Opinion
No. CV 02-0820536
October 27, 2003
MEMORANDUM OF DECISION
This court is an Application to Vacate or Modify Arbitration Award by the plaintiffs, Michael and Bessie Economos. The defendant is Liljedahl Brothers, Inc.
There is also before this court an Application to Confirm Arbitration Award by the plaintiff claimant, Liljedhal Brothers, Inc. Liljedhal Brothers as claimant, and the defendants, as respondents, entered into binding arbitration (American Arbitration Association ["AAA"]) before the AAA pursuant to two agreements relating to Liljedhal Brother's construction of improvements to the respondents' home.
The agreements contain identical arbitration clauses.
The principle of limited judicial review has been expressed by the supreme Court in O G/O'Connell Joint Venture v. Chase Family Limited Partnership, 203 Conn. 133, 523 A.2d 1271 (1987).
When arbitration is created by contract we recognized that this autonomy can only be preserved by minimal judicial intervention. (Citations omitted.) Because the parties themselves, by virtue of the submission, frame the issues to be resolved and define the scope of the arbitrator's powers, the parties are generally bond by the resulting award. (Citations omitted.) Since the parties consent to arbitration, and have full control over the issues to be arbitrated, a court will make every reasonable presumption in favor of the arbitration award and the arbitrator's acts and proceedings. (Citations omitted.) The party challenging the award bears the burden of producing evidence sufficient to invalidate or avoid it, and only upon a showing that it falls within the proscriptions of Section 52-418 of the General Statutes or procedurally violates the parties' agreement: will the determination of an arbitrator be subject to judicial inquiry." (Citations omitted.) 203 Conn. at 145-46.
In City of New Haven v. AFSCME, Council 15, Local 530, 208 Conn. 411, 544 A.2d 186 (1988), the Connecticut Supreme Court reiterated the longstanding, basic principle supporting the autonomy of arbitration and minimal judicial review of consensual arbitration awards. See also, City of Middletown v. Police Local 1361, 187 Conn. 228, 445 A.2d 322 (1982). Addressing a challenge on public policy grounds to an arbitrator's award, the Supreme Court in City of New Haven v. AFSCME Council 15, Local 530, 208 Conn. 411, stated:
This court has long endorsed arbitration as an alternative method of settling disputes "intended to avoid the formalities, delay, expense and vexation of ordinary litigation." (Citations omitted.) We have recognized that when arbitration is consensual, rather than statutorily imposed, judicial review is limited in scope. (Citations omitted.) If the parties mutually agree to submit their dispute to arbitration, the resulting award is not reviewable for errors of law or fact. (Citations omitted.) Judicial review of unrestricted submissions is limited to a comparison between the submission and the award to see whether, in accordance with the powers conferred upon the arbitrators, their award conforms to the submission. (Citations omitted.)
In deciding whether an arbitrator has exceeded his power, the Court only examines the submission and the award to determine whether the award conforms to the submission. In O G/O'Connell, supra, the Supreme Court emphasized this rule, writing that:
Unless the submission provides otherwise, an arbitrator has authority to decide factual and legal questions and courts will not review the evidence, or, where the submission is unrestricted, the arbitrator's determination of legal questions. (Citations omitted.) In this case, because neither the plaintiff's demand for arbitration nor the defendants' answer contained any conditional language restricting the powers of the arbitrators, the submission was unrestricted. (Citations omitted.) Since the award conforms to the submission, the defendants' claim that the arbitrators exceeded their powers is without merit.
"When the scope of the submission is unrestricted, the resulting award is not subject to de novo review even for errors of law so long as the award conforms to the submission . . ." (Citations omitted.) Saturn Construction Co. v. Premier Roofing Co., 238 Conn. 293, 304 (1996).
This case involves a breach of contract claim by Liljedahl Brothers, Inc. brought to the American Arbitration Association. Liljedahl Brothers claim breach of contract against Michael G. and Bessie Economos pursuant to two contracts. The first contract is dated April 3, 2000 for renovation to a bathroom and laundry in the home of Bessie and Michael Economos, 6 Cypress Road, West Hartford, Connecticut. By the terms of the contract agreed to by the parties, Liljedahl Brothers, Inc. were to remodel the bathroom and laundry at the Economos residence with a start date of April 17, 2000 and a completion date of July 14, 2000. Pursuant to the contract dated April 3, 2000, Michael and Bess Economos agreed to pay Liljedahl Brothers, Inc. a total of $42,570.00 for the bathroom and laundry remodel. By June 6, 2000, Michael and Bess Economos had paid Liljedahl Brothers, Inc. $40,602.45.
