GABRIELLE DITULLIO v. LM GENERAL INSURANCE COMPANY
(AC 44114)
Appellate Court of Connecticut
Argued May 11, 2021-officially released February 1, 2022
Alvord, Suarez and Clark, Js.
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Syllabus
The plaintiff sought to confirm an arbitration award against the defendant arising out of a separate action in which she sought to recover damages from the insurer L for underinsured motorist benefits. The plaintiff previously had received a $20,000 settlement from a tortfeasor in connection with injuries she sustained in a motor vehicle collision. In bringing the underinsured motorist action against L, the plaintiff alleged that the $20,000 settlement was insufficient to fully compensate her and that L was legally responsible for damages in excess of the underinsured motorist‘s coverage. The plaintiff, the defendant and L ultimately agreed to settle the case by means of binding arbitration and entered into a written arbitration agreement. Thereafter, an arbitrator issued an award in the amount of $33,807.50. The arbitrator made no findings regarding collateral sources, which were to be deducted from the total damages pursuant to the parties’ arbitration agreement. The parties subsequently agreed with each other as to the amounts of collateral sources, but disagreed as to whether the $20,000 settlement should be deducted from the award. The defendant filed an objection to the plaintiff‘s application to confirm the award, in which it argued, inter alia, that it was legally responsible only for damages exceeding the $20,000 settlement that the plaintiff already had received from the tortfeasor. The defendant did not otherwise file a motion to modify or to correct the award. Thereafter, upon the parties’ request, the arbitrator issued an articulation stating that the award of $33,807.50 was a full value award, which did not take into account any collateral sources or offsets, or the $20,000 settlement. Subsequently, the trial court rendered judgment confirming the award with deductions of $1020.02 in collateral sources and $20,000 to offset the prior settlement, from which the plaintiff appealed to this court. Held:
1. The trial court properly deducted $20,000 from the arbitration award to offset the settlement that the plaintiff had received from the tortfeasor: although the plaintiff claimed that the court lacked statutory and common-law authority to modify the award, this court concluded that the trial court did not modify the award but, instead, merely conformed the award to the parties’ arbitration agreement; moreover, in light of the agreement‘s reference to the plaintiff‘s underinsured motorist lawsuit and the nature of her underlying claim, the only reasonable interpretation of the agreement was that the parties initially contemplated and agreed that the arbitrator‘s gross award would be the sum of the plaintiff‘s total economic and noneconomic damages, less the $20,000 she had received from the tortfeasor; furthermore, although the arbitration agreement provided that the arbitrator would calculate the gross award and then deduct damages determined to be collateral sources, the arbitrator made clear in his decision and in his articulation that his award was for the full value of the plaintiff‘s damages, without considering the issues of collateral sources or offsets, demonstrating that the parties subsequently modified their written agreement and submitted to the arbitrator only the question of the plaintiff‘s total economic and noneconomic damages and preserving the written agreement‘s provisions limiting the defendant‘s liability only to those damages in excess of the $20,000 settlement and any collateral sources.
2. This court concluded that, although the trial court properly deducted the $20,000 settlement from the arbitration award, it miscalculated the amount of the judgment: subtracting the collateral sources and the settlement from the arbitrator‘s full value award yielded the sum of $12,787.48, not the amount of $12,500 that the trial court had calculated.
Procedural History
Application to confirm an arbitration award, brought to the Superior Court in the judicial district of Danbury, and tried to the court, Brazzel-Massaro, J.; judgment confirming and clarifying the award, from which the plaintiff appealed to this court. Affirmed in part; reversed in part; judgment directed.
James M. Harrington, with whom, on the brief, was Joseph T. Coppola II, for the appellant (plaintiff).
Matthias J. DeAngelo, with whom, on the brief, was Evan Tegtmeier, for the appellee (defendant).
