Dept. of Transportation v. White Oak Corp., 332 Conn. 776

White Oak Corp. (contractor) obtained an arbitration award/judgment against the Connecticut Department of Transportation for $8,362,308.41 plus interest following disputes over public-works contracts.
After this court affirmed confirmation of the arbitration award, White Oak requested payment; the Office of the State Comptroller issued payment but reduced it by $1,642,312.14 for White Oak taxes reportedly due to the state.
The withholdings reflected tax liabilities asserted by the Departments of Revenue Services and Labor and were taken pursuant to Conn. Gen. Stat. § 12-39g, which requires the Comptroller to withhold or reduce state payments when notified of unpaid taxes not under timely administrative appeal.
White Oak moved in trial court for a determination that the judgment had not been satisfied, arguing collateral estoppel barred the Comptroller from withholding taxes because a prior arbitration (Tomlinson arbitration) had found the department failed to prove a tax debt.
The trial court denied White Oak’s motion, concluding (1) § 12-39g creates a mandatory obligation for the Comptroller to reduce payment unless taxes are under timely administrative appeal, and (2) collateral estoppel did not apply to bar the withholding.
The Supreme Court affirmed, holding the Comptroller properly reduced the payment under § 12-39g and collateral estoppel was inapplicable because White Oak had an available administrative appeal procedure it did not pursue.

Issue	Plaintiff's Argument (Department)	Defendant's Argument (White Oak)	Held
Whether the Comptroller properly reduced the state payment by taxes owed under § 12-39g	§ 12-39g mandates withholding/reduction when notified of unpaid taxes not under timely administrative appeal; Comptroller complied	Reduction was improper because prior arbitration (Tomlinson) found no tax debt, so judgment was fully satisfi ed	Held: Comptroller had a mandatory statutory duty to reduce payment under § 12-39g; reduction was proper because taxes were not timely administratively appealed
Whether collateral estoppel barred the Comptroller from withholding taxes	Collateral estoppel should not apply because statutory tax-collection scheme affords an independent administrative remedy; allowing estoppel would frustrate tax policy	Collateral estoppel precludes relitigation because the Tomlinson arbitration found no credible evidence of tax debt	Held: Collateral estoppel inapplicable—White Oak could have pursued a timely administrative appeal and failing that, estoppel cannot be mechanically applied to defeat tax-collection policy

DeMayo v. Quinn, 315 Conn. 37 (2014) (use of "shall" generally evidences a mandatory duty)
Pereira v. State Board of Education, 304 Conn. 1 (2012) (interpreting statutory language combining "shall" and "unless" as conveying mandatory procedure)
Katz v. Commissioner of Revenue Services, 234 Conn. 614 (1995) (test whether statute is mandatory or directory)
Cumberland Farms, Inc. v. Groton, 262 Conn. 45 (2002) (collateral estoppel is judicially created and flexible; avoid mechanical application when it frustrates other policies)
Lighthouse Landings, Inc. v. Connecticut Light & Power Co., 300 Conn. 325 (2011) (application of preclusion doctrines is a legal question reviewed de novo)
Dept. of Transportation v. White Oak Corp., 319 Conn. 582 (2015) (prior appellate history affirming confirmation of arbitration award)