Opinion
No. CV 06-5005359 S
March 22, 2007
MEMORANDUM OF DECISION RE APPLICATION FOR TEMPORARY INJUNCTION
This matter involves disputes which have arisen between the Plaintiffs, David and Helen Kaplan, and the Defendants, Gable Construction, Inc., and its principals, Hedy Jarvis and Henry Colangelo, arising out of the Plaintiffs' contract with Gable for certain home improvements to the Plaintiffs' residence in West Simsbury. Before the court is the Plaintiffs' request for a temporary injunction enjoining the Defendants from pursuing, participating in, and/or proceeding with any arbitration arising from or relating to the disputes between them concerning a contract entered into by the parties for the provision of goods and/or services at the Plaintiffs' residence or Defendants' provision of contracting or project management goods and/or services at the residence.
The Plaintiffs claim that they will be irreparably harmed if the Defendants are not enjoined from proceeding with arbitration because the Defendants have commenced an arbitration pursuant to a contract and an arbitration clause therein that are both invalid, null, void, unenforceable and of no force and effect due to the Defendants' violation of the Home Improvement Act in that the contract does not contain a start and end date as required by the Act. General Statutes § 20-429(a) provides that: "No home improvement contract shall be valid or enforceable against an owner unless it: . . . (7) contains a starting date and completion date . . ."
The court received evidence in the form of testimony and documents on the Plaintiffs' application on September 26, 2006 and received post-hearing briefs, the filing of which was completed on December 5, 2006.
At the hearing, the parties stipulated that: the Home Improvement Act applies to this case; Gable Construction is a "contractor" within the meaning of the Act, namely, General Statutes § 20-419(3); the work performed at the residence is "home improvement" within the meaning of General Statutes § 20-419(4); the documents which constitute the contract between the parties is a "home improvement contract" within the meaning of General Statutes § 20-419(5); the Plaintiffs are "owners" within the meaning of General Statutes § 20-419(6); and the residence is a "private residence" within meaning of General Statutes § 20-419(8).
General Statutes § 20-419 provides: ". . . (3) `Contractor' means any person who owns and operates a home improvement business or who undertakes, offers to undertake or agrees to perform any home improvement . . . (4) `Home improvement' includes, but is not limited to, the repair, replacement, remodeling, alteration, conversion, modernization, improvement, rehabilitation or sandblasting of, or addition to any land or building or that portion thereof which is used or designed to be used as a private residence, dwelling place or residential rental property, or the construction, replacement, installation or improvement of driveways, swimming pools, porches, garages, roofs, siding, insulation, sunrooms, flooring, patios, landscaping, fences, doors and windows and waterproofing in connection with such land or building or that portion thereof which is used or designed to be used as a private residence, dwelling place or residential rental property or the removal or replacement of a residential underground heating oil storage tank system, in which the total cash price for all work agreed upon between the contractor and owner exceeds two hundred dollars . . . (5) `Home improvement contract' means an agreement between a contractor and an owner for the performance of a home improvement. (6) `Owner' means a person who owns or resides in a private residence and includes any agent thereof. An owner of a private residence shall not be required to reside in such residence to be deemed an owner under this subdivision . . . (8) `Private residence' means a single family dwelling, a multifamily dwelling consisting of not more than six units, or a unit, common element or limited common element in a condominium, as defined in section 47-68a, or in a common interest community, as defined in section 47-202 . . ."
The contract between the parties provides: "In the event of any dispute or matter in question between Gable and Kaplan arising out of or relating to this Contract, Gable and Kaplan agree to submit the dispute or question to a mutually acceptable mediator. Each party shall bear the fees and costs of the mediation equally, except that each party will bear the cost of any legal counsel retained by that party. In the event the dispute or matter in question is not resolved by means of mediation, the parties agree to submit the matter to arbitration before the American Arbitration Association under the Construction Arbitration Rules in effect at the time of the submission to arbitration. Each party shall bear the cost of the arbitration equally, except that each party will bear the cost of any legal counsel retained by that party." The parties have already attempted mediation of their dispute, which was unsuccessful.
In order to determine the Plaintiffs' motion, the court must first determine whether the arbitration clause commits to the arbitrator the determination of the contract's validity under the Home Improvement Act.
