HARKINS v. HARKINS

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NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES. See Ariz. R. Supreme Court 111(c); ARCAP 28(c); Ariz. R. Crim. P. 31.24 IN THE COURT OF APPEALS STATE OF ARIZONA DIVISION ONE In re the Marriage of: KAREN A. HARKINS, Petitioner/Appellant, v. DANIEL E. HARKINS, Respondent/Appellee. ) ) ) ) ) ) ) ) ) ) ) ) DIVISION ONE FILED: 12/18/2012 RUTH A. WILLINGHAM, CLERK BY: mjt 1 CA-CV 12-0143 DEPARTMENT C MEMORANDUM DECISION (Not for Publication Rule 28, Arizona Rules of Civil Appellate Procedure) Appeal from the Superior Court in Maricopa County Cause No. FC2010-005222 The Honorable Thomas L. LeClaire, Judge AFFIRMED Sternberg & Singer, Ltd. By Melvin Sternberg And Law Office of Paul M. Briggs By Paul M. Briggs Attorneys for Appellant Phoenix The Cavanagh Law Firm By Christina S. Hamilton Attorneys for Appellee Phoenix Phoenix T H U M M A, Judge ¶1 Karen A. Harkins appeals from the superior court s order approving an arbitration award setting forth the terms of a confidentiality agreement. Because Karen failed to establish that the arbitrator exceeded her authority, the superior court s order is affirmed. FACTS AND PROCEDURAL HISTORY ¶2 Karen petitioned for dissolution of her marriage to Daniel E. Harkins in August 2010. In early June 2011, following a mediation, the parties agreed to and the superior court entered a detailed consent decree dissolving the marriage. The decree included the parties written agreement to submit to binding arbitration certain types of disputes that might arise in the future, but contained no general, overarching arbitration agreement. The decree also contained a broad anti-disparagement provision. ¶3 The final paragraph of the decree required the parties to execute a confidentiality agreement, which Karen was to draft and provide for Daniel to review. No draft confidentiality agreement was exchanged for several months after entry of the decree. In early September 2011, Daniel asked Karen to provide a draft confidentiality agreement or Daniel would take this matter to [the arbitrator s] attention. Also in September, the parties were preparing to arbitrate a variety of issues left 2 open or disputed in the wake of the decree. Daniel specified the confidentiality agreement as one such issue to be arbitrated. In a late-September arbitration memorandum, Karen acknowledged that Daniel ha[d] also raised issues regarding the confidentiality agreement. Karen arbitration, joined arguing the issue against for resolution enforcement of the in the decree s provision calling for a confidentiality agreement. ¶4 At the end of September, Karen provided Daniel a draft confidentiality agreement. The record does not include any objections by Daniel to this proposal. In mid-October, however, Daniel did request the addition of non-disparagement and liquidated damages provisions to Karen s draft confidentiality agreement. The record does not include Karen s response, if any, to Daniel s request for this additional language. ¶5 of Pre-hearing, Karen did not challenge the arbitrability the issues. As relevant here, the parties proceeded to arbitration on November 7. The arbitration decision states that issues addressed included [] what language should be contained in the Confidentiality Agreement to be executed by the parties, recounting agreement damages] that on the language [t]he parties additional and the have been unable [non-disparagement issue has been and to reach liquidated presented to [the arbitrator] for binding arbitration. The arbitrator disagreed with Karen s testimony as to how the decree s non-disparagement 3 provision was substance, modified limited. the to The arbitration confidentiality account for and decision agreement include a includes, Karen in proposed, non-disparagement and liquidated damages provision similar to Daniel s proposal. ¶6 After the arbitrator filed the arbitration award with the superior court, Karen filed an objection to this portion of the award. Karen conceded that, [f]or convenience, the parties also arbitrated the issue of the confidentiality agreement, although there was no written agreement to do so. Karen argued, however, that the arbitrator exceeded her authority and infringed on Karen s First Amendment right to free speech by modifying her confidentiality agreement to include the non- disparagement and liquidated damages provisions. ¶7 The superior court overruled Karen s objection and approved the arbitration award. The superior court found [t]he parties voluntarily submitted the terms of the draft of the Confidentiality Agreement, a document that was required to be produced by the parties consistent with the requirements of the [decree,] . arbitrator, determine . . to rendering the scope arbitration and it appropriate and language the for of parties the the chosen arbitrator to Confidentiality Agreement when the parties could not agree on a final draft. The superior court therefore concluded the arbitrator did not exceed her authority. The superior 4 court found no merit in Karen s First Amendment argument, as the non-disparagement language in the confidentiality agreement was at least as narrow as the applicable portion of the decree to which Karen had agreed. ¶8 Karen timely appealed from the superior court s order overruling Karen s award. 