State Ex Rel. Citydeck Landing LLC v. Circuit Court for Brown Cnty.
Opinions
REBECCA GRASSL BRADLEY, J.
*835*522¶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's2 order. CityDeck asserts the circuit court exceeded its jurisdiction by putting the private arbitration3 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, *523Inc.; 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. *836¶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 *524involved 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,
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
*525Interpreting 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,
¶7 A writ of prohibition "restrain[s] a court in the exercise of judicial functions outside or beyond its jurisdiction, and when there is no other adequate remedy."
*837State ex rel. Attorney Gen. v. Circuit Court of Eau Claire Cty.,
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REBECCA GRASSL BRADLEY, J.
*835*522¶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's2 order. CityDeck asserts the circuit court exceeded its jurisdiction by putting the private arbitration3 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, *523Inc.; 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. *836¶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 *524involved 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,
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
*525Interpreting 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,
¶7 A writ of prohibition "restrain[s] a court in the exercise of judicial functions outside or beyond its jurisdiction, and when there is no other adequate remedy."
*837State ex rel. Attorney Gen. v. Circuit Court of Eau Claire Cty.,
¶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,
¶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'l Bank,
¶10 While Fourth National Bank explained the court's superintending power, it specifically dealt with the issuance of a writ of mandamus.
*838¶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,
¶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.,
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,
¶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.,
¶14 Likewise, other cases did not uniformly or consistently apply the Pierce-Arrow principles. Some *530cases 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,
¶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;
*531(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,
¶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.
*840Sup. 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).
*532¶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
*533¶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,
¶19 Dissecting the relevant paragraph in Pierce-Arrow results in a list of seven factors guiding the exercise of superintending authority:
*534(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 be speedy and prompt.
Pierce-Arrow,
¶20 While the Oman court did not say how it arrived at the four factors, it likely condensed these seven principles into four factors given their overlap:
(1) An appeal is an inadequate remedy (see #2 and #6 of Pierce-Arrow );
(2) Grave hardship or irreparable harm will result (see #1 and #5 of Pierce-Arrow );
(3) The duty of the trial court is plain and the court must have acted or intend to act in violation of that duty (see #3 and #4 of Pierce-Arrow );
(4) The request for relief is made promptly and speedily (see #7 of Pierce-Arrow ).
¶21 Alternatively, because the party in Oman sought two writs-a writ of mandamus and a writ of prohibition-the Oman court may have applied factors *535derived from each of the tests tied to those writs, respectively. Mandamus requires: "(1) a clear legal right; (2) a plain and positive duty; (3) substantial damages or injury should the relief not be granted, and (4) no other adequate remedy at law." Oman,
¶22 As Wisconsin appellate courts grappled with the language of the older cases, together with the post-1978 body of cases, profuse variations of both terminology and tests appeared in our modern writ cases. Cases sometimes referred to "supervisory writs" and sometimes referred to a specific common law writ. Some courts combined the old and new terminology into "supervisory writ of prohibition." See State ex rel. Godfrey & Kahn, S.C. v. Circuit Court for Milwaukee Cty.,
*842State ex rel. Garibay v. Circuit Court for Kenosha Cty.,
¶23 Attempting to define "supervisory writ," the court of appeals described it as "a blending of the writ of mandamus and the writ of prohibition." State ex rel. Dressler v. Circuit Court for Racine Cty.,
*536(citing Oman ). This court likewise adopted this definition. See Madison Metro. Sch. Dist. v. Circuit Court for Dane Cty.,
2. Supervisory Writ
¶24 With the introduction of the term "supervisory writ" in 1978, our cases became less clear. The cases are silent as to whether the "supervisory writ" was an intentional invention or resulted fortuitously from the title the Judicial Council drafters chose for Rules 809.51 and 809.71. It is also unclear whether a supervisory writ existed as an independent writ under which this court exercised its superintending authority or whether it was simply a generic term providing the mechanism by which parties reached the appellate courts when seeking the exercise of supervisory (court of appeals) or superintending (supreme court) authority.
