Heike Baierl v. Robert John Baierl

COURT OF APPEALS
DECISION NOTICE
DATED AND FILED This opinion is subject to further editing. If
published, the official version will appear in
the bound volume of the Official Reports.
October 9, 2024
A party may file with the Supreme Court a
Samuel A. Christensen petition to review an adverse decision by the
Clerk of Court of Appeals Court of Appeals. See WIS. STAT. § 808.10
and RULE 809.62.

Appeal No. 2023AP662 Cir. Ct. No. 2021FA401

STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT II

IN RE THE MARRIAGE OF:

HEIKE BAIERL,

PETITIONER-APPELLANT,

V.

ROBERT JOHN BAIERL,

RESPONDENT-RESPONDENT.

APPEAL from orders of the circuit court for Waukesha County:
WILLIAM J. DOMINA, Judge. Reversed and cause remanded for further
proceedings.

Before Gundrum, P.J., Neubauer and Grogan, JJ.

Per curiam opinions may not be cited in any court of this state as precedent

or authority, except for the limited purposes specified in WIS. STAT. RULE 809.23(3).
No. 2023AP662

¶1 PER CURIAM. Heike Baierl appeals a circuit court order granting
her estranged husband Robert Baierl’s motion to partially stay the underlying
divorce action. The circuit court granted the stay after determining that Heike’s
marital waste and property division claims were business claims subject to
arbitration and that Robert did not waive his right to request arbitration. Heike
also appeals an order removing the divorce trial from the court’s calendar until
arbitration is complete and an order denying her motion for reconsideration. On
appeal, Heike challenges the circuit court’s determination that her claims are
arbitral. Alternatively, she argues that Robert waived his right to request her
claims be submitted to arbitration. We conclude Robert waived his right to
arbitration of these claims. We therefore reverse the circuit court’s order granting
Robert’s stay request and remand the case for further proceedings consistent with
this opinion.

BACKGROUND

¶2 Heike and Robert were married in 1965. They have four adult
children: Marlene, Kelly, Kim, and Jonathan. During their marriage, and as
relevant to this appeal, Heike and Robert invested in and ultimately amassed a
multi-million dollar apartment portfolio. The apartment portfolio was placed
under various LLCs for administrative and liability purposes. Heike and Robert
also established a company, Supreme Builders, Inc. to manage their property.

¶3 Robert is a director and managing member of the LLCs and the
corporation. In general, Heike and Robert own approximately ninety-eight percent

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of almost all of the LLCs and the corporation.1 The remaining ownership interests
belong to their son, Jonathan, their daughter, Kelly, and Jonathan’s wife, Jessica.

¶4 Heike and Robert have lived separately since 2008. On April 13,
2021, Heike petitioned for legal separation, which she later converted to a petition
for divorce. In her petitions, she identified the apartment portfolio, both the real
estate and businesses, as marital property subject to division. Litigation between
the couple was immediately contested—the parties filed motions against each
other along with separate legal actions. In this divorce case, the circuit court
appointed a special master to:

(1) account for real estate and other property owned by the
parties through certain companies, (2) account for assets,
income, debts, and liabilities associated with the operation
of the companies, or associated with real estate owned by
the parties otherwise, (3) facilitate the discovery of
information between the parties and, as necessary, from
third parties, (4) make recommendations regarding the
resolution of discovery disputes, and (5) make
recommendations regarding the effectiveness and
enforceability of any party’s transfer of rights in co-owned
companies or marital assets.

The order provided that the original of every document submitted to the referee
would be filed with the court; the referee would make his recommendation; a party
could object to a recommendation and seek de novo review; and all
recommendations ultimately approved by the circuit court would be “appealable
after the final disposition of this case as if they were made by this Court.”

1
Heike has challenged the third-party ownership interests and the transfers of shares
establishing their interests. That dispute is currently in arbitration.

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¶5 Both parties availed themselves of the referee on numerous
occasions during the pendency of this action. The referee reviewed the parties’
filings and made detailed recommendations to the circuit court.

