Suzanne M. Cuomo–Smith v. Benjamin Daily (2013)

MEMORANDUM OF DECISION

These matters are competing applications to confirm arbitration awards issued by a single arbitrator.   The dispute between the parties arose out of a February 11, 2011 motor vehicle accident in which Suzanne M. Cuomo–Smith (hereinafter referred to as the plaintiff) ¹ claims to have suffered personal injuries as the result of the negligence of Benjamin Daily (hereinafter referred to as the defendant).   By agreement of the parties the matter was referred to a single arbitrator, George L. Holmes, Jr., with the stipulation that the arbitrator could award any amount between $0.00 and $50,000.00.

After hearing the parties the arbitrator issued his initial decision on May 14, 2013, awarding the plaintiff $49,865.45 in total damages.   On May 21, 2013, the plaintiff's attorney, Joseph M. Brophy wrote the following letter to the arbitrator:

Dear Attorney Holmes:

I am a little confused by your award in the above.   I was under the impression that at the end of the hearing the policy limits were being thrown in (which is $50,000.00) and that is why I agreed that the Expert report you previously ruled could not come in could be reviewed by you so that the carrier would not feel that Attorney Karayiannis had wasted their money.

This is important because I believe this case has a value of $75,000.00 to $90,000.00, especially given the fact that the Plaintiff is still treating.   I made the demand for $50,000.00 as you know because that was the policy limits and I have to exhaust that before I can go after the rest in an uninsured insurance claim against my client's policy.   As it stands now, because of $134.56 I cannot bring the Underinsured claim.   I am, therefore, asking that you reconsider your ruling.

On May 23, 2013, having received a letter from the plaintiff's counsel, the arbitrator issued an amended award finding damages in the amount of $54,865.45, resulting in a final award of $50,000.00 to the plaintiff.

On July 17, 2013, the plaintiff filled an application to confirm the May 23, 2013 arbitration award.   Thereafter, the defendant filed a separate application to confirm the May 14, 2013 arbitration award.   By order of the court (Mintz, J.) the two cases were consolidated.   On October 15, 2013, both cases appeared on short calendar and the court heard arguments from the parties concerning their respective applications.   The court noted that neither side had moved to vacate either award and asked the parties to submit briefs within thirty days.

DISCUSSION

“Judicial review of arbitral decisions is narrowly confined ․ When the parties agree to arbitration and establish the authority of the arbitrator through the terms of their submission, the extent of our judicial review of the award is delineated by the scope of the parties' agreement ․ When the scope of the submission is unrestricted, the resulting award is not subject to de novo review even for errors of law so long as the award conforms to the submission ․ Because we favor arbitration as a means of settling private disputes, we undertake judicial review of arbitration awards in a manner designed to minimize interference with an efficient and economical system of alternative dispute resolution ․ 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 the courts will not review the evidence considered by the arbitrators nor will they review the award for errors of law or fact.’   “ (Citations omitted;  Internal quotation marks omitted.)  Indstrl.  Risk Insurers v. Hartford Steam Boiler Insp. & Ins. Co., 273 Conn. 86, 92–93 (2005).

General Statutes § 52–417 provides:  “At any time within one year after an award has been rendered and the parties to the arbitration notified thereof, any party to the arbitration may make application to the superior court for the judicial district in which one of the parties resides ․ for an order confirming the award.   The court or judge shall grant such an order confirming the award unless the award is vacated, modified or corrected as prescribed in sections 52–418 and 52–419.”

The arbitration award of May 23, 2013 is entitled “Amended Arbitration Award.”   If that award is valid, then it is clear that the arbitrator did not intend to issue two awards, one awarding the plaintiff $49,865.45 in damages and the other awarding her $50,000 in damages.   Logically and necessarily, if the May 23, 2013 is valid it supercedes and replaces the May 14, 2013 award.   Conversely, if the May 23, 2013 award can not be confirmed or must be vacated, then the May 14, 2013 award would stand as the final valid award issued by the arbitrator.   Guided by these principles, the court will first consider the plaintiff's application to confirm the May 23, 2013 award and the defendant's opposition thereto.

In their November 14, 2013 brief filed in support of his application to confirm the award of May 14, 2013 and in opposition to the application to confirm the award of May 23, 2013, the defendant states:  “Benjamin Daily, this date, has also filed a Motion to Vacate the May 23, 2013 Arbitration Award in Docket No. CV–13–6019160, in which he incorporates by reference the argument presented in this memorandum.”   In his brief the defendant states that Attorney Karayiannis was prepared to testify that, despite the fact that he was “cc'd” on Attorney Brophy's May 21, 2013 letter to the arbitrator, he never received a copy of the letter.   The brief further states that Attorney Karayiannis was prepared to testify that the discussion referred to in Brophy's May 21, 2013 letter never took place.

