Appeals Court Found Arbitrator Did Not Exceed His Authority

In Re Estate of Lederer, No. A-0175-14T1, 2017 N.J. Super. Unpub. LEXIS 665 (N.J. Super. Ct. App. Div. Mar. 16, 2017).

This case pertains to an arbitrator’s authority to decide the validity of a Will.  The Appellate Division addressed two appeals that were consolidated.

In the first matter, defendants James Lederer, Jessica Lederer, and Jeremy Lederer appealed from an order that, among others, confirmed an arbitration award declaring the March 21, 1997, Will of Selma H. Lederer’s (“decedent”) as her valid and binding last Will.  In the second matter, James Lederer’s minor son, J.L., through his mother and guardian ad litem, appealed from an order dismissing his complaint seeking to probate a copy of a purported Will dated August 26, 2000.

The appeals court affirmed the trial court’s rulings in both cases, finding that the judge decided all issues thoroughly and correctly in a series of cogent written and oral opinions, which included a February 28, 2011, written opinion, and oral opinions on June 10, 2014, and September 12, 2014.  Id. at *2-3.

As to J.L.’s appeal, the court noted that the decedent’s inter vivos transfers and Wills were litigated by the adult parties.  During discovery, a document surfaced that defendants claimed was a copy of a handwritten Will, signed by the decedent and naming J.L. as one of the beneficiaries.  None of the other Wills involved in the litigation or the arbitrations named J.L. as a beneficiary.  The adult parties signed an agreement to submit the entire dispute to binding arbitration.  However, J.L. was not a party to the adults’ litigation, and he did not participate in the arbitration.

In one of several awards, the arbitrator found that the August 26, 2000, document was not a valid Will, as it was the result of undue influence.  The trial court confirmed the arbitrator’s award.  However, the lower court found the award applied to the adult parties only and gave J.L. the choice of two remedies:  (1) either reopen the arbitration concerning the August 26, 2000, Will or (2) submit the August 26, 2000, Will for probate and allow the parties to litigate the validity of the Will.  J.L. submitted the Will for probate, and the plaintiffs filed objections to the Will.

A trial followed as to the Will’s validity, and after hearing evidence, the court dismissed J.L.’s complaint on the basis that the purported Will was only a copy of a set of handwritten instructions for the eventual preparation of a Will.  Thus, the court found that J.L. failed to present prima facie evidence from which the court could possibly conclude by clear and convincing evidence that the proffered document in fact represented Selma’s Last Will.

On appeal, J.L. pointed to the unfairness of the arbitration.  The Appellate Division found this argument without merit as J.L. received a full and fair opportunity to litigate the validity of the purported Will in a trial.  In addition, J.L. cited the doctrine of dependent relevant revocation, but again the appeals court found the argument without merit.

Next, the appellate court addressed the defendants’ appeal of the arbitration award.  Specifically, the issue on appeal was whether the arbitrator exceeded his authority by addressing the validity of the August 26, 2000, Will.  The Appellate Division found the arbitrator did not exceed his authority.

The appeals court relied on N.J.S.A. § 2A:23B-23(4), stating that a court may only vacate an award when “an arbitrator exceeded the arbitrator’s powers.”  The New Jersey Supreme Court has opined that courts “will review the arbitrator’s interpretation of the parties’ intention under a ‘highly deferential’ standard.”  Bound Brook Bd. of Educ. v. Ciripompa, 228 N.J. 4 (Feb. 21, 2017).

Applying that standard to this matter, the appeals court found that the parties entered into an agreement to submit “all matters subject to this action” to binding arbitration before a retired former Chief Justice of the Supreme Court.  Thus, a fair interpretation of that phrase is that the parties intended to arbitrate all issues that were or could have been raised in the pending litigation over Selma’s estate – including which Will governed Selma’s testamentary dispositions.  The validity of the August 26, 2000, Will “clearly fell within the scope of the arbitrator’s authority.”  Id. at *11.