Title: Loren Imhoff Homebuilder, Inc. v. Taylor

State: wisconsin

Issuer: Wisconsin Supreme Court

Document:

2022 WI 12 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2019AP2205 
 
 
 
COMPLETE TITLE: 
Loren Imhoff Homebuilder, Inc., 
          Petitioner-Appellant, 
     v. 
Lisa Taylor and Luis Cuevas, 
          Respondents-Respondents-Petitioners. 
 
 
 
 
 
REVIEW OF DECISION OF THE COURT OF APPEALS 
Reported at 395 Wis. 2d 178,953 N.W.2d 353 
(2020 – unpublished) 
 
 
OPINION FILED: 
March 1, 2022   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
October 4, 2021   
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit   
 
COUNTY: 
Dane   
 
JUDGE: 
Frank D. Remington   
 
 
 
JUSTICES: 
 
ROGGENSACK, J., delivered the majority opinion for a unanimous 
Court. 
NOT PARTICIPATING: 
KAROFSKY, J., did not participate.   
 
 
 
ATTORNEYS: 
 
For the respondents-respondents-petitioners, there were 
briefs filed by Deborah C. Meiners, Barret V. Van Sicklen, Jordan 
Rohlfing, and DeWitt LLP, Madison. There was an oral argument by 
Barret V. Van Sicklen. 
 
For the petitioner-appellant, there was a brief filed by Paul 
W. Schwarzenbart, Jeffrey W. Younger, and Stafford Rosenbaum LLP, 
Madison. There was an oral argument by Paul W. Schwarzenbart. 
 
 
 
 
2022 WI 12 
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.  2019AP2205 
(L.C. No. 
2016CV3177) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Loren Imhoff Homebuilder, Inc., 
 
          Petitioner-Appellant, 
 
     v. 
 
Lisa Taylor and Luis Cuevas, 
 
          Respondents-Respondents-Petitioners. 
 
FILED 
 
MAR 1, 2022 
 
Sheila T. Reiff 
Clerk of Supreme Court 
 
 
 
 
ROGGENSACK, J., delivered the majority opinion for a unanimous 
Court. 
 
KAROFSKY, J., did not participate.  
 
 
REVIEW of a decision of the Court of Appeals.  Reversed and 
cause remanded.    
 
¶1 
PATIENCE DRAKE ROGGENSACK, J.   We review the decision 
of the court of appeals1 that applied the doctrine of forfeiture 
as the basis for its reversal of the circuit court's2 vacatur of 
                                                 
1 Loren Imhoff Homebuilder, Inc. v. Taylor, 2020 WI App 80, 
395 Wis. 2d 178, 953 N.W.2d 353. 
2 The Honorable Frank D. Remington of Dane County Circuit 
Court presided.   
No. 
2019AP2205   
 
2 
 
Loren Imhoff Homebuilder, Inc.'s ("Imhoff") arbitral award under 
Wis. Stat. § 788.10(1) (2019-2020).3  On our review, Lisa Taylor 
and Luis Cuevas ("the homeowners") urge us to reverse the court of 
appeals, arguing that they did not forfeit their objections to the 
arbitrator's conduct because they properly raised them before the 
arbitral award was issued.  Furthermore, they assert that the 
arbitrator's sleeping was both misbehavior that resulted in 
prejudice and indicative of a flawed process to the extent that 
the vacatur of the arbitral award was required under both 
§§ 788.10(1)(c) and (1)(d).    
¶2 
We conclude that, because the homeowners objected to the 
arbitrator's sleeping before he issued the arbitral award, they 
did not forfeit their objection.  However, we are evenly divided 
on whether the arbitration award should be vacated pursuant to 
Wis. Stat. § 788.10.  Therefore, we reverse the decision of the 
court of appeals and remand the matter to the court of appeals for 
consideration of § 788.10 issues. 
I.  BACKGROUND 
¶3 
This case originates from a construction contract that 
Imhoff entered into with the homeowners for a remodeling project 
on their home.  Eight months into the contract, the homeowners 
were dissatisfied with the work completed by Imhoff, alleging a 
number 
of 
deficiencies 
that 
they 
asserted 
breached 
the 
construction contract, as well as discrepancies in Imhoff's 
                                                 
