RONALD H PORRITT V VERONICA M STRAUS
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STATE OF MICHIGAN
COURT OF APPEALS
RONALD H. PORRITT,
UNPUBLISHED
April 2, 2002
Plaintiff-Appellant/Cross-Appellee,
V
No. 227041
Livingston Circuit Court
LC No. 99-000752-DO
VERONICA M. STRAUS,
Defendant-Appellee/CrossAppellant.
Before: Gage, P.J., and Hoekstra and Meter, JJ.
PER CURIAM.
In this divorce action, plaintiff appeals as of right from the trial court’s denial of his
motion to vacate an arbitration award of property. Defendant cross-appeals by right. We affirm.
Plaintiff and defendant married on June 27, 1992. The parties had no children together.
In 1994, plaintiff’s adult son was electrocuted. Plaintiff received a wrongful death settlement
amounting to $1,280,000. Plaintiff placed $600,000 of this money into a trust in his name and
placed $400,000 into a trust in defendant’s name. The parties subsequently separated and
plaintiff filed a complaint for divorce.
The parties agreed to binding arbitration. The arbitrator found that the money plaintiff
put into the trust in defendant’s name constituted marital property. While equitably distributing
the property the arbitrator awarded the $400,000 to defendant. Plaintiff moved to vacate the
arbitration award on the basis that the arbitrator had exceeded his powers by committing an error
of law when he found that the money in defendant’s trust was marital property, but the trial court
denied plaintiff’s motion.
Plaintiff now contends that the trial court erred in refusing to vacate the arbitrator’s
award. The parties to a divorce action may agree to submit their property distribution disputes to
binding arbitration. Dick v Dick, 210 Mich App 576, 581-582; 534 NW2d 185 (1995). At the
time the parties agreed to arbitrate, an arbitration agreement had to comply with the standards of
the uniform arbitration act, MCL 600.5001 et seq., and MCR 3.602.1 Dick, supra at 588. In
1
Effective March 28, 2001, domestic relations arbitrations are subject to the domestic relations
arbitration act, MCL 600.5070 et seq. This act, however, does not apply to the instant case.
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accordance with MCR 3.602(J)(1), a court must vacate an arbitration award only under the
following circumstances:
(a)
the award was procured by corruption, fraud, or other undue
means;
(b)
there was evident partiality by an arbitrator appointed as a neutral,
corruption of an arbitrator, or misconduct prejudicing a party’s rights;
(c)
the arbitrator exceeded his or her powers; or
(d)
the arbitrator refused to postpone the hearing on a showing of
sufficient cause, refused to hear evidence material to the controversy, or otherwise
conducted the hearing to prejudice substantially a party’s rights.
The fact that the relief could not or would not be granted by a court of law or
equity is not ground for vacating or refusing to confirm the award. [Emphasis
added.]
We will vacate an arbitration award on the ground that an arbitrator exceeded his powers through
an error of law only when it clearly appears on the face of the award or in the reasons for the
decision that the arbitrator was led to the wrong conclusion because of the error of law, and that
but for such error the award would have been substantially different. Dohanyos v Detrex Corp
(After Remand), 217 Mich App 171, 176; 550 NW2d 608 (1996).
Plaintiff asserts that the arbitrator committed an error of law when it denominated the
trust in defendant’s name as marital property and awarded it to defendant. In distributing
property, the first task is to determine whether the property is a marital asset or a separate asset.
Reeves v Reeves, 226 Mich App 490, 493-494; 575 NW2d 1 (1997). Unless a statutory
exception applies, marital assets are divided among the parties, and each party leaves the
marriage with their own separate property. Id. at 494. Marital assets are assets earned by either
spouse during the marriage. Byington v Byington, 224 Mich App 103, 110; 568 NW2d 141
(1997).
We agree with plaintiff that when he first received the wrongful death settlement it
constituted his separate property. The wrongful death settlement paid to plaintiff for the death of
his son was similar to an inheritance, which usually is considered separate property. Dart v
Dart, 460 Mich 573, 584-585; 597 NW2d 82 (1999). See also MCL 600.2922(3) (limiting those
entitled to recovery in a wrongful death action to family members of the decedent, individuals to
whom the decedent’s estate would pass under the laws of intestate succession, or persons who
are devisees under the decedent’s will). We emphasize, however, that plaintiff did not keep the
settlement separate. Instead, plaintiff placed a portion of the settlement money into a trust in
defendant’s name. Furthermore, the arbitrator specifically found that plaintiff did so for tax
purposes and with the intent to “offer the Defendant wife comfort and security.” Accordingly,
the money then became marital property.
To the extent that plaintiff avers that the arbitrator mistakenly determined that he placed
the settlement proceeds in trust in defendant’s name for other than tax purposes, we reiterate the
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established principle that “[c]laims that quarrel with a binding arbitrator’s factual findings are
not subject to appellate review.” Krist v Krist, 246 Mich App 59, 67; 631 NW2d 53 (2001).2
Similarly, we also decline to address plaintiff’s challenge to the arbitrator’s factual finding that
“the Defendant wife used her efforts and income to help maintain the funds and assets received
by the Plaintiff husband as a result of the wrongful death of his son,” and the consequent finding
that the rental real estate owned by the parties, to which “both parties contributed from their sole
trust accounts into joint accounts,” constituted marital property subject to equitable division.3
Plaintiff additionally argues that the arbitrator committed an error of law by admitting
into evidence summaries of notes taken by the attorney whom the parties retained to establish the
trusts.4 We need not address the merits of plaintiff’s claim, however, because any error that
occurred was harmless in light of the arbitrator’s explicit explanation that it would have reached
the same decision “[r]egardless of [the attorney’s] notes.” Krohn v Sedgwick James of Michigan,
Inc, 244 Mich App 289, 295; 624 NW2d 212 (2001), citing MCR 2.613(A) and MRE 103(a).5
Affirmed.
/s/ Hilda R. Gage
/s/ Joel P. Hoekstra
/s/ Patrick M. Meter
2
While plaintiff argues that the title of the trust in defendant’s name was not dispositive of the
nature of this asset, we note that the arbitrator found more than the asset’s title, specifically
plaintiff’s intent to provide comfort and support for defendant, indicating that the trust
constituted marital property.
3
We reject plaintiff’s related suggestion that the arbitrator disparately treated the parties’ assets
by failing to characterize certain items purchased with the wrongful death settlement proceeds as
plaintiff’s separate property. The arbitrator found that the property that plaintiff incorrectly
characterizes as his separate property was purchased at least in part with the money in trust in
defendant’s name, which we have already explained the arbitrator properly deemed marital
property. Consequently, the items purchased with marital funds likewise constituted marital
property.
4
With respect to plaintiff’s characterization of the notes as hearsay, we note that we need not
address this unpreserved claim that plaintiff raises for the first time on appeal. Plaintiff
previously challenged the notes only on the basis that they contained privileged information.
Garavaglia v Centra, Inc, 211 Mich App 625, 628; 536 NW2d 805 (1995) (explaining that issues
raised for the first time on appeal ordinarily are not subject to review).
5
We note that we do not address the issue raised by defendant on cross appeal. We find it
unnecessary to address defendant’s assertion that the trust money constituted a gift in light of our
conclusion that the arbitrator did not exceed its powers in finding that the trust in defendant’s
name was marital property. We also do not address the ultimate distribution of the marital
property, the equitable nature of which the parties do not specifically challenge.
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