155 Conn.App. 264
Conn. App. Ct.2015Background
- Nxegen (plaintiff) awarded a Phase II Bridgeport Board of Education energy contract; Carbone (defendant) was Nxegen’s COO in charge of the proposal.
- Carbone resigned in September 2007, formed Power Point Energy, LLC in December 2007, and his company obtained and completed the Phase II contract in 2008.
- Arbitrator found Carbone wilfully and maliciously misappropriated Nxegen’s trade secrets in violation of CUTSA, breached his employment agreement and fiduciary duties, and violated CUTPA (but dismissed the CUTPA claim as duplicative).
- Arbitrator awarded $1,031,356 total under CUTSA (including compensatory damages) and $340,156 in punitive damages after a second hearing.
- Trial court confirmed the arbitration award; Carbone appealed, arguing the punitive damages were awarded in manifest disregard of the law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the arbitrator manifestly disregarded law in awarding punitive damages under CUTSA | Arbitrator applied correct standard (wilful and malicious) and supported malice finding on facts (ill will toward Sutcliffe; breaches of fiduciary duty) | Arbitrator ignored controlling precedent on what constitutes malice and applied a different, improper standard | Court: No manifest disregard; arbitrator acknowledged legal standard, explained factual basis for malice, and error (if any) was not obvious or deliberate; award affirmed |
| Whether trial court properly confirmed the unrestricted arbitration award | Arbitration award is final under unrestricted submission and not reviewable for legal error absent narrow Garrity grounds | Same as plaintiff — vacatur sought only under narrow statutory/ Garrity grounds | Court: Confirmed award; Garrity test not satisfied (no obvious error, no conscious ignoring of controlling law) |
Key Cases Cited
- Economos v. Liljedahl Bros., Inc., 279 Conn. 300 (Conn. 2006) (scope of judicial review for unrestricted arbitration submissions)
- Garrity v. McCaskey, 223 Conn. 1 (Conn. 1992) (manifest disregard vacatur standard articulated)
- Saturn Construction Co. v. Premier Roofing Co., 238 Conn. 293 (Conn. 1996) (three‑part Garrity test explained)
- Elm City Cheese Co. v. Federico, 251 Conn. 59 (Conn. 1999) (illustrative CUTSA malicious‑misappropriation precedent)