MARY TIRRENO v. THE HARTFORD
(AC 36879)
Connecticut Appellate Court
Argued October 7—officially released December 15, 2015
Beach, Alvord and Pellegrino, Js.
(Appeal from Superior Court, judicial district of Fairfield, Hon. Richard P. Gilardi, judge trial referee.)
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Meg R. Reid, with whom, on the brief, was Daniel P. Scapellati, for the appellees (defendants).
ALVORD, J. The plaintiff, Mary Tirreno, appeals from the trial court‘s judgment in favor of the defendants, The Hartford Financial Services Group, Inc., and its wholly-owned subsidiary, Trumbull Insurance Company (collectively, The Hartford).1 On appeal, Tirreno claims that the court erred by granting The Hartford‘s motion to enforce a settlement agreement negotiated by her prior counsel.2 Specifically, Tirreno claims that the court improperly failed to conclude that she “lacked the mental capacity to enter into an agreement of binding mediation or binding arbitration.” In the alternative, if the agreement is valid, she claims that the parties agreed to settle their dispute through arbitration, but they failed to reduce their agreement to writing and, therefore, under
The following facts and procedural history are relevant to this appeal. Tirreno alleged injuries from a motor vehicle accident on September 27, 2010. Tirreno sought underinsured motorist benefits from her insurer, The Hartford. Unable to reach a resolution of her insurance claim, Tirreno filed a breach of contract complaint against The Hartford in March, 2012. Tirreno also sought punitive damages, claiming that The Hartford was not abiding by the terms of her policy and was thus violating the Connecticut Unfair Trade Practices Act,
On April 24, 2013, The Hartford‘s counsel sent a letter to Tirreno‘s counsel proposing to resolve the claim through mediation. Following a pretrial conference on April 25 and through a series of e-mails, the attorneys negotiated the terms of a binding mediation. The parties agreed that Tirreno would withdraw all extracontractual claims and The Hartford would permit Tirreno to argue for damages in excess of its policy limits. The parties selected a mediator and agreed that they would work with the mediator to reach a settlement. If they could not reach a settlement of their dispute in this manner, the mediator would decide the claim and determine damages. On April 29, 2013, the parties initially agreed that they would accept the mediator‘s decision as final and they confirmed that they would use this method of adjudication just prior to beginning the mediation session. These terms were agreed to orally, memorialized in a series of e-mails exchanged between counsel, and later testified to by counsel.3
On June 18, 2013, the parties, including Tirreno and her husband, attended the mediation. Tirreno participated in the mediation proceedings by presenting evidence of the injuries that she claimed were caused by
On July 11, 2013, the mediator, in a written decision summarizing the mediation evidence, awarded Tirreno $75,000 in net damages. In response, The Hartford issued a check for that amount, and on July 23, the check was sent to Tirreno‘s counsel. After several weeks elapsed with the check not having been cashed, The Hartford‘s counsel attempted to contact Tirreno‘s counsel. On October 14, 2013, Tirreno personally e-mailed The Hartford‘s counsel, stating: “Attorney Perkins no longer represents me, and has not since July 27th. I [i]nstructed Atty. Perkins to return the check as I never agreed to any settlement, as this was not in my best interest at that time as I am in need of surgery and further treatment as a result of the accident.” One week later, the uncashed check was returned to The Hartford. On October 25, 2013, Tirreno‘s counsel filed a motion to withdraw his appearance.
On November 14, 2013, The Hartford filed a motion to enforce the settlement agreement. Represented by new counsel, Tirreno objected to the motion to enforce the agreement, arguing that she did not have the mental capacity to decide to enter into a binding settlement agreement. A hearing on the motion to enforce was held on December 10, 2013. At the hearing, Tirreno did not dispute that her prior attorney had agreed to binding mediation or that she had authorized him to do so, merely stating that she did not have the capacity to resolve her claim in this manner. Tirreno called one witness, her treating psychiatrist, R.S. Lowe, III, and she submitted as an exhibit a letter that he wrote. Dr. Lowe testified that he wrote the letter, addressed “to whom it may concern,” at the request of Tirreno and her husband, in which he stated that she lacked the “decisional capacity”4 to enter into a legal agreement for binding mediation.
On December 26, 2013, the court granted The Hartford‘s motion to enforce the settlement agreement. In response, Tirreno filed a motion to reargue, claiming that the settlement was actually an arbitration proceeding and as such had failed to comply with applicable statutes. On March 27, 2014, the court held a hearing on the motion to reargue. On May 7, 2014, the court affirmed its prior order granting The Hartford‘s motion to enforce the settlement agreement. This appeal followed.
