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State ex rel. CityDeck Landing LLC v. Circuit Court for Brown County

Supreme Court of Wisconsin

February 21, 2019

State of Wisconsin ex rel. CityDeck Landing LLC, Petitioner,
v.
Circuit Court for Brown County, the Honorable Thomas J. Walsh, presiding, Society Insurance, Smet Construction Services Corporation and GB Builders, LLC, Respondents.

          Oral Argument: October 10, 2018

          PETITION for supervisory writ L.C. No. 2017CV1324.

          For the petitioner, there were briefs filed by Eric M. McLeod, Paul D. Cranley, Katherine Smith Polich, Joseph S. Diedrich, and Husch Blackwell LLP, Madison.

          For the respondents, Circuit Court for Brown County and the Honorable Thomas J. Walsh, there was a brief filed by Brian P. Keenan, assistant attorney general, with whom on the brief was Brad D. Schimel, attorney general.

          For the respondent, Society Insurance, there was a brief filed by Jeffrey Leavell, Danielle N. Rousset, Brandon L. Parks, and Jeffrey Leavell, S.C., Racine.

          OPINION

          REBECCA GRASSL BRADLEY, J.

         ¶1 The circuit court ordered the arbitration of a private construction dispute stayed until it could decide an insurance coverage dispute between one of the contractors connected to the arbitration and the contractor's insurer. CityDeck Landing LLC petitions this court, pursuant to Wis.Stat. § (Rule) 809.71 (2015-16), [1] for a supervisory writ. CityDeck asks this court to exercise its superintending constitutional authority to vacate the circuit court's[2] order. CityDeck asserts the circuit court exceeded its jurisdiction by putting the private arbitration[3] on hold, and that a supervisory writ is necessary to correct the circuit court's extra-jurisdictional act. We hold the circuit court lacked the authority to issue the order staying the arbitration, the requirements necessary to issue a supervisory writ have been satisfied, and the stay order must be vacated.

         I. BACKGROUND

         ¶2 In December 2013, CityDeck hired Smet Construction Services Corporation as its general contractor to construct an apartment building called "CityDeck Residences" in Green Bay. Smet hired subcontractors, including GB Builders of Northeastern Wisconsin, LLC; Lunda Construction Company; Security-Luebke Roofing, Inc.; and Lakeland Construction, Inc. The construction contract required any disputes to be resolved by arbitration. A dispute arose and in May 2016, CityDeck filed for arbitration against Smet, alleging breach of the construction contract and theft by contractor. It filed an amended demand for arbitration in November 2016. In July 2017, Smet sought to bring the subcontractors into the arbitration because it contended the subcontractors were responsible for the problems and each of the subcontracts contained an indemnity provision requiring the subcontractor to "defend, indemnify and hold [Smet] harmless." Most of the subcontractors voluntarily joined the arbitration. GB Builders notified its insurer, Society Insurance, of the claim, and Society hired an attorney to represent GB Builders under a reservation of rights. In August 2017, Smet tendered the defense of the CityDeck claim to Society, asserting it was an additional insured under the insurance policy Society issued to GB Builders. In October 2017, GB Builders filed an answer to Smet's demand for arbitration, asking the arbitrator for dismissal. The arbitrator scheduled the arbitration hearing for March 1, 2018.

         ¶3 In October 2017, however, Society Insurance filed a declaratory judgment complaint in Brown County Circuit Court against CityDeck, Smet, and GB Builders. Society sought a declaration "on the scope of its insurance duties" to Smet and GB Builders with respect to CityDeck's construction claims under arbitration. Society asked the circuit court to stay the arbitration until it could decide the insurance coverage issue. The circuit court granted Society's request and ordered the arbitration stayed on January 2, 2018.

         ¶4 CityDeck asserted the circuit court lacked jurisdiction to order a private arbitration stayed, particularly when the circuit court action and the arbitration involved different issues and different parties; three subcontractors who were parties to the arbitration were not named in the circuit court suit. CityDeck filed a motion asking the circuit court to reconsider its decision. The circuit court ignored CityDeck's motion to reconsider, and CityDeck filed a petition for a supervisory writ in the court of appeals. The court of appeals construed the petition as an appeal from a non-final order and denied the petition. CityDeck filed a petition for a supervisory writ with this court. We accepted jurisdiction over CityDeck's petition and heard oral argument.

         II. ANALYSIS

         A. Historical Analysis

         ¶5 Wisconsin cases contain inconsistencies regarding writ procedure, terminology, and the standards applicable to the exercise of our constitutional superintending authority. For the sake of clarity, we set forth the history of writs requested under our superintending authority, the origin of the term "supervisory writ," and an unexplained discrepancy in our cases illuminated in State ex rel. Beaudry v. Panosian, 35 Wis.2d 418, 151 N.W.2d 48');">151 N.W.2d 48 (1967) .

