Party can lose case but still 'prevail'.

• Date: 08 May 2002

Byline: David Ziemer

When one party in arbitration was seeking $780,000, the other party argued it owed only $20,000, and the arbitrator awarded $22,286, the second party is the prevailing one, the Wisconsin Court of Appeals held on April 30.

Asset Purchase

In 1998, Wisconsin Seafood Company, Inc. entered into an asset purchase agreement with David and Elizabeth Fisher, in which the Fishers sold assets to Wisconsin Seafood.

Pursuant to the agreement, Wisconsin Seafood executed a promissory note for $358,171.57, providing for quarterly payments commencing on Dec. 1, 1998 and ending on Aug. 31, 2005. David Fisher also executed a non-compete covenant.

Fisher violated the non-compete covenant, however, by accepting employment with a competitor, and Wisconsin Seafood withheld payment on the installments.

Arbitration

After rejecting an offer from Fisher of $20,000 off the purchase price, Wisconsin Seafood filed a complaint seeking damages and an injunction to enforce the non-compete covenant. Pursuant to the agreement, Fisher filed a motion to compel alternate dispute resolution.

The circuit court granted Fisher's motion, ordered that all installments under the promissory note be paid into an escrow account, and retained jurisdiction to consider attorney fees.

At the arbitration hearing, Wisconsin Seafood presented testimony valuing the non-compete covenant at approximately $780,000. Fisher's expert valued the covenant at $20,000.

The arbitrator found that Fisher had breached the non-compete agreement and awarded Wisconsin Seafood $22,286 in damages. The arbitrator did not award attorney fees to either party.

Fisher moved for entry of judgment, and both parties moved for an award of attorney fees as the prevailing party, pursuant to the asset purchase agreement.

Brown County Circuit Court Judge William M. Atkinson found that Fisher was the prevailing party entitled...