I
Tirreno‘s first claim on appeal is: “The Plaintiff lacked the mental capacity to enter into an agreement of binding mediation or binding arbitration.” We disagree with
“A trial court has the inherent power to enforce summarily a settlement agreement as a matter of law when the terms of the agreement are clear and unambiguous. . . . [T]o the extent that the defendant[s‘] claim implicates the court‘s factual findings, our review is limited to deciding whether such findings were clearly erroneous. . . . A finding of fact is clearly erroneous when there is no evidence in the record to support it . . . or when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed. . . . In making this determination, every reasonable presumption must be given in favor of the trial court‘s ruling.” (Internal quotation marks omitted.) Kidder v. Read, 150 Conn. App. 720, 732-33, 93 A.3d 599 (2014).
“[I]t is hornbook law that clients generally are bound by the acts of their attorneys . . . . In the context of settlement agreements, the authority to determine whether and on what terms to settle a claim is reserved to the client except when the client has validly authorized the attorney to make such decisions. . . . Thus, an attorney with apparent authority may enter into a settlement agreement that is binding on the client.” (Citations omitted; emphasis in original; internal quotation marks omitted.) Ackerman v. Sobol Family Partnership, LLP, 298 Conn. 495, 509-10, 4 A.3d 288 (2010). “Apparent authority is derived not from the acts of the agent but from the deliberate or inadvertent acts of the principal. . . . Apparent authority has two elements. First, it must appear from the acts of the principal that the principal held the agent out as possessing sufficient authority to embrace the act in question, or knowingly permitted him to act as having such authority . . . . Second, the party seeking to bind the principal must have acted in good faith reliance on that appearance of authority.” (Internal quotation marks omitted.) L & V Contractors, LLC v. Heritage Warranty Ins. Risk Retention Group, Inc., 136 Conn. App. 662, 669, 47 A.3d 887 (2012).
The relationship between client and attorney is governed by our Rules of Professional Conduct. Rule 1.14 (a) states: “When a client‘s capacity to make or communicate adequately considered decisions in connection with a representation is impaired, whether because of minority, mental impairment or for some other reason, the lawyer shall, as far as reasonably possible, maintain a normal client-lawyer relationship with the client.” Section (b) of rule 1.14 addresses what an attorney should do if an issue of incapacity arises: “When the lawyer reasonably believes that the client is unable to make or communicate adequately considered decisions, is likely to suffer substantial physical, financial or other
Here, it was not the role of the trial court to determine Tirreno‘s mental capacity; rather, the court only needed to determine if her prior counsel had the authority to enter into a settlement agreement. There was no dispute that she was represented by counsel in April, 2013, when attorneys for the parties agreed to use binding mediation as the method of adjudication. It was also undisputed that her counsel had the authority to enter into a settlement agreement on Tirreno‘s behalf. Thus, Tirreno was bound to the agreement that her counsel had negotiated and accepted. See Ackerman v. Sobol Family Partnership, LLP, supra, 298 Conn. 510. Tirreno‘s attendance at, and participation in, the mediation validated the parties’ understanding that counsel had the authority to agree to the resolution of the claim by mediation. See L & V Contractors, LLC v. Heritage Warranty Ins. Risk Retention Group, Inc., supra, 136 Conn. App. 669. In an e-mail exchange, Tirreno‘s counsel advised that he needed his client‘s approval before agreeing to binding mediation.6 Under the protection of the attorney-client privilege, Tirreno‘s counsel declined to testify about the conversations he had with his client, but when the court asked whether he would “independently agree to a binding arbitration for any of [his] clients without their permission?” Counsel answered: “No.” Based on these facts, it was reasonable for The Hartford to believe that counsel was acting as an agent of Tirreno and that he had the authority to enter into a settlement agreement on behalf of his client. The Hartford relied on this authority; the company agreed to forgo application of the contractual policy limit and to accept the final damages amount awarded by the mediator in July, 2013. If there was an issue of mental capacity, as was first claimed in counsel‘s November, 2013 objection to the motion to enforce the settlement agreement, it was a matter between Tirreno and her prior attorney. The court properly granted The Hartford‘s motion to enforce the settlement agreement.
II
In Tirreno‘s second claim on appeal, she argues: “There was no agreement signed between the parties to submit the matter to binding mediation or arbitration,” which deprived the arbitrator of subject matter jurisdiction and, therefore, the motion to enforce was improperly granted. After authorizing her attorney to agree to binding mediation as the method of adjudicating her
As a preliminary matter, it is important to clarify the court‘s ruling as to whether this was an arbitration proceeding. After receiving the motion to reargue, the trial court held a hearing to determine whether an arbitration proceeding had taken place, and if so, whether there had been compliance with the state‘s arbitration statutes. At the conclusion of the hearing, the court did not make a finding as to what type of dispute resolution procedure had been undertaken by these parties. Instead, the court issued a memorandum of decision which reiterated its judgment granting The Hartford‘s motion to enforce the settlement agreement. In its memorandum of decision, the court did not analyze whether the parties agreed to arbitration. Rather, for the sake of the argument, the court addressed whether the procedures required by the state‘s arbitration statutes had been satisfied, if in fact, an arbitration proceeding had occurred.
