Chang v. Siu

• Decision Date: 22 April 2014
• Docket Number: No. 1 CA–CV 12–0798.,1 CA–CV 12–0798.
• Parties: In re the Marriage of Helen Yu–Wen CHANG, Petitioner/Appellee, v. William Molim SIU, Respondent/Appellant.
• Court: Arizona Court of Appeals

234 Ariz. 442

323 P.3d 725

685 Ariz. Adv. Rep. 18

In re the Marriage of Helen Yu–Wen CHANG, Petitioner/Appellee,

v.William Molim SIU, Respondent/Appellant.

No. 1 CA–CV 12–0798.

Court of Appeals of Arizona,

Division 1.

April 22, 2014.

Jensen and Gordon, PLLC By Robert A. Jensen, Tracy Gordon, Law Office of Scott E. Boehm, PC By Scott E. Boehm, Phoenix, Co–Counsel for Petitioner/Appellee.

The Cavanagh Law Firm, PA By Philip C. Gerard, William F. Begley, Law Offices of Annette T. Burns By Annette T. Burns Law Offices of Robert E. Siesco, Jr. By Robert E. Siesco, Jr., Phoenix, Co–Counsel for Respondent/Appellant.

Chief Judge DIANE M. JOHNSEN authored the opinion of the Court, in which Presiding Judge PATRICIA A. OROZCO and Judge LAWRENCE F. WINTHROP joined.

OPINION

JOHNSEN, Judge.

¶ 1 After a nine-day hearing, an arbitrator concluded the assets in a series of brokerage accounts were community property, and the superior court adopted that conclusion in a decree of dissolution. On appeal, Husband argues the parties' arbitration agreement requires this court to review the legal and factual merits of the arbitrator's decision. Without deciding whether Arizona law permits such review, we affirm the judgment.

FACTS AND PROCEDURAL HISTORY

¶ 2 William Molim Siu (“Husband”) and Helen Yu–Wen Chang (“Wife”) married in June 1998. Before the marriage, Husband owned various securities. He eventually closed his sole-and-separate securities accounts and deposited the securities into a new brokerage account containing community funds. That brokerage account eventually generated ten subaccounts with assets of considerable worth.

¶ 3 Wife filed a petition for dissolution in 2009. In the proceedings that followed, Husband and Wife agreed to resolve their property issues by a binding arbitration conducted pursuant to Arizona Revised Statutes (“A.R.S.”) sections 12–3001 to –3029 (2014).¹ They presented to the superior court a stipulation, which the court approved, appointing a retired Maricopa County superior court judge to arbitrate the property issues and other matters. In relevant part, the stipulation and order provided as follows:

2. The parties stipulate, AND IT IS SO ORDERED, that [the Arbitrator] is authorized to proceed as an Arbitrator, to hold hearings and issue binding Arbitration Award(s) orders on all issues raised in the parties' dissolution action and heard by him.... [The Arbitrator] is authorized, pursuant to ARS 12–3001 et seq., to make an Arbitration Award on all issues submitted to him pursuant to Title 25, Arizona Revised Statutes, and said Arbitration Award(s) will include requested findings of fact and conclusions of law concerning the disputed issues.

* * *

4. Each party expressly waives his or her right to a trial before a judge in the Maricopa County Superior Court based upon the appointment of the Arbitrator. The parties are aware this stipulation is made pursuant to ARS § 12–3001 et seq.

The stipulated order established the arbitrator's hourly billing rate at $350 and granted him the power “to do all acts and to take all measures necessary or proper for the efficient performance of his duties,” including the power to require production of evidence, to resolve discovery disputes and the admissibility of evidence and the power to place witnesses under oath and examine them. The parties agreed, and the court ordered, that the Arizona Rules of Evidence would apply to the arbitration proceedings. Finally, the stipulated order provided:

Appellate jurisdiction preserved to Arizona Court of Appeals. The parties agree, AND IT IS ORDERED, that each is preserving his and her right to appeal a final Arbitration Award to the Arizona Court of Appeals, and that appeals shall not be taken to the Superior Court of Arizona.

¶ 4 After hearing evidence and considering proposed findings and conclusions, the arbitrator issued a 34–page ruling. He found, among other things, that all of the assets in the brokerage accounts were community property and ordered them to be divided equally between the parties.

¶ 5 Citing A.R.S. § 12–3020, Husband filed a “Motion to Change, Modify and Correct Arbitration Award” asking the arbitrator to “amend[ ] and correct [ ]” his characterization of the disputed accounts. The arbitrator denied Husband's motion, concluding his challenge to the merits of the award was not proper under A.R.S. §§ 12–3020 or –3024. The superior court then granted Wife's application to confirm the arbitrator's award and entered a judgment and decree of dissolution that incorporated the arbitrator's findings and conclusions.

¶ 6 Husband timely appealed. We have jurisdiction pursuant to Article 6, Section 9 of the Arizona Constitution, and A.R.S. §§ 12–2101(A)(1) (2014) and –2101.01(A)(6) (2014).

