JANICE M. HOLDER, C.J., delivered the opinion of the Court, in which CORNELIA A. CLARK, GARY R. WADE, WILLIAM C. KOCH, JR., and SHARON G. LEE, JJ., joined.
We granted appeal in this case to determine the trial court's scope of review of the parties' arbitration award. After thoroughly reviewing the record, we conclude that the parties entered into binding arbitration governed by the Tennessee Uniform Arbitration Act ("TUAA") and reaffirm our holding in Pugh's Lawn Landscape Co., Inc. v. Jaycon Development Corp., 320 S.W.3d 252, 254 (Tenn. 2010), that the judicial review of an arbitration award is confined to the grounds enumerated in the TUAA. The provision in the parties' arbitration agreement modifying the trial court's scope of review therefore is invalid, and the invalidity of this provision is a mutual mistake justifying rescission of the parties' agreement to arbitrate. Because our holding necessitates additional proceedings on remand, we further hold that parenting issues may not be submitted to binding arbitration in Tennessee because such arbitration eliminates the trial court's determination of the children's best interests. We therefore reverse the judgment of the Court of Appeals, vacate the judgment of the trial court, and remand the case to the trial court for further proceedings consistent with this opinion.
Elizabeth Sams Tuetken ("Mother") filed a complaint for divorce in the Shelby County Circuit Court on March 13, 2001, against Lance Edward Tuetken ("Father"). The trial court entered a final decree of divorce on January 31, 2003, incorporating a parenting plan reflecting the trial court's ruling on issues related to the parties' son and daughter, who were ages eleven and six, respectively, at the time of trial. The parenting plan designated Mother as the primary custodial parent and required Father to pay child support. The parenting plan also addressed the children's schedules, the allocation of decision-making authority between Mother and Father, the children's daily care, and the rights of each parent when the children were not in his or her care.
In 2004 and 2005, Mother and Father filed cross-motions for civil contempt, each alleging that the other had failed to abide by one or more provisions in the parenting plan. In addition, Mother requested that Father's child support be modified to reflect an increase in his earnings. In anticipation of the entry of a consent order permitting arbitration of the parties' disputes, an arbitration hearing was held on June 20, 2006. On June 27, 2006, a "Parenting Arbitrator" submitted preliminary findings of fact and conclusions of law to the parties and requested that the parties review the document for clerical errors.
On June 28, 2006, the trial court entered a "Consent Order Appointing Parenting Arbitrator" ("consent order"). The consent order embodied the parties' agreement to arbitrate and provided the Parenting Arbitrator with the authority "to make decisions regarding the best interests of the parties' minor children."
The Parenting Arbitrator was required to decide all issues and to set forth findings of fact and conclusions of law if requested by either party. The parties agreed that a party challenging the Parenting Arbitrator's ruling was required to file a motion with the trial court within ten calendar days of receipt of the Parenting Arbitrator's ruling. The consent order further provided that "[i]n the event of an appeal, the decision of the arbitrator shall be binding on the parties pending the resolution of the matter by the Trial Court, and said decision shall carry with it a presumption of correctness." The parties also initialed a provision acknowledging "that the orders of the Parenting Arbitrator can be reviewed by the Court." If neither party filed a timely objection, "the Parenting Arbitrator shall cause his or her order to be signed by the Court."
Father filed a motion in the trial court objecting to the Parenting Arbitrator's June 27, 2006 decision. The Parenting Arbitrator thereafter filed amended findings and conclusions with the trial court requiring the parties to complete their child support worksheets and participate in another arbitration hearing to resolve issues concerning the education of the parties' son. Father filed a motion to continue the parties' second scheduled arbitration until his objections to the Parenting Arbitrator's June 27, 2006 decision could be heard by the trial court. He also filed a petition in the trial court to reduce his child support.
The trial court entered an order on May 18, 2007, ruling that Father was required to submit all issues to the Parenting Arbitrator in accordance with the consent order and that Father's motions had been raised prematurely. The trial court therefore denied Father's motion objecting to the Parenting Arbitrator's June 27, 2006 decision and dismissed his petition to reduce child support.
The Parenting Arbitrator conducted additional arbitration hearings. On August 15, 2007, she submitted her findings of fact and conclusions of law to the trial court and to the parties. These findings addressed child support, the son's education, both children's uninsured medical expenses, transportation of the children between
Father filed in the trial court a notice of objections to the Parenting Arbitrator's decision. On August 31, 2007, the trial court entered an order incorporating the Parenting Arbitrator's decision. In response to Father's motion seeking a ruling on his objections, Mother asserted that the parties had agreed to binding arbitration governed by the Tennessee Uniform Arbitration Act ("TUAA") and that the TUAA permits modification of an arbitrator's decision only under limited circumstances. See Tenn.Code Ann. §§ 29-5-312 to -314 (2000).
