Opinion
No. CV 10-6004094
September 13, 2010
MEMORANDUM OF DECISION MOTION TO STAY #114
FACTS
On June 4, 2010, defendants Stonestreet Hospitality Realty Company, LLC and Stonestreet Construction, LLC (collectively, "Stonestreet") filed a motion to stay this action pending arbitration. On June 18, 2010, defendant/cross-complainant Fernandes Masonry, Inc. (Fernandes) filed an objection to the motion to stay. On June 21, 2010, the plaintiff, Madaio Glass, Inc., filed an objection to the motion to stay. On June 24, 2010, defendant American Industries, Inc. (American) filed an objection to the motion to stay. On July 8, 2010, Stonestreet filed a memorandum in reply to the objections by the plaintiff, Fernandes and American. On July 15, 2010, defendant Pasquariello Electric Corporation (Pasquariello) filed an objection to the motion to stay.
In this action, the plaintiff seeks foreclosure on a mechanic's lien on property known as 2049 Norwich-New London Turnpike, Montville, Connecticut (the property). The plaintiff alleges the following facts in its complaint. Stonestreet Hospitality Realty Company, the owner of the property, entered into an agreement with Stonestreet Construction to construct a hotel and other commercial improvements on the property. On or about May 21, 2008, Stonestreet Construction entered into a subcontract agreement with the plaintiff. Pursuant to the subcontract agreement, the plaintiff was to provide and install windows, doors, storefronts, glazing and mirrors on the property.
The plaintiff performed work on the property from on or about December 12, 2008, until on or about December 30, 2009. Presently, there is a balance of $198,943.80 owed to the plaintiff for services and materials. On February 8, 2010, the plaintiff filed a certificate of mechanic's lien with the clerk of the town of Montville to secure the balance owed. This foreclosure action followed.
The following facts are also relevant to this motion. On or about May 7, 2010, Stonestreet Construction filed a demand for arbitration with the American Arbitration Association based on the subcontract agreement. The subcontract agreement is attached to Stonestreet's motion to stay as exhibit A. Article six of the agreement applies to dispute resolution and contains the following relevant provisions:
"6.2 In the event of a dispute, the [c]ontractor and [s]ubcontractor agree to conduct a meeting between their respective project managers upon written notification by either party, and make best efforts to resolve the dispute. If the dispute is not resolved within thirty (30) days of the initial written notice, then the [c]ontractor and [s]ubcontractor agree to conduct a meeting between the designated executives of each firm, and make best efforts to resolve the dispute.
"6.3 In the event of an unresolved dispute pursuant to article 6.2, the [c]ontractor, at his sole discretion, may elect to settle the dispute in . . . binding arbitration . . .
"6.7 This [a]rticle 6 shall not be deemed a limitation of rights or remedies which the [s]ubcontractor may have under [f]ederal [l]aw, under state mechanics' lien laws, or under applicable labor or material payment bonds unless such rights or remedies are expressly waived by the [s]ubcontractor."
DISCUSSION
Stonestreet moves to stay this proceeding on the ground that the claims asserted by the plaintiff are subject to binding arbitration pursuant to the subcontract agreement. Stonestreet argues that there is a strong federal policy in favor of arbitration, and that Connecticut statutes embody the same policy. Stonestreet asserts that Connecticut statutes require a stay for any action involving an issue that is subject to an agreement to arbitrate, and that the arbitration clause in this case clearly and unambiguously requires arbitration.
The plaintiff objects to the motion on the ground that the dispute is clearly beyond the scope of the arbitration clause. The plaintiff argues that a party cannot be compelled to arbitrate a dispute unless it has agreed to do so pursuant to a written agreement. The plaintiff asserts that the arbitration clause in the present case explicitly excludes claims under mechanic's lien laws, which is the subject of this action. Further, the plaintiff argues that it has no arbitration agreement with Stonestreet Hospitality Realty Company. Fernandes, American and Pasquariello have all objected to the motion on the ground that they are not parties to the arbitration agreement.
In its reply brief, Stonestreet argues that it seeks to arbitrate the underlying contract dispute. Stonestreet argues that the "positive assurance test" governs the application of arbitration provisions and that, in the present case, it cannot be said with "positive assurance" that the underlying dispute should not be arbitrated. Additionally, Stonestreet argues that the proceeding should be stayed as to all parties in the interests of judicial economy.