Opinion
The record reveals the following undisputed facts. The plaintiff was injured on March 30, 2015, when her motor vehicle was struck in Bethel by a vehicle operated by Tracie Fabri-Lino (tortfeasor). At the time of the collision, the plaintiff‘s vehicle was insured by Liberty Mutual Insurance Company (Liberty Mutual).3 The plaintiff settled her claims against the tortfeasor for $20,000. Thereafter, in January, 2018, the plaintiff commenced an underinsured motorist action (UIM case) against Liberty Mutual,4 alleging that she had sustained injuries, damages, and other losses as a direct result of the tortfeasor‘s negligence. She also alleged that she had settled her claim against the tortfeasor for $20,000, the limit of the tortfeasor‘s liability policy. Significantly with respect to the present appeal, the plaintiff alleged that the settlement was “insufficient to fully compensate [her] for her damages and losses. . . . Wherefore [Liberty Mutual] . . . is legally responsible for all damages in excess of the underinsured driver‘s coverage.” (Emphasis added.)
A pretrial settlement conference in the UIM case was held in May, 2019, at which time the parties were unable to agree on a sum to resolve the litigation. They agreed, however, to settle the UIM case by means of binding arbitration and that the UIM case would be withdrawn. On May 31, 2019, the plaintiff, Liberty Mutual, and the defendant signed an arbitration agreement (written agreement) that provides in relevant part: “[The parties] have agreed to arbitrate the UM/UIM Plaintiff‘s claim against the [defendant and Liberty Mutual] regarding a motor vehicle accident which occurred on March 30, 2015 . . . . [T]he [p]arties hereby agree to the follow-ing:
“1. The issues in the Lawsuit shall be resolved by means of binding arbitration, and the Lawsuit shall be resolved by way of release and withdrawal of action. . . .
“2. The Arbitrator shall be mutually agreed upon . . . . All issues of liability, causation, and damages shall be decided by the Arbitrator.
* * *
“6. Following the arbitration hearing in connection with this matter, the Arbitrator will render a decision containing a ‘Gross Award.’
“7. After determining the Gross Award, the Arbitrator is to deduct from total damages, all economic damages determined to be collateral sources.
“8. After the agreed deductions from the Gross Award per Paragraph 7, the resulting sum shall be the ‘Net Award.’ “9. The parameters of the arbitration shall be subject to a confidential high/low agreement wherein the Net Award to the Plaintiff, per Paragraph 8, will be no higher than thirty-two thousand five hundred dollars ($32,500) and no lower than two thousand five hundred dollars ($2,500).
“10. In the event that the Net Award is $32,500 or greater, then the sum due . . . shall be $32,500. In the event the Net Award is $2,500 or less, then the Sum Due shall be $2,500.5
“11. None of the parties will disclose the high and low figures of this Agreement to the Arbitrator. . . .” (Emphasis added.)
On July 9, 2019, Attorney Christopher P. Kriesen (arbitrator) held an arbitration hearing, and on July 12, 2019, he issued a written decision. In his decision, the arbitrator found that the tortfeasor‘s negligence proximately caused the plaintiff‘s injuries. He also found that the plaintiff had received treatment from several medical providers, but was able to complete training at the police academy and become a patrol officer. The arbitrator found that the plaintiff‘s economic damages were $13,807.50, her noneconomic damages were $20,000, and the award was $33,807.50. The arbitrator further stated that he made “no finding on collateral sources. If the parties are unable to agree on the issue, they may submit the issue to me.” Neither the plaintiff nor the defendant and Liberty Mutual filed with the arbitrator a motion to modify or correct the award pursuant to
Thereafter, counsel for the plaintiff informed counsel for the defendant and Liberty Mutual that the collateral source payments totaled $1020.02. Counsel subtracted the collateral source amount from the arbitrator‘s eco-nomic award, added the remainder to the arbitrator‘s $20,000 noneconomic award, and stated that the net award was $32,787.48, which should be reduced to $32,500 in accordance with the “high/low” provision set forth in paragraphs 9 and 10 of the written agreement. Counsel for the defendant and Liberty Mutual agreed with respect to the amount of collateral source payments, but countered that the $20,000 settlement that the plaintiff had received from the tortfeasor also had to be subtracted from the award, resulting in a net award of $12,787.48. Counsel for the plaintiff disagreed, contending that the agreement was for “new money” and that the written agreement did not include a provision regarding the $20,000 tortfeasor settlement. Counsel were unable to resolve their disagreement, and on July 19, 2019, the plaintiff moved to restore the UIM case. See footnote 4 of this opinion.
