Family Law Arbitration in Kentucky: Current Case Law

In Kentucky, the right of litigants to contract for settlement of claims by arbitration is guaranteed by Section 250 of the Kentucky Constitution:

It shall be the duty of the General Assembly to enact such laws as shall be necessary and proper to decide differences by arbitrators, the arbitrators to be appointed by the parties who may choose that summary mode of adjustment.

One enabling statute, Ky. Rev. Stat. § 417.050, provides:

A written agreement to submit any existing controversy to arbitration or a provision in      written contract to submit to arbitration any controversy thereafter arising between the      parties is valid, enforceable and irrevocable, save upon such grounds as exist at law for the revocation of any contract....

Specifically excluded by the statute are arbitration agreements between employers and employees. There is no exclusion of family law claims. Expressio unius est exclusio alterius, the mention of one thing implies the intentional exclusion of another. C.D.G. v. N.J.S.[1] Thus, constitutionally family law claims may be arbitrated.

As observed by sister states, over 100 years ago the Kentucky Supreme Court recognized and enforced agreements to arbitrate family law claims in the published decisions in Masterson I,[2] Masterson II,[3] and Masterson III[4].[5],[6] Before the Masterson courts were classic family law claims of property division, child custody, visitation, child support, alimony, and attorney fees. All were settled through arbitration. The underlying procedural history is described in Masterson I:

Pending a suit brought by the appellee against his wife for separation from bed and board, due, as he avers, to her passionate outbursts of temper and violence to appellee's children by a former wife, an agreement was reached by which the parties were to live separate and apart from each other, and the question of alimony and of all property rights was left to arbitration. This agreement was entered as an order of court in the pending case. The award was duly made and reported, and by it the husband was to pay the wife $500 cash, $512.50 in one year, and a like amount in two years, with interest from date of the award. He was likewise to pay the wife the sum of $20 per annum for six years as support for an infant, custody of which was given the wife under the terms of the agreement.[7]

Vacating the trial court’s judgment, in favor of the arbitrators’ award, that court held:

As the arbitrators selected by these parties to adjust this question heard proof, and did adjust it, apparently to the satisfaction of both husband and wife at the time, although the finding by consent was subsequently abandoned,-but by the wife from sheer necessity, -we are convinced that the award was a just and equitable one, and the wife should be adjudged substantially the amount fixed therein.[8]

Directly addressing the enforceability of the arbitrated agreement, the Masterson II court held:

Pending the original controversy between the husband and wife, they agreed upon a permanent separation, and, in contemplation thereof, further agreed to leave to arbitrators the matters of settlement of alimony and custody and support of the children. The arbitrators selected returned their award into court, which for some reason appears not to have been enforced, and the litigation was prosecuted. This court, however, on the former appeal, took the agreement to arbitrate as valid, and adopted the award as a just basis of settlement of the question of alimony… But no case has been cited in which it has been decided that such contracts are void if made in contemplation of the continuance of a previous separation, or in contemplation of an immediate separation where disagreements have taken place between the husband and wife. On the contrary, it has been decided in numerous cases that the husband's contract to support the wife, made under such circumstances, is valid. Clancy, Husb. & W. p. 397, c. 4; 2 Story, Eq. Jur. §§ 1427, 1428.[9]

Two years after Masterson II, the Court decided Masterson III. In that decision it reaffirmed its earlier decisions to enforce the parties’ arbitrated settlement and affirmed the trial court’s later decision to change custody based on new evidence.[10]

One hundred and one years after Masterson III came the unpublished decision in Redmon v. Redmon.[11] Redmon was the appeal of a final order modifying child support. In their marital settlement contract “[t]he parties agreed that any request for modification of the child support obligation would be submitted to binding arbitration with no right of appeal.”[12]  After entry of the arbitrator’s award, Mr. Redmon filed a motion to “modify or correct”[13] alleging the award was so excessive it constituted fraud. The trial court granted his motion and reduced the award. Reversing and remanding the Kentucky Court of Appeals held:

KRS 417.050 provides that a written agreement to submit a controversy to arbitration is valid, enforceable and irrevocable, except for grounds existing at law for the revocation of any contract. An arbitration decision will not be held invalid merely because it is unjust, inadequate, excessive or contrary to the law. Carrs Fork Corp. v. Kodak Mining Co., Ky., 809 S.W.2d 699, 702 (1991)[[14]]. It shall not be set aside even if it is wrongly decided.[15]

Though the Redmon court did not reference Masterson I, II, or III, its decision to enforce the parties’ arbitrated settlement agreement was consistent with it.

