Chapter 788

788.10 Annotation The time limit under s. 788.13 does not apply when the prevailing party moves to confirm under s. 788.09 and an adverse party wishes to raise objections under ss. 788.10 and 788.11. Milwaukee Police Ass’n v. City of Milwaukee, 92 Wis. 2d 145, 285 N.W.2d 119 (1979).

788.10 Annotation An arbitrator appointed under a specific contract had no power to make awards under successor contracts not in existence at the time the grievance was submitted. Milwaukee Board of School Directors v. Milwaukee Teachers’ Education Ass’n, 93 Wis. 2d 415, 287 N.W.2d 131 (1980).

788.10 Annotation An arbitrator exceeded the arbitrator’s authority by directing that the grievant be transferred when the contract reserved transfer authority to the city and chief of police. City of Milwaukee v. Milwaukee Police Ass’n, 97 Wis. 2d 15, 292 N.W.2d 841 (1980).

788.10 Annotation Although a contract gave management the right to determine job description classifications, the arbitrator did not exceed the arbitrator’s authority by overruling management’s determination that an employee with eight years of job experience was not qualified for promotion to a job requiring two years of college “or its equivalent as determined by management.” City of Oshkosh v. Oshkosh Public Library Clerical Employees Union Local 796-A, 99 Wis. 2d 95, 299 N.W.2d 210 (1980).

788.10 Annotation The burden of proving “evident partiality” of an arbitrator was not met when the apparently biased remarks of the arbitrator represented merely an initial impression, not a final conclusion. Diversified Management Services, Inc. v. Slotten, 119 Wis. 2d 441, 351 N.W.2d 176 (Ct. App. 1984).

788.10 Annotation An award was vacated for “evident partiality” because the arbitrator failed to disclose past employment with the entity supplying a party’s counsel. School District v. Northwest United Educators, 136 Wis. 2d 263, 401 N.W.2d 578 (1987).

788.10 Annotation A party cannot complain to the courts that an arbitrator acted outside the scope of the arbitrator’s authority if an objection was not raised before the arbitrator. DePue v. Mastermold, Inc., 161 Wis. 2d 697, 468 N.W.2d 750 (Ct. App. 1991).

788.10 Annotation A party disputing the existence of an agreement to arbitrate may choose not to participate in arbitration and may challenge the existence of the agreement by motion to vacate the award under sub. (1) (d). Scholl v. Lundberg, 178 Wis. 2d 259, 504 N.W.2d 115 (Ct. App. 1993).

788.10 Annotation If arbitrators had a reasonable basis for not following case law, the arbitrators’ decision will not be interfered with by the court. Lukowski v. Dankert, 184 Wis. 2d 142, 515 N.W.2d 883 (1994).

788.10 Annotation “Evident partiality” under sub. (1) (b) exists only when a reasonable person knowing previously undisclosed information would have such doubts about the arbitrator’s impartiality that the person would have taken action on the information. DeBaker v. Shah, 194 Wis. 2d 104, 533 N.W.2d 464 (1995).

788.10 Annotation This section does not prevent the vacation of an arbitration award on the basis of a manifest disregard of the law. Employers Insurance of Wausau v. Certain Underwriters at Lloyd’s London, 202 Wis. 2d 673, 552 N.W.2d 420 (Ct. App. 1996), 95-2930.

788.10 Annotation An arbitrator’s award that relied on oral testimony with no formal record, rather than the wording of the prevailing party’s proposal, was not final and definite as required by sub. (1) (d). La Crosse Professional Police Ass’n v. City of La Crosse, 212 Wis. 2d 90, 568 N.W.2d 20 (Ct. App. 1997), 96-2741.

788.10 Annotation Courts may vacate an arbitration award that was procured by fraud, but should be hesitant to do so in order to protect the finality of arbitration decisions. To merit vacation of the award, the plaintiff must demonstrate: 1) clear and convincing evidence of fraud; 2) that the fraud materially relates to an issue involved in the arbitration; and 3) that due diligence would not have prompted the discovery of the fraud during or prior to the arbitration. Steichen v. Hensler, 2005 WI App 117, 283 Wis. 2d 755, 701 N.W.2d 1, 03-2990.

