Blondeau v. Baltierra, 337 Conn. 127 (2020) (arbitration & child support related issues; restricted and unrestricted arbitration submissions; exceeding scope and manifest disregard of the law in arbitration) .
Officially released September 24, 2020.
In Short: in an unrestricted submission (as with most arbitration submissions) the arbitrator has tremendous discretion and is subject to review only for egregious disregard for the law or going beyond the scope of the arbitration; the restriction against arbitration of child support related issues cannot be waived, but unrelated aspects of the award can be upheld; a broad arbitration submission provides for significantly less scrutiny in appellate review than would apply at trial.
The parties had been married in 1999 in France and executed a premarital agreement expressly adopting French law as the basis for separation of property. The parties had three children and purchased a home titled in both names. Wife filed for divorce in 2016 and both parties sought to enforce the premarital agreement.
The trial court approved the parties’ agreement to arbitrate this dissolution of marriage. The arbitration agreement included the following clause:
The parties agree to be guided by the laws . . . of Connecticut during the arbitration process and with respect to the substantive issues submitted for resolution by the [a]rbitrator, except that the [a]rbitrator shall be guided by the French Civil Code with regard to any claim by the parties that the [a]rbitrator either vacate their premarital agreement or effectuate their premarital agreement and if effectuated determine what property is included within the scope of the premarital agreement pursuant to [the] French Civil Code…. The parties shall arbitrate the dissolution of marriage action, including, but not limited to issues of . . . property division for both assets and liabilities, [and] . . . determine the validity and effectuation of the parties’ premarital agreement; and if effectuated determine what property is included within the scope of the premarital agreement pursuant to [the] French Civil Code . . . .”
The parties participated in binding arbitration pursuant to the agreement. The arbitrator’s award designated the marital home as joint property and applied Connecticut law to distribute the equity in the home, awarding the home to Wife and ordering her to pay $212,000, or 40% of the equity, to Husband. The arbitrator also issued orders regarding payment of child-care expenses, health insurance and expenses for children, and life insurance benefit of the children.
Wife submitted a motion to articulate/clarify/reargue the arbitration award, arguing that the award violated the premarital agreement by not applying French law to determine that she owned, as separate property, her $429,000 contribution to the purchase of the home, which would result n a lower buyout. The arbitrator denied Wife’s motion. Husband filed an application with the trial court to confirm the arbitration award and Wife filed a motion to vacate the arbitration award. The trial court denied the application to confirm and granted the motion to vacate.
The trial court determined that (1) the arbitrator exceeded her authority under the arbitration agreement by dividing the equity in the marital home under Connecticut law rather than French law, as prescribed by the parties’ premarital agreement, (2) the arbitrator disregarded the law controlling her decision making, and (3) the award improperly included issues related to child support.
Husband appealed, arguing that (1) the trial court lacked subject matter jurisdiction to consider the motion to vacate, because it was untimely, (2) the trial court lacked subject matter jurisdiction to consider Wife’s arguments regarding child support because she was not aggrieved and her arguments were moot, (3) the trial court improperly vacated the award under § 52-418(a)(4) because the arbitrator did not exceed her authority under the arbitration agreement nor manifestly disregarded the law, and (4) the trial court improperly vacated the arbitration award on the ground that the award addressed issues related to child support in violation of § 46b-66(c), or, in the alternative, that such award was severable. Wife opposed each argument and claimed that the appeal must be dismissed for lack of a final judgment.
The Appellate Court first addressed Wife’s claim that there is no final Judgment from which to appeal because § 52-423 is inapplicable to arbitration awards that include issues related to child support, pursuant to § 46b-66(c). The Appellate Court held, quite reasonably, that the limitation regarding child support related issues from § 46b-66(c) merely limits the enforceable scope of arbitration awards. It does not operate to strip such awards of appealability.