In review, we first address whether the trial court erred by not concluding that this agreed upon method of adjudication was an arbitration proceeding. “[T]he scope of [a contract‘s] terms are questions of fact to be determined by the trier on the basis of all the evidence . . . and are thus subject to a limited scope of review by this court.” (Citation omitted; internal quotation marks omitted.) Harry Skolnick & Sons v. Heyman, 7 Conn. App. 175, 178, 508 A.2d 64, cert. denied, 200 Conn. 803, 510 A.2d 191 (1986). “[W]e are mindful that [q]uestions of fact are subject to the clearly erroneous standard of review.” (Internal quotation marks omitted.) Burns v. Adler, 158 Conn. App. 766, 802, 120 A.3d 555, cert. granted on other grounds, 319 Conn. 931 (2015). Because we conclude that the parties did not agree to arbitrate their dispute, we do not address whether the court‘s granting of the motion to enforce a settlement agreement also conformed with our statutory arbitration procedures.
“Although there is no particular form of words required to form an agreement to arbitrate, the intent of the parties that arbitration be the exclusive method for the settlement of disputes arising under the contract must be clearly manifested. This express intent by both parties to enter into the arbitration agreement is essen-
tial to its existence.” (Emphasis in original; internal quotation marks omitted.) Harry Skolnick & Sons v. Heyman, supra, 7 Conn. App. 179.
Here, there is no indication that the parties intended that their method of adjudicating their dispute would be considered an arbitration and, thus, subject to the provisions of the arbitration statutes. Our review of the record shows that the parties did not refer to their proposed method of adjudication as arbitration. In the initial e-mail exchanges that contemplated reaching a third party assisted resolution, the counsel for The Hartford termed the undertaking a mediation, and proposed that the mediator would take on an additional responsibility of assigning a “final number” if a settlement was not reached. The only reference to arbitration was in the caption used by the mediator on his decision; he labeled it “Arbitration Award.” Formal words are not required to create an agreement to arbitrate, but the lack of such words aids us in determining the intent of the parties. See id., 178.
In deciding whether the agreement manifested a clear and direct intent to arbitrate, we also consider whether the method employed by the parties to resolve this dispute resembled arbitration. Here, although the process arguably fit the general definition of arbitration in that the parties’ final determination would be made by a disinterested person, the parties specifically contemplated that their resolution process would differ from statutory arbitration. In an e-mail to Tirreno‘s prior counsel, The Hartford‘s counsel stated: “It would be similar to arbitrating the case, but would not be as time-consuming and less expensive.” The process here was to begin with mediation between the parties, and it would only evolve to resemble ordinary arbitration, in the sense that the mediator would assign a binding dollar amount, if the parties could not reach a facilitated agreement.9 Before this court, Tirreno conceded that the procedures employed by the mediator did not resemble a typical arbitration proceeding with her representation that: “The problem is [that] the arbitration was not a regular arbitration in which there was evidence presented [or] expert testimony given on either side.” Finally, it is telling that, after the mediator awarded damages to Tirreno, neither party availed themselves of arbitration‘s statutory mechanisms.10 The Hartford filed a motion to enforce the settlement agreement, not an application to confirm the award; and Tirreno‘s counsel objected, claiming that she did not have the capacity to enter into a settlement agreement, but counsel did not file an application to vacate an arbitration award.
We conclude that trial court did not err when it refused to categorize the parties’ chosen method of adjudication of their dispute as an arbitration proceeding and subsequently granted the motion to enforce the
The judgment is affirmed.
In this opinion the other judges concurred.
Notes
“[Scapellati]: [I]n response to my e-mail that I sent to you on the day before mediation saying I want to make sure we‘re both on the same page—
“[Perkins]: I said agreed.
“[Scapellati]: You said you were in agreement; correct?
“[Perkins]: Correct.”
During the December 10, 2013 hearing to enforce the settlement agreement, Tirreno conceded that there was an agreement and it was binding:
“[The Plaintiff‘s Counsel]: There was an agreement.
“[The Court]: To enter into binding arbitration?
“[The Plaintiff‘s Counsel]: To enter into—well, it says mediation but—
“[The Court]: Binding mediation?
“[The Plaintiff‘s Counsel]: Yes.”
On the basis of these admissions, the court‘s enforcement of the settlement agreement was legally and logically correct and supported by facts set out in the memorandum of decision. See Kidder v. Read, 150 Conn. App. 720, 733, 93 A.3d 599 (2014).