The parties entered into a contract dated September 15, 2000 for a kitchen remodel and den addition pursuant to plans dated July 21, 2000 by the architect. The second contract had a start date of October 10, 2000 and a completion date of April 30, 2001. On June 6, 2001, Liljedahl Brothers left the job.
The contract dated September 15, 2000, signed by the parties on March 2, 2001, states that Liljedahl Brothers, Inc. will furnish the material and labor in accordance with the specifications for $176,460.00. Prior to June 6, 2001, Liljedahl Brothers had been paid $84,700.00 by Michael and Bess Economos.
On July 19, 2001, Liljedahl Brothers, Inc. filed a claim for arbitration and a mechanic's lien on the home of Michael and Bess Economos.
The defendants, Michael and Bess Economos, asserted two Special Defenses. The First Special Defense states as follows.
The plaintiff, Liljedahl Brothers, Inc.'s recovery is barred by Connecticut General Statutes § 20-418 et seq. (the Home Improvement Act) for the following reasons.
1. The contracts, specifically all change orders were not signed by the owners, Michael or Bess Economos as most change orders were rejected pursuant to Connecticut General Statutes § 20-429(a).
2. The written contract and change orders upon which the plaintiff seeks to recover is not valid or enforceable against the defendants under Connecticut General Statutes § 20-429(a) in that:
a) the contract under date of September 15, 2000 does not contain the entire agreement between the parties, specifically the payment schedule.
The parties' introductory statements before the arbitrator are that the matter before him is essentially a breach of contract action. Statement by Attorney Clemens at p. 8 of the November 15, 2001, of the transcript:
This is a breach of contract action and we intend to introduce testimony to the effect that by not paying the Claimant when the Claimant reasonably requested payment, when the architect approved the payment, when a substantial period of time had passed following the submission of a payment, the failure to pay was a breach of contract.
The other incidental issues we'll get into but that at its core is what the case is about, sir. Thank you.
Statement by Attorney Varunes at p. 9 of the November 15, 2001 transcript:
The contract calls for the Respondents and the Respondents agreed to pay the claimants $42,570.00 to renovate and build a bathroom and laundry at their residence at 6 Cypress Road in West Hartford.
To date, the Respondents, Michael and Bess Economos, have paid Liljedahl Brothers under the contract dated April 3rd, 2000, $40,622.45, the balance being the retainage. The only issue is the retainage.
The Michael and Bessie Economos homeowners filed a Motion for Summary Judgment on December 17, 2001 requesting that the arbitrator find in their favor regarding the issue that they had failed to make payment within a reasonable amount of time, thereby constituting breach on the part of the Economos. The arbitrator denied the motion without articulation. On February 4, 2002, the arbitrator ruled that he would articulate the denial of the summary judgment at the appropriate time. The arbitrator did not address the issues before his award and subsequent death.
An amendment to the submission of the Economos which would add a CUTPA claim to their claim. The arbitrator initially allowed the amendment but when the claimant objected that the amendment added a new claim the arbitrator stated "I will reserve my decision at the end of the hearing and we'll proceed on the regular rules and you may present your testimony and I'll decide it." (Trans. Nov. 15, 2001, pp. 6-7). This was not addressed in the award. There was no ruling as to the CUTPA claim.
The arbitrator's award nowhere addresses the submission of the parties alleging breach of contract. The arbitration awards Liljedahl Brothers, Inc. damages based on the following finding.
The claimant did not abandon the project as alleged. After receiving both written and verbal threats of dismissal, the latest being verbally received on June 5, 2001, it is reasonable that the claimant accepted it as his dismissal.
The court finds that the award of the arbitrator fails to address in his award three of the claims of Michael and Bessie Economos. Accordingly, the application to confirm the award is denied. The award is VACATED.
Hennessey, J.