Conney v. Quarles & Brady LLP et al

Filing 31

DECISION AND ORDER signed by Judge Lynn Adelman on 4/16/14 denying 24 Motion to Compel. (cc: all counsel) (dm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
DAVID CONNEY, M.D.,
Plaintiff,
v.

Case No. 10-CV-1150

QUARLES & BRADY, LLP,
MICHAEL SCHAALMAN, and
PAUL BAUER,
Defendants.

DECISION AND ORDER
Plaintiff Dr. David Conney filed this diversity action against defendants Quarles &
Brady, LLP (“Quarles”), a Wisconsin law firm, and two Quarles lawyers on December 21,
2010. The action arises out of defendants’ representation of plaintiff in an unsuccessful
lawsuit. Plaintiff alleges that defendants committed malpractice and charged excessive
fees for their services. Plaintiff moved to stay the proceedings and compel arbitration of his
claims against Quarles pursuant to §§ 3 and 4 of the Federal Arbitration Act (“FAA”), 9
U.S.C. §§ 3–4. Quarles conceded that it had entered into an arbitration agreement with
plaintiff, which was governed by the FAA, but opposed the motion to compel arbitration.
I granted the motion in part and denied it in part. I ordered Quarles to arbitrate the
excessive fee claim but found that the malpractice claim was not arbitrable. I then stayed
litigation of the malpractice claim pending arbitration of the fee dispute.
As permitted by the agreement, plaintiff selected Michael Conway, who is based in
Chicago, as the arbitrator and suggested that the arbitration take place in Chicago because

it would be more convenient for Conway. Quarles objected to this proposal in a letter
addressed to Conway, which stated:
The United States District Court for the Eastern District of Wisconsin is the place
where this litigation was commenced. It ordered arbitration. It did not order
arbitration in Chicago. There is no reason to believe the arbitration should take
place in Chicago, which has absolutely nothing to do with this dispute other than the
fact that Dr. Conney chose to retain Mr. Joyce and Dr. Conney and Mr. Joyce chose
you as the arbitrator. We believe you should direct that the arbitration take place in
Milwaukee because we believe you have no authority to direct otherwise.
(Aff. of Terry E. Johnson, Ex. B, ECF No. 29-2.) Despite this objection, the arbitrator ruled
on February 3, 2012, that the arbitration would take place in Chicago. In October 2012,
defendants filed a motion in this court asking me to enforce the arbitration order because
they believed the arbitrator was planning to arbitrate the malpractice claim. In that motion,
defendants did not discuss the location of the arbitration or object to arbitrating in Chicago.
On December 22, 2013, the arbitrator issued a written decision awarding relief to
plaintiff. Shortly thereafter, plaintiff filed a petition to confirm the arbitration award in the
Circuit Court of Cook County, Illinois. Quarles removed the case to the Northern District
of Illinois with the intent to have that court transfer the matter back to this court, and plaintiff
filed a motion to remand which is pending. Before me now is defendants’ motion for an
order either compelling plaintiff to dismiss the action filed in Illinois or prohibiting him from
pursuing that action until I have the opportunity to review the arbitration award and resolve
plaintiff’s malpractice claim.
As an initial matter, I find that the parties’ arbitration agreement is governed by the
FAA. Plaintiff states that he filed the confirmation proceeding in Illinois because “the
arbitration agreement is governed by Wisconsin law . . . [and] the Wisconsin Arbitration Act
requires that the confirmation proceeding take place in the county from which the award
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was issued.” (Pl.’s Resp. to Defs.’ Supplemental Authority in Supp. of Non-Dispositive Mot.
3, ECF No. 30.) This is the first time in over three years of litigation that plaintiff has argued
that the FAA does not govern the parties’ arbitration agreement. As noted, he expressly
relied on the FAA when moving to compel arbitration, and defendants did not dispute that
the FAA applied to this case. As a result, I applied the FAA when deciding to compel
arbitration. Moreover, in his briefs, plaintiff does not explain his change of position or offer
any legal authority in support of his view that the Wisconsin Arbitration Act governs. Thus,
I find that plaintiff has waived this argument, and I will continue to apply the FAA. See
Puffer v. Allstate Ins. Co., 675 F.3d 709, 718 (7th Cir. 2012) (even arguments that are
raised are waived “if they are underdeveloped, conclusory, or unsupported by law”); U.S.
v. Berkowitz, 927 F.2d 1376, 1384 (7th Cir. 1991) (“[P]erfunctory and undeveloped
arguments, and arguments that are unsupported by pertinent authority, are waived . . . .”).
Defendants argue that plaintiff should be required to bring his petition to confirm the
arbitration award in this court because, under § 4 of the FAA, I could only compel the
parties to arbitrate in this district. Therefore, according to defendants, the arbitration should
have taken place in the Eastern District of Wisconsin and not in Chicago. If the arbitration
had taken place in this district as it should have, defendants argue plaintiff would have
been required to bring his petition to confirm the award in this district. This is so because
this district would have provided the only proper venue under § 9 of the FAA, which states
that an application to confirm an arbitration award “may be made to the United States court
in and for the district within which such award was made.” 9 U.S.C. § 9.1
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Defendants also suggest that this court has exclusive jurisdiction over the
confirmation proceeding, but they offer no legal analysis or authority to support this claim.
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I agree that § 4 of the FAA only gives me the authority to compel a party to arbitrate
within this district. Section 4 requires an arbitration to take place “within the district in which
the petition for an order directing such arbitration is filed.” 9 U.S.C. § 4; see also
Faulkenberg v. CB Tax Franchise Systems, LP, 637 F.3d 801, 808 (7th Cir. 2011) (“[U]nder
§ 4 of the FAA, a district court cannot compel arbitration outside the confines of its
district.”). However, I find that Quarles waived its right to object to the location of the
arbitration by failing to raise the issue before this court in a timely fashion.
Waiver occurs “when there has been the voluntary or intentional relinquishment of
a known right.” Haber v. Biomet, Inc., 578 F.3d 553, 558 (7th Cir. 2009) (discussing a
forum selection clause in an arbitration agreement). In this case, Quarles was clearly
aware of its right to arbitrate in this district because it objected to the location of the
arbitration in a proceeding before the arbitrator in February 2012. But it waited until two
months after the arbitrator had issued his award to raise the issue before this court. This
was too long of a delay. See 14D Charles Alan Wright & Arthur R. Miller, Federal Practice
and Procedure § 3801 (3d ed.) (“The defense of improper venue is a personal privilege of
the defendant, who may waive it either expressly or by failing to make timely objection.”).
Quarles argues that it had no means of challenging the arbitrator’s decision to arbitrate in
Chicago until after the arbitration was complete, but that is not true. The arbitrator decided
that the arbitration would take place in Chicago in February 2012, and in October 2012
Quarles filed a motion in this court to enforce the order compelling arbitration. In its motion,
Quarles could have objected to the location of the arbitration. Since it chose not to do so,
I find Quarles voluntarily relinquished its right to arbitrate in this district. Because the

