ROBERT CLASBY ET AL. v. EDWARD ZIMMERMAN ET AL.
AC 41463
Appellate Court of Connecticut
July 9, 2019
Lavine, Prescott and Elgo, Js.
Argued February 4
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Syllabus
The defendant general contractor, B Co., appealed to this court from the judgment of the trial court denying its application to confirm an arbitration award made in connection with a prior action the plaintiff homeowners had brought against B Co. and its owners, the defendants E and L. The plaintiffs had hired B Co. to raise and remodel their home, and, after becoming dissatisfied with B Co.‘s work, they commenced the underlying action seeking damages for, inter alia, breach of contract. Prior to trial, the parties, in an effort to settle their issues and allow B Co. to complete the project, signed a stipulation that included an agreement to resolve their disputes through arbitration, and the plaintiffs thereafter withdrew their action. The arbitration agreement provided, inter alia, that the parties would submit their issues regarding the renovations to an arbitration panel, which was given broad oversight authority to determine what work remained to be done on those issues and the price to be paid for that work, and that the plaintiffs agreed to pay the amount determined by the panel to be due for the completion of the project. In February, 2017, the panel issued an award, which expressly stated that it was final as to those costs that had been proven but that it was interim as to those costs yet to be proven to complete the project. The award further specified that the cost to complete certain cabinetry work was $76,500, of which $24,643.50 had been paid to date by the plaintiffs, and noted the remaining balance due for the cabinetry. Neither party filed a motion to vacate, modify or correct the February, 2017 award. Thereafter, in light of an ongoing dispute between the parties concerning B Co.‘s claim that, pursuant to the February, 2017 award, it was entitled to be paid the entire $76,500 for the cabinetry work, the panel issued a second award in August, 2017. In the August, 2017 award, the panel found that the parties had agreed to a design change that had reduced the cost of the cabinetry by approximately $20,000 and clarified that, contrary to B Co.‘s claim, because the cabinetry work had not been completed when the panel issued the February, 2017 award, the $76,500 cost it attributed to the cabinetry had not been a final determination, as the actual cost to complete the cabinetry had been unknown and unproven at the time. Neither party filed a motion to vacate, modify or correct the August, 2017 award. Subsequently, B Co. filed an application to confirm the February, 2017 award. B Co. also sought an order vacating the August, 2017 award, and an order that the plaintiffs pay B Co. the entire $76,500 cost of the cabinetry work as set forth in the February, 2017 award, rather than the reduced amount reflecting the actual cost of the cabinetry work as set forth in the August, 2017 award. The trial court denied B Co.‘s application to confirm the award, and B Co. filed an amended appeal with this court. Held:
- The trial court improperly denied B Co.‘s application to confirm the February, 2017 award; where, as here, B Co. filed a timely application to confirm the February, 2017 award within one year after it was rendered, and the parties failed to timely file any motion to vacate, modify or correct that award as required by the thirty day statutory (
§ 52-420 ) limitation period, the court was required, pursuant to statute (§ 52-417 ), to confirm the award unless it was vacated, modified or corrected. - The trial court correctly denied B Co.‘s request that it vacate the August, 2017 award and hold the plaintiffs responsible for the cost of the cabinetry work as set forth in the February, 2017 award: because B Co. failed to timely file an application to vacate, modify or correct the August, 2017 award, which reduced the cost of the cabinetry work by more than $20,000 and clarified that the $76,500 for the cabinetry work in the February, 2017 award had been an interim placeholder pending the determination of the actual cost, B Co. thereby consented to its terms, the trial court lacked any authority to invalidate the award, which was binding on the parties and not subject to judicial scrutiny, and the court was required to defer to the arbitration panel‘s clarification; moreover, the February, 2017 award expressly provided, with respect to the cost of the uncompleted cabinetry work, that it was an interim determination on the basis of the evidence available to that date, such that it was reasonable to conclude that the $76,500 cost was not intended to reflect a final and binding determination, and the parties were on notice that the cost was subject to modification by the arbitration panel, which had been granted broad authority by the parties in their submission.
Argued February 4—officially released July 9, 2019
Procedural History
Action to recover damages for, inter alia, breach of contract, and for other relief, brought to the Superior Court in the judicial district of Stamford-Norwalk, where the defendants filed a counterclaim; thereafter, the plaintiffs withdrew the action in accordance with the parties’ stipulation to enter into binding arbitration and the defendants withdrew their counterclaim; subsequently, the arbitrators issued certain awards and entered certain orders; thereafter, the court, Genuario, J., denied the application to confirm the arbitration award filed by the defendant Bradford Estates, LLC, and rendered judgment thereon, from which the defendant Bradford Estates, LLC, appealed to this court; subsequently, the court denied the motion for reconsideration filed by the defendant Bradford Estates, LLC, and the defendant Bradford Estates, LLC, filed an amended appeal with this court. Reversed in part; judgment directed.
