During family law arbitration presentations, the most frequently asked question is whether settling family law claims using arbitration would be an unlawful delegation of judicial power. Save for a lapse in concentration during a recent Brown Bag seminar hosted by the Louisville Bar Association, I have consistently contended applicable case law supports the conclusion it would not. To those eleven Brown Bag seminar attendees, I apologize and by these presents clarify myself. Arbitration of family law claims is not an unlawful delegation of judicial power for two reasons. First, arbitration originates from parties exercising their constitutional rights to contract1 and arbitrate2 and cannot be ordered sua sponte or upon unilateral motion.
Golden Gate National Senior Care, LLC v. Rucker.3 Therefore, there is no delegation in the literal sense of the word. It is a choice, common in nonfamily law cases. Second, because in family law cases trial courts have an independent duty under KRS 403.180(3)-(4) to determine the conscionability4 of marital settlement agreements, the court never loses its role as final decision maker of the claims, the key legal question when the issue is raised on appeal.
For a discussion of the right of family law litigants to use arbitration as the process for settlement of their family law claims, please review my article titled Family Law Arbitration In Kentucky: A Rebirth. It appeared in the May/June 2019 issue of Kentucky’s Bench and Bar magazine. That article lays out the constitutional argument for arbitration of family law claims and addresses relevant Kentucky case law on the topic. The intent of this article is to address the concern among the family law bench and bar that marital settlement agreements which employ arbitration to settle outstanding claims will not be enforced, or later set aside, on the basis that the arbitration process is an unlawful delegation of judicial power.
Is there such thing as the lawful delegation of judicial power? Absolutely, and that is why it is also lawful to arbitrate these kinds of claims. Citing Bingham v. Bingham,5 the Court of Appeals in Warawa v. Warawa held “to avoid the constitutional prohibition of delegating the trial judge's judicial power, the decision-making process must be under the control of the trial judge and the findings and conclusions must be ‘the product of the deliberations of the trial judge's mind.’”6 In Warawa, the trial court entered an order “adopting the recommendations,
rationale and findings and conclusions of a parenting coordinator” who was appointed in an agreed order.7 While the Court of Appeals reversed, it was not because the parties agreed to use a parenting coordinator to resolve their custody related claims. In the realm of family law, parenting coordinators are frequently appointed by courts in high conflict custody cases to resolve child related disputes between the parties e.g., will the child play soccer or football this season, neither or both? Customarily, a parenting coordinator, in an informal process, listens to both parties, perhaps does some independent investigation, and then makes a presumptively binding recommendation. In Warawa, the parenting coordinator went a step further and made CR 52.01-like recommendations, findings, and conclusions. The trial court, without a hearing, adopted them verbatim as the order of the court. Important to this discussion is the fact that Warawa was reversed not because the parties agreed to use a parenting coordinator to decide their disputes, but because the trial court did not grant the Appellant a hearing on his objections to the recommendations of the parenting coordinator prior to adopting them as the order of the court.8 Most notably, the Court of Appeals did not vacate the order, but sent the case back to the trial court only for a hearing on the Appellant’s objections to the parenting coordinator’s recommendations. The conclusion supported by Warawa is that it is not an unlawful delegation of judicial power to permit parties to select a nonjudicial person to hear proof on child-related claims and make presumptively binding recommendations. Rather, it is an unlawful delegation of judicial power to deny parties the right to have a judge review and pass final judgment on such recommendations (i.e., it is unlawful to give a parenting coordinator the final say).
