Opinion
CV176033914S
08-29-2018
James THOMAS v. WINDWARD DEVELOPMENT, INC.
UNPUBLISHED OPINION
TAGGART D. ADAMS, Judge Trial Referee
I. BACKGROUND
James Thomas has made application to vacate a "Partial Final Award" and a "Final Award" issued on October 12 and 26, 2017 respectively in American Arbitration Association Case No. 01-16-003-9517. The Application is opposed by the defendant Windward Development, Inc. (Windward) which also seeks to have the awards confirmed Docket Entry (DE) 107.00. The arbitration proceeding and the Awards concerned a dispute over costs and expenses of architectural and construction work performed by the defendant Windward in connection with a renovation of the Thomas residence in New Canaan, Connecticut.
According to a stipulation of the parties, Thomas’ application to vacate and Windward’s application to confirm the awards were initially filed in the United States District Court for the District of Connecticut, but dismissed by that court for lack of subject matter jurisdiction with the parties agreeing to litigate the above applications in this court on the basis of the exhibits already filed in federal court. DE 106.00. The application then appeared on the Superior Court Short Calendar for July 23, 2018, and at this court’s request, counsel appeared to further argue the matter on August 14 record in this case encompasses a number of exhibits. Both parties submitted exhibits resulting in considerable duplication. The Thomas exhibits are found at DE’s 131.00 through 143.00. The Windward exhibits are located at DE’s 110.00 through 118.00.
The contract between Thomas and Windward contained a straight forward arbitration clause; DE 132.00, ¶ 10.1g; and Thomas commenced an arbitration proceeding. The arbitration took place over six days in May and July 2017. In the Partial Final Award the arbitrator noted that both parties sought money damages as well as an award of "attorneys fees." DE’s 110.00, 131.00, at ¶¶ 30, 33. The arbitrator further found that based on "Rule 48(d) of the Construction Industry Arbitration Rules of the American Arbitration" [Thomas] "shall be responsible for the reasonable attorneys fees incurred by [Windward] in this arbitration." Windward was to file an affidavit of attorneys fees within fifteen days. In the Final Award the arbitrator awarded $182,250 to Windward for attorneys fees. Exhibit A, Final Award at 6.
II. DISCUSSION
Because this case is between Connecticut parties and involves a contract made in Connecticut the court will review the applications to vacate and confirm under the provisions of General Statutes § § 52-417 through 520. Section 52-418(a) provides four grounds for vacating an arbitration award: (1) an award procured by corruption, fraud, etc., (2) evident arbitrator partiality or corruption; (3) arbitrator misconduct in refusing to postpone a hearing in the face of good cause, and (4) if the arbitrators have exceeded their powers or so imperfectly executed them that a "mutual, final and definite" award on the subject matter was not made. The parties in this case both contend that only subsection 4 is pertinent to this case.
Specifically, the Thomas application seeks to vacate the awards on the ground that the arbitrator exceeded her powers, that the awards are in "manifest disregard" of the law and the awards violate the public policy of Connecticut. The American Arbitration Association (AAA) Construction Industry rule 48(d) relied upon by the arbitrator, allowed for attorney fee awards "if all the parties have requested such an award or it is authorized by law or their arbitration agreement." Thomas contends that his claim against Windward included a claim under the Connecticut Home Improvement Act, General Statutes § 20-429 which, if proven, is also a claim under the Connecticut Unfair Trade Practice Act, General Statutes § 42-110a et seq. (CUTPA) a statute that allows for an award of attorneys fees. See General Statutes § 42-110g(d). Thomas argues therefore that any award of fees that he requested was limited to a successful claim by him under CUTPA. This argument is ingenious, but in the end, not persuasive. Thomas did not include a claim for attorneys fees in his arbitration submission (DE 138.00) but he did include such a claim in the brief filed with the arbitrator following the arbitration hearings. DE 118.00, p.16 (requesting an award "together with attorneys fees pursuant Connecticut’s Unfair Trade Practices Act"). Windward requested the award include attorneys fees without limitation. This was communicated by Windward’s Answering Statement and counter claim (DE 138.00) and in its post-hearing brief. DE 119.00, 30.
The court also notes that the record does not reveal any form of objection made by Thomas to Windward’s request for attorneys fees, either when Windward requested such fees in its Answering Statement and Counterclaim or in its post-hearing brief. Furthermore, Thomas did not object on relevancy, or any other grounds, when the arbitrator requested Windward, in her Partial Award, to submit evidence of attorneys fees expended. The court finds that the arbitrator properly relied on AAA rule 48(d) in her awards.
Thomas contends that the arbitrator’s awards were in "manifest disregard" of the applicable law. Connecticut courts have recognized that such manifest disregard of law is included within the scope of Section 52-418(a)(4). Nikituk v. Field Company Builders, 106 Conn.App. 558, 560-61 (2008). "[H]owever that ground is narrow and should be reserved for circumstances of an arbitrator’s extraordinary lack of fidelity to established legal principles. Id., 561; see also AFSCME, Council 4, Local 1303-119 v. East Haven, 109 Conn.App. 179, 185 [quoting Garrity v. McCaskey, 223 Conn. 1, 8-9 (1992) ]. Thomas’ argument that the arbitrator ignored clear principles of law (set forth in his memorandum in support of vacating, DE 129.00 at pp. 12-14) is discursive and somewhat unclear. The contention seems to be based on the so-called "American" rule that parties bear their own legal expenses. It seems also to be based on a reference to Thomas’ claims under the Home Improvement Act and CUTPA. The court is not persuaded by the "American" rule or other arguments, and especially not in face of AAA Rule 48(d) which the parties accepted by means of their contractual agreement to resolve disputes through the AAA.
Lastly, Thomas appears to contend that the arbitrator’s decision is violative of the accepted policy in Connecticut in favor of arbitrating disputes because the award of attorneys fees in this case is penal. This policy of favoring arbitration has been reiterated by the Connecticut Supreme Court often. McCann v. Department of Environmental Affairs, 288 Conn. 203, 208 (2008) ("we undertake judicial review of arbitration awards in a manner to minimize interference with an efficient and economic system of alternative dispute resolution ...); Norwalk Police Union v. City of Norwalk, 324 Conn. 618, 628 (when scope of submission to arbitration is unrestricted courts will not review award for errors of fact or law. This court concludes that no such inference can be drawn that the awards were unfair to Thomas. Indeed, the awards are within the scope of the arbitrator’s authority and the parties agreed to this method of dispute resolution.
III. CONCLUSION
The application to vacate the arbitration awards is denied, and the application to confirm such awards is granted.