Thomas B. Noonan, for the appellees (plaintiffs).
Opinion
PRESCOTT, J. The defendant, Bradford Estates, LLC,1 is a general contracting business hired by the plaintiffs, Robert Clasby and
The defendant‘s claim on appeal is essentially twofold. First, he claims that, because no timely application to vacate, modify or correct the February 4, 2017 award was ever filed, the court was obligated to grant the defendant‘s application to confirm the award. Second, the defendant claims that, by denying its application to confirm the February 4, 2017 award, the court effectively and improperly gave legal effect to a subsequent award issued by the arbitration panel on August 23, 2017, in which the arbitration panel clarified that the February 4, 2017 award was not a final determination with respect to the cost of the cabinetry work and reduced the amount that the defendant was entitled to collect for the cabinetry work by more than $20,000.
We agree with the defendant that the trial court “had no choice” but to grant the defendant‘s timely application to confirm the award because neither party filed a timely application to vacate, modify or correct the February 4, 2017 arbitration award. See Rosenthal Law Firm, LLC v. Cohen, 165 Conn. App. 467, 472, 139 A.3d 774, cert. denied, 322 Conn. 904, 138 A.3d 933 (2016). Nevertheless, we do not agree with the remaining aspect of the defendant‘s claim that confirmation of the February 4, 2017 award necessarily invalidates or renders legally inoperative the arbitration panel‘s August 23, 2007 award, particularly with respect to its modification of the balance owed to the defendant for the cabinetry work. In other words, we conclude that the trial court properly denied the defendant‘s request for an order directing the plaintiffs to pay the defendant an additional $21,463 for cabinetry work.3 For the reasons that follow, we affirm in part and reverse in part the judgment of the trial court, and remand the matter with direction to grant the application to confirm the February 4, 2017 award, but to deny the remainder of the relief requested in the application.
The record reveals the following facts, as found by the arbitration panel or as undisputed in the record.4 The plaintiffs
The plaintiffs commenced a civil action against the defendant in January, 2014. In their operative complaint, the plaintiffs alleged causes of action sounding in breach of contract, a violation of the Connecticut Unfair Trade Practices Act,
After several years of litigation, on April 29, 2016, the parties signed a stipulation that included an agreement to resolve their disputes through private arbitration in lieu of a trial. The plaintiffs withdrew their complaint, and the defendant withdrew its counterclaim. The parties agreed to submit their issues to a three member arbitration panel with the intent that the defendant would return to the project and finish the renovations to the plaintiffs’ home under the direction and supervision of an engineer and a building professional, both of whom also would serve as members of the arbitration panel.6 The stipulation
The parties submitted evidence to the arbitration panel, and the panel conducted several days of hearings. The parties submitted simultaneous posthearing briefs on January 6, 2017. On February 4, 2017, the arbitration panel issued an award with the seemingly contradictory title “Interim Award/Final Award.” By way of explanation, the arbitrators expressly provided that the award should be viewed as final “as to allocations of costs of items proven to date,” but interim “as to costs to complete.” Later in the award, in a section addressing the costs to complete the project, the arbitrators again discussed, albeit in somewhat different terms, the interim aspects of the award. In particular, they stated that the award was interim “as to the attribution to the parties of costs to complete the project, but is a final award as to each credit and/or cost accounted for” in a spreadsheet appended to the award.8
The spreadsheet attached to the award listed a variety of specific items that remained to be completed. Associated with each enumerated item was (1) a “cost,” representing a total cost that the arbitrators assigned to complete the item, (2) a “paid to date” amount, reflecting the amount the plaintiffs already had paid toward completion of that item; and (3) a “balance,” or the difference between the “cost” and the “paid to date” amount. Item 21 of the spreadsheet pertained to “Cabinetry—labor/material” and listed a cost of $76,500, a paid to date amount of $24,643.50, and a balance of $51,856.65.9
Neither party timely filed an application to vacate, modify or correct the February 4, 2017 award.10 The defendant resumed its
On August 23, 2017, the arbitration panel issued another arbitration award titled “Interim Award (revised).” That award attempted to resolve the parties’ ongoing dispute regarding payment for the cabinetry work referenced in item 21 of the spreadsheet appended to the February 4, 2017 award.11 The August 23, 2017 award provided in relevant part: “Despite numerous discussions between the [supervising members of the arbitration panel] and the [defendant], [the defendant] continues to insist to the [arbitration panel] that its [February 4, 2017 award] requires that it be paid $76,500 for cabinetry work, whether or not this amount is ever proven as the actual cost of the cabinetry. The [defendant‘s] position is groundless and untenable. While the [arbitration panel] found there was a contract between the parties, which included a ‘total price,’ because the actual costs were unknown, this price was only a placeholder for whatever the actual construction costs turned out to be.” The arbitration panel explained that the spreadsheet containing the $76,500 figure representing the “cost” of cabinetry work was prepared “to show what the [plaintiffs] had already paid, as of the hearing, toward the construction‘s actual cost. This was the sole purpose of the [spreadsheet]. As to costs yet unknown, the [February 4, 2017 award] was interim, because it was subject to change, as any construction cost might be, for such items and events as change orders, unforeseen and/or hidden costs, and delay.” The arbitration panel found that the defendant had agreed to a design change involving a reduction in the amount of cabinetry originally envisioned, noting that “had the parties added to the project, the [defendant] would have expected to be paid for additional cabinetry.”
