Chase v. Cohen

Decision Date11 October 2007
Docket NumberNo. 3:04cv588 (MRK).,3:04cv588 (MRK).
Citation519 F.Supp.2d 267
CourtU.S. District Court — District of Connecticut
PartiesCheryl CHASE and Rhoda Chase, Plaintiffs, v. Eugene COHEN and Design Concepts International, Inc., Defendants.

Thomas J. Weihing, Daly, Weihing & Bochanis, Bridgeport, CT, for Defendants.

MEMORANDUM OF DECISION

MARK R. KRAVITZ, District Judge.

In this case, Plaintiffs, Cheryl Chase and Rhoda Chase, seek confirmation of an arbitral award pursuant to the Federal Arbitration Act ("FAA"). 9 U.S.C. § 9. Defendants, Eugene Cohen and Design Concepts, object to confirmation of the award on the ground that the arbitrator exceeded his powers and failed to issue a final and definite award under § 10(a)(4) of the FAA, manifestly disregarded the law, and issued an award that is contrary to public policy. Defendants' objections have no merit and accordingly, the Court GRANTS Plaintiffs' Motion to Confirm Arbitration Award and Enter Judgment [doc. # 51]. Moreover, construing Defendants' Objection to Motion to Confirm Arbitration Award and Enter Judgment [doc. # 54] as a motion to vacate the award, the Court DENIES Defendants' Objection.

I.

The parties' underlying dispute stems from a contract for customized kitchen cabinets. On October 15, 2001, Design Concepts International, Inc. ("Design Concepts"), which is owned by Eugene Cohen and his wife Rose Cohen, entered into a contract with Cheryl Chase and her mother, Rhoda Chase ("the Chases") for the sale and installation of customized "Neff" kitchens in the Chases' West Hartford, Connecticut residences.1 The kitchens were designed and manufactured by Neff Kitchen Mfg. Ltd. ("Neff Kitchen"), a Canadian-based company, which is not party to this action. Before work began on the Chases' kitchens, Rhoda Chase paid Design Concepts for the work to be done on her kitchen and Landar Associates Limited Partnership, which owns the property in which Cheryl Chase resides and in which she appears to be a limited partner, paid for the work to be done on Cheryl Chase's kitchen.

Following installation of the kitchen cabinets, the Chases discovered that the cabinetry did not meet their expectations and had workmanship and installation defects. See Defendants' Brief Objecting to Motion to Confirm Arbitration Award and Enter Judgment [doc. # 55] [hereinafter Defs.' Objecting Brief], App. 3. On October 7, 2002, they filed suit against Neff Kitchen and Design Concepts in Connecticut Superior Court in Hartford. See Chase v. Neff Kitchen, No. HHS-CV-02-0820079-S (Conn.Super. Ct. filed Oct. 7, 2002). On March 5, 2004, they filed another complaint in the Superior Court in Hartford against Mr. Cohen, Ms. Cohen, Design Concepts, and Neff Kitchens, alleging violations of the Connecticut Home Improvement Act ("HIA"), Conn. Gen.Stat. § 20-418, et seq., and the Connecticut Unfair Trade Practices Act ("CUTPA"), Conn. Gen.Stat. § 42-110a, et seq. See Notice of Removal [doc. # 1]. On April 7, 2004, Defendants removed the second lawsuit to federal court, see id., and later moved to dismiss the action on the grounds that this Court lacked personal jurisdiction over Neff Kitchens, and Mr. and Ms. Cohen. See Motion to Dismiss for Lack of Jurisdiction [doc. # 9]. They also moved to dismiss the case on the ground that this Court lacked subject matter jurisdiction over Design Concepts because a "valid contractual arbitration clause exists which precludes the Plaintiff's [sic] from proceeding in court against the Defendant." Id. at 2. On September 29, 2004, the Chases amended their Complaint in this action, dropping Design Concepts, Neff Kitchens and Ms. Cohen as defendants and proceeding only against Mr. Cohen. See Amended Complaint [doc. # 20]. In light of their Amended Complaint, the Chases did not address Defendants' arguments regarding subject matter jurisdiction. However, they opposed Defendants' Motion to Dismiss [doc. # 9] as to Mr. Cohen, arguing that this Court did in fact have personal jurisdiction over him. See Plaintiffs' Memorandum of Law in Opposition to Motion to Dismiss [doc. # 19]. On December 29, 2004, the Court denied Defendants' Motion to Dismiss [doc. # 9]. See Ruling & Order [doc. # 31].

On January 31, 2005, the parties, with the exception of Ms. Cohen, entered into an Agreement to Submit to Binding Arbitration, which provided that

[t]he parties ... agree to submit all controversies related directly and indirectly in regard to the purchase and installation of two kitchens in claimants' West Hartford, Connecticut homes to binding arbitration .... The claimants shall stay the actions pending in the State of Connecticut Superior Court entitled Cheryl Chase and Rhoda Chase v. Neff Kitchen Mfg. Ltd. and Design Concepts International Inc. Docket No. CV-02-0820079 S, and the matter entitled Cheryl Chase and Rhoda Chase v. Eugene Cohen, Design Concepts International, Inc. d/b/a/ Neff by Design Concepts International., Inc. and Neff Kitchens Mfg. Ltd. Pending in the U.S. District Court, District of Connecticut, Civil Action No. 3:04CV00688 (MRK) pending decision of the arbitrator. The parties may submit the arbitration award to the courts to enter judgment thereon.

