Loren Imhoff Homebuilder, Inc. v. Taylor, Appeal No. 2019AP2205

CourtCourt of Appeals of Wisconsin
Writing for the CourtBLANCHARD, J.
Citation2020 WI App 80,953 N.W.2d 353,395 Wis.2d 178
Docket NumberAppeal No. 2019AP2205
Decision Date05 November 2020
Parties LOREN IMHOFF HOMEBUILDER, INC., Petitioner-Appellant, v. Lisa TAYLOR and Luis Cuevas, Respondents-Respondents.

395 Wis.2d 178
953 N.W.2d 353
2020 WI App 80

LOREN IMHOFF HOMEBUILDER, INC., Petitioner-Appellant,
v.
Lisa TAYLOR and Luis Cuevas, Respondents-Respondents.

Appeal No. 2019AP2205

Court of Appeals of Wisconsin.

Submitted on Briefs August 20, 2020
Opinion Filed November 5, 2020


On behalf of the petitioner-appellant, the cause was submitted on the briefs of Paul W. Schwarzenbart and Jeffrey W. Younger of Stafford Rosenbaum LLP, Madison.

On behalf of the respondents-respondents, the cause was submitted on the brief of Lisa Taylor and Luis Cuevas, pro se.

Before Blanchard, Kloppenburg, and Graham, JJ.

BLANCHARD, J.

395 Wis.2d 181

¶1 Lisa Taylor and Luis Cuevas (the homeowners) entered into a construction contract with Loren Imhoff Homebuilder, Inc. (the builder) for a remodeling project. The project bogged down in disputes. The disputes went into mediation and then into arbitration before a single arbitrator. The parties participated in an evidentiary hearing before the arbitrator. The arbitrator's decision resulted in a net award in favor of the builder, but each side prevailed on some issues.

¶2 The homeowners moved the circuit court to vacate the arbitration award on multiple grounds. The court rejected all but one. The court accepted the homeowners' argument that the arbitrator fell asleep at some point or points during the evidentiary hearing and that as a result he "so imperfectly executed [his powers as arbitrator] that a mutual, final and definite award upon the subject matter submitted was not made." See WIS. STAT. § 788.10(1)(d) (2017-18) (including such "imperfect execut[ion]" as one ground on which a circuit court must vacate an arbitration award).1 The builder appeals.

953 N.W.2d 356

¶3 We conclude that the homeowners forfeited the claim that the circuit court should vacate the award based on the momentary drowsiness or sleeping that they ended up alleging in court because they failed to ask the arbitrator to resolve any problems

395 Wis.2d 182

caused by alleged momentary drowsiness or sleeping. Accordingly, we reverse the order vacating the arbitration award and direct the circuit court to confirm it.

BACKGROUND

¶4 The building construction contract between the homeowners and the builder included provisions addressing dispute resolution, such as eventual recourse to binding arbitration. After the disputes arose, the builder commenced this action by filing a petition in the circuit court to compel arbitration. The circuit court granted the petition.2 The parties selected a mediator-arbitrator (the arbitrator). The arbitrator made unsuccessful mediation attempts on two days in fall 2017 and then conducted a five-day evidentiary arbitration hearing in February, March, and July 2018, before issuing a decision in September 2018.

¶5 The issue we resolve on appeal does not require us to delve into the details of the arbitration. In broad strokes, the builder claimed unpaid contract amounts—including payments on a quantum meruit basis for work requested outside the contract—and the homeowners made claims for offsetting damages based on alleged construction defects. Both sides were represented by counsel during the arbitration hearing. The parties filed post-hearing briefs on the merits with the arbitrator.

395 Wis.2d 183

¶6 As the parties awaited the arbitration decision, the homeowners asked the arbitrator to recuse himself, primarily based on allegations of bias. We address pertinent details of the homeowners' post-hearing recusal request in the Discussion section below. Included in the recusal request were assertions that the arbitrator had exhibited drowsiness or sleeping during the hearing. The builder disputed that the arbitrator had exhibited drowsiness or sleeping. In addition, the builder objected that the homeowners had waited too long to raise the issue.

