City of Hartford v. American Arbitration Ass'n

Decision Date21 March 1978
Citation391 A.2d 137,174 Conn. 472
CourtConnecticut Supreme Court
PartiesCITY OF HARTFORD v. AMERICAN ARBITRATION ASSOCIATION et al.

Thomas F. Parker, Hartford, with whom, on the brief, was William A. Taylor, Hartford, for the appellant-appellee (plaintiff).

John J. Reid, Hartford, for the appellee-appellant (defendant Gilbane Building Company).

Before HOUSE, C. J., and LOISELLE, BOGDANSKI, LONGO and SPEZIALE, JJ.

SPEZIALE, Associate Justice.

The plaintiff, the city of Hartford, brought this action for injunctive relief, seeking to restrain the defendants, the American Arbitration Association, the three appointed arbitrators individually, and the Gilbane Building Company (hereinafter Gilbane), from proceeding with arbitration to settle claims arising from a contract for construction of the Hartford civic center. The city has appealed from the judgment of the trial court denying injunctive relief. Gilbane has cross appealed, claiming error in the court's conclusion that the Hartford city manager lacked authority to bind the city to the arbitration provisions in the construction contract executed between the city and Gilbane.

The city and Gilbane have stipulated to most of the underlying facts from which the dispute arose. The crux of the dispute is whether the provisions for arbitration in the contract between the city and Gilbane are binding on the city.

In 1970, the city of Hartford, having taken the preliminary steps necessary to initiate construction of a civic center, hired a firm of Philadelphia architects to design and oversee the project. These architects prepared the bid documents, including the contract which was to be executed by the city and the contractor who would be selected as the general contractor. The contract contained provisions for arbitration of claims and disputes. The contract containing these provisions was made available to bidders at the time of the invitation to bid. Bids were received from several contractors, and, after a review of the bids by various city agencies involved in the project, it was recommended that Gilbane's bid be accepted. On January 22, 1972, the city manager, on behalf of the city, and Gilbane executed the contract. The procedures followed in the preparation and award of the contract were those normally used by the city's administrative officers. The city of Hartford had authority to enter into the contract, and the city manager, as chief executive officer of the city, was a proper person to sign the contract on behalf of the city.

Construction of the project began in the spring of 1972 and it was largely completed by the end of 1974. In March, 1975, Gilbane filed a demand for arbitration with the American Arbitration Association. 1 At that time the civic center was substantially completed and the city had accepted the project for occupancy and use. As of February 10, 1976, the arbitration panel had been selected and notices of the first hearing date of March 8, 1976, had been forwarded to the parties by the American Arbitration Association. On February 27, 1976, the city for the first time informed Gilbane of its position that the arbitration was unauthorized. The city based its claim on the fact that the court of common council, the city body which has authority to institute actions or compromise claims, had never agreed to or approved the arbitration provisions in the contract.

On March 23, 1976, the city filed an action seeking a temporary and permanent injunction restraining the defendants from proceeding with arbitration. The city and Gilbane stipulated to four issues which were to be determined by the court: (1) whether specific approval or at least specific authorization by the court of common counsel is required before the city can enter a binding agreement to arbitrate; (2) whether the city had, by its actions, ratified the arbitration provisions; (3) whether the city was estopped from denying the validity of the arbitration provisions; and (4) whether the city was barred by laches from asserting the validity of the arbitration provisions.

The court concluded that the court of common council had not delegated its authority to institute actions or compromise claims, that such authority could not be implied, and that, therefore, neither the city manager nor the corporation counsel had the authority to execute or approve a contract provision for arbitration. It further concluded, however, that the city had ratified the contract, including the provisions for arbitration, and that the city was estopped and also barred by laches from denying the validity of these provisions. Finally, the court concluded that the city had not come into court with clean hands and that it had not established, nor was it self-evident, that it would be irreparably injured by the arbitration or that it lacked an adequate remedy at law. On the basis of these conclusions, the injunctive relief was denied.

I

The plaintiff claims on appeal that the court erred in finding ratification, estoppel and laches. It further claims that the court was unjustified in going outside the stipulation of the parties by introducing and deciding the issues of unclean hands, irreparable harm, and lack of an adequate remedy at law. We hold that the trial court did not err in going beyond the stipulated issues. The questions of irreparable harm and availability of an adequate remedy at law are threshold issues which the court must consider before it can determine whether injunctive relief is warranted, and, therefore, the court's conclusions on these issues alone are dispositive of the plaintiff's appeal.

In its prayer for equitable relief, the plaintiff city was claiming the extraordinary remedy of an injunction. This is a power that courts exercise cautiously. A party seeking injunctive relief has the burden of alleging and proving irreparable harm and lack of an adequate remedy at law. The allegations and proof are conditions precedent to the granting of an injunction. Stocker v. Waterbury, 154 Conn. 446, 449, 226 A.2d 514 (1967); Theurkauf v. Miller, 153 Conn. 159, 161, 214 A.2d 834 (1965); Stapleton v. Lombardo, 151 Conn. 414, 416, 198 A.2d 697 (1964). These elements are so crucial that a party's failure to allege and prove them is sufficient ground for sustaining the refusal to grant an injunction, even where a court's conclusions on the merits are erroneous. Koepper v. Emanuele, 164 Conn. 175, 177, 319 A.2d 411 (1972).

In this case, the plaintiff did not allege either irreparable harm or lack of an adequate remedy at law, and no evidence was introduced on either point. Thus, the court was clearly justified in refusing to enjoin the arbitration proceedings. The plaintiff city argues that the imminence of unauthorized arbitration is, in itself, adequate to establish irreparable harm and lack of an adequate remedy at law and cites this court's recent decision in Policemen's and Firemen's Retirement Board v. Sullivan, 173 Conn. 1, 12, 376 A.2d 399 (1977), as authority. In that case, however, we were upholding the discretionary judgment of the trial court in granting injunctive relief, and the language on which the plaintiff relies merely states that the imminence of unauthorized arbitration, under the facts of that case, was an adequate basis to support the decision of that court that there was no adequate remedy at law and that those plaintiffs would suffer irreparable harm.

The court here, in the exercise of its discretion, determined that injunctive relief was inappropriate. As previously noted, it concluded, inter alia, that the city of Hartford had not established, nor was it self-evident, that it would be irreparably injured or that it lacked an adequate remedy at law. "Even where the danger of irreparable injury is shown, the granting of an injunction is not mandatory but within the sound discretion of the court. Until it is shown that the court's discretion was abused, there can be no reversal of the court's action in denying the injunction." Koepper v. Emanuele, supra, 164 Conn. 178, 319 A.2d at 412; see Crouchley v. Pambianchi, 152 Conn. 224, 226-27, 205 A.2d 492 (1964). We find that the...

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