         1. History of writ procedure

         ¶6 Article VII, § 3 of the Wisconsin Constitution gives the supreme court "superintending and administrative authority over all courts" and the ability to "issue all writs necessary in aid of its jurisdiction."[4] Interpreting this provision, this court held that" [the supreme court] was endowed with a separate and independent jurisdiction, which enables and requires it in a proper case to control the course of ordinary litigation in such inferior courts, and was also endowed with all the common-law writs applicable to that jurisdiction." State ex rel. Fourth Nat'l Bank of Phila. v. Johnson, 103 Wis. 591, 613, 79 N.W. 1081 (1899) . This court concluded that "when the makers of the constitution used the words 'superintending control over all inferior courts' they definitely referred to that well-known superintending jurisdiction of the court of king's bench." Id. at 614. "The two great writs by which this superintending jurisdiction was principally exercised by the court of King's bench were the writs of mandamus and prohibition; the one directing action by the inferior court, and the other forbidding action." Id.

         ¶7 A writ of prohibition "restraints] a court in the exercise of judicial functions outside or beyond its jurisdiction, and when there is no other adequate remedy." State ex rel. Attorney Gen, v. Circuit Court of Eau Claire Cty., 97 Wis. 1, 15, 72 N.W. 193 (1897) . See also State ex rel. De Puy v. Evans, 88 Wis. 255, 263, 60 N.W. 433 (1894) ("So this court has repeatedly held that under our statutes such writ issues only to restrain the acts of a court or other inferior tribunal exercising some judicial power which it has no legal authority to exercise at all."); State ex rel. Kellogg v. Gary, 33 Wis. 93, 98 (1873) ("It does not issue to restrain the acts of either executive or administrative officers, but only those of a court or other inferior tribunal engaged in the exercise of some judicial power, and that not merely in a manner not authorized by law, but it must also be in defiance of law, or without any legal authority whatever for that purpose.").

         ¶8 Prior to 1921, it was the rule in Wisconsin "that prohibition will not lie against a judge of a lower court except in a situation where such judge is exceeding his jurisdiction." State ex rel. Kiekhaefer v. Anderson, 4 Wis.2d 485, 490, 90 N.W.2d 790');">90 N.W.2d 790 (1958) . However, the rule changed so that "prohibition may be invoked in case of a non-jurisdictional error in a situation where appeal from the judgment would come too late for effective redress and great hardship would result if such writ were not issued." Id. See also In re Inland Steel Co., 174 Wis. 140, 143, 182 N.W. 917 (1921) ("[I]t is the opinion of the court that jurisdiction may properly be exercised though the duty of the court below may not be so plain as to permit of but one conclusion, if a careful consideration of all the facts shows that a valid service has not been made."); State ex rel. Hustisford Light, Power & Mfg. Co. v. Grimm, 208 Wis. 366, 370, 243 N.W. 763 (1932) ("Neither the power nor the exercise of it as a matter of policy is limited to keeping the lower court within its jurisdiction or compelling it to act."); State ex rel. Gaynon v. Krueger, 31 Wis.2d 609, 614, 143 N.W.2d 437');">143 N.W.2d 437 (1966) ("Traditionally, this writ was used to keep an inferior court from acting outside its jurisdiction when there was no adequate remedy by appeal or otherwise. But, . . . the writ has been expanded to cover cases of 'nonjurisdictional error when the appeal may come too late for effective redress, or be inadequate and there is a need for such intervention to avoid grave hardship or a complete denial of the rights of a litigant.'") (internal citations and quoted source omitted).

         ¶9 In Fourth National Bank, this court acknowledged it granted a writ of prohibition in Attorney General, to prevent "the further prosecution of certain contempt proceedings in the circuit court because such court was acting in excess of its jurisdiction." Fourth Nat' 1 Bank, 103 Wis. at 617. This court explained in Attorney General: "Having held that the attempt to punish the publication in question as contempt was in excess of the jurisdiction of the circuit court, no reason is seen why the writ is not an apt and proper remedy, unless, indeed, there be other adequate remedies." Attorney Gen., 97 Wis. at 15. The court proceeded to rule out the use of other writs and concluded that a writ of prohibition was appropriate. Id.

         ¶10 While Fourth National Bank explained the court's superintending power, it specifically dealt with the issuance of a writ of mandamus. 103 Wis. at 618. The court stated that "unless there be adequate remedy for such denial in the regular exercise of the appellate jurisdiction of this court, it is difficult to see why the superintending jurisdiction should not be exercised to quash the neglect or refusal of the circuit court, and compel it to act within its jurisdiction." Id. at 621.