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arbitration took place in Chicago, the Northern District of Illinois is a proper venue for the
petition to confirm the arbitration award under § 9 of the FAA. That court is “the United
States court in and for the district within which such award was made.” 9 U.S.C. § 9.
Moreover, even if the arbitration had taken place in this district, defendants
argument would still fail because a petition to confirm the arbitration award could still be
filed in the Northern District of Illinois. The venue provision in § 9 is permissive and not
restrictive, which means a petition to confirm an arbitration award may be filed “either
where the award was made or in any district proper under the general venue statute.”
Cortez Byrd Chips, Inc. v. Bill Harbert Construction Co., 529 U.S. 193, 195 (2000)
(emphasis added).2 And the Northern District of Illinois is a proper venue under the general
venue statute because Quarles has offices in Chicago. See 28 U.S.C. § 1391(b)(1) (“A civil
action may be brought in a judicial district in which any defendant resides, if all defendants
are residents of the State in which the district is located.”).
Because defendants have failed to prove that this court is the exclusive venue for
plaintiff’s petition to confirm the arbitration award, I will deny defendants’ motion for an
order either compelling plaintiff to dismiss the Illinois action or prohibiting him from pursuing
that action until I have the opportunity to review the arbitration award.

2

The Supreme Court read § 9's venue provision as permissive in part because it
benefits the parties to an arbitration by giving them more flexibility when choosing a
location for the arbitration. Cortez, 529 F.3d at 202. The Court noted, “The parties may be
willing to arbitrate in an inconvenient forum, say, for the convenience of the arbitrators, or
to get a panel with special knowledge or experience, or as part of some compromise, but
they might well be less willing to pick such a location if any future court proceedings had
to be held there.” Id. Here, the parties appear to have agreed to arbitrate in Chicago as part
of a compromise for the benefit of the arbitrator, but that does not mean they are required
to conduct all future litigation in Chicago.
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THEREFORE, IT IS ORDERED that defendants’ motion to compel (Docket #24) is
DENIED.
Dated at Milwaukee, Wisconsin, this 16th day of April, 2014.

s/ Lynn Adelman
______________
LYNN ADELMAN
District Judge

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