L. G., By Chippewa Family Servs., Inc. v. Aurora Residential Alternatives, Inc.

• Decision Date: 28 June 2019
• Docket Number: No. 2018AP656,2018AP656
• Parties: L. G., BY her Guardian, CHIPPEWA FAMILY SERVICES, INC., Plaintiff-Respondent, State of Wisconsin Department of Health Services and Centers for Medicare & Medicaid Services, Involuntary-Plaintiffs, v. AURORA RESIDENTIAL ALTERNATIVES, INC., Aurora Integrated Management, Inc. and Aurora Community Services, Inc., Defendants-Appellants-Petitioners, Aurora 023 Community Based Residential Facility and Massachusetts Bay Insurance Company, Defendants.
• Court: Wisconsin Supreme Court

387 Wis.2d 724

929 N.W.2d 590

2019 WI 79

L. G., BY her Guardian, CHIPPEWA FAMILY SERVICES, INC., Plaintiff-Respondent,State of Wisconsin Department of Health Services and Centers for Medicare & Medicaid Services, Involuntary-Plaintiffs,

v. AURORA RESIDENTIAL ALTERNATIVES, INC., Aurora Integrated Management, Inc. and Aurora Community Services, Inc., Defendants-Appellants-Petitioners,Aurora 023 Community Based Residential Facility and Massachusetts Bay Insurance Company, Defendants.

No. 2018AP656

Supreme Court of Wisconsin.

Oral Argument: March 26, 2019

Opinion Filed: June 28, 2019

For the defendants-appellants-petitioners, there were briefs filed by Donna J. Fudge, Esquire, and Fudge Broadwater, P.A., Fond du Lac. There was an oral argument by Donna J. Fudge, Esquire.

For the plaintiff-respondent, there was a brief filed by Matthew Boller, James E. Biese, and Boller & Vaughan, LLC, Madison. There was an oral argument by James E. Biese.

DANIEL KELLY, J.

¶1 This case addresses whether a circuit court order denying a request to compel arbitration and stay a pending lawsuit is final for the purposes of appeal. We hold that it is and so reverse and remand the matter to the court of appeals.

I. BACKGROUND

¶2 Aurora Residential Alternatives, Inc., Aurora Integrated Management, Inc., and Aurora Community Services, Inc. (collectively, "Aurora") own and operate residential facilities. L.G., the respondent, is a mentally disabled resident of one of Aurora's facilities. In October 2012, L.G. accused an Aurora employee of sexually assaulting her by forcing her to perform sexual acts on him, for which he was convicted of fourth-degree sexual assault.

¶3 Approximately four years later, L.G. filed a lawsuit against Aurora over the incident in the Dunn County Circuit Court.¹ But L.G.² had signed an arbitration agreement with Aurora that provided, in relevant part:

Any and all claims or controversies arising out of or in any way relating to this Arbitration Agreement, the Admission Agreement, and/or any of the Consumer's stay(s) at the Home, including disputes regarding the making, execution, validity, enforceability, voidability, unconscionability, severability, scope, arbitrability, interpretation, waiver, duress, preemption, or any other defense to enforceability of this Arbitration Agreement, whether arising out of State or Federal law, whether now existing or arising in the future, whether for statutory, compensatory or punitive damages and whether sounding in breach of contract, tort (i.e., negligence or wrongful death), or breach of statutory duties (including, without limitation, any claim based on Consumers' Rights or a claim for unpaid Home charges), irrespective of the basis for the duty or of the legal theories upon which the claim is asserted, shall be submitted to binding arbitration.

....

The Parties hereby expressly agree that the Admission Agreement, this Arbitration Agreement, and the Consumer's stay at the Home involve interstate commerce. The Parties also stipulate that the Federal Arbitration Act, 9 U.S.C. § 1 - 16 in effect as of July 1, 2013 ("FAA"), shall apply to this Arbitration Agreement and that the FAA shall preempt any inconsistent state law and shall not be reverse preempted.

(Emphasis in original.)

¶4 In response to the lawsuit, Aurora filed a motion to compel arbitration and stay the circuit court proceedings pending the arbitration pursuant to the Federal Arbitration Act, 9 U.S.C. §§ 1 - 16 ("FAA") (the "Motion"). The circuit court denied the Motion in a written order (dated February 15, 2018), which bore the following statement: "THIS IS A FINAL ORDER FOR PURPOSES OF APPEAL" (the "Order").³