Two years after Redmon came the unpublished decision in Patterson v. Patterson.[16] Patterson arose on a petition for dissolution of marriage and related claims. Citing the arbitration provision of the parties’ marital settlement agreement, the court of appeals dismissed holding:

This appeal arises from a dissolution proceeding originally scheduled for trial on April 4, 2002. Approximately one week prior to that date, the parties entered into a written agreement to arbitrate all issues related to the divorce with attorney B. Mark Mulloy acting as the agreed-upon arbitrator. The voluntary arbitration agreement, the validity of which is not in dispute, clearly states that the final judgment tendered by the arbitrator and entered by the Court ‘shall be binding on the parties and shall not be subject to appeal.’[17]

Patterson was followed two years later by the unpublished decision in Pippin v. Pippin.[18] Pippin was another action for dissolution of marriage where the parties’ marital settlement agreement required arbitration of their claims. In its opinion affirming all but the trial court’s decision on maintenance arrears, the Pippin court supported its decision citing findings made both by the arbitrator and by the trial court. But the court noted that the validity of the arbitration agreement was “not in dispute.”[19]

Three years later the Kentucky Court of Appeals issued the unpublished decision in Campbell v. Campbell. [20] The Campbell court, sua sponte, vacated the trial court’s judgment confirming the arbitrator’s award, declaring the trial court’s approval of the agreement an “unlawful delegation of a judicial function.”[21] The Kentucky Supreme Court granted discretionary review but before the Court could render an opinion, the parties settled. But the Supreme Court did depublished the Campbell decision.

The Campbell court reasoned that arbitration of family law claims is an unlawful delegation of a judicial function because it is antithetical to the concept of “One Family, One Judge, One Court.”[22] The Campbell majority’s observation that the concept of ‘one family, one judge, one court’ is a bedrock concept of family court was correct. Kurprion v. Fitzgerald.[23] But uniformity in orders and judicial economy is but one pillar of the framework of family court; there is another. Just as fundamental to the architecture of family court is the integration of all forms of nonjudicial i.e., alternative dispute resolutions systems. Court designated support workers, mediators, lawyers trained in collaborative law, psychologists, and social workers, court appointed custody evaluators and business appraisers, Friend[s] of the court, Guardians ad litem, parenting coordinators, relationship counselors, Families in Transition and Batterer’s Intervention Program trainers, and CASA volunteers, are all heavily used in family court, by design, to help parties resolve their claims with a minimum of judicial intervention. In Morgan v. Getter the Court described this two-pillar dynamic of family court:

Unified family courts, with their holistic approach to families (the one-family one-judge idea), their alternatives to litigation (mandated or encouraged mediation, for example), their involvement with other social service providers (often facilitated by a family court judge's on-staff support worker), and what are often less formal proceedings (including, for example, the relaxation of evidentiary rules) have been hailed as the    providers of “therapeutic justice,” as problem solvers and conflict mitigators for families suffering from underlying dysfunctions. Simply put, these courts are not mere umpires or dispute deciders. John Lande, The Revolution in Family law Dispute Resolution, 24 J. Am. Acad. Matrim. Law 411 (2012); Jana B. Singer, Dispute Resolution and the Post-divorce Family: Implications of a Paradigm Shift, 47 Fam. Ct. Rev. 363 (2009).[24]

This inclusion of a wide variety of nonjudicial dispute resolution options is what is meant when family court is also described as a portal to community-based services.

