Dighello v. Busconi
| Decision Date | 10 November 1987 |
| Docket Number | N-81-461(RCZ).,Civ. A. No. B-87-167(RCZ) |
| Citation | 673 F. Supp. 85 |
| Parties | In the Matter of the Arbitration Between Ronald DIGHELLO and By-The-Sea, Inc., Petitioners, and Lewis J. BUSCONI, and Lion Construction Co., Inc., Respondents. |
| Court | U.S. District Court — District of Connecticut |
Bernard Green, Green & Gross, P.C., Bridgeport, Conn., for petitioners.
F. Anthony Mooney, Hale and Dorr, Boston, Mass., for respondents.
RULING ON PENDING MOTIONS
This is another in a seven-year series of lengthy, acrimonious legal proceedings involving former business associates, Ronald DiGhello and Lewis Busconi. Their disputes revolve around the development and construction of a $66 million project on 165 acres of valuable land owned by the parties in Milford, Connecticut. Due to the discord and dissension between the two men, little if any progress has been made to improve or utilize the partially-built facilities on the property.
The parties' disagreements have spawned several lawsuits—both state and federal—which, in turn, have generated a myriad of motions, counter-motions, petitions, briefs, reply briefs, affidavits, counter-affidavits and other prolific moving papers. Despite valiant efforts by counsel, and lengthy discussions with state judges and this Court, the parties have tenaciously refused to resolve their controversies amicably. Their inane determination "to fight to the finish" is indeed unfortunate. Had the parties compromised their differences in a rational, businesslike way, as recommended by their counsel and the courts, the parcels in question long ago would have been successfully and profitably developed for condominiums, a golf course, and a marina.
In 1982 Magistrate Smith, noting that there were so many disputes between the parties "that merely to identify them would be a triumph in itself," held that the parties should arbitrate all their disagreements pursuant to their written contract entered into on April 29, 1981. Ruling On Petition To Enforce Arbitration and Cross-Motion To Dismiss, Civ. No. N-81-461 (D.Conn. Mar. 10, 1982). On October 5, 1982, this Court sustained the Magistrate's reasoned and thorough decision and ordered the parties to submit themselves to arbitration. Ruling On Objection To Magistrate's Ruling, Civ. No. N-81-461 (D.Conn. October 5, 1982).
After an abandoned appeal to the Second Circuit, and another round of legal maneuvers, arbitration finally was commenced before a panel of three arbiters in May 1984 and was concluded in January 1987. The Arbitration Panel filed its Award on February 11, 1987. Consistent with the pattern of prior conduct, the parties have now directed motions to this Court with the customary salvo of "paper."
Pending before the Court are Dighello's motion to vacate the Award, and Busconi's motions to confirm the Award and for further orders.
The Arbitration Panel conducted forty days of hearings to resolve the disputes between the parties. The hearings were comprehensive and complete: the parties, represented by counsel, and their witnesses were fully heard, over thirty-eight volumes of transcripts were recorded, more than 300 exhibits were introduced, and extensive briefs and moving papers were submitted.
In a detailed, reasoned twenty-two page Award, the Arbitration Panel unanimously concluded, inter alia, that: (1) throughout DiGhello's business dealings with Busconi for the development and construction of the multi-million dollar project, DiGhello acted individually and through a network of corporate entities, which he owned and controlled, known as By-The-Sea, Inc., Luxury Properties, Inc., Brandy Incorporated-Milford, Millionaire, Inc., and Millstone Country Club, Inc.; (2) DiGhello substantially breached existing contracts and agreements by, among other things, failing to execute documents necessary for the construction of housing units, interfering with the delivery of building supplies, and designing a plan whereby Busconi would pay third parties for work never performed; (3) DiGhello's conduct was a chronicle of "obstruction, interference, and duplicity"; (4) Busconi was entitled to both monetary and equitable relief; (5) despite Busconi's claims of over thirty million dollars in lost profits and over seven million dollars in out-of-pocket expenses, many of his damages were not proved or not recoverable as a matter of law; (6) Busconi's allowable money damages were $5,648,677.20 plus "supplemental interest"; (6) nonmonetary relief to Busconi to enable him to complete the project as originally proposed would not be feasible because of several factors including zoning obstacles, the illegality under state law of the existing plan to sell certain buildings, and other unworkable aspects of the plan for development; (7) due to the property's complex and entangled state of affairs, the most sensible and suitable nonmonetary relief would be to grant Busconi partial specific performance "to effectuate as much of the original plan as may still be possible"; and (8) under the circumstances, DiGhello would be required to execute and deliver to Busconi certain corrective deeds, easements, declarations, assignments and other documents.