DISCUSSION

¶ 7 Husband argues the arbitrator erred in concluding the brokerage accounts were community property and in dividing them equally between the parties. The arbitrator's ruling, he contends, misapplies Arizona law and “inappropriately awarded Wife millions of dollars of Husband's separate property.”

¶ 8 As a matter of public policy, Arizona favors arbitration as a means of resolving controversies when parties have agreed to do so. S. Cal. Edison Co. v. Peabody W. Coal Co., 194 Ariz. 47, 51, 977 P.2d 769, 773 (1999). Litigants who turn to private arbitration usually do so to resolve their disputes speedily and at a minimum of expense. “The primary attraction of arbitration is an expeditious and inexpensive method of dispute resolution.” Rancho Pescado, Inc. v. Northwestern Mut. Life Ins. Co., 140 Ariz. 174, 182–83, 680 P.2d 1235, 1243–44 (App.1984); see Gates v. Arizona Brewing Co., 54 Ariz. 266, 269, 95 P.2d 49, 50 (1939) (arbitration allows “the parties to any controversy or dispute ... to obtain an inexpensive and speedy final disposition of the matter involved” by agreeing to “submit their controversy” for determination by “judges of their own choice”).

¶ 9 It does not appear that the parties here, however, were trying to save money when they decided to hire a private arbitrator to try their case. As noted, the hearing the arbitrator conducted spanned nine days, and at the end of the proceeding, each party filed an attorney's fees request seeking more than $500,000. Instead, Husband and Wife apparently agreed to arbitration because they wanted their complicated property issues resolved by an experienced, albeit retired, jurist who would have the time to consider the evidence and relevant legal principles free of the pressure of a crowded superior court calendar.²

¶ 10 Litigants who have the resources to do so certainly are free to fashion a proceeding such as that which occurred here—a full-blown bench trial in every sense of the word, conducted in a law-firm conference room rather than a courtroom. See Atreus Cmtys. Group of Ariz. v. Stardust Dev., Inc., 229 Ariz. 503, 506, ¶ 13, 277 P.3d 208, 211 (App.2012) (“boundaries of [an] arbitrator['s] powers are defined by the agreement of the parties”) (quoting Smitty's Super–Valu, Inc. v. Pasqualetti, 22 Ariz.App. 178, 180, 525 P.2d 309, 311 (1974)). The question first presented by this appeal, however, is whether and to what extent parties may by agreement avoid the procedural and substantive limitations our statutes and common law impose on the review of a private arbitration award.

¶ 11 Under the Arizona Revised Arbitration Act, §§ 12–3001 et seq., upon completion of an arbitration, a party may move the superior court to confirm the arbitrator's award. A.R.S. § 12–3022. Pursuant to A.R.S. § 12–3023, a party aggrieved by the award may move the court to vacate it. Under the statute, the grounds for such a motion are limited: The superior court “shall vacate” an award procured by fraud or on a showing of “evident partiality,” corruption or misconduct by the arbitrator, or that the arbitrator exceeded his powers, conducted the arbitration without notice or refused to postpone the hearing despite sufficient cause; or that “[t]here was no agreement to arbitrate.” A.R.S. § 12–3023(A).

¶ 12 When Wife asked the superior court to confirm the arbitrator's award, Husband objected but, pursuant to their agreement not to “appeal” the award to the superior court, did not move to vacate the award pursuant to § 12–3023(A) or object on any of the grounds in the statute. In fact, he did not ask the superior court to rule on any of the legal and factual issues he raises on appeal. An appellate court normally will not address arguments not raised in the superior court prior to the appeal. See McDowell Mountain Ranch Land Coalition v. Vizcaino, 190 Ariz. 1, 5, 945 P.2d 312, 316 (1997). This rule is one of procedure, however, which the court has discretion to overlook. See Dombey v. Phoenix Newspapers, Inc., 150 Ariz. 476, 482, 724 P.2d 562, 568 (1986). We may review an issue first raised on appeal when, as here, there is no question of notice and the issue is a matter of law. Id.

¶ 13 Waiver is one thing; jurisdiction is another. Although this court may consider an issue a party arguably waived by failing to raise it in the superior court, parties may not by agreement create appellate jurisdiction where it otherwise would not exist. Thomas v. Thomas, 203 Ariz. 34, 36, ¶ 9, 49 P.3d 306, 308 (App.2002). Husband argues that in the agreement they submitted to the court authorizing the arbitration, he and Wife agreed that any substantive review of the arbitrator's award would be by this court rather than by the superior court. He cites the provision in the stipulation, quoted ¶ 3 supra, that each party “is preserving his and her right to appeal a final Arbitration Award to the Arizona Court of Appeals, and that appeals shall not be taken to the Superior Court of Arizona.” Our jurisdiction, however, arises not from the parties' agreement but from the superior court's final order and judgment granting Wife's motion to confirm the award, which we have jurisdiction to review pursuant to ...