788.10 Annotation Evident partiality under sub. (1) (b) cannot be avoided simply by a full disclosure and a declaration of impartiality. The circuit court must vacate an arbitration award under sub. (1) (b) due to evident partiality if, based on evidence that is clear, plain, and apparent, a reasonable person would have serious doubts about the impartiality of the arbitrator. An ongoing attorney-client relationship between an insurer and its named arbitrator is of such a substantial nature that a reasonable person would have serious doubts about the partiality of the arbitrator. Therefore, as a matter of law, the arbitrator was evidently partial, and the arbitration award must be vacated. Borst v. Allstate Insurance Co., 2006 WI 70, 291 Wis. 2d 361, 717 N.W.2d 42, 04-2004.

788.10 Annotation A presumption of impartiality among all arbitrators, whether named by the parties or not, is adopted. This presumption may be rebutted, and an arbitrator may act as a non-neutral when the parties contract for non-neutral arbitrators or the arbitration rules otherwise provide for non-neutral arbitrators. Borst v. Allstate Insurance Co., 2006 WI 70, 291 Wis. 2d 361, 717 N.W.2d 42, 04-2004.

788.10 Annotation Sub. (1) (d) requires a court to vacate an arbitrator’s award when the arbitrator exceeds his or her powers. Arbitration awards must be vacated when they conflict with governing law, as set forth in the constitution, a statute, or case law interpreting the constitution or a statute. Racine County v. International Ass’n of Machinists & Aerospace Workers, 2008 WI 70, 310 Wis. 2d 508, 751 N.W.2d 312, 06-0964.

788.10 Annotation Courts will vacate an award when arbitrators exceeded their powers through perverse misconstruction, positive misconduct, a manifest disregard of the law, or when the award is illegal or in violation of strong public policy. When there is no contractual language that would allow for the arbitrator’s construction, there is no reasonable foundation for the award. In such a case, the arbitrator perversely misconstrues the contract and exceeds the authority granted by the collective bargaining agreement. Baldwin-Woodville Area School District v. West Central Education Ass’n, 2009 WI 51, 317 Wis. 2d 691, 766 N.W.2d 591, 08-0519. See also Milwaukee Police Supervisors’ Organization v. City of Milwaukee, 2012 WI App 59, 341 Wis. 2d 361; 815 N.W.2d 391, 11-1174.

788.10 Annotation The arbitration panel’s decision in this case was properly modified by the circuit court under this section and s. 788.11 because the arbitrators exceeded their authority by failing to fully review and apply the supreme court’s decisions on the collateral source rule and the law of damages. Orlowski v. State Farm Mutual Automobile Insurance Co., 2012 WI 21, 339 Wis. 2d 1, 810 N.W.2d 775, 09-2848.

788.10 Annotation A party involved in an arbitration proceeding must ordinarily wait until the arbitrators have reached a final decision on the award to be given, if any, before turning to the circuit courts. Courts that have permitted interlocutory review during an arbitration proceeding have done so only in rare circumstances that present a compelling reason to depart from the normal practice, balancing the need for efficient and orderly arbitration proceedings with the need for an occasional exception to accommodate especially urgent or potentially irreparably prejudicial matters that demand the immediate attention of the courts. Marlowe v. IDS Property Casualty Insurance Co., 2013 WI 29, 346 Wis. 2d 450, 828 N.W.2d 812, 11-2067.

788.10 Annotation During an arbitration, a proper time to raise an objection in order to preserve it is before the arbitration award is issued. The arbitral award is the arbitrator’s decision on the merits of the disputes that were subjected to arbitration. Therefore, as long as an objection to a new issue is raised before the merits are decided, the policy goals underlying forfeiture are protected and the fairness of the proceeding is preserved. In this case, because a party objected to the arbitrator’s sleeping following the conclusion of the evidentiary hearing, but before the arbitrator issued the arbitral award, the party did not forfeit its objection. Loren Imhoff Homebuilder, Inc. v. Taylor, 2022 WI 12, 400 Wis. 2d 611, 970 N.W.2d 831, 19-2205.

