KEVIN D. KELLY v. DEBORAH E. KELLY

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is only binding on the parties in the case and its use in other cases is limited. R.1:36-3.

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

KEVIN D. KELLY,

Plaintiff-Appellant,

v.

DEBORAH E. KELLY,

Defendant-Respondent.

________________________________________________

October 17, 2016

Submitted September 14, 2016 Decided

Before Judges Messano, Espinosa, and Guadagno.

On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Morris County, Docket No. FM-19-578-10.

Kevin D. Kelly, appellant pro se.

Deborah E. Kelly, respondent pro se.

PER CURIAM

Plaintiff Kevin D. Kelly appeals from the January 2, 2015 Family Part order denying his motion to stay arbitration of the issues raised in his divorce complaint and enforcing a March 25, 2013 consent order wherein the parties agreed to dismiss the complaint and proceed to binding arbitration. We affirm substantially for the reasons set forth in the motion judge's thirty-five-page statement of reasons appended to the January 2, 2015 order. R. 2:11-3(e)(1)(A).

The parties were married in 1987 and had five children. Plaintiff filed a complaint for divorce in the Chancery Division, Sussex County in 2010. Court records indicate that in 2011 the case was transferred to Morris County because plaintiff, an attorney, practiced in Sussex County. The parties attempted to mediate the matter without success and in late 2012, defendant moved to list the matter for trial. Plaintiff opposed the motion and argued that the parties should continue to pursue mediation. On January 4, 2013, the judge entered an order scheduling trial to begin on April 8, 2013.

On March 25, 2013, the judge held a pre-trial conference. The attorneys advised the judge that the parties could resolve all outstanding issues through binding arbitration. After discussing arbitration with their clients, the attorneys presented a handwritten consent order executed by both parties agreeing to resolve the outstanding issues in their divorce through binding arbitration. The order identified a retired superior court judge as arbitrator, and provided that plaintiff would pay the arbitrator's retainer without prejudice. Plaintiff's complaint for divorce was then dismissed without prejudice.

On April 2, 2013, plaintiff executed the arbitrator's retainer agreement confirming that, after plaintiff paid the initial retainer, the parties would be billed equally. On June 22, 2013, the arbitrator conducted the first session, followed by sessions on September 3 and 4, 2013. At the September 4 session, the arbitrator informed the parties that the retainer had been exhausted and additional funds were required.

In October 2013, plaintiff's counsel filed a motion in the Family Part to be relieved. Because the motion was filed under the dismissed FM docket number, the judge returned the pleadings without deciding the motion. In February 2014, plaintiff's counsel moved to be relieved before the arbitrator who denied the motion.

In October 2013, a non-dissolution or "FD" docket was created when defendant sought enforcement of plaintiff's pendente lite support obligation. A child support hearing officer recommended that plaintiff be required to pay $2600 per month plus $400 toward arrears. Plaintiff initially sought to appeal that recommendation, but withdrew the appeal on December 6, 2013.

Later that month, plaintiff moved pro se to reinstate the divorce complaint under the FM docket. As she did with the application by plaintiff's counsel, the judge returned the pleadings to plaintiff as the arbitration was ongoing.

Plaintiff then moved before the arbitrator to reinstate the divorce complaint, set a trial date, and modify his support obligation. On February 19, 2014, the arbitrator denied the motion, noting one more hearing was necessary to complete the testimony in the arbitration. The arbitrator ordered all parties and attorneys to appear for the next arbitration hearing on April 1, 2014, and indicated that plaintiff's motion to modify his support obligation will be decided at the completion of the testimony.

On March 27, 2014, plaintiff again moved pro se before the motion judge to reinstate his divorce complaint and set a trial date. On March 31, 2014, the judge notified counsel for both parties that the motion had been returned to plaintiff, and the arbitration was to resume on April 1, 2014.

Later that day, plaintiff filed a Chapter 7 bankruptcy petition in United States Bankruptcy Court for the District of New Jersey. This filing resulted in the cancellation of the arbitration hearing scheduled for April 1, 2014. On June 10, 2014, defendant's motion to vacate the automatic stay to permit the continuation of the arbitration was granted. On July 3, 2014, plaintiff received a discharge under the Bankruptcy Code.

On September 23, 2014, we granted plaintiff's application for emergent relief and ordered the deputy clerk of the court to accept plaintiff's motion to reinstate his complaint, and directed the Family Part judge to decide the motion and enter an appropriate order.

Plaintiff then filed a motion requesting a stay of arbitration proceedings, reinstatement of his divorce complaint, setting of a peremptory trial date, and modification of his support obligation. Plaintiff filed a supplemental motion to disqualify the trial judge and to transfer the FM matter to Warren County. The trial judge combined the two motions and heard testimony from both parties and oral argument on December 19, 2014. On January 2, 2015, the judge entered an order denying plaintiff's motions accompanied by a thirty-five-page statement of reasons.