1 This Section 9, court of objections has the and approving jurisdiction Arizona pursuant the Constitution and to arbitration Article Arizona 6, Revised Statutes (A.R.S.) section 12-2101(A)(1). 2 DISCUSSION ¶9 Karen argues the superior court erred in approving the arbitration decision because the arbitrator exceeded her 1 The parties filed no motion to seal any documents in this court. The clerk of this court nevertheless received the record on appeal under seal in furtherance of the superior court s order sealing the case. The superior court s order granted an unopposed motion to seal the entire file, based on a conclusory recitation of good cause without reference to any authority to seal the otherwise-public court file and without addressing the presumption of public access to court records. See Ariz. R. Supreme Ct. 123(d); A.R.S. § 39-121; Griffs v. Pinal County, 215 Ariz. 1, 5, ¶ 13, 156 P.3d 418, 422 (2007) ( [T]he presumption favoring disclosure applies [to public records] and, when necessary, the court can perform a balancing test to determine whether privacy, confidentiality, or the best interests of the state outweigh the policy in favor of disclosure. ); see also Kamakana v. City of Honolulu, 447 F.3d 1172, 1178-79 (9th Cir. 2006). No party has challenged the propriety of the superior court s blanket sealing order, but there is no basis in the record upon which to seal the proceedings in this court. 2 Absent material revisions after the relevant dates, statutes cited refer to the current version unless otherwise indicated. 5 authority by deciding issues beyond those the parties agreed to submit to arbitration. On appeal, the superior court s confirmation of an arbitration award is reviewed for an abuse of discretion. Nolan v. Kenner, 226 Ariz. 459, 461, ¶4, 250 P.3d 236, 238 (App. 2011). ¶10 Judicial review of an arbitration award is narrowly constrained; the superior court shall decline to confirm an award only on specific enumerated grounds. A.R.S. § 12-1512(A); Smitty s Super-Valu, Inc. v. Pasqualetti, 22 Ariz. App. 178, 180, 525 P.2d 309, 311 (1974). One such ground is where [t]he arbitrators exceeded their powers, A.R.S. § 12-1512(A)(3), as [t]he boundaries of the arbitrators powers are defined by the agreement of the parties, Smitty s Super-Valu, 22 Ariz. App. at 180, 525 P.2d at 311. On review, the arbitrator is presumed to have decided only matters within the scope of issues submitted for arbitration, and the party opposing the award has the burden to prove otherwise. Einhorn v. Valley Med. Specialists, P.C., 172 Ariz. 571, 573, 838 P.2d 1332, 1334 (App. 1992); Fisher ex rel. Fisher v. Nat l Gen. Ins. Co., 192 Ariz. 366, 369, ¶ 12, 965 P.2d 100, 103 (App. 1998). ¶11 Karen has failed to demonstrate that the arbitrator exceeded her liquidated authority damages by deciding language to the be non-disparagement included in and the confidentiality agreement. Karen concedes that she agreed to 6 arbitrate Karen s the terms of arbitration a confidentiality memorandum agreement. recognized that Indeed, [Daniel] has also raised issues regarding the confidentiality agreement and Karen joined that issue on the merits by challenging the decree s requirement of a confidentiality agreement. ¶12 Karen objects that non-disparagement and liquidated damages were not within the terms of the agreement she agreed to arbitrate. By mid-October -- weeks before the arbitration -Karen was on notice that Daniel disputed the terms of the confidentiality agreement by asking to include non-disparagement and liquidated damages language. The arbitration decision expressly confirms this dispute -- that the parties were unable to agree damages on inclusion language presented to -- [the and of non-disparagement states arbitrator] that for the binding and liquidated issue has arbitration. been The decision further recites that Karen testified about the scope of the decree s non-disparagement clause, apparently contesting the propriety of including non-disparagement language in the confidentiality agreement. Karen s participation in this manner clearly suggests the dispute over inclusion of non-disparagement language was submitted to arbitration. ¶13 The record October request to damages language into is not insert to the contrary. non-disparagement Karen s draft 7 Daniel s and confidentiality mid- liquidated agreement gave Karen evidence notice of suggests the that scope Karen of the objected dispute. to No record arbitrating this dispute before the arbitration hearing. Although at least one arbitration session was transcribed, Karen has provided no transcript -- and no pre-award written objection -- showing any objection to the arbitrator s consideration of the disputed language. Given this absence of record evidence showing nondisparagement and liquidated damages were not properly submitted to arbitration, Karen has not met her burden to show the arbitration award fell outside of the arbitrator s authority. ¶14 Based on the record on appeal, it appears the only remaining dispute about the confidentiality agreement by the time of the November 7 arbitration was whether to include the non-disparagement Karen s and liquidated