3 All references to the Wisconsin Statutes are to the 2019-
2020 version unless otherwise indicated. 
No. 
2019AP2205   
 
3 
 
billing invoices.  Following an unsuccessful attempt at mediation, 
Imhoff filed a petition to compel arbitration under the terms of 
the contract, which was granted by the circuit court.  
¶4 
The arbitration commenced before a single arbitrator and 
consisted of a five-day evidentiary hearing.  Following the 
conclusion of the hearing, but prior to the conferment of the 
arbitral 
award, 
the 
homeowners 
raised 
objections 
to 
the 
arbitration proceedings and asked the arbitrator to recuse.  
Specifically, the homeowners asserted that the arbitrator was 
biased towards Imhoff, and that the arbitrator repeatedly fell 
asleep and missed the presentation of evidence by their expert 
witness.  The arbitrator denied the homeowners' motion and awarded 
Imhoff over $320,000 in damages and fees.  The arbitrator did not 
directly address the homeowners' allegation that he was sleeping 
during the hearing.4  Imhoff subsequently brought a motion in 
circuit court to confirm the arbitral award.  The homeowners 
opposed Imhoff's motion and moved to vacate the award based, 
partly, on the arbitrator's sleeping.  
¶5 
The circuit court took testimony from the parties and 
their counsel regarding the arbitrator's sleeping during the 
arbitration hearing.  The homeowners testified that his sleeping 
happened repeatedly and that "[t]here was never a day . . . where 
                                                 
4 The allegation that the arbitrator was sleeping was not 
mentioned in his arbitral Decision and Order.  It was mentioned in 
note 2 of the Order Denying Recusal:  "Ms. Taylor's suggestion 
that my drowsiness somehow explains why I was unaware of recordings 
having been made continuously over the course of a five-day 
arbitration hearing is incredible on its face."   
No. 
2019AP2205   
 
4 
 
he was not sleeping."  Specifically, the homeowners noted that the 
arbitrator had "glazed eyes, haziness, drowsiness, and sometimes 
[went into a state of outright] sleep."  The homeowners further 
testified that the arbitrator's sleeping prejudiced their case 
because it often coincided with their expert witness's testimony.   
¶6 
After hearing testimony from the parties and Imhoff's 
attorney in regard to the allegation that the arbitrator was 
sleeping, the circuit court said it found the homeowners' testimony 
regarding the sleeping to be "credible."  Conversely, it found 
Imhoff's counsel's testimony——that he did not see the arbitrator 
sleeping——to be "more [of] an acknowledgment" and "certainly not 
a denial" because he did not reject "the general proposition that 
[the arbitrator] was sleeping." 
¶7 
Following the testimony, the circuit court concluded 
that the homeowners had "satisfied [their] burden by clear and 
convincing evidence that [the arbitrator] so imperfectly executed 
his power that an award upon the subject was not made."  
Accordingly, the circuit court denied Imhoff's motion to confirm 
the award, granted the homeowners' motion to vacate, and remanded 
the case for a new arbitration of the dispute with a different 
arbitrator.  Imhoff appealed.  
¶8 
The court of appeals reversed, holding that by failing 
to raise the arbitrator's sleeping during evidentiary testimony at 
the hearing, failing to voice an objection requesting the 
arbitrator to reconsider any missed evidence, and waiting to raise 
the issue of sleeping until after the close of evidence, "the 
homeowners forfeited drowsiness or sleeping by the arbitrator as 
No. 
2019AP2205   
 
