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Masters v. Masters

Supreme Court of Indiana

October 16, 2015

ROBERT A. MASTERS, Appellant/Cross-Appellee,
v.
LEAH MASTERS, Appellee/Cross-Appellant

Appeal from the Allen Superior Court, No. 02D07-1204-DR-261. The Honorable Charles F. Pratt, Judge, Linda Chrzan, Arbitrator. On Transfer from the Indiana Court of Appeals, No. 02A04-1404-DR-178.

ATTORNEYS FOR APPELLANT: Michael A. Setlak, Perry D. Shilts, Shilts Law Office, Fort Wayne, Indiana.

ATTORNEYS FOR APPELLEE: Michael H. Michmerhuizen, Barrett & McNagny LLP, Fort Wayne, Indiana; Cornelius B. Hayes, Hayes & Hayes, Fort Wayne, Indiana.

Dickson, Justice. Rush, C.J., and Rucker, David, and Massa, JJ., concur.

OPINION

Dickson, Justice.

This appeal challenges an award of attorney's fees in a dissolution of marriage case by a family law arbitrator under the Family Law Arbitration Act. We affirm the fee award.

The parties were married in 1993 and are the parents of one child, a daughter, born in January 2007. Dissolution proceedings began in 2012, and a year later, the parties signed an agreement to arbitrate under the Family Law Arbitration Act (FLAA). See Ind. Code § 34-57-5-1 et seq. The FLAA permits parties in a dissolution of marriage action to resolve their disputes through arbitration rather than in a trial before a trial judge. The FLAA details the role and duties of the family law arbitrator in such arbitration.

The family law arbitrator's findings of fact in this case are undisputed. Noting that this had " been a very contentious divorce," Appellant's App'x at 22, the family law arbitrator entered extensive findings of fact regarding the legal and primary physical custody of the parties' daughter, parenting time, child support, parochial school expenses, healthcare expenses for their daughter, dependency exemptions for tax purposes of the husband and the wife, spousal maintenance for the wife, rehabilitative maintenance for the wife, division of marital property, and the allocation of attorney's fees and litigation expenses.[1] The family law arbitrator then entered conclusions of law that in summary provided for: the marriage to be dissolved, sole legal and primary physical custody to be granted to the wife, parenting time to be granted to the husband, the husband to pay certain child support obligations, the wife to receive 60% of the assets and the husband to receive 40% of the assets, the husband to replenish $51,000 in the parties' bank accounts, the wife to be awarded an equalization judgment against the husband for $23,965.05 with an interest rate of 8% until paid in full, the husband to pay certain spousal maintenance costs, the husband to pay $95,000 of the wife's attorney's fees, and the wife to be denied rehabilitative maintenance. The family law arbitrator's decision was submitted to the trial court, which entered judgment thereon in accordance with Indiana Code section 34-57-5-7(d)(1).

The husband appealed only the arbitrator's attorney fee award. In his appeal, the husband presents what he identifies as a single issue: that the arbitrator's order requiring the husband to immediately pay $95,000 toward the wife's attorney's fees was " clearly against the logic and effect of the facts and circumstances of the case." Appellant's Br. at 1. In the argument section of his brief, the husband further asserts that the rationale was inconsistent with the arbitrator's findings. The wife argues to the contrary in her response and also cross-appeals regarding other issues.[2] The Court of Appeals reversed and remanded the order awarding attorney's fees, finding the order clearly erroneous. Masters v. Masters, 20 N.E.3d 158, 165 (Ind.Ct.App. 2014). We granted the wife's petition to transfer the appeal to this Court. [3]

1. Appellate Review of a Family Law Arbitration Award

To support his argument for reversal of the attorney fee award, the husband argues that the proper standard of review of a family law arbitrator's decision is the same standard currently used to review trial court decisions regarding attorney's fees. Under this standard, he argues that the family law arbitrator's decision ought to be vacated entirely or remanded to the trial court with instructions to receive " evidence and/or argument on the issue of whether an attorney fee award should be entered and, if so, in what reasonable amount." Appellant's Br. at 24. In response, the wife acknowledges that support arguably exists for such standard but she contends that " the proper standard of review has not been conclusively resolved." Appellee's Br. at 7. She asserts that the purposes of the FLAA would be better served by a more deferential standard of review similar to the narrow review of an arbitrator's decision afforded by the Uniform Arbitration Act (UAA). See Ind. Code § 34-57-2-1 et seq. But she alternatively argues that, even under the standard of appellate review for a trial court decision regarding attorney's fees, the arbitration award in this case should be affirmed.

The FLAA expressly authorizes family law arbitrators to award attorney's fees in dissolution cases. Ind. Code § 34-57-5-12(b). It also provides that " [a]n appeal may be taken after the entry of judgment under section 7(d) of this chapter as may be taken after a judgment in a civil action." Ind. Code § 34-57-5-11 (emphasis added). Section 7 directs the arbitrator to send a copy of the written findings of fact and conclusions of law to " the court," which upon receipt " shall enter: (1) judgment; and (2) an order for an entry on the docket regarding the judgment." Ind. Code § 34-57-5-7. The FLAA contains no other provision specifying the nature and scope of appellate review to be applied to an arbitration award.

In contrast, for cases submitted to arbitration under the Uniform Arbitration Act (UAA), review of the arbitration award by a trial court and an appeal therefrom is expressly provided. See Ind. Code § 34-57-2-14 and Ind. Code § 34-57-2-19. But, such review is explicitly limited to modification or correction on the following grounds:

(1) there was an evident miscalculation of figures or an evident mistake in the description of any person, thing, or property referred to in the award; (2) the arbitrators have awarded upon a matter not submitted to them and the award may be corrected without affecting the merits of the decision upon the issues submitted; or (3) the ...

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