Equitable Distribution

Court Confirms Award Of Arbitration Setting The Value And Equitable Distribution Of Marital Business Asset

In the family law, equitable distribution, matrimonial case of Hetherington v. Molinaro, App. Div. 20-2-6897, the defendant appealed from the trial court’s confirmation of two arbitration awards, one setting the termination date of the marriage and the other setting the value and equitable distribution of a business formed and operated by plaintiff during the marriage. In a consent order, the parties agreed to binding arbitration on the termination date of the marriage for equitable distribution purposes and the valuation and equitable distribution of the business. They jointly chose a retired judge as the arbitrator. Thereafter, a new attorney substituted as counsel for plaintiff. The arbitrator did not disclose that the attorney had served as his law clerk thirteen years earlier. Defendant contended for the first time on appeal that the arbitration awards must be vacated because the arbitrator did not disclose the plaintiff’s attorney was his former law clerk. There was no evidence that the arbitrator and plaintiff’s attorney maintained any relationship, let alone a substantial relationship, after the clerkship ended. The fact of the judicial clerkship alone did not satisfy defendant’s burden to show that the relationship between the arbitrator and attorney was “existing and substantial” as required for a presumption of impartiality or that a reasonable person would consider likely to affect the impartiality of the arbitrator. Accordingly, there was no violation of N.J.S.A. 2A:23B-12(b) or N.J.S.A. 2A:23B-23(a)(1) and (2). The appellate panel also rejected plaintiff’s argument that the arbitrator violated N.J.S.A. 2A:23B-23(a)(3) by applying “an absurd” salary estimate for plaintiff and failing to consider evidence material to the controversy specifically, good will and potential future income. Nor did the arbitrator exceed his powers under N.J.S.A.2A:23B-23(a)(4) by ignoring legal precedent relating to the marriage’s termination date for equitable distribution purposes, as plaintiff claimed. The arbitrator carefully analyzed the testimony and issued two comprehensive decisions in support of the awards, explaining at length the basis of his decision on the termination date of the marriage and value and equitable distribution of the company. The record more supported the arbitrator’s awards.

Reference: Case & Analysis, New Jersey Law Journal, 220 N.J.L.J. 682 (June 1, 2015)

Filed Under: Equitable Distribution, Family Law: Divorce Law

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