Horizon v. Geib: Wisconsin Court of Appeals Upholds Arbitration Award

Note: This opinion was not published in an official reporter and may not be cited as authority. Please consult counsel before relying on this opinion.

In Horizon Invest & Devel. Co. v. Geib, the Court of Appeals of Wisconsin addressed whether arbitrators must divide an award equally between two brokers. The court held that the arbitrators did not exceed the scope of their power by granting one party a 25% share of the commission, and that arbitration awards need not be on a one-half or nothing basis.

After closing a sale of commercial real estate in which he represented the purchaser, Geib sought to collect one-half of the $80,500 sales commission from Horizon, the listing broker. Geib maintained that he and Horizon orally contracted to split the commission payable out of the sale proceeds. When Horizon refused his demand for payment, Geib took the matter to arbitration, pursuant to his and Horizon's membership in the Greater Madison Board of REALTORS®. The arbitrators awarded Geib $20,125, or 25% of the commission. Based on its conclusion that the arbitrators exceeded the scope of their power, a trial court granted Horizon's request to vacate the award. Geib appealed.

The Court of Appeals of Wisconsin noted that courts conduct only limited review of arbitrators' awards, that such awards are generally presumed valid, and will be overturned only on clear and convincing evidence. The court of appeals stated that "courts will overturn an award only if arbitrators exceeded their authority, dispensed their own brand of justice, issued a perverse misconstruction of the contract, committed positive misconduct, demonstrated a manifest disregard for the law, or acted illegally or in violation of public policy."

The Court of Appeals of Wisconsin applied this standard to determine that the arbitrators did not exceed their authority by awarding Geib $20,125. The court of appeals noted that the trial court ruled that the arbitrators were empowered to award either one-half the commission earned by Horizon, or no commission. The court of appeals also noted that the trial court found that the arbitrators lacked the power to grant either the reasonable value of Geib's services or the equivalent of a quotient verdict. The court of appeals found that the arbitrators possessed the power to grant Geib a portion of the commission if Horizon had a legal obligation to compensate him. The court held that even if the arbitrators employed the wrong theory in their calculation of the award, they did not exceed their powers. Thus, the arbitrators' award of 25% of the commission was affirmed. In addition, the court granted Geib's request for interest on the award from the date of the award, but denied his request for attorneys' fees.

Horizon Invest & Devel. Co. v. Geib, 163 Wis. 2d 966, 473 N.W.2d 610 (Ct. App. 1991) (Unpublished Opinion).