¶6 As relevant to this appeal, on December 9, 2021, Heike wrote to the
referee requesting an emergency hearing regarding Robert’s sale of their
apartment portfolio. Heike claimed that Robert had unilaterally negotiated a sale
of their apartment portfolio’s real estate for $59 million but that her expert
believed the property had a higher fair market value. At a hearing and following
the parties’ arguments, the referee made various findings. The referee determined
that it could and would grant approval of the sale without Heike’s consent. The
referee also determined that it did not need to resolve the fair market value of the
apartment portfolio before approving the sale. The referee explained:

I think the parties, like in any proceeding, deserve the
opportunity to marshal their expert opinion evidence before
any judge makes a decision about the value of this
property. Therefore, if this property is sold for $59 million
and if $59 million is less than the fair market value of the
property, it is possible -- I’m not saying it’s necessarily the
case, but it is possible that [Robert] will owe some duty to
[Heike] when it comes to equalizing the distribution of
the -- or the division of the couple’s property to make up
the difference for any shortfall between this sale price and
the fair market value of the property.

¶7 The referee also concluded “Despite the fact I am approving this
transaction, [Heike] reserves her right to object to whether the sale represents a
fair market value and whether the allocation stated in Exhibit A [to the Real Estate
Purchase Agreement] is accurate.”

¶8 Following the hearing, in the amended Special Master/Referee Order
No. 9, the referee recommended and the circuit court ordered:

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1. The proposed sale of real estate to Cobalt Development
Holdings, LLC (“Cobalt”), as identified in the Real
Estate Purchase Agreement dated December 9, 2021 is
approved.

2. Robert Baierl is authorized to negotiate and close the
transaction described in the Real Estate Purchase
Agreement, on the following conditions:

….

3. [Heike] may reserve her right to object to the
admissibility and/or probative value of any statements
made in Schedule A to the Real Estate Purchase
Agreement.

¶9 Less than two weeks later, on December 22, 2021, Heike requested
another hearing before the special master. She explained:

There is an active purchase sale agreement for the real
estate to be sold. Pursuant to the Order of [the circuit
court] on April 22, 2021 the proceeds from the sale of any
property in which Heike Baierl or Robert Baierl are to be
held in trust. At this time, the proceeds of the sale do not
need attention due to this Order containing specific
direction from the court when real estate is sold, however,
the cash holdings of the LLCs that are not part of the sale
do require immediate attention and further Orders of the
court. According to the terms of the various LLC
Operating Agreements, the LLCs will be dissolved upon
the sale of the real estate…. The cash holdings are of
significant value and are at great risk to be funneled outside
of the marital estate since only [Robert] has control over
those assets.

Heike believed the amount of cash holdings held by the LLCs was approximately
$4.5 million. She requested a distribution of at least fifty percent of that amount.
She explained she was requesting at least fifty percent based on her belief that
Robert:

has already taken hundreds of thousands of dollars in
attorney fees from the cash holdings without a signed
stipulation for this withdrawal to be accounted for as an
advanced distribution on property division. Because of
this, we believe the first order must be to offset the amount

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pre-distributed to [Robert] unilaterally from the cash
holdings by making an equal distribution to [Heike]. The
second order then should be to distribute the remaining
cash holdings equally between Heike Baierl and Robert
Baierl.

¶10 The parties met with the referee and set a briefing schedule
regarding Heike’s request for a distribution of martial assets. On January 26,
2022, Heike, in her letter brief, outlined a number of allegedly improper actions
taken by Robert in regard to their businesses during the divorce, including in part:
“1) Excessive spending”; “2) Manipulation of deposits”; “3) Unexplained
Shortage of Revenue”; “4) Unexplained usage of accounts where property was
sold”; “5) Failure to distribute Cash Holdings from other sold properties”;
“6) [$]800,000.00 distribution from LLC to Supreme Builders is being spent
down”; and “7) Unexplained withdrawals.”

¶11 In February 2022, as briefing concluded on Heike’s request for a
distribution of marital assets, Jonathan, Jessica, and Kelly moved to intervene into
the divorce, stay proceedings, and compel arbitration. Robert then moved to stay
the referee’s ruling on Heike’s request for a distribution of marital assets pending
resolution of the proposed intervenors’ motions. He also stated he joined in the
intervenors’ substantive motions.

¶12 The referee addressed all of these issues in Special Master/Referee
Order No. 14. In that order, the referee first determined that “deciding whether a
non-spouse may participate in this divorce and deciding whether to compel
arbitration of property division issues” was outside the scope of tasks the circuit
court had referred to the referee. Accordingly, the referee stated it was not going
to decide those issues and the circuit court would determine whether the third
parties could intervene and whether to order arbitration.

