COURT OF APPEALS OF VIRGINIA
Present: Judges Bumgardner, Humphreys and Clements
Argued at Richmond, Virginia
MICHAEL ALAN MARKS
OPINION BY
v. Record No. 0222-00-4 JUDGE JEAN HARRISON CLEMENTS
JULY 17, 2001
KAREN MICHAEL MARKS
FROM THE CIRCUIT COURT OF FAIRFAX COUNTY
R. Terrence Ney, Judge
James Ray Cottrell (Kyle F. Bartol; Gannon,
Cottrell & Ward, P.C., on briefs), for
appellant.
David D. Masterman (Condo & Masterman, P.C.,
on brief), for appellee.
Michael A. Marks (husband) appeals the decision of the
trial court affirming an arbitrator's award of certain payments
to Karen M. Marks (wife). On appeal, husband contends the trial
court erred by confirming the arbitrator's decision despite
numerous errors by the arbitrator, including (1) failing to
apply Virginia law, (2) granting wife a greater share of the
marital estate than warranted under the parties' antenuptial
agreement, (3) misinterpreting the antenuptial agreement as to
the parties' marital residence, (4) relying on numerous
mathematical miscalculations, (5) failing to apply the statutory
guideline amount of child support without adequate reason for
deviation, (6) improperly requiring husband to pay educational
expenses for the parties' child beyond those authorized by
Virginia law and the terms of the antenuptial agreement, (7)
requiring husband to pay all marital liabilities of the parties,
and (8) awarding attorney's fees to wife. 1
In her response, wife contends husband's appeal is without
merit because it is procedurally barred. Wife also seeks an
award of her appellate costs and attorney's fees. We conclude
that, because husband failed to properly raise his challenge to
the arbitration award before the trial court, he is foreclosed
from raising these issues on appeal. We, therefore, affirm the
trial court's decision. Furthermore, because husband's appeal
is unjustified, we award wife reasonable appellate costs and
attorney's fees and remand this matter to the trial court for
determination of those costs and fees.
I. PROCEDURAL BACKGROUND
Prior to their marriage, the parties entered into an
antenuptial agreement. In that agreement, the parties provided
for future dispute resolution as follows:
Should [husband] and [wife] have difficulty
implementing this agreement they will put
all disputed matters before a mediator for
voluntary resolution. Should this prove
unsuccessful, the disputed items will be put
before an arbitrator for a final
1
Husband also contends the trial court "further erred in
making its own award of attorney's fees to the wife and in
failing to award fees and costs to the husband." We will not
consider this issue, however, because husband failed to address
it on brief or in oral argument. See Quintana v. Commonwealth,
224 Va. 127, 134 n.1, 295 S.E.2d 643, 645 n.1 (1982).
- 2-
determination. If there is any problem
selecting a mediator or arbitrator, the
parties will request that the American
Arbitration Association appoint one.
The parties further provided in the antenuptial agreement that
the agreement was to be "interpreted under the laws of
Virginia."
The parties, who had one child, separated for the last time
on September 13, 1998, and wife filed for divorce on September
18, 1998. She attached the antenuptial agreement to the bill of
complaint and requested the marital property be divided in
accordance with the terms of that agreement and that she be
granted all other appropriate relief consistent with the
parties' antenuptial agreement.
Difficulties implementing the antenuptial agreement arose.
The parties attempted mediation, but that proved unsuccessful.
Pursuant to the terms of their antenuptial agreement, the
parties entered into arbitration. After conducting a three-day
hearing, the arbitrator issued his award on September 21, 1999.
That award was officially mailed to the parties by the American
Arbitration Association on September 24, 1999.
