Court Opinion

ID: 9687821
Source: CourtListenerOpinion
Date Created: 2023-08-24 16:50:26.8059+00
Date Added: 2024-06-11T12:07:54.544264
License: Public Domain

JON E WILCOX, J.
¶ 88. (dissenting). I join in the dissent of Justice Prosser, but write separately because of the majority's failure to determine the date upon which parties are required to update their financial information. Majority op., ¶¶ 65-66. The majority states that the presence of an arbitral award may sometimes constitute a "special circumstance" such that the property is valued on some date other than the date of the divorce, but "it does not follow that a circuit court's heightened deference to an arbitral award requires, as a matter of law, that the closing of the arbitration record must always be the date on which the property is valued." Majority op., ¶ 63.
*406¶ 89. Wisconsin Stat. § 767.27(2) requires that a party update financial information "to the date of the hearing." The dispute in this case centers on what "hearing" refers to in the context of a divorce judgment that confirms an arbitration award. As the majority notes, case law establishes that normally property is to be valued on the date of divorce. Majority op., ¶ 61 & n.40. However, this rule is problematic if the parties enter into an agreement to arbitrate the division of their property. In this scenario, the "hearing" could have four possible meanings: 1) the date on which the arbitrator chooses to close the record; 2) the date on which the arbitrator renders an award; 3) the date on which the parties move for the circuit court to confirm the arbitral award in a judgment; or 4) the date on which the circuit court actually confirms the arbitral award in a judgment.
¶ 90. I agree with Justice Prosser that " [deference to the arbitrator requires that the arbitrator, not the court, determine when the record is closed. This is a categorical exception to § 767.27(2)." Justice Prosser's dissent, ¶ 164. In all arbitration proceedings of this nature, the arbitrator will have to pick a date upon which the parties are required to update their information. Then, the arbitrator will have to take this information — which, depending upon the nature and extent of the parties' assets, could be voluminous — and make calculations as to the proper division of the property. Given the fact that the value of most property fluctuates, particularly stocks, the value of the parties' assets will undoubtedly change between the date the arbitrator closes the arbitration record and the time the arbitrator renders an award. Where, as here, the arbitrator did not render a decision until long after the record was closed, there is little surprise that the *407parties' assets changed in value. Further, the value of assets will undoubtedly change between the time the arbitrator closes the record and the time the circuit court confirms the award in a judgment.
¶ 91. Given the fluid nature of assets, if the valuation date is any other than the date on which the arbitrator decides to close the record, the arbitration process would be rendered meaningless. If parties are required to constantly update their financial information after the close of the arbitration record, then the arbitrator will never be able to make a definitive calculation as to property division because the parties' assets will continue to fluctuate in value after the close of the record. This never-ending cycle of updating and recalculation will likely result in the circuit court making its own independent valuation of assets in every case at the time the parties seek to have the arbitral award confirmed.
¶ 92. The majority's failure to squarely address this issue is problematic for several reasons. First, the majority concludes that the circuit court did not err in deciding to reopen the divorce judgment because the record establishes that Mr. Franke failed to make full financial disclosures to the arbitrator and the circuit court. Majority op., ¶¶ 56, 69. However, this failure to disclose — or more properly, failure to update his financial statements — stems from Mr. Franke's failure to update his assets between the close of the arbitration hearing and the entry of divorce. I fail to see how the majority can conclude that Mr. Franke can be charged with fraud or misrepresentation for failure to provide the appropriate documentation regarding his updated assets without first determining the last date upon which he was required to update this information. If Mr. Franke's obligation to update ended on October 11, *4081996, the date the arbitration record was closed, then the majority's assertion that Mr. Franke failed to disclose assets is tenuous and Ms. Franke's Wis. Stat. § 806.07 motion fails because there is little indication in the record or the majority's discussion that Mr. Franke failed to disclose assets prior to the close of the arbitration record. If the majority is to allow litigants to be charged with fraud or misrepresentation for failure to update their financial statements, it should at least do them the courtesy of informing them when their obligation to update ends.
¶ 93. Second, how can the majority conclude that the circuit court properly revalued Mr. Franke's assets without first determining the appropriate date upon which those assets are to be valued? The majority must determine when a party's assets should be valued because the majority today allows a circuit court to independently review the parties' financial statements and modify the arbitral award before it is confirmed in a judgment. As the majority fails to provide litigants and circuit courts with a clear rule as to when the parties' assets are to be valued, the valuation date will inevitably fluctuate on a case-by-case basis, depending upon the circuit court's independent assessment of the arbitral award.
¶ 94. By failing to give guidance to parties on this issue, the majority opens the door for claims of fraud or misrepresentation in numerous divorce arbitration proceedings and destroys the finality usually accorded to the arbitration process.
¶ 95. For the reasons discussed, I respectfully dissent.
¶ 96. I am authorized to state that Justices DAVID T. PROSSER, JR. and DIANE S. SYKES join this opinion.