Mbna America Bank, N.A. v. Boata

• Decision Date: 28 March 2006
• Docket Number: No. 25788.,25788.
• Citation: Mbna America Bank, N.A. v. Boata, 893 A.2d 479, 94 Conn.App. 559 (Conn. App. 2006)
• Court: Connecticut Court of Appeals
• Parties: MBNA AMERICA BANK, N.A. v. Teofil BOATA.

893 A.2d 479

94 Conn.App. 559

MBNA AMERICA BANK, N.A. v.Teofil BOATA.

No. 25788.

Appellate Court of Connecticut.

Argued November 16, 2005.

Decided March 28, 2006.

Teofil Boata, pro se, with whom, on the brief, were Stewart I. Edelstein and Carrie L. Larson, Bridgeport, for the appellant(defendant).

Jeanine M. Dumont, East Hartford, with whom, on the brief, was Corinne D. Brophy, for the appellee(plaintiff).

DiPENTIMA, HARPER and FOTI, Js.

DiPENTIMA, J.

The dispositive issue in this appeal is whether the trial court lacks subject matter jurisdiction to consider a claim that an issue is not subject to arbitration if that claim is not brought within thirty days of the issuance of notice of the arbitration award.Because we conclude that, under the circumstances of this case, the court had jurisdiction to consider the claim and the defendant was entitled to a hearing on the issue of whether an agreement to arbitrate existed, we reverse the court's judgment and remand the case for further proceedings.

The following facts and procedural history are relevant to our disposition of this appeal.Since 1996, the defendant, Teofil Boata, has used credit extended to him by the plaintiff, MBNA America Bank, N.A.¹The plaintiff claims that a credit agreement accompanied the issuance of the credit card to the defendant and that, by using the credit card, the defendant acceded to the terms of the agreement.²Although this initial standard form agreement did not include an arbitration provision, the plaintiff claims to have issued an amendment to the standard form agreement in 1999.This amendment provided that any and all claims arising under the agreement would be submitted to binding arbitration.The amendment included a provision by which the card user could opt out of the arbitration provision by sending the rejection in writing to the plaintiff.The plaintiff claims that it never received from the defendant any written notice that he rejected the arbitration term, and, in fact, the defendant continued to use the credit card.The defendant claims that he did not receive either the initial standard form agreement or the amendment providing for binding arbitration.

The plaintiff alleges that in April, 2003, the defendant defaulted on his obligation to make payments on the credit card.At the time of the default, the defendant had an outstanding balance of approximately $45,000.The plaintiff initiated an arbitration proceeding with the National Arbitration Forum in an attempt to recover the allegedly overdue sum.The defendant filed a response in which he claimed that he never received any agreement and objected to the imposition of any arbitration provision of such an agreement.The defendant specifically maintained that he retained any right he had to be heard by a jury in regard to the plaintiff's claim.On March 19, 2004, the arbitrator issued notice of his award.The arbitrator found that (1)the plaintiff had issued the defendant a credit card in 1996 pursuant to the terms enumerated in the credit card agreement, (2) the credit card agreement included provisions that provided that the signing and use of the card obligated the user to pay for the credit used, (3)the defendant did, in fact, utilize credit and obtain cash advances from the plaintiff, and (4)the defendant affirmed his obligation to pay for such credit by making timely payments and failing to object in a timely fashion to any outstanding balances.³On the basis of these findings, the arbitrator issued an award of $57,486.66 in favor of the plaintiff.

The defendant did not file a motion to vacate the award in the Superior Court or take any other action to challenge the award.On August 17, 2004, the plaintiff filed an application to confirm the award in the Superior Court pursuant to General Statutes § 52417.On August 23, 2004, the defendant filed an objection to the application to confirm the award on the ground that the parties had not entered into a written agreement to arbitrate, rendering the arbitrator without jurisdiction to consider the matter or to issue an award.The court concluded that it did not have jurisdiction to consider the defendant's objection, which it interpreted as a motion to vacate, modify or correct brought pursuant to General Statutes §§ 52-418 or 52-419, because that objection to the award was not filed within thirty days of the issuance of notice of the arbitration award.⁴SeeGeneral Statutes § 52-420(b).The court confirmed the award, and this appeal followed.

On appeal, the defendant claims that the court improperly concluded that he failed to preserve his right to challenge the arbitrability of the claim because he did not file a motion to vacate the award within the thirty day time limitation of § 52-420(b).⁵We agree.