On October 1, 1999, wife filed a motion for confirmation of
the arbitration award pursuant to Code § 8.01-581.09. On
October 7, 1999, husband filed a motion to "reduce and/or abate
the support provisions under the terms of the [a]rbitrator's
award" based on a material change of circumstances and a motion
- 3-
to reconsider the award, in which husband "move[d] that the
[a]rbitrator reconsider[] the award." The trial court denied
husband's motion for a reduction in child support by order of
October 15, 1999, but did not address in that order husband's
motion to reconsider the arbitrator's award. No hearing was
held on husband's motion to reconsider, and no ruling was ever
made or action taken thereon by the court. By order entered
October 8, 1999, the trial court ordered husband to convey the
marital home to wife, in accordance with the award of the
arbitrator, and continued to a later date the remainder of
wife's motion for confirmation of arbitration award. Counsel
for husband endorsed the order as "Seen and Objected to delay in
confirmation."
On October 20, 1999, wife filed another motion for
confirmation of the arbitration award. On November 5, 1999, the
trial court entered an order confirming the arbitrator's award.
The order was endorsed by counsel for husband as
Seen and Excepted to as to the confirmation
of the award and exception as to the amount
of time to make payments. Exception as to
the amount of child support and exception of
[sic] amount of time support is to be paid.
*Exception further as to the award of
college and graduate school education.
In a final decree of divorce a vinculo matrimonii entered
on December 30, 1999, the trial court ordered that its order
entered November 5, 1999, confirming the arbitrator's award,
- 4-
"remain in full force and effect" and ordered the parties "to
comply with the terms thereof." The trial court further
integrated the provisions of the arbitration award in its orders
in the final decree of divorce concerning the payment by husband
of child support and child care expenses, the payment by husband
of child's educational expenses through graduate school, and the
amount of husband's arrearages for unpaid child support payments
and child care expenses. Husband's counsel, in endorsing the
final decree of divorce, attached a list of nineteen exceptions
to the final decree of divorce, including the following that
pertain to the arbitration award:
3. Defendant objects and excepts to the
court's interlocutory order of November 5,
1999 confirming the award of the arbitrator
and the arbitration award.
4. Defendant objects and excepts to the
award of the arbitrator on grounds that the
arbitrator exceeded the scope of arbitration
by failing to apply the laws of the
Commonwealth of Virginia with respect to the
interpretation and enforcement of those
provisions of the pre-nuptial agreement
pertaining to child support.
5. Defendant objects and excepts to the
award of the arbitrator on grounds that the
award exceeded the provisions of the
pre-nuptial agreement, including the
determination of the award of damages and
the determination of property division in an
amount that exceeded 50% of the property
subject to division under the express terms
of the agreement.
6. Defendant objects and excepts to the
award of the arbitrator on grounds that the
arbitrator's award failed to correctly
- 5-
interpret the pre-nuptial agreement with
respect to the identity of the residence
that was the subject of the agreement, and
failed to credit defendant's greater
contributions to the second residence, and
failed to sustain the waiver of the
complainant to the proceeds of the first
resident.
7. Defendant objects and excepts to the
award of the arbitrator due to numerous
mathematical errors made in calculating the
amounts due each party, and the failure of
the arbitrator to correct such errors when
brought to the arbitrator's attention, and
the court's failure to correct such errors
when the award of the arbitrator was
presented for confirmation.
8. Defendant objects and excepts to all
awards of attorneys fees made by the court
and by the arbitrator.
9. Defendant objects and excepts to the
denial of the defendant's claims in
arbitration.
10. Defendant objects and excepts to the
arbitrator's decision that the defendant pay
marital liabilities of the parties.
11. Defendant objects and excepts to all
monetary awards made to the complainant in
arbitration.
12. Defendant objects and excepts to the
failure of the arbitrator and the court in
confirming the arbitrator's award to apply
the Virginia state child support guidelines
in determining child support.
13. Defendant objects and excepts to the
arbitrator's determination that the
defendant be required to pay educational
costs beyond the child's high school
education as a violation of Virginia law.
- 6-
16. Defendant objects and excepts to the
failure of the court to award his legal,
accounting, and arbitration fees.
