G.L. Capasso, Inc. v. The Neri Corp. (2014)

MEMORANDUM OF DECISION ON PLAINTIFF'S APPLICATION TO VACATE AND DEFENDANT'S APPLICATION TO CONFIRM ARBITRATION AWARD

This case arises out of a contract dated March 14, 2012 between the plaintiff G.L. Capasso, Inc. And The Neri Corp. for work to be performed by Neri on property at 81 McDermott Road in North Haven, Connecticut.   Capasso claimed that Neri performed defective work and Neri counterclaimed for work performed by Neri but not paid for by Capasso.

The contract between the parties provided for arbitration of any disputes.   The matter was referred to Arbitrator Margaret Rattigan who conducted evidentiary hearings and on October 3, 2013 rendered an award denying Capasso's claims and finding that Capasso had failed to pay Neri for work completed under the contract.

Capasso has filed an Application to Vacate Arbitration Award alleging that the award is the result of partiality and/or corruption and is not in accord with applicable law and the facts.   Neri has filed an Application to Confirm Arbitration Award.   Both applications were heard by this court on January 23, 2014.

The two applications are made pursuant to statutes providing for confirming and vacating arbitration awards.

Sec. 52–417.  Application for order confirming award.   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 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.

Sec. 52–418.  Vacating award. (a) Upon the application of any party to an arbitration, the superior court shall make an order vacating the award if it finds any of the following defects;  (1) If the award has been procured by corruption, fraud or undue means;  (2) if there has been evidence partiality or corruption on the part of any arbitrator;  (3) if the arbitrators have been guilty of misconduct in refusing to postpone the hearing upon sufficient cause shown or in refusing to hear evidence pertinent and material to the controversy or of any other action by which the rights of any party have been prejudiced;  or (4) if the arbitrators have exceeded their powers or so imperfectly executed them that a mutual, final and definite award upon the subject matter submitted was not made.

The law concerning arbitration has been long established.  “Our analysis is guided by the well established principles of law governing consensual arbitration.  “Arbitration is a creature of contract and the parties themselves, by the terms of their submission, define the powers of the arbitrators.  Waterbury v. Waterbury Police Union, 176 Conn. 401, 403, 407 A.2d 1013 (1979).”  (Internal quotation marks omitted.)  United States Fidelity & Guaranty Co. v. Hutchinson, 244 Conn. 513, 519, 710 A.2d 1343 (1998).  “The authority of an arbitrator to adjudicate the controversy is limited only if the agreement contains express language restricting the breadth of issues, reserving explicit rights, or conditioning the award on court review.   In the absence of any such qualifications, an agreement is unrestricted.  Carroll v. Aetna Casualty & Surety Co., 189 Conn. 16, 20, 453 A.2d 1158 (1983);  Bic Pen Corporation v. Local No. 134, 183 Conn. 579, 584–85, 440 A.2d 774 (1981);  Bridgeport v. Bridgeport Police Local 1159, 183 Conn. 102, 106–07, 438 A.2d 1171 (1981).”  Garrity v. McCaskey, 223 Conn. 1, 5, 612 A.2d 742 (1992).

“Because we favor arbitration as a means of setting 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.  Saturn Construction Co. v. Premier Roofing Co., 238 Conn 293, 304, 680 A.2d 1274 (1996).   Under 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.  American Universal Ins. Co. v. DelGreco, 20S Conn. 178, 186, 530 A.2d 171 (1987);  Carroll v. Aetna Casualty & Surety Co., [189 Conn. 16, 19, 453 A.2d 1158 (1983) ].   The resulting award can be reviewed, however, to determine if the award conforms to the submission.   Garrity v. McCaskey, supra, 223 Conn. 4. Such a limited scope of judicial review is warranted given the fact that the parties voluntarily bargained for the decision of the arbitrator and, as such, the parties are presumed to have assumed the risks of and waived objections to that decision ․ It is clear that a party cannot object to an award which accomplishes precisely what the arbitrators were authorized to do merely because that party dislikes the results ․ American Universal Ins. Co. v. DelGreco, supra, 186–87.   The significance, therefore, of a determination that an arbitration submission was unrestricted or restricted is not to determine what the arbitrators are obligated to do, but to determine the scope of judicial review of what they have done.   Put another way, the submission tells the arbitrators what they are obligated to decide.   The determination by a court of whether the submission was restricted or unrestricted tells the court what its scope of review is regarding the arbitrators' decision.”  (Internal quotation marks omitted.)   United States Fidelity & Guaranty Co. v. Hutchinson, supra, 244 Conn. 519–20.”   Industrial Risk Insurers v. Hartford Steam Boiler Inspection & Ins. Co., 2S8 Conn. 101 (2001).

