Mso, LLC v. Desimone

• Decision Date: 12 August 2014
• Docket Number: No. 18979.,18979.
• Citation: 94 A.3d 1189,313 Conn. 54
• Court: Connecticut Supreme Court
• Parties: MSO, LLC v. Anthony DeSIMONE, Coexecutor (Estate of Charles E. DeSimone), et al.

313 Conn. 54
94 A.3d 1189

MSO, LLC
v.
Anthony DeSIMONE, Coexecutor (Estate of Charles E. DeSimone), et al.

No. 18979.

Supreme Court of Connecticut.

Argued Dec. 10, 2013.
Decided Aug. 12, 2014.

[94 A.3d 1191]

Stuart Hawkins, with whom, on the brief, was Daniel Shepro, Stratford, for the appellant (plaintiff).

John A. Keyes, New Haven, with whom was Martin M. Looney, Branford, for the appellees (named defendant et al.).

ROGERS, C.J., and PALMER, ZARELLA, EVELEIGH and ESPINOSA, Js.

ROGERS, C.J.

The sole issue in this certified appeal ¹ is whether the trial court improperly granted the defendants' motion for a stay pending arbitration because the trial court determined, as a matter of law, that a party cannot waive enforcement of an arbitration clause in a contract. The plaintiff, MSO, LLC, appeals from the judgment of the Appellate Court affirming the trial court's decision to stay this action brought against the defendants,² Anthony DeSimone and Charles DeSimone, Jr., in their individual capacities and as coexecutors of the estate of Charles E. DeSimone, pending arbitration pursuant to an arbitration clause in the parties' lease agreement. MSO, LLC v. DeSimone, 134 Conn.App. 821, 830, 40 A.3d 808 (2012). The plaintiff claims that the Appellate Court improperly concluded that the record was inadequate for review because the trial court failed to make any factual findings on the issue of waiver. See id., at 827, 40 A.3d 808. Specifically, the plaintiff argues that the trial court concluded that waiver was unavailable as a matter of law and, accordingly, the record was adequate for review and the Appellate Court should have reversed the trial court's decision. We agree with the plaintiff that the record was adequate for review and that the trial court improperly concluded as a matter of law that the defense of waiver was unavailable to the

[94 A.3d 1192]

parties. Accordingly, we reverse the judgment of the Appellate Court.

The Appellate Court opinion sets forth the extensive procedural background in the present case and we need not recite it here. See id., at 823–27, 40 A.3d 808. Rather, a brief overview of the relevant facts and procedural history, as described by the Appellate Court, adequately situates the issue on appeal in the present case. “The plaintiff leased a commercial space for its liquor store, Budget Rite Liquors, from the defendants pursuant to a lease agreement. The lease agreement permitted sublease or assignment of the lease only with the written consent of the defendants. The lease agreement also included an arbitration clause. The validity of the lease agreement is not disputed by either party. In its original complaint, filed May 9, 2006, the plaintiff claimed that the defendants unlawfully withheld consent to assign the lease, which withholding deprived the plaintiff of the opportunity to enter into ‘contracts with multiple ready, willing and able buyers' for the sale of its business.... On August 15, 2006, the defendants filed an answer, special defense and counterclaim alleging, inter alia, that they lawfully refused to consent to the assignment pursuant to the lease agreement and that the plaintiff owed unpaid rent and had damaged the subject property before vacating.” Id., at 823–24, 40 A.3d 808. While the litigation was pending for more than two years, various discovery disputes arose and the parties filed several motions in the trial court. See id., at 824–27, 40 A.3d 808.

The record reveals the following additional procedural history relevant to our disposition of this appeal. On December 16, 2008, the defendants filed a motion for a stay of the proceedings, pursuant to General Statutes § 52–409, ³ pending arbitration under the parties' lease agreement.⁴ The plaintiff objected to the motion for a stay on the ground that the defendants had waived their right to enforce the arbitration clause by engaging in lengthy litigation with the plaintiff over the course of more than two years. On March 10, 2009, the trial court, Cronan, J., heard oral argument on the defendants' motion for a stay. The defendants argued that the plaintiff's lack of compliance in the discovery process so “frustrated” their participation in the litigation that they needed to enforce the arbitration clause in the lease agreement.⁵ The plaintiff responded that the parties' discovery issues were not properly before the trial court on the motion for a stay, and that the defendants had waived their right to enforce the

[94 A.3d 1193]

arbitration clause by participating in the extensive litigation.

