2023 Wisconsin Statutes & Annotations › Chapter 788 - Arbitration. › 788.10 - Vacation of award, rehearing by arbitrators.

788.10
Vacation of award, rehearing by arbitrators.
(1)
In either of the following cases the court in and for the county wherein the award was made must make an order vacating the award upon the application of any party to the arbitration:
(a)
Where the award was procured by corruption, fraud or undue means;
(b)
Where there was evident partiality or corruption on the part of the arbitrators, or either of them;
(c)
Where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced;
(d)
Where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final and definite award upon the subject matter submitted was not made.
(2)
Where an award is vacated and the time within which the agreement required the award to be made has not expired, the court may, in its discretion, direct a rehearing by the arbitrators.
History:  1979 c. 32 s. 64; Stats. 1979 s. 788.10.
A court may order arbitrators to hear further testimony without establishing a new panel. Gallagher v. Schernecker, 60 Wis. 2d 143, 208 N.W.2d 437 (1973).
The interjection of a new contract time period in an amended final offer after the petition is filed presents a question beyond the statutory jurisdiction of the arbitrators. Milwaukee Deputy Sheriffs' Ass'n v. Milwaukee County, 64 Wis. 2d 651, 221 N.W.2d 673 (1974).
Arbitration awards are presumptively valid, and an award may not be attacked on the grounds that a portion of it could conceivably be allocable to an allegedly improper item. Scherrer Construction Co. v. Burlington Memorial Hospital, 64 Wis. 2d 720, 221 N.W.2d 855 (1974).
Contacts between the arbitrator and one party outside the presence of the other do not in themselves justify vacating an award to the party involved if the challenger does not demonstrate either improper intent or influence by clear and convincing evidence. City of Manitowoc v. Manitowoc Police Department, 70 Wis. 2d 1006, 236 N.W.2d 231 (1975).
An arbitrator exceeded the arbitrator's authority under sub. (1) (d) in determining that the discharge of a city employee for a violation of an ordinance residency requirement was not for just cause within the meaning of the collective bargaining agreement. WERC v. Teamsters Local No. 563, 75 Wis. 2d 602, 250 N.W.2d 696 (1977).
An arbitrator did not exceed the arbitrator's powers by adopting a ministerial-substantive distinction in determining the scope of the unfettered management function provided by agreement. The arbitrator did exceed the arbitrator's powers by ordering maintenance of past practice without finding that the agreement required such action. Milwaukee Professional Firefighters, Local 215 v. City of Milwaukee, 78 Wis. 2d 1, 253 N.W.2d 481 (1977).
Arbitrators did not exceed their authority by arbitrating a grievance under a “discharge and nonrenewal" clause of a collective bargaining agreement when the contract offered by the board was signed by a teacher after deleting the title “probationary contract" and the board did not accept this counteroffer or offer the teacher a second contract. Joint School District No. 10 v. Jefferson Education Ass'n, 78 Wis. 2d 94, 253 N.W.2d 536 (1977).
Although the report of an arbitrator did not explicitly mention a counterclaim, the trial court did not err in determining that the denial of the counterclaim was implicit in the report. The failure of the arbitrator to set forth theories or support the arbitrator's findings is not grounds for objection to the arbitrator's award. McKenzie v. Warmka, 81 Wis. 2d 591, 260 N.W.2d 752 (1978).
Discussing the disclosure requirements for neutral arbitrators regarding the vacation of an award under sub. (1) (b). Richco Structures v. Parkside Village, Inc., 82 Wis. 2d 547, 263 N.W.2d 204 (1978).
Courts should apply one standard of review of arbitration awards under municipal collective bargaining agreements. Madison Metropolitan School District v. WERC, 86 Wis. 2d 249, 272 N.W.2d 314 (Ct. App. 1978).
The time limit under s. 788.13 does not apply when the prevailing party moves to confirm under s. 788.09 and an adverse party wishes to raise objections under ss. 788.10 and 788.11. Milwaukee Police Ass'n v. City of Milwaukee, 92 Wis. 2d 145, 285 N.W.2d 119 (1979).
An arbitrator appointed under a specific contract had no power to make awards under successor contracts not in existence at the time the grievance was submitted. Milwaukee Board of School Directors v. Milwaukee Teachers' Education Ass'n, 93 Wis. 2d 415, 287 N.W.2d 131 (1980).
