Computerized Vehicle Registration v. General Sys. Solutions, Inc., No. 4006274 (Conn. Super. 11/8/2006), 4006274
| Decision Date | 08 November 2006 |
| Docket Number | No. 4006274,4006274 |
| Parties | Computerized Vehicle Registration v. General Systems Solutions, Inc. et al. Opinion No.: 95867 |
| Court | Connecticut Superior Court |
In this vigorously contested matter the plaintiff, Computerized Vehicle Registration ("CVR"), applied for the issuance of a temporary injunction without bond against defendants, General Systems Solutions, Inc. ("GSS"), triVIN, Inc. ("triViN"), and the American Arbitration Association, Inc. ("AAA"), preventing defendants from exercising jurisdiction over CVR in the pending arbitration proceedings. Considerable briefing has been accomplished by the parties which includes providing the court with copies of the various documents involved in the dispute.
A hearing was held before this court on October 17, 2006, at which all parties, except AAA, were represented by counsel and presented oral argument in support of their position. The counsel present represented to the court that AAA agreed with them to be bound by the ruling of the court. No party offered evidence. The parties did not agree to have the hearing on the temporary injunction serve as the hearing for the resolution of the entire dispute. A briefing schedule was ordered by the Court after consultation with counsel, including the opportunity to file additional affidavits. The parties submitted the case to the court on the basis of the factual material submitted in their briefs with factual affidavits and the court will decide the case on the same basis as the submission.
For the purpose of this decision, there is no factual dispute. For the limited purpose of the resolution of the issues related to the temporary injunction the following statement of the facts should suffice. However, the court has given consideration to all the facts submitted by the parties to which reference may be had in the briefs.
The plaintiff CVR is a general partnership organized and existing under the laws of the State of California with its principal place of business in La Palma, California.
Renuit is a corporation organized and existing under the laws of the State of Delaware with its principal place of business in Springhouse, Pennsylvania.
GSS is a corporation organized and existing under the laws of the State of Connecticut with its principal place of business located at 115 Poheganut Drive, Suite 201, Groton, Connecticut 06340.
triVIN is a corporation organized and existing under the laws of the State of Delaware with its principal place of business located at 115 Poheganut Drive, Suite 201, Groton, Connecticut 06340.
AAA is a corporation organized and existing under the laws of the State of New York doing business in Connecticut from offices at 950 Warren Avenue, East Providence, Rhode Island 02914.
In March 2000, GSS and Renuit entered into a contract (the "Consolidator Agreement") relating to on-line vehicle registration systems that included the following arbitration provision:
Any disputes between the Parties that may arise during the course of this Agreement should be resolved by good faith negotiations between the Parties. If the Parties are unable to reach a mutual agreement through good faith negotiations over any dispute that may occur, the Parties agree to assign a third party mediator, agreed to by both parties, to assist in dispute negotiations.
If after 90 days from the date the dispute was first raised, no mutually satisfactory resolution is reached, either party may notify the other Party in writing of its desire to arbitrate the dispute. The controversy or claim shall be settled by binding arbitration in the City of Groton, Connecticut in accordance with the Commercial Rules of Arbitration of the American Arbitration Association then in effect.
The agreement was extended thru August 2009 by addenda.
The Consolidator Agreement also contained a non-assignment provision in paragraph 16, the terms of which provided that, because the contract was essentially a personal services contract, neither party was free to assign their interests in the contract without the permission of the other, with the exception that both Renuit and GSS reserved some rights in that regard under certain limited circumstances not here relevant.
Around August 2000, triVIN, Inc. became a parent of General Systems Solutions, Inc.
In May 2006, 100% of Renuit's stock was purchased by CVR.
CVR is a competitor of GSS.
In June 2006, triVIN claimed Renuit breached the anti-assignment provision of the Consolidator Agreement while Renuit claimed that triVIN attempted to terminate the Consolidator Agreement in violation of the terms of that contract.
In June 2006, triVIN filed a demand for arbitration with AAA captioned General Systems Solutions, Inc./triVIN, Inc. v. Renuit Now, Inc. seeking injunctive and declaratory relief as well as monetary damages from Renuit.
