Bacon Const. Co. v. Dept. of Public Works

• Decision Date: 09 February 2010
• Docket Number: No. 18198.,18198.
• Citation: 294 Conn. 695,987 A.2d 348
• Court: Connecticut Supreme Court
• Parties: BACON CONSTRUCTION COMPANY, INC. v. DEPARTMENT OF PUBLIC WORKS.

987 A.2d 348

294 Conn. 695

BACON CONSTRUCTION COMPANY, INC. v. DEPARTMENT OF PUBLIC WORKS.

No. 18198.

Supreme Court of Connecticut.

Argued September 9, 2009.

Decided February 9, 2010.

Timothy S. Fisher, Hartford, with whom were Brian P. Rice, Stamford, and, on the brief, Charles D. Ray, Hartford, for the appellant (defendant).

Timothy T. Corey, with whom was Richard F. Wareing, Hartford, for the appellee (plaintiff).

NORCOTT, KATZ, PALMER, ZARELLA and BISHOP, Js.

ZARELLA, J.

The defendant, the department of public works, appeals¹ from the judgment of the trial court granting the application of the plaintiff, Bacon Construction Company, Inc., to confirm an arbitration award for damages relating to a public works contract between the parties and denying the defendant's motion to vacate the award, and from the court's denial of the defendant's motion to dismiss the application to confirm. The defendant claims that the trial court improperly accepted the arbitrator's determination regarding the arbitrability of the plaintiff's claims and, specifically, the arbitrator's interpretation of General Statutes § 4-61² and conclusion that the plaintiff's claims had been timely asserted under that statute. The defendant claims that it therefore follows that (1) the trial court and this court lack subject matter jurisdiction because the plaintiff's claims are barred by the doctrine of sovereign immunity, (2) the plaintiff's claims are not arbitrable, and (3) the award does not conform to the submission. The plaintiff responds that (1) the defendant is not entitled to judicial review of whether the plaintiff's claims are arbitrable under § 4-61 because the defendant submitted the issue of arbitrability to the arbitrator without objection, and (2) the trial court properly granted the plaintiff's application to confirm the award because the award conformed to the submission. We affirm the judgment of the trial court.

The record reveals the following relevant facts and procedural history.³ On May 13, 1992, the plaintiff and the defendant entered into a contract pursuant to which the plaintiff agreed to perform masonry and plank work in connection with the construction of a correctional facility in Niantic. The plaintiff was to commence work on June 1, 1992, and the contract provided for an overall project duration of 300 calendar days. The plaintiff's work on the project required coordination with various other contractors. Coordination was the responsibility of the defendant, which delegated that responsibility to its construction manager, Tishman Construction Corporation (Tishman). Tishman failed to schedule and coordinate the contractors properly, and, as a result, the plaintiff was delayed in performing its work. Ultimately, the plaintiff remained at the work site until November, 1993, well past the 300 day duration provided for in the contract.

Early on in the project, the plaintiff complained to the defendant that it would be incurring additional costs due to delays and issued to the defendant various notices of claims for reimbursement of such costs. The defendant initially disputed the plaintiff's claims but eventually, in October, 1994, authorized the issuance of several change orders that approved contract payment for the plaintiff's claims. On November 8, 1994, Tishman advised the plaintiff to submit two requisitions for payment, one for the value of the outstanding contract work, adjusted by the change orders, and the second for the retainage.⁴ In response, on November 10, 1994, the plaintiff submitted requisitions for payment in accordance with Tishman's directive. In December, 1994, the defendant issued a check to the plaintiff for the first requisition but did not pay the retainage.

In April, 1995, the defendant advised the plaintiff that it would issue final payment in exchange for a release in its favor. On May 22, 1995, the plaintiff gave the defendant a release, but the defendant subsequently failed to pay the plaintiff the retainage. The plaintiff sent letters to the defendant in June and July, 1995, advising that the release had been issued on the basis of the defendant's representation that it would issue the final payment. The defendant did not respond to these letters.

In March, 1996, the plaintiff again sent a letter to the defendant, advising that if it did not pay the balance in full, the plaintiff would take legal action. This letter also went unanswered. In August, 1996, however, the defendant advised the plaintiff that some of the buildings that the plaintiff had worked on were leaking due to the plaintiff's allegedly defective workmanship. In response, the plaintiff submitted a quote to perform the repair work, agreeing to absorb one third of the cost. The plaintiff performed the work and submitted an invoice for two thirds of its cost. The defendant did not pay that invoice.

