2011 Chapter 788

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

788.15 Appeal from order or judgment.

788.17 Title of act.

788.18 Not retroactive.

788.01 788.01  Arbitration clauses in contracts enforceable. A provision in any written contract to settle by arbitration a controversy thereafter arising out of the contract, or out of the refusal to perform the whole or any part of the contract, or an agreement in writing between 2 or more persons to submit to arbitration any controversy existing between them at the time of the agreement to submit, shall be valid, irrevocable and enforceable except upon such grounds as exist at law or in equity for the revocation of any contract. This chapter shall not apply to contracts between employers and employees, or between employers and associations of employees, except as provided in s. 111.10, nor to agreements to arbitrate disputes under s. 101.143 (6s) or 230.44 (4) (bm).

788.01 History History: 1979 c. 32 s. 64; Stats. 1979 s. 788.01; 1993 a. 16; 1997 a. 237, 254; 2001 a. 38.

788.01 Annotation An insurer's refusal to either pay the plaintiff's claim under the uninsured motorist provision of its automobile policy or to submit to arbitration under an arbitration clause that could be invoked by either party constituted a breach of the contract and a waiver of the insurer's right to later demand arbitration. Collicott v. Economy Fire and Casualty Co. 68 Wis. 2d 115, 227 N.W.2d 668 (1975).

788.01 Annotation Failure to comply with provisions of ch. 298 [now ch. 788] constitutes waiver of the contractual right to arbitration. State ex rel. Carl v. Charles, 71 Wis. 2d 85, 237 N.W.2d 29 (1976).

788.01 Annotation If the intent of the parties is not clearly expressed, the court favors construing an arbitration agreement as statutory rather than common law arbitration. Stradinger v. City of Whitewater, 89 Wis. 2d 19, 277 N.W.2d 827 (1979).

788.01 Annotation Although courts have common law jurisdiction to enforce arbitration awards generally, they cannot enforce an award against the state absent express legislative authorization. State ex rel. Teaching Assistants Associates v. UW-Madison 96 Wis. 2d 492, 292 N.W.2d 657 (Ct. App. 1980). But see also the note to State v. P.G. Miron Const. Co.

788.01 Annotation Municipal labor arbitration is within the scope of ch. 788. Milwaukee District Council 48 v. Milwaukee Sewerage Commission, 107 Wis. 2d 590, 321 N.W.2d 309 (Ct. App. 1982).

788.01 Annotation Insurance coverage is a proper matter for arbitration. Maryland Casualty Co. v. Seidenspinner, 181 Wis. 2d 950, 512 N.W.2d 186 (Ct. App. 1994).

788.01 Annotation Sovereign immunity is not applicable to arbitration and there need not be specific statutory authority for the state to be subject to the arbitration provisions of ch. 788. State v. P.G. Miron Construction Co. 181 Wis. 2d 1045, 512 N.W.2d 499 (1994).

788.01 Annotation Preclusion doctrines preventing rehearing of identical claims are applicable to a limited extent in arbitration cases. Dane County v. Dane County Union Local 65, 210 Wis. 2d 267, 565 N.W.2d 540 (Ct. App.1997), 96-0359.

788.01 Annotation Whether the parties agreed to submit an issue to arbitration is a question of law for the courts to decide. Kimberly Area School District v. Zdanovec, 222 Wis. 2d 27, 586 N.W.2d 41 (Ct. App. 1998), 98-0783.

788.01 Annotation The trial court erred in ruling that the unavailability of the arbitrator named in an agreement resulted in a dissolution of the agreement's arbitration provision. When the primary purpose of the dispute resolution provision in the agreement is to arbitrate disputes that arise between the parties, the unavailability of the named arbitrator does not nullify an arbitration provision. Madison Teachers, Inc. v. Wisconsin Education Association Council, 2005 WI App 180, 285 Wis. 2d 737, 703 N.W.2d 711, 04-1053.

788.01 Annotation Commercial arbitration agreements: let the signers beware. 61 MLR 466.

788.015 788.015  Agreement to arbitrate real estate transaction disputes. A provision in any written agreement between a purchaser or seller of real estate and a real estate broker, or between a purchaser and seller of real estate, to submit to arbitration any controversy between them arising out of the real estate transaction is valid, irrevocable and enforceable except upon any grounds that exist at law or in equity for the revocation of any agreement. The agreement may limit the types of controversies required to be arbitrated and specify a term during which the parties agree to be bound by the agreement.

