Matley v. Matley,__Mich App__(1999), No. 203423 (March 19, 1999)
Domestic Relations ReviewDefendant appeals trial court order to vacate arbitration award on the basis of fraud.
In 1992, parties agreed to a consent judgment of divorce. One aspect of the agreement was for each party to make the lease, insurance, and maintenance payments for the vehicle in his or her possession. Plaintiff was at the time in possession of a 1990 Honda vehicle. After disputes arose concerning the divorce, both parties agreed to a final and binding arbitration. The arbitrator issued an award of $498.35 for the plaintiff to pay the defendant in November, 1993. Further disputes lead to a court hearing, where the plaintiff alleged that the defendant committed fraud during the arbitration hearing by concealing the fact that he had taken the Honda from the plaintiff's possession in March, 1993. The arbitrator testified that he had credited the defendant with payments the defendant made on the Honda, and that is award would most likely be different had he been aware of the fact that the defendant had taken the car from the plaintiff. The trial court held an evidentiary hearing and concluded that the defendant had committed fraud at the arbitration hearings and vacated the arbitration award.
Defendant argued that the trial court erred because, pursuant to MCR 2.119; MCR 3.602 (B)(1), neither party made a proper application to vacate the arbitration award. However, the Court of Appeals found that under MCR 3.602 (J)(1) the trial court can sua sponte vacate the award. "It is proper for a court to vacate an arbitration award procured on the basis of fraud." The Court further stated that "despite the fact that the parties knew of the fraud at the time the arbitration award was issued, in light of the arbitrator's testimony that his award most likely would have been different if he had known that defendant took possession of the Honda in March, 1993, and in the absence of any prejudice to defendant in considering the issue in an untimely manner, we do not believe the trial court erred in considering the fraud issue." Affirmed.
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