160 Conn.App. 75
Conn. App. Ct.2015Background
- Bacon Construction (defendant) built masonry work at York Correctional Institution; the state (plaintiff) later alleged defective construction, negligence, and breach of contract causing water intrusion and façade problems.
- Defendant initiated arbitration under Gen. Stat. § 4-61 seeking unpaid contract balance and delay/disruption damages; the state limited its participation in arbitration and stipulated for arbitration purposes that Bacon had performed under the contract.
- Arbitrator denied the defendant’s attempt to amend to seek a declaratory finding that its work was defect-free, ruled he lacked jurisdiction over that amendment, and relied on the state’s stipulation; he awarded the defendant retainage and other damages based on claims different from alleged defective work.
- The state then sued Bacon in Superior Court asserting negligence and breach of contract for defective construction; Bacon moved to bar those claims by res judicata and collateral estoppel (and later moved for summary judgment on that basis).
- The trial court denied summary judgment, concluding the state’s defective-construction claims were not actually litigated or necessarily decided in the arbitration; the court relied on its earlier December 16, 2008 memorandum overruling Bacon’s objection to a prejudgment remedy application.
- On appeal, the Appellate Court affirmed, holding neither res judicata nor collateral estoppel barred the state’s suit, because Connecticut is a permissive counterclaim jurisdiction and the issue of defectiveness was not litigated or necessary to the arbitration award.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Res judicata — may state’s claims be barred because they could have been counterclaims in arbitration? | State could bring claims now because it was not required to assert counterclaims in arbitration. | State could/should have filed counterclaims in arbitration; failure to do so bars relitigation. | Connecticut is permissive on counterclaims; §22 Restatement rule for compulsory counterclaims doesn’t apply — res judicata does not bar the state’s action. |
| Collateral estoppel — were defective-performance issues actually litigated and necessary in arbitration? | Defective-construction issues were not litigated; the arbitrator relied on a stipulation and lacked jurisdiction over the proposed declaratory claim. | The stipulation and arbitrator’s language effectively determined that Bacon’s performance was contractually proper, precluding relitigation. | Issue of defect was not fully and fairly litigated nor necessary to the award; collateral estoppel does not apply. |
| Law of the case / summary judgment denial — was reliance on earlier decision improper? | Earlier interlocutory decision correctly held preclusion doctrines inapplicable and the court properly denied summary judgment. | Earlier ruling was wrong and should not foreclose summary judgment now. | Appellate review resolves the preclusion questions; the court properly applied its December 2008 reasoning and denied summary judgment. |
Key Cases Cited
- Bacon Construction Co. v. Dept. of Public Works, 294 Conn. 695, 987 A.2d 348 (Conn. 2010) (prior appeal confirming arbitration award addressed related contract dispute)
- Massey v. Branford, 119 Conn. App. 453, 988 A.2d 370 (Conn. App. 2010) (overview of res judicata and collateral estoppel principles)
- Lyon v. Jones, 291 Conn. 384, 968 A.2d 416 (Conn. 2009) (standards for issue preclusion: actually litigated and necessarily decided)
- Santorso v. Bristol Hospital, 308 Conn. 338, 63 A.3d 940 (Conn. 2013) (denial of summary judgment based on preclusion defenses may be appealable as final for purposes of appeal)