| MR v AR |
| 2015 NY Slip Op 50918(U) [48 Misc 3d 1201(A)] |
| Decided on June 17, 2015 |
| Supreme Court, Kings County |
| Adams, J. |
| Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. |
| This opinion is uncorrected and will not be published in the printed Official Reports. |
MR, Plaintiff,
against AR, Defendant. |
Recitation as required by C.P.L.R. 2219(a) of the papers considered in the review of the motion to vacate an arbitration award and cross motion to confirm an arbitration award.
Plaintiff (Wife), pro se, moves by notice of motion, pursuant to CPLR §7511(c) to vacate the arbitration award by the Badatz of Lakewood Rabbinical Court as it relates to the division of marital property, specifically distribution of the marital residence jointly owned by the parties.
Defendant (Husband), by his counsel Eli Yeger, Esq. cross moves for an order denying the Wife's application and an order confirming the arbitration award.
The Court sets forth the relevant religious and matrimonial proceedings as follows [FN1] :
•November 10, 2011:The parties entered into a Divorce Agreement (Agreement I) with the assistance of the Eizer Mishpat Beth Din resolving, inter alia, the division of the marital property.
•December 13, 2011:Wife commences the within divorce action by the filing of the summons and verified complaint.
•August 24, 2012:Husband files a request for judicial intervention.
•October 5, 2012:Both parties and their counsel appear and enter into a preliminary conference order and so ordered stipulation.
•April 1, 2014:Agreement to Submit to Arbitration (Agreement II) (Badatz Rabbinical Court) is signed and acknowledged by both parties.
•July 1, 2014:Arbitration Decision (Award) issued by Badatz Rabbinical Court.
•September 25, 2014:Wife files motion sequence No.5 to vacate the Award.
•November 17, 2014:Husband files motion sequence #6 to confirm the Award.
The Divorce Agreement provides in relevant part:
Divorce agreement between Avrohom (AJ) and Miriam (Monica) Rothstein
The Arbitration Agreement provides in relevant part:
The parties purchased the marital residence in 2000 and resided together until 2011 when the Husband moved to Lakewood, New Jersey to reside with his sister. The Wife continued to reside in the marital residence with the parties' three children.[FN3] She asserts that she alone has made the monthly mortgage payment of $1,639.74 since July 1, 2011 for total payments of $61,967.12 as of the date of her application (September 2014). These payments, the Wife states, include the taxes and insurance on the home.
She explains, pursuant to Agreement I, dated November 10, 2011 and signed by both parties, the Beth Din, Eizer Mishpat, acting as an arbitration panel, resolved all matters regarding division of the parties' property, including the marital residence. The Wife submits further that by order of this Court dated October 5, 2012, the parties agreed as follows: "On consent of the parties, it is hereby ordered: All financial issues including maintenance, equitable distribution are resolved pursuant to an agreement of the parties dated November 10, 2011, except for issues relating to child support."
The Wife explains that because she subsequently failed to appear in front of Eizer Mishpat on issues that, she asserts, are to be determined by this Court, Eizer Mishpat imposed a Jewish contempt or siruv on her.[FN4] She states that in an effort to alleviate pressure placed on her in the community and on the children at school, and upon a promise to her that the Eizer Mishpat contempt would be removed, she agreed to sign Agreement II before a new Beth Din, Badatz of Lakewood (dated April 1, 2014). Badatz issued the Award, dated July 1, 2014 which, the Wife avers, directs "a new sharing of costs and various offsetting rental and mortgage payments related to the marital residence." These new provisions, she states, generally favor the Husband.
In support of her application to vacate the Award, the Wife argues that pursuant to CPLR §7511, an arbitration award may be modified or vacated if the award was made regarding matters [*4]not properly before the arbitration panel. Specifically, the award may be vacated if it clearly exceeds a specifically enumerated limitation on the arbitrator's power. Here, she submits, Badatz had no authority to reconsider issues regarding the marital residence due to the "exclusion" language in Agreement II itself.
Further, she asserts that Agreement II clearly states: "[t]his arbitration agreement does not cover...issues that have already been ruled upon by the Honorable Judge Rachel Adams in NYS Supreme Court." This, the Wife argues, necessarily includes the October 5, 2012 order directing that the issues of equitable distribution are resolved pursuant to Agreement I. As Agreement I sets forth the parties' rights with respect to the marital residence, any award made by Badatz in 2014 was beyond its scope and the Award should therefore be vacated.
