Timeliness – Estoppel
First Weber Grp. Inc. v. Synergy Real Estate Grp. LLC, 2015 WI 34 (filed 24 March 2015)
HOLDING: Under an arbitration agreement’s terms, defenses involving timeliness and estoppel are “procedural arbitrability issues” to be determined during the arbitration process, not by the court.
SUMMARY: An arbitration panel ordered Graham to pay First Weber a disputed real estate brokerage commission. A circuit court later ordered Graham to pay the commission but denied First Weber’s request for costs and reasonable attorney fees. A second round of arbitration and judicial proceedings over the costs and attorney fees resulted in the circuit court’s determination that First Weber’s request was untimely. In a published decision, the court of appeals affirmed. See 2014 WI App 41.
Prof. Daniel D. Blinka, U.W. 1978, is a professor of law at Marquette University Law School, Milwaukee.
Prof. Thomas J. Hammer, Marquette 1975, is a law professor and Director of Clinical Education at Marquette University Law School, Milwaukee.
The supreme court reversed in a unanimous opinion authored by Justice Ziegler. The “crux of the issue” before the court was whether “the timeliness of the arbitration request should be decided by a court or in arbitration” (¶ 21). “We hold that Graham’s timeliness and estoppel defenses against arbitration are to be determined in the arbitration proceedings, not by a court in a proceeding under Wis. Stat. § 788.03 to compel arbitration. We base our decision on Wisconsin’s public policy favoring arbitration, the arbitration agreement, the Realtors Association’s arbitration procedures, the limited role of courts in actions to compel arbitration under § 788.03, and relevant case law” (¶ 23).
“[T]he Realtors Association’s rules and grievance process intend that disputes between its members be resolved out of court and demonstrate that its arbitration process may determine whether an arbitration request was timely” (¶ 29). The court also distinguished between “substantive arbitrability” and “procedural arbitrability” (¶ 34).
Case law holds that “courts presume that the question of substantive arbitrability is for a court to decide and that matters of procedural arbitrability are for an arbitrator to decide.…The rationale behind the presumption associated with substantive arbitrability is to protect parties from being compelled to arbitrate a dispute that they did not agree to arbitrate.The rationale behind the presumption associated with procedural arbitrability is that it advances the public policy of encouraging arbitration and enforcing arbitration agreements, … and prevents courts from ruling on the merits of an underlying claim when determining whether to compel arbitration…” (¶ 45).
“If the arbitration agreement could cover the subject matter of the dispute, which is an issue of substantive arbitrability, the court must order arbitration and resolve all doubts as to the scope of the agreement in favor of compelling arbitration. Issues like timeliness or estoppel are matters of procedural arbitrability to be determined during the arbitration process, not by a court, unless the parties agreed otherwise” (¶ 46).
Criminal Complaints – Allegations of Child Sexual Assault Made Years After Alleged Assaults Occurred – Pleading the Time of Offenses
State v. Kempainen, 2015 WI 32 (filed 19 March 2015)
HOLDING: A criminal complaint alleging remote incidents of child sexual assault by identifying windows of time within which the assaults occurred provided sufficient notice to the defendant of the nature of the charges against him and enabled him to plead and prepare a defense.
SUMMARY: In October 2012, L.T. reported to police that her stepfather (defendant Kempainen) sexually assaulted her between Aug. 1 and Dec. 1, 1997, when she was 8 years old and did so again between March 1 and June 15, 2001, when she was 11 or 12 years old. L.T. was able to recall many specifics with respect to the assaults. She also stated that one week after the first assault, the defendant told her that she was “bad” and would get in trouble if she reported the incident to her mother. L.T. explained to the officer who took her complaint in 2012 that she did not immediately tell anyone about either incident because she was afraid that her mother would be mad at her and because she was afraid of what her mother might do to Kempainen.
When asked why she came forward with her complaints in 2012, L.T. explained that she had confided in her first serious boyfriend what Kempainen had done and the boyfriend thereafter provided this information to L.T.’s mother in October 2012. The complaint to the police followed. The district attorney charged the defendant with the two child sexual assaults using the time frames for the charges as described above.
