Divorce at Altitude: A Podcast on Colorado Family Law

Arbitration Process in a Colorado Divorce | Episode 150

April 20, 2023 Ryan Kalamaya & Amy Goscha Season 1 Episode 150
Divorce at Altitude: A Podcast on Colorado Family Law
Arbitration Process in a Colorado Divorce | Episode 150
Show Notes Transcript

In the right circumstances, arbitration can be a very effective tool. During today’s episode, we unpack the pros and cons of divorce arbitration with regard to children and property. Kicking off our conversation, we offer a comprehensive definition of arbitration and go into detail about professionals who can act as arbitrators. 

We discuss the length of the process, as well as the steps to reviewing and appealing these decisions through real-world examples of arbitration processes. You’ll hear about the benefit of privacy that arbitration affords clients, budgetary concerns, and why defining the parameters of your arbitration process is so important. 

Key Points From This Episode:

  • What arbitration is.
  • Examples of people who can act as arbitrators.
  • The parenting aspect of arbitration.
  • What happens when you get an adverse ruling in the arbitration process.
  • How arbitration can expedite and resolve problems.
  • Reviewing an arbitrator’s order.
  • The efficiency of an arbitration process.
  • Using arbitration to resolve a school choice issue.
  • How arbitration can streamline the decision-making process.
  • The benefit of privacy that arbitration affords clients.
  • Budget benefits of arbitration.
  • Cons associated with arbitration.
  • Appealing an arbitrator’s decision.
  • How arbitration can be a very effective tool.
  • The importance of defining the parameters of the arbitration process.
  • How a Memorandum of Understanding can support the arbitration process.

What is Divorce at Altitude?

Ryan Kalamaya and Amy Goscha provide tips and recommendations on issues related to divorce, separation, and co-parenting in Colorado. Ryan and Amy are the founding partners of an innovative and ambitious law firm, Kalamaya | Goscha, that pushes the boundaries to discover new frontiers in family law, personal injuries, and criminal defense in Colorado.

To subscribe to Divorce at Altitude, click here and select your favorite podcast player. To subscribe to Kalamaya | Goscha's YouTube channel where many of the episodes will be posted as videos, click here. If you have additional questions or would like to speak to one of our attorneys, give us a call at 970-429-5784 or email us at info@kalamaya.law.



Ryan Kalamaya (3s):
Hey Everyone. I'm Ryan Kalamaya

Amy Goscha (6s):
And. I'm Amy Goscha

Ryan Kalamaya (8s):
Welcome to the Divorce at Altitude. A Podcast on Colorado. Family Law.

Amy Goscha (13s):
Divorce is not easy. It really sucks. Trust me I. know Besides being an experienced divorce attorney, I'm also a Divorce client.

Ryan Kalamaya (20s):
Whether You are someone considering divorce or a fellow family law attorney. listen in for weekly tips and insight into topics related to Divorce co-parenting and Separation in Colorado. Welcome Back. to another episode of Divorce Altitude. I am Ryan Kalamaya. And I. Am joined this week by Amy. What's new? Amy?

Amy Goscha (47s):
Not much. Just you know, another interesting topic that we're gonna talk about to hopefully resolve people's problems.

Ryan Kalamaya (55s):
Right? Well, what are we talking about today,

Amy Goscha (58s):
Arbitration? So we're gonna talk about the what it is, what you can do with it, you know, the pros and the cons. So I'll let you kinda tee that up.

Ryan Kalamaya (1m 6s):
Yeah. So first I'll talk about what Divorce Arbitration is and how it works in Colorado. We've had previous episodes, one with Judge Arkin Amy. You had one on private judging. We also have another episode with Mike Dam on me, ARB or mediation, Arbitration. And. we get into some of the things with Arbitration, but I think it's helpful for people to understand what Divorce Arbitration is and what is not And. we can talk about the pros and the cons. So Arbitration simply put is to have a neutral third party who is someone other than a judge in, in essence act as a judge. In Arbitration we call 'em the arbiter and it's binding and Amy.

