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The Oregon Court of Appeals held that a husband was entitled to a trial de novo following court-annexed arbitration of issues arising from the dissolution of his marriage. However, the Court indicated that binding arbitration is an option for parties in a marital dissolution seeking an alternative to litigation.
In In re Marriage of Woods, 2006 WL 2498195 (Or. Ct. App. Aug. 30, 2006), Mack and Cynthia Woods, husband and wife, petitioned for dissolution of their marriage. The trial court referred the matter to court-annexed arbitration pursuant to Or. Rev. Stat. § 36.405.
The parties later stipulated to a “motion for an order of referral to binding arbitration,” whereby arbitration would be binding, but each party would retain the right to appeal to the Oregon Court of Appeals. The stipulated motion was never filed with the court.
Following arbitration, the husband requested a trial de novo pursuant to statute. The wife responded by filing a motion to enter the arbitration award as a general judgment, arguing that the husband waived any entitlement to a trial de novo. The trial court granted the wife’s motion.
On appeal, the husband argued that he was entitled to a trial de novo under Or. Rev. Stat. § 36.425(2)(a), which guarantees a trial de novo to a party who properly appeals from court-annexed arbitration. The wife argued that the husband waived that right by stipulating to the motion for an order of referral to binding arbitration.
The Court held that the husband retained his right to a trial de novo because the trial court never removed the matter from court-annexed arbitration as permitted by Or. Rev. Stat. § 36.405(2)(b). The Court further held that the husband’s purported waiver of that right was ineffective because the stipulated motion was based on a mutual mistake of law – namely, the erroneous belief that the parties could confer jurisdiction on the court of appeals. Accordingly, the Court remanded the case for a trial de novo.
Despite ruling in the husband’s favor, the Court rejected his argument that public policy does not permit binding arbitration of issues arising from a marital dissolution. Most courts agree. For example, North Carolina has adopted the North Carolina Family Arbitration Act, which allows binding arbitration of “all issues arising from a marital separation or divorce, except for the divorce itself.”
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