award which, in part, modified downward the amount of alimony fixed under the agreement. The second order denied the husband’s motion to renew his application to confirm the award.
In 1965 the parties executed a separation agreement containing a nonmerger clause and shortly thereafter the husband obtained a Mexican divorce decree which incorporated by reference the nonmerged agreement. By its terms the husband agreed to pay to the wife a base amount of $1,217 per month, plus $200 per month for the support of the parties’ two children. Other provisions were made for medical, dental and educational expenses and for the conveyance of the family residence to the wife. A further provision was made for payment by the husband of "one-half of all reasonable tuition expense incurred by the wife for the purpose of training and preparing herself for gainful occupation or employment.” The basic amount of alimony was subject to modification under a cost-of-living adjustment, and alimony payments to the wife were to continue only until such time as she might remarry.
Paragraph 20 of the agreement, the construction of which is determinative of this appeal, is the arbitration clause which
In November, 1972 the husband unsuccessfully petitioned Family Court, under section 466 of the Family Court Act, to reduce the alimony payment on the ground that circumstances had changed since the decree; that his former wife had secured gainful employment and was earning approximately $13,000 per year. On appeal to this court we affirmed the Family Court’s refusal to modify the alimony (Swartz v Swartz, 43 AD2d 1012).
On October 19, 1973 the wife sought arbitration of several disputes, primarily her claim for arrearages in alimony payments. On November 21, 1973 the husband, through his attorneys, responded by letter requesting arbitration of additional issues, including a demand that there be a downward revision in alimony because of the wife’s earnings. A hearing was had and an award made on March 22, 1974, one month after this court’s affirmance of the Family Court’s refusal to reduce alimony. The award resolved the wife’s claims, which are only tangentially relevant,
The main issue here is whether the arbitrator exceeded his power when he awarded a downward adjustment of alimony. CPLR 7511 (subd [b], par 1, cl [iii]) provides that an award may be vacated when “an arbitrator * * * exceeded his power or so imperfectly executed it that a final and definite award upon the subject matter submitted was not made”. Special Term reasoned that when the arbitrator reduced the alimony he
There are, of course, cases where the arbitrator’s award should be vacated; where the construction of a document is "completely irrational” (Matter of National Cash Register Co. [Wilson], 8 NY2d 377, 383) "or where the document expressly limits or is construed to limit the powers of the arbitrators” (Lentine v Fundaro, 29 NY2d 382, 385). Matter of Granite Worsted Mills (Cowen) (25 NY2d 451, 456) is illustrative of this principle. That case involved arbitration of a claim that a seller had delivered defective goods to a commercial buyer. The sale contract provided that the buyer’s damages could not exceed the difference in value between the goods specified and the goods delivered. Yet the arbitrator awarded the buyer damages several times greater than the total purchase price of the goods. The court reasoned (p 456) that: "Where it is clear from the face of the award itself * * * that the arbitrator has included an element of damages specifically excluded by the
Although the paragraph covering the amount to be paid to the wife may seem at first reading an effort to except alimony from arbitration, that provision must be read in the context in which it is used. It appears in a recitation of an elaborate cost-of-living adjustment scheme. It states that "[adjustments will be made to reflect the percentage-wise increase over 109 of the Revised Consumers Price Index, provided, however, that the monthly alimony payments shall under no circumstances be less than * * * $1,217.00”. The arbitrator was justified in his consideration of the entire agreement to conclude that this provision placed a floor on cost-of-living adjustments but did not limit his right to consider the reasonableness and fairness of the alimony provision in the light of all the circumstances.
The arbitration provision in the instant case is extremely broad; "[i]n the event the parties are unable to agree in respect of any matter * * * concerning which their mutual agreement is required or in the event that any claim, dispute, controversy or misunderstanding* * * the enforcement, interpretation or meaning of any part thereof, such matter shall be arbitrated” (emphasis supplied). Nowhere in this 16-page, detailed, and carefully drafted agreement, described by Special Term as "a most comprehensive document”, is there a provision excluding from the powers of the arbitrator his consideration of the reasonableness of the alimony provision.
In the domestic relations field courts have repeatedly approved arbitration as a proper forum for the fixing of alimony or support payments under valid separation agreements. (See Hirsch v Hirsch, 37 NY2d 312; Schneider v Schneider, 17 NY2d 123; Matter of Robinson, 296 NY 778; Kleiner v Sanjenis, 46 AD2d 617; Storch vStorch, 38 AD2d 904.) In Sperling v Sperling (26 AD2d 827, 828), which contained an arbitration clause similar to the case at bar ("any controversy or claim arising out of or relating to this contract shall be settled by arbitration”), the Second Department held that this general arbitration clause was sufficient in and of itself to authorize the arbitrator to change the alimony by reason of a change in
What is the equitable result of the arbitrator’s decision? If we exclude from the amount to be paid to the wife under the agreement the $200 per month for the support of the children, the wife’s annual payments are $14,604. If we then reduce that amount by one third of the wife’s earnings of $13,000, as ordered by the arbitrator, she would receive from the husband $10,271, which when added to her $13,000 income would make her total income $23,271 per year—$8,667 more than she now receives under the agreement. From this point of view the arbitrator’s award surely does equity and cannot be said to be "irrational”.
Special Term further concluded, as an alternative rationale for its decision to vacate, that the husband had waived his right to arbitrate his demand to reduce the contractual alimony payments by previously petitioning Family Court to modify the alimony provided for in the agreement and divorce decree. We do not agree with this determination. When a separation agreement with a nonmerger clause is incorporated in a divorce decree there are two legal theories on which the wife may proceed against the ex-husband. She may seek enforcement or modification of the decree (see Family Ct Act, § 466), or she may commence a contract action for breach of the nonmerged separation agreement (Goldman v Goldman, 282 NY 296, 303-304, supra). Similarly,. the husband could seek modification of the divorce decree (see Swartz v Swartz, 43 AD2d 1012, supra), or attempt to reform, rescind, nullify or modify his contractual obligations (see Hirsch v Hirsch, 37 NY2d 312, supra). It is well settled that courts cannot alter the contractual obligations of the nonmerged separation agreement unless the wife is in danger of becoming a public charge (McMains v McMains, 15 NY2d 283; Gardner v Gardner, 40 AD2d 153, affd 33 NY2d 899). Therefore, because the husband has two concurrent, but separate and distinct obligations, the doctrine of voluntary waiver should not be applied to his efforts to modify those obligations.
Schussel v Schussel (63 NYS2d 380), cited by Special Term in support of its waiver determination, is distinguishable. There the court denied the husband’s motion to compel arbitration on the grounds of laches and waiver. In the instant case, in contrast, the waiver objection is raised after the
Special Term’s order vacating the award should be reversed and the motion to confirm the award should be granted. The appeal from the order denying appellant’s motion to renew his prior motion to confirm is dismissed as academic.
Moule, J. P., Simons and Witmer, JJ., concur.
Order, entered March 12, 1975, unanimously reversed without costs and motion to confirm award granted.
Appeal from order, entered June 27, 1975, unanimously dismissed as academic.
. The arbitrator ordered that arrearages for alimony, reimbursement for hospitalization insurance, child support, and children’s dental expenses be paid by the husband in accordance with a stipulation by the parties. The award also held that the cost-of-living adjustment clause was valid, that the husband had not interfered with his ex-wife’s personal life in violation of the agreement, that the husband had not failed to pay the wife’s medical and dental expenses and that no one had violated the visitation paragraph.