Ryan Kalamaya (1m 50s):
You'll get into the, a little bit about the Divorce, or not the Divorce, but the Arbitration Act. You can arbitrate contract disputes. You can have, there might be an Arbitration, Award or Arbitration provision in your credit card agreement or bank. And you can actually arbitrate Divorce. And that is different than a private judge. A private judge is similar. That motivations to have Arbitration, which we'll talk about are similar for a private judge. You have some privacy can be dealt with a sophisticated party, but it is different. You could have someone that is another Divorce lawyer, you could have a financial expert and you can carve off certain issues.

Ryan Kalamaya (2m 35s):
So oftentimes we will have Arbitration on the sale of a house after a Divorce. You can have, you know, a disagreement two months down the road about whether you should drop the price of the house. And the husband, Eric, he thinks the price should be dropped. And then Melanie says No, and you can arbitrate that. So oftentimes Divorce attorneys that we work with, with Amy will have a provision that's specific issues. Taxes could come up and instead of waiting down the road for a judge to deal with it, you can have an arbitrator deal with that. So there's different outfits. Former judges will act as arbitrators, but as I said before, you can have financial experts.

Ryan Kalamaya (3m 20s):
You could have a real estate broker designated as an arbiter. So then kind of to move down, you could arbitrate an entire Divorce. There's gonna be some differences in what the law or other issues procedurally will be for parenting versus financial. You could have, for example, a different arbiter on financial issues. You could have kind of a CPA or some sort of financial expert or divorced lawyer and you could have, you know, somebody else that really focuses on parenting issues. I mean within our own practice, Amy you tend to focus more on the parenting issues. And I tend to focus more on the financial issues.

Ryan Kalamaya (4m 1s):
So, you know, that is something that, you know, from an Arbitration perspective, you could really kind of have someone that specializes in that. but why don't you Amy talk a little bit about The parenting aspect of arbitration, the relevant law and what happens if you get an adverse ruling in Arbitration on parenting issues.

Amy Goscha (4m 24s):
Yeah, so I, you know, I think, we'll let's talk about that and you can use that. I think one thing I wanted to say, just in relation to, you know, Arbitration and people going through Divorce or post decree issues, you know, Arbitration mainly is gonna come up like you're talking about like within mediation, if you mediate a Memorandum of understanding, a lot of times there will be a provision in that MOU that says, you know, if you disagree on certain terms, that the mediator then can serve as the arbitrator in the limited capacity just to the, the decision maker on like language, you know, and it's essentially, you know, as an attorney I look at Arbitration as kind of a problem solving tool.

Amy Goscha (5m 8s):
you know, like if I need something that's limited or up to like a whole Divorce And, we'll talk about that. Our parenting issues, you can use Arbitration to really, you know, expedite and resolve problems. I think that other place that we see it, you know, a lot of times is in the context of like real estate, like you were talking Ryan, you know, like the last thing that the court wants to deal with is, you know, reserving jurisdiction on dealing with, you know, a house sale dispute. So it's very helpful to have someone come in and you can make a decision on that quick. you know, when you have offers going back and forth, you know, like you need an answer quick. So it's really helpful where you can really expand that tool of Arbitration.

Amy Goscha (5m 51s):
Within the Family Law context, you know, is directly related to parenting. We have within Title 14, we have an appointment of an arbitrator statute, which talks about that in Family Law disputes. You can appoint an arbiter to resolve disputes between parties concerning their minor children. And it's very specific about, you can have an arbitrator decide parenting, non-reoccurring adjustments in child support. So some limited financial issues and parenting decisions. you know, as a person who's looking at whether or not Arbitration is a good fit, you have to agree to it.

Amy Goscha (6m 31s):
So a court cannot agree or cannot order parties to do Arbitration. Both parties have to agree to it in writing and to the scope of what the arbitrator can do. you know, one consideration that Ryan, you And I have when looking at whether or not Arbitration is the right fit for a specific case to resolve, like a parenting issue is going to be, you know, one consideration that we have to advise our clients is what if our client doesn't like the outcome from what the arbitrator says on parenting? you know? And so as Listeners it's important to understand that there is a limited capacity essentially to review an arbiter's order.

