CDO LLC v. Bogaert Construction Co., Inc. (2013)

MEMORANDUM OF DECISION RE MOTION FOR STAY (# 103)

CDO Properties, LLC, the owner of real estate known as 2 Elm Street, Noank, Connecticut, filed this application to discharge or reduce a mechanic's lien placed on the property by the defendant, Bogaert Construction Co., Inc.

The lien in question was filed on August 14, 2013, and sought to secure the sum of $50,689.37 which was claimed to be due under a certain construction contract.   The contract between the parties provided that under Article 11.1:  “All claims, disputes and other matters in question arising out of, or relating to, this agreement, or breach thereof, shall be decided by arbitration ․”

Upon the filing of this application, the defendant, Bogaert Construction Co., Inc. filed this motion to stay.   It asserts that they have demanded that the plaintiff proceed with arbitration in accordance with the terms of the contract, that it stands ready to proceed with the arbitration and that any litigation, including this application for a discharge or reduction of the amount of the mechanic's lien, must be stayed in accordance with the arbitration clause.

The plaintiff counters that while the agreement does call for arbitration of contract disputes, “the primary reason for plaintiff's petition to discharge the mechanic's liens is due to the fact that it was filed more than ninety days from the last date of furnishing services.”

Each of the parties has filed a memorandum of law in support of their particular positions.   The court will grant the defendant's motion to stay these proceedings for the following reasons:  1) Connecticut has a strong jurisprudential policy of favoring arbitration when the parties have agreed to utilize that mechanism to resolve their disputes, and 2) The arbitration language in this case is very broad and extends to questions “arising out of or relating to this agreement.”

There is nothing in the briefs filed by the parties or in the argument before the court that would create a foundation for the court to conclude that their dispute did not arise out of or relate to the performance of the contractual duties created by the agreement.   There is no claim by the plaintiff that contests the agreement to arbitrate, rather, there is only an assertion that the defendant has acted tardily in exercising its statutory rights to file a mechanic's lien.

Finally, in adjudicating this motion, the court would engage in a determination of exactly when the work on the project was ceased by the defendant and thus would necessarily engage the court in an examination of the terms of the contract, the nature of the work performed and when the work was performed.   These are issues that would naturally come up during the course of an arbitrator adjudicating and determining the party's rights under the contract that contained the arbitration clause.

The court hereby grants the defendant's motion to stay proceedings in this action pending arbitration of the disputes pursuant to the terms of their contract.   In the event that the plaintiff desires to substitute a bond and obtain thereby release of the mechanic's lien, the court would allow such a motion to be filed as an exception to the granting of this stay.   The sole issue in such a hearing, however, would be whether or not the proposed bond or other security is adequate, not whether or not the defendant is entitled to maintain the lien on the real property.

Cosgrove, J.

Cosgrove, Emmet L., J.