332 Conn. 67
Conn.2019Background
- Owners (John and Cindy Girolametti) contracted with general contractor Rizzo for a retail expansion; disputes were submitted to broad, unrestricted arbitration under an AIA-form prime contract.
- The arbitrator found the owners defaulted by leaving the hearing and awarded Rizzo $508,597; owners later litigated claims against five subcontractors (design/construction of steel joists supporting second floor).
- Subcontractors moved for summary judgment asserting res judicata: the owners could have raised the same claims in the arbitration with Rizzo; the trial court granted judgment for Rizzo but denied subcontractors’ motions, finding no privity.
- The Appellate Court reversed, adopting a rebuttable presumption that subcontractors are in privity with the general contractor for purposes of res judicata when owners and the general contractor submit disputes to broad arbitration.
- The Connecticut Supreme Court affirmed: it adopted a rebuttable presumption of privity between general contractors and subcontractors for preclusion of subsequent litigation after unrestricted arbitration, and held the record did not rebut that presumption here.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether unrestricted arbitration between owner and GC bars later suits against nonparticipating subcontractors (privity for res judicata) | Presumption of privity is unfair and conflicts with precedent; subcontractors may owe independent duties that cannot be litigated in GC-owner arbitration | Broad arbitration and standard contracts make GC answerable for subcontractors; arbitration awards should be presumptively final as to subcontractors to prevent multiplicity | Adopted rebuttable presumption that subcontractors are in privity with GC for res judicata where owner–GC arbitration is broad and unrestricted; affirmed below |
| Whether privity must be shown by factual identity of claims (Wheeler reliance) | Wheeler requires closer factual identity; contractual privity cannot alone support preclusion where claims differ | Wheeler distinguishes transactional "same claim" element from privity; contractual privity can establish privity irrespective of factual overlap | Rejected plaintiffs’ Wheeler-based argument; contractual/derivative privity is a valid basis for preclusion here |
| Whether the record shows intent not to treat subcontractors as within arbitration's scope | Owners say project complexity and separate contracts show they did not expect arbitration to bind subcontractors | Prime contract flow‑down clauses, broad arbitration clause, and owners’ litigation conduct show they should have anticipated arbitration would address subcontractor-related claims | Record supports inference owners reasonably expected arbitration with Rizzo would cover subcontractor issues; presumption not rebutted |
| Whether arbitrator’s finding that Rizzo was not responsible for all engineering work defeats privity | Owners argue the arbitrator’s statement shows Rizzo was not liable for certain subcontractor engineering, so no privity for those claims | That statement reflects limited outsourcing of certain trades to contractors directly hired by owners and does not negate privity as to other subcontractor work | Court interprets the arbitrator’s finding as limited and not dispositive of privity; privity still applies for claims at issue |
Key Cases Cited
- Girolametti v. Michael Horton Associates, Inc., 173 Conn. App. 630 (Conn. App. 2017) (Appellate Court decision adopting privity presumption)
- Haynes v. Yale-New Haven Hospital, 243 Conn. 17 (Conn. 1997) (arbitration awards accorded res judicata effect)
- Mazziotti v. Allstate Ins. Co., 240 Conn. 799 (Conn. 1997) (privity analysis focuses on functional relationships and identity of legal rights)
- Wheeler v. Beachcroft, LLC, 320 Conn. 146 (Conn. 2016) (distinguishes same-claim and privity elements of res judicata)
- Industrial Risk Insurers v. Hartford Steam Boiler Inspection & Ins. Co., 273 Conn. 86 (Conn. 2005) (definition of "unrestricted" arbitration)
- DKN Holdings, LLC v. Faerber, 61 Cal. 4th 813 (Cal. 2015) (recognizes derivative liability supporting preclusion between GC and subcontractors)
- Columbia Steel Fabricators, Inc. v. Ahlstrom Recovery, 44 F.3d 800 (9th Cir. 1995) (arbitration award for GC held res judicata as to subcontractor in privity)