General Statutes § 52-409 provides: "If any action for legal or equitable relief or other proceeding is brought by any party to a written agreement to arbitrate, the court in which the action or proceeding is pending, upon being satisfied that any issue involved in the action or proceeding is referable to arbitration under the agreement, shall, on motion of any party to the arbitration agreement, stay the action or proceeding until an arbitration has been had in compliance with the agreement, provided the person making application for the stay shall be ready and willing to proceed with the arbitration."
The court acknowledges that there is a policy in Connecticut in favor of using arbitration "as an effective alternative method of settling disputes intended to avoid the formalities, delay, expense and vexation of ordinary litigation." (Internal quotation marks omitted.) Stutz v. Shepard, 279 Conn. 115, 124, 901 A.2d 33 (2006). Simultaneously, "[a]rbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit . . . Arbitration is essentially a creature of contract, a contract in which the parties themselves charter a private tribunal for the resolution of their disputes . . . Arbitration agreements are contracts and their meaning is to be determined . . . under accepted rules of [state] contract law . . ." (Citations omitted; internal quotation marks omitted.) Levine v. Advest, Inc., 244 Conn. 732, 744-45, 714 A.2d 649 (1998).
"In ascertaining the contractual rights and obligations of the parties, we seek to effectuate their intent, which is derived from the language employed in the contract, taking into consideration the circumstances of the parties and the transaction . . . We accord the language employed in the contract a rational construction based on its common, natural and ordinary meaning and usage as applied to the subject matter of the contract . . . Where the language is unambiguous, we must give the contract effect according to its terms . . . Where the language is ambiguous, however, we must construe those ambiguities against the drafter . . ."A contract is unambiguous when its language is clear and conveys a definite and precise intent . . . The court will not torture words to impart ambiguity where ordinary meaning leaves no room for ambiguity . . . Moreover, the mere fact that the parties advance different interpretations of the language in question does not necessitate a conclusion that the language is ambiguous . . . In contrast, a contract is ambiguous if the intent of the parties is not clear and certain from the language of the contract itself . . . [A]ny ambiguity in a contract must emanate from the language used by the parties . . . The contract must be viewed in its entirety, with each provision read in light of the other provisions . . . and every provision must be given effect if it is possible to do so . . . If the language of the contract is susceptible to more than one reasonable interpretation, the contract is ambiguous." (Citations omitted; internal quotation marks omitted.) Catonbury Heights Condominium Assn., Inc. v. Local Land Development, LLC, 273 Conn. 724, 734-35, 873 A.2d 898 (2005).
In the present case, subsection 6.7 unambiguously states that the dispute resolution section of the subcontract is not a "limitation of rights or remedies which the [s]ubcontractor may have . . . under state mechanics' lien laws . . ." The applicable Connecticut mechanic's lien laws are found at General Statutes § 49-33, which allows for the placement of a lien on land, buildings or appurtenances when a person has claim for materials or services rendered in the construction of a building on the land. Section 49-33(i) provides: "Any mechanic's lien may be foreclosed in the same manner as a mortgage." The clear language of the subcontract reserves the plaintiff's rights and remedies with respect to mechanic's lien actions. Accordingly, the plaintiff is entitled to all rights and remedies provided in § 49-33, including the right to foreclose on the lien in the same manner as a mortgage. The dispute resolution provisions do not apply to the plaintiff's rights and remedies in the present case, which is an action to foreclose the plaintiff's mechanic's lien.
Having determined that the dispute resolution provisions do not apply to the present case, the motion to stay is appropriately denied on that ground. The court notes, however, that Fernandes, American and Pasquariello are not parties to the subcontract agreement and Stonestreet has not provided any contracts that contain an arbitration clause with respect to those parties. Without such an agreement, Fernandes, American and Pasquariello could not be required to submit to arbitration. Levine v. Advest, Inc., supra, 244 Conn. 744.
ORDER
Based on the foregoing, the plaintiff may proceed with this action to foreclose the mechanic's lien without being subjected to arbitration. The motion to stay is denied.