5 
 
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 arbitration setting and, if so, (2) whether it should have 
been applied here.  
II.  DISCUSSION 
A.  Standard of Review  
¶10 Whether a party has forfeited its right to raise an issue 
on appeal is a question of law that we review independently.  City 
of Eau Claire v. Booth, 2016 WI 65, ¶6, 370 Wis. 2d 595, 882 N.W.2d 
738.  See also State v. Coffee, 2020 WI 1, ¶17, 389 Wis. 2d 627, 
937 N.W.2d 579 ("Whether a claim is forfeited or adequately 
preserved for appeal is a question of law this court reviews de 
novo.").  Additionally, whether a violation of Wis. Stat. 
§ 788.10(1) occurred, thereby requiring vacatur of an arbitral 
award, is a question of law that we review independently.  Racine 
Cnty. v. Int'l Ass'n of Machinists & Aerospace Workers Dist. 10, 
AFL-CIO, 2008 WI 70, ¶11, 310 Wis. 2d 508, 751 N.W.2d 312.  And 
finally, we affirm the "circuit court's findings of fact unless 
they are unsupported by the record and are . . . clearly 
                                                 
5 Because the court of appeals resolved the appeal based on 
the forfeiture issue, it did not consider the issue of vacatur of 
the arbitral award.  Id., ¶15 ("Because we resolve this appeal 
based on the homeowners' forfeiture, we need not reach the 
statutory and common law standards that guide courts in addressing 
a request to vacate an arbitration award."). 
No. 
2019AP2205   
 
6 
 
erroneous."  Royster-Clark, Inc. v. Olsen's Mill, Inc., 2006 WI 
46, ¶11, 290 Wis. 2d 264, 714 N.W.2d 530.  
B  Arbitration Generally 
¶11 Arbitration is, first and foremost, a matter of 
contract.  Rent-A-Ctr., W., Inc. v. Jackson, 561 U.S. 63, 67, 
(2010).  It is "a method of dispute resolution in which the parties 
submit a dispute to an impartial person who has been selected by 
the parties for a final and binding decision."  7 Jay E. Grenig & 
Nathan A. Fishbach, Wisconsin Practice Series:  Arbitration § 
86:40 (5th ed. 2021).  Arbitration can provide a "prompt and 
efficient method for resolving disputes without the expense, 
delays, or complications that are inherent in litigation."  Id.  
Because arbitration occurs outside of the court system, it does 
not carry with it the same formality inherent in the judicial 
process.  Id.  
¶12 Arbitration proceedings are not required to follow 
procedures that are applicable to a court.  Arbitration procedures 
are established by contract and are "enforceable except upon such 
grounds as exist at law or in equity for the revocation of any 
contract."  Wis. Stat. § 788.01.  The arbitrators are not required 
to have any legal education or background and are, instead, chosen 
based on "their integrity and impartiality as well as for their 
professional competence and knowledge of business affairs."  
Grenig & Fishbach, supra, § 86:44; see also Newark Stereotypers' 
Union No. 18 v. Newark Morning Ledger Co., 397 F.2d 594, 599 (3d 
Cir. 1968) (describing that most arbitrators are laymen).  Unless 
limited by statute, rule, or arbitration agreement, "arbitrators 
No. 
2019AP2205   
 
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have considerable discretion as to the mode of conduct[ing] the 
proceeding."  See Grenig & Fishbach, supra, § 86:45.  In addition, 
representation by counsel is not required in all arbitrations.  
Id.  
C.  Forfeiture in Arbitration 
¶13 We "often [have] referred to the issue preservation rule 
as the 'waiver rule' in the past."  State v. Huebner, 2000 WI 59, 
¶11 n.2, 235 Wis. 2d 486, 611 N.W.2d 727.  Although opinions 
sometimes use "'forfeiture' and 'waiver' interchangeably, the two 
words embody very different legal concepts.  'Whereas forfeiture 
is the failure to make the timely assertion of a right, waiver is 
the intentional relinquishment or abandonment of a known right.'"  
State v. Ndina, 2009 WI 21, ¶29, 315 Wis. 2d 653, 761 N.W.2d 612 
(quoting United States v. Olano, 507 U.S. 725, 733 (1993)).   
¶14 Whether a right is forfeited or waived depends, in part, 
on the state of mind of the non-objecting party.  Forfeiture has 
been consistently understood as failing to claim a right at trial 
or the simple failure to object.  Ndina, 315 Wis. 2d 653, ¶30.  
Non-actions may result in forfeiture of the right on appellate 
review.  Id.  There is no subjective component to the forfeiture 
analysis; it occurs by operation of law.  See State v. Kelty, 2006 
WI 101, ¶18 n.11, 294 Wis. 2d 62, 716 N.W.2d 886 (citing Peter 
Westen, Away from Waiver:  A Rationale for the Forfeiture of 
Constitutional Rights in Criminal Procedure, 75 Mich. L. Rev. 
1214, 1214 (1975) (explaining that forfeiture "occurs by operation 
of law without regard to the defendant's state of mind")). 
No. 
2019AP2205   
 