788.015 History History: 1991 a. 163.

788.02 788.02  Stay of action to permit arbitration. If any suit or proceeding be brought upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, providing the applicant for the stay is not in default in proceeding with such arbitration.

788.02 History History: 1979 c. 32 s. 64; Stats. 1979 s. 788.02.

788.02 Annotation Commencing litigation did not waive a contractual right to arbitration. J.J. Andrews, Inc. v. Midland, 164 Wis. 2d 215, 474 N.W.2d 756 (Ct. App. 1991).

788.02 Annotation The right to arbitrate may be waived. Conduct that allows an action to proceed to a point where the purpose of arbitration is frustrated estops a party from claiming a right to arbitration. Meyer v. Classified Ins. Corp. 179 Wis. 2d 386, 507 N.W.2d 149 (Ct. App. 1993).

788.03 788.03  Court order to arbitrate; procedure. The party aggrieved by the alleged failure, neglect or refusal of another to perform under a written agreement for arbitration may petition any court of record having jurisdiction of the parties or of the property for an order directing that such arbitration proceed as provided for in such agreement. Five days' notice in writing of such application shall be served upon the party in default. Service thereof shall be made as provided by law for the service of a summons. The court shall hear the parties, and upon being satisfied that the making of the agreement for arbitration or the failure to comply therewith is not in issue, the court shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement. If the making of the arbitration agreement or the failure, neglect or refusal to perform the same is in issue, the court shall proceed summarily to the trial thereof. If no jury trial is demanded, the court shall hear and determine such issue. Where such an issue is raised, either party may, on or before the return day of the notice of application, demand a jury trial of such issue, and upon such demand the court shall make an order referring the issue to a jury summoned and selected under s. 756.06. If the jury finds that no agreement in writing for arbitration was made or that there is no default in proceeding thereunder, the proceeding shall be dismissed. If the jury finds that an agreement for arbitration was made in writing and that there is a default in proceeding thereunder, the court shall make an order summarily directing the parties to proceed with the arbitration in accordance with the terms thereof.

788.03 History History: Sup. Ct. Order, 67 Wis. 2d 585, 775 (1975); 1977 c. 187 s. 135; 1979 c. 32 s. 64; Stats. 1979 s. 788.03; Sup. Ct. Order No. 96-08, 207 Wis. 2d xv (1997).

788.03 Annotation An insured who acceded to the insurer's refusal to arbitrate the insured's uninsured motorist claim until after the insured's passengers' claims were litigated was not an "aggrieved party" within the meaning of this section. Worthington v. Farmers Insurance Exchange, 77 Wis. 2d 508, 253 N.W.2d 76 (1977).

788.03 Annotation In the absence of a reservation of rights, "partial participation" in the arbitration process may estop a party from challenging an arbitration agreement. Pilgrim Investment Corp. v. Reed, 156 Wis. 2d 677, 457 N.W.2d 544 (Ct. App. 1990).

788.04 788.04  Arbitrators, how chosen.

788.04(1) (1) If, in the agreement, provision is made for a method of naming or appointing an arbitrator or arbitrators or an umpire that method shall be followed. If no method is provided in the agreement, or if a method is provided and any party thereto fails to make use of the method, or if for any other reason there is a lapse in the naming of an arbitrator or arbitrators or an umpire, or in filling a vacancy, then upon the application of either party to the controversy, the court specified in s. 788.02 or the circuit court for the county in which the arbitration is to be held shall designate and appoint an arbitrator, arbitrators or umpire, as the case or sub. (2) may require, who shall act under the agreement with the same force and effect as if specifically named in the agreement; and, except as provided in sub. (2) or unless otherwise provided in the agreement, the arbitration shall be by a single arbitrator.

788.04(2) (2) A panel of arbitrators, consisting of 3 persons shall be appointed to arbitrate actions to recover damages for injuries to the person arising from any treatment or operation performed by or any omission by any person who is required to be licensed, registered or certified to treat the sick as defined in s. 448.01 (10).

788.04(2)(a) (a) One arbitrator shall be appointed by the court from a list of attorneys with trial experience. The list shall be prepared and periodically revised by the State Bar of Wisconsin.

788.04(2)(b) (b) One arbitrator shall be appointed by the court from lists of health professionals prepared and periodically revised by the appropriate statewide organizations of health professionals. The lists shall designate the specialty, if any, of each health professional listed. The organizations of health professionals shall assist the court to determine the appropriate specialty of the arbitrator for each action to be arbitrated.

