Code of Ethics Update: 2Q 2015

Once a year, we let you know about new decisions interpreting NAR’s Code of Ethics. There was just one case of interest during the period covered.

A.  Case

First Weber Group, Inc. v. Synergy Real Estate Group, LLC, 2015 WI 34, 361 Wis. 2d 496,  880 N.W.2d 498 (2015), rev'g 363 Wis. 2d 492, 846 N.W.2d 348 (Ct. App. 2014)

The timeliness of an arbitration request for a broker/brokerage dispute under an Association’ ethics rules is determined by the arbitrator.

A broker and a brokerage were both members of a REALTOR® Association and Article 17  requires members to arbitrate certain disputes. The brokerage and the broker had a dispute over an unpaid commission claimed by the brokerage, and an arbitration panel ordered payment of the commission to the brokerage. The broker did not pay, and the brokerage brought a court action for confirmation of the arbitrator’s award. The court ordered payment, but did not order payment of costs and attorney’s fees. The brokerage filed another arbitration request with their REALTOR® association for its costs and attorney’s fees. The broker did not attend the hearing and so the association did not hold the hearing. The brokerage petitioned the court for an order to compel arbitration but the petition was denied because it was brought more than 180 days after the dispute arose. The Court of Appeals affirmed the denial. The Supreme Court reversed, saying that the timeliness of an arbitration request was for the arbitrator to decide. The association’s arbitration panel was in a better position to interpret the association’s arbitration requirements than courts.