18. Defendant hereby preserves all
objections made and noted in all prior
proceedings, at the arbitrations, and on the
prior interlocutory orders rendered by the
court in this cause.
It is from the final decree of divorce that husband now
appeals.
II. APPEALABILITY OF ARBITRATOR'S DECISION
Husband contends on appeal that the trial court erred in
confirming the arbitration award because the award contained
numerous errors by the arbitrator, as memorialized in husband's
above-noted exceptions to the trial court's final decree of
divorce. Wife contends that, because husband failed to properly
raise his challenge to the arbitration award before the trial
court, he may not now be heard on the issues he raises on
appeal. We agree with wife's contention.
The parties in this case entered into a valid and binding
antenuptial agreement. According to the terms of that
agreement, the parties agreed to have any unresolved disputes
related to their antenuptial agreement remedied through
arbitration. They also agreed that the interpretation of their
antenuptial agreement would be governed by Virginia law.
In Virginia, a "trial court's review of an arbitration
award is governed by specific statutory criteria," and "the
party attacking an arbitrator's award bears the burden of
- 7-
proving the invalidity of the award." Trustees of Asbury United
Methodist Church v. Taylor & Parrish, Inc., 249 Va. 144, 153,
452 S.E.2d 847, 852 (1995). The Uniform Arbitration Act, as
adopted in Code §§ 8.01-581.01 et seq., provides the exclusive
means for challenging errors in the award by the arbitrator and
sets forth the procedures for obtaining judicial review and
confirmation of the arbitration award. Cf. Decker v. Merrill
Lynch, Pierce, Fenner & Smith, Inc., 205 F.3d 906, 909 (6th Cir.
2000) (observing that Federal Arbitration Act [which, we note,
is substantially similar in pertinent parts to Virginia's
Uniform Arbitration Act] provides exclusive remedy for
challenging acts that taint an arbitration award subject to that
Act).
Thus, in choosing to have Virginia law govern their
arbitration agreement, the parties effectively consented to be
bound by the rules of the Uniform Arbitration Act. See C & L
Enterprises, Inc. v. Citizen Band Potawatomi Indian Tribe of
Okla., 121 S. Ct. 1589, 1595 (2001) (noting that parties who
selected Oklahoma law to govern their arbitration agreement
consented to confirmation of the award in accordance with the
Oklahoma Uniform Arbitration Act). Accordingly, once the
arbitrator rendered his decision in this case pursuant to the
parties' valid agreement to arbitrate their disputes, the
arbitration award was binding on the parties unless they
properly and successfully availed themselves of the review
- 8-
provisions of the Uniform Arbitration Act. Cf. Decker, 205 F.3d
at 909. Code §§ 8.01-581.08, 8.01-581.010, and 8.01-581.011
provide the sole mechanisms in the Uniform Arbitration Act for
challenging errors in the award.
Code § 8.01-581.08, entitled "Change of award by
arbitrators," provides, in pertinent part, as follows:
On application of a party or, if an
application to the court is pending under
§§ 8.01-581.09, 8.01-581.010 or
§ 8.01-581.011, on submission to the
arbitrators by the court under such
conditions as the court may order, the
arbitrators may modify or correct the award
upon the grounds stated in subdivisions 1
and 3 of § 8.01-581.011, or for purposes of
clarifying the award. The application shall
be made within twenty days after delivery of
the award to the applicant. . . . The award
as modified or corrected is subject to the
provisions of §§ 8.01-581.09, 8.01-581.010
or § 8.01-581.011.
If no such application is made within twenty days, "the
arbitrator has no further authority over the award." Waterfront
Marine Constr., Inc. v. North End 49ers Sandbridge Bulkhead
Groups A, B & C, 251 Va. 417, 429, 468 S.E.2d 894, 901 (1996).