¶5 Aurora filed its notice of appeal 46 days later.⁴ L.G. moved to dismiss the appeal for lack of jurisdiction because Aurora was "seeking a review of a non-final order that denied their motion to compel arbitration." L.G. v. Aurora Residential Alts., Inc., No. 2018AP656, unpublished order (Wis. Ct. App. May 10, 2018). The court of appeals granted the motion. It held that "because the order denying arbitration does not dispose of the entire matter of litigation, it is not a final and appealable order as of right under Wis. Stat. § 808.03(1) [ (2017-18) ]^{[5 ]}." Id. The court of appeals also stated that Aurora could appeal the Order only pursuant to Wis. Stat. § 808.03(2), which governs permissive appeals. Under that procedure, the prospective appellant must file a petition requesting permission to appeal no later than 14 days after entry of the order to be reviewed. Wis. Stat. § 809.50(1). The court of appeals dismissed the appeal for lack of jurisdiction, concluding that the Order was not final, and Aurora had not filed a petition requesting permission to appeal. L.G., No. 2018AP656, unpublished order (Wis. Ct. App. May 10, 2018). Aurora moved the court of appeals to reconsider, specifically pointing out the statement on the Order indicating it was final for purposes of appeal. The court of appeals denied the motion, concluding that the statement was erroneous because the order did "not dispose of the matter in litigation among the parties." L.G. v. Aurora Residential Alts., Inc., No. 2018AP656, unpublished order (Wis. Ct. App. May 31, 2018) (order denying the motion for reconsideration). The court of appeals also denied Aurora's alternative request to extend the deadline to file a petition requesting permission to appeal.

¶6 Aurora filed a petition for review of the court of appeals' orders, which we granted. We now reverse the court of appeals' dismissal of Aurora's appeal.

II. STANDARD OF REVIEW

¶7 In the course of this opinion we are required to interpret and apply our statutes. "These are questions of law that we review de novo." Kieninger v. Crown Equip. Corp., 2019 WI 27, ¶12, 386 Wis. 2d 1, 924 N.W.2d 172 (citing State v. Alger, 2015 WI 3, ¶21, 360 Wis. 2d 193, 858 N.W.2d 346 ). More specifically, the finality of a circuit court's order presents a question of law subject to de novo review. Admiral Ins. Co. v. Paper Converting Mach. Co., 2012 WI 30, ¶22, 339 Wis. 2d 291, 811 N.W.2d 351.

III. ANALYSIS

¶8 Whether Aurora may appeal the Order depends entirely on whether it was final within the meaning of Wis. Stat. § 808.03(1). If it was, then the notice of appeal was timely, and the court of appeals should not have dismissed the appeal. If not, then the quest must end because Aurora did not file a petition requesting permission to appeal the Order, and it does not argue otherwise.⁶ Therefore, the balance of this opinion focuses on whether the Order was final within the meaning of § 808.03(1).⁷

¶9 The finality of the Order is outcome dispositive because of its jurisdictional consequences. Our statutes provide for an appeal as of right only from final orders or judgments: "A final judgment or a final order of a circuit court may be appealed as a matter of right to the court of appeals unless otherwise expressly provided by law." Wis. Stat. § 808.03(1). Without finality, there is no jurisdiction for such an appeal. "[T]his court lacks jurisdiction over an appeal [as of right] brought from a nonfinal judgment or order."

McConley v. T.C. Visions, Inc., 2016 WI App 74, ¶3, 371 Wis. 2d 658, 885 N.W.2d 816 (quoting Leske v. Leske, 185 Wis. 2d 628, 630, 517 N.W.2d 538 (Ct. App. 1994) ) (alteration in original).

¶10 "Finality," to the extent it concerns us today, has two components. Our statutes say that "[a] final judgment or final order is a judgment, order or disposition that disposes of the entire matter in litigation as to one or more of the parties, whether [it is] rendered in an action or special proceeding ...." Wis. Stat. § 808.03(1). The first component, therefore, relates to whether the order in question is part of an "action" or, instead, a "special proceeding." The second component relates to whether the order disposed of the entire matter in dispute between the parties.

A. "Action" versus "Special Proceeding"

¶11 We will start with the first component—whether the Order denying the Motion to compel arbitration was entered in an action as opposed to a special proceeding. The distinction is important because it will define the "matter in litigation" that must be resolved before we may consider whether the order was final. If the Motion was part of L.G.'s "action" against Aurora for damages stemming from the sexual assault, then there can be no disposition of the "entire matter in litigation" until the question of Aurora's alleged liability to L.G. has been answered. But if the Motion represents a "special proceeding" separate from L.G.'s "action," then we will need to identify the "disputed matter" within that special proceeding so that we may determine whether the Order entirely disposed of it. The court of appeals' conclusion that the Order had not disposed of the entire matter indicates it understood the Motion to have been part of L.G.'s action, rather than a separate special proceeding. This is a question on which we have not yet provided any guidance. See Wisconsin Auto Title Loans, Inc. v. Jones, No. 2011AP2482, unpublished slip op., 2013 WL 425449 (Wis. Ct. App. Feb. 5, 2013) ("[T]he finality of orders regarding arbitration appears to be an open question.").

¶12 Although we may not have provided any guidance on this question, the Legislature has. The Wisconsin Arbitration Act ( Wis. Stat. § 788.01 et seq. (the "Arbitration Act")) governs the enforcement of arbitration agreements, and describes how to compel arbitration both before a lawsuit has been filed as well as when a lawsuit is already pending. We examine these provisions for what they might say about whether a motion to compel arbitration represents a special proceeding or, instead, a motion integral to a pending action.

¶13 When a party to an arbitration agreement refuses to arbitrate, the other party may apply to our courts for relief. If there is no pending lawsuit when the refusal occurs, the aggrieved party may "petition" the circuit court...