This case involves the question of arbitration in the family-court setting. Norman G. Swentor appeals from the family court’s decision to set aside a property division established through binding arbitration. We reverse and remand.
I.
Audrey M. Swentor (the Wife) and Norman G. Swentor (the Husband) agreed to submit to arbitration the property issues arising from their impending divorce. On June 18, 1996, the parties signed a contract with Resolute Systems, Inc., providing for binding arbitration. The contract stated that the award was conclusive as to the issues involved in the arbitration and that the parties “shall be deemed to have consented that judgment upon the arbitration award may be entered in any federal or state court having jurisdiction thereof.”
After a hearing, the arbitrator issued his decision, which awarded the Wife the doll-making and restoration business bought during the marriage but awarded the Husband the marital home, where the doll business was located. Unhappy with the result, the Wife filed a motion to reconsider. The arbitrator denied the motion.
Before the arbitrator denied the Wife’s motion to reconsider, the Wife filed an action in family court seeking, among other things, separate maintenance and support, and equitable distribution of the marital property. The Wife sought to set aside the arbitration award on the ground that the award was “grossly inequitable on its face.” The Husband moved to dismiss the Wife’s action, contending that the arbitration agreement divested the family court of subject matter jurisdiction to apportion the marital property. Thereafter, the Husband filed a motion requesting the family court to confirm the arbitration award. On November 13, 1996, the family court held a hearing “for the purpose of taking testimony on the
The Wife, who had been through the family court system “four or five times,” testified that she thought arbitration would be less expensive than litigating the property issues in court. The Wife agreed to arbitrate with the hope that “we could settle and just present the results to [the] court later for approval.” The Wife testified that she freely and voluntarily entered into the agreement to arbitrate and that she understood the arbitration to be binding. She also testified, however, that she believed she “was bound to take the results of this agreement to family court for ultimate approval or disapproval.” The Wife testified that “I was never advised that the family court did not have the ultimate decision. If I had been, I would never have agreed to it.” The Wife also testified that she believed she was required to go through arbitration or mediation before she could proceed in family court in Richland County.
The Husband testified that he understood the arbitration to be binding, which he defined as meaning that “once you have done something that you are obligated.” The Husband testified that he understood that the arbitration award would be presented to the family court for approval “for enforcement purposes.”
By order dated December 13,1996, Judge Riddle denied the Husband’s motion to confirm the award. Judge Riddle set aside the arbitration award, concluding the award “is not binding on the Family Court in this matter on the grounds that the parties agreed that the Family Court had final approval of the award.”
In December 1996, the Wife served the Husband with her amended complaint seeking, inter alia, a divorce on the ground of physical cruelty and equitable distribution of marital property. The Husband answered and counterclaimed, and again sought to have the Wife’s equitable apportionment claims dismissed for lack of subject matter jurisdiction. By order dated February 7, 1997, Judge Riddle denied the Husband’s motion for relief. By order dated February 10, 1997, Judge
Judge Gray held a hearing on the merits of the Wife’s action on May 12 and 13, 1997. Prior to trial, the Husband again sought to dismiss that portion of the action seeking equitable distribution on the ground the family court lacked subject matter jurisdiction to determine the issue.
Judge Gray issued his final order on May 27, 1997. Judge Gray denied the Wife’s request for a divorce, equitably divided the marital property, and again denied the Husband’s motion to dismiss. Judge Gray interpreted Judge Riddle’s order as concluding that parties in a domestic relations matter could not, through arbitration or mediation, divest the family court of subject matter jurisdiction over the property issues. Judge Gray stated in his order that “this Court holds the view that an agreement to arbitrate and the outcome would be treated in the same manner as any other agreement reached or claimed to have been reached by the parties in domestic relations matters.” Thus, Judge Gray determined that the agreement to arbitrate and the arbitration award were subject to review and approval by the family court. Judge Gray then concluded that he was bound by. Judge Riddle’s December 1996 order in which she determined that the arbitration award should be set aside.
On appeal, the Husband contends the family court erred in failing to grant his multiple motions to dismiss the Wife’s equitable distribution claims for lack of subject matter jurisdiction. The Husband argues that the parties’ agreement to submit the issue of equitable apportionment to binding arbitration divested the family court of jurisdiction to redetermine merits of the property issúes. The Husband further contends that the Wife failed to allege any ground that would warrant vacating the award under the statutory law governing judicial review of arbitration awards.
The Wife, of course, strongly disagrees with the Husband’s argument. In essence, the Wife’s position is that there can be no binding arbitration in family court. The Wife contends that the family court has a duty to review all settlement agreements to ensure the fairness of the agreements. Thus, the Wife argues that the family court has the power to
II.