Delegation of judicial power in claims arising from actions for dissolution of marriage was even more comprehensively addressed in Maclean v. Middleton.9 There, the judgment appealed arose from a process bearing all the hallmarks of arbitration.10 The parties agreed to submit their claims of restoration of nonmarital property, division of marital property, allocation of debt, child support, and request for attorney fees to a “Master Commissioner.”11 For a year, the Master Commissioner conducted hearings on their claims.12 Thereafter, he issued findings and recommendations, the parties filed exceptions, and he issued final recommendations.13 Though not specifically described in the decision, all indications support the assumption that a trial-like process was utilized at this stage. Then, “[a]fter additional [judicial] proceedings and hearings…the court adopted the Master Commissioner’s findings and recommendations and entered judgment resolving the disputed issues per the Master Commissioner’s report.”14 Although neither party asserted as error the unlawful delegation of judicial power on appeal, the Maclean court extensively addressed the issue, both in the majority’s opinion and the dissent— which was thorough and thoughtful in its argument that the use of an arbitrator to resolve family law claims is unlawful in a family court setting. Ultimately, however, the majority concluded no unlawful delegation took place, holding “[u]nder the circumstances, we cannot find that the trial court abdicated its fact-finding and decision-making responsibilities to such a degree that its judgment must be set aside on this basis.”15 Thus McLean, like Warawa, supports the proposition that it is not an unlawful delegation of judicial power to let parties agree to appoint a nonjudicial person to resolve their family law claims so long as the trial court retains final decision- making authority.
Unique to family law is the fact that, for settlements made in actions brought under Chapter KRS 403, the trial court can never be divested of its final decision making power. By statute, trial courts are required to review settlement agreements for conscionability, no matter how the agreement was obtained. KRS 403.180(3)-(4). This gatekeeping function of the court requires a considered review, not a mere rubber stamping of the parties’ agreement. Citing Clark v. Clark,16 the Court in Edwardson v. Edwardson held “[a] separation agreement will be closely scrutinized by a court of equity,…”17 The KRS 403.180 determination of conscionability occurs before the incorporation of the agreement into a judgment. KRS 403.180(4), Money v. Money.18 This judicial involvement is nonwaivable. Warawa. The statute has also been construed to include the right of a party to challenge the conscionability of a marital settlement agreement even after they signed it. Patterson v. Patterson.19 Therefore, there is no chance that a marital settlement agreement, reached using arbitration, will become a court order without prior judicial scrutiny and approval i.e., without satisfying Warawa and McLean.
So, to my Brown Bag seminar attendees I say, I was correct when I acknowledged using arbitration to settle family law claims is an example of the delegation of judicial power. What I hope I have clarified is that, to the extent the court is involved, it is an example of the lawful delegation of judicial power. This, because relevant case law supports the proposition that parties, by agreement, may empower nonjudicial persons to resolve their child custody claims utilizing an informal process (i.e., they may utilize a parenting coordinator); and, by agreement, they may empower a nonjudicial person to resolve their property division and support claims using a more traditional legal process (i.e., they may utilize a Master Commissioner). Warawa, McLean. And because relevant statutory law, with its requirement of close scrutiny of settlement agreements and an independent judicial determination of their conscionability before they become judgments, ensures that, in family law cases, the trial judge will always be the final decision maker. KRS 403.180(3)-(4), Edwardson, Patterson, Money, McLean.
1 General Elec. Co. v. American Buyers Co-op., Inc., 316 S.W.2d 354 (Ky. 1958).
2 Ky. Const. § 250.
3 588 S.W.3d 868 (Ky. App. 2019).
4 The term of art is “not unconscionable.” KRS 403.180(4).
5 628 S.W.2d 628 (Ky. 1982).
6 Warawa v. Warawa, 587 S.W.3d 631, 635 (Ky. App. 2019).
7 Id. at 632.
8 Id. at 637.
9 419 S.W.3d 755 (Ky. App. 2014).
10 Anderson v. Johnson, 350 S.W.2d 453, 455 (Ky. 2011) (“A rose by any other name smells just as sweet.”).
11 Id. at 759.
12 Id. at 760.
13 Id.
14 Id.
15 Id. at 761 (Emphasis added).
16 192 S.W.2d 968, 970 (1946).
17 798 S.W.2d 941 (Ky. 1990).
18 297 S.W.3d 69 (Ky. App. 2009).
19 583 S.W.2d 707 (Ky. 1979).