As a general matter, judicial review of arbitration awards is narrow in scope because we favor arbitration as an alternative method of dispute resolution.Board of Education v. Wallingford Education Assn.,271 Conn. 634, 639, 858 A.2d 762(2004).This deferential review, however, does not extend to questions of whether any individual dispute is subject to arbitration, unless the parties have left that question, as well, to the consideration of the arbitrator.Welch Group, Inc. v. Creative Drywall, Inc.,215 Conn. 464, 467, 576 A.2d 153(1990).In any given case, therefore, "[w]hether a particular dispute is arbitrable is a question for the court"; (internal quotation marks omitted)id.; and deference need not be given to the arbitrator's decision.

"It is well established that [a]rbitration is a creature of contract. . . .It is designed to avoid litigation and secure prompt settlement of disputes. . . .[A] person can be compelled to arbitrate a dispute only if, to the extent that, and in the manner which, he has agreed so to do. . . .No one can be forced to arbitrate a contract dispute who has not previously agreed to do so. . . .Moreover, [i]t is the province of the parties to set the limits of the authority of the arbitrators, and the parties will be bound by the limits they have fixed. . . .The arbitration provision in an agreement is, in effect, a separate and distinct agreement.Courts of law can enforce only such agreements as the parties actually make. . . .Accordingly, because an arbitrator's jurisdiction is rooted in the agreement of the parties . . . a party who contests the making of a contract containing an arbitration provision cannot be compelled to arbitrate the threshold issue of the existence of an agreement to arbitrate.Only a court can make that decision."⁶(Citations omitted; emphasis in original; internal quotation marks omitted.)Nussbaum v. Kimberly Timbers, Ltd.,271 Conn. 65, 72-73, 856 A.2d 364(2004).

A claim, therefore, that a contract dispute is not subject to arbitration is an attack on the subject matter jurisdiction of the arbitrator, and, as such, may be raised at any time prior to a final court judgment.Total Property Services of New England, Inc. v. Q.S.C.V., Inc.,30 Conn.App. 580, 591, 621 A.2d 316(1993);see alsoBennett v. Meader,208 Conn. 352, 364, 545 A.2d 553(1988)("authority of the arbitrator is a subject matter jurisdiction issue, and as such it may be challenged any time")."The final judgment in an arbitration proceeding is ordinarily an order of the trial court modifying. vacating or confirming the arbitrator's award."(Internal quotation marks omitted.)Phoenix Windows, Inc. v. Viking Construction, Inc.,88 Conn.App. 74, 77, 868 A.2d 102, cert. denied, 273 Conn. 932, 873 A.2d 1001(2005).

Our Supreme Court has recognized "two procedural routes by which a party may preserve the issue of the arbitrability of a particular dispute for judicial determination.First, a party may refuse to submit to arbitration at the outset and instead compel a judicial determination of the issue of arbitrability. . . .Alternatively, threshold questions of arbitrability may properly be committed to the arbitrators themselves for determination under the terms of the contract, along with the merits of the underlying dispute. . . .In such casesa court, on a motion to vacate, may properly entertain a challenge to an award alleging disregard of the limits in the parties' agreement with respect to arbitration."(Citations omitted; internal quotation marks omitted.)White v. Kampner,229 Conn. 465, 476, 641 A.2d 1381(1994).

When the question is whether the arbitration has exceeded the limits of the agreement of the parties to arbitrate, the question of jurisdiction may be waived due to the actions of the parties.Id., at 477-78, 641 A.2d 1381.For example, a failure to object to the arbitrability of a question during the arbitration proceedings may operate as a waiver of that objection.Id.;see alsoNew Britain v. State Board of Mediation & Arbitration,178 Conn. 557, 561, 424 A.2d 263(1979).The claim raised by the defendant here, however, is not whether the arbitrator exceeded the limits of the arbitration agreement, but whether any agreement to arbitrate ever existed between the parties.In such a case, the waiver rule is inapplicable.Total Property Services of New England, Inc. v. Q.S.C.V., Inc.,supra, 30 Conn.App. at 586, 621 A.2d 316.

Dicta from our Supreme Court in White v. Kampner,supra, 229 Conn. at

465, 641 A.2d 1381, is instructive on this point.In that case, our Supreme Court recognized that not all questions regarding arbitrability involve subject matter jurisdiction.Id., at 477 n. 12, 641 A.2d 1381.In doing so, however, the court recognized that there exist some questions of arbitrability that do involve a challenge to the subject matter jurisdiction of the arbitrator.In particular, the court noted that questions of arbitrability that inquire into the existence of a valid agreement to arbitrate are the types of arbitrability issues that necessarily involve a challenge to the arbitrator's subject matter jurisdiction and,...