Opinion
No. FST CV 09 5013155
February 24, 2010
MEMORANDUM OF DECISION RE MOTION TO DISMISS (101.00)
I. Background
The plaintiffs, Pendelton King and P D 85, LLC of which King is a member, have made application, pursuant to General Statutes § 52-422, for a prejudgment remedy against the defendants William Gardiner, Jr., Gardiner, Inc. and 77 and 81 Sherwood Place, LLC. Section 52-422 authorizes the Superior Court, in connection with an arbitration proceeding under Chapter 909 of the General Statutes, to take such steps "as may be necessary to protect the rights of the parties pending the rendering of the [arbitration] award, and to secure the satisfaction thereof when rendered and confirmed." The defendants have moved to dismiss this action on the ground that certain "conditions precedent to the commencement of arbitration have not been met, thus rendering Conn. Gen. Stat. § 52-422 inapplicable to the present dispute." They contend this deprives the court of subject matter jurisdiction.
II. Discussion
This dispute arises out of alleged breaches of a written agreement dated June 28, 2005 between the plaintiff King and Bill Gardiner, Inc. (now known as the defendant Gardiner, Inc.). The June 2005 agreement contained an arbitration provision stating:
10. The parties shall endeavor to resolve their disputes by mediation, which unless the parties mutually agree otherwise, shall be in accordance with the applicable mediation rules of the American Arbitration Association currently in effect. Request for mediation shall be filed in writing with the other party to this Agreement and with the American Arbitration Association. The request may be made concurrently with the filing of a demand for arbitration, but in such event, mediation shall proceed in advance of arbitration, legal or equitable proceedings, which shall be stayed pending mediation for a period of sixty (60) days from the date of filing, unless stayed for a longer period by agreement of the parties or court order.
11. Claims, disputes or other matters in question arising out of or relating to this Agreement that are not resolved by mediation shall be decided by arbitration, which unless the parties mutually agree otherwise, shall be in accordance with the applicable Arbitration rules of the American Arbitration Association and shall be made within a reasonable time after the dispute has arisen. The award rendered by the arbitrator or arbitrators shall be final and judgment may be entered upon it in accordance with the applicable law in any court having jurisdiction thereof.
The heart of the defendants' motion is their contention that "[p]rior to the filing of the Demand for Arbitration, a mediation between the parties never occurred, and plaintiffs never requested mediation `in writing with the other party to this Agreement and with the American Arbitration Association.'" Def's. Memorandum in Support of Motion to Dismiss, 2. There is no dispute that, at least at the time the motion to dismiss was argued, no mediation had taken place. However, the record reflects that plaintiffs did request a mediation in writing by asking the American Arbitration Association (AAA) to contact the defendants and arrange a mediation. This was accomplished by checking a box at the top of the AAA's Demand for Arbitration form and sending the written form to the defendants and the AAA. See Exhibit C to Plaintiffs' application pursuant to General Statutes § 52-422 (Dkt. Entry 101.00). Furthermore, this court determines that the language of the arbitration agreement contained in the June 29, 2005 does not require the mediation to be initiated or completed prior to the initiation of arbitration proceedings. In fact, the arbitration agreement specifically states that "[t]he request [for mediation] may be made concurrently with the filing of a demand for arbitration . . ." which is precisely what happened in this case. To emphasize the point that an arbitration may be initiated before the mediation is completed, the agreement states the mediation shall proceed in advance of the arbitration "which shall be stayed pending mediation."
Defendants argue that "no active arbitration is pending and any demands for arbitration have been stayed pending mediation." Therefore, they continue, General Statutes "§ 52-422 is improperly invoked at this premature stage and the application must be dismissed for lack of subject matter jurisdiction." Defs'. Memo., 3. The court does not believe the facts in the record support this argument. An arbitration is pending, although in accordance with the parties' agreement, it is stayed. The demand for arbitration has not been stayed. General Statutes § 52-422 requires only that an arbitration be in existence and that the court may issue pendente lite relief before an arbitration award issued.
Defendants rely on two Connecticut Supreme Court cases. Neither is particularly helpful to the defendants' argument. In Goodson v. State of Connecticut, 232 Conn. 175 (1995) it was held that "a pending arbitration is an essential condition that must exist before § 52-422 may be invoked." Id., 180. However, in that case it was undisputed that the parties had not yet begun arbitration when the plaintiffs sought to invoke General Statutes § 52-422; Id., 178; and the plaintiffs' petition was properly dismissed. White v. Kampner, 229 Conn. 465 (1994) dealt with a dispute where the contract between the parties required two good faith negotiation sessions between the parties "prior" to seeking any resolution by arbitration Id., 468. The Connecticut Supreme Court held that the negotiating sessions were a condition precedent to arbitration, and since they had not occurred before arbitration, the arbitration was vacated. In this case, the parties agreed that a request for mediation could be made "concurrently" with a demand for arbitration. Therefore, the lack of a completed mediation is not a bar to commencing arbitration. Since there is a pending arbitration, the court concludes that the requirements of the statute have been met, and it has jurisdiction over the plaintiff's application for relief under Section 52-422.
The motion to dismiss is denied.