The defendant never filed a timely application to vacate, modify or correct the August 23, 2017 award. Rather, on November 22, 2017, the defendant filed an application to confirm the February 4, 2017 award, in which it also asked the court to vacate “any such subsequent order(s) from the arbitration panel which are contrary to the terms of the award originally rendered.”12 The plaintiffs filed an objection to the application to confirm, arguing that the defendant had misinterpreted the February 4, 2017 award and, essentially, was seeking to be paid for work that it never provided.
The trial court, Genuario, J., heard argument on January 22, 2018. It later
Before turning to our discussion of the defendant‘s claim, we remark briefly on the unusual nature of the stipulation entered into by the parties. As noted by the trial court, the parties used very broad language in their stipulation defining the powers of the arbitration panel, which included expansive authority to resolve, perhaps on a daily basis, any disputes arising from changes in costs and how those changes would affect the amount the plaintiffs owed the defendant for work performed. The broad and sometimes imprecise language used in the submission increases the difficulty of determining the proper legal effect to afford to the arbitration panel‘s arbitration awards, neither of which is characterized as having completely resolved the parties’ disputes. Ordinarily, private arbitrators are utilized by parties as an alternative to litigation with the hope of expedited resolution of then-existing disputes with defined, articulable contours. It would seem to fall outside the usual role of an arbitrator to act not only as an adjudicator but, like in the present case, as a quasi-special master, with extensive powers to oversee and direct completion of a construction project in which factual and legal issues, potentially uncontemplated by the parties in drafting their submission, might later arise. This dual role, in which supervising members of the arbitration panel would make immediate, on-site decisions regarding the construction project and then potentially later would be asked to adjudicate the financial
I
We turn first to the defendant‘s claim that the court lacked the discretion to deny its application to confirm the arbitration award. The defendant argues that, pursuant to the statutory framework governing arbitrations in Connecticut, once an arbitration award is rendered, and the thirty day period for filing an application to vacate, modify or correct the award lapses, a timely application to confirm the award ordinarily must be granted by the court. We agree.14
We begin with general legal principles, including the standard that governs our review of the court‘s denial of the application to confirm the arbitration award. “Arbitration is favored by courts as a means of settling differences and expediting the resolution of disputes. . . . There is no question that arbitration awards are generally upheld and that we give great deference to an arbitrator‘s decisions since arbitration is favored as a means of settling disputes. . . . The limited scope of judicial review of awards is clearly the law in Connecticut.” (Citations omitted; internal quotation marks omitted.) Wolf v. Gould, 10 Conn. App. 292, 296, 522 A.2d 1240 (1987). Whether the circumstances presented require a court to grant an application to confirm an arbitration award as a matter of law presents a legal question over which we exercise plenary review. See HH East Parcel, LLC v. Handy & Harman, Inc., 287 Conn. 189, 196, 947 A.2d 916 (2008) (determination of whether trial court engaged in correct level of review was question of law requiring plenary review).
The core principles of Connecticut‘s arbitration law are set forth in
In Directory Assistants, Inc. v. Big Country Vein, L.P., supra, 134 Conn. App. 415, the plaintiff filed an application in the Superior Court to confirm an arbitration award. Id., 418. The defendants, who had failed to file a timely application to vacate, modify or correct the award, filed a motion to dismiss the application to confirm, arguing, inter alia, that the parties’ dispute had not been arbitrable. Id. The trial court agreed with the defendant and dismissed the application to confirm the award. Id. The plaintiff appealed, and this court reversed the judgment of the trial court. Id., 422. We held that a party that failed to file a timely application to vacate an arbitration award was barred from raising any claims challenging the award in a pleading filed in response to an application to confirm the award. Id. Further, we held that in the absence of a valid application to vacate, modify or correct an award, the court “lacked any discretion in confirming [the award] pursu-ant to § 52-417.” Id.