8 
 
¶15 Conversely, 
because 
waiver 
is 
the 
intentional 
relinquishment of a known right, see Ndina, 315 Wis. 2d 653, ¶29, 
there is a subjective component to determine whether the failure 
to assert the right was done knowingly.  The determination of 
whether there has been a knowing waiver depends, in each case, 
"upon the particular facts and circumstances surrounding that 
case, including the background, experience, and conduct of the 
accused."  Johnson v. Zerbst, 304 U.S. 458, 464 (1938).  Therefore, 
as the court of appeals correctly determined,6 because this case 
involves the potential failure to object, it implicates issues of 
forfeiture rather than waiver.  
¶16 As 
part 
of 
the 
adversarial 
system, 
forfeiture 
historically has been applied to aspects of the arbitration process 
in Wisconsin.  For example, in 1876, we determined that a party's 
argument regarding an arbitrator's possible bias had not been 
preserved and that "by accepting him as an arbitrator, [the party 
had] waived[7] any right to object to him for that reason."  Kane 
v. City of Fond du Lac, 40 Wis. 495, 501 (1876); see also Borst v. 
Allstate Ins. Co., 2006 WI 70, ¶36, 291 Wis. 2d 361, 717 N.W.2d 42 
("A failure to initially object to the selection of an arbitrator, 
based on the information disclosed prior to the arbitration, may 
act as a forfeiture of any subsequent post-arbitration challenge 
                                                 
6 See id, ¶21 n.5. 
7 Because this case involved a litigant's failure to raise an 
issue as the reason for its non-preservation, it should properly 
be understood to constitute forfeiture rather than waiver.  See 
State v. Ndina, 2009 WI 21, ¶29, 315 Wis. 2d 653, 761 N.W.2d 612. 
No. 
2019AP2205   
 
9 
 
[based] on the disclosed information.").  Furthermore, in a 
challenge to the scope of an arbitrator's authority, Wisconsin 
courts have held that "a party cannot complain to the courts that 
the arbitrator acted outside the scope of his or her authority if 
the objection was not first raised before the arbitrator."  De Pue 
v. Mastermold, Inc., 161 Wis. 2d 697, 705, 468 N.W.2d 750 (Ct. 
App. 1991). 
¶17 Wisconsin's usage of forfeiture in the arbitration 
context is consistent with the majority of other jurisdictions 
around the country.  See, e.g., Howard Univ. v. Metro. Campus 
Police Officer's Union, 512 F.3d 716, 720 (D.C. Cir. 2008) ("[A] 
party that does not object to the arbitrator's jurisdiction during 
the arbitration may not later do so in court."); Cummings v. Future 
Nissan, 27 Cal. Rptr. 3d 10, 14-16 (Cal. Ct. App. 2005), as 
modified (Apr. 8, 2005) ("[A] party who knowingly participates in 
the arbitration process without disclosing a ground for declaring 
it invalid is properly cast into the outer darkness of 
forfeiture."). 
¶18 Specifically, in terms of "when" during an arbitration 
an objection must be made in order to preserve it, many 
jurisdictions, including Wisconsin, agree that a proper time to 
raise an objection is before the arbitration award is issued.  See 
City of Manitowoc v. Manitowoc Police Dep't, 70 Wis. 2d 1006, 1021, 
236 N.W.2d 231 (1975) ("A party cannot attack procedural 
irregularities after an award when he was aware of them earlier 
but remained silent until an unfavorable outcome."); see also 
Ahluwalia v. QFA Royalties, LLC, 226 P.3d 1093, 1098 (Colo. App. 
No. 
2019AP2205   
 