¶25 Notably, just last term, in DNR, we referenced an 1874 case empowering this court to use both the traditional common law writs when exercising superintending jurisdiction or "devise" any new writs we might deem necessary:
We have previously observed that with the grant of [ art. VII, § 3 superintending] jurisdiction [over all courts] come all the writs necessary to give it effect:
The framers of the constitution appear to have well understood that, with appellate jurisdiction, *537the court took all common law writs applicable to it; and with superintending control, all common law writs applicable to that; and that, failing adequate common law writs, the court might well devise new ones, as Lord Coke tells us, as "a secret in law."
Attorney Gen. v. Chicago & N.W. Ry. Co.,35 Wis. 425 , 515 (1874) (construing our original constitution); see State v. Buchanan,2013 WI 31 , ¶ 11,346 Wis. 2d 735 ,828 N.W.2d 847 ("As the court of original jurisdiction, we have discretion to issue a supervisory writ.").
DNR,
¶26 This suggests our "supervisory writ" may in fact be a new writ devised to exercise our superintending constitutional authority. But, the term "supervisory writ" also bears a second meaning. Since its appearance in 1978, a supervisory writ is commonly known as the general term used when petitioning Wisconsin appellate courts under Rules 809.51 and 809.71. This terminology, regardless of whether it entered the law intentionally or fortuitously, is firmly entrenched in our jurisprudence, and we have never explained or addressed its purpose or presence. This historical analysis does not provide clear answers, but the court takes this opportunity to clarify and acknowledge the dual purpose of the term supervisory writ. It is both: (1) the general term used in petitioning the court of appeals to exercise its constitutional supervisory authority7 and in petitioning *843this court to exercise *538its constitutional superintending authority;8 and (2) a new writ this court devised independent of the traditional common law writs.
3. Beaudry's jurisdictional distinction
¶27 Our last consideration in this historical analysis addresses the unexplained discrepancy in our case law illuminated in State ex rel. Beaudry v. Panosian,
¶28 Although Beaudry has never been overruled, it appears time, lack of precision, and perhaps the commonplace use of the supervisory writ has eroded any distinction between jurisdictional and non-jurisdictional categories of error. Parties seeking a supervisory writ-regardless of which category of error-must satisfy the *844four-criteria supervisory writ test. This test is well-known, easy to apply, and firmly entrenched in Wisconsin law. *540B. Application
¶29 This court's authority to issue a supervisory writ arises from the constitutional grant of jurisdiction in Article VII, § 3 of the Wisconsin Constitution, which provides:
(1) The supreme court shall have superintending and administrative authority over all courts.
(2) The supreme court has appellate jurisdiction over all courts and may hear original actions and proceedings. The supreme court may issue all writs necessary in aid of its jurisdiction.
(3) The supreme court may review judgments and orders of the court of appeals, may remove cases from the court of appeals and may accept cases on certification by the court of appeals.
We do not exercise this authority lightly; instead, we reserve this jurisdiction for extraordinary circumstances. See DNR,
¶30 A party seeking the issuance of a supervisory writ must establish four factors: (1) a circuit court had a plain duty and either acted or intends to act in violation of that duty; (2) "an appeal is an inadequate remedy;" (3) "grave hardship or irreparable harm will result;" and (4) the party requested relief "promptly and speedily." DNR,
¶31 In deciding whether to grant the writ requested by CityDeck, we consider the four criteria in turn. First, there must be a plain duty violated by the *541Brown County Circuit Court-in this case, the duty to refrain from exercising jurisdiction over a private arbitration with which it had no authority to interfere. We conclude the circuit court had a plain duty to act within its jurisdiction and a concomitant duty to refrain from acting beyond it.
¶32 Article VII, § 8 of the Wisconsin Constitution confers broad jurisdiction on Wisconsin circuit courts to hear "all matters civil and criminal within this state," but not without exception:
Except as otherwise provided by law, the circuit court shall have original jurisdiction in all matters civil and criminal within this state and such appellate jurisdiction in the circuit as the legislature may prescribe by law. The circuit court may issue all writs necessary in aid of its jurisdiction.
(Emphasis added.) The Wisconsin Arbitration Act, Wis. Stat. ch. 788, comprises one constitutionally-permissible exception to a circuit court's original jurisdiction:
A provision in any written contract to settle by arbitration a controversy thereafter arising out of the contract, or out of the refusal to perform the whole or any part of the contract, or an agreement in writing between 2 or more persons to submit to arbitration any controversy existing between them at the time of the agreement to submit, shall be valid, irrevocable and enforceable except upon such grounds as exist at law or in equity for the revocation of any contract.