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¶13 As for Robert’s motion to stay the referee’s ruling on Heike’s
request for a distribution of marital assets, the referee observed “the better course
is to hold off ruling until the objections of the proposed Intervenors are resolved.”
However, the referee acknowledged that Heike opposed the motions in part
because:

[T]he motions of the proposed Intervenors come at the
eleventh hour and after a good deal of time and effort was
invested in briefing the merits of [Heike’s] request. I
sympathize with [Heike]. The proposed Intervenors are
and have been represented by counsel who were made
aware in early- to mid-December that [Heike] was asserting
that there was cash on hand in the LLCs that should be
distributed in advance of final property division. [Heike’s]
assertions were opposed from the get-go by those attorneys,
yet at least eight weeks passed before any of the proposed
Intervenors invoked the parties’ arbitration agreement.

[Heike] is not unjustified in questioning the motives of
the proposed Intervenors. One reason courts respect
arbitration agreements is that arbitration tends to be a more
expeditious, less costly alternative to litigation. But in this
case, arbitration offers no such relief. At the time
arbitration was invoked, the issue in dispute was almost
fully briefed and ready to be decided. Arbitration will not
expedite a ruling on the objections of the proposed
Intervenors or reduce the expense of these proceedings.
Indeed, it is highly unlikely that the merits of [Heike’s]
claim (or the objections of the proposed Intervenors) will
be heard at all before the real estate operations of the LLCs
are liquidated.

Alas, for [Heike] to assert that the proposed Intervenors’
motions are untimely or that they have been waived by
virtue of their participation in these proceedings, see, e.g.,
J.J. Andrews, Inc. v. Midland, 164 Wis. 2d 215, 223[, 474
N.W.2d 756] (Ct. App. 1991), is tantamount to asking me
to rule on motions that have not been referred to me. These
arguments will have to await presentation to [the circuit
court].

The referee ordered “[Heike]’s request for a distribution of marital assets is
stayed.” The referee explained Heike was permitted to renew her request once the

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sale of the apartment portfolio closed and if the parties’ dispute was not resolved
by mediation. The circuit court signed the referee’s recommendation.

¶14 Before the circuit court ruled on the intervenors’ motions, they
withdrew them based on the terms in Special Master/Referee Order No. 17.2 In
April 2022, Heike then renewed her request for an advanced property division.

¶15 After more briefing between the parties, the referee found that Heike
requested:

▪ $440,000 from the cash assets of Supreme Builders, “as a
matching payment to that which [Robert] received from
Supreme Builders for his personal estimated tax
obligation.” ...

▪ Half the liquidated value of an alleged note payable to
the couple from Supreme Builders in the alleged amount
of $2,903,000.

▪ An amount of cash on deposit in the businesses in which
the couple owns controlling interests (Supreme Builders
and several other businesses to which we have referred
collectively as “the LLCs”), to offset what [Heike] claims
to have been “personal expenses of $1,245,442.69, paid
[to Robert] through the Supreme Builders Inc. account,”
which sum includes the $440,000 in personal taxes
allegedly advanced on [Robert’s] behalf, for items such
as “gifts, personal expenses, cash draws and personal
attorney fees.”

2
Special Master/Referee Order No. 17 provided in part that:

On the condition that (a) loans made by Mr. and Ms. Baierl
individually to various business entities (“LLCs”) are repaid into
trust out of the proceeds of the sale of the real estate owned by
the LLCs and (b) the proposed intervenors Kelly, Jonathan and
Jessica Baierl are paid at closing the net proceeds allocable to
their proportionate share of each LLC, then the requests to
intervene filed by all of the proposed intervenors, including the
LLCs, are withdrawn.

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▪ Half of the cash that remains in the possession of
Supreme Builders and the LLCs.

¶16 In Special Master/Referee Order No. 20, which was signed by the
circuit court, the referee denied Heike’s request for various reasons. One reason
the referee offered was that “[Heike’s] claims about [Robert] using family
business funds to pay for personal expenses falls within the scope of her marital
waste claim, a classic issue for trial[.]” Another reason for denial was that
although “[Robert] did not appear to contest … that he has paid for his own
personal taxes with company funds but has not arranged for payment of [Heike’s]
corresponding personal taxes,” Heike’s “bald factual assertions” did not fulfill the
evidentiary standards that must be met before a court would dispose of a claim
without a trial.

