State ex rel. Citydeck Landing LLC v. Circuit Court for Brown Cnty., 2018AP291-W

• Decision Date: 21 February 2019
• Docket Number: No. 2018AP291-W,2018AP291-W
• Parties: STATE of Wisconsin EX REL. CITYDECK LANDING LLC, Petitioner, v. CIRCUIT COURT FOR BROWN COUNTY, the Honorable Thomas J. Walsh, Presiding, Society Insurance, Smet Construction Services Corporation and GB Builders, LLC, Respondents.
• Court: Wisconsin Supreme Court

385 Wis.2d 516

922 N.W.2d 832

2019 WI 15

STATE of Wisconsin EX REL. CITYDECK LANDING LLC, Petitioner,

v.CIRCUIT COURT FOR BROWN COUNTY, the Honorable Thomas J. Walsh, Presiding, Society Insurance, Smet Construction Services Corporation and GB Builders, LLC, Respondents.

No. 2018AP291-W

Supreme Court of Wisconsin.

Oral Argument: October 10, 2018

February 21, 2019

For the petitioner, there were briefs filed by Eric M. McLeod, Paul D. Cranley, Katherine Smith Polich, Joseph S. Diedrich, and Husch Blackwell LLP, Madison.

For the respondents, Circuit Court for Brown County and the Honorable Thomas J. Walsh, there was a brief filed by Brian P. Keenan, assistant attorney general, with whom on the brief was Brad D. Schimel, attorney general.

For the respondent, Society Insurance, there was a brief filed by Jeffrey Leavell, Danielle N. Rousset, Brandon L. Parks, and Jeffrey Leavell, S.C., Racine.

REBECCA GRASSL BRADLEY, J.

¶1 The circuit court ordered the arbitration of a private construction dispute stayed until it could decide an insurance coverage dispute between one of the contractors connected to the arbitration and the contractor's insurer. CityDeck Landing LLC petitions this court, pursuant to Wis. Stat. § (Rule) 809.71 (2015-16),¹ for a supervisory writ. CityDeck asks this court to exercise its superintending constitutional authority to vacate the circuit court's² order. CityDeck asserts the circuit court exceeded its jurisdiction by putting the private arbitration³ on hold, and that a supervisory writ is necessary to correct the circuit court's extra-jurisdictional act. We hold the circuit court lacked the authority to issue the order staying the arbitration, the requirements necessary to issue a supervisory writ have been satisfied, and the stay order must be vacated.

I. BACKGROUND

¶2 In December 2013, CityDeck hired Smet Construction Services Corporation as its general contractor to construct an apartment building called "CityDeck Residences" in Green Bay. Smet hired subcontractors, including GB Builders of Northeastern Wisconsin, LLC; Lunda Construction Company; Security-Luebke Roofing,Inc.; and Lakeland Construction, Inc. The construction contract required any disputes to be resolved by arbitration. A dispute arose and in May 2016, CityDeck filed for arbitration against Smet, alleging breach of the construction contract and theft by contractor. It filed an amended demand for arbitration in November 2016. In July 2017, Smet sought to bring the subcontractors into the arbitration because it contended the subcontractors were responsible for the problems and each of the subcontracts contained an indemnity provision requiring the subcontractor to "defend, indemnify and hold [Smet] harmless." Most of the subcontractors voluntarily joined the arbitration. GB Builders notified its insurer, Society Insurance, of the claim, and Society hired an attorney to represent GB Builders under a reservation of rights. In August 2017, Smet tendered the defense of the CityDeck claim to Society, asserting it was an additional insured under the insurance policy Society issued to GB Builders. In October 2017, GB Builders filed an answer to Smet's demand for arbitration, asking the arbitrator for dismissal. The arbitrator scheduled the arbitration hearing for March 1, 2018.

¶3 In October 2017, however, Society Insurance filed a declaratory judgment complaint in Brown County Circuit Court against CityDeck, Smet, and GB Builders. Society sought a declaration "on the scope of its insurance duties" to Smet and GB Builders with respect to CityDeck's construction claims under arbitration. Society asked the circuit court to stay the arbitration until it could decide the insurance coverage issue. The circuit court granted Society's request and ordered the arbitration stayed on January 2, 2018.

¶4 CityDeck asserted the circuit court lacked jurisdiction to order a private arbitration stayed, particularly when the circuit court action and the arbitration involved different issues and different parties; three subcontractors who were parties to the arbitration were not named in the circuit court suit. CityDeck filed a motion asking the circuit court to reconsider its decision. The circuit court ignored CityDeck's motion to reconsider, and CityDeck filed a petition for a supervisory writ in the court of appeals. The court of appeals construed the petition as an appeal from a non-final order and denied the petition. CityDeck filed a petition for a supervisory writ with this court. We accepted jurisdiction over CityDeck's petition and heard oral argument.

