Schwarzschild v. Martin

• Decision Date: 06 September 1983
• Citation: 191 Conn. 316,464 A.2d 774
• Court: Connecticut Supreme Court
• Parties: Martin SCHWARZSCHILD v. Ramela MARTIN et al.

Page 774

464 A.2d 774

191 Conn. 316

Martin SCHWARZSCHILD v. Ramela MARTIN et al.

Supreme Court of Connecticut.

Argued May 13, 1983.

Decided Sept. 6, 1983.

Harry Cohen, New Milford, for appellants (defendants Irene Binsse et al., Administrators [Estate of Edward A. Binsse].

David M. Cohen, Stamford, with whom, on brief, was Sydney C. Kweskin, Stamford, for appellee (plaintiff).

Before PETERS, HEALEY, PARSKEY, SHEA and GRILLO, JJ.

GRILLO, Associate Justice.

The arbitration proceedings in this case arose out of a joint and several promissory note in the amount of $95,273 given by the original defendants, Edward A. Binsse, ¹ Ramela Martin, and Doris Hodge, ² to the plaintiff, Martin Schwarzschild, in connection with the purchase of the stock in the Roosevelt School located in Stamford. ³ A subsequent addendum to the May 18 agreement between the plaintiff and the defendants contains the arbitration clause involved in this appeal: "If there shall be any dispute under this agreement the parties agree to submit it to arbitration ...." The addendum is signed by all three defendants, but not by Martin Schwarzschild.

A short time after the note was executed, the defendants defaulted. By letter dated November 26, 1973, arbitration was requested by all of the defendants. This arbitration session, however, was never completed; a mistrial was declared due to the resignation of one of the arbitrators. Although the record reveals neither when this first hearing began nor when it concluded, it was not until the hearing was well under way that the defendants learned that Martin Schwarzschild had not signed the arbitration addendum. The defendants promptly initiated a civil action, Ramela Martin et al. v. Martin Schwarzschild (No. 0029537), ⁴ claiming fraud and invalidity of the contract and seeking, inter alia, recission of the contract and an order restraining further arbitration. ⁵

In October of 1975, the plaintiff commenced an action pursuant to General Statutes §§ 52-410 and 52-411 ⁶ for an order directing the defendants to proceed with arbitration and for a further order appointing a replacement for the arbitrator who had resigned during the first hearing. The trial court, Stapleton, J., directed all parties promptly to proceed to arbitration, pending and subject to final judgments in two other related cases, Schwarzschild v. Binsse et al., and Ramela Martin v. Schwarzschild (No. 156872). The plaintiff subsequently filed a motion to stay the proceedings in the latter case, which was granted on October 25, 1977, by the court, Zarrilli, J., who ordered the parties to proceed to arbitration.

On February 27, 1979, the arbitrators issued a unanimous finding holding the defendants jointly and severally liable to the plaintiff for $144,301.09 and providing that "[a]ll other claims made by any other parties are disallowed." When the applications by the defendants to vacate and by the plaintiff to confirm the arbitration award were joined for trial, the court, Belinkie, J., confirmed the award. It is from this judgment, dated April 27, 1981, that the defendant estate takes the present appeal.

The defendant estate presents the following issues on appeal: (1) whether the agreement in this case constituted an arbitrable contract; (2) whether the arbitration award conformed to the submission; (3) whether a prior Superior Court order by the court, Stapleton, J., invalidated the arbitration proceedings; (4) whether the issue of timely presentation of a claim to the estate of Binsse was considered by the arbitrators; and (5) whether there was proof of partiality by one of the arbitrators sufficient to invalidate the award. ⁷ We shall consider each of these claims separately.

The threshold question involved in this appeal concerns the issue of the validity of the arbitration agreement and consequently the arbitrability of the dispute. The defendant argues that since the arbitration addendum was not signed by the plaintiff, it was not valid or binding. ⁸

Section 52-408 of the General Statutes provides, in pertinent part, that "[a]n agreement in any written contract or in a separate writing executed by the parties to any written contract, to settle by arbitration any controversy thereafter arising out of such contract ... shall be valid, irrevocable and enforceable, except when there exists sufficient cause at law or in equity for the avoidance of written contracts generally." Nowhere in the statute is found the specific requirement urged on us by the defendant that the contract be signed by both parties. The statute requires only that the agreement between the parties be contained in a "written contract" or "separate writing"; ⁹ this requirement has been resolved in the plaintiff's favor by both the arbitrators and the trial court. We find no error in this conclusion.