In addition, the Campbell court did not  attempt to reconcile Ky. Const. § 250, and its corollary, Ky. Rev. Stat. §§ 417.045-240, with Ky. Rev. Stat. § 23A.100 [Jurisdiction of family court]. The decision mentions both statutory schemes but only summarily concludes “[i]n our review of Kentucky law, we can find no published authority that has addressed whether domestic relations cases fall within the purview of KRS 417.050.”[25]  In Kentucky, the law of statutory construction requires an attempt to reconcile apparently conflicting statutes and an attempt to give effect to both. Commonwealth v. Kenley;[26] and Masterson I, II, and III are published authority falling within the purview of Ky. Rev. Stat. § 417.050, Masterson II specifically cites 73, Ky. St., a forerunner to Ky. Rev. Stat. §§ 417.045-240.[27]

Finally, the assertion of unlawful delegation of a judicial function carries the implication of no judicial oversight over marital settlement agreements achieved through arbitration. However, Ky. Rev. Stat. § 403.180 requires judicial oversight over such agreements, regardless of the process used to reach consensus. The review is de novo and requires a factual finding that the agreement is or is not “unconscionable.”[28] Further, because marital settlement agreements become the court’s judgment, a de novo finding is required that all provisions for custody and visitation are “in the best interest of the child.”[29] For a more detailed analysis of the unlawful delegation of judicial power argument, see my article Family Law Arbitration: Unlawful Delegation Of Judicial Power.[30]

In Kentucky, Ky. Const. § 250, Masterson I, II, III, Maclean, and Ky. Rev. Stat. § 417.050 remain as controlling authority. They support the right to arbitrate family law claims. The unpublished opinions in Redmon, Patterson, Pippin, and Campbell are not authoritative and vary as to their support of arbitration family law claims. CR 76.28(4)(c).[31]

[1] 469 S.W.3d 413 (Ky. 2015).

[2] 46 S.W. 20 (Ky. 1898) [hereinafter Masterson I].

[3] 60 S.W. 301 (Ky. 1901) [hereinafter Masterson II].

[4] 71 S.W. 490 (Ky. 1903) [hereinafter Masterson III].

[5] Faherty v. Faherty, 477 A.2d 1257 (N.J.Sup.Ct.1984) (citing Bandas v. Bandas, 430 S.E.2d 706 (Va.Ct.App.1993), 1 Alt. Disp. Resol. Sec. 23:13 (4th ed.), and 18 J. Am. Acad. Matrim. Law 429 (2003)).

[6] Carolyn M. Zack, Family Law Arbitration in the United States, American Bar Association (forthcoming 2019).

[7] Masterson I at 21.

[8] Id.

[9] See id. at 302.

[10] Masterson III at 490.

[11] No. 2002-CA-001799-MR, 2003 WL 21476789 (Ky. App. 2003).

[12] Id. at *1.

[13] Id. at *2.

[14] overruled on other grounds by Nami Resources Company, LLC. v. Asher Land and Mineral, Ltd., 554 S.W.3d 323 (Ky. 2018) (trial court has duty to take corrective action when error at trial is so egregiously prejudicial as to cause manifest injustice).

[15] Redmon at *2.

[16] 2003-CA-001588-MR, 2005 WL 3001673 (Ky. App. 2005).

[17] Id. at *1.

[18] 2005-CA-002087-MR, 2007 WL 2460713 (Ky. App. 2007).

[19] Pippin at *1.

[20] No. 2006-CA-001803-MR, 2010 WL 391841 (Ky. App. 2010).

[21] Campbell at *16.

[22] Campbell at *7.

[23] 888 S.W.2d 679 (Ky. 1994).

[24] 441 S.W.3d 94, 105 (Ky. 2014) (emphasis added).

[25] Campbell at *15.

[26] 516 S.W.3d 362 (Ky. 2017).

[27] Masterson III at 303, see also Young v. Vista Homes, Inc., 243 S.W.3d 352, 369 n.4 (Ky. App. 2007) (“[N]ot to be officially reported” designation by former Kentucky Court of Appeals does not render opinions published in Southwestern Reporter  “unpublished,” as that term is used in CR 76.28(4)(c)).

[28] Ky. Rev. Stat. §§ 417.045-240 (also requires judicial confirmation of arbitrator’s award).

[29] Id. at § 403.270.

[30] /category/attorney-articles/family-law-blog/.

[31] (unpublished opinions may only be cited as precedent if no published opinions adequately address the issue before the court).

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