Majority
OPINION OF THE COURT
Confronting in this case the increasingly common use of arbitration in the context of a dispute between former
After nearly 17 years of marriage, in April of 1972 John and Dorothy Bowmer entered into a lengthy and detailed separation agreement which, as later incorporated but not merged in a judgment of divorce, provided for the husband’s payment of alimony and support for their three minor children pursuant to a carefully arranged formula. Its arbitration clause, numbered paragraph 17, reads in pertinent part: "Any claim, dispute or misunderstanding arising out of or in connection with this Agreement, or any breach hereof, or any default in payment by the Husband, or any matter herein made the subject matter of arbitration, shall be arbitrated”.
As the clause suggests, at various points the agreement delineated certain matters that were expressly made arbitrable, including adjustments in the support formula (upon the stated contingencies that the tax laws were amended to make support payments taxable to the husband and that the Government’s cost of living index was discontinued or its method of publication altered) and in the extent of the husband’s obligation to underwrite college costs should the parties disagree over the husband’s ability to meet them.
The present dispute had its genesis in July, 1977, when Bowmer informed his former wife that, because of changed circumstances, as of February, 1978 he would reduce his support payments by almost $1,000 per month and make no further tuition payments.[1] She refused to accede to this plan or to his alternative informal request that they submit the question to arbitration. Thereafter, when he nevertheless unilaterally undertook to make these downward adjustments, Ms. Bowmer invoked the arbitration clause to compel him to pay the arrearages. Her former husband then commenced this proceeding to stay the arbitration she had commenced and to compel arbitration on the issues of whether he was entitled to downward modification of his monetary obligations consistent
1 Petitioner asserted that it was no longer economically feasible for him to meet the support obligations in the agreement because his second wife was no longer employéd and because, with all three children in college, the additional payments for educational expenses had grown to $12,000 per year.
But, on Ms. Bowmer’s appeal from so much of the order that directed arbitration on the issue of reduction in the level of support payments, the Appellate Division modified, holding that issue to be nonarbitrable ( 67 AD2d 8 , 10). On the former husband’s appeal to us, therefore, the sole question is whether the arbitrator may properly consider the claim for downward modification on the support obligations. For the reasons which follow, we conclude he may not and, therefore, wé now affirm the order from which this appeal arises.
Arbitration clauses are by now familiar provisos in separation agreements. Indeed, aside from expressing the parties’ preference for a means of dispute resolution more informal, more expedient and possibly less costly than litigation (Matter of Siegel [Lewis], 40 NY2d 687 , 689), an arbitration provision may well have been intended to furnish insulation from the potential for notoriety and other stresses that so often accompanies the airing of marital disputes in court (see Matter of Lasek v Lasek, 13 AD2d 242 , 244). Moreover, resort to the arbitral forum may afford the spouses an opportunity to have their grievances heard by someone who they think may be especially well qualified in matrimonial matters. (See 1 Lindey, Separation Agreements and Ante-Nuptial Contracts, §29.)
But as with such provisions in the commercial context generally, the rule is clear that unless the agreement to arbitrate expressly and unequivocally encompasses the subject
2 In his demand, Bowmer also sought to direct the sale of the marital abode, reading the agreement as permitting his former spouse to reside there only while the children, then attending college away from home, lived there on a full-time basis. Although Ms. Bowmer unsuccessfully contested the arbitrability of this issue below, it was not appealed to the Appellate Division.
3 The separation agreement specifically provided: "If the Husband is of the opinion that he cannot afford to pay for the [college] education of a particular Child, and if the Wife does not agree with his alleged inability to do so, she shall have the right to have the matter arbitrated, pursuant to Article '17’ of this Agreement”.