The Appellate Court next addressed Husband’s argument that the trial court lacked subject matter jurisdiction to consider Wife’s motion to vacate the award because her motion was untimely under § 52-420(b). Husband argued that, although Wife filed her motion to vacate within the 30-day time period permitted by statute, it was deficient because it failed to identify specific factual grounds for vacating the award. Wife had filed her one paragraph motion to vacate well within the 30-day time period. Seven months later, Husband filed an objection claiming that Wife had failed to identify a factual basis for the award within the required thirty days. Wife filed a detailed memorandum of law in support of her motion on the day before argument thereon. Husband raised his timeliness challenge at the hearing and the trial court offered him additional time, if he needed it, to address the memorandum of law. The Appellate Court applied plenary review to the issue of statutory interpretation over the required specificity of a motion to vacate under § 52-420. As nothing in the statute requires specific articulation of a factual basis, the Appellate Court held that the motion was timely and the trial court had subject matter jurisdiction.
The Appellate Court applied plenary review to Husband’s mootness and subject matter jurisdiction arguments that the trial court lacked subject matter jurisdiction to consider the child support arguments because Wife was not aggrieved. Judicial review of the arbitration award here was governed by § 52-418, which provides that any party to an arbitration may apply to vacate the award. The statute makes no reference to aggrievement. The Appellate Court contrasted this language with the statutory right to appeal in civil actions, § 52-263, which requires aggrievement, to determine that the trial court had subject matter jurisdiction.
Husband further claimed that elements of the award were moot by the time the motion to vacate was ruled on because those issues had been resolved by a pendente lite stipulation. The Appellate Court rejected this argument, as pendente lite orders are not permanent orders but terminate with the conclusion of the litigation. The trial court was still bound to make a final consideration of child support guidelines.
The Appellate Court next addressed Husbands claims that the trial court erred in its conclusion that the arbitrator exceeded the scope of the agreement and manifestly disregarded the choice of law provision. The arbitrator had concluded that, notwithstanding the premarital contributions, the parties had taken joint ownership of the marital residence. The arbitrator then had concluded that the parties had failed to make a choice of law designation regarding joint property in the event of a divorce. The arbitrator then applied the “most significant relationship approach” as to the choice of law issue and concluded that Connecticut law should apply to that issue. The Appellate Court expounded upon the deferential standard to be applied to arbitration awards, providing every reasonable presumption in favor of the award. The standard of review depended on whether the submission to the arbitrator was restricted or unrestricted. A restricted award expressly limits the issues and conditions the award on court review, and is subject to de novo review.[1] An unrestricted submission is final and binding and will not be reviewed for errors of law or fact. The only standard raised by the parties here was scope of the submission and manifest disregard of the law under § 52-418(a)(4), which presupposes and unrestricted submission.
The Appellate Court noted the standard for reviewing an award that does not conform to the submission is simply whether the arbitrator has ignored their obligation to interpret and apply the contract as written, with broad discretion to the arbitrator. Wife argued that the provisions of the submission require applying French law to whether the marital residence was joint, whereas Husband argued that French law only applied to whether the premarital agreement would be enforced and what property came within the scope of the agreement. The Appellate Court determined, based on the ambiguity of the language of the submission, that the question is not which interpretation is correct, but simply whether the issues were submitted to the arbitrator to decide, which they clearly were.
As to manifest disregard of the law, a highly deferential standard applies, requiring three elements, “(1) the error was obvious and capable of being readily and instantly perceived by the average person qualified to serve as an arbitrator; (2) the arbitration panel appreciated the existence of a clearly governing legal principle but decided to ignore it; and (3) the governing law alleged to have been ignored by the arbitration panel is [well-defined], explicit, and clearly applicable.” The Appellate Court held that these elements were not met here. The language of the submission employed inexact language requiring that the arbitrator be “guided” by the French law only in limited respects, over complicated legal issues.
Finally, the Appellate Court addressed Husband’s argument that the trial court improperly vacated the award on the ground that it included issues related to child support in violation of § 46b-66(c) and § 52-408, or in the alternative, that that portion of the award was severable. That portion of the award included payment of child-care expenses, health insurance and expenses, extracurricular expenses and life insurance for the children. The Appellate Court determined that the parties could not waive the prohibition on inclusion of child support in arbitration awards where a question of public policy was involved. However, the Appellate Court found those orders severable from the remainder of the award.
The judgment was reversed as to the trial court’s granting of the motion to vacate and denial of the application to confirm the award, except as to the portions of the award related to child support.
[1] “A restricted submission … expressly restrict[s] the breadth of the issues [to be resolved by the arbitrator], reserv[es] explicit rights, or condition[s] the award on court review…”