¶17 After that determination, additional motion practice continued
between the couple. In September 2022, the parties agreed to a scheduling order
in anticipation of trial. The parties agreed to disclose expert witnesses on
October 5, disclose expert reports on October 31, and disclose rebuttal experts and
fact witnesses on November 4. The parties made the witness disclosures as
required.

¶18 On November 10, 2022, Robert moved, in part, “TO STAY ALL
BUSINESS MATTERS IN THIS ACTION FOR LACK OF JURISDICTION.”
Robert explained he had just reviewed Heike’s expert reports and “learned for the
first time that Heike intends to assert claims against him that relate directly to acts
taken by the business entities regarding business assets, through Robert in his
capacity as managing member.” Specifically, Robert asserted that “Heike will
seemingly attempt to claim that Robert, while acting in his capacity as managing

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No. 2023AP662

member, conducted business in a manner contrary to her interest as a member or
shareholder of the business entities” in various ways:

• Excessive spending of Supreme Builders, Inc. funds, (see
Dkt. #530);[3]

• Under-renting of apartment units relative to the
applicable industry standard, (see id.);

• Failing to distribute to Heike $3,231,556.00 of cash to
which she claims as an entitlement but for a loan strategy
implemented by Robert and his accountant, (see
Dkt. #508);[4]

3
Docket No. 530 is not an expert report, but it is Heike’s “Disclosure of Fact and
Rebuttal Expert Witnesses.” It was filed on November 4, 2022 pursuant to the scheduling
stipulation. In this witness list, Heike identified three expert rebuttal witnesses and twenty-five
lay witnesses. As to the first rebuttal expert witness, Andrew Hess, Heike stated:

It is anticipated that Mr. Hess will testify in rebuttal of
[Robert’s] allegations of likely brokerage fees saved and
[Robert’s] alleged amount he says he should have received as a
brokerage fee. Mr. Hess will also testify on the excessive
spending of the management company and under-renting of the
apartment unit portfolio. He will also testify as to [Robert’s]
management as it relates to historical revenues of the apartment
portfolio versus the industry standard, and the alleged expertise
of [Robert] as presented in his expert reports and anticipated
testimony. He will also testify as to related expert testimony to
the sale of the apartment investment portfolio including the
statements made in the expert report by [Robert] to
Ms. Knowles. Additionally, he will testify as to the reasons and
contributions resulting in growth of the apartment and property
investment portfolio.
4
Docket No. 508 is Dave Schultz, CPA’s expert report. On October 5, 2022, Heike
advised:

Mr. Schultz will testify regarding his analysis of the marital
estate, the historical tax related records, business records and
other financial records of the parties and the various entities
owned by the parties to this action (“Baierl Entities”). He will
provide testimony regarding the operations of the businesses,
assets, loans, accounting practices, transfers and other related
testimony supporting any related claim of the Petitioner
including fair property division and marital waste.

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No. 2023AP662

• Arranging for the sale of all real estate holdings without
Heike’s approval, (see id);

• Underselling the apartment unit portfolio and Greenfield
Park II, LLC, by $9,000,000.00, (see Dkt. #515);[5]

• Underpaying Heike in the amount of “at least”
$2,670,894.00 between January 1, 2018, and August 31,
2022, (see Dkt. #506);[6] and

• Providing gifs to three [sic] of the parties four children,
specifically, Kelly Baierl, Jonathan Baierl, and Jessica
Baierl.[7]

¶19 In his motion, Robert explained that he “and Heike each signed
operating agreements … that contained broadly worded arbitration provisions[.]”
Specifically, he stated that each of the business entities’ operating agreements
contained the following arbitration provision:

5
Docket No. 515 is Andrew J. Hess’s expert report. On October 5, Heike advised that
“Mr. Hess … will testify regarding the value of the real estate of the Baierl Entities and the value
of Baierl Entities, appropriate brokerage fees, and testimony regarding Supreme Builders, Inc.’s
management of said properties and any related claim of the Petitioner including fair property
division and marital waste.”
6
Docket No. 506 is Tracy L. Coenen, CPA, CFF, MAFF’s expert report. On October 5,
Heike advised:

Ms. Coenen will testify regarding her forensic analysis
including the analysis of the financial and business records of the
parties and the various entities owned by the parties to this action
(“Baierl Entities”). She will provide testimony regarding the
operations of the businesses, assets, loans, accounting practices,
transfers and other related testimony supporting any related
claim of the Petitioner including fair property division and
marital waste.
7
The couple’s four children are Marlene, Kelly, Kim, and Jonathan. Jessica is not one
of the couple’s four children; she is their daughter-in-law.