The trial court granted the defendants' motion for a stay pending arbitration. In ruling on the motion for a stay, the trial court stated as follows: “When individuals enter a contract fully aware of what the elements of the contract are, and enter an agreement ... I have found in the past that if there is an arbitration clause, that the arbitration clause is going to control, and ... I am being consistent in other decisions I have made since coming to New Haven.” (Emphasis added.) The plaintiff subsequently appealed from the trial court's decision in the defendants' favor to the Appellate Court.⁶

A majority of the Appellate Court concluded that the plaintiff had failed to meet its burden to provide the court with an adequate record for review. MSO, LLC v. DeSimone, supra, 134 Conn.App. at 827, 40 A.3d 808. Because the plaintiff did not seek articulation of the trial court's succinct ruling on the defendants' motion for a stay, the majority could not conclude that the trial court made any findings on the issue of waiver. Id., at 828, 40 A.3d 808. In the absence of pertinent factual findings regarding waiver, the Appellate Court majority presumed that the trial court “undertook the proper analysis of the law and the facts in directing the parties to proceed to arbitration as provided in the lease agreement.” Id., at 829, 40 A.3d 808; id. (“in the absence of an articulation—which the appellant is responsible for obtaining—we presume that the trial court acted properly” [internal quotation marks omitted] ), quoting Orcutt v. Commissioner of Correction, 284 Conn. 724, 739 n. 25, 937 A.2d 656 (2007). This certified appeal followed.⁷

[94 A.3d 1194]

The plaintiff argues that the Appellate Court improperly determined that the record was inadequate for review and, therefore, incorrectly presumed that the trial court undertook the proper analysis in ordering the parties to arbitration. Rather than deciding the factual question of waiver, the plaintiff contends that the trial court concluded that waiver was unavailable as a matter of law because of the written arbitration clause in the parties' lease agreement. Accordingly, the plaintiff asserts that the record was adequate for review and that the Appellate Court should have reversed the trial court's decision as neither legally nor logically correct. ⁸ By contrast, the defendants argue that the trial court made a factual determination that the defendants did not waive their right to arbitration. The defendants further contend that the trial court's purported factual findings regarding waiver were not clearly erroneous. As alternative grounds for affirmance, the defendants argue that the record was inadequate for review and, accordingly, that the Appellate Court correctly presumed that the trial court undertook the proper analysis in granting the defendants' motion for a stay pending arbitration. We agree with the plaintiff that the Appellate Court improperly concluded that the record was inadequate for review. Despite the absence of any factual findings on waiver, the trial court concluded that waiver was unavailable as a matter of law due to the parties' arbitration agreement. Accordingly, we conclude that the record was adequate for review. We further conclude that the trial court's decision was based upon an erroneous statement of the law. As a result, we reverse the judgment of the Appellate Court.

We begin with the standard of review. “The scope of our appellate review depends upon the proper characterization of the rulings made by the trial court. To the extent that the trial court has made findings of fact, our review is limited to deciding whether such findings were clearly erroneous. When, however, the trial court draws conclusions of law, our review is plenary and we must decide whether its conclusions are legally and logically correct and find support in the facts that appear in the record.” Morton Buildings, Inc. v. Bannon, 222 Conn. 49, 53, 607 A.2d 424 (1992). “Therefore, the trial court's conclusions must stand unless they are legally or logically inconsistent with the facts found or unless they involve the application of some erroneous rule of law material to the case.” (Internal quotation marks omitted.) AFSCME, Council 4, Local 704 v. Dept. of Public Health, 272 Conn. 617, 622–23, 866 A.2d 582 (2005).

We now set forth the relevant statutory language and legal principles.

[94 A.3d 1195]

“[A]n agreement to arbitrate must meet the requirements of the arbitration statute, [General Statutes § 52–408] ⁹ including the requirement that the agreement be in writing, or it is invalid.” (Footnote added.) Bennett v. Meader, 208 Conn. 352, 364, 545 A.2d 553 (1988). “Arbitration is the voluntary submission, by the interested parties, of an existing or future dispute to a disinterested person or persons for final determination. It is intended to avoid the formalities, the delay, the expense and vexation of ordinary litigation.” Gores v. Rosenthal, 150 Conn. 554, 557, 192 A.2d 210 (1963). When parties have a valid arbitration agreement, “the courts are empowered to direct compliance with its provisions.” Id. To this end, General Statutes § 52–409 “provides relief when a party to a contract that contains an arbitration clause desires arbitration of a dispute, and the other party, instead of proceeding with arbitration, institutes a civil action to resolve the dispute. The party...