On December 7, 2007, the trial court conducted a hearing on Father's objections. The trial court determined that it was not prohibited by the TUAA from modifying the Parenting Arbitrator's ruling. The trial court then modified the Parenting Arbitrator's ruling as to three issues and expressly reserved five issues for an evidentiary hearing in addition to any other issues not completely adjudicated.
Mother appealed the trial court's order modifying the arbitrator's ruling. She based her appeal on section 29-5-319 of the TUAA, which states that "[a]n appeal may be taken from: ... [a]n order modifying or correcting an [arbitrator's] award."
On appeal, the parties do not dispute that the Parenting Arbitrator's decision may be appealed to the trial court. The issue before us therefore concerns only the scope of the trial court's review. Mother asserts that the trial court should apply the narrow scope of review provided in the TUAA, which governs binding arbitration. Father, on the other hand, asserts that the trial court should apply the broader scope of review included in the consent order. Before addressing this issue, we will first determine whether the consent order entered by the trial court provided for non-binding arbitration pursuant to Tennessee Supreme Court Rule 31, as held by the Court of Appeals.
Rule 31 sets forth the procedures for court-annexed alternative dispute resolution, including non-binding arbitration.
Viewed in its entirety, we conclude that the consent order in this case does not invoke the provisions of Rule 31 related to non-binding arbitration. The parties' agreement vests decision-making authority in the Parenting Arbitrator and provides for an appeal procedure to the trial court. This procedure is foreign to Rule 31. Rule 31, section 21 provides that neutrals serving in non-binding arbitrations are subject to Rule 31, Appendix A, "Standards of Conduct for Rule 31 Neutrals." In a subsection entitled "Neutral's Role," Appendix A states that "[i]n dispute resolution proceedings, decision-making authority rests with the parties. The role of the Neutral includes but is not limited to assisting the parties in identifying issues, reducing obstacles to communication, maximizing the exploration of alternatives, and helping the parties reach voluntary agreements." Tenn. Sup.Ct. R. 31 app. A, § 1(b). Accordingly, in non-binding arbitration the parties may accept the result of the arbitration, thereby reaching a voluntary agreement, or they may disagree with the result of the arbitration and return to the court for a resolution in that forum. Rule 31 does not vest decision-making authority in the arbitrator. Because the arbitrator's award is not binding, Rule 31 does not provide for appeal from the arbitrator's decision.
Our conclusion that the consent order is not governed by Rule 31 is reinforced by other provisions of Rule 31. For example, neutrals must "preserve and maintain the confidentiality of all information" obtained during the arbitration proceedings and may not divulge that information without the parties' consent. Tenn. Sup.Ct. R. 31 § 10(d). Also, Rule 31 makes it abundantly clear that information concerning the arbitration proceedings is inadmissible in the trial court. Neutrals filing a final report with the trial court pursuant to Rule 31 must state "only: (i) which parties appeared and participated in the [proceedings]; (ii) whether the case was completely or partially settled; and (iii) whether the Rule 31 Neutral requests that the costs of the Neutral's services be charged as court costs." Tenn. Sup.Ct. R. 31 § 5(a). Rule 31 further provides that "[e]vidence of conduct or statements made in the course of [the ADR proceedings] shall be inadmissible to the same extent as conduct or statements are inadmissible under Tennessee Rule of Evidence 408." Tenn. Sup.Ct. R. 31 § 7. Contrary to these provisions, the parties' consent order emphasizes that "[t]here is no confidentiality as to any evidence presented" during the arbitration hearings and requires the Parenting Arbitrator to submit detailed findings and conclusions to the trial court.
In short, the role of the Parenting Arbitrator in this case, as described in the parties' consent order and in actuality, is inconsistent with the role of a neutral in a non-binding arbitration conducted pursuant to Rule 31.