This court applied the same rationale in Rosenthal Law Firm, LLC v. Cohen, supra, 165 Conn. App. 467. In that case, the self-represented defendant appealed from the judgment of the trial court granting an application to confirm an arbitration award, arguing that the trial court improperly had concluded that his responsive pleading, in effect, was an untimely motion to vacate the award, and that the court failed to consider the
In the present case, the defendant filed its application to confirm the February 4, 2017 arbitration award on November 22, 2017, well within the one year period set forth in
In denying the defendant‘s application to confirm the award, the trial court did not cite to any specific defect as justifying its ruling. Rather, it appears that the court was focused on the defendant‘s challenge to the arbitration panel‘s later modification and clarification of the award, which the court indicated was well within the broad authority the parties had granted to the arbitration panel in their submission. In the absence of a timely application to vacate, modify or correct the award, however, the court had no choice but to confirm the February 4, 2017 award. The court‘s decision to deny the application was, therefore, in error. This conclusion does not, however, fully resolve the claim on appeal.
II
The remaining aspect of the defendant‘s claim is that by denying its application to confirm the February 4, 2017 arbitration award, the court also improperly declined to order the plaintiffs to pay the defendant in accordance with that award and, instead, tacitly validated the arbitration panel‘s August 23, 2017 award, which, by its terms, modified the amount the plaintiffs owed the defendant for the cabinetry work. The premise underlying this argument is that confirmation of the
By failing to timely challenge the August 23, 2017 award, the defendant consented to its terms. In its August 23, 2017 award, the arbitration panel acknowledged the defendant‘s claim that the February 4, 2017 award contained a final and binding determination that the defendant was entitled to be paid $76,500 for cabinetry work. The arbitration panel, however, rejected that construction of its February 4, 2017 award, describing the defendant‘s position as “groundless and untenable.” The panel took the opportunity to clarify that, because the cabinetry work had not been completed at the time it rendered the February 4, 2017 award, the actual costs were unknown at that time, and, thus, the $76,500 listed as the “cost” represented only “a placeholder for whatever the actual construction costs turned out to be.” The panel maintained that the only figures on the spreadsheet that were final, and thus not subject to later modification, were the figures reflecting the amount the plaintiffs already had paid to date. Those figures were a final determination by the panel of the credit the plaintiffs would be due against the actual cost, which had yet to be finally determined.
In its application for confirmation of the February 4, 2017 award, the defendant argued that the court should declare the August 23, 2017 award “illegal, null, and void” because, according to the defendant, the panel lacked any authority to modify the February 4, 2017 award with respect to the cabinetry work. The defendant‘s arguments challenging the propriety of the August 23, 2017 award, however, could have been raised in a timely application to vacate the award. Because the defendant failed to do so, the trial court lacked any authority to invalidate the award. Instead, the court was required to give deferential treatment to the arbitration panel‘s own articulation and clarification of the February 4, 2017 award. See All Seasons Services, Inc. v. Guildner, 94 Conn. App. 1, 11, 891 A.2d 97 (2006) (holding that court improperly disregarded arbitrator‘s articulation of award and that “arbitrator‘s judgment that a clarification was warranted is to be given deference by the court“).
Finally, even without the benefit of the panel‘s August 23, 2017 clarification, the February 4, 2017 award, although not a model of clarity, conveys by its terms that the “costs” set forth for the various items listed on the attached spreadsheet, including the cabinetry work, reflected only the arbitration panel‘s interim determination of cost on the basis of the evidence available to date. The arbitration panel stated that the award should not be viewed as final with respect to any “costs to complete.” In other words, the costs listed on the spreadsheet for items not yet completed were not final costs but, instead, were the panel‘s best estimate at that time based on the terms of the original contract and the defendant‘s initial proposal. The
Accordingly, under any reasonable construction of the February 4, 2017 award, the parties were on notice that the amounts listed on the spreadsheet, other than those reflecting the plaintiffs’ paid to date amounts, could be subject to revision or modification by the parties in consultation with the supervising arbitrators based on the actual work performed. The parties could have sought to modify or correct the award if they felt that it failed accurately to reflect the intent of the parties or improperly left issues open for further consideration. Instead, by failing to do so, they chose to be bound by the award as it was rendered. We conclude that the court correctly denied the defendant‘s request for an order holding the plaintiffs responsible for the cost of cabinetry work as set forth in the February 4, 2017 award, rather than pursuant to the updated determination as set forth in the unchallenged August 23, 2017 award.
The judgment is affirmed as to the trial court‘s denial of the defendant‘s request for an order directing the plaintiffs to pay the defendant an additional amount for cabinetry work, the judgment is reversed as to the trial court‘s denial of the defendant‘s application to confirm the February 4, 2017 arbitration award, and the case is remanded with direction to grant the application to confirm that award but to deny any additional relief requested therein.
In this opinion the other judges concurred.
PRESCOTT, J.
