Delegating Custody and Placement Disputes to Third Parties

By Attorney Gregg Herman
January 18, 2017

A recent court of appeals case raises the issue of the use of a third party to resolve custody and placement issues rather than recourse to courts. The case, Rose v. Rose, Nos. 2015AP2646 and 2016AP692, is an authored, unpublished opinion so it may only be cited for its persuasive, rather than precedential, value.

Background

In this case, the parties agreed that a special master/referee would decide placement disputes after the divorce. Subsequently, one party was unhappy with the result. On appeal, the court of appeals found that it was not improper for the parties to delegate future disputes on modifying placement to a referee.

The case itself raises a few questions. First, nowhere does it cite a previous, published court of appeals case, Lawrence v. Lawrence, 276 Wis. 2d 403, 687 N.W.2d 748 (Ct. App. 2004), which specifically held that it is not against public policy in Wisconsin for courts to approve an agreement that post-judgment disputes regarding custody and placement can be delegated to a third party. In Lawrence, the impasse-breaking authority was delegated to the guardian ad litem and a family court counselor.

Moreover, the court in Rose did not cite or consider a number of court of appeals cases that found it is against public policy for parties to stipulate to a ceiling for child support. See Frisch v. Henrichs, 2007 WI App 102, and Jalovec v. Jalovec, 2007 WI App 206, 305 Wis. 2d 467, 739 N.W.2d 834. While I disagree with the holdings in those cases (it should not be against public policy ever to settle a case), both cases were decided subsequent to Lawrence and may very well be interpreted as implicitly overruling it. But, the court of appeals in Rose does not even cite Lawrence or appear to know of its existence.

Note: The issue of delegation to a third party by a trial court for discovery issues is currently before the Wisconsin Supreme Court in a non-family law matter: Universal Processing Services v. Circuit Court of Milwaukee, 2016 WI APP 923.

Meaning of “Joint Custody”

Under Wisconsin law, the term “joint custody” is frequently assumed to mean that the parties must communicate and agree on major decisions for their minor children. Actually, that is not how the term is defined in the statute. Rather, Wis. Stat. section 767.001 (1s) defines the term as meaning that both parties have the right and responsibilities to make major decisions with neither party’s rights being superior to the other.

There are six major decisions specified in the statutes (the parties can agree to others), with the most common one being choice of school. The choice of school arguments tend to fall into two categories: First, one party wants the children to go to private school while the other wants them to go to public school. Second, if there is equal physical placement (which is very common today) and the parties live in different school districts, both parties want a perceived upper hand by having the children go to school in the district in which they reside.

Of course, children cannot go to two different schools alternating days or weeks. Therefore, in these disputes someone has to make a decision.

The court does not decide which school the children attend. Rather, the court awards decision-making power to one party or the other.

Proceed with Caution

The primary problem in resolving school issues is the amount of time it generally takes to get a decision from a court. In Milwaukee County, for example, it can take three months to get a hearing date before the Family Court Commissioner (no, I’m not exaggerating). Add on the necessary time for the appointment of a guardian ad litem, investigation, litigation, and perhaps a subsequent de novo motion before the circuit court, and the parties may have to start this process when the child is born so that it is determined when the child is of school age.

As a result, it sometimes helps to resolve cases if the parties designate a trusted third party. This can be the guardian ad litem, a social worker, or an arbitrator. The question then becomes whether an agreed party must have recourse to the court if that party wants to challenge the decision.

The Lawrence case is a bit confusing on this issue. It appears that once the court approves the agreement, the parties can ask for relief from the agreement to delegate power to make the decision, but strangely, there is “no review by the court of the particular decision made…” (Lawrence at 416). One would think that it should be the other way around, that is, the court can review the ultimate decision made but the decision process would be a stipulation of the parties, which they are held to. Go figure.

As stated earlier, Wisconsin courts have held that since children are not parties to a divorce action, child support cannot be limited even if the parties agree to do so and the agreement is approved by the court. Since one would think that custody and placement decision making are more important than simply money, it is confusing why child support limitation agreements are against public policy but custody and placement delegations to third parties are not.

If I were to write the laws, I would agree with the following statement in the Lawrence case, which upheld the agreement to delegate power, because “[I]t is consistent with the public policy favoring settlement in divorce cases.” (Lawrence at 416.) This is a public policy that is ignored by the courts in the child support cases. As exhibited by the unpublished case in Rose, the result is confusion in the current status of the law. Attorneys drafting these agreements should proceed cautiously.

Editor’s Note: This article originally appeared in Inside Track, a bi-weekly newsletter of the State Bar of Wisconsin.

Attorney Gregg Herman is a founding partner of Loeb & Herman S.C. in Milwaukee, WI. He practices family law exclusively, and can be reached via e-mail or by calling (414) 272-5632.