In CityDeck Landing LLC v. Circuit Court for Brown County (2019 WI 15), the Wisconsin Supreme Court held that circuit courts may not stay private arbitration, even when there is an ongoing insurance coverage dispute connected to the arbitration parties. The 4-2 decision, authored by Justice R. Bradley (joined by Chief Justice Roggensack, Justice Kelly and Justice Ziegler, with Justice Dallet not participating), allows CityDeck Landing to proceed in private arbitration with its contractors.
The underlying issue in this case began when a dispute arose between CityDeck and its contractor. CityDeck and the contractor had contracted to use private arbitration. Several of the subcontractors joined the arbitration, and one subcontractor tendered its defense to its insurer Society Insurance. The main contractor claimed it was an additional insured under the Society policy. In turn, Society filed a lawsuit seeking a determination on coverage in the CityDeck arbitration and asked the circuit court to stay the arbitration until the resolution of the coverage dispute. The circuit court agreed to stay the arbitration. CityDeck asked the Supreme Court to vacate the stay.
The Supreme Court opinion undertakes a historical analysis of the development of the four factors it uses in issuing supervisory writs, such as CityDeck requested in this case. Then, the opinion applies the four factors to the CityDeck case, finding that it meets the criteria for a supervisory writ, and vacates the circuit court order to stay arbitration.
The court found the CityDeck meets the criteria for a supervisory writ because:
- The circuit court had a plain duty to comply with the Wisconsin Arbitration Act (Wis. Stat. § 788.01), which holds arbitration agreements as “valid, irrevocable, and enforceable.” Even though Wisconsin courts typically recommend the bifurcation and stay of liability cases and coverage disputes, circuit courts do not have the authority to stay arbitration.
- CityDeck could not receive an adequate remedy through the ordinary appeal process because continuing to stay the arbitration on appeal would be a non-reparable and non-compensable damage. Furthermore, an appeal would subject CityDeck to even more litigation, which the parties intended to contract out of via arbitration.
- Grave hardship or irreparable harm would have resulted if the Supreme Court did not issue the writ because CityDeck had been denied its right to arbitration and would be forced into public proceedings when it contracted to resolve the matter privately.
- CityDeck filed for the writ promptly and speedily.
In a dissent, Justice Walsh Bradley (joined by Justice Abrahamson) argued that the majority opinion too broadly expands the hardships and harms eligible for a supervisory writ under factor number three above. The dissent states that CityDeck does not meet the grave hardship and irreparable harm criterium because a delay in arbitration is not a grave hardship, and any harm caused could be reparable by a monetary award. According to the dissent, applying the supervisory writ criteria in the broad way the majority does here would make the criteria applicable to almost any request for a writ.