157 Conn.App. 731
Conn. App. Ct.2015Background
- SBD Kitchens (plaintiff) performed kitchen/bath renovations for Brett and Catherine Jefferson (defendants); defendants created a website criticizing SBD’s work.
- Parties had an arbitration agreement (AA A rules) requiring a “reasoned award”; arbitrator Robert J. O’Brien heard breach-of-contract, defamation, counterclaims and defenses.
- Arbitrator found for defendants on breach-of-contract, for plaintiff on defamation: $25,000 compensatory damages, and punitive damages in the form of attorney’s fees and costs ($170,559.49), plus injunctions limiting website content.
- Defendants moved in superior court to vacate the punitive-damage portion; plaintiff moved to confirm the award; court confirmed award and denied defendants’ motion to vacate; plaintiff’s later motion for additional fees (for post-arbitration court proceedings) was denied.
- Appeals: defendants challenged punitive damages as made in manifest disregard of law (arguing arbitrator failed to find "actual malice"); plaintiff appealed denial of attorney’s fees for litigation to confirm the award.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether arbitrator’s punitive-damage award in defamation was in manifest disregard of law | Award proper; arbitrator applied Connecticut law and evidence supports actual malice | Arbitrator failed to make explicit finding of "actual malice" (knowledge or reckless disregard); reasoned award confined review to its four corners and lacks required finding | Affirmed: no manifest disregard; record and award support a plausible finding of actual malice and review may consider the record beyond four corners |
| Whether reviewing court is confined to the four corners of a "reasoned award" when assessing manifest disregard | Court may examine the full record to determine whether award is supported | Award review should be limited to the written reasoned award | Court may consider all information available on review; limiting to four corners would frustrate arbitration-deference principles and be unduly restrictive |
| Whether plaintiff is entitled to additional attorney’s fees for post-arbitration confirmation/vacatur proceedings | Fees are an extension of punitive fees awarded by arbitrator because those fees were to make plaintiff whole for defendants’ wrongful conduct | American Rule bars fee recovery absent contract, statute, or recognized exception; punitive award already compensated pre-arbitration misconduct | Affirmed denial: no contractual or statutory fee-shifting; O’Leary controls—court has no authority to add appellate/post-judgment fees as extension of punitive award |
| Standard for vacating an arbitration award for manifest disregard | (implicit) high burden; award should be vacated only for egregious, obvious legal error | same | Confirmed that manifest-disregard test is narrow and rarely met; three-element test applies and was not satisfied here |
Key Cases Cited
- Gambardella v. Apple Health Care, Inc., 291 Conn. 620 (establishes actual malice standard for punitive damages in defamation)
- Harty v. Cantor Fitzgerald & Co., 275 Conn. 72 (sets three-element test for manifest disregard of law in arbitration)
- O’Leary v. Industrial Park Corp., 211 Conn. 648 (court may not award additional attorney’s fees for defending an appeal or post-judgment proceedings as extension of punitive damages)
- Duferco Int’l Steel Trading Co. v. T. Klaveness Shipping A/S, 333 F.3d 383 (2d Cir.) (where multiple plausible readings of an award exist, manifest disregard cannot be found if one reading yields legally correct justification)
- Sarofim v. Trust Co. of the West, 440 F.3d 213 (5th Cir.) (reasoned award review may consider the entire record; not strictly limited to four corners)