Code § 8.01-581.010, entitled "Vacating an award," provides
that,
[u]pon application of a party, the court
shall vacate an award where:
1. The award was procured by corruption,
fraud or other undue means;
2. There was evident partiality by an
arbitrator appointed as a neutral,
corruption in any of the arbitrators, or
- 9-
misconduct prejudicing the rights of any
party;
3. The arbitrators exceeded their powers;
4. The arbitrators refused to postpone the
hearing upon sufficient cause being shown
therefor or refused to hear evidence
material to the controversy or otherwise so
conducted the hearing, contrary to the
provisions of § 8.01-581.04, in such a way
as to substantially prejudice the rights of
a party; or
5. There was no arbitration agreement and
the issue was not adversely determined in
proceedings under § 8.01-581.02 and the
party did not participate in the arbitration
hearing without raising the objection.
The fact that the relief was such that it
could not or would not be granted by a court
of law or equity is not grounds for vacating
or refusing to confirm the award.
Under Code § 8.01-581.010, the party seeking to vacate the
award must apply to the court within ninety days after delivery
of a copy of the award, or, if based upon fraud, within ninety
days after such grounds are known or reasonably should have been
known. The application to vacate the award "shall be made by
filing a petition with the appropriate court within the
prescribed time limits of this section, or by raising reasons
supporting vacation in response to another party's petition to
confirm the award, provided that such response is filed within
the prescribed time limits of this section." Id. "If the
application to vacate is denied and no motion to modify or
- 10-
correct the award is pending, the court shall confirm the
award." Id.
Under Code § 8.01-581.011, entitled "Modification or
correction of award," a party seeking to challenge the
arbitration award may also apply to the court within ninety days
after delivery of the award to the party to have the court
modify or correct the award under the following limited
circumstances:
1. There was an evident miscalculation of
figures or an evident mistake in the
description of any person, thing or property
referred to in the award;
2. The arbitrators have awarded upon a
matter not submitted to them and the award
may be corrected without affecting the
merits of the decision upon the issues
submitted; or
3. The award is imperfect in a matter of
form, not affecting the merits of the
controversy.
The statute further provides that, if the application to modify
or correct the award is granted,
the court shall modify and correct the award
so as to effect its intent and shall confirm
the award as modified and corrected.
Otherwise, the court shall confirm the award
as made.
An application to modify or correct an award
may be joined in the alternative with an
application to vacate the award.
Id.
- 11-
Under the Uniform Arbitration Act, applications to the
court must be "by motion and shall be heard in the manner and
upon the notice provided by law or rule of court for the making
and hearing of motions." Code § 8.01-581.013.
In this case, the arbitration award was submitted to the
parties on September 24, 1999. Neither party made a direct
application to the arbitrator for a modification or correction
of the award under Code § 8.01-581.08. Wife filed a motion in
the circuit court on October 1, 1999, for confirmation of the
arbitration award under Code § 8.01-581.09. 2 On October 7, 1999,
husband filed a pleading in the circuit court that consisted of
two motions: a motion for reduction or abatement of the support
provisions in the arbitration award because he had been
terminated from his employment "since the date of [the] award"
and a motion to reconsider the arbitration award, in which
husband moved solely that the arbitrator reconsider the award
for the reasons listed in the motion.
2
Code § 8.01-581.09, entitled "Confirmation of an award"
reads as follows:
Upon application of a party any time after
an award is made, the court shall confirm an
award, unless within the time limits
hereinafter imposed grounds are urged for
vacating or modifying or correcting the
award, in which case the court shall proceed
as provided in §§ 8.01-581.010 and
8.01-581.011.
- 12-
While the motion to reconsider did not cite Code
§ 8.01-581.08 or contain a request that the trial court submit
the motion to the arbitrator "under such conditions as the court
may order," the reasons listed in the motion to reconsider were,
according to husband's characterization in the motion, all
"computational errors" that "should be corrected upon
reconsideration by the arbitrator." Some of the grounds
included in the motion, however, plainly were outside the scope
of subdivisions (1) and (3) of Code § 8.01-581.011.
