Bandas v. Bandas

• Decision Date: 01 June 1993
• Docket Number: No. 0143-92-2,0143-92-2
• Citation: 16 Va.App. 427,430 S.E.2d 706
• Parties: William I. BANDAS v. Helen Kay Denson BANDAS. Record
• Court: Virginia Court of Appeals

Page 706

430 S.E.2d 706

16 Va.App. 427

William I. BANDAS v. Helen Kay Denson BANDAS.

Record No. 0143-92-2.

Court of Appeals of Virginia.

June 1, 1993.

William I. Bandas, pro se.

Harry P. Anderson, Jr., Richmond (Anderson & Parkerson, on brief), for appellee.

Present: MOON, C.J., ^* and BARROW and ELDER, JJ.

MOON, Chief Judge.

William I. Bandas appeals an order affirming the arbitration award between him and his wife, Helen Kay Denson Bandas, on the following grounds: (1) the court failed to use the appropriate standard of review when affirming the arbitration award; (2) the court erred in failing to scrutinize the award based on substantive fairness and equity; (3) the court erred when affirming the award of spousal support and the classification, valuation and division of marital property; (4) the court erred in affirming the effective due date of the monetary award embodied in the arbitration award; and (5) the court erred in imposing sanctions against the husband. Except for the amount of the sanctions imposed, we affirm because in a domestic relations case an arbitration award must be upheld unless it is unconscionable or against public policy.

On May 30, 1980, the appellant, husband, and the appellee, wife, were married in Richmond, Virginia. They have one child, Benjamin Denson Bandas, born April 12, 1986. Wife filed a Bill of Complaint against husband on April 20, 1989, in the Circuit Court of the City of Richmond. The ground for divorce alleged by wife, pursuant to Code § 20-91(3), was that after the marriage husband was convicted of a felony, confined in the penitentiary on September 16, 1986, and cohabitation had not resumed. Husband filed a cross-bill alleging that on November 24, 1988, wife deserted him by informing him by "telephone that she no longer wanted to be married and did not want to resume cohabitation with him upon his release."

Subsequently, pursuant to Code § 8.01-581.01, the parties entered into an arbitration agreement which provided that "they specifically agree that in lieu of a trial of this case before the Circuit Court of the City of Richmond, the same shall be arbitrated and decided by the arbitrator named herein." The parties further agreed that "either of them may submit to the court the decision of the arbitrator as a final and binding agreement between them as to the issues arbitrated, said agreement to be affirmed, ratified and incorporated by reference in an appropriate order or decree pursuant to Code § 20-109.1."

The arbitrator found that the wife had a ground for divorce against husband under Code § 20-91(3); the arbitrator also found that husband had a ground for divorce against wife under Code § 20-91(1) because while the husband was incarcerated wife committed adultery. The arbitrator found that under these circumstances recrimination was a defense of the husband. He further found, however, that wife was entitled to spousal support under the exception of Code § 20-107.1, notwithstanding her adultery. The arbitrator found that denial of such award to wife would be manifestly unjust. The trial court affirmed the arbitrator's award.

I.

Husband contends that the trial court used the incorrect standard of review when affirming the arbitration award.

After reviewing the alleged errors of the arbitrator, the trial court addressed the issue of the standard of review of arbitration awards. The court cited Code § 8.01-581.010, which states that because another court of law or equity would not grant such award embodied in the arbitrator's decision, this fact is not a ground to vacate such award. The court also cited Howerin Residential Sales Corp. v. Century Realty of Tidewater, Inc., 235 Va. 174, 365 S.E.2d 767 (1988), which involved an arbitration award in a contract dispute. Howerin states that an arbitration award should be interpreted liberally so as to uphold the award and that the complaining party must overcome three factors: (1) the conclusiveness of the award as binding; (2) the presumption in its favor; and (3) the burden of showing arbitrator misconduct by convincing proof. Despite the fact that Howerin was a contract dispute and the arbitration agreement before the court here was a domestic relations issue, the trial court stated: "Even considering the importance of marriage and family relations, there is no indication in this record that the arbitration award is unconscionable or is against public policy."

The trial court, based on Code § 8.01-581.01 and Howerin, stated that "the test should be whether there is a gross miscarriage of justice under the circumstances." The trial court found none.

