The Power of Arbitration Agreements in Divorce/Dissolution Proceedings in Washington

As a divorce attorney in Vancouver (Clark County), Washington I am frequently called on to discuss many aspects of the divorce process with clients.  One such aspect of consulting and advising on divorces is the use of arbitration.  In Gamache v. Gamache, a recent unpublished opinion from Division Three of the Washington Court of Appeals, that Appellate Court vacated the trial court’s orders in that case because an arbitration agreement covered the disputes between the parties that led to the entry and enforcement of the orders but the court failed to refer the matter to arbitration despite the agreement of the parties to do so.    This case highlights the power and importance of arbitration agreements can be in the dissolution process, if they are entered into, even if a party does not follow the exact guidelines to enforce the arbitration agreement at the trial level.  Now let’s take a brief look at the particular facts of Gamache and how the court’s view arbitration agreements under Washington law.  The complete facts will be streamlined for purposes of this article.

On July 17, 2017, Todd and Darice Gamache, both represented by counsel, engaged in mediation ultimately entered into a CR 2A Agreement. The CR 2A agreement provided for the distribution of property.  The parties inserted an arbitration clause into the settlement agreement, which clause read:  Daniel Smith to serve as an arbitrator for any drafting disputes.  . . .  Daniel Smith to serve as an arbitrator for any residual issues or conflicts.

In October 2017, Darice Gamache filed a motion to enter a dissolution decree and to enforce the CR 2A agreement because of Todd’s failure to draft the orders despite the agreement directing his attorney to do so.  Darice’s Gamache filed a proposed dissolution of marriage decree.  In November 2017, in response to the motion to enforce the settlement and enter a dissolution decree, Todd Gamache’s counsel wrote in a declaration: 

There are issues with the final pleadings and with certain expenses that were not disclosed by Ms. Gamache as part of the settlement process. Accordingly, pursuant to the CR 2A Agreement the matter is going to have to go back to Daniel Smith for arbitration.  That has to take place before final papers can be entered.  In a subsequent declaration, Mr. Gamache’s counsel repeated the request to direct the dispute to arbitration before Daniel Smith.   Todd Gamache objected to Darice’s proposed language in the dissolution decree and contended the language conflicted with the parties’ agreement. 

Despite the request by Mr. Gamache to refer the matter to arbitration because of the dispute with the agreement and language, the dissolution court entered findings of fact, conclusions of law, and a decree of dissolution as prepared by Darice.   Other issues ensued with the case and the court made further rulings but never referred the matter to arbitration. 

Todd Gamache argued on appeal that the dissolution court erred on multiple fronts, to include the fact that the trial court should have referred the pending dispute, concerning the enforceability of the agreement and the meaning of the terms of the agreement, to arbitration.  Division Three agreed that the trial court erred in failing to refer the dispute to arbitration.  On appeal, Darice Gamache asks this court to decline to address Todd’s request for referral to arbitration because he did not request arbitration before the dissolution court.  Division Three did recognize that generally, the party seeking arbitration files a formal motion to refer the dispute to arbitration.  Nevertheless, Todd Gamache, although not filing a motion, identified for the trial court the existence of the arbitration clause and asked that the dispute be referred to arbitration. 

Division Three In Gamache went on to state that the uniform arbitration act stipulates that a “court may not refuse to order arbitration because the claim subject to arbitration lacks merit or grounds for the claim have not been established.”  RCW 7.04A.070(3).  Instead, when determining whether a dispute should be arbitrated, the court must limit its inquiry to the question of whether that dispute falls within the scope of the parties’ agreement to arbitrate.  See, In re Marriage of Pascale, 173 Wn. App. 836, 838, 295 P.3d 805 (2013).  The court must order arbitration, if the arbitration agreement covers the dispute.  In re Marriage of Pascale, 173 Wn. App. at 838.   Division Three of the Court of Appeals also clearly articulated that Washington strongly favors arbitration.  See, In re Marriage of Pascale, 173 Wn. App. at 842; Mendez v. Palm Harbor Homes, Inc., 111 Wn. App. 446, 454, 45 P.3d 594 (2002).  The court should resolve any doubts regarding the applicability of an arbitration agreement in favor of coverage.  Peninsula School District No. 401 v. Public School Employees of Peninsula, 130 Wn.2d 401, 413-14, 924 P.2d 13 (1996).   In re Marriage of Pascale, 173 Wn. App. 836 informs our decision. 

Division Three highlighted the fact that the parties, in this case, entered into a marital dissolution agreement that read in part: “[a]ny disputes in the drafting of the final documents or any other aspect of this agreement (form or substance), or any issue not discussed shall be submitted to Harry R. Slusher for binding arbitration.”  In re Marriage of Pascale, 173 Wn. App. at 840.  When the parties later disputed the interpretation of the agreement, the wife brought a motion to enforce the agreement.  The husband moved to refer the dispute to arbitration, per the agreement.  The dissolution court chose to enter a decree of dissolution that confirmed the wife’s view of the agreement.  The dissolution court concluded that the terms of the settlement agreement were not ambiguous and extrinsic evidence could not be heard to construe the agreement.  On appeal, this court reversed and remanded for arbitration.  This court concluded that the arbitration clause arguably covered the dispute.   Darice Gamache does not contend that the arbitration provision in her settlement agreement with Todd fails to cover the disputes resolved by the dissolution court.  We also conclude that the arbitration clause in the settlement agreement arguably covers those disputes.  Therefore, we hold that the dissolution court erred when failing to remand the dispute to arbitration.  Other than the portion of the dissolution decree dissolving the parties’ marriage, Division Three vacated the dissolution court’s November 17, 2017, findings, conclusions, and decree and also vacated the trial court’s January 26, 2018 orders.   This case illustrates that once the parties agree to arbitration then even a trial court must respect that decision and refer the dispute to arbitration, if the arbitration provisions cover the dispute in question.  The trial court in this case chose to ignore the arbitration clause and make its own rulings.  Division Three of the Washington Court of Appeals struck the trial court down and said the law in this state required you to follow the arbitration agreement in this case, period.  Choosing to arbitrate a dispute takes it out of the hands of the court (at least per the terms of the arbitration agreement/clause).  So it is very important to understand that choice and the short-term and long term ramifications it may have on your case.