Opinion
No. X06 CV 07 4016521 S
February 24, 2009
MEMORANDUM OF DECISION ON THE PARTIES' MOTIONS FOR SUMMARY JUDGMENT (#138 and #251)
STATEMENT OF THE CASE
This action was instituted by the plaintiff, Seitz Corporation, seeking declaratory and injunctive relief. More specifically, the plaintiff seeks a declaration that an employment agreement between the plaintiff and the defendant William McClane (the "2006 Agreement") supersedes the employment agreement executed by the parties in 2005 (the "2005 Agreement"). The plaintiff further seeks an order enjoining arbitration under the 2005 Agreement. The undisputed facts are as follows. In 2005, the parties executed an agreement regarding the defendant's employment with the plaintiff. In 2006, the parties executed another agreement which, according to its terms, replaced and superseded the 2005 agreement. After 2006, disputes arose concerning the defendant's employment and he was terminated. The plaintiff subsequently demanded an arbitration of the parties' disputes under the arbitration provision of the 2006 Agreement. The defendant contests the enforceability of the 2006 Agreement based on fraud, lack of consideration, violation of public policy and other grounds. Because of these claims, the defendant has demanded arbitration under the arbitration provision of the 2005 Agreement. The defendant has filed a motion for summary judgment and the plaintiff has filed a cross motion for summary judgment. The plaintiff claims that there are no material issues of disputed fact about the parties' execution of the 2006 agreement and that the parties are required to arbitrate their disputes pursuant to the arbitration provision of that contract. The defendant, on the other hand, emphasizes that both the 2005 Agreement and the 2006 Agreement have broad arbitration provisions, and that these provisions "make clear that the parties intended the question of arbitrability to be submitted to the arbitrator." Defendant's Memorandum of Law in Support of Motion for Summary Judgment, dated November 5, 2008, p. 11. Stated differently, the defendant argues that "the 2005 employment agreement and the 2006 document commit the arbitrability issue to the arbitrator." Id., 12. For the following reasons, the plaintiff's cross motion for summary judgment is granted and the defendant's motion for summary judgment is denied.
The arbitration provision of the 2006 Employment Agreement provides the following in relevant part:
The parties agree that any controversy, claim or dispute arising out of or relating to this Agreement . . . including any related to the Executive's Termination and/or post-termination entitlements, shall be settled by arbitration before a mutually selected arbitrator in the City of Bridgeport, Connecticut, [in] accordance with the Commercial Arbitration Rules of the American Arbitration Association as such rules shall be applied by JAMS, or some other tribunal mutually agreed upon by the parties, then in effect. The Company shall pay all arbitration fees and charges.
Judgment may be entered on the arbitrator's award in any court having jurisdiction, and the parties consent to the jurisdiction of the courts of Connecticut for this purpose.
Employment Agreement, ¶ 10(B), attached as Exhibit C to the Verified Complaint for Declaratory Judgment.
DISCUSSION
The procedures for a motion for summary judgment are governed by Practice Book Sections 17-44 though 17-51. The standards governing the court's consideration of a motion for summary judgment are well established and will not be restated here. See Weber v. U.S. Sterling Securities, 282 Conn. 722, 728, 924 A.2d 816 (2007). Section 17-49 of the Practice Book provides that summary judgment shall be "rendered forthwith if the pleadings, affidavits and any other proof submitted show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law."
There is no dispute that after the parties executed the 2005 Agreement they executed the 2006 agreement. There also is no dispute that the 2006 agreement contains the following provision:
13. (I) Prior Agreements. This agreement replaces and supersedes any and all employment agreements and stock option agreements between the Executive [the defendant] and the Company [the plaintiff], including without limitation the Employment Agreement and the Stock Option Agreement entered into by the parties hereto as of January 1, 2005, which earlier agreements are hereby rendered null and void and of no further force and effect as of the effective date of this Agreement.
Employment Agreement, ¶ 13(I), attached as Exhibit C to the Verified Complaint for Declaratory Judgment.