arbitration confidentiality damages memorandum agreement, Karen s provisions. argued counsel Although against provided any a draft confidentiality agreement less than a week later, and Daniel s only requested liquidated change damages was to language. include The non-disparagement arbitration decision and itself based the final confidentiality agreement on Karen s proposal, modified largely by inserting a paragraph addressing non- disparagement and liquidated damages. Because Karen concedes the terms of arbitration the and confidentiality no other agreement dispute 8 about were the submitted terms of to the agreement is evidenced in the record, the superior court did not abuse its discretion by confirming the arbitration award. ¶15 P.2d Relying on Clarke v. ASARCO Inc., 123 Ariz. 587, 601 587 (1979), Karen contends that, although the parties agreed to arbitrate an issue arising out of one paragraph of the decree (confidentiality agreement), the arbitrator must have exceeded her authority because she decided an issue related to a different paragraph (non-disparagement) not included in the arbitration provision. Clarke does not support this argument. Clarke simply held that disputes were arbitrable pursuant to a contractual arbitration provision only if they fell within the scope of that arbitration provision; of disputes thus, upon one all paragraph matters providing covered by for this paragraph did not serve to mandate arbitration of disputes not covered by this paragraph. Id. at 589, 601 P.2d at 589. Here, however, the record shows no such paragraph-specific limitation on the agreement to arbitrate. As set forth above, Karen agreed that the confidentiality agreement terms were subject to arbitration and has not shown any limitation on that issue that would exclude the non-disparagement provision. ¶16 the Karen next arbitration restraint on her argues award the non-disparagement constitutes speech and thus an language unconstitutional necessarily in prior indicates the arbitrator exceeded her authority. Although parties may properly 9 waive constitutional rights, including by agreement, the First Amendment issue Karen raises is not necessary to resolution of this appeal. A court reviewing an arbitration award does not independently result in assess extending the the arbitrator s arbitration rulings beyond the unless scope they of the submission. Smitty s Super Valu, 22 Ariz. App. at 180-81, 525 P.2d at 311. Here, as described above, Karen has not established that inclusion of non-disparagement language was outside of the dispute submitted to arbitration. Karen had notice of Daniel s request to include confidentiality a agreement non-disparagement before clause arbitration, but in Karen the never asked the court to restrict the scope of arbitration to exclude non-disparagement nor does the record reflect any objection to the arbitrator disparagement expressly on this clause limits ground. specified itself to In in any the preventing any event, the arbitration nonaward disparagement as required by [the non-disparagement provision] of the parties Consent Decree, to which Karen undisputedly agreed. Inclusion of a restriction to which the parties had earlier agreed does not, as Karen argues, demonstrate[] how the arbitrator exceeded her powers by extending the matter beyond what the parties submitted. ¶17 is Karen also contends the liquidated damages provision completely devoid of any factual 10 support, and that the arbitrator exceeded her authority by rewriting the parties agreement to include this provision. Review of an arbitration award in these circumstances is limited to whether the arbitrator acted beyond her powers, not whether the substance of the award is supported by sufficient evidence. See id. Although Karen argues the parties did not jointly ask the arbitrator to fashion a new contract for them regarding liquidated damages, the parties did seek arbitration of the terms to be included in a confidentiality damages before as a proposed arbitration, opposed to confidentiality agreement. term and in the Karen argument) terms Daniel has restricting that would had raised confidentiality provided no agreement evidence consideration exclude liquidated of consideration (as the of liquidated damages. ¶18 Karen last argues the superior court erred by awarding Daniel his attorneys fees and seeks reversal as fees will be unjustified if [Karen] is successful on appeal. As Karen was not successful on appeal, the superior court s fee award is affirmed. ¶19 Daniel requests his attorneys fees on appeal pursuant to A.R.S. § 25-324 and Arizona Rule of Family Law Procedure 31. Having considered the relevant factors under § 25-324 and in the exercise of this court s discretion, Daniel s request for fees is denied. As the prevailing party on appeal, however, Daniel is 11 entitled to recover costs upon compliance with Arizona Rule of Civil Appellate Procedure 21. A.R.S. § 12-341. CONCLUSION ¶20 Because Karen failed to establish that the arbitrator exceeded her authority, the superior court s order confirming the arbitration award is affirmed. /s/_ SAMUEL A. THUMMA, Judge CONCURRING: /s/_ PHILIP HALL, Presiding Judge /s/_ PETER B. SWANN, Judge 12

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