Court Opinion

ID: 9853968
Source: CourtListenerOpinion
Date Created: 2023-09-24 05:58:33.533276+00
Date Added: 2024-06-11T09:20:24.589130
License: Public Domain

*365DYKMAN, J.
(concurring in part; dissenting in part).
¶ 47. I agree with all but paragraphs 41 through 45 of the majority opinion. But because the majority's analysis of the issue of attorney fees for court proceedings contradicts the rationale it adopts to affirm the arbitrator's award of attorney fees for the arbitration, I cannot agree with its conclusion that Winkelman may not recover his attorney fees in the circuit court and here.
¶ 48. I believe that the majority gets it exactly right when it concludes that the arbitrator could reasonably rely on the American Arbitration Association (AAA) rules agreed to by the parties and Wis. Stat. § 100.18(ll)(b) (2003-04)1 to award attorney fees for the arbitration proceeding. The majority notes:
[The arbitrator's] authority to award the fees thus derived from the parties' contract and the rules it adopted, not directly from the statute itself. The only role the statute played was to demonstrate that Wisconsin substantive law authorizes attorney fees to be awarded when a party is induced by another's misrepresentations to enter into a contract.
.... Here, as we have explained, the parties' contract, via the rules it adopts, permits an attorney fees award if "authorized by law." In this case, that authority is supplied by Wis. Stat. § 100.18, which in turn also satisfies the exception to the American Rule allowing fee shifting if a statute provides for it."
Majority at ¶¶ 17-18.
*366¶ 49. This is not a surprising result. Courts have been affirming arbitration awards for many years. One can think of few areas of law with a more deferential review than an appeal of an arbitrator's award.
¶ 50. But the majority changes from a deferential review to a de novo review when deciding whether attorney fees should be awarded for the court proceedings brought to confirm or set aside the arbitrator's award. Why this change? The majority's reason seems to be that the big issue in court was whether the arbitrator had exceeded her powers while the issue of Kraft's violation of Wis. Stat. § 100.18 was only peripheral.
¶ 51. The portions of the majority's decision I have quoted in ¶ 48 show that the two issues are inextricably intertwined. Yet, the majority suggests that the court litigation had little to do with the arbitration litigation. The parties spent more time arbitrating Kraft's liability for damages than on its liability for attorney fees. But that is always the case in attorney fee litigation whether in court or at an arbitration proceeding. The substantive issues were factual, and necessitated witnesses. The attorney fee issue was legal and was briefed. It is no surprise that the parties may have spent more time on the factual issues than on the legal ones. But even that is open to question. Kraft claimed that the issues arbitrated were "straightforward, uncomplicated and did not require an army of lawyers, especially in view of the amount claimed."
¶ 52. Ultimately, the majority concludes that because neither the parties' agreement nor Wis. Stat. § 788.09 authorizes post-arbitration attorney fees, Winkelman cannot recover them. That is a red herring. The question is not which statutes do not authorize post-arbitration attorney fees, but which statute does. *367The arbitrator answered that question by observing that the parties' contract provided that they would arbitrate disputes under AAA rules. She noted that AAA mies provided that she should provide a full and complete remedy if a statute permitted the award of attorney fees. She found that Wis. Stat. § 100.18 permitted the award of attorney fees in a case such as this.2 The majority and I have concluded that this rationale permitted the arbitrator to award attorney fees for the arbitration proceeding. Why the flip-flop on post-arbitration attorney fees? If the parties' agreement and Wis. Stat. § 100.18(ll)(b) do not distinguish between arbitration and post-arbitration fees, why should we?
¶ 53. There is a logical disconnect in concluding that because more time was spent during arbitration on substantive issues than on litigating attorney fee liability, attorney fees spent appealing the attorney fee issue cannot be awarded for fees incurred in the circuit court and here. Had the arbitration proceeding been a circuit court trial, such a distinction would be without precedent. See First Wisconsin Nat'l Bank v. Nicolaou, 113 Wis. 2d 524, 539-41, 335 N.W.2d 390 (1983) (allowing attorney fees for all issues, including fees for appeal, where two of the issues were substantive and one pertained to attorney fees).
*368¶ 54. There is no reason why the rule should be different for cases starting with arbitration than for cases arising in circuit court. Either way, there must be a statute or a contract which provides for fee shifting. The arbitrator concluded that the parties' contract, coupled with AAA rules and Wis. Stat. § 100.18, met that test, and awarded fees to Winkelman. Though the majority accepts the arbitrator's reasoning and permits the award of attorney fees for the arbitration proceeding, it rejects the same reasoning for circuit court and appellate fees.
¶ 55. The correct answer to the attorney fee issue is that there is no liability for attorney fees in the arbitration proceeding, in the circuit court or in this court, unless a statute or the parties' contract so provides. Milwaukee Teachers' Educ. Ass'n v. Milwaukee Board of School Directors, 147 Wis. 2d 791, 797-98, 433 N.W.2d 669 (Ct. App. 1988). Since this is an arbitration case, the arbitrator is the fact and law finder, absent a perverse misconstruction. For me, that leaves us with two alternatives. We can conclude that the reasoning the arbitrator applied to award attorney fees necessarily applies to attorney fees in the circuit and appellate courts. Or, we can conclude that because the parties' contract is the wellspring from which liability for attorney fees arises, the arbitrator should decide whether Kraft is liable for Winkelman's circuit court and appellate attorney fees. The court chose the latter procedure as to continued testimony in Gallagher v. Schernecker, 60 Wis. 2d 143, 149-50, 208 N.W.2d 437 (1973), and I would do the same here. Kraft and Winkelman's contract governs the issue, and they agreed that the arbitrator would make decisions such as this one.
*369¶ 56. The majority's result is unnecessary, and unfortunate for Wisconsin farmers and others who sell commodities to organizations capable of litigating until the cows come home. Even if a contract would permit the majority's result, the advice any attorney will give to a farmer is: "Don't litigate, don't arbitrate. You can't win. Even if your contract is identical to John Winkelman's and you were deceived by the commodity purchaser, attorney fees for circuit court and appellate litigation will exceed any recovery you might obtain. Forget it."
¶ 57. I would remand to the circuit court with directions to remand to the arbitrator to decide the circuit court and appellate attorney fee issue. Because I agree with much of the majority's opinion and disagree only as to its treatment of attorney fees in circuit court and on appeal, I respectfully concur in part and dissent in part.

 All references to the Wisconsin Statutes are to the 2003-04 version unless otherwise noted.

 Wisconsin Stat. § 100.18(ll)(b) provides in pertinent part:
Any person suffering pecuniary loss because of a violation of this section by any other person may sue in any court of competent jurisdiction and shall recover such pecuniary loss, together with costs, including reasonable attorney fees, except that no attorney fees may be recovered from a person licensed under ch. 452 while that person is engaged in real estate practice, as defined in s. 452.01(6).