At oral argument, the Wife reiterated that Agreement II specifically excluded "...all other issues that had already been ruled upon by this Court" and that because this Court's October 5, 2012 order on consent directed that all financial issues including maintenance, equitable distribution are resolved pursuant Agreement I, the Award exceeds its authority in ruling on issues previously determined by this Court. The Wife adds that the parties' preliminary conference order (also dated October 5, 2012) issued on consent, marked issues of equitable distribution resolved.
In opposition, the Husband argues that although Agreement I settled various open issues in the divorce action, paragraph 14 of the Agreement states, "...the parties agree that the Bais Din...shall have the sole and exclusive power to...modify...clarify..., interpret and or terminate and/or otherwise effect (sic) part and/or all of this Agreement in any way...."
The Husband explains that subsequent to Agreement I, the parties agreed to return to the rabbinical courts and in December 2013 engaged in further arbitration in order to resolve all open issues. The Husband asserts that on December 3, 2013, the parties participated in a lengthy mediation in which each party had their own representative and a rabbi from Badatz was present; he states that the parties agreed to shift all future rabbinical court proceedings to Badatz and, in a religious process, submitted to its jurisdiction (without executing documents to that effect).[FN5]
The Husband disputes having any knowledge that his children were threatened with expulsion as a result of the Wife's siruv (contempt) nor did the Wife contact him with these concerns. Rather, he submits, on April 1, 2014 the parties signed Agreement II (to arbitrate) through Badatz, which signatures were notarized.[FN6] The Husband asserts that the Wife never raised the siruv as a motivating factor for her agreeing to arbitrate before Badatz. He notes that the siruv was imposed by a separate Beth Din (Eizner Mishpat) which is unrelated to the Wife submitting to the jurisdiction of Badatz.
Regarding the arbitration before Badatz, the Husband avers that the Wife participated fully and without hesitation. In fact, she sought a determination from the Beth Din as to the allocation for [*5]the children's summer camp expense. She does not claim that any fraud, deceit or improper conduct took place during this proceeding nor has she alleged any facts warranting vacatur of the Award. Lastly, in opposition to the Wife's application, the Husband reiterated that Agreement I reserves authority for the rabbinical court to clarify, modify or otherwise change same.
In support of his application to confirm the Award, the Husband states that the parties submitted to the jurisdiction of Badatz to make a determination as to equitable distribution and financial relief, with the exception of child support. He argues that the Award was not improper and decided issues within its authority. The Award directs the parties to divide equally the property taxes, insurance and water charges on the marital residence. It further granted the Husband a credit for the benefit received by the Wife in remaining in the marital residence and maintaining expenses which would be far exceeded if she was required to rent an apartment for her and the children. The Husband maintains that this determination should be confirmed and that the Award should be confirmed in its entirety to the extent that it relates to all issues except child support and statutory add-ons.
At oral argument, Husband's counsel first argues that Agreement II specifically permitted Badatz to "deal" with various issues of the 2011 divorce agreement. He adds that Agreement I was modifiable and permitted the parties to utilize a Beth Din to amend or modify it. Within the Beth Din's authority is the ability, at the parties request, to look at various issues still within its purview such that Badatz was within its jurisdiction to modify any terms of Agreement I it deemed appropriate. Counsel argues further that on three separate occasions the Wife submitted herself to the arbitration authority of Badatz. The first instance was on March 13, 2014, the second on April 1, 2014 when she signed Agreement II and the third in December 2014 when she participated in a Jewish religious law procedure whereby she lifted and accepted possession of an article which under Jewish Law establishes that one accepts the authority of the panel who will hear the case.[FN7] Husband's counsel asserts that the Wife's application to vacate the Award is not premised on any lack of jurisdiction but rather that the Wife does not agree with the determinations made in the Award.
Regarding the specific Award, counsel submits that it determines financial and equitable distribution issues which in no way impact on the issue of child support to be paid to the Wife by the Husband, nor does the Award determine issues of tuition or daycare. As all matters determined in the Award were properly within Badatz's authority, and because the Wife has failed to establish a basis pursuant to CPLR §7511 to vacate the Award, same should be confirmed.
