Arbitration board does not lose jurisdiction where parties bargained
for continued arbitration
An initial arbitration award is not necessarily "final" for
purposes of the arbitration confirmation statute that requires judicial
confirmation within a year. The arbitration process can continue
pursuant to agreement.
By Joe Forward, Legal Writer, State
Bar of Wisconsin
Sept. 15, 2010 – The arbitration confirmation statute that
requires a party to confirm an arbitration award within one year delays
when parties agree to continued arbitration, a Wisconsin Appeals Court
In 2005, Michael and Lynn Sewart and Silvercryst Limited Inc.
(Silvercryst) agreed to submit a dispute to the Construction Arbitration
Board (CAB) of the Metropolitan Builders Association (MBA). The Sewarts
had purchased a Silvercryst-constructed home in 2003 and experienced
continued flooding in the basement.
In November of 2006, CAB memorialized a three-page award that gave
Silvercryst an opportunity to repair the basement within 90 days. The
award also noted that CAB retained the right to “assign money
values to any items of work not completed in a timely fashion.”
Disagreements and delays ensued, and the dispute continued for 18
In March 2008, CAB ordered Silvercryst to make repairs or the MBA would
issue a money award to the Sewarts. In response, Silvercryst requested
that CAB reconsider the November 2006 award. CAB refused. In July 2008,
CAB ruled that if flooding occurred within an extended two-year warranty
period, it would issue a monetary award to complete repair work.
Despite attempted repairs, the Sewart’s basement flooded again
six months later. In May 2009, CAB awarded the Sewarts $92,030, and the
Sewarts immediately filed a petition in circuit court to confirm the
award under Wis. Stat section 788.09, which allows a party to seek
judicial confirmation of a final arbitration award within one year after
the award is made.
But the circuit court accepted Silvercryst’s argument that CAB
lost jurisdiction over arbitration proceedings a year after the initial
award in November 2006 because the Sewarts failed to confirm the award
within a year under section 788.09. Thus, the circuit court denied the
petition for confirmation of the monetary award issued by CAB. The
Reversing the circuit court, the appeals court in Sewart
v. Silvercryst Limited, Inc., 2009AP2415 (Sept. 15, 2010),
ruled that the Sewarts’ motion for confirmation was not barred by
section 788.09’s one-year limitation because the parties
“contracted for an ongoing arbitration process that provided for
the continuing jurisdiction of the arbitration board.”
The appeals court examined the 2005 arbitration agreement, which gave
Silvercryst an opportunity to make repairs, CAB the authority to ensure
repairs were performed satisfactorily, and authority to issue a monetary
award if repairs were not made.
“Examining the arbitration agreement entered into by the parties,
this court concludes that the Sewarts and Silvercryst bargained for the
continuing arbitration process that the CAB engaged in. … Both
parties agreed that that the failure to make the necessary repairs could
result in a monetary award that was confirmable in court,” the
appeal court wrote.
The appeals court rejected Silvercryst’s argument that
arbitration was final – and the section 788.09 one-year
confirmation clock started ticking – after the CAB issued its
initial November 2006 award defining the process that would take place
in the ensuing months.
Instead, the court held that arbitration was final when the CAB issued
the monetary award in May 2009 that ended the arbitration process set by
the 2005 arbitration agreement and administered through subsequent CAB
“Chapter 788 does not prohibit an arbitration agreement providing
for interim decisions flowing from continuing jurisdiction of
arbitrators. … The November 15, 2006 decision was not a final
decision but rather an interim order, whereby the parties expressly
agreed that the CAB arbitration process would continue,” the
appeals court explained.
The appeals court also rejected Silvercryst’s argument that the
CAB was not impartial and, therefore, the court should vacate the
CAB’s decision to award $92,030 to the Sewarts. Silvercryst, the
court explained, “offers no evidence that the arbitrators were