Of paramount importance to the resolution of this issue is the fact that it is the defendant, the party whose signature is found on the arbitration agreement, who is seeking to avoid the arbitration award. Furthermore, it is the defendant who initially not only petitioned for arbitration but also participated in the arbitration sessions.

As evidenced by its signature as well as its initiation of the arbitration proceedings, the defendant recognized and agreed to the contract to arbitrate. One enjoying rights is estopped from repudiating dependent obligations which he has assumed; parties cannot accept benefits under a contract fairly made and at the same time question its validity. Mozzochi v. Luchs, 35 Conn.Sup. 19, 23, 391 A.2d 738 (1977). Clearly, the quid pro quo accorded both parties was the mechanism of arbitration, a benefit which served to avoid the expense and delay of court proceedings. "In the absence of a statute requiring a signature ... parties may become bound by the terms of a contract, even though they do not sign it, where their assent is otherwise indicated, such as by the acceptance of benefits under the contract." 17 Am.Jur.2d, Contracts § 70.

It is incongruous for the defendants to have initiated and attended the initial arbitration proceedings, although aborted, and then to question the propriety of the arbitration agreement in the reinstituted hearing. We therefore hold that a party who signs an arbitration agreement, petitions a court for arbitration, then participates in the arbitration proceedings may not later avoid his agreement because of a claim that the other party did not sign the agreement.

In a subsidiary claim, the defendant asserts that the arbitrators exceeded their powers; General Statutes (Rev. to 1972) § 52-418(d); ¹⁰ in that they exceeded the scope of the submission by deciding the question of arbitrability. By this argument the defendant effectively seeks a second determination, pursuant to § 52-418, on the issue of whether there exists a binding agreement to arbitrate. We will not countenance such a claim.

In Waterbury Board of Education v. Waterbury Teachers Assn., 168 Conn. 54, 357 A.2d 466 (1975), we recognized that the arbitrability of a dispute, although properly raised on a motion to vacate, is a distinct claim which may not be reviewed pursuant to the specific proscriptions of § 52-418. " '[T]he court is bound by the arbitrator's determination unless that determination clearly falls within the proscriptions of § 52-418 of the General Statutes, or procedurally violates the parties' agreement.' Thus, the mere conformity of the submission to the award does not foreclose the court from reviewing whether that award is in violation of the parties' agreement." (Emphasis added.) Id., 63, 357 A.2d 466. In New Britain v. Connecticut State Board of Mediation and Arbitration, 178 Conn. 557, 560-61, 424 A.2d 263 (1979), we outlined two ways in which, in the ordinary case, a party may question the arbitrability of a particular issue. First, he may refuse to submit to arbitration at the outset and instead compel a judicial determination of the issue of arbitrability. His other alternative is to submit the issue in conjunction with the merits of the dispute to the arbitrators themselves. Id., 560, 424 A.2d 263. Left unanswered in New Britain, however, was the procedural question presented by this case: when a party to a pending case has refused to arbitrate voluntarily, thus requiring the other party, pursuant to General Statutes § 52-409, ¹¹ to compel arbitration by gaining a "judicial reconciliation" of the threshold issue of arbitrability; New Britain v. Connecticut State Board of Mediation and Arbitration, supra, 561, 424 A.2d 263; may the party who is forced to arbitrate later raise the arbitrability issue in the Superior Court as a basis for vacating an arbitration award? To be consistent with the view that a § 52-409 order requiring arbitration is not a judgment from which an appeal lies; Martin v. Schwarzschild, 174 Conn. 778, 380 A.2d 538 (1977); the issue of arbitrability necessarily must be reviewable upon application to the Superior Court. To hold otherwise would be to deny appellate review to a claim which we previously precluded from review on the grounds that it was premature. Thus, although we refuse to consider the defendant's claim of arbitrability as couched in the language of § 52-418, under these circumstances we recognize the issue as properly before us. To the extent that the trial court refused to consider the arbitrability of the dispute in light of the all inclusive language of the submission, the decision is erroneous. This error, however, is harmless, since we have previously rejected the merits of the defendant's arbitrability claim.

The defendant next claims that the arbitration award should be vacated because the arbitrators "exceeded their powers"; General Statutes (Rev. to 1972) § 52-418(d), by acting at all. The estate claims that in view of a stay granted by the trial court, Stapleton, J., ¹² in 1976, arbitration could not subsequently take place, even though the court,...