For, though the parties might well have thought that the particularized matters were subsumed under the general arbitration language — in which case they could be understood as merely intending to emphasize the arbitrability of certain disputes — the inclusion perhaps more reasonably suggests that the spouses viewed the general language somewhat qualifiedly. This accords with the rule of construction that, in such cases, the specific provisions tend to restrict the general (see 4 Williston, Contracts [3d ed], § 624, pp 822-825). Thus, rather than place reliance on a single boilerplate proviso,[4] the parties were careful to direct explicitly that arbitration be the remedy for several critical and foreseeable conflicts on the extent of the husband’s support obligation.
Further evidence that the arbitration clause was not intended to encompass the dispute here comes from the fact that the support provisions themselves were particularly detailed and drawn flexibly to anticipate changes in the spouses’ circumstances. Exemplifying this is the agreement’s design for a sliding scale of support payments equivalent to 50% of the husband’s gross income, but in no event less than $14,000 or more than $30,000, less an amount equivalent to one half of
4 Paragraph 17, in fact, seems to have been taken almost verbatim from a sample arbitration clause that appears in Lindey, Separation Agreements and Ante-Nuptial Contracts (Vol 1, Form 29.04).
The sense of these provisions, taken together, is to indicate that the parties gave their attention to the possibility of changed circumstances and tried to address the problem by injecting elasticity into the support formula itself. Given this and the fact that the husband’s obligation to pay for the costs of his children’s college education was expressly made modifiable under changed circumstances and specifically made the subject of arbitration, it is significant that neither the modification nor arbitrability of the more fundamental support obligation is addressed by any term of the 37-page separation agreement.
The omission becomes especially important in light of the inability of courts to effect any change in an adequate level of support fixed by a valid and unimpeached separation agreement unless it has been merged in a judgment of divorce (Goldman v Goldman, 282 NY 296 , 302-304; Schmelzel v Schmelzel, 287 NY 21 , 26-27; 2 Foster and Freed, Law and the Family, § 28.64). Of course, had they so intended, the parties could have agreed that the support provisions be modifiable by judicial proceedings under appropriate circumstances (see Kleila v Kleila, 50 NY2d 277 ; Hunter v Hunter, 57 AD2d 797 ). But they did not. And, although the power to alter the support provisions in a separation agreement may likewise be conferred upon on arbitrator (Matter of Robinson [Robinson], 296 NY 778 ; Matter of Luttinger [Luttinger], 294 NY 855 ), the cases so holding have involved contracts explicitly authorizing such relief (see Braverman v Braverman, 9 Misc 2d 661 , supra; Storch v Storch, 38 AD2d 904 ; 1 Lindey, Separation Agreements and Ante-Nuptial Contracts, § 29, pp 29-13 to 29-15). Against this background — the frame of reference of the drafters of this detailed and comprehensive document — appellant’s claim that a downward modification of support "arises out of or in connection with” the terms of the agreement is hardly persuasive.
More fundamentally, what appellant seeks, in essence, is to
Appellant insists that our decision in Matter of SCM Corp. (Fisher Park Lane Co.) ( 40 NY2d 788 ) sanctions such an arbitral rewriting. However, the rationale of that case was considerably more limited. There, though holding that a landlord’s counterclaim for reformation was time-barred, we took the occasion to state that the arbitrator, acting pursuant to a broad arbitration clause, could permissibly reform the terms of a lease on the landlord’s assertion that the instrument failed to conform to the parties’ original intent (40 NY2d, supra, at pp 792-794; see International Union of Operating Engrs. v Carl A. Morse, Inc., 529 F2d 574 , 580; American Home Assur. Co. v American Fid. & Cas. Co., 356 F2d 690 , 692). Reformation of a contract to express what the parties in fact agreed upon has been held to be a claim which arises out of the contract, in contradistinction to modification of contract terms to reflect changed circumstances, a claim of a fundamentally different nature, which finds no basis at all in the agreement (see Matter of Agora Dev. Corp. [Low], 19 AD2d 126 , 127; cf. Matter of Lipman [Haeuser Shellac Co.], 289 NY 76 , 79). Pointedly, appellant nowhere suggests that by reason of accident, mistake or fraud the agreement failed to express the real intentions of the contracting parties (see Matter of Weinrott [Carp], 32 NY2d 190 , 199); he seeks instead to create a wholly new contract.
