SYLLABUS
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).
Christine Saba Fawzy v. Samih M. Fawzy (A-38/39-08)
Argued February 3, 2009 -- Decided July 1, 2009
LONG, J., writing for a unanimous Court.
The issue in this appeal is whether parties to a matrimonial action may agree to submit questions regarding child custody and parenting time to binding arbitration, and if so, what standard of review will apply.
In 2005, Mrs. Fawzy filed a complaint for divorce. Leonard R. Busch, Esq., was appointed guardian ad litem for the parties' two children. On January 22, 2007, the day on which trial was to take place, the parties notified the judge that they had agreed to arbitrate in place of proceeding to trial. The attorneys asked Busch to serve as the binding arbitrator on all issues. Mr. Fawzy's attorney asked that the parties be sworn in to place on the record their agreement to arbitrate. The judge told the parties that the arbitrator would be making decisions about parenting time and that the award is not appealable unless there are changed circumstances and the best interests of the children would be served by modifying support. In response to his attorney's questions, Mr. Fawzy stated that he was voluntarily choosing to proceed to arbitration.
In March 2007, the judgment of divorce was entered, including reference to the agreement to arbitrate. The attorneys signed an interim arbitration order, which stated that the parties agreed to enter into binding arbitration pursuant to N.J.S.A. 2A:24-1 et seq. (In 2003, that statute was superseded in relevant part by N.J.S.A. 2A:23B-1 to -32. Now, N.J.S.A. 2A:24-1 to -11 governs only arbitration of collective bargaining agreements.) On March 28, 2007, while the arbitration was in process, Mr. Fawzy filed an order to show cause seeking to restrain Busch from issuing a custody or parenting-time award, arguing that as a matter of law those issues could not be arbitrated and that, in any event, he was pressured into agreeing to arbitrate. The judge denied the application and noted that the arbitration award could be modified based on changed circumstances, or vacated under N.J.S.A. 24-8(d) if the arbitrator exceeded his powers.
In April 2007, Busch issued a custody and parenting-time award, granting joint legal custody with primary physical custody to Mrs. Fawzy and granting Mr. Fawzy parenting time. Arbitration continued on financial issues. In May, Mr. Fawzy filed a second order to show cause, now seeking to vacate the arbitration award and to disqualify Busch from further participation in the case. Alternatively, he requested that the court review the award de novo and stay the award pending appeal. Mr. Fawzy certified that he did not understand the rights he was waiving when he agreed to arbitration, and that he was not involved in the process that led to the interim order. The trial judge denied the application and entered an amended judgment of divorce, which confirmed the arbitration award.
Mr. Fawzy appealed, arguing that custody issues cannot be submitted to binding arbitration because it deprives the court of its parens patriae obligation to assure the best interests of the child. The Appellate Division was troubled by Mr. Fawzy's failure to establish that the award would harm the children, but held that child custody issues cannot be submitted to binding arbitration. Fawzy v. Fawzy, 400 N.J. Super. 567 (App. Div. 2008). The panel reversed the trial court's decision and remanded for a hearing on custody and parenting-time issues. Mrs. Fawzy filed a petition for certification. Mr. Fawzy cross-petitioned on the issue of whether an arbitrator in a child-custody proceeding may also serve as a guardian ad litem. The Court granted the petition and cross-petition. 196 N.J. 595 (2008).
HELD: The constitutionally protected right of parental autonomy includes the right of parents to choose the forum in which to resolve their disputes over child custody and parenting time, including arbitration. An agreement to arbitrate must be in writing or recorded and must establish that the parties are aware of and have knowingly and voluntarily waived their rights to a judicial determination. A record of documentary evidence adduced during the proceedings must be kept; testimony must be recorded; and the arbitrator must issue findings of fact and conclusions of law in respect of the award. The arbitrator's award is subject to review under the Arbitration Act, N.J.S.A. 2A:23B-1 to -32, except that judicial review is also available if a party establishes that the award threatens harm to the child.
