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Wisconsin justices probe case of sleeping arbitrator in home construction fight

Two homeowners say they were prejudiced by the decision of an arbitrator because he fell asleep during a hearing, but a home construction company argues they tried too late to use that claim to scrap the award in its favor.

MADISON, Wis. (CN) — The Wisconsin Supreme Court attempted Monday to put to rest the question of whether two homeowners have recourse to vacate an award issued by an arbitrator they claim fell asleep during key parts of an arbitration hearing and therefore issued a faulty decision against them.

Due to a variety of disputes over their home addition project, Lisa Taylor and Luis Cuevas entered arbitration spurred by Loren Imhoff Homebuilder over nonpayment under the parties’ contract. Five days of evidentiary hearings took place in 2018 with Mark Frankel, a former Dane County Circuit Court judge who now works in alternative dispute resolution and acted as arbitrator.

After the hearings but before Frankel issued his decision, the homeowners brought a motion demanding the arbitrator recuse himself because he was allegedly sleeping or dozing off during the hearings and missed important expert testimony and evidence, making his decision awarding more than $250,000 to the builder biased. Frankel denied the motion and the matter moved to the circuit court for confirmation of the award.

However, Dane County Circuit Court Judge Frank Remington found that the homeowners had not forfeited the sleeping issue before a final award was delivered and considered it more likely than not that Frankel had been sleeping during parts of the hearings, so the judge vacated the award and remanded for new proceedings.

A three-judge panel of the Wisconsin Court of Appeals disagreed and reversed Remington’s ruling last year, finding that the homeowners had forfeited the sleeping issue because they did not adequately bring it up with Frankel at the time of the hearing and they were too vague in explaining exactly what his alleged sleep caused him to miss and how it prejudiced them.

On Monday in the Wisconsin Supreme Court’s hearing room at the state Capitol in Madison, Barrett Van Sicklen, counsel for Taylor and Cuevas with the Madison office of DeWitt Law Firm, argued the homeowners had not forfeited the issue of Frankel’s sleeping because they brought it up multiple times before his award in post-hearing filings and that the alleged sleeping was misconduct sufficient to vacate the award.

Pressed by Justice Rebecca Grassl Bradley on why the homeowners waited until after the hearing to bring up Frankel’s sleeping instead of efficiently raising the issue at the time, Van Sicklen offered that “figuring out a way to delicately raise [the issue of sleeping] during a hearing is difficult.”

Van Sicklen said that, in any case, the legal standard only holds that a party must bring up such a dispute before the award was issued, arguing the homeowners did and that sleeping during an arbitration hearing is not a minor issue.

“The parties contracted to have an arbitrator hear, listen to, examine the testimony, and they didn’t get the benefit of that bargain here,” Van Sicklen said, adding that “it could not have been clearer to the arbitrator that this was a problem” before he rendered his decision.

Representing the builder, Paul Schwarzenbart with the Madison office of Stafford Rosenbaum charged that Frankel’s sleeping was not timely raised before the arbitrator himself during the hearing, going further to imply that the homeowners and their attorney deliberately waited to raise the issue until after the arbitration process had not gone well for them, saying they “swung for the fences” in trying to “get rid of the arbitrator and start from scratch.”

Schwarzenbart said the informal setting of arbitration makes it easy to simply stop proceedings, take a break and address such an issue, offering that “the time to fix a problem with evidence being missed is when it happens. That’s true of every other type of evidentiary motion made at trial.”

He disputed the way the homeowners argued the issue, by filing a pro se motion after post-hearing briefs were submitted that Schwarzenbart referred to as a “screed” full of false allegations brought in bad faith.

The two attorneys agreed that the forfeiture doctrine should be determined by the high court to apply to arbitration proceedings, arguing that the opposite finding would result in courts getting bogged down by endless motions challenging an award after it is issued.

The five justices present on Monday did not say when they would issue a decision in the case. Justice Ann Walsh Bradley appeared via phone, and Justice Jill Karofsky did not participate.

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