Dissent
Clearly, in this case we need not be so rigidly confined because, Ms. Bowmer having moved to stay the arbitration, we are bound to inquire whether the parties have agreed to arbitrate the particular dispute (Matter of Nationwide Gen. Ins. Co. v Investors Ins. Co., 37 NY2d 91 , 95; CPLR 7503, subd [b]). We hold that they did not (cf. Matter of Silver v Pilzer, 59 AD2d 680 , 681).
Accordingly, the order of the Appellate Division should be affirmed.
(dissenting). I am impelled to dissent, for I cannot concur in the misapplication of previously well-settled principles of law to this rather simple case. The dispositive issue presented by this appeal is whether a separation agreement requiring arbitration of "[a]ny claim, dispute or misunderstanding arising out of or in connection with” the agreement authorizes arbitration of the husband’s claim that his support obligations under the agreement should be modified because of a change in circumstances. Also implicated, because of the analysis employed by the majority of this court, is whether an arbitrator’s power to grant certain requested relief may be challenged by an application to stay arbitration.
Although the factual and procedural background to this appeal is rather complex, the relevant portions thereof are readily stated. The parties entered into an unusually detailed separation agreement in 1972. That agreement contains a
It is beyond dispute that the parties to a separation agreement may agree to arbitrate disputes concerning the support provisions of that agreement (see Hirsch v Hirsch, 37 NY2d 312 ). Hence, the only issue in this case is whether in fact the Bowmers have so agreed. As is noted above, the agreement provides for arbitration of "[a]ny claim, dispute or misunderstanding arising out of or in connection with” the separation agreement. It is difficult to conceive of a broader declaration of arbitrability. Appellant’s claim, whether it be viewed as an attempt to modify the agreement or, more accurately, as a claim that the agreement itself impliedly contemplated modification of the support obligation by an arbitrator, certainly must fall within the purview of that wide-sweeping language.
The majority, however, now concludes that this seemingly broad language does not truly mean what it says, but is instead limited in some inarticulable manner and to some uncertain extent. Unfortunately, there exists no support for such an interpretation in the language of the agreement. As noted above, the arbitration clause explicitly provides for arbitration of "[a]ny claim, dispute or misunderstanding arising out of or in connection with this Agreement, or any breach hereof, or any default in payment by the Husband, or any matter herein made the subject matter of arbitration”. The majority suggests that the provision for the arbitration of "any claim, dispute or misunderstanding arising out of or in connection with” the agreement has no real application or meaning, and that the only controversies actually made arbitrable by the agreement are those involving "any breach hereof, or any default in payment by the Husband, or any matter herein made the subject matter of arbitration”. To so hold is to simply read the opening words of the arbitration provision out of existence entirely, and that is something which a court may not do under the guise of contract interpretation. Had the parties desired to provide for arbitration of only those disputes mentioned in the latter phrases of the arbitration clause, there would have been no reason to include the broad opening words. However, that language was made an integral part of the agreement and should be given effect by the courts.