788.04(2)(c) (c) One arbitrator who is not an attorney or a health professional shall be appointed by the court.

788.04(2)(d) (d) Any person appointed to the arbitration panel may disqualify himself or herself or be disqualified by the court if any reason exists which requires disqualification. A substitute member of the arbitration panel shall be chosen in the same manner as the person disqualified was chosen.

788.04(2)(e) (e) No member of the panel may participate in any subsequent court proceeding on the action arbitrated as either a counsel or a witness unless the court deems the member's testimony necessary for hearings under s. 788.10 or 788.11.

788.04 History History: 1975 c. 43, 199; 1977 c. 26 s. 75; 1977 c. 418 s. 929 (41); 1977 c. 449; 1979 c. 32 ss. 64, 92 (15); Stats. 1979 s. 788.04; 2001 a. 103.

788.05 788.05  Court procedure. Any application to the court hereunder shall be made and heard in the manner provided by law for the making and hearing of motions, except as otherwise herein expressly provided.

788.05 History History: 1979 c. 32 s. 64; Stats. 1979 s. 788.05.

788.06 788.06  Hearings before arbitrators; procedure.

788.06(1) (1) When more than one arbitrator is agreed to, all of the arbitrators shall hear the case unless all parties agree in writing to proceed with a lesser number.

788.06(2) (2) Any arbitrator may issue a subpoena under ch. 885 or may furnish blank forms therefor to a representative for any party to the arbitration. The representative may issue a subpoena under s. 805.07. The arbitrator or representative who issues the subpoena shall sign the subpoena and provide that the subpoena is served as prescribed in s. 805.07 (5). If any person so served neglects or refuses to obey the subpoena, the issuing party may petition the circuit court for the county in which the hearing is held to impose a remedial sanction under ch. 785 in the same manner provided for witnesses in circuit court. Witnesses and interpreters attending before an arbitration shall receive fees as prescribed in s. 814.67.

788.06 History History: 1985 a. 168.

788.07 788.07  Depositions. Upon petition, approved by the arbitrators or by a majority of them, any court of record in and for the county in which such arbitrators, or a majority of them, are sitting may direct the taking of depositions to be used as evidence before the arbitrators, in the same manner and for the same reasons as provided by law for the taking of depositions in suits or proceedings pending in the courts of record in this state.

788.07 History History: 1979 c. 32 s. 64; Stats. 1979 s. 788.07.

788.07 Annotation Arbitrators have no inherent authority to dictate the scope of discovery. Absent an express agreement, the parties are limited to the procedure for depositions, as described in this section. Borst v. Allstate Insurance Company, 2006 WI 70, 291 Wis. 2d 361, 717 N.W.2d 42, 04-2004.

788.07 Annotation While an arbitrator lacks inherent power to order discovery beyond the taking of depositions, parties to an arbitration agreement are free to draft the agreement to allow for a broader range of discovery. When the parties do so, the arbitration panel has authority to interpret the agreement and determine what discovery it permits. When an arbitration agreement stated, "(l)ocal rules of law as to procedure and evidence will apply," the phrase arguably referred to the scope of discovery and the panel was entitled to interpret the phrase and determine the scope of discovery it allowed. Marlowe v. IDS Property Casualty Insurance Company, 2012 WI App 51, 340 Wis. 2d 594, 811 N.W.2d 894, 11-2067.

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

788.08 788.08  Written awards. The award must be in writing and must be signed by the arbitrators or by a majority of them.

788.08 History History: 1979 c. 32 s. 64; Stats. 1979 s. 788.08.

788.09 788.09  Court confirmation award, time limit. At any time within one year after the award is made any party to the arbitration may apply to the court in and for the county within which such award was made for an order confirming the award, and thereupon the court must grant such an order unless the award is vacated, modified or corrected under s. 788.10 or 788.11. Notice in writing of the application shall be served upon the adverse party or the adverse party's attorney 5 days before the hearing thereof.

788.09 History History: 1979 c. 32 s. 64; Stats. 1979 s. 788.09; 1981 c. 390; 1993 a. 486.

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

788.10 788.10  Vacation of award, rehearing by arbitrators.

