In Thomas Zimmer Builders, LLC v. Roots (2017AP2037), the Court of Appeals District IV held that an arbitration clause was enforceable because the complaint challenged the contract as a whole and because a company’s employee may invoke an arbitration clause even if the employee is not a signatory party to the contract.

Kurt and Monika Roots entered into a Design Consultant Agreement with Udvari-Solner Design Co. The Rootses later challenged the contract on the basis that employee Mark Udvari-Solner misrepresented himself as an architect before they signed the agreement. Udvari-Solner moved to compel arbitration pursuant to the contract’s arbitration clause.

The appeals court reversed the circuit court’s denial of Udvari-Solner’s motion to compel arbitration because:

1. Federal and state cases have held that challenges to the validity of a contract as a whole must be arbitrated when the contract has an arbitration provision.
2. An established legal rule states that employees may compel arbitration under a contract between their employer and a third party, even if the employee is not named in the contract, if the employee is acting within the scope of their employment.

In Gage Corp. v. Tamareed Co.(2017AP881), the Court of Appeals District IV held that Gage Corp. did not owe commission to sales agent Tamareed Corp. after Gage’s deal for a Saudi building project collapsed.

Tamareed procured a contract between Gage and the Saudi company. Gage and the Saudi company entered into an agreement, but Gage later discovered that the Saudi company was counterfeiting the design for its product. The two companies settled, and Gage offered Tamareed a portion of its settlement proceeds. Tamareed rejected the settlement funds and sought its full commission payment in court.

The court determined that email agreements between Gage and Tamareed established a contract between the parties that Gage would only pay Tamareed upon receiving payment for the goods it sold. Therefore, since Gage ultimately sold no goods to the Saudi company, Tamareed was not entitled to the full commission payment. The court rejected Tamareed’s argument that a prior case, Foster v. Holbrook-Armstrong Iron Co., created a blanket rule that sales agents should receive commission for procuring contracts between buyers and sellers, whether or not the sale ultimately goes through. The court ruled such a “procuring clause doctrine” favoring sales agents does not override contracts. Furthermore, the court said Tamareed could not pursue an unjust enrichment claim as an alternative to its breach of contract claim.

The court also rejected Tamareed’s argument that the circuit court erred in allowing expert witness testimony under the Daubert standard. The court ruled the expert used by Gage to testify to custom and usage in the trade industry was relevant and reliable, so the admissibility was at the proper discretion of the circuit court.

In Badgerland Overhead Door v. Today’s Overhead Door (2017AP714), the Court of Appeals District III held that Day Enterprises was liable for $20,000 owed to Badgerland Overhead Door after Day purchased assets and became successor to Today’s Overhead Door.

Day and Today’s Overhead Door entered into an asset purchase agreement that included the provision of a $20,000 credit to Today’s Overhead Door from Day. Following the purchase, Badgerland Overhead Door sought a garnishment action against Day, claiming it could collect from Day debts owed by Today’s Overhead Door because Day still owed the company the $20,000 credit.

Agreeing with the circuit court, the court of appeals held that the $20,000 credit was “property” eligible for garnishment under Wis. Stat. § 812.01(1). The court denied Day’s arguments that the circuit court improperly applied successor liability and that Today’s Overhead Door breached their contract with Day.

In City of Weyauwega v. Wisconsin Central Ltd.(2017AP2298), the Court of Appeals District IV held that the Federal Railroad Safety Act (FRSA) pre-empts a city ordinance prohibiting trains from obstructing cross-streets for more than 10 minutes. Wisconsin Central had received several citations for blocking roads and argued that FRSA regulations pre-empt the City of Weyauwega’s ordinance.

The FRSA includes two saving clauses exempting states’ (in this case the city’s) regulations from pre-emption (49 U.S.C. § 20106(a)(2)). First, the city may enforce a regulation so long as federal regulations do not cover the same subject matter. Here, the court determined that the subject of the city’s ordinance was the operation and movement of trains. Federal regulations on speed, crossing, and brake testing mean Wisconsin Central could violate federal regulations if it complies with the city’s ordinance. Therefore, the federal regulations do cover the same subject matter, and the first saving clause does not apply.

The second saving clause states that the city may enforce a regulation that is necessary to reduce a local safety hazard. The city argued that blocking cross streets increases emergency services response times, creating a local safety hazard. However, the court determined that increased emergency response times are not an issue unique to Weyauwega, so the second saving clause does not apply.

Because the city’s ordinance failed to pass either saving clause, the FRSA pre-empts, and trains may block Weyauwega streets for more than 10 minutes.