This judicial evisceration of an extremely broad arbitration provision portends a return to that outmoded and heavy-handed judicial scrutiny of arbitration agreements which I had thought this court had abandoned by its decision in Matter of Weinrott (Carp) ( 32 NY2d 190 ). Today’s decision resurrects, in new guise, the so-called "specifically enumerated” approach to arbitration clauses which we explicitly rejected in Weinrott. The effect of this decision is to render meaningless the otherwise broad provisions of any arbitration agreement in which the parties, possibly from an excess of caution, have taken the care to specify those particular types of disputes which they feared might not be covered by the general language of the arbitration agreement. I cannot concur in such an approach. It serves no valid purpose where, as here, the intent of the parties is plainly to submit to arbitra
No more persuasive is the majority’s suggestion that the instant dispute is not arbitrable because appellant is attempting to have the arbitrator "rewrite” the agreement and not merely interpret it. Initially, I note that there exists no reason why two persons may not enter into an agreement authorizing an arbitrator to modify the terms of that agreement upon the application of one of the parties. Any objections to the concept of an arbitrator "rewriting” a contract for the parties stems not from some evil inherent in the idea itself, but rather from the more general doctrine that, at least in the area of consensual arbitration, a party may be bound by the decision of an arbitrator only to the extent that he has agreed to be bound. Normally, the parties to an agreement will not wish to confer upon an arbitrator the power to modify their agreement, and it is for that reason that the arbitrator will lack the power to "rewrite” the agreement. Such objections, however, pertain not to the arbitrability of a dispute, but rather to the power of the arbitrator to provide certain relief, and as such may only be raised by application to vacate an award, not by application to stay arbitration (compare CPLR 7503, with 7511; see Board of Educ. v Barni, 49 NY2d 311 ).
That the instant application to stay involves no more than a premature contention, that the arbitrator will exceed his power is shown by the fact that regardless of the outcome of this appeal, arbitration will proceed on the question of appellant’s obligations under the contract. The only effect of this proceeding can be to limit the range of remedies which the arbitrator may employ in an attempt to resolve the dispute between the Bowmers. The expenditure of so much time and effort merely to inform an arbitrator in advance of arbitration that he may not grant certain requested relief is hardly consistent with the function of arbitration as an inexpensive and swift alternative forum. Moreover, it serves to take from the arbitrator the power to determine, at least in the first instance, the range of remedies authorized by the agreement, and creates yet another preliminary inquiry to be made by the. courts before ordering arbitration.
Judges Jasen, Jones, Wachtler and Meyer concur with Judge Fuchsberg; Judge Gabrielli dissents and votes to reverse in a separate opinion in which Chief Judge Cooke concurs.
Order affirmed, with costs.
Cases cited
- In re Arbitration between Exercycle Corp. & Maratta 9 NY2d 329 p. 290, p. 291
- Marchant v. Mead-Morrison Manufacturing Co. 252 NY 284 p. 290
- In re the Arbitration between Weinrott & Carp 32 NY2d 190 at 199 p. 290, p. 296, p. 299
- Kepp v. Springville-Griffith Central School District 43 NY2d 767 p. 290
- In re the Arbitration between First Republic Building Corp. & Gildenhorn 20 AD2d 256 p. 290
- G. E. Howard & Co. v. Daley 27 NY2d 285 p. 290
- In re the Arbitration between Long Island Lumber Co. & Martin 15 NY2d 380 p. 290
- New York Institute of Technology v. Council of Metropolitan & Old Westbury Chapters 47 AD2d 659 p. 290
- In re the Arbitration between Fitzgerald & General Electric Co. 19 NY2d 325 p. 290