This court believes that the resolution of this issue is controlled by the Supreme Court's decision in Nussbaum v. Kimberly Timbers, LTD., 271 Conn. 65 (2004). In Nussbaum a dispute arose between the plaintiffs and the defendant regarding payments due pursuant to a home construction contract which contained an arbitration clause. The plaintiffs claimed the contract was unenforceable and void because it did not comply with the act concerning new home construction contractors. The plaintiffs sought to stay the arbitration proceedings instituted by the defendant on the basis that the contract was void and unenforceable. The Court stated: "We begin by noting that Connecticut has adopted a clear public policy in favor of arbitrating disputes. The policy is expressed in General Statutes § 52-408, which provides in relevant part: `An agreement in any written contract, or in a separate writing executed by the parties to any written contract, to settle by arbitration any controversy thereafter arising out of such contract, or out of the failure or refusal to perform the whole or any part thereof . . . shall be valid, irrevocable and enforceable, except when there exists sufficient cause at law or in equity for the avoidance of written contracts generally.'" Id., 71. The Court further stated: "It is well established that [a]rbitration is a creature of contract . . . It is designed to avoid litigation and secure prompt settlement of disputes . . . [A] person can be compelled to arbitrate a dispute only if, to the extent that, and in the manner which, he has agreed so to do . . . No one can be forced to arbitrate a contract dispute who has not previously agreed to do so . . . Moreover, [i]t is the province of the parties to set the limits of the authority of the arbitrators, and the parties will be bound by the limits they have fixed . . . The arbitration provision in an agreement is, in effect, a separate and distinct agreement. Courts of law can enforce only such agreements as the parties actually make . . ." (Citations omitted; internal quotation marks omitted.) Id., 72. The Court held that the arbitrator should decide the issue of the contract's enforceability, including whether it complied with the statutory requirements governing new home construction contractors.
In Nussbaum the arbitration provision was very similar to that before the court here. There the provision stated: "Any controversy or claim arising out of or relating to this Contract, or breach thereof, shall be settled by arbitration in accordance with Construction Industry Arbitration rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof." Id., 73. Here the arbitration provision states: "In the event of any dispute or matter in question between Gable and Kaplan arising out of or relating to this Contract, Gable and Kaplan agree to submit the dispute or question to a mutually acceptable mediator. Each party shall bear the fees and costs of the mediation equally, except that each party will bear the cost of any legal counsel retained by that party. In the event the dispute or matter in question is not resolved by means of mediation, the parties agree to submit the matter to arbitration before the American Arbitration Association under the Construction Arbitration Rules in effect at the time of the submission to arbitration." The Plaintiffs claim that the court "must enjoin Defendants from proceeding with the arbitration because Gable has commenced that proceeding pursuant to a contract, and an arbitration clause contained therein, that are both invalid, null, void, unenforceable, and of no force and effect due to Defendants' violation of the Home Improvement Act, Conn. Gen. Stat. § 20-418, et seq." Plaintiffs' Post-Hearing Temporary Injunction Brief, pp. 1-2. As in Nussbaum, the Plaintiffs do not attack the arbitration clause itself, but the legality of the whole contract because of its alleged failure to comply with the Home Improvement Act. In Nussbaum, the claim was that the contract did not comply with certain requirements of the statutes concerning new home construction contractors which require a contractor to provide a consumer with certain information prior to entering into a contract. The Court held that: "We conclude that the plaintiffs' claim that the contract is unenforceable because of the defendant's alleged failure to comply with § 20-417d clearly is a claim `arising out of or relating to' the contract. The claim is, therefore, arbitrable. Furthermore, the arbitration clause is in writing, as required under § 52-408, and the plaintiffs do not allege that the agreement to arbitrate is void for reasons that involve the formation of that agreement, such as duress, misrepresentation, fraud or undue influence. c.g., Dewart v. Northeastern Gas Transmission Co., 140 Conn. 446, 449, 101 A.2d 299 (1953) (`an arbitration agreement, like any other, can be declared void for fraud, misrepresentation, duress or undue influence'). Finally, the plaintiffs do not make a claim of any improprieties in the formation of the underlying contract that would render the arbitration agreement void. See, International Brotherhood of Teamsters v. Shapiro, 138 Conn. 57, 60, 65, 82 A.2d 345 (1951) (duress in formation of contract can serve as basis to render arbitration agreement void). Accordingly, we conclude that the plaintiffs' claim that the contract is unenforceable is within the scope of the arbitration clause and must be decided initially by the arbitrator." Id., 74-75. The Court summarized as follows: ". . . because the arbitration agreement is separate and distinct from the underlying contract; Success Centers, Inc. v. Huntington Learning Centers, Inc., supra, 223 Conn. 772; and because the plaintiffs' claim that the contract is unenforceable does not pertain to the validity of the arbitration agreement itself, the claim plainly falls within the scope of the arbitration agreement and must be decided in the first instance by the arbitrator." Id., 78.
