Tuesday, November 16, 2010

Help! My Case Is Lost In Arbitration

By: Carole L. Chiamp

Prominent Michigan family law attorney Carole L. Chiamp, who is of counsel to our firm, is a family law court-approved mediator. She is among the first attorneys in Michigan to obtain this designation. She currently authors a monthly article in the Michigan Family Law Journal entitled "Mediation Matters." Carole's October 2010 article focuses on arbitration and how to avoid delays.

Too often I receive a telephone call from a prospective client asking me to help them. Their case has been in arbitration for one year, two years or more. The explanations stem from their agreeing to arbitrate because their attorney told them it would be faster and cheaper. Once the arbitrator was chosen there were too many adjournments to count. Several have told me that appraisals that were completed earlier were so old that they had to be redone.

What can be done about the delay? Probably the most effective assistance can be rendered by the judge being in full control of their docket. However, when judges attempt to assert their authority to remove an arbitrator for delay there are those who would say that the court has no authority to do so. Often a contract to arbitrate is signed taking decision making from the judge and turning it over to the arbitrator. I have spoken with several court administrators, judges and looked for law in this area. It seems that the case is not “closed” when it goes to arbitration. Consequently judges, who under the court rules are in charge of their own docket, may have recourse to correct the delay.

The question I asked several docket officials: “What is the official word on whether referring a domestic relations case to arbitration closes a case for docket control purposes?” The best answer I received was: based on the Supreme Court Administrative Order caseload reporting manual for Domestic Relations case dispositions (Part II - Section D), there are seven disposition types that are reportable. Sending a prejudgment case to arbitration is not one of them. The seven dispositions are:

  1. Bench Verdict.
  2. Uncontested/Default/Settled. (Effective date proofs are placed on the record).
  3. Transferred. (To another jurisdiction prior to adjudication.)
  4. Dismissed by Party.
  5. Dismissed by Court. (No service, no progress, no cause of action.)
  6. Inactive Status. (Interlocutory appeal granted by a higher court, military stay issued by trial court.)
  7. Case Type Change (rare).

Therefore sending a case to arbitration in a domestic relations case does not “close” the case.

As to whether a judge can remove a case from arbitration you should refer to an opinion by Honorable Lita Popke in Perpich v Perpich, Wayne County Circuit Court Docket No. 00-002013, in which she found she did have that authority. You can get the opinion by ordering the court file and copying the opinion.

Other judges have advised that they believe a show cause order may be the way to go. If a party, through their attorney, notifies the court of delay on the arbitrator’s part, the judge may “show cause” the arbitrator before the court for delay and the judge can deal with the recalcitrant arbitrator. (This however presumes that one of the attorneys will bring the arbitrator before the court.) One of the best ways at controlling arbitration delays may be for judges to impose a time standard for concluding the arbitration and a return date to monitor and/or close the case.

There is also recourse for smart attorneys who think ahead. In all cases, it is important to determine what the authority is for arbitrating. Is it under a contract? If so, is there a clause providing for a successor in the event of removal or recusal of the arbitration? If there is no provision for a successor, the matter goes back to the judge, MCR 3.602(J)(4). If you know this, then it can be dealt with in the arbitration contract. Since a written arbitration agreement (or order2) is required under the Domestic Relations Arbitration Act (MCL 600.5001 et seq.), a wise practitioner can save a lot of grief by putting clear parameters in the agreement to arbitrate in a timely manner. Between good attorneys and good judges, there is no need for clients to encounter delay.

The "Mediation Matters" archives can be found here.

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