146 Conn. App. 60
Conn. App. Ct.2013Background
- Design Tech and Moriniere entered a written construction contract (Nov. 16, 2009) to rebuild a residence; contract required written, pre-priced change orders and provided for arbitration and attorney’s fees.
- During construction the parties agreed to numerous undocumented change orders; work continued without complying with the contract’s written-change-order formalities.
- Dispute arose after disagreements over extras/credits; Moriniere terminated Design Tech (June 23, 2011). Design Tech sought arbitration claiming ~$67,983; Moriniere counterclaimed ~$150,000.
- An unrestricted AAA arbitration awarded Design Tech $106,194 (damages, fees, costs, and attorney’s fees), finding (inter alia) that the parties waived/enforced the contract, Design Tech substantially performed, and Moriniere breached by improper termination and nonpayment.
- Design Tech moved to confirm the award in superior court; Moriniere moved to vacate under Conn. Gen. Stat. § 52-418(a)(4), alleging the arbitrator manifestly disregarded the law in several ways.
- The trial court confirmed the award; on appeal the Appellate Court affirmed, applying the narrow Garrity/manifest-disregard standard and finding no basis to vacate.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether arbitrator manifestly disregarded law by awarding estimated/unjust enrichment-style damages while finding an enforceable written contract | Design Tech: award was based on enforceable contract, waiver/estoppel of written change-order requirement, and contract remedies — not unjust enrichment | Moriniere: once written change-order requirement ignored, there was no enforceable bargain on extras so arbitrator improperly used equitable/estimated damages inconsistent with an express contract | Held: No manifest disregard — arbitrator found waiver/estoppel, enforced the contract, and did not clearly apply unjust enrichment; mere legal error is insufficient to vacate. |
| Whether arbitrator erred in finding Moriniere breached by failing to pay a “proper amount” despite no fixed agreed prices for extras | Design Tech: parties waived written pricing; Moriniere refused to pay for extras despite acquiescing to work performed | Moriniere: lack of pre-agreed prices means he could not be held to pay an unspecified amount | Held: No manifest disregard — arbitrator reasonably found waiver/estoppel and that Moriniere failed to pay for extras; record supports award. |
| Whether arbitrator should have required proof of actual cost as a condition precedent or assessed damages under contract cost-plus formula | Design Tech: plaintiff provided change order with prices prior to termination; arbitrator accepted estimates and awarded amounts (including 12% as contract contemplates) | Moriniere: article 8.1 required submission of actual cost as condition precedent and 12% fee; arbitrator improperly used estimates/reasonable value | Held: No manifest disregard — arbitrator found waiver of the written precondition, credited evidence (including defendant’s expert estimates), and applied contract principles (adding 12%); defendant failed Garrity test. |
Key Cases Cited
- Garrity v. McCaskey, 223 Conn. 1 (1992) (adopts three-part test for vacatur based on manifest disregard of law)
- AFSCME, Council 4 v. Dept. of Correction, 298 Conn. 824 (2010) (highly deferential review of arbitral awards; manifest-disregard standard rarely met)
- Teamsters Local Union No. 677 v. Board of Education, 122 Conn. App. 617 (2010) (review principles for unrestricted submissions; courts minimize interference with arbitration)
- Lathuras v. Shoreline Dental Care, LLC, 65 Conn. App. 509 (2001) (examples of vacatur only where arbitrator knowingly issued an award contrary to law)