COURT OF APPEALS DECISION DATED AND RELEASED APRIL 30, 1996 |
NOTICE |
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, Stats. |
This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official Reports. |
No. 95-2837
STATE
OF WISCONSIN IN COURT OF
APPEALS
DISTRICT III
In the Matter of the
Arbitration
Proceedings
Between:
JIM MATTSON
and MARIFRAN MATTSON,
Petitioners-Appellants,
v.
THOMAS O. SCHULTZ,
Respondent-Respondent.
APPEAL from a judgment
of the circuit court for Outagamie County:
HAROLD V. FROEHLICH, Judge. Affirmed.
Before Cane, P.J.,
LaRocque and Myse, JJ.
PER
CURIAM. Jim and Marifran Mattson appeal a judgment affirming
an arbitration award to Attorney Thomas Schultz. They argue that the arbitration panel committed misconduct when
it refused to grant an adjournment of the arbitration hearing until
jurisdiction could be determined, that the arbitrators exceeded their authority
when they awarded Schultz compensation for his legal work without permitting
the Mattsons to mount a defense, and that the arbitration decision should be
reversed because a witness was not sworn before giving testimony. We reject these arguments and affirm the
judgment.
Schultz represented Jim
Mattson in an age discrimination case.
Under the terms of the contract, Schultz was to receive one-third of the
judgment if the matter went to trial.
The contract was silent as to what the attorney fees would be if the
matter settled prior to trial. The age
discrimination suit was settled before trial for $250,000. Schultz demanded a fee of one-third of the
gross settlement which was less than a bill sent to the Mattsons based on an
hourly rate. The Mattsons agreed to a
fee arbitration when they filed a fee arbitration application with the State
Bar. The arbitrators awarded Schultz
one-third of the amount of the settlement.
The Mattsons argue that
the arbitrators were guilty of misconduct when they refused the Mattsons'
request for an adjournment until a jurisdictional issue could be resolved. See § 788.10(1)(c), Stats.
The record does not show that the Mattsons requested an adjournment for
that reason. Rather, they requested an
adjournment pending resolution of their complaint against Schultz before the
Board of Attorneys Professional Responsibility. The record discloses no misconduct and no grounds for a
continuance based on the complaint filed with BAPR. The issues presented to BAPR are not sufficiently related to the
fee question to justify postponing arbitration of the fee agreement. The decision to adjourn the arbitration
hearing is within the arbitrators' discretion, see In re Kemp v.
Fisher, 89 Wis.2d 94, 101, 277 N.W.2d 859, 863 (1979), and the Mattsons
have not established that the panel's discretion was improperly exercised.
To the extent the
Mattsons challenge the arbitrators' jurisdiction, we conclude that the panel
had jurisdiction to decide this fee dispute.
The Mattsons' argument on jurisdiction closely parallels their argument
on the merits. They contend that the
jurisdiction of the arbitrators under the State Bar's Rules for Arbitration
preclude arbitration where there was no attorney-client arrangement between the
parties at the time the legal services were performed. They construe the contract to create no
attorney-client arrangement if the case did not go to trial. We disagree. The parties' express contract created an attorney-client
relationship. The fact that the
contract did not specify a formula for compensation if the case did not go to
trial does not mean that there was no attorney-client arrangement.
We also reject the
Mattsons' argument that the arbitrators exceeded their authority by
"amending the contract." The
contract was ambiguous regarding the amount of payment if the case settled
before trial. The arbitrators did not
recreate or amend the existing contract, they merely construed the existing
contract.
Next, the Mattsons argue
that the arbitrators exceeded their authority when they "fashioned a
quantum meruit remedy for Schultz without permitting the Mattsons to mount a
defense." The "defenses"
consist of the Mattsons' claims that Schultz was negligent and inadequate in
preparing their case, that he told them they would not have to worry about
attorney fees if they accepted the settlement offer, and that he coerced an
out-of-court settlement. The Mattsons
concede, however, that "An arbitration hearing is not the proper forum to
adjudicate an action for attorney negligence." The Mattsons' argument appears to be a challenge to the method
used by the arbitrators to fashion a remedy for Schultz rather than a claim
that the arbitrators erred by failing to consider their
"defenses."
The standard of review
for arbitration awards is very limited.
See Lukowski v. Dankert, 184 Wis.2d 142, 149, 515
N.W.2d 883, 886 (1984). The function of
the court is essentially supervisory, ensuring that the parties receive the
arbitration for which they bargained.
The court will overturn an arbitration award only if there is a
"perverse misconstruction or if there is a positive misconduct plainly
established, or if there is a manifest disregard of the law, or if the award is
illegal or violates strong public policy." Id. The
panel's decision to award Schultz one-third of the settlement proceeds does not
meet any of the criteria for judicial interference.
Finally, the fact that a
witness was not sworn does not provide a basis for relief. Even if that witness's testimony were
stricken, the result would remain the same.
That witness, Attorney Winston Ostrow, who represented the opposing
party in the age discrimination case, testified that Schultz's hourly rate was
reasonable and that the number of hours he expended on the case was
reasonable. Because the panel chose to
award one-third of the settlement proceeds, Ostrow's testimony had no effect on
the outcome. Although witnesses are
required to be sworn, we conclude that failure to swear a witness whose
testimony is not utilized does not constitute grounds for reversal.
By the Court.—Judgment
affirmed.
This opinion will not be
published. See Rule 809.23(1)(b)5, Stats.