The defendant moved the circuit court to dismiss the complaint and information on grounds that they were “not sufficiently definite and the defendant [was] not adequately informed of the charges against him” because the time periods in which the alleged crimes were committed were “too vague,” such that he could not plead for, or prepare a defense against, “when” the crimes occurred (¶ 2). The circuit court granted the motion and dismissed the complaint and information. The state appealed. In a published decision, the court of appeals reversed the circuit court. See 2014 WI App 53.
In a unanimous decision authored by Justice Gableman, the supreme court reversed the court of appeals. It concluded that in child sexual assault cases, courts can apply the seven factors outlined in State v. Fawcett, 145 Wis. 2d 244, 253 N.W.2d 91 (Ct. App. 1988) and can consider any other relevant factors necessary to determine whether the complaint and information “states an offense to which the defendant can plead and prepare a defense. No single factor is dispositive, and not every Fawcett factor will necessarily be present in all cases” (¶ 4) (internal quotations and citations omitted).
The seven factors are “(1) the age and intelligence of the victim and other witnesses; (2) the surrounding circumstances; (3) the nature of the offense, including whether it is likely to occur at a specific time or is likely to have been discovered immediately; (4) the length of the alleged period of time in relation to the number of individual criminal acts alleged; (5) the passage of time between the alleged period for the crime and the defendant’s arrest; (6) the duration between the date of the indictment and the alleged offense; and (7) the ability of the victim or complaining witness to particularize the date and time of the alleged transaction or offense” (¶ 2 n.5).
(Note: In this case the supreme court overruled the court of appeals decision in State v. R.A.R., 148 Wis. 2d 408, 435 N.W.2d 315 (Ct. App. 1988), to the extent that it held that the first three Fawcett factors apply only in situations in which the defendant claims that the state could have obtained a more definite charging period through diligent efforts (see ¶ 28).)
The supreme court applied the Fawcett factors to conclude that, under the circumstances of this case as described above, the defendant “was given sufficient notice of the nature of the charges against him and that he is able to plead and prepare a defense” (¶ 41). (Note: The court’s factor-by-factor analysis may be found at paragraphs 33-40 of the decision.) With respect to the allegations of time frames within which the assaults allegedly occurred, the court indicated that “[b]ecause time is not of the essence in child sexual assault cases, when the date of the commission of the crime is not a material element of the offense it need not be precisely alleged. A more flexible application of notice requirements is required and permitted in child sexual assault cases. The vagaries of a child’s memory more properly go to the credibility of the witness and the weight of the testimony, rather than to the legality of the prosecution in the first instance” (¶ 22) (internal quotations and citations omitted).
The court considered the effect of the passage of time on the defendant’s ability to prepare a defense. Kempainen argued that the passage of time prevented him from putting forth an alibi defense. Said the court in reply, “Kempainen has not articulated any way in which the charging periods have impaired his ability to prepare a defense, only that the charges make it difficult to prepare his preferred defense” (¶ 39).
Pollution Liability – Comprehensive General Liability Insurance Coverage
Acuity v. Chartis Specialty Ins. Co., 2015 WI 28 (filed 17 March 2015)
HOLDING: A natural gas leak constituted a “pollution condition” covered by a contractors’ pollution liability policy.
SUMMARY: Construction crews damaged a gas pipe while moving it, causing an explosion and fire that destroyed property. Acuity had issued a comprehensive general liability (CGL) policy that provided coverage. Chartis had issued a contractors’ pollution liability (CPL) policy that also provided coverage. This litigation involves the dispute between the providers of the CGL coverage and the CPL coverage. The circuit court ruled that the CPL policy provided coverage and awarded Acuity nearly $800,000, which was about half the indemnified damages. In an unpublished decision, the court of appeals reversed, finding that the “pollution conditions” had not caused the damages.
The supreme court reversed the court of appeals in a unanimous opinion authored by Chief Justice Abrahamson.
“[W]e agree with the circuit court’s determination that the natural gas leak was a pollution condition under Chartis’s CPL policy and that this pollution condition caused the bodily injury and property damage alleged in the four lawsuits. We therefore conclude that Chartis’s CPL policy covers the insured’s liability arising from the natural gas-fueled explosion and fire” (¶ 8).