It is firmly established that the public policy of New York State favors and encourages arbitration and alternative dispute resolutions (Westinghouse Elec. Corp. v New York City Tr. Auth., 82 NY2d 47 [1993], citing, Nationwide Gen. Ins. Co. v Investors Ins. Co. of Am., 37 NY2d 91 [1975]). Arbitration has long been shown to be an effective "means of conserving the time and resources of the courts and the contracting parties" (Nationwide Gen. Ins. Co, supra; see, also, Westinghouse Elec. Corp., supra). In Nationwide Gen. Ins. Co., the Court of Appeals noted that "[o]ne way to encourage the use of the arbitration forum ... would be to prevent parties to such [*6]agreements from using the courts as a vehicle to protract litigation," as such conduct "has the effect of frustrating both the initial intent of the parties as well as legislative policy" (supra) (internal quotations and citation omitted). "Therefore, New York courts interfere as little as possible with the freedom of consenting parties to submit disputes to arbitration" (Smith Barney Shearson Inc. v. Sacharow, 91 NY2d 39 [1997], quoting, Matter of 166 Mamaroneck Ave. Corp. v 151 E. Post Rd. Corp., 78 NY2d 88 [1991]).
Further, "arbitrators have great discretion in fashioning remedies for aggrieved parties and are not bound by substantive rules of law in fixing awards. The arbitrator is empowered to do justice as he sees it, applying his own sense of law and equity to the facts as he finds them" (Dicker v Jodi—Lynn Washomatic, Inc., 149 AD2d 649 [1989]). "Even where the arbitrator makes a mistake of fact or law, [an arbitration] award is not subject to vacatur unless the court concludes that it is totally irrational or violative of a strong public policy and thus in excess of the arbitrator's powers" (Matter of Ishakis v Lieberman, 2015 NY Slip Op 04486).
"The only basis upon which an award can be vacated at the behest of a party who participated in the arbitration or was served with notice of intention to arbitrate is that the rights of that party were prejudiced by corruption, fraud or misconduct in procuring the award, partiality of an arbitrator, that the arbitrator exceeded his power or failed to make a final and definite award, or a procedural failure that was not waived" (Silverman v Benmor Coats, Inc., 61 NY2d 299 [1984]; CPLR 7511(b)(1).
As particularly relevant here, New York courts have confirmed that an agreement to proceed before a Beth Din is treated as an agreement to arbitrate (see, Spilman v Spilman, 273 AD2d 316 [2000], Weisenberg v Sass, 209 AD2d 424 [1994][an "arbitration before a Beth Din is a valid form of alternate dispute resolution and therefore a Beth Din, by voluntary agreement of the parties, can resolve contractual disputes"]).
Here, contrary to the Wife's contention, vacatur of the Award is not warranted based upon her allegation that the Beth Din exceeded a specific, enumerated limitation on its power (Berg v Berg, 85 AD3d 950 [2011]; Matter of Local 456, Intl. Bhd. of Teamsters v City of Yonkers, 75 AD3d 555[2010]; see CPLR 7511[b][1][iii]; see also Matter of United Fedn. of Teachers, Local 2, AFT, AFL—CIO v Board of Educ. of City School Dist. of City of NY, 1 NY3d 72 [2003]). Although the Wife alleges that the Court's October 5, 2012 order specifically precluded the Beth Din from arbitrating issues previously determined in Agreement I and therefore exceeded its authority in awarding relief related to the marital residence, the Court disagrees.
The October 5, 2012 so ordered stipulation states that "[a]ll financial issues including maintenance, equitable distribution are resolved pursuant to an agreement of the parties dated November 10, 2011 [Agreement I], except for issues relating to child support." This agreement to be bound by the terms of Agreement I as it pertains to these enumerated issues was not made to the exclusion of the remaining provisions of Agreement I and does not absolve the parties of their remaining obligations contained therein. Specifically,
The Court finds that the clear terms of the October 5, 2012 so ordered stipulation clarified for this Court those issues which the parties resolved before the Beth Din pursuant to Agreement I (e.g. equitable distribution and maintenance). That so ordered stipulation merely reflects that these issues remain within the purview of the rabbinical courts to address as set forth in Agreement I. Specifically, Agreement I as a whole sets forth the Beth Din's exclusive authority "now and in the future, to amend, modify, delete, add to, release, clarify, interpret, and/or terminate and/or otherwise effect (sic) part and/or all of this Agreement in any way, manner and/or form as the said Bais Din may deem proper" and, significantly, its exclusive authority to address all disputes that may arise regarding or associated with Agreement I. Ultimately, resolution of the enumerated issues set out in Agreement I and reflected in the October 5, 2012 order is inclusive of the additional provisions in Agreement I in which the Beth Din retained its authority to amend, modify, interpret, terminate, or in any other way affect the original terms of Agreement I. Thus, the Court finds that the Beth Din acted within its authority in issuing the subsequent Award while also acknowledging that the Award differs from the prior determinations regarding the marital residence in Agreement I.