Arbitration agreements in South Carolina are governed by the Uniform Arbitration Act (the Arbitration Act), S.C.Code Ann. § 15-48-10 through -240 (Supp.1998). The Arbitration Act provides that a “written agreement to submit any existing controversy to arbitration ... is valid, enforceable and irrevocable, save upon such grounds as exist at law or in equity for the revocation of any contract.” S.C.Code Ann. § 15-48-10(a) (Supp.1998) (emphasis added). The Act sets forth the only exceptions to its applicability as follows:
(1) Any agreement or provision to arbitrate in which it is stipulated that this chapter shall not apply or to any arbitration or award thereunder;
(2) Arbitration agreements between employers and employees or between their respective representatives unless the agreement provides that this chapter shall apply; provided, however, that notwithstanding any other provision of law, employers and employees or their respective representatives may not agree that workmen’s compensation claims, unemployment compensation claims and collective bargaining disputes shall be subject to the provisions of this chapter and any such provision so agreed upon shall be null and void. An agreement to apply this chapter shall not be made a condition of employment.
(3) A pre-agreement entered into when the relationship of the contracting parties is such that [sic] of lawyer-client or doctor-patient....
(4) Any claim arising out of personal injury, based on contract or tort, or to any insured or beneficiary under any insurance policy or annuity contract.
S.C.Code Ann. § 15-48-10(b) (Supp.1998).
By its terms, then, the Arbitration Act governs agreements to arbitrate equitable apportionment claims or other
We first note that there is nothing in the Arbitration Act that could be viewed as depriving the family court of jurisdiction. Under the Act, an arbitration award must be confirmed by “the court” unless a party timely seeks to correct, modify, or vacate the award.
See
S.C.Code Ann. § 15-48-120 (Supp. 1998) (“Upon application of a party, the court shall confirm an award, unless within the time limits hereinafter imposed grounds are urged for vacating or modifying or correcting the award, in which ease the court shall proceed as provided in §§ 15-48-130 and 15^18-140.”). The Act provides that “[t]he term ‘court’ means any court of competent jurisdiction of this State. The making of an agreement described in § 15-48-10 providing for arbitration in this State confers jurisdiction on the court to enforce the agreement under this chapter and to enter judgment on an award thereunder.” S.C.Code Ann.
Clearly, the family court has subject matter jurisdiction over actions seeking divorce or separate maintenance and support.
See
S.C.Code Ann. § 20-7-420(2) (Supp.1998) (Granting family court exclusive jurisdiction over actions “[f]or divorce a vinculo matrimonii, separate support and maintenance, legal separation, and in other marital litigation between the parties, and for settlement of all legal and equitable rights of the parties in the actions in and to the real and personal property of the marriage and attorney’s fees, if requested by either party in the pleadings.”). Likewise, it is clear that parties may enter into contracts resolving issues of alimony and equitable distribution and that the family court has jurisdiction over those contracts.
See
S.C.Code Ann. § 20-3-130(G) (Supp.1998) (“The Family Court may review and approve all agreements which bear on the issue of alimony or separate maintenance and support, whether brought before the court in actions for divorce from the bonds of matrimony, separate maintenance and support actions, or in actions to approve [an] agreement where the parties are living separate and apart. The failure to seek a divorce, separate maintenance, or a legal separation does not deprive the court of its authority and jurisdiction to approve and enforce the agreements.”); S.C.Code Ann. § 20-7-479 (Supp.1998) (“The family courts of this State have subject matter jurisdiction over all contracts relating to property which is involved in a proceeding under this article and over the construction and enforcement of those contracts.”);
see also Moseley v. Mosier,
However, if a written contract designates property as non-marital or otherwise provides that certain property shall not be considered part of the marital estate, the family court lacks jurisdiction over the property included within the agreement.
See
S.C.Code Ann. § 20-7-473 (Supp.1998) (“The [family] court does not have jurisdiction or authority to apportion nonmarital property.”); S.C.Code Ann. § 20-7-473(4) (Supp. 1998) (Property excluded from the marital estate by written contract of the parties is considered non-marital property);
Gilley v. Gilley,
As noted above, the general rule is that agreements regarding alimony, child support, or property issues must be presented to the family court for approval.
See Moseley,
As indicated in the discussion above, the family court’s general obligation to review and approve agreements involves two distinct questions — whether the parties freely and voluntarily entered into the agreement, and whether the substance of the agreement is fair. A review of the cases involving the first inquiry — whether an agreement was entered into freely and voluntarily — reveals that family courts will refuse to approve agreements under essentially the same circumstances that would render any other type of contract unenforceable, such as fraud, duress, or mistake.
See, e.g., Blejski,
An inquiry into the substantive fairness of an agreement, however, would be inconsistent with the Arbitration Act. To allow a family court judge to set aside an arbitration award because the judge found the award to be unfair would severely undermine the finality of arbitration agreements.
See, e.g., Pittman Mortgage Co. v. Edwards,
In order to advance the underlying purposes of arbitration, the scope of judicial review is necessarily restricted. “[T]he court’s function in confirming or vacating an arbitration award is severely limited. If it were otherwise, the ostensible purpose for resort to arbitration, i.e., avoidance of litigation, would be frustrated.... ” Indeed, “[b]road judicial review on the merits would render resort to arbitration wasteful and superfluous.”