788.10(1) (1) In either of the following cases the court in and for the county wherein the award was made must make an order vacating the award upon the application of any party to the arbitration:

788.10(1)(a) (a) Where the award was procured by corruption, fraud or undue means;

788.10(1)(b) (b) Where there was evident partiality or corruption on the part of the arbitrators, or either of them;

788.10(1)(c) (c) Where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced;

788.10(1)(d) (d) Where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final and definite award upon the subject matter submitted was not made.

788.10(2) (2) Where an award is vacated and the time within which the agreement required the award to be made has not expired, the court may, in its discretion, direct a rehearing by the arbitrators.

788.10 History History: 1979 c. 32 s. 64; Stats. 1979 s. 788.10.

788.10 Annotation A court may order arbitrators to hear further testimony without establishing a new panel. Gallagher v. Schernecker, 60 Wis. 2d 143, 208 N.W.2d 437 (1973).

788.10 Annotation The interjection of a new contract time period in an amended final offer after the petition is filed presents a question beyond the statutory jurisdiction of the arbitrators. Milwaukee Deputy Sheriffs' Association v. Milwaukee County, 64 Wis. 2d 651, 221 N.W.2d 673 (1974).

788.10 Annotation Arbitration awards are presumptively valid, and an award may not be attacked on the grounds that a portion of it could conceivably be allocable to an allegedly improper item. Scherrer Construction Co. v. Burlington Mem. Hosp. 64 Wis. 2d 720, 221 N.W.2d 855 (1974).

788.10 Annotation Contacts between the arbitrator and one party outside the presence of the other do not in themselves justify vacating an award to the party involved if the challenger does not demonstrate either improper intent or influence by clear and convincing evidence. Manitowoc v. Manitowoc Police Department, 70 Wis. 2d 1006, 236 N.W.2d 231 (1975).

788.10 Annotation An arbitrator exceeded his authority under sub. (1) (d) in determining that the discharge of a city employee for a violation of an ordinance residency requirement was not for just cause within the meaning of the collective bargaining agreement. WERC v. Teamsters Local No. 563, 75 Wis. 2d 602, 250 N.W.2d 696 (1977).

788.10 Annotation An arbitrator did not exceed his powers by adopting a ministerial-substantive distinction in determining the scope of the unfettered management function provided by agreement. The arbitrator did exceed his powers by ordering maintenance of past practice without finding that the agreement required such action. Milwaukee Professional Fire Fighters Local 215 v. Milwaukee, 78 Wis. 2d 1, 253 N.W.2d 481 (1977).

788.10 Annotation Arbitrators did not exceed their authority by arbitrating a grievance under a "discharge and nonrenewal" clause of a collective bargaining agreement when the contract offered by the board was signed by a teacher after deleting the title "probationary contract" and the board did not accept this counteroffer or offer the teacher a 2nd contract. Joint School District No. 10 v. Jefferson Education Association, 78 Wis. 2d 94, 253 N.W.2d 536 (1977).

788.10 Annotation Although the report of an arbitrator did not explicitly mention a counterclaim, the trial court did not err in determining that the denial of the counterclaim was implicit in the report. The failure of the arbitrator to set forth theories or support finding is not grounds for objection to the arbitrator's award. McKenzie v. Warmka, 81 Wis. 2d 591, 260 N.W.2d 752 (1978).

788.10 Annotation The disclosure requirements for neutral arbitrators regarding the vacation of an award under sub. (1) (b) are discussed. Richco Structures v. Parkside Village, Inc. 82 Wis. 2d 547, 263 N.W.2d 204 (1978).

788.10 Annotation Courts should apply one standard of review of arbitration awards under municipal collective bargaining agreements. Madison Metropolitan School District v. WERC, 86 Wis. 2d 249, 272 N.W.2d 314 (Ct. App. 1978).

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 Association v. 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 Association, 93 Wis. 2d 415, 287 N.W.2d 131 (1980).

788.10 Annotation An arbitrator exceeded his authority by directing that the grievant be transferred when the contract reserved transfer authority to the city and chief of police. Milwaukee v. Milwaukee Police Association 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 his authority by overruling management's determination that an employee with 8 years of job experience was not qualified for promotion to a job requiring 2 years of college "or its equivalent as determined by management." Oshkosh v. 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 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. Spooner Dist. v. N. W. 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 his 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. (10) (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. 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). LaCrosse Professional Police Association v. City of LaCrosse, 212 Wis. 2d 90, 568 N.W.2d 20 (Ct. App. 1997), 96-2741.

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 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 Company, 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 Company, 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 Association of Machinists and 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 Dist. v. West Central Education Association, 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.