Thus, there is no dispute that the 2006 Agreement executed by the parties expressly states that it "replaces and supersedes" the 2005 Agreement and that the 2005 Agreement is "rendered null and void and of no further force and effect." This language is plain and unambiguous. By the clear language of the 2006 Agreement, the 2005 Agreement is replaced and nullified. Consequently, the arbitration provision of the 2005 Agreement suffers the same fate because a contract's arbitration provision does not survive the parties' subsequent agreement to nullify the contract in its entirety. The law is well established that a party cannot be required to arbitrate unless it has expressly agreed to arbitrate; Scinto v. Sosin, 51 Conn.App. 222, 721 A.2d 552 (1998), cert. denied, 247 Conn. 963, 724 Conn. 1125 (1999); and the plaintiff cannot be required to arbitrate under an agreement that has been superceded and rendered null and void. "Arbitration is a creature of contract and without a contractual agreement to arbitrate there can be no arbitration . . . No one can be directed to arbitrate a dispute who has not previously agreed to do so." (Citations omitted; internal quotation marks omitted.) Id., 227.
The defendant's argument inexplicably seeks to treat this language of the 2006 Agreement nullifying the 2005 Agreement as though it does not exist. There is no rule of construction, however, authorizing the court simply to eliminate a provision of the contract agreed to by the parties or to interpret the contract as though this language is invisible. "A contract is to be construed as a whole and all relevant provisions will be considered together. A court will not torture words to import ambiguity where the ordinary meaning leaves no room for ambiguity and words do not become ambiguous simply because lawyers or laymen contend for different meanings . . ." (Citations omitted; internal quotation marks omitted.) Scinto v. Sosin, supra, 51 Conn.App. 239.
The court also rejects the defendant's argument that the continued viability of the 2005 Agreement is outside the court's province and must itself be submitted to arbitration. As a general rule, whether a contract exists requiring arbitration is a question for the court, and therefore, the court may properly determine whether the 2005 Agreement is a contract requiring the parties to arbitrate their disputes. See C.R. Klewin Northeast, LLC v. City of Bridgeport, 282 Conn. 54, 81, 919 A.2d 1002 (2007) ("[a]s arbitration depends on a valid contract, an argument that the contract does not exist can't logically be resolved by the arbitrator"); accord, Scinto v. Sosin, supra, 51 Conn.App. 227.
Furthermore, contrary to the defendant's position, the defendant's additional contention that the 2006 Agreement is unenforceable because of fraud, lack of consideration and violation of public policy does not somehow "revive" the 2005 Agreement. All of the defendant's arguments against the enforceability of the 2006 Agreement attack the agreement in its entirety. Consequently, they are all arbitrable matters under the broad arbitration provision of the 2006 Agreement and may be adjudicated in the arbitration forum. C.R. Klewin Northeast, LLC v. City of Bridgeport, supra, 282 Conn. 71-83.
The court concludes that the plaintiff has asserted a controversy between the parties amenable to declaratory relief under Practice Book § 17-55. The court further concludes that the plaintiff has shown irreparable harm justifying injunctive relief "[I]rreparable harm results where parties are forced to expend time, energy and money to defend themselves in a forum in which they never clearly and unmistakenly agreed to arbitrate (Citation omitted; quotation marks omitted). Scinto v. Sosin, supra, 51 Conn.App. 245.
CONCLUSION
Therefore, for the foregoing reasons, the plaintiff's cross motion for summary judgment is granted and the defendant's motion for summary judgment is denied. The court declares that the 2006 Agreement by its express and undisputed terms replaces and supercedes the 2005 Agreement. Furthermore, an injunction issues enjoining the defendant from instituting any arbitration or proceeding with any pending arbitration under the 2005 Agreement. This order does not in any way address what relief, if any, the defendant may be entitled to if the 2006 Employment agreement is in any way found unenforceable.
So ordered this 24th day of February 2009.