         ¶11 In addition, Fourth National Bank created several principles for issuing a writ of mandamus. First, "[t]he general rule of law undoubtedly is that mandamus will not lie where there is a remedy by appeal or writ of error. But the remedy by appeal must be substantially adequate in order to prevent relief by mandamus." Id. at 622 (internal citations omitted). Second, "[i]t is very plain that, if the creditors are to exercise their rights with any prospect of benefit, they must exercise them promptly." Id. Third, "reliance is placed upon the well-known principle that mandamus will not lie to control the exercise of discretion." Id. Fourth, "[w]here it clearly appears that discretion has been not merely abused, but not exercised at all, or that the action taken by the inferior court is without semblance of legal cause, and no other adequate remedy exists, mandamus will lie to compel the specific action which should have been taken." Id. at 623. Fifth, "[t]he duty of the court must be plain, the refusal to proceed within its jurisdiction to perform that duty must be clear, the results of such refusal prejudicial, the remedy, if any, by appeal or writ of error utterly inadequate, and the application for relief by mandamus speedy and prompt, in order to justify the issuance of the writ." Id. at 623-24.

         ¶12 It appears, however, that the requirements outlined in Fourth National Bank for a writ of mandamus became requirements for all writs issued under the court's supervisory powers. In 1907, in a mandamus case, the court wrote that it would apply its supervisory control only "where the duty of the inferior court to act within its jurisdiction or to refrain from going beyond its jurisdiction is plain and imperative, where such court threatens to violate that duty to the substantial prejudice of the rights of the petitioner, where all other remedies are inadequate, and the application for relief [is] prompt." State ex rel. Milwaukee Elec. Ry. & Light Co. v. Circuit Court for Rock Cty., 133 Wis. 442, 444, 113 N.W. 722 (1907) (citing Fourth Nat'1 Bank). That case, Fourth National Bank, and two other mandamus cases, [5] were then cited in State ex rel. Pierce-Arrow Motor Car Co. v. Circuit Court of Milwaukee Cty., 143 Wis. 282, 127 N.W. 998 (1910), as principles for exercising general superintending control. The court stated:

Those principles in substance are that this [superintending] jurisdiction is not to be exercised upon light occasion, but only upon some grave exigency; that the writs by which it is exercised will not be used to perform the ordinary functions of an appeal or writ of error; that the duty of the court below must be plain; its refusal to proceed within the line of such duty, or, on the other hand, its intent to proceed in violation of such duty must be clear; the results must be not only prejudicial, but must involve extraordinary hardship; the remedy by appeal or writ of error must be utterly inadequate; and the application for the exercise of the power of superintending control must be speedy and prompt.

Id. at 285. Pierce-Arrow, however, was a prohibition case-not a mandamus case.

         ¶13 Nonetheless, the principles outlined in Pierce-Arrow were reiterated in a later prohibition case, State ex rel. Pabst v. Circuit Court for Milwaukee Cty., 184 Wis. 301, 304, 199 N.W. 213 (1924) . However, that court went on to apply only some of the Pierce-Arrow principles, stating "[i]f the duty of the circuit court to abate the action against the Pabst Brewing Company were clear, and the relator did suffer extraordinary hardship by reason of the court's failure to perform its duty, and if he had no other adequate remedy, the duty of this court to assume jurisdiction is well settled." Id. Notably, the court did not address the factor requiring that "the application for the exercise of the power of superintending control must be speedy and prompt."

         ¶14 Likewise, other cases did not uniformly or consistently apply the Pierce-Arrow principles. Some cases utilized only two. First, "[i]n order to entitle a party to a writ of prohibition, the results of the error attacked must not only be prejudicial to him but must [also] involve extraordinary hardship." Kiekhaefer, 4 Wis.2d at 490 (emphasis omitted) (citing Pierce-Arrow). Second, "[i]t is a further well established principle that prohibition will not lie where there is an adequate remedy by appeal." Id. at 491. See also State ex rel. Mitchell v. Superior Court of Dane Cty., 14 Wis.2d 77, 81, 109 N.W.2d 522 (1961) ("Ordinarily such a writ should be issued only to prevent an inferior court from exercising jurisdiction in a case where i[t] should not be exercised or assumed. Nor should a writ of prohibition be issued if there is an adequate remedy by way of appeal, except where great hardship would result.") (internal citations omitted). However, other cases referenced all of the principles from Pierce-Arrow. For example, in State ex rel. Beaudry v. Panosian, the court cited Pierce-Arrow and affirmed a motion to quash a petition for a writ of prohibition because "from this record it cannot be said that the justice court's 'duty' to refrain from exercising jurisdiction was plain." Beaudry, 35 Wis.2d at 425-26; see also State ex rel. Lang v. Municipal Justice Court of Cudahy, 50 Wis.2d 21, 23-24, 183 N.W.2d 43 (1971) (citing Pierce-Arrow); State ex rel. Prentice v. Cty. Court, Milwaukee Cty., 7 0 Wis.2d 230, 234-35, 234 N.W.2d 283 (1975) (citing Pierce Arrow and Beaudry).