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Section 11.7. Dispute Resolution.

(a) Disputes. Any dispute arising with respect to this
Agreement, in its making or validity, its interpretation, or
its breach shall be settled by arbitration in Waukesha
County, Wisconsin, by a single arbitrator mutually agreed
to by the disputing parties pursuant to the then obtaining
rules of the American Arbitration Association. Such
arbitration shall be the sole and exclusive remedy for such
disputes except as otherwise provided in this Agreement.
Any award rendered shall be final and conclusive upon the
parties, and a judgment may be entered in any court having
jurisdiction.

Robert argued that because of these arbitration provisions, “this Court is
compelled to hold that any decision related to the businesses value, or Robert’s
actions as managing member, or any other Entity-related issues is outside the
scope of the Court’s jurisdiction.” Robert, requested, in part:

An order that all issues related to the Entities, including but
not limited to Heike’s allegations, the contested valuation
of the Entities, the issues raised by the experts in their
reports, and Robert’s actions as managing member, be
stayed so that Heike may proceed with her claims in
arbitration[.]

¶20 Heike opposed the motion. She argued that: (1) Robert’s personal
use of cash holdings from the parties’ company Supreme Builders, Inc. and his
unilateral sale of the parties’ multi-million-dollar marital apartment portfolio were
martial waste claims not subject to arbitration; (2) even if the claims were subject
to arbitration, Robert’s failure to seek arbitration during the course of the divorce
action constituted waiver of his right to arbitration; and (3) the management
company, Supreme Builders, Inc., was not subject to an arbitration clause.

¶21 In terms of Heike’s waiver argument, Robert replied that he believed
she withdrew her claims regarding the sale and he “expressly and consistently
asserted throughout briefing on both of Heike’s advanced property distribution

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motions that arbitration was required as to specific issues presented in Heike’s
motions.”

¶22 The circuit court granted Robert’s motion. It determined:

What the Petitioner, Heike, claims are marital waste issues
that result from the Respondent, Robert’s, manipulation
and abuse of the business entities by disposing of or
encumbering business assets clearly presents a complaint
surrounding the operation of the business entities.
Moreover, the claims about business management and
operations implicate the rights of third parties. The Court
will not conclude that the enforceability of the arbitration
provisions have been waived by the Respondent, Robert.
This issue had been identified in the Spring of 2022 as
note[d] in Special Master Order No. 14 and resulting in
arbitration submissions. The Court concludes that this
issue has not been dormant and, finally, because of the
acknowledgment by the Petitioner, Heike, that … all the
business entities are “tightly intertwined and aligned” the
Court concludes that the arbitration clauses expressed in
some of the governing documents applies to all business
entities.

It partially stayed the divorce action pending arbitration. It also imposed a sixty-
day limit for Heike to assert in arbitration all the claims she attempted to raise in
the divorce proceeding. After the court determined that the parties’ divorce claims
could not be determined before arbitration, it removed the divorce trial from its
calendar. Heike appeals.

DISCUSSION

¶23 On appeal, Heike challenges the circuit court’s determination that
her claims are arbitral. Alternatively, she argues Robert waived his right to
request her claims be submitted to arbitration. We begin with her argument that
Robert waived his right to request her claims be submitted to arbitration because
our resolution on that issue disposes of the appeal.

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¶24 “Wisconsin has a policy to encourage arbitration as an alternative to
litigation.” J.J. Andrews, 164 Wis. 2d at 223. “The purpose of arbitration is to
obtain a speedy, inexpensive and final resolution of disputes, and thereby avoid
the expense and delay of a protracted court battle.” Id. at 223-24.

¶25 However, even if an arbitration clause properly includes a party’s
claims, “there are circumstances where a party may be deemed to have waived
arbitration.” Meyer v. Classified Ins. Corp. of Wis., 179 Wis. 2d 386, 392, 507
N.W.2d 149 (Ct. App. 1993). The general rule on waiver is that:

[A]ny conduct of the parties inconsistent with the notion
that they treated the arbitration provision as in effect, or
any conduct which might be reasonably construed as
showing that they did not intend to avail themselves of such
provision, may amount to a waiver thereof and estop the
party charged with such conduct from claiming its benefits.