Nevertheless, regardless of whether the grounds listed in the
motion to reconsider were subject to reconsideration by the
arbitrator under Code § 8.01-581.08, we find nothing in the
record that indicates the motion for reconsideration was ever
considered by the court or arbitrator.
The trial court denied husband's motion for a reduction in
child support by order of October 15, 1999, but did not address
in that order husband's motion to reconsider the award. No
hearing was apparently ever requested by husband or held on
husband's motion to reconsider, and no ruling was ever made or
action taken thereon by the court. Certainly, the record fails
to show that the motion was ever submitted by the trial court to
the arbitrator. It is clear from the record that husband
obtained no relief from the arbitrator from his motion, as the
arbitration award remained unchanged. We find, therefore, that
husband did not exercise the option provided for in Code
- 13-
§ 8.01-581.08 for challenging the alleged errors by the
arbitrator in the award.
Hence, husband's remedy for attacking errors by the
arbitrator in the arbitration award was confined to obtaining
judicial review by filing a motion to vacate the award under
Code § 8.01-581.010 and/or a motion to modify or correct the
award under Code § 8.01-581.011. Absent such a timely
application under one or both of those sections, the award would
be binding on the parties and the trial court would be required,
in light of wife's motion for confirmation of the award, to
confirm the award under Code § 8.01-581.09 and then enter a
decree in conformity with the award under Code § 8.01-581.012. 3
Because the allegations of the arbitrator's wrongdoing
raised by husband in his exceptions to the trial court's final
decree of divorce, and on appeal, fell within the purview of
Code §§ 8.01-581.010 and 8.01-581.011, the issues raised by
husband on appeal could have been resolved by a timely and
proper application to the trial court for vacation and
modification or correction of the arbitration award under those
sections. Our review of the record, however, convinces us that
husband did not make such a timely and proper application to the
3
Code § 8.01-581.012 provides, in pertinent part, that,
"[u]pon granting an order confirming, modifying or correcting an
award, a judgment or decree shall be entered in conformity
therewith and be docketed and enforced as any other judgment or
decree."
- 14-
trial court for judicial review of those issues. 4 Indeed, in the
ninety days following delivery of the arbitrator's award to the
parties, husband filed no pleadings in the trial court
pertaining to the alleged errors in that award except, as
previously noted, the October 7, 1999 motions for reduction or
abatement of the support provisions in the arbitration award and
to have the arbitrator reconsider certain "computational errors"
in the arbitration award. Neither of those motions constituted
a proper application to the court for vacation of the
arbitration award under Code § 8.01-581.010 or for modification
or correction of the arbitration award by the trial court under
Code § 8.01-581.011.
No motion to vacate, modify, or correct the arbitration
award having been filed by husband, the trial court entered an
order confirming the arbitrator's award on November 5, 1999. On
December 23, 1999, more than ninety days after delivery of the
award to the parties, the trial court entered a final decree of
divorce in conformity with the award. Husband then appealed
from the final decree of divorce.
We conclude that, despite having consented by express
contract to be bound by the dispute resolution procedures set
forth in the Uniform Arbitration Act, husband failed to abide by
those procedures for challenging errors by the arbitrator in the
4
Counsel for husband conceded as much at oral argument.
- 15-
arbitrator's award and for obtaining judicial review of that
award. We hold, therefore, that, because he failed to comply
with the Uniform Arbitration Act's statutory provisions for
challenging the arbitration award in the trial court, husband
forfeited his right to appellate review of the award on the
grounds he raises on appeal. He is, therefore, precluded from
renewing his challenge to the arbitration award on appeal, and
we will not consider the merits of husband's assignments of
error concerning that award.
