Bowmer v. Bowmer, 50 N.Y.2d 288 (1980)

A broad arbitration clause in a separation agreement, encompassing any claim or dispute arising out of or in connection with the agreement, includes disputes over modification of support obligations due to changed circumstances, unless the agreement explicitly excludes such matters from arbitration.

Summary

This case addresses whether a broad arbitration clause in a separation agreement allows arbitration of a dispute concerning the modification of support obligations based on changed circumstances. The husband sought arbitration to modify his support payments, arguing a change in circumstances warranted a reduction. The wife opposed, arguing the arbitrator lacked the power to modify the agreement. The New York Court of Appeals held that the broad arbitration clause encompassed the dispute, affirming the order to proceed with arbitration, emphasizing the parties’ intent to resolve all disputes related to the agreement through arbitration.

Facts

The Bowmers entered into a detailed separation agreement in 1972, including a broad arbitration clause covering any claim, dispute, or misunderstanding arising out of or connected with the agreement. The agreement also contained a formula for support payments and a provision for the husband to pay for the children’s college education if he could afford it. A dispute arose when the husband began deducting college tuition payments from his direct support payments to the wife. The wife demanded arbitration to recover the deducted amounts, while the husband sought arbitration to modify the support provisions due to changed circumstances.

Procedural History

The wife filed a demand for arbitration, which prompted the husband to file his own demand seeking a modification of support. Both parties sought to stay the other’s arbitration application. Special Term concluded the entire dispute should proceed to arbitration. The Appellate Division modified the Special Term’s order by staying arbitration of the husband’s request for modification of support obligations. The husband then appealed to the New York Court of Appeals.

Issue(s)

Whether a broad arbitration clause in a separation agreement, which provides for arbitration of “[a]ny claim, dispute or misunderstanding arising out of or in connection with this Agreement,” encompasses a dispute over the modification of support obligations due to a change in circumstances.

Holding

Yes, because the broad language of the arbitration clause indicates the parties’ intent to arbitrate all disputes arising from the agreement, including those concerning modification of support obligations due to changed circumstances, unless specifically excluded.

Court’s Reasoning

The Court of Appeals emphasized the broad language of the arbitration clause, stating it is difficult to conceive of a broader declaration of arbitrability. The court found that the husband’s claim for modification, whether viewed as an attempt to modify the agreement or as a claim that the agreement impliedly contemplated modification by an arbitrator, fell within the scope of the arbitration clause. The court distinguished between interpreting an agreement and rewriting it, noting that the arbitrator’s role is to interpret the agreement, not to rewrite it. The majority noted that it is for the court to determine whether a valid agreement to arbitrate exists and whether the asserted claim comes within the agreement. The Court reasoned that unless the agreement expressly permits the arbitrator to consider subsequent changes in circumstances, the arbitrator is bound by the terms of the original agreement. The dissent argued that the majority was improperly limiting the scope of the arbitration clause and returning to an outdated approach of judicial scrutiny of arbitration agreements. The dissent contended that the broad language of the arbitration clause should be given full effect, and any limitations on the arbitrator’s power to grant relief should be raised after the award, not before. The dissent highlighted that, “[a]ny claim, dispute or misunderstanding arising out of or in connection with this Agreement…shall be arbitrated” is about as broad as possible. The court held that arbitrators could not “rewrite” the agreement absent express language.