Arbitration Award Stands Even Though One Of The Arbitrators Was Later Convicted Of Crime

  by:  Peter J. Gallagher (@pjsgallagher) (LinkedIn)

Divorce decree (pd)Arbitration awards are, by design, difficult to vacate. But what happens when one of the arbitrators who entered the award is later convicted of a crime related, at least to some extent, to an issue in the arbitration. In Litton v. Litton, the Appellate Division addressed this interesting but (hopefully) uncommon occurrence.

In Litton, plaintiff and defendant were married in 1982 and had one child. In 2008, the Family Part entered a judgment of divorce and ordered them to share joint custody of their son. They were also directed to proceed to arbitration before a rabbinical panel, or Beth Din, which they did. The panel, which was comprised of three rabbis, entered an award requiring the husband to pay the wife $5,000 per month until he gave her a Get. (As the Appellate Division explained, a Get is a "written document a husband must obtain and deliver to his wife when entering into a divorce. Without a Get, a wife cannot remarry under Jewish law.") Once the wife received the Get, the husband's monthly support obligation would be reduced to $3,500. The husband was also ordered to pay $20,0250 in arrears, $100,000 in the wife's legal fees, and a fine of $250,000 for "his refusal to disclose information about the couple's joint funds."

Several months later, the wife moved to enforce the award and, apparently, have the husband jailed for not complying with it. The Family Part denied the request and found that the husband was not capable of complying with the support order.

Four years later, the Family Part reduced the husband's support obligation from $5,000 per month to $23 per week. Around the same time, in a "wholly unrelated matter," one of the arbitrators on the panel was charged with, and apparently later convicted  of, "criminal conspiracy to threaten and coerce Jewish husbands to give Gets to their wives."  The husband moved to vacate the arbitration award, arguing that, in light of these charges against one of the rabbis on the panel, "the award was the product of corruption." The trial court denied the motion, holding that there was no causal connection between the arbitration in 2008 and the charges against the rabbi five years later, and that there were two other rabbis on the panel who were not charged as part of the conspiracy. The husband appealed.

The Appellate Division affirmed the trial court's decision. It observed that New Jersey favors arbitration and therefore a court will only vacate an arbitration award if (1) it is  "procured by corruption, fraud, or other undue means," or (2) the court finds partiality, corruption, or misconduct by the arbitrator that prejudices a party's rights. The husband argued that, based on the Family Part's decision that he could not afford to pay $5,000 per month, its subsequent reduction of the support obligation to $23 per week, and the rabbi's conviction, the court could "'connect the dots' and infer the arbitration award in the parties' case was fraudulently procured or corrupt." The Appellate Division disagreed, citing favorably the trial court's conclusion that "the dots [were] too far away and unrelated." Accordingly, the Appellate Division affirmed the trial court's decision that the husband could not satisfy his burden of showing that the arbitration award was the product of fraud or corruption.

The Appellate Division also rejected the husband's argument that the rabbi had a duty to disclose "the lengths he would go to to 'assure wayward husbands granted GETS to their wives.'" The court noted that an arbitrator is required to "disclose to all parties any financial or personal interest, and any existing or past relationship with any of the parties." If the arbitrator fails to do so, then a court may vacate a subsequent award. But, in Litton, the Appellate Division held that the husband could not establish that the rabbi had any personal or financial interest in the award or that he was even "unlawfully coercing husbands to give their wives Gets at the time plaintiff and defendant engaged the rabbinical panel." Accordingly, the arbitrator did not breach any disclosure obligation and the arbitration award could stand.

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