An arbitrator exceeded the arbitrator's authority by directing that the grievant be transferred when the contract reserved transfer authority to the city and chief of police. City of Milwaukee v. Milwaukee Police Ass'n, 97 Wis. 2d 15, 292 N.W.2d 841 (1980).
Although a contract gave management the right to determine job description classifications, the arbitrator did not exceed the arbitrator's authority by overruling management's determination that an employee with eight years of job experience was not qualified for promotion to a job requiring two years of college “or its equivalent as determined by management." City of Oshkosh v. Oshkosh Public Library Clerical Employees Union Local 796-A, 99 Wis. 2d 95, 299 N.W.2d 210 (1980).
The burden of proving “evident partiality" of an arbitrator was not met when the apparently biased remarks of the arbitrator represented merely an initial impression, not a final conclusion. Diversified Management Services, Inc. v. Slotten, 119 Wis. 2d 441, 351 N.W.2d 176 (Ct. App. 1984).
An award was vacated for “evident partiality" because the arbitrator failed to disclose past employment with the entity supplying a party's counsel. School District v. Northwest United Educators, 136 Wis. 2d 263, 401 N.W.2d 578 (1987).
A party cannot complain to the courts that an arbitrator acted outside the scope of the arbitrator's authority if an objection was not raised before the arbitrator. DePue v. Mastermold, Inc., 161 Wis. 2d 697, 468 N.W.2d 750 (Ct. App. 1991).
A party disputing the existence of an agreement to arbitrate may choose not to participate in arbitration and may challenge the existence of the agreement by motion to vacate the award under sub. (1) (d). Scholl v. Lundberg, 178 Wis. 2d 259, 504 N.W.2d 115 (Ct. App. 1993).
If arbitrators had a reasonable basis for not following case law, the arbitrators' decision will not be interfered with by the court. Lukowski v. Dankert, 184 Wis. 2d 142, 515 N.W.2d 883 (1994).
“Evident partiality" under sub. (1) (b) exists only when a reasonable person knowing previously undisclosed information would have such doubts about the arbitrator's impartiality that the person would have taken action on the information. DeBaker v. Shah, 194 Wis. 2d 104, 533 N.W.2d 464 (1995).
This section does not prevent the vacation of an arbitration award on the basis of a manifest disregard of the law. Employers Insurance of Wausau v. Certain Underwriters at Lloyd's London, 202 Wis. 2d 673, 552 N.W.2d 420 (Ct. App. 1996), 95-2930.
An arbitrator's award that relied on oral testimony with no formal record, rather than the wording of the prevailing party's proposal, was not final and definite as required by sub. (1) (d). La Crosse Professional Police Ass'n v. City of La Crosse, 212 Wis. 2d 90, 568 N.W.2d 20 (Ct. App. 1997), 96-2741.
Courts may vacate an arbitration award that was procured by fraud, but should be hesitant to do so in order to protect the finality of arbitration decisions. To merit vacation of the award, the plaintiff must demonstrate: 1) clear and convincing evidence of fraud; 2) that the fraud materially relates to an issue involved in the arbitration; and 3) that due diligence would not have prompted the discovery of the fraud during or prior to the arbitration. Steichen v. Hensler, 2005 WI App 117, 283 Wis. 2d 755, 701 N.W.2d 1, 03-2990.
Evident partiality under sub. (1) (b) cannot be avoided simply by a full disclosure and a declaration of impartiality. The circuit court must vacate an arbitration award under sub. (1) (b) due to evident partiality if, based on evidence that is clear, plain, and apparent, a reasonable person would have serious doubts about the impartiality of the arbitrator. An ongoing attorney-client relationship between an insurer and its named arbitrator is of such a substantial nature that a reasonable person would have serious doubts about the partiality of the arbitrator. Therefore, as a matter of law, the arbitrator was evidently partial, and the arbitration award must be vacated. Borst v. Allstate Insurance Co., 2006 WI 70, 291 Wis. 2d 361, 717 N.W.2d 42, 04-2004.
A presumption of impartiality among all arbitrators, whether named by the parties or not, is adopted. This presumption may be rebutted, and an arbitrator may act as a non-neutral when the parties contract for non-neutral arbitrators or the arbitration rules otherwise provide for non-neutral arbitrators. Borst v. Allstate Insurance Co., 2006 WI 70, 291 Wis. 2d 361, 717 N.W.2d 42, 04-2004.
