Scinto v. Sosin

• Citation: 51 Conn. App. 222,721 A.2d 552
• Decision Date: 15 December 1998
• Docket Number: (AC 17441)
• Court: Connecticut Court of Appeals
• Parties: BARBARA SCINTO ET AL. v. HOWARD SOSIN ET AL.

51 Conn. App. 222

721 A.2d 552

BARBARA SCINTO ET AL. v. HOWARD SOSIN ET AL.

(AC 17441)

Appellate Court of Connecticut.

Argued September 15, 1998.

Officially released December 15, 1998.

O'Connell, C. J., and Foti and Sullivan, JS. J. Daniel Sagarin, with whom were David A. Slossberg and Joseph F. McKeon, Jr., and, on the brief, Christopher C. Vaugh, for the appellants (defendants).

Louis R. Pepe, with whom was Richard F. Wareing, for the appellees (plaintiffs).

Opinion

FOTI, J.

The defendants, Howard B. Sosin and Susan F. Sosin, appeal from an order of the trial court granting a temporary and permanent injunction barring them from forcing the plaintiffs into arbitration regarding a construction contract between the defendants and the plaintiff R. D. Scinto, Inc. (R. D. Scinto). The plaintiffs Barbara Scinto and Robert Scinto are guarantors of the obligations of the corporate plaintiff. On appeal, the defendants claim that the trial court improperly (1) failed to defer the issue of arbitrability to the arbitration panel, (2) determined that the plaintiff guarantors were not bound to arbitrate, (3) limited the scope of the arbitration and (4) employed its injunctive powers. We affirm the judgment of the trial court.

Sometime in 1986, the individual plaintiffs, Barbara Scinto and Robert Scinto, began construction of a house in Fairfield. The Scintos were the owners of R. D. Scinto, a construction company that began construction on the project. The house was to be approximately 20,000 square feet and to cost several million dollars. In the spring of 1990, the Scintos began having financial difficulty. When banks and subcontractors began calling in the loans that the Scintos had taken out to finance the construction of their house, they decided to sell the house to pay off their debts.

In May or June, 1990, Robert Scinto received a telephone call from Howard B. Sosin, asking whether Scinto would be interested in selling the house. Scinto replied that he might be interested if the price was right. The defendants later viewed the unfinished house and decided to buy it.

In June, 1990, the two men entered into an oral contract (sale contract) for the sale of the unfinished house for a price of $5 million. They entered into another oral contract (construction contract) calling for R. D. Scinto to finish the construction of the house by October 1, 1991, for $3.6 million. The contracts were memorialized and executed on November 15, 1990.¹ In addition to the construction contract entered into by R. D. Scinto, the Scintos each executed personal guarantees of R. D. Scinto's performance of the construction contract. Article 9.1.7.1 of the construction contract provides: "Guarantee: For valuable consideration, Robert D. Scinto and Barbara A. Scinto jointly and severally, personally and expressly guarantee the performance of all of the terms and provisions of the Agreement by the Contractor without condition or exception." This clause appeared on the last page of the contract above the signature lines. Only Robert Scinto signed the construction contract, both as president of R. D. Scinto, and personally. Barbara Scinto, who was not present at the closing, signed a similar guarantee that was separate from the rest of the contract.²

R. D. Scinto began work on the house for the defendants following the execution of the construction contract. There were, however, numerous delays and problems with the construction. As of May, 1992, the house still was unfinished. On May 1, 1992, the defendants and R. D. Scinto executed "Addendum Number 2" to the construction contract, in which were several changes relating to the construction of the house and payment schedule. Additionally, the addendum contained the following clause: "For valuable consideration, paid by the Contractor to the Owner, Barbara A. Scinto is released by Owner as Contractor's Guarantor of the obligations and terms of the Agreement." In December, 1992, the house remained unfinished and over budget, and R. D. Scinto had been replaced by other contractors and subcontractors.

In addition to the guarantee clauses, the construction contract contained the following arbitration clause: "Any controversy or Claim arising out of or related to the Contract, or the breach thereof, shall be settled by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrator or arbitrators may be entered in any court having jurisdiction thereof, except controversies or Claims relating to aesthetic effect and except those waived as provided for in Subparagraph 4.3.5."

The defendants attempted to settle certain disputes with the plaintiffs under article 4.4 of the "General Conditions for the Contract for Construction." Article 4.4 required the parties to send their disputes to the architect for resolution. The project architect, Ferris Architects, was unable to resolve the disputes between the defendants and the plaintiffs. Therefore, the defendants, in November, 1996, commenced arbitration proceedings with the American Arbitration Association pursuant to article 4.5 of the general conditions.