Having received no satisfaction from its letters to the defendant seeking payment in the years that followed, the plaintiff submitted a notice of claim to the defendant on October 1, 2004, pursuant to § 4-61(b).⁵ Thereafter, on or about August 1, 2005, the plaintiff filed a demand for arbitration, seeking damages for the following: (1) lost productivity arising from the delay that required the plaintiff to remain on site after the project completion date; (2) additional expenses incurred as a result of being forced to work during the winter of 1993; (3) reimbursement for the settlement of a delay claim asserted against the plaintiff by one of its subcontractors; (4) lost profits and overhead expenses; (5) payment of the outstanding contract balance (6) payment for the repair work performed in 1996; and (7) prejudgment interest.

In April, 2006, the arbitrator appointed to decide the parties' dispute conducted a preliminary telephone conference with the parties, during which the defendant asserted that the arbitrator lacked authority to consider the plaintiff's claims under § 4-61 because the plaintiff had not filed notice of its claim and had not commenced the arbitration within the statute's time limitations. The defendant then requested that the arbitrator decide the issue of his authority to hear the plaintiff's claims before proceeding further. Thereafter, the arbitrator ordered that the evidentiary hearings be bifurcated. In the initial phase of the proceedings, the arbitrator was to decide the defendant's affirmative defenses of (1) sovereign immunity based on the plaintiff's alleged failure to comply with the time limitations set forth in § 4-61, (2) release, and (3) settlement by accord and satisfaction. In the second phase, the arbitrator was to decide the merits of the plaintiff's claims. In an answering statement dated October 12, 2006, the defendant stated in relevant part: "The actual issues in this proceeding are [the plaintiff's] delay and disruption claims, and [the defendant's] special defenses that: [the plaintiff's] claims are barred by the doctrine of sovereign immunity; [the plaintiff] released [the defendant] from its claims; and [the plaintiff] settled its claims with [the defendant]. Those issues may be heard and fully and finally determined by this arbitration.

"This approach is precisely what the parties anticipated at the outset of this arbitration. . . ."

On November 15 and 16, 2006, the arbitrator conducted the initial phase of the evidentiary hearings. On February 7, 2007, the arbitrator issued a preliminary ruling with respect to his authority to hear the case and the defendant's affirmative defenses. In his ruling, the arbitrator concluded that he had authority under § 4-61 to arbitrate the plaintiff's claims and ruled against the defendant with respect to its defenses of release and settlement.⁶ Specifically, the arbitrator found that "[i]nasmuch as no certificate of acceptance was ever issued [by the defendant] and [the plaintiff] was not terminated, it seems beyond doubt that the period for filing a claim, by the express language of [§ 4-61], ha[d] not yet expired and that, therefore, the notice filed in 2004 and the arbitration demand filed in 2005 [were] . . . timely." The arbitrator further found that "[a]rticle 33 of the contract provides a context to construe `termination.' `Termination' there refers to a process for ending the contract prior to completion, either for reasons of default or for the state's convenience. Accordingly, in the context of the contract . . . there was no premature termination of the contract by [the defendant], and, therefore, the time for filing the notice of claim and demand for arbitration ha[d] not been triggered by a `termination.'"

On January 25, 2008, the arbitrator issued his decision, award and findings of fact on the merits of the plaintiff's claims. The arbitrator awarded the plaintiff $434,974.34, which included damages for each of the claims that the plaintiff had asserted in the arbitration. On February 13, 2008, the plaintiff filed an application to confirm the award in the Superior Court for the judicial district of Hartford. Thereafter, the defendant filed a motion to dismiss the plaintiff's application to confirm and a motion to vacate the award. In its motion to dismiss, the defendant claimed that the trial court lacked subject matter jurisdiction over the plaintiff's application to confirm because the plaintiff had not asserted its claims within the time limitations set forth in § 4-61 and, therefore, that the plaintiff's claims were barred by the doctrine of sovereign immunity. Similarly, in its motion to vacate the award, the defendant claimed that the plaintiff's claims were not arbitrable and that the award did not conform to the submission because the plaintiff had failed to assert its claims within the time limitations contained in § 4-61.⁷

On April 22, 2008, the trial court denied the defendant's motion to dismiss. In its memorandum of decision, the court found that the defendant had submitted the issue of...