Amy Goscha (7m 12s):
You can ask the arbiter to vacate, modify, or correct that order or Award, but it's under a whole different, you know, section of our statute, which is like the Arbitration Act or the Colorado Arbitration Act, you know? And under that, those circumstances, for instance, just to ask for an arbiter to vacate an Award, you know, you have to show for instance, corruption fraud, you know, like it's very limited basis, you know, so it's just something that you have to consider when looking at those things.

Ryan Kalamaya (7m 45s):
Yeah, and, and to clarify for Listeners, you can appeal or go to the district courts, you can go to the judge and ask the judge, Hey, the arbiter got this wrong. And what you were saying is under the Arbitration Act is that there are, if the arbiter was, you know, in cahoots with Eric Wolf, you know, had been paid off, those are the circumstances when you're dealing with vacating an arbi or modifying an Arbitration Award under 14 10, 1 28 0.5 for parenting that Eric could go to, for example, the district court and say, this Arbitration Award is just so off in terms of parenting.

Ryan Kalamaya (8m 31s):
And the judge may order a de novo hearing. And if the cautionary tale for Eric is that if the judge largely sides with the Arbitration, the arbiter in whatever Award it is, then Eric's is gonna be on the hook for Melanie's attorney's fees. So essentially if you may get a second bite at the apple on parenting, but if it's the same kind of Award, then you know that you can't just ask over and over again. And I think it's helpful for people to kind of take a step back. Arbitration is a little bit more like an And. we will get into the pros of Arbitration, but it's like a trial or a hearing.

Ryan Kalamaya (9m 12s):
You basically have been unable to reach an agreement, Eric and Melanie Wolf, and they go to an Arbitration. It can be, and often is informal. So it can be over zoom, it could be in a conference room. But most arbiters Mike Dam would have, we talk about this, but Eric would raises his hand, he would testify under oath and he would tell Mike the arbiter his story, there'd be cross-examination. Oftentimes I've seen, and this is I think probably a good point of mentioning parenting coordinator and decision makers, oftentimes And, we will have different episodes on this specifically, but oftentimes PCDM s is what we call the parenting coordinator decision maker will give them expanded powers under the Arbitration Award.

Ryan Kalamaya (9m 60s):
So if there needs to be a switch, for example, of weekend parenting time, well then, you know, it might be a little bit unclear whether the PCDM has that ability. But as an arbiter, they absolutely do. And then you get into the kind of appellate reviews that I was speaking of earlier, but it could even go so far I've seen PCDM s you know, order a child to switch schools or to change the parenting schedule, some issues that could be dealt with by the judge or that may fall outside of that PCDM, you know, that role. So you would authorize them to have some power as an arbitrator.

Ryan Kalamaya (10m 40s):
But I've seen PCDM they won't allow necessarily cross-examination. They'll allow, you know, they'll say, what questions does Eric wanna ask Melanie? And then Eric will ask the arbiter, these are the things that I wanna discuss or I think that are relevant. And it can be as kind of formal or as informal. It depends on the arbiter. It also depends on the Arbitration agreement. And, you know, you can have re relaxed rules of evidence. But it, you know, and we're getting into the pros, Amy of Arbitration. So the reason the people often like Arbitration is it's really fast. you know, I had a case once where the parties disagreed on the sale of real estate.

Ryan Kalamaya (11m 20s):
We were able to, that dispute arose on Monday. We were unable to schedule a meet an Arbitration via Zoom on Wednesday. There is no conceivable way that you're dealing with a district court judge that has a, you know, a hundred thousand other issues on whether or not the listing price should be dropped by a hundred thousand dollars. They just don't want to deal with it. Similarly with parenting issues, you know, you can get a resolution. Do I get to spend spring break in Mexico? you know, if, and there's a travel advisory, a PCDM or an arbitrary, they can make that decision. I once had, you know, two people that went to an arbiter and they were deciding on what school the children should get.

Ryan Kalamaya (12m 3s):
And they were doing that in the middle of July. They had just kind of somewhat procrastinated. The dispute had just been kind of lingering and they were able to get, you know, a very thoughtful, you know, opinion Award. And it goes into that sophistication of the decision maker. Amy. What you know, we see is that, you know, you pay for it, which is a con that we'll talk about. But the analysis is that really you're gonna get someone that understands the value of a business, that understands children's disputes, especially if a PCDM, if they've been involved with the family over time, they understand the ebbs and flows of that particular family dynamic and they can make that issue or that ruling on whether or not Charlie should go to Mexico for spring break, for example.

