McNulty v. McNulty, 61 N.Y.2d 921 (1984)

When a separation agreement contains a clear and unequivocal arbitration clause covering support modification, the arbitrator, not the court, determines whether a specific dispute, including one involving arrears, falls within the scope of that clause.

Summary

This case concerns whether a dispute over arrears in support payments, which accumulated before arbitration was invoked, should be decided by the courts or by an arbitrator. The Court of Appeals held that because the arbitration clause in the separation agreement expressly covered support modification, the arbitrator should decide whether the specific dispute, including the arrears, was a proper subject for arbitration. The Court also determined that by filing a cross-motion to compel arbitration, the defendant effectively commenced arbitration proceedings.

Facts

The parties, formerly married, had a separation agreement containing an arbitration clause. This clause expressly covered the issue of downward support modification. A dispute arose regarding arrears in support payments. The defendant (presumably the payor) filed a cross-motion to compel arbitration of the dispute. The plaintiff (presumably the payee) argued that the arrears were a sum certain under Domestic Relations Law § 244 and therefore not subject to arbitration.

Procedural History

The Appellate Division’s order was affirmed by the Court of Appeals. The Court of Appeals held that the arbitrator, not the courts, should determine the arbitrability of the arrears dispute given the broad arbitration clause in the separation agreement.

Issue(s)

1. Whether a dispute over arrears in support payments, accumulated before the invocation of an arbitration clause in a separation agreement, is a proper subject for arbitration when the agreement’s arbitration clause expressly covers support modification.
2. Whether the use of the phrase “either party may submit such dispute to arbitration” limits the aggrieved party to a choice between arbitration and abandonment of the claim.
3. Whether filing a cross-motion to compel arbitration constitutes effectively commencing arbitration proceedings.

Holding

1. Yes, because the arbitration clause in the parties’ separation agreement expressly, directly, and unequivocally covered the issue of downward support modification.
2. Yes, because the phrase should be interpreted to limit the aggrieved party to a choice between arbitration and abandonment of the claim.
3. Yes, because in view of the arbitrability of this dispute, the defendant effectively commenced arbitration with his cross motion to compel arbitration.

Court’s Reasoning

The Court reasoned that the arbitration clause in the separation agreement was broad enough to cover the dispute over support modification, including the arrears. The Court relied on Bowmer v Bowmer, 50 NY2d 288, 293, and Gangel v DeGroot, 41 NY2d 840, 841. Because the arbitration clause was sufficiently broad, the question of whether the specific dispute was arbitrable was for the arbitrator to decide, citing Stillman v Stillman, 80 AD2d 356, 359, affd on opn below 55 NY2d 653.

The Court further addressed the arrears issue, stating that once it is decided that arrears may be covered by the arbitration clause, the arbitrator is empowered to consider arrears even though they accumulated before the arbitration clause was invoked. Although the plaintiff argued that Domestic Relations Law § 244 made these arrears a sum certain impervious to challenge, the Court noted that even under § 244, the defendant is allowed to show that his failure to seek relief earlier was motivated by “good cause.” The Court held that the defendant should be allowed to make such a showing before the arbitrator.

The Court also held that the defendant’s cross-motion to compel arbitration effectively commenced arbitration proceedings under CPLR 7503(a).

The case emphasizes the strong policy in favor of arbitration, particularly when the arbitration clause is broad. It also highlights the principle that procedural issues, such as whether a party has “good cause” for delaying a challenge to support obligations, are generally for the arbitrator to decide once arbitrability is established.