10 
 
2009) ("If a party willingly allows an issue to be submitted to 
arbitration, it cannot await the outcome and later argue that the 
arbitrator lacked authority to decide the matter."); AAOT Foreign 
Econ. Ass'n (VO) Technostroyexport v. Int'l Dev. & Trade Servs., 
Inc., 139 F.3d 980, 982 (2d Cir. 1998) ("The settled law of this 
circuit precludes attacks on the qualifications of arbitrators on 
grounds previously known but not raised until after an award has 
been rendered."). 
¶19 Here, the court of appeals determined that, because the 
homeowners 
did 
not 
raise 
their 
objections 
regarding 
the 
arbitrator's sleeping during the evidentiary hearing, they 
forfeited any objection to his sleeping.  Loren Imhoff Homebuilder, 
Inc., 395 Wis. 2d 178, ¶35.  However, unlike a judicial evidentiary 
hearing, where case law directs a general rule that failure to 
contemporaneously object to an issue may result in forfeiture of 
the argument on appeal, this arbitration hearing had no such rule.  
An arbitration hearing is subject to the conditions or rules of 
arbitration chosen by the parties.  Arbitration often is selected 
in order to escape the formalities inherent in a judicial process.  
Arbitration's chief concern is that the arbitration contract be 
followed, unless "such grounds as exist at law or in equity for 
the revocation of any contract" are present.  Wis. Stat. § 788.01; 
Grenig & Fishbach, supra, § 86:45. 
¶20 In discerning whether the objection took place during 
the hearing or after the hearing, the court of appeals failed to 
consider the following:  neither party had prior notice of the 
issue now in dispute, i.e., the arbitrator's sleeping, and an 
No. 
2019AP2205   
 
11 
 
arbitration is not concluded until the arbitral award is issued.  
City of Manitowoc, 70 Wis. 2d at 1021.   
¶21 The arbitral award is the arbitrator's decision on the 
merits of the disputes that were subjected to arbitration.  
Therefore, as long as an objection to a new issue is raised before 
the merits are decided, the policy goals underlying forfeiture are 
protected and the fairness of the proceeding is preserved.  Before 
the award is issued, the arbitrator can reopen testimony to hear 
or rehear testimony and to correct any perceived errors without 
resorting to the appeals process.  Furthermore, by raising an issue 
to the arbitrator, the danger of "sandbagging" the process and 
claiming the unraised issues as a grounds for reversal is 
mitigated. 
¶22 Here, the homeowners raised their objection to the 
arbitrator's sleeping to him before he issued the arbitral award.  
Even though it was after the evidentiary hearing was completed, 
there remained the opportunity for the arbitrator to make 
corrections for his sleeping during the evidentiary hearing.  
However, he failed to do so.  Therefore, because the homeowners 
raised their objection before the issuance of the arbitral award, 
we conclude that the issue was not forfeited and was preserved for 
review by the circuit court. 
¶23 The homeowners also sought review of whether the 
arbitrator's sleeping merited vacatur of the arbitral award under 
Wis. Stat. § 788.10.  However, we are evenly divided on whether 
the award should be vacated pursuant to § 788.10.  Accordingly, 
because the court of appeals did not reach this question in its 
No. 
2019AP2205   
 
12 
 
previous opinion,8 we remand this matter to the court of appeals 
for consideration of § 788.10 issues. 
III.  CONCLUSION 
¶24 We conclude that, because the homeowners objected to the 
arbitrator's sleeping before he issued the arbitral award, they 
did not forfeit their objection.  However, we are evenly divided 
on whether the arbitral award should be vacated pursuant to Wis. 
Stat. § 788.10.  Therefore, we reverse the decision of the court 
of appeals and remand the matter to the court of appeals for 
consideration of § 788.10 issues. 
By the Court.—The decision of the court of appeals is reversed 
and the cause is remanded to the court of appeals for further 
consideration. 
¶25 JILL J. KAROFSKY, J., did not participate. 
                                                 
8 Loren Imhoff Homebuilder, Inc., 395 Wis. 2d 178, ¶15. 
No. 
2019AP2205   
 
 
 
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