Although there is no law in Virginia dealing with the standard of review of arbitration agreements in domestic relations cases, other jurisdictions have considered the matter. See Faherty v. Faherty, 97 N.J. 99, 477 A.2d 1257 (1984); Masterson v. Masterson, 22 Ky.L.Rptr. 1193, 60 S.W. 301 (1901); Schneider v. Schneider, 17 N.Y.2d 123, 269 N.Y.S.2d 107, 216 N.E.2d 318 (1966); Sheets v. Sheets, 22 A.D.2d 176, 254 N.Y.S.2d 320 (App.Div.1964); Crutchley v. Crutchley, 306 N.C. 518, 293 S.E.2d 793 (1982). All have held that arbitration may be used in divorce proceedings as in all other disputes. Of course, no jurisdiction allows the arbitrator's award to ignore its jurisdictional prerequisites regarding divorce.

The New Jersey Supreme Court, in Faherty, held that arbitration awards in domestic relations "shall be valid, enforceable and irrevocable, except upon such grounds as exist at law or in equity for the revocation of a contract." 97 N.J. at 108 n. 2, 477 A.2d at 1262 n. 2 (citation omitted). The Faherty court applied the same standard of review for an arbitration agreement in a domestic relations case as in any other contract case.

Virginia has adopted the Uniform Arbitration Act in Code §§ 8.01-581.01 et seq. Code § 8.01-581.01, entitled "Validity of Arbitration Agreement," states in pertinent part:

A written agreement to submit any existing controversy to arbitration or a provision in a written contract to submit to arbitration any controversy thereafter arising between the parties is valid, enforceable and irrevocable, except upon such grounds as exist at law or in equity for the revocation of any contract.

This language implies that arbitration agreements should be upheld unless the agreement is against public policy or unconscionable, which are two grounds to set aside a contract in equity.

Nowhere in the Uniform Arbitration Act, as adopted by Virginia, are courts required to review an arbitration agreement in a domestic relations context with more scrutiny than other disputes, as husband would have us hold. We hold that the standard of review involving arbitration agreements in domestic relations should conform to the standard set forth in Code § 8.01-581.01. Arbitration agreements and the award embodied in them shall not be set aside on appeal unless there exists grounds to set aside a contract in equity such, as unconscionability or, as contrary to public policy.

II.

Husband contends that the trial court erred in failing to scrutinize the arbitration award for substantive fairness and equity, and argues that the trial court cannot be bound by the Arbitration Act. This argument is based upon husband's premise that the Arbitration Act does not provide for substantive fairness and equity. Based on our holding concerning the standard of review for arbitration agreements in domestic relations cases, we disagree with husband.

Furthermore, husband's contention concerning how the trial court reviewed the arbitration award is incorrect. The court stated in its letter opinion that "there is no indication in this record that the arbitration award is unconscionable or is against public policy." The court found as follows:

The Court, in carrying out its responsibility to see that what it orders is appropriate, has reviewed this record at [husband's] urging only to find that the issues are ones that a fair thinking Arbitrator with adequate knowledge of the law could resolve. Indeed, the Court itself could have decided these questions the same way had it heard the evidence in regular proceedings. Especially in the context of arbitration generally, and here in the context of the specific agreement on arbitration, according to the principles the parties made for themselves, there is no basis and utterly none, on which [husband] could rightly urge the Court to invoke the relief he seeks.

"The trial court's findings must be accorded great deference. Its judgment will not be disturbed on appeal unless plainly wrong or without evidence to support it." Keyser v. Keyser, 7 Va.App. 405, 409, 374 S.E.2d 698, 701 (1988) (citation omitted).

Here, abundant evidence exists to support the court's conclusion that husband is not entitled to have the arbitrator's award set aside, as there is no evidence that the award is unconscionable or against public policy.

III.

Next, the husband contends that the trial court erred in affirming the award of spousal support, and the classification, valuation and division of marital property.

A. Spousal Support

Husband argues that wife is guilty of adultery under Code § 20-91(1) and, therefore, is not entitled to support pursuant to Code § 20-107.1, which states in pertinent part:

Any maintenance and support shall be subject to the limitations set forth in § 20-109, and no permanent maintenance and support shall be awarded from a spouse if there exists in such spouse's favor a ground of divorce under the provisions of § 20-91(1). However, the court may make such an award notwithstanding the existence of such ground if the court determines from clear and convincing evidence, that a denial of support and maintenance would constitute a manifest injustice, based upon the respective degrees of fault during the marriage and the relative economic circumstances of the parties. (emphasis added).

The arbitrator determined that both pa...