II. ANALYSIS

A. Historical Analysis

¶5 Wisconsin cases contain inconsistencies regarding writ procedure, terminology, and the standards applicable to the exercise of our constitutional superintending authority. For the sake of clarity, we set forth the history of writs requested under our superintending authority, the origin of the term "supervisory writ," and an unexplained discrepancy in our cases illuminated in State ex rel. Beaudry v. Panosian, 35 Wis. 2d 418, 151 N.W.2d 48 (1967).

1. History of writ procedure

¶6 Article VII, § 3 of the Wisconsin Constitution gives the supreme court "superintending and administrative authority over all courts" and the ability to "issue all writs necessary in aid of its jurisdiction."⁴

Interpreting this provision, this court held that "[the supreme court] was endowed with a separate and independent jurisdiction, which enables and requires it in a proper case to control the course of ordinary litigation in such inferior courts, and was also endowed with all the common-law writs applicable to that jurisdiction." State ex rel. Fourth Nat'l Bank of Phila. v. Johnson, 103 Wis. 591, 613, 79 N.W. 1081 (1899). This court concluded that "when the makers of the constitution used the words ‘superintending control over all inferior courts’ they definitely referred to that well-known superintending jurisdiction of the court of king's bench." Id. at 614, 79 N.W. 1081. "The two great writs by which this superintending jurisdiction was principally exercised by the court of King's bench were the writs of mandamus and prohibition; the one directing action by the inferior court, and the other forbidding action." Id.

¶7 A writ of prohibition "restrain[s] a court in the exercise of judicial functions outside or beyond its jurisdiction, and when there is no other adequate remedy."

State ex rel. Attorney Gen. v. Circuit Court of Eau Claire Cty., 97 Wis. 1, 15, 72 N.W. 193 (1897). See also State ex rel. De Puy v. Evans, 88 Wis. 255, 263, 60 N.W. 433 (1894) ("So this court has repeatedly held that under our statutes such writ issues only to restrain the acts of a court or other inferior tribunal exercising some judicial power which it has no legal authority to exercise at all."); State ex rel. Kellogg v. Gary, 33 Wis. 93, 98 (1873) ("It does not issue to restrain the acts of either executive or administrative officers, but only those of a court or other inferior tribunal engaged in the exercise of some judicial power, and that not merely in a manner not authorized by law, but it must also be in defiance of law, or without any legal authority whatever for that purpose.").

¶8 Prior to 1921, it was the rule in Wisconsin "that prohibition will not lie against a judge of a lower court except in a situation where such judge is exceeding his jurisdiction." State ex rel. Kiekhaefer v. Anderson, 4 Wis. 2d 485, 490, 90 N.W.2d 790 (1958). However, the rule changed so that "prohibition may be invoked in case of a non-jurisdictional error in a situation where appeal from the judgment would come too late for effective redress and great hardship would result if such writ were not issued." Id. See also In re Inland Steel Co., 174 Wis. 140, 143, 182 N.W. 917 (1921) ("[I]t is the opinion of the court that jurisdiction may properly be exercised though the duty of the court below may not be so plain as to permit of but one conclusion, if a careful consideration of all the facts shows that a valid service has not been made."); State ex rel. Hustisford Light, Power & Mfg. Co. v. Grimm, 208 Wis. 366, 370, 243 N.W. 763 (1932) ("Neither the power nor the exercise of it as a matter of policy is limited to keeping the lower court within its jurisdiction or compelling it to act."); State ex rel. Gaynon v. Krueger, 31 Wis. 2d 609, 614, 143 N.W.2d 437 (1966) ("Traditionally, this writ was used to keep an inferior court from acting outside its jurisdiction when there was no adequate remedy by appeal or otherwise. But, ... the writ has been expanded to cover cases of ‘nonjurisdictional error when the appeal may come too late for effective redress, or be inadequate and there is a need for such intervention to avoid grave hardship or a complete denial of the rights of a litigant.’ ") (internal citations and quoted source omitted).

¶9 In Fourth National Bank, this court acknowledged it granted a writ of prohibition in Attorney General, to prevent "the further prosecution of certain contempt proceedings in the circuit court because such court was acting in excess of its jurisdiction." Fourth Nat'l Bank, 103 Wis. at 617, 79 N.W. 1081. This court explained in Attorney General: "Having held that the attempt to punish the publication in question as contempt was in excess of the jurisdiction of the circuit court, no reason is seen why the writ is not an apt and proper remedy, unless, indeed, there be other adequate remedies." Attorney Gen., 97 Wis. at 15, 72 N.W. 193. The court proceeded to rule out the use of other writs and concluded that a writ of prohibition was appropriate. Id.

¶10 While Fourth National Bank explained the court's superintending power, it specifically dealt with the issuance of a writ of mandamus. 103 Wis. at 618, 79 N.W. 1081. The court stated that "unless there be adequate remedy for such denial in the regular exercise of the appellate jurisdiction of this court, it is difficult to see why the superintending...