1. Arbitration is a method of dispute resolution involving a neutral third person, usually agreed to by the parties, whose decision is binding. The use of arbitration proceedings is encouraged as a substitute for litigation. Arbitration is a matter of contract. Issues may be arbitrated only if the parties have agreed to arbitrate those issues. Waiver of the time-honored right to sue must be clearly established. (pp. 12-14)
2. In 2003, the Legislature adopted the Arbitration Act, which generally mirrors the Uniform Arbitration Act. The Act details the arbitration procedures that apply unless varied by contract. It contains provisions that detail the conduct of the arbitration process itself, the issuance of the award, the standards for confirmation, and the narrow circumstances under which a court may vacate or modify an arbitration award. (pp. 14-16)
3. The Act does not contain a bar to the arbitration of family law matters. In Faherty v. Faherty, the Court long ago approved arbitration of alimony and child support issues. Today, the Court resolves the issue left open in Faherty -- whether child-custody and parenting-time issues can be resolved by arbitration. The majority of states that have addressed the issue have concluded that parents may submit those issues to arbitration in the exercise of their parental autonomy. Arbitration conducted with a fact-finder of the parties' own choosing is often less antagonistic than litigation and may minimize the harmful effects of divorce litigation on the family. (pp. 16-19)
4. The right to rear one's children is a fundamental liberty interest. Deference to parental autonomy means that the state does not second-guess parental decision making, interfere with the shared opinion of parents regarding how a child should be raised, or impose its own notion of a child's best interests on a family. Parental autonomy includes the freedom to decide wrongly, but it is not absolute. Under the parens patriae doctrine, the state has an obligation to intervene where it is necessary to prevent harm to a child. That harm standard is a constitutional imperative that allows the state to intervene into the otherwise private and protected realm of parent-child relations. (pp. 20-25)
5. Parental autonomy includes the right to submit any family controversy, including child-custody and parenting-time issues, to a decision maker of chosen by the parents. The right of parents to make decisions regarding custody, parenting time, health, education, and other child-welfare issues between themselves, without state interference, does not evaporate when a marriage breaks down. It is only when the parents cannot agree that the court becomes the default decision maker. There is no basis to carve out of the right to parental autonomy the decision to submit child-custody and parenting-time matters to arbitration. Just as parents choose to decide those issues among themselves, they may opt to sidestep the judicial process and submit their dispute to an arbitrator whom they have chosen. The right to arbitrate serves an important family value by allowing parents the opportunity to choose an arbitrator based on her familiarity with the family or her understanding of the values that the parents hold dear and have tried to follow in raising their child. (pp. 25-27)
6. Turning to the standard of review of a child-custody arbitration award, where no harm to the child is threatened, there is no basis to infringe on the parents' choice to be bound by the arbitrator's decision, and the parties are limited to the Arbitration Act's remedies. If a prima facie case of harm is advanced, the court must determine the harm issue. If no finding of harm ensues, the award is only subject to review under the Arbitration Act standard. If the court finds harm, the presumption favoring the parents' arbitration choice will be overcome and the court must decide what is in the child's best interests. This hybrid model advances the goals of arbitration, affords deference to parental decision making, and leaves open the availability of court intervention when necessary to prevent harm to the child. (pp. 27-31)
7. When parties in a dissolution proceeding agree to arbitrate, the general rules governing the conduct of arbitration apply. However, to ensure a record on which to evaluate a claim that an award threatens harm to the child and to avoid a complete replay of the arbitration proceedings, the Court directs that in respect of child-custody and parenting-time issues only, a record of all documentary evidence shall be kept; all testimony shall be recorded verbatim; and the arbitrator shall state in writing or otherwise record findings of fact and conclusions of law with a focus on the best-interests standard. An arbitration award regarding child-custody and parenting-time issues that results from procedures other than those mandated by the Court will be subject to vacation upon motion. (pp. 31-33)
8. An agreement to arbitrate must be in writing or recorded in accordance with the requirements of N.J.S.A. 2A:23B-1, must establish in clear and unmistakable terms that the parties understand and have knowingly waived their rights to a judicial determination and that they are aware of what review is available, and must specify the issues that are subject to the arbitrator's decision. The Court asks its Committee on Family Practice to develop form agreements and scripts for use by lawyers and judges in cases in which the parties seek to bind themselves to arbitration. (pp. 33-35)
9. In this case, the agreement to arbitrate was insufficient to bind the parties. There was no written agreement. Although the details of the arbitration may have been worked out and explained by the lawyers, it cannot be ascertained from the record whether that is so and whether the Fawzys understood what they were relinquishing by opting for arbitration. Because the parties imperfectly exercised their power to agree upon arbitration as a way of resolving their differences over child custody and rearing, the judgment overturning the arbitration award is affirmed. (pp. 35-36)
10. A guardian ad litem may not simultaneously or sequentially serve as an arbitrator for the parties. (pp. 36-38)
The judgment of the Appellate Division is AFFIRMED.
CHIEF JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN, WALLACE, RIVERA-SOTO and HOENS join in JUSTICE LONG's opinion.