Ryan Kalamaya (12m 51s):
This episode is brought to you by our law firm, Kalamaya Goscha Amy And I describe our law firm as an innovative and ambitious trial team that pushes the boundaries to discover new frontiers in family law, personal injuries in criminal defense in Colorado. We currently have offices in Aspen, Glenwood Springs, Edwards, Denver, and Boulder. If you wanna find out more, visit our website, Kalamaya dot law. Now back to the show. Any other kind of pros, Amy that you know I haven't mentioned thus far?

Amy Goscha (13m 27s):
Yeah, I think some other pros, just thinking, you know, where I've used it and it's very effective is in like a school choice issue. you know, having an arbiter actually, you know, talk to the child if they're old enough to figure out what the child's wishes are, you know, so you can kind of expedite and get the information that you need to the arbiter to be able to, you know, make a decision that needs to be made, you know, for a family to move forward. So I think, you know, I've used it just recently and in the past, you know, even for the arbiter to both counsel have to agree in parents, but to actually talk to the child, you know, cuz I think as attorneys a lot of times we just think we have to automatically get a CFI or get a pe.

Amy Goscha (14m 10s):
But sometimes you can actually, if it's a limited issue, you can say, well let's have the child, if they're old enough, talk directly to the judge. So

Ryan Kalamaya (14m 19s):
Yeah, and And I think the, a couple other pros of Arbitration, it can be less costly because instead of dealing with formal discovery, the arbiter could say, you know, really streamline the process. The attorneys could agree or that parties could agree, Hey, we're going to, you know, go to Arbitration and we're gonna relax the rules of evidence more civil procedure and it can result in it being less expensive. You also have flexibility in scheduling. So if you know your schedule allows for you to be in a hearing on Monday morning, but then you gotta go to work on Monday afternoon and then Tuesday morning you can really customize it.

Ryan Kalamaya (15m 0s):
You could do it on the weekend, arguably I mean you'll pay more, but you know, that really can work around your schedule. The other issue is it's private. you know, you can be in a conference room instead of a public courtroom. Amy, you, And I have been in Denver district court. you know, there's just people sitting there, you know, it's not necessarily a Judge Judy situation where you know, people are in the audience, but it can be, and in Arbitration it can be, you know, as private as just a zoom, you know, recording or not necessarily a recording, but just a zoom meeting and you get a decision and it can all be, you know, much more private. So generally speaking, the pros are that it's a more streamlined process.

Ryan Kalamaya (15m 42s):
You're dealing with a more sophisticated decision maker, the arbiter, you've got flexibility in scheduling. It's informal, so it can be less contentious, it's private for those that are worried about confidentiality and it's potentially, you know, less expensive. That said, there are some cons, So Amy, we're doing some of the notable cons on Arbitration in a Divorce.

Amy Goscha (16m 6s):
Yeah, so we talked about parenting issues. If you're having an arbitrator deal with, you know, the disposition of financial issues, essentially there's no appeal process. Like what you're stuck with is asking for the court to modify or vacate the Award under 2 23. you know, and again, you have to prove that, you know, the arbiter was exceeding their powers, you know, there was some kind of fraud. I mean, it's just such a high threshold. So you know, when you're thinking about, well I want this process to be private, I want, you know, but you also have to weigh that against, well what if they get it wrong? And, I have to have it fixed.

Ryan Kalamaya (16m 45s):
Yeah. I've seen people, you know, come to me after an Arbitration Award and they are stuck with it and they were unhappy with the decision. I have seen, you know, both people agree there's a time crunch or they just don't want to involve attorneys and they say they're aware of the downsides of how long a Divorce will take and they just say, listen, we just want to go to Arbitration And. you know, sometimes, you know, people make mistakes. This is a reason that they have And. we have the appellate process, you know, Colorado arbitrators. They don't have to apply Colorado law unless they agree in the Arbitration agreement to do so.