         ¶15 Eventually, the principles developed in Pierce-Arrow and cited in Beaudry merged into a four-factor test:

A petition for a supervisory writ will not be granted unless: (1) an appeal is an inadequate remedy; (2) grave hardship or irreparable harm will result; (3) the duty of the trial court is plain and it must have acted or intends to act in violation of that duty[;] and (4) the request for relief is made promptly and speedily.

State ex rel. Oman v. Hunkins, 120 Wis.2d 86, 91, 352 N.W.2d 220 (Ct. App. 1984) (citing Beaudry) . This court subsequently endorsed these four factors, and routinely applies them whenever a party petitions for a supervisory writ. See Burnett v. Alt, 224 Wis.2d 72, 96-97, 589 N.W.2d 21 (1999); State ex rel. Kalal v. Circuit Court for Dane Cty., 2004 WI 58, ¶17, 271 Wis.2d 633, 681 N.W.2d 110; DNR v. Wis. Court of Appeals, Dist. IV., 2018 WI 25, ¶9, 380 Wis.2d 354, 909 N.W.2d 114. This was not always the case.

         ¶16 Before adoption of the modern four-factor test, Wis.Stat. ch. 817 (1975-76) provided guidance for writs of errors and appeals. Parties asking the supreme court to exercise its superintending authority did so via an application or a petition for a particular writ-typically a writ of mandamus or a writ of prohibition. In 1978, the typical practice changed when Wisconsin revamped its court system, adding the intermediate appellate court-the Wisconsin Court of Appeals. The newly revised appellate court structure required revisions to appellate rules. The Judicial Council drafted new rules of appellate procedure, which this court enacted. Sup. Ct. Order, 83 Wis.2d xxvii (1978) . Two Rules, 809.51 and 809.71, created procedural and filing guidance regarding writ practice in the appellate courts. Rule 809.51 applied to the newly-created court of appeals, and Rule 809.71 applied to this court. Both Rules were titled "Supervisory Writ" although this term did not appear in the text of the original statutes. See Wis.Stat. §§ (Rules) 809.51 & 809.71 (1977-78).

         ¶17 The text of the court of appeals' rule said: "A person may request the court to exercise its supervisory jurisdiction over a court . . . by filing a petition and supporting memorandum." The text of the supreme court rule said: "A person may request the supreme court to exercise its supervisory jurisdiction . . . by filing a petition in accordance with Rule 809.51." The term "supervisory writ" does appear in the second sentence of our current Rule 809.71: "A person seeking a supervisory writ from the supreme court shall first file a petition for a supervisory writ in the court of appeals [, ]" but the term still does not appear in the text of Rule 809.51.[6]

         ¶18 With the introduction of the term "supervisory writ" via the new appellate rules, post-1978 cases attempted to draw from both the old, existing terminology and the new rules. The term "supervisory writ" appears for the first time in Wisconsin cases in State v. Whitty, 86 Wis.2d 380, 385, 272 N.W.2d 842 (1978), which references Wis.Stat. §§ (Rules) 809.51 and 809.71. Six years later, the current four-factor "supervisory writ" test was explicitly declared in a 1984 court of appeals' per curiam opinion in Oman, 120 Wis.2d at 91. Oman lists the test with a citation to Beaudry. Beaudry, as noted, does not explicitly denominate a four-factor test, but instead cites to the general principles set forth in Pierce-Arrow.

         ¶19 Dissecting the relevant paragraph in Pierce-Arrow results in a list of seven factors guiding the exercise of superintending authority:

(1) This jurisdiction is not to be exercised upon light occasion, but only upon some grave exigency;
(2) The writs by which it is exercised will not be used to perform the ordinary functions of an appeal or writ of error;
(3) The duty of the court below must be plain;
(4) Its refusal to proceed within the line of such duty or, on the other hand, its intent to proceed in violation of such duty must be clear;
(5) The results must be not only prejudicial but must involve extraordinary hardship;
(6) The remedy by appeal or writ of error must be utterly inadequate;
(7) The application for the exercise of the power of superintending control must ...

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