788.10 Annotation An omission by an arbitrator that deprives the parties of the benefit of execution of a fundamental duty assigned to the arbitrator through the mutual agreement of the parties can constitute such imperfect execution of an arbitrator’s powers that a mutual, final, and definite award upon the subject matter submitted was not made under sub. (1) (d). In this case, the arbitrator failed to perform a fundamental duty that was assigned to him as the arbitrator: remain awake to consider the presentation of material evidence, most notably significant portions of the testimony of the expert called by the homeowners. Loren Imhoff Homebuilder, Inc. v. Taylor, 2022 WI App 14, 401 Wis. 2d 510, 973 N.W.2d 836, 19-2205.

788.10 Annotation There is a role for trial court fact finding in response to some categories of challenges to arbitration orders, and the clearly erroneous standard applies to the court of appeals’ review of that fact finding. Loren Imhoff Homebuilder, Inc. v. Taylor, 2022 WI App 14, 401 Wis. 2d 510, 973 N.W.2d 836, 19-2205.

788.10 Annotation Arbitrators exceed their powers when: 1) they demonstrate “perverse misconstruction” or “positive misconduct”; 2) they manifestly disregard the law; 3) the award is illegal; or 4) the award violates a strong public policy. A court will reverse an arbitration award as manifestly disregarding the law when the arbitrator fails to examine and apply the relevant law because parties to arbitration have a legitimate expectation that the governing law will be followed and applied properly. However, a court will not reverse an arbitration award for mere errors of judgment as to law or fact on the part of the arbitrator. Arbitrators are bound to follow precedent, but they are not expected to anticipate how a court might apply or extend that precedent when faced with novel arguments or fact scenarios. Parties do not have the same “legitimate expectation” regarding new applications of the law that they have in established applications. Green Bay Professional Police Ass’n v. City of Green Bay, 2023 WI 33, 407 Wis. 2d 11, 988 N.W.2d 664, 21-0102.

788.10 Annotation That an arbitrator made a mistake by erroneously rejecting a valid legal defense does not provide grounds for vacating an award unless the arbitrator deliberately disregarded the law. Flexible Manufacturing Systems v. Super Products Corp., 86 F.3d 96 (1996).

788.10 Annotation Borst Clarifies Arbitration Procedures. Frankel. Wis. Law. Dec. 2006.

788.11 788.11 Modification of award.

788.11(1) (1) In either of the following cases the court in and for the county wherein the award was made must make an order modifying or correcting the award upon the application of any party to the arbitration:

788.11(1)(a) (a) Where there was an evident material miscalculation of figures or an evident material mistake in the description of any person, thing or property referred to in the award;

788.11(1)(b) (b) Where the arbitrators have awarded upon a matter not submitted to them unless it is a matter not affecting the merits of the decision upon the matters submitted;

788.11(1)(c) (c) Where the award is imperfect in matter of form not affecting the merits of the controversy.

788.11(2) (2) The order must modify and correct the award, so as to effect the intent thereof and promote justice between the parties.

788.11 History History: 1979 c. 32 s. 64; Stats. 1979 s. 788.11.

788.11 Annotation The intent of the parties controls a determination under sub. (1) (b) whether a matter was submitted to the arbitrator. Milwaukee Professional Firefighters, Local 215 v. City of Milwaukee, 78 Wis. 2d 1, 253 N.W.2d 481 (1977).

788.11 Annotation A court had no jurisdiction to vacate or modify an award if grounds under this section or s. 788.10 did not exist. Milwaukee Police Ass’n v. City of Milwaukee, 92 Wis. 2d 175, 285 N.W.2d 133 (1979).