Ryan Kalamaya (17m 27s):
But you know, you are paying someone, a Divorce attorney or a former judge and it can be more expensive because you are dealing with, you're paying for the person's time. So, but I, you know, there was one Arbitration Award that I saw where I just thought the arbiter just misallocated the law or misapplied the law. It was a former judge And, you know, they just thought that they, they knew what, you know, they weren't necessarily abreast of the kind of current developments and, but they were stuck with it. But those are some of the cons. But I think In the right circumstances, it can be a very effective tool. I think that the ta, you know, issues on taxes, you know, spousal support, post decree modifications where, you know, a former judge or a Divorce attorney who understands income and the current economy, you're gonna get a resolution much quicker instead of, you know, for example, filing a motion to modify child support and then having that motion sit out there for a year, which, you know, can happen parenting, you know, the relocation issues authorizing someone to make a decision.

Ryan Kalamaya (18m 36s):
I think it more like what I was talking about with the school decisions, but having that PCDM that is entitled to switch, you know, various activities or switch weekends, you know, really empowering someone, but you gotta trust them. And, you know, I've seen, I currently have a case where the, you know, the Melanie Wolf in that, you know, post-degree Divorce, she doesn't like the decision maker in the arbiter. And so she's said, I'm not gonna continue with their services And. we put a a time limitation, which I think is a good idea. I mean you have to do it with PCDM s but you know, to really spell out what it is that they're arbitrating, is it just X, Y, and z?

Ryan Kalamaya (19m 18s):
If so, then be very specific because if it's just like, just deal with our problems, you could be stuck with that arbitrator for a very long time. And if it's someone with, you know, jams or Jag, you know, very reputable, you know, organizations that have former judges, it's gonna be expensive. So I think really spelling out what it is that you're doing and how you're doing it, and most, I think arbitrators, they'll address those issues up front. But I think that those are a number of issues that hopefully people can understand. Arbitration in a Divorce. Anything else that Listeners should keep in mind?

Amy Goscha (19m 56s):
Yeah, I think that with any tool that, you know, gives you flexibility, you have to define the parameters. So I think it's just very important, you know, for this to be an effective tool for resolving problems judiciously, you know, streamlining 'em, but there has to be detail on what those parameters are or it can cause further litigation. So I think that's something, you know, I've learned over the years, And I, it's a great tool, but you have to make sure that, you know, there are details.

Ryan Kalamaya (20m 24s):
Yeah, to explain that a little bit more, I a hundred percent agree with that Amy and that I think it often, the best example is, you know, you go to mediation, you agree to an M mou that's just on the high level, the 10 deal points that occurred at mediation, well, you know, it's six o'clock at night, you get this deal done, there's gonna be some things that slip through the cracks or you know, people disagree with or that they didn't really think of. And in the M O U, it's fairly common to say that the mediator then acts as an arbiter and you have to spell out is that mediator slash you know, arbiter, are they going to resolve issues on drafting So that what the M O U says because they were presumably involved.

Ryan Kalamaya (21m 10s):
And so, you know, and then you also get into, are you waving the communications that went on in mediation? Because generally speaking, you know, those are confidential. You can't take those into consideration. But then you have the other question of, well, if there are things that aren't in the M O U and they aren't related to drafting, you just either overlook them or there is, you know, an assumption, you know, is that subject to Arbitration. So I think dealing with those issues, especially in deal with an M O U, but then, you know, oftentimes afterwards in a Separation agreement could be a disagreement on standard boiler plate language, or what did the parties actually mean when they negotiated this.

Ryan Kalamaya (21m 55s):
Those are things that I think people and including attorneys often overlook. Well, hopefully this has been helpful for people to take into consideration. Divorce Arbitration can be great for those, especially if costs are outweighed by the privacy and the flexibility and sophistication issues. But until next time, thanks for joining us on Divorce at Altitude. Hey Everyone. This is Ryan again. Thank you for joining us on Divorce at Altitude. If you found our tips, insight, or discussion helpful, please tell a friend about this podcast. For show notes, additional resources or links mentioned on today's episode, visit Divorce at Altitude dot com.

Ryan Kalamaya (22m 37s):
Follow us on Apple Podcasts, Spotify, or wherever you listen in. Many of our episodes are also posted on YouTube. You can also find Amy and me at Kalamaya.law or 970-315-2365. Thats's K A L A M A Y A.law.