In June 2006, Renuit initiated an action in the United States District Court for the Eastern District of Pennsylvania captioned Renuit Now, Inc. v. triVIN, Inc. et al seeking preliminary and permanent injunctive relief and monetary damages from triVIN and GSS.
In June 2006, triViN and GSS initiated an action in the United States District Court for the District of Connecticut captioned General Systems Solutions, Inc. and triVIN, Inc. v. Renuit Now, Inc. seeking to compel arbitration of their claims against Renuit.
GSS, triViN, Renuit and CVR entered a so-called Standstill Agreement on June 29, 2006 under which GSS, triVIN and Renuit agreed to dismiss the two federal suits and maintain the status quo while GSS, triVIN and Renuit resolved their breach of contract dispute via the pending AAA arbitration. The Standstill Agreement defines the "Parties" in the opening paragraph as GSS, triVIN, Renuit and CVR.
Under the terms of the Standstill Agreement, CVR agreed to undertake three obligations: (1) "the Parties agree that . . . [they will abide by] the 'Agreed Upon Restraints' "; (2) "the Parties agree they shall . . . submit the Agreed Upon Restraints to the arbitrator . . . as [an] interim award; and (3) the Parties agree to arbitrate "[a]ny dispute arising out of this Agreement between any of the Parties. There is no specific provision in the Standstill Agreement by which CVR agreed to become a party to the underlying AAA arbitration which then involved only GSS, triVIN and Renuit.
The arbitration clause in paragraph six of the Standstill Agreement states that the parties agree to submit to arbitrate only "any dispute arising out of this Agreement." CVR is not a party to the Consolidator Agreement, which is the contract at issue in the breach of contract claims asserted in the AAA arbitration presently underway.
An Interim Award was issued by AAA adopting the Standstill Agreement at the request of the parties under the emergency rules of the AAA.
On July 19, 2006, triVIN and GSS forwarded AAA a Supplemental Arbitration Demand that was an effort to add CVR as a respondent to the AAA arbitration. On July 31, 2006, after the Interim Award hearing, CSS and triVIN, claiming CVR was a full party to the original AAA arbitration proceedings, served a Request for Production upon CVR demanding, among other things, all of CVR's financial statements, tax returns, business plans, business models, forecasts and projections from January 1, 1999, to present and served Supplemental Requests on August 1, 2006.
The legal issues are: (1). Whether participation in the Standstill Agreement and the subsequent Interim Award proceedings subject CVR to the jurisdiction of the original arbitration, to which it was not an original party, and (2). Is that decision made by this court or by the arbitration process.
Additionally, the Court will have to determine if the Plaintiff has satisfied the requirements of law relating to the granting of a temporary injunction without bond.
Pursuant to Connecticut General Statutes, §52-471, "[a]ny judge of any court of equitable jurisdiction may, on motion, grant and enforce a writ of injunction, according to the course of proceedings in equity . . ." To qualify for injunctive relief, the party seeking such relief must make four showings: (1) a likelihood of success on the merits; (2) an imminent, substantial and irreparable injury; (3) a lack of an adequate remedy at law; and (4) that the balance of the equities is in its favor. Waterbury Teachers Ass'n. v. Freedom of Information Commission, 230 Conn. 441, 446, 645 A.2d 978 (1994).
The purpose of a temporary injunction is to preserve the status quo until final determination of the parties' rights after a hearing on the merits. See Clinton v. Middlesex Mutual Assurance Co., 37 Conn.App. 269, 270, 655 A.2d 814 (1995), quoting Olcott v. Pendleton, 128 Conn. 292, 295, 22 A.2d 633 (1941).
Connecticut General Statutes §52-472 provides in relevant part that "a bond need not be required when, for good cause shown, the court or a judge is of the opinion that a temporary injunction ought to issue without bond." Spiniello Construction Co. v. Manchester, 189 Conn. 539, 546, 456 A.2d 1199 (1983). The bond, therefore, is provisional on the court's determination that such bond is required to indemnify the defendants. Rustici v. Malloy, 60 Conn.App. 47, 55, 758 A.2d 424 (2000).
The parties agree, and state in their briefs, that matters of arbitrability are generally resolved by the courts. Under both federal and Connecticut law, "the issue of arbitrability may only be referred to the arbitrator if there is 'clear and unmistakable' evidence from the arbitration...
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