On October 11, 2019, the defendant filed an objection to the plaintiff‘s application to confirm the award on the ground that it was frivolous given that there was a prior lawsuit pending before the court. It also argued that the plaintiff was asking the court to confirm “an arbitration award without taking into account the nature of the claim. This claim is, and always was, a contractual claim for underinsured motorist benefits.” The defendant argued, as well, that the complaint in the plaintiff‘s underlying UIM case alleged that the defendant and Liberty Mutual are “legally responsible for all damages in excess of the [underinsured] driver‘s coverage.” (Emphasis altered.) The defendant also argued that “it is well established that a plaintiff is not [to] be compensated twice for the same damages.” The defendant suggested that the parties return to the arbitrator for clarification of the award, noting that the arbitrator had not made a finding with regard to collateral sources and that the arbitrator had invited the parties to return if they were unable to agree with respect to collateral sources.
The parties returned to the arbitrator on October 30, 2019, and requested that he articulate his July 12, 2019 award. On the same date, the arbitrator issued an articulation, stating that “the award of $33,807.50 is a ‘full value’ award, taking into account only the facts and basis set forth in the decision. . . . The award does not take into account any collateral sources or offsets. . . . The award does not take into account in any way the $20,000 payment apparently made by the alleged tortfeasor. This amount was disclosed to the arbitrator in a position statement (which was not evidence) by the plaintiff and in a deposition transcript submitted by the defendant (but which was not considered since it was irrelevant to the arbitrator‘s determination of the award and was therefore not deemed a fact by the arbitrator). . . . The arbitrator will consider any issues of collateral sources and/or offsets if the parties have agreed, or do agree, to have these issues considered by the arbitrator.” (Emphasis added.)
The court also noted the defendant‘s objection, in which the defendant argued that the application to confirm was frivolous when filed because the UIM case had been restored to the docket and remained pending at that time. The defendant noted that the plaintiff was asking the court to confirm the award without taking into account the nature of the underlying contractual claim for underinsured motorist benefits or the plaintiff‘s UIM lawsuit, which were incorporated into the written agreement by reference, and the defendant alleged that it was legally responsible only for damages exceeding the $20,000 settlement that the plaintiff already had received from the tortfeasor.
In addition, during the March 9, 2020 hearing on the plaintiff‘s application to confirm, “the defendant also alleged that the parties agreed to an offset and stated in front of the arbitrator that he did not need to take that into consideration because the parties had agreed to the offset.” The plaintiff denied that there had been any conversation with the arbitrator about an offset and the court ultimately concluded that it was “not necessary . . . to address any disagreement between the parties about the subject of discussing the offset with the arbitrator, as the arbitrator explained that the award was a full value award, and though he was aware of the offset, he did not consider it because it was irrelevant in determining the award.”
Turning to the merits of the plaintiff‘s application to confirm, the court found that the plaintiff‘s underlying claim was a contractual one for underinsured motorist benefits. It also found that the written agreement was clear and unambiguous, but that it did not mention offsets for prior settlements. In addition, neither party took issue with the decision rendered by the arbitrator. Instead, they disagreed about whether an offset should be subtracted from the arbitrator‘s full value award.
Even though the defendant had not filed with the court a motion to vacate, modify, or correct the award pursuant to the statutory provisions authorizing such filings, the court nevertheless considered the defendant‘s objection and reviewed the law governing underinsured motorist coverage. In considering the plaintiff‘s application to confirm, the court stated that it was “necessary to also apply to the present case the fundamental principle of the purpose of underinsured motorist insurance recognized by [Connecticut courts], which is to
In ruling on the plaintiff‘s motion to confirm, the court noted the articulation that the award is a ”full value award has significance in deciphering the award as no more than $32,500, which would not [have been] so if the court awarded the entire sum in addition to the settlement amount of $20,000.” (Emphasis in original.) Therefore, pursuant to
On appeal, the plaintiff‘s principal claim is that the court lacked statutory and common-law authority to modify the award. We agree that it would have been improper for the court to modify the arbitrator‘s award.
