2004AP1053 Madison Teachers, Inc. v. Wisconsin Education Association Council

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“The general rule under the Federal Arbitration Act, 9 U.S.C. § 1 et seq. and, therefore, also under the Wisconsin Arbitration Act, Wis. Stat. § 788.01 et seq., which is patterned after the federal act, indicates that: ‘[W]here the arbitrator named in the arbitration agreement cannot or will not arbitrate the dispute, a court does not void the agreement but instead appoints a different arbitrator.’ McGuire, Cornwell & Blakey v. Grider, 771 F.Supp. 319, 320 (D. Colo. 1991). This rule is qualified, however, when it appears that the named arbitrator is central to the arbitration agreement. Zechman v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 742 F. Supp. 1359, 1364 (N.D. Ill. 1990). …

“Clearly, the arbitration provision under the Agreement specifically names Professor Haughton. The Agreement, however, does not state that if he is unavailable, the parties will not arbitrate disputes. It does not indicate that using Professor Haughton is a condition precedent that must be satisfied in order to engage in arbitration. In fact, the Agreement does not indicate any expectation as to what will happen if Professor Haughton is not available to serve as arbitrator. It appears that the parties either overlooked this eventuality or simply chose to ignore it. …

“The language of the Agreement identifies Professor Haughton by name, which does support the State Council’s argument that the professor was an important part of the Agreement. The language also indicates, however, that the parties wanted prompt resolution of their disputes — with a decision made ‘not later than seven days following the hearing.’ Quick resolution is one of the advantages to arbitration, yet rarely available from litigation. In addition, there is no language specifically stating that if Professor Haughton is not available, then the parties prefer to take their disputes to the courthouse.

“The surrounding circumstances also suggest that arbitration by a neutral party was the central factor to these parties. This is evidenced by the history they shared, including that every dispute up until the current one, was submitted to arbitration for resolution. Moreover, one year after this Agreement was signed, the parties were informed that Professor Haughton could not serve as permanent arbitrator any longer because of a federal appointment. Despite Haughton’s unavailability due to this appointment, neither party sought dissolution of the dispute resolution provision. …

“…We hold that the essence of the dispute resolution provision was to arbitrate all disputes before a neutral and objective third party without having to rush to the courthouse. Accordingly, we reverse the order of the trial court and remand with directions that the trial court enter an order compelling the State Council to participate in arbitration. We also direct the trial court to afford the parties an opportunity to select a mutually agreed-to arbitrator within a reasonable period of time. If no agreement can be reached, then the trial court is directed to appoint an arbitrator pursuant to Wis. Stat. § 788.04(1).”

FINE, J. (DISSENTING): “In my view, the Agreement here is not ambiguous: it is not an ‘arbitration agreement’; rather, it is an agreement to have Ronald W. Haughton, and only Haughton, resolve disputes under that Agreement. …

“Significantly, the Agreement does provide for replacement of others involved in the resolution of possible disputes under it. Thus, a ‘United Staff Services Program,’ referred to in the Agreement by its acronym ‘UniServ,’ is designated as a facilitator between Madison Teachers on one hand, and the Council and the Association on the other. …

“It is inconceivable to me that such careful drafting to cover a possible vacancy in the facilitating organization would not have been replicated in connection with Haughton, the person invested with the authority of ‘resolving all disputes which arise over the interpretation or application of the Agreement.’ That the parties did not provide for a similar mechanism if Haughton could no longer resolve disputes under the Agreement; that he was never designated as an ‘arbitrator’; and that the agreement refers to him by name every time it discusses resolution of disputes under the Agreement is unassailable plain-language evidence that the Agreement was not an agreement to ‘arbitrate,’ and that Haughton was not designated to ‘arbitrate’ disputes thereunder. Rather, he, and he alone, was chosen to resolve disputes under the Agreement because, apparently, the parties trusted him personally. That the parties may have agreed to permit someone to stand in for Haughton when they believed he was temporarily unavailable does not transmute the resolution-of-dispute agreement into a formal ‘arbitration agreement’ governed by Wis. Stat. ch. 788.

“In sum, the Agreement was executed in September of 1978, and Haughton was the very essence of its dispute-resolution system. With him no longer available, that essence is gone. In my view, it trumps the parties’ intent in 1978 by saying that someone other than Haughton can now be his surrogate. Accordingly, I respectfully dissent.”

Dist IV, Dane County, Krueger, J., Wedemeyer, P.J.