DiGhello moves, pursuant to 9 U.S.C. § 10(d), to set aside the Award on three grounds: (1) the Arbitration Panel decided issues not submitted to it for resolution; (2) the orders of relief in the Award bind four of DiGhello's corporate entities that were not named as parties to the arbitration; and (3) the Award is incomplete, ambiguous, and contradictory.
Section 10(d) provides in relevant part that an award may be vacated "where the arbitrators exceeded their powers." Thus if an arbitration panel rules on issues not presented to it by the parties, it has exceeded its authority and the award must be vacated. United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582-83, 80 S.Ct. 1347, 1353, 4 L.Ed.2d 1409 (1960); Lackawanna Leather Co. v. United Food & Commercial Workers Int'l Union, 692 F.2d 536, 538-39 (8 Cir.1982); Piggly Wiggly Operators' Warehouse, Inc. v. Piggly Wiggly Operators' Union, 611 F.2d 580, 583 (5 Cir.1980). However, Congress has indicated a strong preference for enforcing arbitration agreements, see 9 U.S.C. § 2; Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 22, 103 S.Ct. 927, 940, 74 L.Ed.2d 765 (1983), and it is well settled that a reviewing court's power to vacate an award is severely limited so that an award may be set aside only under the very narrow circumstances enumerated in § 10, or if it is "irrational" or "manifestly disregards the law." See I/S Stavborg v. Nat'l Metal Converters, Inc., 500 F.2d 424, 430-31 (2 Cir.1974); see also Andros Compania Maritima v. Marc Rich & Co., A.G., 579 F.2d 691, 703-04 (2 Cir.1978).
In determining whether an arbitration agreement covers a particular issue, all doubts must be resolved in favor of arbitration. Metro Indus. Painting Corp. v. Terminal Construction Co., 287 F.2d 382, 385 (2 Cir.), cert. denied, 368 U.S. 817, 82 S.Ct. 31, 7 L.Ed.2d 24 (1961). Any issue that is "inextricably tied up with the merits of the underlying dispute" may properly be decided by the arbitrator. See McAllister Bros. v. A & S Trans. Co., 621 F.2d 519, 522-23 (2 Cir.1980); see also Nolde Bros., Inc. v. Local 358, Bakery & Confectionery Workers Union, 430 U.S. 243, 254, 97 S.Ct. 1067, 1073, 51 L.Ed.2d 300 (1977). These general standards guide our analysis of the merits of DiGhello's motion.
Busconi's first request for arbitration on August 10, 1981, was limited to only three matters: corrective deeds, condominium declarations, and a mortgage commitment. Relying on this written request, DiGhello argues that the arbitration proceedings during the years 1984 to 1987 covered numerous other issues and, therefore, the Arbitration Panel exceeded its powers under § 10(d). The claim is frivolous.
On October 5, 1982, this Court granted Busconi's motion to compel arbitration and ordered the parties to arbitrate their disputes "pursuant to the agreement of April 29, 1981." Ruling On Objection To Magistrate's Ruling at 3. That contract provided for an unrestrictive, plenary submission of "any disputes between the parties, either unresolved issues not affected by this Agreement or any future disagreements." Partial Settlement Agreement As To Parcel "C" (April 29, 1981).
In addition, on October 7, 1982, Busconi made demand upon DiGhello to arbitrate "any and all existing disagreements" as directed by this Court and as mandated by the agreement signed on April 29, 1981. The record of the arbitration proceedings reveals that both parties recognized the expansive scope of the matters being presented for resolution, and that issue was joined on each of them. Busconi's statement of claims exceeded fifty pages and covered every point of the disagreements between the parties. See Plaintiff's Prehearing Statement, 1-53 (May 1, 1984). On his part, DiGhello, in a lengthy statement of issues to be arbitrated, sought relief for alleged breaches by Busconi of almost every aspect of the parties' contracts and obligations for the development and construction of the project. See Respondents' Statement Of Claims at 1-14 (May 24, 1984). When specifically asked by one of the arbitrators at the commencement of the proceeding whether the arbitration was to cover "all the disputes" between the parties, DiGhello's counsel replied, "We are before the panel on all disputes involving this transaction." Tr. at 98-99. Thus, the Arbitration Panel's determination that the proceedings encompassed "all issues between the parties" without restriction or limitation, Award at 15, is more than amply supported by the record in this case.
DiGhello next asserts that the Arbitration Panel exceeded its powers by considering and determining...
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