*542¶33 A circuit court possesses only limited, statutorily enumerated powers with respect to a private arbitration. See *845Midwest Neurosciences Assocs. v. Great Lakes Neurosurgical Assocs., LLC,
¶34 A circuit court's role in arbitration is restricted because parties who contract for arbitration do so to avoid the court system altogether. Borst v. Allstate Ins. Co.,
¶35 Arbitration is a matter of contract between private parties who enjoy that freedom.
*543McAdams v. Marquette Univ.,
¶36 Nothing in the statutes or the cases authorizes a circuit court to halt a private arbitration so that an insurance company can litigate whether its policy provides coverage to an insured. Although Wisconsin cases do allow insurance companies to bifurcate coverage from liability when both coverage and liability are being decided in the courts, see, e.g., Newhouse by Skow v. Citizens Sec. Mut. Ins. Co.,
¶37 Society suggests American Family Mut. Ins. Co. v. American Girl, Inc.,
¶38 We conclude the circuit court violated its plain duty when it stepped outside its original jurisdiction under Article VII, § 8 of the Wisconsin Constitution by issuing an order it had no authority to make. The circuit court compounded its error by stopping an *545arbitration proceeding involving three parties who were not participating in the court case at all and therefore had no opportunity to be heard on an order that affected their rights. Accordingly, the first criterion for a supervisory writ is met.
¶39 The second criterion for granting a supervisory writ requires a showing that CityDeck cannot receive an adequate remedy through the ordinary appeal process. This criterion is also met. Here, the circuit court acted beyond its original jurisdiction under Article VII, § 8 of the Wisconsin Constitution and halted a private arbitration to decide a separate coverage issue in the circuit court involving different parties. There is no adequate appellate remedy for the circuit court's unlawful act because any "appeal comes too late for effective redress" and the damage-stopping the parties from resolving their dispute in arbitration-is not reparable or compensable. See DNR,
¶40 Significantly, the appeal process continues to subject the parties to the court system for resolving *546their dispute, effectively trampling their agreement to avoid court altogether. Rather than serving as a vehicle for vindicating a party's rights, the appeal exacerbates the injury. The damage is done and cannot be reversed.
¶41 Third, we consider whether grave hardship or irreparable harm will result if we do not issue the supervisory writ. We conclude that it would. A litigant's right to be free from the exercise of the court's power has been completely denied. The circuit court's unlawful stay order halted attempts by these private parties *847to resolve a construction dispute in their contractually-selected forum of arbitration. CityDeck was deprived of the benefits of its bargained-for method of dispute resolution: rather than avoiding the court system, it was subjected to an order issuing from it, and instead of its contractually agreed-upon arbitration progressing, it was indefinitely delayed by a court acting without authority. Additionally, CityDeck was forced into public proceedings in a matter it had contracted to resolve privately. These factors satisfy the grave hardship/irreparable harm criterion.
¶42 Finally, CityDeck met the fourth criterion by acting promptly and speedily. Although Society asserts that the 21 days between the issuance of the unlawful stay order and CityDeck's writ filing is neither prompt nor speedy, we disagree. The circuit court issued the stay order on January 2, 2018. Two days later, on January 4, 2018, CityDeck filed a motion for reconsideration with the circuit court, which the circuit court ignored. On January 11, 2018, the circuit court issued an order giving the parties permission to proceed with a planned mediation. Twelve days after *547that order, CityDeck filed its writ petition in the court of appeals. This timeline satisfies the "prompt and speedy" criterion.
¶43 CityDeck's petition fulfills all four criteria for issuance of a supervisory writ; therefore, we grant CityDeck's request and vacate the circuit court's order staying the arbitration.
By the Court. -The petition for a supervisory writ is granted; the stay order is vacated.
¶44 REBECCA FRANK DALLET, J., withdrew from participation.
2019 WI 15 (State Ex Rel. Citydeck Landing LLC v. Circuit Court for Brown Cnty.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.