Husband claims he has an absolute right to challenge the
arbitrator's award on appeal to this Court from the final decree
of divorce, despite not having availed himself of the review
provisions of the Uniform Arbitration Act and abided by the
procedural requirements therein, because Code § 8.01-581.016(6)
permits an appeal from a decree entered, like the final decree
here, in conformity with the arbitration award pursuant to Code
§ 8.01-581.012. 5 To interpret Code § 8.01-581.016(6) in the way
5
Code § 8.01-581.016 provides, in pertinent part, that an
appeal may be taken from:
1. An order denying an application to
compel arbitration made under § 8.01-581.02;
2. An order granting an application to stay
arbitration made under subsection B of
§ 8.01-581.02;
3. An order confirming or denying an award;
4. An order modifying or correcting an
award;
5. An order vacating an award without
directing a rehearing; or
- 16-
husband suggests, however, would render Code §§ 8.01-581.010 and
8.01-581.011 and the time constraints prescribed in those
statutes meaningless. We hold, therefore, that husband's claim
is without merit. See Natrella v. Board of Zoning Appeals, 231
Va. 451, 461, 345 S.E.2d 295, 301 (1986). Husband argues that
to hold as we do renders Code § 8.01-581.016(6) meaningless. We
disagree. A party who does not obtain judicial review under
Code §§ 8.01-581.010 and 8.01-581.011 to challenge alleged
errors in the underlying award may still appeal from the final
decree under Code § 8.01-581.016(6) to challenge, for instance,
whether the decree was entered in conformity with the
arbitration award.
Husband also claims that, because his challenge to the
arbitration award was largely on public policy grounds, he may
make his challenge at any time, without concern for the time
limits imposed by the Uniform Arbitration Act. We disagree.
While it is true that judgments that are void because they
were procured by extrinsic or collateral fraud or entered by a
court that did not have jurisdiction over the parties or subject
matter may be challenged in any court at any time, the Supreme
Court concluded in Rook v. Rook, 233 Va. 92, 353 S.E.2d 756
(1987), that a challenge solely on public policy grounds against
an agreement incorporated into a decree is subject to the time
6. A judgment or decree entered pursuant to
the provisions of this article.
- 17-
constraints of Rule 1:1. Id. at 95, 353 S.E.2d at 758. We
conclude that a similar decision may be reached in this case
with regards to the time limits mandated in the Uniform
Arbitration Act for challenging an arbitration award.
Here, as in Rook, husband does not contend that the divorce
decree was procured by fraud or that the decree was void for
lack of jurisdiction. He contends that provisions of the
arbitration award violated the public policy of Virginia because
the arbitrator exceeded his powers under the arbitration
agreement by "failing to apply the law of Virginia in his
'interpretation' of the terms of the [a]greement." Such an
abuse of power by the arbitrator, however, is precisely the
defect in an arbitration award that Code § 8.01-581.010(3)
targets:
Upon application of a party, the court shall
vacate an award where . . . [t]he
arbitrators exceeded their powers;
* * * * * * *
An application under this section shall be
made within ninety days after delivery of a
copy of the award to the applicant . . . .
To rule as husband suggests would render that portion of the
statute meaningless. We conclude, therefore, that husband's
challenge to the arbitration award on public policy grounds
could and should have been raised within ninety days of delivery
of the arbitration award to husband, as required by Code
§ 8.01-581.010. Our conclusion is buttressed, we believe, by
- 18-
Code § 8.01-581.010's requirement that an application for
vacation of an award procured by fraud must be made within
ninety days of when the fraud is known or should reasonably be
known, rather than at any time.
III. APPELLATE COSTS AND ATTORNEY'S FEES
Both parties request an award of costs and attorney's fees
for this appeal. Because husband brought this appeal without
following the requisite procedures in the trial court, we deny
husband's request and find that wife should be compensated for
the reasonable expenses incurred in defending this unjustified
appeal. See O'Loughlin v. O'Loughlin, 23 Va. App. 690, 695, 479
S.E.2d 98, 100 (1996). We, therefore, remand this case to the
trial court solely for a determination of those costs and fees.
For the foregoing reasons, we affirm the judgment of the
trial court and remand for further proceedings consistent with
this opinion.
Affirmed and remanded.
- 19-