788.11 Annotation The arbitration panel’s decision in this case was properly modified by the circuit court under this section and s. 788.10 because the arbitrators exceeded their authority by failing to fully review and apply the supreme court’s decisions on the collateral source rule and the law of damages. Orlowski v. State Farm Mutual Automobile Insurance Co., 2012 WI 21, 339 Wis. 2d 1, 810 N.W.2d 775, 09-2848.

788.12 788.12 Judgment. Upon the granting of an order confirming, modifying or correcting an award, judgment may be entered in conformity therewith in the court wherein the order was granted.

788.12 History History: 1979 c. 32 s. 64; Stats. 1979 s. 788.12.

788.12 Annotation There is no statutory authority for awarding costs to a party in an arbitration proceeding. Finkenbinder v. State Farm Mutual Auto Insurance Co., 215 Wis. 2d 145, 572 N.W.2d 501 (Ct. App. 1997), 97-0357.

788.13 788.13 Notice of motion to change award. Notice of a motion to vacate, modify or correct an award must be served upon the adverse party or attorney within 3 months after the award is filed or delivered, as prescribed by law for service of notice of a motion in an action. For the purposes of the motion any judge who might make an order to stay the proceedings in an action brought in the same court may make an order, to be served with the notice of motion, staying the proceedings of the adverse party to enforce the award.

788.13 History History: 1979 c. 32 s. 64; 1979 c. 176; Stats. 1979 s. 788.13.

788.13 Annotation The time limit under this section does not apply when the prevailing party moves to confirm under s. 788.09 and an adverse party wishes to raise objections under ss. 788.10 and 788.11. Milwaukee Police Ass’n v. City of Milwaukee, 92 Wis. 2d 145, 285 N.W.2d 119 (1979).

788.13 Annotation Under federal labor law, this section governs challenges to arbitration decisions. Teamsters Local No. 579 v. B&M Transit, Inc., 882 F. 2d 274 (1989).

788.14 788.14 Papers filed with motion regarding award; entry of judgment, effect of judgment.

788.14(1) (1) Any party to a proceeding for an order confirming, modifying or correcting an award shall, at the time the order is filed with the clerk of circuit court for the entry of judgment thereon, also file the following papers with the clerk of circuit court:

788.14(1)(a) (a) The agreement, the selection or appointment, if any, of an additional arbitrator or umpire, and each written extension of the time, if any, within which to make the award;

788.14(1)(b) (b) The award;

788.14(1)(c) (c) Each notice, affidavit or other paper used upon an application to confirm, modify or correct the award, and a copy of each order of the court upon such an application.

788.14(2) (2) The judgment shall be entered in the judgment and lien docket as if it was rendered in an action.

788.14(3) (3) The judgment so entered shall have the same force and effect, in all respects, as, and be subject to all the provisions of law relating to, a judgment in an action; and it may be enforced as if it had been rendered in an action in the court in which it is entered.

788.14 History History: 1979 c. 32 s. 64; Stats. 1979 s. 788.14; 1995 a. 224.

788.14 Annotation Section 806.07 (1) can be used to reopen judgments confirming arbitration awards. Under sub. (3), a judgment confirming an arbitration award shall “have the same force and effect, in all respects, as, and be subject to all the provisions of law relating to, a judgment in an action.” Sands v. Menard, Inc., 2013 WI App 47, 347 Wis. 2d 446, 831 N.W.2d 805, 12-0286.

788.15 788.15 Appeal from order or judgment. An appeal may be taken from an order confirming, modifying, correcting or vacating an award, or from a judgment entered upon an award, as from an order or judgment in an action.

788.15 History History: 1979 c. 32 s. 64; Stats. 1979 s. 788.15.

788.17 788.17 Title of act. This chapter may be referred to as “The Wisconsin Arbitration Act”.

788.17 History History: 1979 c. 32 s. 64; Stats. 1979 s. 788.17.

788.18 788.18 Not retroactive. The provisions of this chapter shall not apply to contracts made prior to June 19, 1931.

788.18 History History: 1979 c. 32 s. 64; Stats. 1979 s. 788.18.