On appeal, plaintiff claims the arbitration proceeding failed to comply with statutory and case law; he is being denied access to the courts; the court-ordered pendente lite support should be taxable income to defendant and deductible by plaintiff; he is entitled to credits for support payments made; and the trial judge should have recused herself.

We begin by noting the familiar standard of review that a trial judge's factual findings are binding on appeal when supported by adequate, substantial, and credible evidence. Cesare v. Cesare, 154 N.J. 394, 411-12 (1998). "Because of the family courts' special jurisdiction and expertise in family matters," we "accord deference to family court factfinding[s]." Id. at 413. We do not disturb the "factual findings and legal conclusions of the trial judge unless . . . convinced that they are so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice." Id. at 412 (quoting Rova Farms Resort, Inc. v. Inv'rs Ins. Co., 65 N.J. 474, 484 (1974)). Our review of a trial court's legal conclusions is plenary. Manalapan Realty, L.P. v. Twp. Comm., 140 N.J. 366, 378 (1995).

Plaintiff now argues that the arbitration proceedings he agreed to did not comply with the Uniform Arbitration Act of 2003 (Act). Specifically, he claims that there was no written arbitration agreement, and that the issue of custody was introduced "by surprise on the first day of arbitration proceedings."

Under the Act, the determination of whether an agreement to arbitrate exists is left to the sound discretion of the court. N.J.S.A. 2A:23B-6(b). Courts apply "state contract-law principles . . . [to determine] whether a valid agreement to arbitrate exists." Hirsch v. Amper Fin. Servs., LLC, 215 N.J. 174, 187 (2013) (quoting Hojnowski v. Vans Skate Park, 187 N.J. 323, 342 (2006)).

Here, the trial judge determined that both plaintiff and his counsel signed the March 2013 consent order and that plaintiff executed the arbitrator's retainer agreement, and "voluntarily moved forward to arbitrate this matter with a session in the summer of 2013, as well as two more sessions in September 2013." The judge noted that by the end of the third session, plaintiff had presented his case and rested; during this period, neither plaintiff nor his counsel ever asserted that the arbitration process was invalid.

The trial judge rejected plaintiff's claim that he was surprised that custody of the children was the subject of arbitration, noting that defendant raised custody during the first session and the issue had been fully arbitrated. The judge found that because three of the children remained unemancipated, "it would not make sense for either party to believe that child-related issues, including child support, health insurance, college contributions, etc. were 'off the (arbitration) table.'" The judge also found that plaintiff's testimony during the December 19, 2014 hearing in support of his motion, was not credible.

We are satisfied that the trial judge's determination that a valid agreement existed to arbitrate all contested issues is adequately supported in the record. Moreover, by signing the consent order to arbitrate, signing the arbitrator's retainer agreement, paying the arbitrator's retainer, and participating in three arbitration sessions, plaintiff waived any procedural challenges to the arbitration. See Wein v. Morris, 194 N.J. 364, 384 (2008) (by failing to either object before the arbitrator or to seek direct appeal or interlocutory review, defendants waived their right to appeal the order compelling arbitration). We agree that "it would be a great waste of judicial resources to permit [plaintiff], after fully participating in the arbitration proceeding, to essentially have a second run of the case before a trial court." Ibid.

Next, plaintiff argues that the judge's refusal to hear his motions during the pendency of the arbitration denied him access to the courts. He also complains that defendant was permitted to file motions whereas he was not. We find this argument lacks sufficient merit to warrant discussion in our opinion, Rule 2:11-3(e)(1)(E), beyond the following comments.

Three years after he filed his complaint for divorce, plaintiff agreed to arbitration on the eve of trial. Plaintiff then stopped paying defendant's court-ordered support,1 and defendant was permitted to enforce plaintiff's support obligation under a non-dissolution docket. Plaintiff fully participated in this litigation and filed an appeal of the hearing officer's recommendation, but later withdrew it.

Plaintiff's arguments challenging prior interlocutory orders as to whether spousal support is taxable to defendant and deductible by plaintiff are issues to be addressed by the arbitrator and are not properly before us.

As we are remanding this matter to the arbitrator to permit arbitration to continue, we need not consider plaintiff's argument that the trial judge should have recused herself. We note that plaintiff's claim of judicial bias is based primarily on the judge's refusal to consider three motions filed after the divorce complaint had been dismissed on consent in favor of arbitration. Even if we were to consider this claim, we find nothing in the record to support plaintiff's claim of bias.

The January 2, 2015 order is affirmed and the matter is returned to the arbitrator for continuation and completion of the arbitration. We do not retain jurisdiction.

1 Court records indicate that, as of January 7, 2013, plaintiff's support arrears were fixed at $55,579.85.