First, the court held that the escape of natural gas from the damaged pipe constituted a pollution condition (see ¶ 42). “To summarize: ‘Pollution Conditions’ is defined by Chartis’s CPL policy as the ‘release or escape of any … gaseous … irritant or contaminant … [into] the atmosphere …provided such conditions are not naturally present in the environment in the concentration or amounts … discovered.’ Natural gas is, of course, ‘gaseous.’Natural gas is also a ‘contaminant’ under the circumstances of the instant case. Natural gas was ‘release[d] or escape[d]’ from the damaged natural gas pipe, and there is no dispute that natural gas is ‘not naturally present in the environment in the concentration’ that caused the explosion and fire” (¶ 61).
Second, the pollution condition caused the damages. “There is no dispute that the natural gas leak caused the explosion and fire. There is no dispute that the explosion and fire caused the alleged bodily injury and property damage. This sequence of events is sufficient to establish that the escape of natural gas (a pollution condition) caused the alleged bodily injury and property damage” (¶ 66).The court exhaustively distinguished cases from other states proffered by Chartis.
Finally, the court rejected Chartis’s contention that “concurrent coverage” under both policies was “not possible”
(¶ 95). The CGL and CPL policies provided “simultaneous” coverage (¶ 100).
Publicly Subsidized Housing – Eviction for Drug-related Criminal Activity – No Right to Cure under Wis. Stat. Section 704.17(2)(b)
Milwaukee City Housing Auth. v. Cobb, 2015 WI 27 (filed 12 March 2015)
HOLDING: Federal law preempts the right-to-cure provision of Wis. Stat. section 704.17(2)(b) when a public-housing tenant is evicted for engaging in “drug-related criminal activity.”
SUMMARY: Defendant Cobb was a tenant in publicly subsidized housing operated by the Milwaukee City Housing Authority. The Housing Authority receives federal funding from the U.S. Department of Housing and Urban Development; the funding is contingent on compliance with federal laws governing public housing. The Housing Authority brought an eviction action against Cobb because he smoked marijuana inside his apartment and thereby violated the terms of his lease by engaging in “drug-related criminal activity.”
Cobb argued that he could not be evicted because he was not given a five-day opportunity to remedy the breach of his lease, as required by Wis. Stat. section 704.17(b). The Housing Authority responded that it need not provide Cobb with an opportunity to take reasonable steps to remedy the default because federal housing law preempts section 704.17(2)(b) in this case.
Specifically, the Housing Authority contended that section 704.17(2)(b) is preempted by 42 U.S.C. § 1437d(l)(6) such that no right to cure or remedy exists for a tenant who engaged in drug-related criminal activity. The Housing Authority asserted that its preemption argument is supported by the fact that 42 U.S.C. § 1437d(l)(6) requires public-housing authorities to use leases that state that engaging in drug-related criminal activity is grounds for eviction (see ¶ 3). The circuit court agreed with the Housing Authority and issued a writ of eviction. In a published decision, the court of appeals reversed. See 2014 WI App 70.
In a majority decision authored by Justice Ziegler, the supreme court reversed the court of appeals. It held that “42 U.S.C. § 1437d(l)(6) preempts the right-to-remedy provision of Wis. Stat. § 704.17(2)(b) when a public housing tenant is evicted for engaging in ‘drug-related criminal activity’ within the meaning of 42 U.S.C. § 1437d(l)” (¶ 37).
Said the court, “[a] right to cure a lease violation that constitutes drug-related criminal activity conflicts with the federal Anti-Drug Abuse Act in two related respects. First, a right to cure past illegal drug activity is counter to Congress’ goal of providing drug-free public housing. Second, a right to cure past illegal drug activity is in conflict with Congress’ method of achieving that goal by allowing eviction of tenants who engage in drug-related criminal activity” (¶ 28). “Tenants will have an incentive not to use illegal drugs in the first instance if they can be evicted for, and given no right to cure, drug-related criminal activity. The potential to be evicted for any drug-related criminal activity, including a first offense, provides a powerful incentive to avoid such activity” (¶ 29).
Chief Justice Abrahamson filed a dissenting opinion.