Sub. (1) (d) requires a court to vacate an arbitrator's award when the arbitrator exceeds his or her powers. Arbitration awards must be vacated when they conflict with governing law, as set forth in the constitution, a statute, or case law interpreting the constitution or a statute. Racine County v. International Ass'n of Machinists & Aerospace Workers, 2008 WI 70, 310 Wis. 2d 508, 751 N.W.2d 312, 06-0964.
Courts will vacate an award when arbitrators exceeded their powers through perverse misconstruction, positive misconduct, a manifest disregard of the law, or when the award is illegal or in violation of strong public policy. When there is no contractual language that would allow for the arbitrator's construction, there is no reasonable foundation for the award. In such a case, the arbitrator perversely misconstrues the contract and exceeds the authority granted by the collective bargaining agreement. Baldwin-Woodville Area School District v. West Central Education Ass'n, 2009 WI 51, 317 Wis. 2d 691, 766 N.W.2d 591, 08-0519. See also Milwaukee Police Supervisors' Organization v. City of Milwaukee, 2012 WI App 59, 341 Wis. 2d 361; 815 N.W.2d 391, 11-1174.
The arbitration panel's decision in this case was properly modified by the circuit court under this section and s. 788.11 because the arbitrators exceeded their authority by failing to fully review and apply the supreme court's decisions on the collateral source rule and the law of damages. Orlowski v. State Farm Mutual Automobile Insurance Co., 2012 WI 21, 339 Wis. 2d 1, 810 N.W.2d 775, 09-2848.
A party involved in an arbitration proceeding must ordinarily wait until the arbitrators have reached a final decision on the award to be given, if any, before turning to the circuit courts. Courts that have permitted interlocutory review during an arbitration proceeding have done so only in rare circumstances that present a compelling reason to depart from the normal practice, balancing the need for efficient and orderly arbitration proceedings with the need for an occasional exception to accommodate especially urgent or potentially irreparably prejudicial matters that demand the immediate attention of the courts. Marlowe v. IDS Property Casualty Insurance Co., 2013 WI 29, 346 Wis. 2d 450, 828 N.W.2d 812, 11-2067.
An arbitrator exceeds the arbitrator's powers when the arbitrator demonstrates either “perverse misconstruction” or “positive misconduct,” when the arbitrator manifestly disregards the law, when the award is illegal, or when the award violates a strong public policy. An arbitrator manifestly disregards the law when the arbitration award conflicts with governing law, as set forth in the constitution, a statute, or the case law interpreting the constitution or a statute. An arbitrator does not manifestly disregard the law if substantial authority sustains the arbitrator's assumption as to the law. Green Bay Professional Police Ass'n v. City of Green Bay, 2021 WI App 73, 399 Wis. 2d 504, 966 N.W.2d 107, 21-0102.
During an arbitration, a proper time to raise an objection in order to preserve it is before the arbitration award is issued. 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. In this case, because a party objected to the arbitrator's sleeping following the conclusion of the evidentiary hearing, but before the arbitrator issued the arbitral award, the party did not forfeit its objection. Loren Imhoff Homebuilder, Inc. v. Taylor, 2022 WI 12, 400 Wis. 2d 611, 970 N.W.2d 831, 19-2205.
An omission by an arbitrator that deprives the parties of the benefit of execution of a fundamental duty assigned to the arbitrator through the mutual agreement of the parties can constitute such imperfect execution of an arbitrator's powers that a mutual, final, and definite award upon the subject matter submitted was not made under sub. (1) (d). In this case, the arbitrator failed to perform a fundamental duty that was assigned to him as the arbitrator: remain awake to consider the presentation of material evidence, most notably significant portions of the testimony of the expert called by the homeowners. Loren Imhoff Homebuilder, Inc. v. Taylor, 2022 WI App 14, 401 Wis. 2d 510, 973 N.W.2d 836, 19-2205.
There is a role for trial court fact finding in response to some categories of challenges to arbitration orders, and the clearly erroneous standard applies to the court of appeals' review of that fact finding. Loren Imhoff Homebuilder, Inc. v. Taylor, 2022 WI App 14, 401 Wis. 2d 510, 973 N.W.2d 836, 19-2205.
That an arbitrator made a mistake by erroneously rejecting a valid legal defense does not provide grounds for vacating an award unless the arbitrator deliberately disregarded the law. Flexible Manufacturing Systems v. Super Products Corp., 86 F.3d 96 (1996).
Borst Clarifies Arbitration Procedures. Frankel. Wis. Law. Dec. 2006.