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COURT OF APPEALS DECISION DATED AND RELEASED October 17, 1995 |
NOTICE |
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A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See § 808.10 and Rule 809.62(1), Stats. |
This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official Reports. |
No. 95-0391-FT
STATE
OF WISCONSIN IN COURT OF
APPEALS
DISTRICT I
JEROME M. COHEN,
Plaintiff-Appellant,
v.
VIC TANNY
INTERNATIONAL
OF WISCONSIN, INC.,
Defendant-Respondent.
APPEAL from a judgment
of the circuit court for Milwaukee County:
GEORGE A. BURNS, JR., Judge. Reversed
in part and cause remanded with directions.
Before Wedemeyer, P.J.,
Fine and Schudson, JJ.
PER
CURIAM. Jerome M. Cohen appeals from that part of the circuit
court's judgment confirming the award of an arbitrator who found that Cohen's
tenant, Vic Tanny, had procured insurance coverage adequate to meet the terms
of the parties' lease agreement.
Because the arbitrator's decision had no support in the language of the
lease, we reverse the trial court's judgment confirming the award and remand
the cause for further proceedings.[1]
BACKGROUND
The facts dispositive of
the appeal are undisputed. On April 17,
1981, Vic Tanny entered into a lease securing 40,000 square feet of commercial
property in Milwaukee from John B. Fazio, who later assigned his interest to
Cohen. The lease provided in part that
"Tenant shall insure itself and Landlord ... by maintaining at Tenant's
expense ... the following property insurance: (a) ... fire and extended
coverage insurance ... as may be required by the Mortgagee ...." The mortgage provided in pertinent part that
"[i]nsurance coverage must at all times be maintained in proper
relationship to such replacement value and must be written in amounts
sufficient to prevent Mortgagor from becoming a co-insurer under the applicable
policies, and may provide for a deductible not greater than $1,000 per
occurrence."
After a dispute arose
between the parties regarding a common parking facility, certain utility bills,
and the issue of whether Vic Tanny had maintained the insurance coverage
required by the lease, Vic Tanny filed a demand for arbitration. At the arbitration hearing, Vic Tanny
offered evidence that it maintained property insurance with a deductible of
$250,000 for fire and extended coverage loss through December 1993. Thereafter, Vic Tanny's deductible fell to
$100,000 per occurrence.
Cohen presented evidence
showing that he purchased insurance with a $1,000 deductible for the premises
leased by Vic Tanny for the time period from November 8, 1987 through September
8, 1994. Cohen claimed that the
premiums for this insurance totaled $21,423.
That part of the
arbitrator's award relevant to this appeal provided as follows: "Insurance
furnished by [Vic Tanny] was more than adequate. [Cohen] is not entitled to reimbursement of any insurance
premiums paid by him." Cohen
sought review of the arbitrator's award in the circuit court. The circuit court affirmed.
DISCUSSION
"Judicial
review of arbitration awards is very limited." Milwaukee Professional Firefighters Local 215 v. City of
Milwaukee, 78 Wis.2d 1, 21, 253 N.W.2d 481, 491 (1977). Our function is merely a supervisory one,
ensuring "that the parties receive the arbitration that they bargained
for." Id. at 22, 253
N.W.2d at 491. The arbitrator
"obtains his authority from the contract of the parties." Id. at 21, 253 N.W.2d at
491. Accordingly, while this court will
afford both flexibility and latitude to the arbitrator in formulating remedies,
it remains incumbent upon the arbitrator to confine himself or herself to the
terms of the contract. Id.
at 25, 253 N.W.2d at 493. Where an
arbitrator fails to confine an award to the terms of the agreement, "the
arbitrator exceeded his power in respect thereto," and the arbitration
award will be reversed. Id. Similarly, this court will reverse an
arbitration award if the court finds "no language in the contract which
would allow for the finding made by the arbitration board." Lukowski v. Dankert, 184
Wis.2d 142, 153, 515 N.W.2d 883, 887 (1984).
Here, the terms of the
lease are undisputed. The lease
required the tenant, Vic Tanny, to secure insurance meeting the requirements of
the mortgage. Vic Tanny's failure to
purchase such insurance was uncontested.
The lease does not contain any language suggesting that an arbitrator
may determine the "adequacy" of the insurance actually provided by
the tenant. We conclude, therefore,
that the arbitrator's finding that the insurance provided by Vic Tanny was
adequate has no support in the language of the contract. Accordingly, this part of the arbitrator's
award must be reversed. See Milwaukee
Bd. Sch. Directors v. Milwaukee Tchrs' Educ. Ass'n, 93 Wis.2d 415,
428-29, 287 N.W.2d 131, 138 (1980) (arbitration award reversed where arbitrator
lacked authority under the contract to order school board to appoint substitute
teachers to regular teaching positions).
Therefore, the cause must be remanded for the determination of the
damages owed to Cohen by Vic Tanny.
By the Court.—Judgment
reversed in part and cause remanded with directions.
This opinion will not be
published. See Rule 809.23(1)(b)5, Stats.