The cases cited by the Plaintiff in which courts have not required arbitration where the claim is that the contract is invalid because of alleged violations of the Home Improvement Act all predate Nussbaum and are therefore of limited value.
Although our Supreme Court, subsequent to its decision in Nussbaum, has found that contracts that do not comply with the New Home Construction Contractors Act are not unenforceable, D'Angelo Development and Construction Co. v. Cordovano, 278 Conn. 237 (2006), unlike the Home Improvement Act which makes contracts which fail to meet certain of its provisions invalid and unenforceable, this does not effect the court's decision here. In Thier v. Kenyon, 49 Conn.Sup. 346 (2005) [ 39 Conn. L. Rptr. 165], Judge Beach addressed the issue of whether an arbitration clause in a contract for a new home is enforceable when the contractor seeking to enforce it was not properly licensed. The court concluded that it was. The court noted the Supreme Court's decision in Nussbaum, where "[t]he court . . . recognized that there was also a strong policy favoring arbitration and that the legislature specifically had provided that arbitration clauses would be enforced unless they are `void for reasons that involve the formation of that agreement, such as duress, misrepresentation, fraud or undue influence.' The court further stated that arbitration clauses within contracts are, in effect, separate and distinct agreements. Id., 75. The court's holding then was that `because the arbitration agreement is separate and distinct from the underlying contract . . . and because the plaintiffs' claim that the contract is unenforceable does not pertain to the validity of the arbitration agreement itself, the claim plainly falls within the scope of the arbitration agreement and must be decided in the first instance by the arbitrator.' (Citation omitted.) Id., 78. The court noted that it is not unusual for courts to consider public policy issues after they have been decided by arbitrators. Id., 75 n. 7. If the set of arbitration clauses in the present case is deemed to be separate and distinct contracts, as Nussbaum apparently directs, it is difficult to see how the licensing problem creates an inability to enter into any contract. The lack of a license may render unenforceable many of the provisions of the contract and arguably may prevent a contractor from lawfully entering into a contract to build a home, but it does not prevent a contractor from entering into an arbitration contract. If, in effect, the arbitration clauses constitute an entirely separate contract, which is what Nussbaum certainly seems to hold, then, at least on the facts apparent at this point, the arbitration clauses are enforceable. The court holds then, on the limited facts before it at this time, that the absence of a license does not, in itself, prevent enforcement of the arbitration clause." (Footnote omitted.) Thier v. Kenyon, 49 Conn.Sup. 346, 349-50 (2005).
Similarly here, even assuming the contract between the Plaintiffs and Gable may fail to meet all the requirements of the Home Improvement Act, the arbitration provision is construed as a separate agreement and there does not appear to be anything in that agreement that prohibits the arbitrator from determining the Plaintiffs' claim that the contract violates the Home Improvement Act. As the Court stated in Success Centers v. Huntington Learning Centers, 223 Conn. 761, 772-73 (1992): ". . . the plaintiff has pointed to no provision in the franchise agreements, and we have found none, that exempts CUTPA and public policy claims from arbitration under the agreements. As we have stated: Arbitration is a creature of contract. It is the province of the parties to set the limits of the authority of the arbitrators, and the parties will be bound by the limits they have fixed . . . The arbitration provision in an agreement is, in effect, a separate and distinct agreement. Courts of law can enforce only such agreements as the parties actually make . . . No one is under a duty to submit any question to arbitration except to the extent that he has signified his willingness . . . By agreeing to the arbitration clause of the franchise agreements; . . . the plaintiff agreed to submit to arbitration any controversy or claim arising out of or relating to the agreements, or any breach thereof including any claim that the agreements are illegal or void as against public policy." (Internal quotation marks and citations omitted.) Likewise here the parties have agreed to submit to arbitration "any dispute or matter in question between Gable and Kaplan arising out of or relating to" their contract. The dispute between the parties as to whether the contract contains a start and end date as required by the Home Improvement Act certainly comes within this provision.
Therefore the request for a temporary injunction is denied.