We also put to rest the notion that Rule 31 governs not just non-binding arbitration, but some form of binding arbitration as well. In Team Design v. Gottlieb, 104 S.W.3d 512, 528 (Tenn.Ct.App.2002), the Court of Appeals stated that "the 2001 amendments [to Rule 31] appear to permit the parties to agree that an arbitrator's award in a `non-binding arbitration' proceeding will be `final and binding,'" relying on Appendix B to Rule 31 in support of its conclusion. Id. at 528 & n. 47. Initially, we observe that no provision of Rule 31 provides for binding arbitration. Section
We acknowledge that paragraph 15 of Appendix B permits parties to "stipulate[ ] in writing that the award shall be final and binding." This provision should not be interpreted to alter the substance and intent of Rule 31. "This Court's role in construing statutes is to give effect to the legislative intent without unduly restricting or expanding a statute's coverage beyond its intended scope." State v. Flemming, 19 S.W.3d 195, 197 (Tenn. 2000). The traditional rules of statutory construction also apply to the construction of the Rules of the Tennessee Supreme Court. See Doe v. Bd. of Prof'l Responsibility of Supreme Ct. of Tenn., 104 S.W.3d 465, 469 (Tenn.2003).
Consistent with the substantive provisions of Rule 31, the language in Appendix B simply permits parties to agree to make binding the result of their non-binding arbitration. Paragraphs 15 and 17 support this conclusion. The arbitrator may issue an award at which time the parties may stipulate that the award "shall be final and binding." Tenn. Sup.Ct. R. 31 app. B, ¶ 15. Then, "[u]pon stipulation of the parties, the clerk shall, in accordance with Rule 58, Tennessee Rules of Civil Procedure,
Having determined that the parties' consent order was not governed by Rule 31, we turn to Mother's contention
Tenn.Code Ann. § 29-5-302. We have held that "[a] judgment by consent is in substance a contract of record made by the parties and approved by the court." Third Nat. Bank v. Scribner, 212 Tenn. 400, 370 S.W.2d 482, 486 (1963). We therefore conclude that Mother and Father's agreement to arbitrate embodied in the consent order falls within the scope of the TUAA. See Pugh's Lawn Landscape, Co. v. Jaycon Dev. Corp., 320 S.W.3d 252, 256 (Tenn. 2010).
The grounds on which a trial court may vacate, modify, or correct an arbitration award under the TUAA are limited. See Tenn.Code Ann. §§ 29-5-312 to -314;
The scope of the trial court's review as included in the consent order is much broader than the trial court's review under the TUAA. Specifically, the consent order states that "[i]n the event of an appeal, the decision of the arbitrator shall be binding pending the resolution of the matter by the Trial Court, and said decision shall carry with it a presumption of correctness." Thus, it appears that Mother and Father attempted to enter into binding arbitration while preserving their right to appeal to the trial court and expanding the trial court's scope of judicial review.
We faced a similar situation in Pugh's Lawn Landscape Co. v. Jaycon Development Corp., 320 S.W.3d at 255. In Pugh's, as in this case, the parties agreed to arbitrate their dispute by entering into a consent order that provided for a broader scope of judicial review than is contemplated under the TUAA. We take this opportunity to reaffirm our holding in Pugh's that the judicial review of an arbitrator's award is confined to the grounds enumerated in the TUAA. Id. at 254. We therefore invalidate the provision in the consent order embodying the agreement to arbitrate that purports to expand the trial court's scope of judicial review.
Having held that a provision in the agreement to arbitrate is invalid, we now must determine whether to reform or rescind the agreement to arbitrate. If we reform the agreement, our review would occur pursuant to the narrow review provisions of the TUAA. If we rescind the agreement, we would remand the case to the trial court to adjudicate the merits of the parties' dispute. Applying traditional contract principles in Pugh's, we rescinded the agreement on the basis that the provision authorizing expanded judicial review was material to the parties' agreement and that its failure constituted a mutual mistake that was sufficient to defeat the contract. Id. at 255. Our analysis in Pugh's applies with equal force in this case. As we explained,
Id. at 261 (citations omitted).
It is clear from the language of the consent order in this case that both parties agreed in good faith to preserve their right to appeal to the trial court and to expand the trial court's scope of judicial review. Thus, the mistake was mutual and innocent. Unlike the consent order in Pugh's, however, the consent order in this case does not describe the provision for judicial review as material consideration for the agreement to arbitrate. Nonetheless, the provision for expanded judicial review embodies a basic assumption on which the agreement to arbitrate was based and as such is material. See Restatement (Second)
Although the above analysis is dispositive of the present appeal, we recognize that our holding will necessitate additional proceedings on remand. In the interest of judicial economy and in the exercise of our supervisory role, we take this opportunity to address the question on which we requested briefing and argument when granting Mother's application for permission to appeal: whether Tennessee law permits parties to submit to arbitration issues that implicate the trial court's duty to ensure that the best interests of children are protected. This issue presents a question of law, which we review de novo. See In re Sidney J., 313 S.W.3d 772, 774 (Tenn.2010).