See Motion for Stay [doc. # 37], Ex. A ("Arbitration Agreement"). Pursuant to this Arbitration Agreement, on February 28, 2005, Plaintiffs moved to stay this case pending arbitration, see Motion for Stay [doc. # 37], and on March 3, 2005, this Court granted the stay. See Order [doc. # 38]. On March 2, 2005, the Chases also moved to stay their state court action, and on March 21, 2005, the Connecticut Superior Court granted the requested stay. See Chase, No. HHS-CV-02-0820079-S, Motion for Stay (Granted) [doc. # 145.00].

In accordance with the parties' Arbitration Agreement, the Chases filed a Demand for Arbitration in which they asserted a number of claims. Defs.' Objecting Brief, App. 2 ("Demand for Arbitration"). The Chases argued that all of the Defendants breached the contract by failing to deliver the installed kitchens as promised. As to Neff Kitchen, the Chases argued that Mr. Cohen and Design Concepts were acting as agents of (and/or joint venturers with) Neff Kitchen. The Chases also asserted five CUTPA-related claims. First, they alleged that the underlying contract violated the HIA, Conn. Gen.Stat. § 20-418 et seq., which constitutes a per se violation of CUTPA. See Conn. Gen.Stat. § 20-427(c). Second, they claimed that Mr. Cohen, individually and not as a representative of Design Concepts, violated the HIA, and thus CUTPA, because he was not licensed or registered in Connecticut as a home improvement salesman or contractor, as required by Connecticut General Statutes § 20-420(a) and § 20-419(3), (4), and (9). In addition, they alleged that he violated the HIA because he acted as a home improvement salesman for an unregistered contractor, i.e., Design Concepts, in violation of Connecticut General Statutes § 20-420(c). Third, the Chases claimed that Design Concepts and Neff Kitchen violated the HIA, and thus CUTPA, because they were not licensed or registered in Connecticut as home improvement contractors, and further because they hired Mr. Cohen, who was also unlicensed and unregistered, in violation of Connecticut General Statutes § 20-420(b). Fourth, the Chases asserted that Mr. Cohen, by making misrepresentations relating to the contract and Defendants, committed a "deceptive act or practice" in violation of CUTPA. Finally, the Chases alleged that all Defendants violated the HIA, and thus CUTPA, because the contract did not meet the requirements of the HIA under § 20-429(a) of the Connecticut General Statutes. Rhoda Chase sought rescission, punitive damages, costs and attorneys' fees. Cheryl Chase sought specific performance, punitive damages, costs and attorneys' fees.

Following hearings, an arbitrator from the Construction Arbitration Tribunal of the American Arbitration Association ("AAA") rendered an award on April 2, 2007. Defs.' Objecting Brief, App. 10 ("Arbitration Award"). On April 26, 2007, he issued a revised opinion to correct a typographical error, replacing a reference to "Rhoda Chase" with "Cheryl Chase." Id. In his two-page award, the arbitrator rejected all claims against Neff Kitchen, see id. ¶ 1, but he found for the Chases on most of the other claims. On the breach of contract claims, the arbitrator found that "Design Concepts, acting through [Mr.] Cohen," entered into the contract with Plaintiffs and that Design Concepts had substantially breached the contract. See id. ¶¶ 2-3. On the CUTPA claims, the arbitrator ruled that "Design Concepts and [Mr.] Cohen, individually were in violation of [the HIA], which is a per se violation of [CUTPA]." Id. ¶ 4. In addition, the arbitrator found that Design Concepts was solely responsible for the design of the Chases' kitchens and that each of the Chases resided in or owned the relevant homes. See id. ¶¶ 5-6. Further, he concluded that damages alone were inadequate to compensate the Chases, and therefore, the arbitrator ordered rescission "based upon Design Concepts' substantial breach of contract, and based upon violations of CUPTA [sic] by [Mr.] Cohen, individually, and by Design Concepts." Id. ¶ 7. Finally, the arbitrator found that the Chases sustained "ascertainable damages" and awarded "punitive damages, based upon violations of CUPTA [sic] by [Mr.] Cohen, individually and by Design Concepts." Id. ¶ 8-9.

Accordingly, the arbitrator ordered the contract rescinded, directed Design Concepts and Mr. Cohen to refund the sum of $69,500 to each of the Chases within 30 days of the award becoming final, and ordered the Chases to make all materials available to be reclaimed by Design Concepts within 60 days of the award becoming final. The arbitrator also ordered Design Concepts and Mr. Cohen to pay Rhoda Chase $35,000 and Cheryl Chase $15,000 in ascertainable and punitive...

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