¶7 Notably, the homeowners' request that the arbitrator recuse himself did not include an allegation that the arbitrator had missed any specific evidence or argument. The request also did not note any particular occasion on which the homeowners had allegedly attempted to rouse him. Further, the homeowners did not ask the arbitrator for the opportunity to resubmit evidence or reargue any specific point that they alleged he had missed. As we discuss in more detail below, the arbitrator rejected the recusal request.

¶8 Shortly after denying the recusal request, the arbitrator issued a written decision on the merits.3 The decision did not include any reference to alleged drowsiness or sleeping.

953 N.W.2d 357

¶9 In this circuit court action, the homeowners moved to vacate the award. The only ground in the

395 Wis.2d 184

motion that the homeowners have not now abandoned on appeal was a claim that the circuit court "must" vacate the award under WIS. STAT. § 788.10(1)(d) because, due to drowsiness or sleeping during the hearing, the arbitrator "so imperfectly executed [his powers as an arbitrator] that a mutual, final and definite award upon the subject matter submitted was not made."

¶10 The circuit court took sworn testimony from the homeowners and the builder's attorney regarding their perceptions of any drowsiness or sleeping by the arbitrator during the arbitration hearing. Taylor testified that, at least once on each day of the hearing but without specification as to how many times, the arbitrator showed signs of drowsiness or being asleep. In contrast, the builder's attorney testified that the arbitrator did not appear drowsy or sleepy at the hearing but instead took an active role in asking questions and taking notes, and that he was "fully engaged the entire time."

¶11 The homeowners acknowledged in the circuit court that during the hearing they never raised with the arbitrator an objection or even a concern involving alleged drowsiness or sleeping. More specifically, they acknowledged that they never suggested that he appeared to have missed particular evidence or argument that could have prejudiced them. To the contrary, the homeowners' position in the circuit court was that they made a tactical decision at the arbitration hearing not to raise the issue with him. Instead, they alleged, "there were a few times when [homeowner Taylor] literally tried to show [the arbitrator] something to wake him up," and "a couple of times ... [Taylor] kind of did something on the table to kind of make some noise to bring him to." They said that they

395 Wis.2d 185

tried "to be subtle about it" and "proceeded with caution," because they suspected that the arbitrator was inclined to rule against them, and "it's not going to make it any better ... [to] tell him[,] you're sleeping too."

¶12 The builder argued in pertinent part that the homeowners had forfeited the sleeping claim by failing to raise it during the arbitration.

¶13 The circuit court ruled that the homeowners had met their "burden of proof to establish by clear and convincing evidence that [the arbitrator's] drowsiness or sleepiness" caused the arbitrator to "so imperfectly execute[ ] his powers that the award upon the subject matter submitted was not made." See WIS. STAT. § 788.10(1)(d). The court stated, "I don't know if [the arbitrator] was sleeping or not." Nevertheless, the court found that there was clear and convincing evidence that the arbitrator had rejected the homeowners' expert's testimony, not on the merits, but instead because he had missed portions of the testimony due to drowsiness or sleeping. The court appeared to rely on some combination of the homeowners' testimony in court and various allegations that they had made in post-arbitration hearing submissions to the arbitrator, as well as the court's perception that neither the builder nor the arbitrator had denied material drowsiness or sleeping after the homeowners raised the issue in their post-hearing recusal request. The court rejected the homeowners' other arguments in favor of vacating the award. It subsequently ruled that the homeowners had not forfeited the drowsiness or sleeping claim and that they had shown resulting prejudice. Based on these rulings, the court denied the builder's motion to confirm the award, granted the homeowners'

395 Wis.2d 186

motion to vacate it, and remanded for the

953 N.W.2d 358

parties to begin arbitration anew before a different arbitrator. The builder appeals.

DISCUSSION

¶14 Based on the record and assuming as true the factual allegations that the homeowners made to the circuit court, we conclude that the homeowners forfeited drowsiness or sleeping by the arbitrator as a basis to vacate the award. The homeowners failed to raise the issue at any point during the arbitration hearing. After the hearing, they failed to voice an objection requesting that the arbitrator consider any...