Tennessee statutes, taken together, impose a duty on trial courts to protect the best interests of children. The general custody provisions provide that "the court may ... award the care, custody and control of ... children ... as the welfare and interest of the ... children may demand" and that "the court shall have the widest discretion to order a custody arrangement that is in the best interest of the child." Tenn.Code Ann. § 36-6-101(a)(1), (a)(2)(A)(i) (2005 & Supp.2009). Furthermore, "in any ... proceeding requiring the court to make a custody determination regarding a minor child, the determination shall be made on the basis of the best interest of the child." Tenn.Code Ann. § 36-6-106(a) (Supp.2009). With respect to parenting plans, like the one at issue in this case, the General Assembly has stated that "the best interests of the child shall be the standard by which the court determines and allocates the parties' parental responsibilities." Tenn.Code Ann. § 36-6-401(a) (2005).
This statutory duty comports with the longstanding notion that the state stands in parens patriae of the minor children within its borders. As early as 1918, this Court stated, in the context of habeas corpus proceedings, that the state has a right "paramount to any parental or other claim, to dispose of such children as their best interests require. The legal rights of a parent are very gravely considered, but are not enforced to the disadvantage of the child." State v. West, 139 Tenn. 522, 201 S.W. 743, 744 (1918).
Nonetheless, relying on our decision in Hawk v. Hawk, 855 S.W.2d 573 (Tenn. 1993), Mother argues that, absent a showing
Contrary to Mother's argument, there is nothing in Tennessee's statutes or the law of this Court to support the conclusion that by agreeing to arbitrate, parties may relieve the trial court of its duty to ensure that disputes between parents are resolved in the best interests of the children. Rather, it is well established that parents cannot bind the court with an agreement affecting the best interest of their children. We held in Berryhill v. Rhodes, for example, that parents may not enter into private agreements that circumvent statutory child-support obligations. 21 S.W.3d 188, 192 (Tenn.2000). It follows that parents cannot bind the court by submitting child-related issues to an arbitrator. See Crutchley v. Crutchley, 306 N.C. 518, 293 S.E.2d 793, 798 (1982) ("`Just as parents cannot by agreement deprive the courts of their duty to promote the best interests of their children, they cannot do so by arbitration.'") (quoting Kovacs v. Kovacs, 98 Md.App. 289, 633 A.2d 425, 431 (1993)); Kelm v. Kelm, 92 Ohio St.3d 223, 749 N.E.2d 299, 303 (2001) ("[I]f parents cannot bind the court by an agreement affecting the interests of their children, they cannot bind the court by agreeing to let someone else, an arbitrator, make such a decision for them.").
Furthermore, as we explained in Pugh's, the limited review procedures that accompany binding arbitration are justified by the need to promote finality of arbitration awards. Pugh's, 320 S.W.3d at 257. Although an important factor, the need to promote finality is not the prevailing concern in resolving child-related matters. Rather, the prevailing concern is ensuring that the best interests of the child are protected. See Tenn.Code Ann. § 36-6-106(a); Kendrick v. Shoemake, 90 S.W.3d 566, 570 (Tenn.2002) (holding that child custody awards are always subject to modification to ensure that the best interests of the child are protected).
We therefore hold that parties may not submit parenting issues to binding arbitration.
For the reasons articulated above, we hold that the provision in the parties' consent order authorizing judicial review is invalid and that its invalidity is a mutual mistake justifying rescission of the parties' agreement to arbitrate. We further hold that parenting issues may not be submitted to binding arbitration in Tennessee. If the parties reach an agreement concerning parenting issues through the use of non-binding arbitration under Rule 31, such agreement must be submitted to the trial court for a determination of the children's best interests. We therefore reverse the judgment of the Court of Appeals, vacate the judgment of the trial court, and remand the case to the trial court for further proceedings consistent with this opinion. Costs of this appeal are assessed equally between the appellant, Elizabeth Sams Tuetken, and the appellee, Lance Edward Tuetken, for which execution may issue if necessary.
Section 21, entitled "Non-Binding Arbitration," provides in part that "[t]rial courts, with the consent of the parties, are authorized to order Non-Binding Arbitration."
Tenn.Code Ann. § 29-5-313(a)-(b). Third, "the court shall modify or correct the award" if an application is "made within ninety (90) days after delivery of a copy of the award to the applicant," and
Tenn.Code Ann. § 29-5-314.