By Joe Forward, Legal Writer, State Bar of Wisconsin

Aug. 10, 2010 – Noting the issue as “important” and “unresolved,” the supreme court in Estate of Parker v. Beverly Enterprises, Inc., 2010 WI 71, unanimously rejected the argument that it lacks jurisdiction to review orders compelling arbitration.

“Making an argument that this court lacks jurisdiction to review a circuit court order is roughly equivalent to a minnow taunting a muskellunge,” wrote Justice David Prosser in a concurring opinion. “Neither the argument nor the minnow is likely to survive.”

However, the supreme court, in an opinion written by Justice Ann Walsh Bradley, noted that “respect for the court of appeals’ exercise of discretion” – not lack of jurisdiction – drives its repeated decision to pass on reviewing appeals court decisions that deny a permissive appeal.

Facts

In 2004, Robert Parker entered a nursing home. As part of his admittance, Parker’s wife signed an arbitration agreement as his durable power of attorney. Six months later, Mr. Parker died. His estate filed tort and breach of contract claims against Beverly Enterprises.

Pursuant to the arbitration agreement, the circuit court compelled arbitration. Parker’s estate filed petitions for a “permissive appeal” (leave to appeal) and an appeal “as of right” (notice of appeal). The court of appeals denied both petitions.

The estate filed a “petition for review” in the supreme court.

Beverly Enterprises filed a motion to dismiss the petition for review, arguing that the supreme court lacks jurisdiction to review orders that compel arbitration.

Jurisdiction to review

Wis. Stat. section 788.15 states that “[a]n appeal may be taken from an order confirming, modifying, correcting or vacating an award, or from a judgment entered upon an award, as from an order or judgment in an action.”

The supreme court noted that two 1970s cases – Teamsters Union Local 695 v. County of Waukesha, 57 Wis.2d 62, 203 N.W.2d 707 (1973), and Worthington v. Farmers Ins. Exch., 64 Wis. 2d 108, 218 N.W.2d 373 (1974) – interpreted the statute to mean that the supreme court lacked jurisdiction to review orders that compel arbitration because such orders do not confirm, modify, correct, or vacate an arbitration award.

But the law governing appellate jurisdiction changed in 1977, the court explained, and the pe-1977 cases no longer “accurately reflect Wisconsin’s construct of appellate jurisdiction.” That is, appellate jurisdiction changed with the creation of the appeals courts in August of 1978. More specifically, Article VII, section 3 of the Wisconsin Constitution changed to give the supreme court discretion to review all orders and judgments from lower courts.

Thus, the court concluded that it has discretion to review an order compelling arbitration, whether or not such an order is considered final or non-final.

Leave to appeal

Beverly Enterprises argued that the supreme court cannot review an appeals court denial of a leave to appeal petition. The supreme court rejected this argument, noting that it had the discretion to review all appeals court orders.

However, the supreme court noted that is has repeatedly refused to review appeals court decisions that deny a leave to appeal based on “concerns for judicial administration and respect for the court of appeals’ exercise of discretion.”

Thus, it affirmed the appeals court order that denied Parker’s estate a leave to appeal the order compelling arbitration.

Concurrences

Justice Prosser noted the while appellate courts have discretion to review orders compelling arbitration, “that does not mean they should exercise that discretion.” Discretion should be reserved for the “most extraordinary of circumstances,” Prosser explained.

Justice Annette K. Ziegler clarified her position, not addressed by the majority, that orders compelling arbitration are not appealable “as of right.”

Attorneys

Jeffrey Pitman and Lisa Kritske of Pitman, Kyle & Sicula, Milwaukee, represented the Estate of Robert Parker. Robert Johnson and Colleen Fleming of Cook & Franke S.C., Milwaukee, represented Beverly Enterprises Inc.