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4 practice notes
  • State v. Mercado, No. 2018AP2419-CR
    • United States
    • United States State Supreme Court of Wisconsin
    • January 20, 2021
    ...Snider, 266 Wis. 2d 830, ¶12, 668 N.W.2d 784 (emphasis in original). We agree with Snider’s conclusion. Section 908.08 provides 953 N.W.2d 353 two methods by which a party may introduce a child's video-recording. By requiring a video-recording to satisfy subsections (2) and (3) despite the ......
  • Loren Imhoff Homebuilder, Inc. v. Taylor, Appeal No. 2019AP2205
    • United States
    • Court of Appeals of Wisconsin
    • March 31, 2022
    ...appealed, seeking reversal and remand for confirmation of the award. Loren Imhoff Homebuilder, Inc. v. Taylor , 2020 WI App 80, ¶13, 395 Wis. 2d 178, 953 N.W.2d 353 ( Imhoff I ), rev'd , 2022 WI 12, ¶22, 400 Wis. 2d 611, 970 N.W.2d 831 ( Imhoff II ). This court reversed the circuit court ba......
  • Loren Imhoff Homebuilder, Inc. v. Taylor, 2019AP2205
    • United States
    • Court of Appeals of Wisconsin
    • March 31, 2022
    ...appealed, seeking reversal and remand for confirmation of the award. Loren Imhoff Homebuilder, Inc. v. Taylor, 2020 WI.App. 80, ¶13, 395 Wis.2d 178, 953 N.W.2d 353 (Imhoff I), rev'd, Loren Imhoff Homebuilder, Inc. v. Taylor, 2022 WI 12, ¶22, ___ Wis.2d ___, ___ N.W.2d ___ (Imhoff II). This ......
  • Loren Imhoff Homebuilder, Inc. v. Taylor, 2019AP2205
    • United States
    • United States State Supreme Court of Wisconsin
    • March 1, 2022
    ...by the arbitrator 400 Wis.2d 618 as a basis to vacate the award."5 Loren Imhoff Homebuilder, Inc. v. Taylor, 2020 WI App 80, ¶14, 395 Wis. 2d 178, 953 N.W.2d 353.¶9 We granted the homeowners’ petition for review. We determine: (1) whether the doctrine of forfeiture may be applied in an arbi......
4 cases
  • State v. Mercado, No. 2018AP2419-CR
    • United States
    • United States State Supreme Court of Wisconsin
    • January 20, 2021
    ...Snider, 266 Wis. 2d 830, ¶12, 668 N.W.2d 784 (emphasis in original). We agree with Snider’s conclusion. Section 908.08 provides 953 N.W.2d 353 two methods by which a party may introduce a child's video-recording. By requiring a video-recording to satisfy subsections (2) and (3) despite the ......
  • Loren Imhoff Homebuilder, Inc. v. Taylor, Appeal No. 2019AP2205
    • United States
    • Court of Appeals of Wisconsin
    • March 31, 2022
    ...appealed, seeking reversal and remand for confirmation of the award. Loren Imhoff Homebuilder, Inc. v. Taylor , 2020 WI App 80, ¶13, 395 Wis. 2d 178, 953 N.W.2d 353 ( Imhoff I ), rev'd , 2022 WI 12, ¶22, 400 Wis. 2d 611, 970 N.W.2d 831 ( Imhoff II ). This court reversed the circuit court ba......
  • Loren Imhoff Homebuilder, Inc. v. Taylor, 2019AP2205
    • United States
    • Court of Appeals of Wisconsin
    • March 31, 2022
    ...appealed, seeking reversal and remand for confirmation of the award. Loren Imhoff Homebuilder, Inc. v. Taylor, 2020 WI.App. 80, ¶13, 395 Wis.2d 178, 953 N.W.2d 353 (Imhoff I), rev'd, Loren Imhoff Homebuilder, Inc. v. Taylor, 2022 WI 12, ¶22, ___ Wis.2d ___, ___ N.W.2d ___ (Imhoff II). This ......
  • Loren Imhoff Homebuilder, Inc. v. Taylor, 2019AP2205
    • United States
    • United States State Supreme Court of Wisconsin
    • March 1, 2022
    ...by the arbitrator 400 Wis.2d 618 as a basis to vacate the award."5 Loren Imhoff Homebuilder, Inc. v. Taylor, 2020 WI App 80, ¶14, 395 Wis. 2d 178, 953 N.W.2d 353.¶9 We granted the homeowners’ petition for review. We determine: (1) whether the doctrine of forfeiture may be applied in an arbi......

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