Given our determination that the Arbitration Act and the family court’s general power to review and approve agreements in domestic relations cases are fundamentally incompatible, we conclude that the Arbitration Act prohibits the family court from exercising this power when presented with arbitration agreements. This Court must presume that, at the time the Arbitration Act was enacted, the legislature was aware of the family court’s power to review and approve property and separation agreements.
5
See, e.g., State v. Bridgers,
Accordingly, we conclude that family courts presented with arbitration agreements and awards must proceed, as any other court, in accordance with the terms of the Arbitration Act. Thus, an agreement to arbitrate may be set aside by the family court only upon proof of “grounds as exist at law or in equity for the revocation of any contract.” S.C.Code Ann. § 15-48-10(a) (Supp.1998). The court may correct or modify an arbitration award only in accordance with the provisions section 15-48-140, and the court may vacate the award only upon the establishment of one of the grounds set forth in
In this case, although the Wife sought to avoid the consequences of the arbitration because she believed the award to be “grossly inequitable on its face,” Judge Riddle set aside the arbitration award and concluded it was “not binding on the Family Court in this matter on the grounds that the parties agreed that the Family Court had final approval of the award.” Thus, it appears Judge Riddle determined that, notwithstanding the provisions of the arbitration agreement, the arbitration agreed to by the parties in fact was not binding arbitration. The question, then, is whether this conclusion is sufficient to set aside the arbitration award.
For the purposes of this opinion, we will assume that the Wife’s participation in the arbitration does not somehow prevent her from challenging the arbitration agreement itself.
See Garrett v. Blanton,
As to the arbitration award itself, we note that the Wife did not allege in her complaint that the award should be vacated under S.C.Code Ann. § 15-48-130(a), nor does she argue on appeal that there are proper grounds for vacating the award. Therefore, because we have concluded that the agreement to
Accordingly, for the foregoing reasons, the appealed orders, including that portion of Judge Gray’s order apportioning the marital estate, are hereby reversed, and we remand for entry of an order confirming the arbitration award.
REVERSED AND REMANDED.
Notes
. In support of her argument that the Arbitration Act does not apply in the family court setting, the Wife points out that Chief Justice Finney’s March 1996 order creating pilot alternative dispute resolution programs in Florence and Richland counties does not require family court litigants to engage in mediation or arbitration. According to the Wife, this omission supports her position "that the general law of arbitration does not apply in Family Court.” We disagree. While the Richland and Florence county programs do not
require
family court litigants to participate, there is nothing in the order establishing the program or in the Arbitration Act prohibiting family court litigants from voluntarily agreeing to submit their disputes to binding arbitration. Once they agree, then the Arbitration Act governs, unless they agree otherwise.
See Messer,
. While an agreement concerning alimony or child support may be modified and enforced by the family court unless the agreement clearly provides otherwise, an agreement regarding equitable apportionment claims is final and may not be modified by the parties‘or the court, although it may be enforced by the family court unless the agreement provides otherwise.
See
S.C.Code Ann. § 20-7-472 (Supp.1998) ("The court's order as it affects distribution of marital property shall be a final order not subject to modification except by appeal or remand following proper appeal.'');
Thompson v.. Ballentine,
. While the Husband couches his challenge to the family court’s actions in terms of subject matter jurisdiction, we nonetheless conclude that his appeal also encompasses this more general issue of the family court's power to set aside the arbitration award.
. The wisdom of this position is illustrated by the facts in this case. Here, the Wife was interested in arbitrating the equitable distribution claims because she believed it would be quicker and less expensive than pursuing the issues in family court, a forum with which the Wife was intimately familiar and of which she apparently was less than enamored. Yet when the Wife was dissatisfied with the arbitrator’s decision, she sought the help of the family court. By forcing the parties to go through a full-blown trial in the family court after they had completed the arbitration process, the Wife exponentially increased the time and expense required to resolve the divorce and related issues.
. The Arbitration Act became effective on May 8, 1978,
see
Act No. 492, § 26, 1978 S.C. Acts 1478, 1486, long after the family court’s general authority to review and approve property and separation agreements was established.
See, e.g., Fischl v. Fischl,
. Our holding, of course, is limited to arbitration agreements resolving issues of property or alimony, and does not apply to agreements involving child support or custody.
See Moseley,
. Because this is a family court matter, this Court has jurisdiction to find facts in accordance with our view of the preponderance of the evidence.
See, e.g., Epperly v. Epperly,
. In her brief, the Wife argues that the Husband did not appeal the substantive findings made in the various orders to support the setting aside of the arbitration award and that the Husband “only challenges the authority of the Family Court to entertain the issue [of equitable apportionment.]” Thus, the Wife contends that "[t]acit in the [Husband’s] failure to appeal these remaining questions is an admission that the Family Court's decision to disapprove the arbitration decision was fair and equitable under the facts of this case.” We disagree. Although lumped together under one issue on appeal, we believe the Husband’s brief sufficiently presents for appellate review the question of whether the family court had the power to set aside the arbitration agreement and the question of whether the award should have been set aside based upon the evidence presented to the court.