- Information Sciences, Inc. v. Mohawk Data Science Corp. 43 NY2d 918 p. 290
- In re the Arbitration Between Agora Development Corp. & Low 19 AD2d 126 at 127 p. 290, p. 296
- In re the Arbitration between Paver & Wildfoerster & Catholic High School Ass'n 38 NY2d 669 at 677 p. 290, p. 296
- In re the Arbitration between National Equipment Rental Ltd. & American Pecco Corp. 35 AD2d 132 p. 290
- In re the Arbitration between Granite Worsted Mills, Inc. & Aaronson Cowen, Ltd. 25 NY2d 451 p. 290
- Lentine v. Fundaro 29 NY2d 382 at 385 p. 290, p. 297
- In re the Arbitration between SCM Corp. & Fisher Park Lane Co. 40 NY2d 788 p. 290, p. 296
- In re the Arbitration between North Colonie Central School District & North Colonie Teachers' Ass'n 60 AD2d 496 p. 290
- In re the Arbitration between Aimcee Wholesale Corp. & Tomar Products, Inc. 21 NY2d 621 p. 290, p. 291
- Swartz v. Swartz 49 AD2d 254 p. 290, p. 291, p. 297
- Board of Education v. Bellmore-Merrick United Secondary Teachers, Inc. 39 NY2d 167 p. 290
- In re the Arbitration between Board of Education of Westmoreland Central School District & Westmoreland Teachers Ass'n 58 AD2d 228 p. 290
- McMains v. McMains 15 NY2d 283 p. 290, p. 291
- In re the Arbitration between Staklinski & Pyramid Electric Co. 6 NY2d 159 p. 290
- In re the Arbitration between Associated General Contractors & Savin Bros. 36 NY2d 957 p. 290
- In re the Arbitration between Ruppert & Egelhofer 3 NY2d 576 p. 290
- In re the Arbitration between the Legislature of the County of Rensselaer & Allen 44 AD2d 628 p. 290
- Nationwide General Insurance v. Investors Insurance Co. of America 37 NY2d 91 at 95 p. 290, p. 297
- In re the Arbitration between Blum Folding Paper Box Co. & Friedlander 27 NY2d 35 p. 291
- Schmelzel v. Schmelzel 287 NY 21 at 26-27 p. 291, p. 295
- Goldman v. Goldman 282 NY 296 at 302-304 p. 291, p. 295
- In re the Arbitration between Robinson & Robinson 296 NY 778 p. 291, p. 295
- Sheets v. Sheets 22 AD2d 176 p. 291
- In re the Arbitration between the Acting Superintendent of Schools of Liverpool Central School District v. United Liverpool Faculty Ass'n 42 NY2d 509 p. 291
- In re the Arbitration between American Silk Mills Corp. & Meinhard-Commercial Corp. 31 NY2d 777 p. 291
- Braverman v. Braverman 9 Misc 2d 661 p. 291, p. 294, p. 295
- In re the Arbitration between Raisler Corp. & New York City Housing Authority 32 NY2d 274 p. 291
- In re the Arbitration between W. M. Girvan, Inc. & Robilotto 40 AD2d 1060 p. 291
- in the Matter of the Arbitration Between W. M. Girvan, Inc., Appellant, and Nicholas M. Robilotto, as President of Local 294, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Respondent. 33 NY2d 425 p. 291
- In re the Arbitration between Angel Fabrics, Ltd. & Cravat Pierre, Ltd. 51 AD2d 951 p. 291
- Boden v. Boden 42 NY2d 210 p. 291
- George Backer Management Corp. v. Acme Quilting Co. 46 NY2d 211 p. 291
- Breed v. Insurance Co. of North America 46 NY2d 351 p. 291
- Garrity v. Lyle Stuart, Inc. 40 NY2d 354 at 359 p. 291, p. 296
- In re the Arbitration between Knickerbocker Agency, Inc. & Holz 4 NY2d 245 p. 291
- Bowmer v. Bowmer 67 AD2d 8 at 10 p. 293
- In re the Arbitration between Siegel & Lewis 40 NY2d 687 at 689 p. 293
- In re the Arbitration between Lasek & Lasek 13 AD2d 242 at 244 p. 293
- In re the Arbitration between Stone & Freezer 304 NY 649 p. 294
- In re the Arbitration between Riverdale Fabrics Corp. & Tillinghast-Stiles Co. 306 NY 288 at 291 p. 294
- In re the Arbitration between R. H. Macy & Co. & National Sleep Products, Inc. 39 NY2d 268 at 271 p. 294
- Kleila v. Kleila 50 NY2d 277 p. 295
- In re an Arbitration Between Luttinger & Luttinger 294 NY 855 p. 295
- In re Lipman 289 NY 76 at 79 p. 296
- In re the Arbitration between Board of Education & Hess 49 NY2d 145 at 151-152 p. 297
- In re the Arbitration between National Cash Register Co. & Wilson 8 NY2d 377 at 383 p. 297
- Hirsch v. Hirsch 37 NY2d 312 p. 298
- Board of Education v. Barni 49 NY2d 311 p. 300