It is apparently the defendant's position that Brophy's letter to the arbitrator constituted a successful attempt to procure an arbitration award by undue means and that by issuing an amended award the arbitrator became guilty of an action which prejudiced the defendant's rights as a party to arbitration.  General Statutes § 52–418 permits a party to an arbitration award to apply to the court for an order vacating the award provided the court finds one or more enumerated defects in the award.   Those defects include “[i]f the award was procured by ․ undue means,” or “if the arbitrators have been guilty ․ of any other action by which the rights of any party have been prejudiced.”   However, § 52–420(b) provides:  “No motion to vacate, modify or correct an award may be made after thirty days from the notice of the award to the party to the arbitration who makes the motion.”   In this case the defendant did not file a motion or application to vacate the May 23, 2013 award until November 14, 2013, long after the expiration of the thirty-day time limit.

Thus, it appears to the court that the defendant is inviting the court to vacate the arbitrator's amended award based on an application to vacate which was not timely filed and based, in part, upon testimony of Attorney Karayiannis which he never gave.   The court finds that it can not consider the substance of objections which the defendant might have raised in a timely application to vacate the amended award.

In his brief, the defendant raised a procedural objection to the motion to confirm the May 23, 2013 arbitration award.   That objection is based on the claim that once the arbitrator issued an award on May 14, 2013, he was without power to act further.   The defendant relies on the doctrine of functus officio, which stands for the proposition that an officer who has fulfilled the function or purpose of his office has no further authority to act.

The doctrine of functus officio was considered by the Appellate Court in All Season Services, Inc. v. Guildner, 94 Conn.App. 1 (2006), an appeal from a decision of the superior court to confirm a clarified arbitration award which had been entered by the arbitrator after the parties had disagreed about the proper interpretation of the arbitrator's initial award.   The court considered the appellant's claim that the arbitrator could not revisit the award because of the application of the doctrine of functus officio.   The court stated:  “Federal courts consistently have applied the common-law doctrine of functus officio to arbitration awards governed by the Federal Arbitration Act, 9 U.S.C. § 1 et seq.   The doctrine provides that, as a general rule, once an arbitrator has issued a final award, having fulfilled his function, he is without authority to reexamine it.   The doctrine originated at a time when judges were hostile to arbitration and distrusted arbitrators' independence.   Exceptions to the doctrine of functus officio have developed over time as arbitration has become more favored as a means of efficient dispute resolution.   Federal precedent is now clear that an arbitrator may revisit a final award where the award, although seemingly complete, leaves doubt whether the submission has been fully executed such that an ambiguity arises which the arbitrator is entitled to clarify.”  (Internal quotation marks and citations omitted.)  94 Conn.App. 10.

The court in All Seasons noted that the appellant had failed to file a motion to vacate the award within thirty days of notice of the award as required by General Statutes § 52–420(b) and found that the trial court had properly confirmed the clarified award issued by the arbitrator.   However, the decision of the court suggests that, notwithstanding the directives of General Statutes § 52–417 (“The court or judge shall grant such an order confirming the award unless the award is vacated, modified or corrected as prescribed in sections 52–418 and 52–419”), a reviewing court could deny an application for confirmation of an arbitration award if the court found that the doctrine of functus officio applied.

In this case, on May 14, 2013 the arbitrator rendered an initial award of $49,865.45, only $134.55 less than the limit of $50,000 agreed to by the parties.   After receiving notice of that award, the plaintiff's counsel wrote to the arbitrator on May 21, 2013 to remind him that during the hearing he had agreed to let the arbitrator consider an otherwise inadmissible expert report once the arbitrator had advised the parties that he believed that the plaintiff's damages exceeded $50,000 (both the limit of the defendant's policy and the limit on the arbitrator's authority under the arbitration agreement).   The letter explained that the $134.55 difference between the award discussed at the hearing and the award made could prevent the plaintiff from pursuing an underinsured motorists' claim.

In light of the context in which the May 14, 2013 award was made and the insignificant difference between the awards of May 14, 2013 and May 23, 2013, the court finds that the award was ambiguous as to the arbitrator's intentions.   Under these circumstances the court finds that the doctrine of functus officio, as discussed in All Seasons, does not prevent confirmation of the May 23, 2013 award.

The court grants the plaintiff's application to confirm the May 23, 2013 award.   In light of the court's finding that the May 23, 2013 represents the final valid award of the arbitrator, the court finds that the May 14, 2013 award was superceded and, accordingly cannot be confirmed.   Accordingly, the court denies the defendant's application to confirm that award.

David R. Tobin, J.T.R.

FOOTNOTES

FN1. In docket no.   FST CV 13–6019160 Suzanne M. Cuomo–Smith is the sole plaintiff and Benjamin Daily is the sole defendant.   In docket no.   FST CV 13–6019558 Benjamin Daily is the plaintiff and Suzanne M. Cuomo–Smith is the defendant.   To avoid confusion the court will refer to Cuomo–Smith as the plaintiff and to Daily as the defendant..  FN1. In docket no.   FST CV 13–6019160 Suzanne M. Cuomo–Smith is the sole plaintiff and Benjamin Daily is the sole defendant.   In docket no.   FST CV 13–6019558 Benjamin Daily is the plaintiff and Suzanne M. Cuomo–Smith is the defendant.   To avoid confusion the court will refer to Cuomo–Smith as the plaintiff and to Daily as the defendant.

Tobin, David R., J.T.R.