First Weber Grp., Inc. v. Synergy Real Estate Grp., LLC
|860 N.W.2d 498,361 Wis.2d 496
|24 March 2015
|FIRST WEBER GROUP, INC. and James R. Imhoff, Jr., Petitioners–Appellants–Petitioners, v. SYNERGY REAL ESTATE GROUP, LLC and James N. Graham, Respondents–Respondents.
|United States State Supreme Court of Wisconsin
For the petitioners-appellants-petitioners, there were briefs by Kim Moermond, General Counsel, Madison, and oral argument by Kim Moermond.
For the respondents-respondents, there was a brief filed by James N. Graham, Accession Law LLC, Madison, and oral argument by James N. Graham.
An amicus curiae brief was filed by Debra P. Conrad on behalf of the Wisconsin Realtors Association.
¶ 1 This is a review of a published decision of the court of appeals, First Weber Group, Inc. v. Synergy Real Estate Group, LLC, 2014 WI App 41, 353 Wis.2d 492, 846 N.W.2d 348, which affirmed the circuit court's1 order denying First Weber Group, Inc.'s petition to compel arbitration.2
¶ 2 An arbitration panel ordered James N. Graham3 to pay First Weber for a disputed real estate brokerage commission. After Graham failed to pay, First Weber filed an action in circuit court to confirm the arbitration award. In that confirmation action, First Weber also requested the court to award it “costs and reasonable attorney fees” and “such other relief as the Court deems just and equitable.” The circuit court ordered Graham to pay First Weber the commission awarded in the arbitration. However, the circuit court denied First Weber's request for costs and reasonable attorney's fees, reasoning that, “[u]nder Wis. Stat. § 814.01, no costs may be awarded when confirming an arbitration award.” Graham paid only the commission award.
¶ 3 First Weber subsequently filed an arbitration request with the Realtors Association of South Central Wisconsin, Inc. (“Realtors Association”), of which First Weber and Graham were members. First Weber's arbitration request asked the Realtors Association to arbitrate a contractual dispute over “costs and reasonable attorney's fees” because judicial confirmation of the commission award was necessary. The Realtors Association scheduled the matter regarding costs and reasonable attorney's fees for arbitration.
Graham refused to attend the arbitration hearing regarding costs and reasonable attorney's fees. As a result, no arbitration hearing was held. First Weber then filed a petition in circuit court to compel arbitration of the dispute over costs and reasonable attorney's fees, arguing that Graham was bound by an arbitration agreement. The circuit court denied the petition, holding that First Weber's arbitration request was untimely. The court of appeals affirmed, also concluding that the arbitration request was untimely.
¶ 4 Graham argues that First Weber's petition to compel arbitration was correctly denied because it was untimely. Although Graham concedes that he is bound by an arbitration agreement, he argues that it does not require him to arbitrate untimely claims. Graham also argues that, on grounds of estoppel, First Weber cannot arbitrate the dispute over costs and reasonable attorney's fees because it did not appeal the circuit court's resolution of this dispute in the previously filed action confirming the arbitrator's award of the commission.
¶ 5 First Weber argues that an arbitrator, rather than a court, should decide whether its arbitration request was timely. First Weber also argues that its arbitration request was timely. First Weber further argues that it is not barred on grounds of estoppel from arbitrating the dispute over costs and reasonable attorney's fees. Finally, First Weber argues that the circuit court in the present action erred by failing to defer to the Realtors Association's determination that this dispute is arbitrable.
¶ 6 We conclude that under the arbitration agreement, Graham's timeliness and estoppel defenses against arbitration are to be determined in the arbitration proceedings, not by a court in a proceeding under Wis. Stat. § 788.034 to compel arbitration.5 Graham's timeliness and estoppel defenses against arbitration are procedural arbitrability issues to be determined during the arbitration process, rather than by a court. Graham has not overcome the presumption in favor of arbitration. Accordingly, we reverse the court of appeals' decision and remand the cause to the circuit court with the instruction that First Weber's petition to compel arbitration be granted.6
¶ 7 First Weber is a member of the Realtors Association. Graham was a member of the Realtors Association from January 2006 through the end of 2011. In order to become a member of the Realtors Association, every prospective member must sign a membership application form that states: “I agree to abide by the Code of Ethics of the National Association of REALTORS®, and the Constitution, Bylaws, Rules and Regulations of [the Realtors Association of South Central Wisconsin], the State Association and the National Association.” It is undisputed that Graham and First Weber signed this document.
¶ 8 The agreement to arbitrate is contained in the Code of Ethics of the National Association of Realtors (“Code of Ethics”), which Realtors Association members are obliged to follow. Article 17 of the Code of Ethics and Standards of Practice reads in relevant part:
In the event of contractual disputes or specific non-contractual disputes as defined in Standard of Practice 17–4 between REALTORS® (principals) associated with different firms, arising out of their relationship as REALTORS®, the REALTORS® shall submit the dispute to arbitration in accordance with the regulations of their Board or Boards rather than litigate the matter.
Article V, section 7 of the Constitution of the Realtors Association states that its members must follow the Code of Ethics' arbitration requirement.
¶ 9 The Code of Ethics also requires that a request for arbitration be filed in a timely manner. Section 47(a) of the Code of Ethics and Arbitration Manual provides in relevant part: “Requests for arbitration must be filed within one hundred eighty (180) days after the closing of the transaction, if any, or within one hundred eighty (180) days after the facts constituting the arbitrable matter could have been known in the exercise of reasonable diligence, whichever is later.” Several Realtors Association publications, including its standardized form for requesting arbitration, contain a similar timeliness requirement with virtually identical language. Section 47(a) further provides that the 180–day time limit is suspended under certain circumstances and that questions concerning this suspension “will be determined by the Board President or the President's designee.”7
¶ 10 First Weber paid a brokerage commission to Graham because he represented a buyer who purchased real estate property being sold by First Weber in the fall of 2008. First Weber later determined that Graham was not entitled to the commission.
¶ 11 First Weber and Graham agreed to arbitrate the dispute over the brokerage commission. Specifically, on February 25, 2009, First Weber signed a standardized Realtors Association form for requesting arbitration. On April 8, 2009, Graham signed a standardized Realtors Association form agreeing to First Weber's arbitration request. Each form stated:
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