Design Consultant Agreement – Arbitration Clause

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WI Court of Appeals – District IV

Case Name: Thomas Zimmer Builders, LLC v. Kurt E. Roots, et al.

Case No.: 2017AP2037

Officials: Lundsten, P.J., Kloppenburg and Fitzpatrick, JJ.

Focus: Design Consultant Agreement – Arbitration Clause

Kurt and Monika Roots filed a third-party complaint against Mark Udvari-Solner seeking relief based on intentional misrepresentation, violation of WIS. STAT. § 100.18 (2015-16), and equitable contribution or indemnification. In support of their claims, the Rootses alleged that Udvari-Solner falsely represented himself to be an architect to induce the Rootses to enter into a Design Consultant Agreement with Udvari-Solner Design Co. for the design of the Rootses’ new house. Udvari-Solner moved to compel arbitration pursuant to the arbitration clause in the Agreement. The circuit court denied the motion. This court granted Udvari-Solner’s petition for leave to appeal the court’s non-final order.

First, we take as admitted Udvari-Solner’s argument, supported by legal authorities, that the Rootses’ claims alleging fraud in the inducement of the Agreement challenge the validity of the entire Agreement and are therefore subject to the arbitration clause in the Agreement. We deem this argument admitted because the Rootses fail to address it or the cited supporting legal authority in any meaningful way in their response brief. Second, we follow the “rule,” fashioned by federal case law and cited by both Udvari-Solner and the Rootses, to the effect that an employee or agent of a company is entitled to invoke a clause requiring arbitration in a contract to which the company is a party even if the employee or agent is not a party to the contract. We follow this rule because it appears to apply here and the Rootses do not develop an argument as to why the rule should not apply. It follows that Udvari-Solner, as an employee or agent of the Design Company, is entitled to arbitration on the Rootses’ claims for monetary damages.

Accordingly, we reverse the circuit court’s denial of Udvari-Solner’s motion to compel arbitration and remand for further proceedings consistent with this opinion.

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