Id. (citing City of Madison v. Frank Lloyd Wright Found., 20 Wis. 2d 361, 387,
122 N.W.2d 409 (1963)). “Parties know how important it is to settle on a forum at
the earliest possible opportunity, and the failure of either of them to move
promptly for arbitration is powerful evidence that they made their election—
against arbitration.” Cabinetree of Wis., Inc. v. Kraftmaid Cabinetry, Inc., 50
F.3d 388, 391 (7th Cir. 1995). We ask whether the party did “all it could
reasonably have been expected to do to make the earliest feasible determination of
whether to proceed judicially or by arbitration[.]” Id.

¶26 “Whether a party’s conduct constitutes a waiver of the right to
arbitrate presents a mixed question of fact and law.” Kirk v. Credit Acceptance
Corp., 2013 WI App 32, ¶41, 346 Wis. 2d 635, 829 N.W.2d 522. “We set aside
the circuit court’s findings of fact only if they are clearly erroneous.” Id.
“‘However, the application of the facts to a legal standard, such as waiver, is a

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question of law that we review independently of the [circuit] court.’” Id. (citation
omitted).

¶27 Heike asserts Robert waived his right to request that her claims be
submitted to arbitration based on his litigation conduct. Robert’s response to
Heike’s assertion is seemingly contradictory. On one hand, Robert argues that he
did not know that Heike’s marital waste and property division claims were
actually business-related claims subject to arbitration until October 31, 2022 (the
day she filed her expert reports) and he promptly moved for arbitration ten days
later. On the other hand, Robert argues that throughout the divorce proceeding he
briefed and argued to the court that the claims being made by Heike were
business-related claims subject to arbitration.

¶28 It appears as though the circuit court adopted Robert’s latter
argument in support of its determination that Robert did not waive his right to
request arbitration. After all, the circuit court determined that Robert did not
waive his right to arbitrate because arbitration “had been identified in the Spring
of 2022 as note[d] in Special Master Order No. 14 and resulting in arbitration
submissions. The Court concludes that this issue has not been dormant.”

¶29 However, Special Master/Referee Order No. 14 did not consider
Robert’s request for arbitration. The order considered only the third-party
intervenors’ motions to intervene and to compel arbitration and Robert’s motion to
stay the referee’s ruling on Heike’s motion for an advanced marital property
disbursement pending the intervenors’ motions. In Special Master/Referee Order
No. 14, the referee explicitly determined it would not make a recommendation on
the intervenors’ motions because they were outside its delegated authority but it

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would grant Robert’s motion to stay so that the circuit court could resolve the
intervenors’ motions.

¶30 In his brief to this court, Robert emphasizes that in his motion to stay
the referee’s ruling on Heike’s advance property disbursement motion, Robert
stated that he “joins in the substantive arguments presented in both [intervenors’]
motions filed on February 8, 2022.” To the extent Robert’s position is that he
should be deemed to have moved to compel arbitration based off this statement,
Robert overlooks that the circuit court never ruled on the intervenors’ motion to
compel arbitration because they withdrew it in April 2022. Once the intervenors
withdrew their requests, Robert made no separate request for arbitration. A party
invoking an arbitration provision must move to compel arbitration. See WIS.
STAT. § 788.05 (2021-22)8 (“Any application to the court hereunder shall be made
and heard in the manner provided by law for the making and hearing of motions,
except as otherwise herein expressly provided.”); see also Kay v. Board of Educ.
of Chi., 547 F.3d 736, 738 (7th Cir. 2008) (“[J]udges must not invoke arbitration
agreements on their own motion.”).

¶31 Moreover, based on Robert’s assertions in his brief to this court, it
appears Robert was on notice as early as December 2021 that Heike’s claims were
going to involve what he asserts are business-related claims. However, in
response to Heike’s December 2021 motion for an advance property distribution,
Robert did not move to compel arbitration. Instead, he chose to file a twenty-three
page brief and more than two hundred pages of exhibits. He then waited until the

8
All references to the Wisconsin Statutes are to the 2021-22 version unless otherwise
noted.

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No. 2023AP662

issue was fully briefed to “join” the third-party motions to intervene and to compel
arbitration. Later, when the intervenors withdrew their intervention/arbitration
motions and after Heike renewed her advance property distribution motion, Robert
did not respond with a request for arbitration but again briefed the issue and filed
exhibits. It seems apparent from the Record that Robert chose to proceed
judicially with these claims. See Cabinetree, 50 F.3d at 391.