It is well settled that courts generally lack the authority to review unrestricted arbitration awards for errors of law, particularly in the absence of a motion to vacate. Harty v. Cantor Fitzgerald & Co., 275 Conn. 72, 80, 881 A.2d 139 (2005); id., 81 (motion to vacate should be granted when arbitrator exceeded powers or so imperfectly executed them that mutual, final, definite award not made). “Judicial review of arbitral decisions is narrowly confined.” (Internal quotation marks omitted.) State v. New England Health Care Employees Union, District 1199, AFL-CIO, 265 Conn. 771, 777, 830 A.2d 729 (2003). “[T]he law in this state takes a strongly affirmative view of consensual arbitration. . . . Arbitration is a favored method to prevent litigation, promote tranquility and expedite the equitable settlement of disputes.” (Citation omitted; internal quotation marks omitted.) Rocky Hill Teachers’ Assn. v. Board of Education, 72 Conn. App. 274, 278, 804 A.2d 999, cert. denied, 262 Conn. 907, 810 A.2d 272 (2002). “Where the submission does not otherwise state, the arbitrators are empowered to decide factual and legal questions and an award cannot be vacated on the grounds that . . . the interpretation of the agreement by the arbitrators was erroneous. Courts will not review the evidence nor, where the submission is unrestricted, will they review the arbitrators’ decision of the legal questions involved. . . . In other words, [u]nder an unrestricted submission, the arbitrators’ decision is considered final and binding; thus courts will not review the evidence considered by the arbitrators nor will they review the award for errors of law or fact. . . .” (Emphasis added; internal quotation marks omitted.) Harty v. Cantor Fitzgerald & Co., supra, 80.10
We,
“Arbitration agreements are contracts and their meaning is to be determined . . . under accepted rules of [state] contract law . . . .” (Internal quotation marks omitted.) Levine v. Advest, Inc., 244 Conn. 732, 745, 714 A.2d 649 (1998). “When a party asserts a claim that challenges the . . . construction of a contract, we must first ascertain whether the relevant language in the agreement is ambiguous. . . . A contract is ambig-uous if the intent of the parties is not clear and certain from the language of the contract itself. . . . When the language of a contract is ambiguous, the determination of the parties’ intent is a question of fact . . . . If a contract is unambiguous within its four corners, intent of the parties is a question of law requiring plenary review. . . . Where the language of a contract is clear and unambiguous, the contract is to be given effect according to its terms.” (Citation omitted; internal quotation marks omitted.) O‘Connor v. Waterbury, 286 Conn. 732, 743-44, 945 A.2d 936 (2008).
The parties’ written agreement in this case provides, in relevant part, that “[the plaintiff] and [the defendant and Liberty Mutual] . . . have agreed to arbitrate the UM/UIM Plaintiff‘s claim against the [defendant and Liberty Mutual] regarding a motor vehicle accident . . . . The issues in the [l]awsuit shall be resolved by means of binding arbitration. . . .” (Emphasis added.) The circumstances surrounding the making of the written agreement were the parties’ inability to settle the UIM case. The parties, therefore, entered into the agreement to resolve the plaintiff‘s UIM lawsuit. The plaintiff‘s complaint in that lawsuit specifically alleged that the tortfeasor‘s $20,000 settlement with the plaintiff was insufficient to fully compensate her for her damages and losses and that Liberty Mutual was legally responsible for all damages in excess of the tortfeasor‘s coverage.
