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DIVORCE 48: The trial court may only determine whether the parties’ agreement to arbitrate is ambiguous, not whether the arbitrator’s interpretation of the contract was correct.

FACTUAL BACKGROUND

Plaintiff filed for divorce in 2013, and following mediation, the parties reached a transcribed mediation agreement in June 2014. The mediator read an outline of a property settlement agreement, the terms of which were to be incorporated into a written settlement agreement. If the parties could not agree on a contractual issue, it would be submitted to binding arbitration. Following hearings and witness testimony, the arbitrator issued an award.  Plaintiff moved to vacate the arbitration award, arguing that the arbitrator issued an award that was inconsistent with the agreements. The trial court ruled that the settlement agreement “speaks for itself” and that the four corners of the settlement agreement did not provide an accounting method for the property settlement payments. It opined that the arbitrator had exceeded the scope of her authority and granted Plaintiff’s motion to vacate the arbitration award.

STANDARDS OF REVIEW

We review de novo the trial court’s decision whether to enforce an arbitration award. We also review de novo whether an arbitrator exceeded his or her powers.  Areviewing court must accept the arbitrator’s factual findings and decisions on the merits, and it cannot engage in contractual interpretation because that is an issue reserved for the arbitrator.

ANALYSIS

Defendant argues that the trial court erred by vacating the arbitration award on the basis that the arbitrator exceeded her powers by looking outside the four corners of the settlement agreement, as the arbitration agreement expressly provided that the arbitrator would draft a separate contract to detail the settlement agreement’s terms. Defendant is correct that the parties granted the arbitrator authority to fashion a separate contract. We conclude that the trial court erred by engaging in contractual interpretation of the parties’ settlement agreement. The trial court is not permitted to interpret the underlying contract when reviewing an arbitration award. The reviewing court may only determine whether the parties’ agreement to arbitrate is ambiguous, not whether the arbitrator’s interpretation of the contract was correct. When the trial court reviewed whether the parties’ contract was ambiguous, it again erroneously considered the merits of the arbitrator’s decision.

CONCLUSION

The trial court erred by determining that the arbitrator exceeded the scope of her authority by looking beyond the four corners of the parties’ settlement agreement. Because the arbitrator did not exceed the scope of her authority, the trial court’s review should have ended and the court should have confirmed the arbitration award.

ADVICE TO CLIENTS HAVING PROPERTY DIVISION ISSUES IN DIVORCE SETTLEMENTS

Aldrich Legal Services understands what a stressful time this is for you when you have property settlement issues.

Aldrich Legal Services represent parties throughout southeast Michigan with a wide range of divorce related matters.

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FAMILY LAW 88: The trial court found that the children did not have an established custodial environment with defendant because, before the separation, he did not have a large role in the children’s lives.

The trial court credited plaintiff’s testimony that, before the parties’ separation, defendant spent minimal time helping to care for the children, so its finding that the children would not have looked to defendant for guidance, discipline, the necessities of life, and parental comfort during that time was not against the great weight of the evidence.

REAL ESTATE 89: RM had not included any language in the deed providing that the property was a joint tenancy with full rights of survivorship, the property instead became a tenancy in common.

RM drafted the deed without seeking counsel and mistakenly believed that, if either she or FK died, the property would fully pass to the surviving tenant. FK’s will provided that if his wife predeceased him—which she did—the personal representative of his estate should sell any residual property that he owned and divide the cash proceeds equally among his surviving children.

FAMILY LAW 83: A trial court can terminate a parent’s rights and permit a stepparent to adopt a child.

A trial court has discretion to terminate a parent’s rights and permit a stepparent to adopt a child when the conditions of MCL 710.51(6) are met. MCL 710.51(6)(b) requires the petitioner to establish that the other parent had the ability to visit, contact, or communicate with the children, and substantially failed or neglected to do so for a period of two years.

PROBATE 53: The trust agreement included an Incontestability Provision.

A settlor’s intent is to be carried out as nearly as possible. Generally, in terrorem clauses are valid and enforceable. However, a provision in a trust that purports to penalize an interested person for contesting the trust or instituting another proceeding relating to the trust shall not be given effect if probable cause exists for instituting a proceeding contesting the trust or another proceeding relating to the trust.

FAMILY LAW 82: Court stated it would terminate the personal protection order (PPO) after the parties present documentation of the initiation of the divorce proceedings.

However, the trial court concluded that these matters should, in fact, be in the province and the jurisdiction of the Family Division and in that respect, having issued a personal protection order, the Court stated it would terminate the personal protection order after the parties present documentation of the initiation of the divorce proceedings.

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