Comprehensive Orthopaedics v. Axtmayer
Citation | 980 A.2d 297,293 Conn. 748 |
Decision Date | 20 October 2009 |
Docket Number | No. 18304.,18304. |
Court | Supreme Court of Connecticut |
Parties | COMPREHENSIVE ORTHOPAEDICS AND MUSCULOSKELETAL CARE, LLC, et al. v. Alfredo L. AXTMAYER et al. |
Dominic Fulco III, with whom were Robert J. Durbin, and, on the brief, Maurice T. FitzMaurice and Edward F. Spinella, Hartford, for the appellants (plaintiffs).
Michael F. O'Connor, with whom were Scott R. Ouellette and, on the brief, James G. Williams, North Haven, for the appellees (defendants).
ROGERS, C.J., and NORCOTT, KATZ, PALMER, ZARELLA, McLACHLAN and QUINN, Js.*
The sole issue on appeal is whether the arbitrator exceeded his authority in declining to award attorney's fees pursuant to the parties' arbitration agreement. The plaintiffs, Comprehensive Orthopaedics and Musculoskeletal Care, LLC (Comprehensive), and certain physician members of Comprehensive,1 appeal2 from the judgment of the trial court, which denied the plaintiffs' motion to vacate in part the arbitration award pursuant to General Statutes § 52-418(a)(4),3 because it concluded that the arbitrator did not exceed his authority by determining that Comprehensive did not "prevail" on its underlying restrictive covenant claim. On appeal, the plaintiffs claim that the arbitrator exceeded his authority by declining to award attorney's fees because Comprehensive "prevailed" under Connecticut law on its underlying claim, and, therefore, the arbitration agreement required the arbitrator to award attorney's fees. The defendants, Alfredo L. Axtmayer (Axtmayer) and Alfredo L. Axtmayer, M.D., P.C., claim that the award was proper because the arbitrator's determination that Comprehensive did not prevail is not reviewable. We agree with the defendants, and, accordingly, affirm the judgment.
Axtmayer, a physician, was employed by the plaintiffs pursuant to an employment agreement (agreement). Section 11 of the agreement contains a restrictive covenant that prohibits Axtmayer from competing with Comprehensive or disrupting any of its business relationships for a period of three years subsequent to the termination of Axtmayer's employment. The restrictive covenant's terms apply to various towns in the state and, in addition, prohibit Axtmayer from maintaining a business relationship with various Connecticut hospitals outside of the restricted territories.4 Section 11(e) of the agreement requires Axtmayer to pay a liquidated damages award of $150,000 if he violates the terms of the covenant. Section 11(d) of the agreement, however, provides that "[i]n the event the provisions of [§] 11 are deemed to exceed the time, geographic, or occupational limitations permitted by applicable law, then such provisions shall be automatically reformed to the maximum time, geographic or occupational limitations permitted by applicable law." At some point during the employment period, the plaintiffs terminated Axtmayer.
Subsequently, the parties entered into an arbitration agreement to submit various issues arising from the employment relationship, including the question of whether Axtmayer had violated the terms of the restrictive covenant.5 In that submission, the parties agreed that "[a]s to [§] 11 of the . . . [a]greement . . . the [a]rbitrator shall award attorney's fees and costs only to [Comprehensive] and only if [Comprehensive] prevails in its claims under [§] 11 of the . . . [a]greement." The parties further agreed that the arbitrator's award could only be vacated on the basis of the grounds set forth in § 52-418. After the presentation of testimony and evidence, the arbitrator found that Axtmayer had "established his solo, competitive practice within the restrictive territory almost immediately after his ouster." Moreover, the arbitrator found that Axtmayer had continued to have a business relationship with many of the medical institutions covered by the restrictive covenant. Although the arbitrator found that those facts weighed in favor of enforcing the covenant, the arbitrator concluded that the time, geographical and occupational limitations imposed by the covenant were excessive. Accordingly, pursuant to the automatic reformation provision in the agreement, the arbitrator reformed the covenant's restrictions6 and reduced the liquidated damages to $75,000 from $150,000. With respect to attorney's fees, the arbitrator concluded that "[i]n view of the reformation, no attorney's fees and costs are awarded to [Comprehensive]."
On February 4, 2008, the plaintiffs filed an application with the Superior Court to vacate the award only with respect to the arbitrator's decision not to award attorney's fees. The plaintiffs claimed that the arbitrator exceeded his authority because the arbitration agreement provided that "the [a]rbitrator shall award attorney's fees and costs . . . if [Comprehensive] prevails in its claims under [§] 11. . . ." On March 3, 2008, the defendants filed an application to confirm the arbitrator's decision and award. On March 26, 2008, the trial court denied the plaintiffs' application to vacate in part. The trial court concluded that the submission to arbitration was unrestricted and that the arbitrator had the authority to fashion any remedy that was rationally related to a plausible interpretation of the agreement. Accordingly, the trial court concluded that, in light of the arbitrator's reformation of the restrictive covenant, the arbitrator reasonably could have concluded that Comprehensive did not prevail on its claims and, therefore, was not entitled to attorney's fees. On April 14, 2008, the trial court granted the defendants' application to confirm the award.7 This appeal followed.
"In our construction of § 52-418(a)(4), we have, as a general matter, looked to a comparison of the award with the submission to determine whether the arbitrators have exceeded their powers." (Internal quotation marks omitted.) Harty v. Cantor Fitzgerald & Co., 275 Conn. 72, 80-81, 881 A.2d 139 (2005). The standard for reviewing a claim that the award does not conform to the submission requires what we have termed "`in effect, de novo judicial review.'" Id., at 84, 881 A.2d 139. "Although we have not explained precisely what `in effect, de novo judicial review' entails as applied to a claim that the award does not conform with the submission . . . [o]ur inquiry generally is limited to a determination as to whether the parties have vested the arbitrators with the authority to decide the issue presented or to award the relief conferred." Id., at 85, 881 A.2d 139.
8 (Internal quotation marks omitted.) Id., at 86 n. 7, 881 A.2d 139, quoting 1 M. Domke, Commercial Arbitration (3d Ed.2003) § 39:6, pp. 39-12 through 39-13. Moreover, Bic Pen Corp. v. Local No. 134, 183 Conn. 579, 585, 440 A.2d 774 (1981).
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