Swentor v. Swentor

Decision Date06 July 1999
Docket NumberNo. 3023.,3023.
PartiesAudrey M. SWENTOR, Respondent, v. Norman G. SWENTOR, Appellant.
CourtSouth Carolina Court of Appeals

Robert L. Jackson, of Jackson & Jackson, of Columbia, for appellant.

Samuel F. Crews, III, of Crews Law Firm; and Thomas M. Neal, III, both of Columbia, for respondent.

HOWELL, Chief Judge:

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 issue of whether the contract entered by the parties was freely and voluntarily entered and whether the parties were knowledgeable and informed of the meaning of `binding arbitration.'"

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 Williams granted the Wife's motion for certain temporary relief.

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 issues. 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 consider the substantive fairness of the arbitration award. According to the Wife, applying the general law of arbitration to arbitration agreements in domestic relations matters "would reduce the Family Court to the status of a `rubber stamp' with no true authority to evaluate agreements between the parties, and determine their equity and fairness."

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 claims arising from a marriage, given that such agreements are not excluded by the Arbitration Act. Moreover, this Court recently concluded that the Arbitration Act is applicable to contracts involving equitable apportionment issues. See Ex parte Messer, 333 S.C. 391, 396, 509 S.E.2d 486, 488 (Ct.App. 1998)

(applying Arbitration Act to provision in separation agreement requiring parties to submit disputes to arbitration). Thus, we have no difficulty concluding that parties may agree to submit equitable apportionment claims to arbitration, and that the Arbitration Act governs such agreements.1 Given this conclusion, we must now determine whether the family court has jurisdiction over cases where the parties have agreed to binding arbitration.

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...

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