Moreover, "... any limitation upon the power of the arbitrator must be set forth as part of the arbitration clause itself, for to infer a limitation from the substantive provisions of an agreement containing an arbitration clause calling for arbitration of all disputes arising out of the contract, or for arbitration in some other broadly worded formulation, is to involve the courts in the merits of the dispute—interpretation of the contract's provisions—in violation of the legislative mandate" (Matter of Nationwide Gen. Ins. Co. v. Investors Ins. Co., 37 NY2d 91 [1975]). Here, Agreement II set forth the following limitation "[t]his agreement does not cover issues of custody, visitation and child support (including educational expenses) and all other issues that have already been ruled upon by the Honorable Judge Rachel Adams in NYS Supreme Court." Here, the limitations of the Beth Din's authority are clear. The Court disagrees that the October 5, 2012 so ordered stipulation constitutes and issue "ruled upon" by this Court. Rather, as stated above, it is a reaffirmance and representation by the parties to the Court that equitable distribution and maintenance have been resolved before the Beth Din; the so ordered stipulation includes no findings or rulings by this Court.
The Wife's contention that she entered into Agreement II and thereby submitted to the jurisdiction of Badatz under duress and upon a promise of the siruv (contempt) being lifted is similarly without merit. Courts have consistently held that the threat of siruv does not constitute duress sufficient to support vacatur of arbitration awards and this Court finds that this rationale extends here, where siruv had been imposed (by a different Beth Din) on the Wife some months [*8]before entering into Agreement II [FN8] (see, In the Matter of the Arbitration between Benjamin Kleinbart v Build Green Solutions LLC, d/b/a BGS, and Elkana Tombak, 45 Misc 3d 2015(A) [2014]; Berg v Berg, 85 AD3d 950 [2011]). In light of the above findings, the Wife's application to vacate the Award is denied.
Turning to the Husband's motion to confirm the Award, the Court agrees that the issues presented to the Beth Din were properly subject to arbitration. Further, courts generally confirm arbitration awards resolving divisions of property and financial issues unrelated to child support and statutory add-on expenses. The Award primarily resolves distribution of the marital residence, responsibility for various expenses related thereto, rental income generated from the residence, its future sale, and future income tax returns filed by the parties. Noteworthy is the Award's provision that:
Further, the parties agreed, in their October 5, 2012 so ordered stipulation that all financial issues (e.g. equitable distribution and maintenance) are resolved pursuant to Agreement I and specifically agreed, and excepted out Agreement I's provision related to child support.
The Court finds that upon the Wife's application to vacate the Award having been denied, and no additional challenges to the Award having been raised, same shall be confirmed in its entirety. Although the issue of child support is subject to arbitration so long as the ultimate award complies with the Child Support Standards Act, here the parties stipulated that Agreement I does not govern child support and the Beth Din declined to consider these issues in issuing its Award (Hirsch v Hirsch, 4 AD3d 451 [2004]).
Accordingly, child support, educational expenses and statutory add-on expenses remain before the Court. The parties are therefore directed to exchange and file with the Court by August 3, 2015, updated statements of net worth, inclusive of 2012, 2013 and 2014 tax returns and proof of year-to-date income (e.g. paycheck stubs). The parties are further directed to submit and exchange proof of mandatory and/or discretionary add-on expenses (e.g. canceled checks, contracts), and proof of payment for tuition, including but not limited to any grants, loans, subsidies, etc.
This constitutes the decision and order of the Court. Husband's counsel is directed to serve a copy of the within decision and order with notice of entry within fourteen (14) days of entry in the Office of the Kings County Clerk.