The written agreement further provides that the arbitrator would render a “Gross Award.” After determining the “Gross Award,” the written agreement stated that the arbitrator would “deduct from total damages, all economic damages determined to be collateral sources.” The resulting sum would constitute the “Net Award.” The “Sum Due” would be the “Net Award,” subject to the agreement‘s “high/low” provision.11 In light of the written agreement‘s reference to the plaintiff‘s lawsuit and the nature of her underlying claim, the only reasonable interpretation of the agreement is that the parties initially contemplated and agreed that the arbitrator‘s “Gross Award” would be the sum of the plaintiff‘s total economic and noneconomic damages, less the $20,000 she had received from the tortfeasor. The “Net Award,” in turn, would be that sum less “all economic damages determined to be collateral sources.” The arbitrator‘s decision and articulation make clear, however, that the parties ultimately submitted a different question to him.
In his decision, the arbitrator found that the tortfeasor caused the plaintiff‘s injuries
The parties subsequently agreed to return to the arbitrator for a clarification of his award. The arbitrator articulated that the award was a ” ‘full value’ award, taking into account only the facts and basis set forth in the decision.” The arbitrator also stated in his articulation that “[t]he award does not take into account any collateral sources or offsets. . . . The award does not take into account in any way the $20,000 payment apparently made by the alleged tortfeasor. This amount was disclosed to the arbitrator in a position statement (which was not evidence) by the plaintiff and in a deposition transcript submitted by the defendant (but which was not considered since it was irrelevant to the arbitrator‘s determination of the award and was therefore not deemed a fact by the arbitrator).” (Emphasis added.) Last, the arbitrator stated that he would “consider any issues of collateral sources and/or offsets if the parties have agreed, or do agree, to have these issues considered by the arbitrator.” (Emphasis added.)
The arbitrator‘s decision and articulation, therefore, make clear that, although the written agreement between the parties was to have the arbitrator decide “[a]ll issues of liability, causation, and damages” and issue a “Gross Award” that accounted for the plaintiff‘s $20,000 settlement with the tortfeasor, the parties subsequently agreed to submit to him only the question of the plaintiff‘s total economic and noneconomic damages as result of the motor vehicle accident. That is precisely the question that the arbitrator answered in his articulation, and, in doing so, he made clear that his award was for the full value of the plaintiff‘s damages.
There is nothing in the record to support a claim that, when they modified their written agreement about what to submit to the arbitrator, the parties also agreed to alter that agreement to limit the extent of the defendant‘s liability to the amount it allegedly owed the plaintiff under the underinsured motorist policy. Concluding otherwise would require us to infer that the defendant agreed to change the written agreement in a way that would make it liable to the plaintiff for amounts that the plaintiff had never sought in the underlying lawsuit and was not entitled to under the laws governing underinsured motorist coverage in our state. See
On the basis of our review of the entire record, including the written agreement, the plaintiff‘s UIM complaint, the arbitrator‘s decision, the parties’ agreement to return to the arbitrator, and the articulation, we conclude that the parties agreed to submit to the arbitrator only the question of the plaintiff‘s total economic and noneconomic damages as a result of the underlying automobile collision, but also preserved the written agreement‘s provisions limiting the defendant‘s liability to only those damages in excess of the $20,000 settlement and any “collateral sources,” up to a maximum of $32,500. For this reason, the court properly confirmed the award, and effectuated the parties’ written agreement, by deducting from the arbitrator‘s “full value” award the plaintiff‘s
There is, however, another issue for us to consider. In its brief, the defendant has identified an error in the court‘s calculation of the amount of the judgment, i.e., $12,500. We agree with the defendant. The amount due to the plaintiff is the arbitrator‘s full value award less collateral sources and the $20,000 settlement with the tortfeasor. Subtracting from the arbitrator‘s gross award of $33,807.50 the undisputed amount of $1020.02 in collateral sources and the $20,000 settlement amount yields the sum of $12,787.48. Therefore, the net award due to the plaintiff is $12,787.48.
The judgment is reversed only as to the amount of the award, and the case is remanded with direction to render judgment in accordance with this opinion; the judgment is affirmed in all other respects.
In this opinion the other judges concurred.