The agreement to arbitrate is contained in the contract between the parties and provides, in relevant part:

6.2.1 Any claim arising out of or related to this Subcontract, except claims as otherwise provided in Subparagraph 4.1.5 and except those waived in this Subcontract, shall be subject to arbitration.   Prior to arbitration, the parties shall endeavor to resolve disputes by mediation in accordance with the provisions of Paragraph 6.1.

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6.2.2 Claims not resolved by mediation shall be decided by arbitration which, unless the parties mutually agree otherwise, shall be in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association currently in effect.   Demand for arbitration shall be filed in writing with the other party to this Subcontract and with the American Arbitration Association, and a copy shall be filed with the Architect.

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6.2.6 Judgment on Final Award.   The award rendered by the arbitrator or arbitrators shall be final, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof.

The plaintiff's initial demand for arbitration alleged that Neri failed to perform its obligations under the contract and that the plaintiff suffered damages.   The demand for arbitration alleged:

8.  Said award should be vacated for the reasons that:

(a) the award is a result of evident partiality and/or corruption;

(b) the award is not in accordance with applicable law and the facts;

(c) the arbitrator has executed the arbitrator's powers so imperfectly that a mutual, and final award upon the subject matter submitted was not made;

(d) the arbitrator has exceeded the arbitrator's powers;  and

(e) on the basis of the forgoing the award is against public policy.

WHEREFORE, the plaintiff prays:

1.  That the Award be vacated awarding damages to the defendant and failing to award damages to the plaintiff.

Neri filed a counterclaim with its Application to Confirm Arbitration Award alleging damages for work performed under the contract for which it has not been paid.

The arbitrator filed a corrected award on October 4, 2013 finding that the plaintiff breached the contract by failing to pay the defendant for all work completed, that the defendant was entitled to damages and interest totaling $31,744.41, that the fees of the American Arbitration Association and the arbitrator should be borne equally, and that all claims not expressly granted in the award are denied.

Various claims were made by the plaintiff in its memorandum in support of the application to vacate the award.   It is alleged that the award was contrary to the facts and the law, that the award did not conform to the submission and the evidence, that the evidence reflects the bias of the arbitrator against the plaintiff, that the award is against public policy, and that the arbitrator exceeded or imperfectly executed her power.   None of these claims have been proved by the plaintiff.

To establish that the award was contrary to the facts and the law the plaintiff makes the same claims as were made in its post-hearing brief submitted to the arbitrator and which were denied.   The claim that the award was contrary to the submission and the evidence was not proven.   The award to the defendant was in response to the evidence offered by the defendant.   The claim of bias by the arbitrator was supported by the examples of evidentiary rulings made against the plaintiff which do not establish bias by the arbitrator.   The claim that the arbitrator violated public policy and exceeded or imperfectly executed her power has not been established by the evidence referred to.

The submission in this case was an unrestricted submission.   Each party submitted the evidence in support of its claims and the arbitrator determined what each party should or should not be paid.  “It is clear that a party cannot object to an award which accomplishes precisely what the arbitrators were authorized to do merely because that party dislikes the results.”  American Universal Ins. Co. v. DelGreco, supra, 186–87.

The defendant's application to confirm the arbitration award is granted.   The plaintiff's application is denied.

William L. Hadden, Jr.

Judge Trial Referee

Hadden, William L., J.T.R.