¶32 Robert nevertheless argues to this court that his position throughout
the litigation was that Heike’s claims needed to be arbitrated. However, the
Record citations he provides do not establish that he made a request or demand
that her marital waste or property division claims be arbitrated before Heike filed
her expert reports.9 Instead, Robert did not make any motion regarding arbitration
until November 10, 2022—nineteen months after litigation in this case
commenced and long after the issues he claims are subject to arbitration were
raised. The Record does not reflect that Robert did “all it could reasonably have
been expected to do to make the earliest feasible determination of whether to
proceed judicially or by arbitration[.]” See id.

¶33 As to Robert’s argument that he only learned of Heike’s claims
against him when she filed her expert reports, his argument is belied by the

9
For example, Robert advises this court that, “At a hearing before the Referee on
February 1, 2022, Robert’s counsel specifically advised the Referee of Robert’s position that
Heike’s request should be arbitrated.” The Record citation provided in support of that assertion
reveals that, in the context of the parties’ discussion on who would broker the sale if the portfolio
sale fell through, the parties decided they would brief that issue if necessary, and Robert advised
the referee that, if briefed, he would argue the broker issue was subject to arbitration.

In another example, Robert advises this court that, “In a letter brief filed with the circuit
court on February 4, 2022, Robert reiterated his position that arbitration was necessary.” The
Record citation provided in support of that assertion reveals Robert made a single reference to the
word “arbitration” on page thirteen of his seventeen-page, single-spaced, sur-reply brief.

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Record. The Record in this case shows that throughout the pendency of this action
Heike put Robert on notice that she was challenging his personal use of cash
holdings from the parties’ companies as well as his sale of the parties’ apartment
portfolio. Robert’s use of the cash holdings from the businesses formed the basis
of Heike’s repeated requests for an advance property distribution along with other
motions related to Heike’s desire to protect and account for her interest in these
holdings.

¶34 The Record also reflects that Robert was put on notice that Heike
was challenging the fair market value of the apartment portfolio sale. The
transcript from the December 10, 2021 hearing with the referee along with the
subsequent order following the hearing shows that Heike did not believe the
cumulative value of the property was $59 million and she was reserving her right
to contest Robert’s sale of the property at the divorce trial. In her filings to the
referee/court, she also offered emails from her expert, who opined that the
portfolio was worth more, in part, due to below-market rents.

¶35 Although Robert claims in his brief that he believed Heike withdrew
that claim based on letters that she later submitted to the circuit court stating she
agreed to the purchase price, Robert overlooks that in both of those letters Heike
also advises that her broker is prepared to list the portfolio for six million dollars
more than the purchase price. This should have put Robert on notice that she was
going to pursue her marital waste claim at trial as the parties had discussed at the
hearing with the referee. Robert did not request arbitration. Instead, the parties
continued to litigate all aspects of this divorce case. Robert waited until Heike
filed her expert reports before he decided to request arbitration.

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No. 2023AP662

¶36 As stated earlier, the standard governing whether a party waived,
through litigation conduct or delay, its ability to invoke an arbitration provision
asks whether the party “[did] all it could reasonably have been expected to do to
make the earliest feasible determination of whether to proceed judicially or by
arbitration.” Id. Applying that standard to the Record before this court, we
conclude that Robert waived his right to arbitrate the marital waste and property
division claims against him. If, as Robert believes, these claims are arbitral, the
Record establishes those claims were at issue for months before Robert sought
arbitration. During that time, Robert chose instead to litigate those claims or, in
terms of the value of the portfolio, gave Heike the false impression that she would
be able to prove at the divorce trial that he undersold their apartment portfolio.
We therefore reverse the circuit court order and remand for further proceedings
consistent with this decision.

¶37 Because we determine Robert waived his right to request arbitration
of Heike’s marital waste and property division claims, we do not resolve the issue
of whether the circuit court erred by determining these claims were business-
related claims subject to arbitration and ordering Heike to submit them to
arbitration. See State v. Blalock, 150 Wis. 2d 688, 703, 442 N.W.2d 514
(Ct. App. 1989) (cases should be decided on narrowest possible ground).

By the Court.—Orders reversed and cause remanded for further
proceedings.

This opinion will not be published. See WIS. STAT.
RULE 809.23(1)(b)5.

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