When a couple enters into a Texas pre-marital agreement or post-marital agreement, they may include an arbitration provision in the agreement. Arbitration can be a cost-effective way to resolve disputes, but an arbitration decision often cannot be appealed. In a recent case, a wife appealed a final divorce decree confirming an arbitration award, arguing the arbitrator exceeded her authority.
Husband and Wife Enter into Post-Nuptial Agreement During Marriage
During the marriage, the parties signed an agreement to make “what would otherwise be community property instead be separate property.” The agreement included an arbitration provision.
When the agreement was executed, the husband was president of a company and the wife was vice president. The agreement stated that the parties agreed each of them would “be guaranteed to receive equal pay and bonuses as both President and Vice President. . .”
Husband and Wife Eventually File for Divorce
The husband later petitioned for divorce and the wife filed a counter-petition. The husband asked the trial court to divide the marital estate according to the terms of the agreement. The court referred the matter to arbitration after the parties signed an agreed order of referral to arbitration.
The arbitrator found the wife’s lost salary claims were against the husband as an officer of the company and not as her spouse and denied them. She also denied both parties’ claims for attorney’s fees and expenses, finding the agreement required each party to pay their own.
The husband moved for entry of a final decree, but the wife moved to vacate the arbitration award, arguing the arbitrator exceeded her authority when she did not enforce the salary guarantee and denied her attorney’s fees. The trial court granted the husband’s motion and signed a final decree confirming the arbitration award. The wife appealed.
Wife Appeals Order Confirming Arbitration Award
The appeals court noted that the parties agreed to submit any dispute regarding the validity, interpretation, or enforceability of the agreement to arbitration. The parties also agreed to arbitrate any issues involving the agreement’s enforcement in connection with a divorce. They also agreed the award would be binding.
The wife argued the arbitrator had exceeded her authority. An arbitrator does not exceed their authority by misinterpreting an agreement or making a mistake of law. The question for the appeals court, therefore, was not whether the arbitrator’s award was correct, but whether the issues she decided were those the parties agreed to arbitrate. The appeals court found the agreement authorized the arbitrator to interpret the agreement and interpretation was submitted to arbitration. The appeals court further found that interpretation of the salary guarantee and attorney’s fee provisions were within the scope of the agreement to arbitrate. The arbitrator therefore did not exceed her authority in interpreting those provisions and denying the wife’s claims for salary and attorney’s fees. The appeals court affirmed the trial court’s judgment.
Arbitrations During Divorce Can be Complex and Contentious – Retain the Astute Attorneys at McClure Law Group to Represent You
Arbitration can be a valuable and cost-effective way of resolving disputes, but the parties should fully understand the potential limitations. Whether you are considering a pre- or post-marital agreement with an arbitration provision or are facing a divorce involving such an agreement, the experienced Texas family law attorneys at McClure Law Group can advise you. Schedule a consultation by calling us at 214.692.8200.