On April 1, 1997, the plaintiffs instituted the present action seeking a temporary and permanent injunction barring the defendants from arbitrating any claims involving the guarantees and for any work done prior to November 15, 1990, and for the work performed by any contractors other than R. D. Scinto. The trial court held a full hearing allowing both sides to present arguments and testimony. Thereafter, the trial court allowed the parties to brief the issues. The trial court issued a temporary and permanent injunction barring the defendants from arbitrating against the Scintos, as guarantors, and against R. D. Scinto for any work done prior to November 15, 1990. The defendants appeal from that judgment and raise numerous claims.

I

The first issue we must decide is whether the trial court properly determined the issue of arbitrability. We conclude that it did.

The defendants argue that the policy of Connecticut courts is to encourage arbitration over litigation and that the trial court lacks jurisdiction to determine whether the parties agreed to arbitrate in the first place. We are not persuaded by this argument.

Although the courts of this state encourage arbitration as a means of alternative dispute resolution, there are limits to this policy. "Arbitration is a creature of contract and without a contractual agreement to arbitrate there can be no arbitration." Wesleyan University v. Rissil Construction Associates, Inc., 1 Conn. App. 351, 354, 472 A.2d 23, cert. denied, 193 Conn. 802, 474 A.2d 1259 (1984). "No one can be directed to arbitrate a dispute who has not previously agreed to do so...." Gores v. Rosenthal, 150 Conn. 554, 557, 192 A.2d 210 (1963); Batter Building Materials Co. v. Kirschner, 142 Conn. 1, 5, 110 A.2d 464 (1954); see Metal Products Workers Union, Local 1645, UAW-AFL-CIO v. Torrington Co., 358 F.2d 103, 106 (2d Cir. 1966) (no policy that favors forcing party who has not agreed to arbitrate to do so).

The law in Connecticut is clear. "`Whether a particular dispute is arbitrable is a question for the court, unless, by appropriate language, the parties have agreed to arbitrate that question, also.'" Weitz Co. v. Shoreline Care Ltd. Partnership, 39 Conn. App. 641, 644, 666 A.2d 835 (1995); College Plaza, Inc. v. Harlaco, Inc., 152 Conn. 707, 708, 206 A.2d 832 (1965). Whether the parties intended to submit the issue of arbitrability, as well as the merits of a claim, to an arbitrator clearly depends on the parties' intent. Whether the parties intended to arbitrate the issue of arbitrability may be determined from an express provision to that effect or from the use of broad terms. Welch Group, Inc. v. Creative Drywall, Inc., 215 Conn. 464, 467, 576 A.2d 153 (1990); Weitz Co. v. Shoreline Care Ltd. Partnership, supra, 644. Unless the agreement shows such intent, the determination of the question of arbitrability remains a function of the court. See United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 583 n.7, 80 S. Ct. 1347, 4 L. Ed. 2d 1409 (1960). The courts, however, must not fail to examine the plain language of the contract and look at it as a whole in determining the parties' intent. Weitz Co. v. Shoreline Care Ltd. Partnership, supra, 644-45.

In the present case, the defendants and the plaintiffs entered into a "Standard Form of Agreement Between Owner and Contractor," a boilerplate construction contract drafted by the American Institute of Architects. The parties merely filled in the blanks regarding the specific details. Article 1 of the construction contract states: "The Contract represents the entire and integrated agreement between the parties hereto and supersedes prior negotiations, representations or agreements, either written or oral." As mentioned previously, the contract also contained a very broad arbitration clause covering "[a]ny controversy or Claim arising out of or related to the Contract...."

The defendants rely on the broad language of the arbitration clause to support their claim that it encompasses the issue of arbitrability. The defendants' brief cites Connecticut case law supporting this claim. They rely on Gary Excavating, Inc. v. North Haven, 164 Conn. 119, 318 A.2d 84 (1972), in which the court held that "by virtue of the broad scope of [the arbitration clause], the appropriate body to hear claims regarding procedural prerequisites to arbitration must be the arbitration panel." Id., 125. The defendants also cite International Assn. of Fire Fighters, Local 1339, AFL-CIO v. Waterbury, 35 Conn. App. 775, 647 A.2d 361 (1994), in which this court followed that same line of reasoning. "The authority of an arbitrator to adjudicate the controversy is limited only if the agreement contains express language...