A second Court of Appeals panel finds family court cannot enforce custody issues decided by arbitration

Posted Thursday, December 19th, 2019 by Gregory Forman
Filed under Child Custody, Mediation/Alternative Dispute Resolution, Of Interest to Family Court Litigants, Of Interest to Family Law Attorneys, South Carolina Appellate Decisions, South Carolina Specific

Argued first but decided second, the December 18, 2019 Court of Appeals opinion in Singh v. Singh, 429 S.C. 10 , 837 S.E.2d 651 (Ct.App. 2019), confirms what a November 6, 2019 Court of Appeals opinion in Kosciusko v. Parham, 428 S.C. 481, 836 S.E.2d 362 (Ct. App. 2019), previously determined: the family court cannot enforce custody issues decided by arbitration. With no judges overlapping on the two three-judge panels, we have a unmistakable understanding of where the Court of Appeals stands on this issue. Whether the Supreme Court decides to grant certiorari in either of these two cases and provide us a definitive, and final, answer remains to be seen.

Singh cites somewhat different cases but reaches the same conclusion as Kosciusko: it violates bedrock state policy for anyone other than family court judges (subject to review by the appellate courts) to make binding determinations regarding the best interests of minor children. In Singh, the parties submitted Father’s custody modification request to binding arbitration, with this request being approved by an order of the family court. The operative order submitting these disputes to arbitration required the family court to accept the arbitrator’s award and imposed an immediate $10,000 penalty on any parent attempting to challenge the arbitration award. The arbitrator subsequently changed custody to Father and Mother filed five separation motions seeking to vacate the arbitration award as void pursuant to Rule 60(b)(4), SCRCP.

The family court denied these motions finding “(1) Mother was estopped from objecting to the arbitration because she procured and accepted a benefit from the Settlement Agreement and the consent order of dismissal, (2) she waived her right to object by participating in the arbitration proceedings, (3) her due process rights were not violated because parents have the right to make decisions for their children, and (4) she waived her constitutional rights by agreeing to the arbitration and failing to timely challenge the arbitration.

Undergoing the same analysis of ADR Rules 3 and 4 that the Kosciusko panel undertook, the Singh court determined there was no express authority to arbitrate children’s issues. The opinion further relies upon the doctrine of parens patriae, citing Alfred L. Snapp & Son, Inc. v. Puerto Rico, ex rel., Barez, 458 U.S. 592, 600 (1982) (alteration in original) (footnotes omitted) (quoting Late Corp. of the Church of Jesus Christ of Latter-Day Saints v. United States, 136 U.S. 1, 57 (1890)).:

Parens patriae means literally “parent of the country.” The parens patriae action has its roots in the common law concept of the “royal prerogative.” The royal prerogative included the right or responsibility to take care of persons “who are legally unable, on account of mental incapacity, whether it proceed from 1st. nonage: 2. idiocy: or 3. lunacy: to take proper care of themselves and their property.” At a fairly early date, American courts recognized this common-law concept, but now in the form of a legislative prerogative: “This prerogative of parens patriae is inherent in the supreme power of every State, whether that power is lodged in a royal person or in the legislature [and] is a most beneficent function . . . often necessary to be exercised in the interests of humanity, and for the prevention of injury to those who cannot protect themselves.”

The opinion further cites Ex parte Messer, 333 S.C. 391, 509 S.E.2d 486 (Ct. App. 1998), “[p]arties to a separation agreement may agree to submit all disputes, other than those involving their children, to arbitration and thus deprive the family court of its traditional powers of enforcement over those disputes” (emphasis added).

In supporting its holding, the opinion notes:

A court cannot be bound by an arbitration award and simultaneously act as parens patriae on behalf of a child. Therefore, although parties are free to agree to submit these issues to alternative dispute resolution, any agreement to limit the family court’s ability to review such an award is unenforceable.

Prohibiting courts from overseeing arbitration decisions that involve the best interest of a child infringes upon the public policy of this state. Our society has an inherent interest in every child. As we stated, family courts are charged with protecting that interest for every child. Arbitrators are not held to the same standards as family court judges, and the law does not impose upon them the same duty to act in the best interest of a child. According to the arbitration agreements Mother and Father entered into, the arbitrator usurped all of the decision-making authority of the family court but undertook none of the duties imposed upon the court. Under the arbitration agreements, this court would not have the ability to review the arbitrator’s decision regardless of whether it conflicted with the best interest of the children. This opens the question of whether family courts would have the ability to modify such arbitration awards should a change in circumstance occur after a final award.

Finally, the Singh court rejected Father’s equitable estoppel defense, while analyzing it as a waiver claim:

[T]his case involves the fundamental rights of children in a custody action and the court’s duty to protect the rights and interest of children. Thus, any waiver on the part of the parent cannot be found to abrogate the rights of the child or the duty of the court. …We acknowledge the parties made a conscious decision to include an arbitration provision in the Settlement Agreement and reaffirmed their desire to arbitrate those issues by entering into agreements to arbitrate, not once, but three times. A parent cannot waive the rights of any child or the duty of the family court.

Emphasis in original.

Since the only two opinions addressing this issue are from the Court of Appeals, we do not have a definitive answer on whether South Carolina parents can be bound by arbitrated custody determinations. However the analysis and holding of these two opinions is what I had expected and is consistent with prior caselaw and doctrine. Until and unless the Supreme Court tells us otherwise, South Carolina family court attorneys should treat arbitrated custody orders as void.

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