EDWARD J DINNEWETH V ELAINE DINNEWETHAnnotate this Case
STATE OF MICHIGAN
COURT OF APPEALS
EDWARD J. DINNEWETH,
December 19, 2006
Oakland Circuit Court
LC No. 03-686920-DO
Before: Owens, P.J., and White and Hoekstra, JJ.
Defendant appeals by leave granted an order denying her motion to set aside the
arbitration award in this divorce dispute. We affirm.
The parties entered into a premarital agreement in 1997. At that time, plaintiff’s assets
included Mack Industries, which was valued at $3 million. Defendant’s net worth at that same
time was valued at approximately $179,000. After just more than six years of marriage, plaintiff
filed for divorce. The parties agreed to submit the dispute, including the issue of the
enforceability of the premarital agreement, to arbitration. At the time of the arbitration, Mack
Industries was insolvent. The arbitrator found that plaintiff’s net worth had decreased from $4.6
million at the time of the premarital agreement to less than $1 million at the time of arbitration,
and that defendant’s net worth had increased approximately fourfold. The arbitrator then
concluded that changed circumstances rendered enforcement of the premarital agreement unfair
and unreasonable, and proceeded to divide the marital property of the parties equitably. In the
trial court, after entry of a judgment of divorce, defendant filed a motion to vacate the arbitration
award. The trial court denied the motion. We granted defendant’s application for leave to
Defendant argues that the trial court erred in refusing to set aside the arbitration award on
the ground that the arbitrator exceeded his powers by employing an asset-balancing approach in
lieu of enforcing the premarital agreement. We disagree.
MCL 600.5081 provides that the court “shall vacate an award under any of” several
circumstances, including where “[t]he arbitrator exceeded his or her powers.” MCL
600.5081(2)(c). “Arbitrators exceed their powers whenever they act beyond the material terms
of the contract from which they draw their authority or in contravention of controlling law.”
Miller v Miller, 474 Mich 27, 30; 707 NW2d 341 (2005). This Court reviews de novo a trial
court’s decision regarding whether an arbitrator exceeded his powers. Id.
At the time of arbitration, the controlling law governing the enforceability of premarital
agreements was Rinvelt v Rinvelt, 190 Mich App 372; 475 NW2d 478 (1991). Under Rinvelt, a
premarital agreement is enforceable if three questions can be answered in the negative:
1. Was the agreement obtained through fraud, duress or mistake, or
misrepresentation or nondisclosure of material fact?
2. Was the agreement unconscionable when executed?
3. Have the facts and circumstances changed since the agreement was executed,
so as to make its enforcement unfair and unreasonable? [Id. at 380 (emphasis
Defendant contends that the arbitrator exceeded his powers by issuing a decision that
deviates from the terms of the premarital agreement on the ground of a change in circumstances,
thereby contravening Reed v Reed, 265 Mich App 131; 693 NW2d 825 (2005). In Reed, this
Court held that the long duration of the parties’ marriage and the fact that the parties’ assets grew
significantly are not unforeseeable changed circumstances that justify judicially voiding a
premarital agreement. Id. at 141-149. Reed, however, was not decided before the arbitration
award at issue, and did not involve arbitration. Thus, it is not controlling under the facts of this
Here, the issue of the enforceability of the agreement was submitted to arbitration. It was
for the arbitrator to decide whether the agreement was enforceable. The arbitrator could refuse
to enforce the agreement, even if the trial court could not render such relief. MCL 600.5081(3).
“Arbitration, by its very nature, restricts meaningful legal review in the traditional sense.”
Detroit Automobile Inter-Ins Exch v Gavin, 416 Mich 407, 429; 331 NW2d 418 (1982).
Thus, an allegation that the arbitrators have exceeded their powers must be
carefully evaluated in order to assure that this claim is not used as a ruse to induce
the court to review the merits of the arbitrator’s decision. Stated otherwise, courts
may not substitute their judgment for that of the arbitrators and hence are reluctant
to vacate or modify an award when the arbitration agreement does not expressly
limit the arbitrator’s power in some way. [Gordon Sel-Way, Inc v Spence Bros,
Inc, 438 Mich 488, 497; 475 NW2d 704 (1991) (emphasis added).]
At the time the arbitrator rendered his decision, Reed was not yet decided. Moreover, the
decision in Reed did not involve arbitration and concerned a longstanding, rather than short,
marriage. Therefore, the arbitrator did not contravene existing controlling authority by finding
that a relatively short marriage, plus a precipitous and unanticipated decrease in the value of
Edward’s principal asset, i.e., Mack Industries, combined to render enforcement of the premarital
agreement unfair and unreasonable.
/s/ Donald S. Owens
/s/ Helene N. White
/s/ Joel P. Hoekstra