Shore v. HAVERSON ARCHITECTURE AND DESIGN, PC

• Decision Date: 06 December 2005
• Docket Number: (AC 25945)
• Citation: 92 Conn. App. 469,886 A.2d 837
• Court: Connecticut Court of Appeals
• Parties: DEBRA SHORE ET AL. v. HAVERSON ARCHITECTURE AND DESIGN, P.C. HAVERSON ARCHITECTURE AND DESIGN, P.C. v. MARC P. SHORE ET AL.

92 Conn. App. 469

886 A.2d 837

DEBRA SHORE ET AL. v. HAVERSON ARCHITECTURE AND DESIGN, P.C.

HAVERSON ARCHITECTURE AND DESIGN, P.C. v. MARC P. SHORE ET AL.

(AC 25945)

Appellate Court of Connecticut.

Argued September 13, 2005.

Officially released December 6, 2005.

Before: Bishop, McLachlan and Foti, Js.

Neal L. Moskow, with whom, on the brief was Deborah M. Garskof, for the appellant (defendant in the first case, plaintiff in the second case).

James R. Fogarty, with whom, on the brief was Gerald G. Reidy, for the appellees (plaintiffs in the first case, defendants in the second case).

Opinion

McLACHLAN, J.

In these consolidated cases involving an arbitration award, Haverson Architecture & Design, P.C. (Haverson) appeals from the judgment of the trial court, denying its application to vacate the award rendered in favor of Marc P. Shore and Debra Shore and granting the Shores' application to confirm the award.¹ On appeal, Haverson claims that the court improperly (1) confirmed the arbitrator's award, (2) refused to hear testimony from the arbitrator, (3) refused to grant Haverson's motion for reconsideration and (4) granted the Shores' application for a prejudgment remedy. We affirm the judgment of the trial court.

On June 26, 2001, the Shores hired Haverson to perform architectural services for their main house and carriage house. Pursuant to a written agreement, the parties agreed to submit claims or disputes to arbitration in accordance with the construction industry arbitration rules of the American Arbitration Association (association). On or about January 24, 2003, Haverson filed a demand for arbitration with the association, claiming that the Shores owed it money for various items. The Shores denied Haverson's claims and submitted counterclaims for construction problems and for substantial underestimation of the construction costs.

Arbitration hearings were conducted on four days in July, 2003, and then again on two days in February, 2004. Posthearing briefs were submitted on March 15 and 16, 2004. In a letter dated March 22, 2004, the association notified the parties that (1) the posthearing briefs had been transmitted to the arbitrator on March 16, 2004, (2) the arbitrator had declared that the hearings would be closed as of March 29, 2004, and (3) the arbitrator would render the award within thirty days from the closing of the hearings, April 28, 2004.

On April 28, 2004, the association sent the parties a copy of the arbitrator's written award by facsimile transmission. The award denied all of Haverson's claims and granted both of the Shores' counterclaims, awarding the Shores $89,200. On April 30, 2004, the association sent the parties, by facsimile transmission, a copy of the arbitrator's modification of award, signed on April 29, 2004. The modification added two sentences that had been cut off at the bottom of the first page of the original award and did not change the substance of the original award.

On May 12, 2004, Haverson wrote to the association, requesting correction or vacation of the award. The association denied the request on June 2, 2004. On June 16, 2004, the Shores filed an application in court to confirm the award. On July 20, 2004, Haverson filed an application in court to vacate the award on the grounds that (1) the award was not timely made, (2) the arbitrator failed to abide by the association's rules and procedure and (3) the award was arbitrary, capricious and without support in the record. The actions were consolidated, and on September 7, 2004, the court granted the Shores' application to confirm the award and denied Haverson's application to vacate. On October 25, 2004, the court denied Haverson's motion for reconsideration and granted the Shores' application for a prejudgment remedy. This appeal followed. We address each claim in turn.

I

We first address Haverson's claim that the court improperly confirmed the decision of the arbitrator. Specifically, Haverson claims that (1) the arbitrator failed to render an award within the time frame required by the association's rules, as provided in the submission, (2) the award rendered by the arbitrator on April 28, 2004, was incomplete and (3) the arbitrator failed to respond to a request to correct the award.

In determining whether the court improperly upheld the arbitration award, we first set forth our standard of review. "Judicial review of arbitral decisions is narrowly confined. . . . When the parties agree to arbitration and establish the authority of the arbitrator through the terms of their submission, the extent of our judicial review of the award is delineated by the scope of the parties' agreement. . . . When the scope of the submission is unrestricted, the resulting award is not subject to de novo review even for errors of law so long as the award conforms to the submission. . . . Because we favor arbitration as a means of settling private disputes, we undertake judicial review of arbitration awards in a manner designed to minimize interference with an efficient and economical system of alternative dispute resolution." Industrial Risk Insurers v.Hartford Steam Boiler Inspection & Ins. Co., 273 Conn. 86, 92-93, 868 A.2d 47 (2005). Here, the parties' arbitration agreement was unrestricted,² thus limiting the scope of review. Nonetheless, courts can vacate an award even in the case of an unrestricted submission when "(1) the award rules on the constitutionality of a statute . . . (2) the award violates clear public policy . . . [or] (3) the award contravenes one or more of the statutory proscriptions of [General Statutes] § 52-418. . . . [Section] 52-418 (a) (4) provides that an arbitration award shall be vacated if the arbitrators have exceeded their powers or so imperfectly executed them that a mutual, final and definite award upon the subject matter submitted was not made." (Citation omitted; internal quotation marks omitted.) Industrial Risk Insurers v. Hartford Steam Boiler Inspection & Ins. Co., supra, 94. Here, Haverson claims that the arbitrator's award contravenes the proscriptions of § 52-418 (a) (4) because a mutual, final and definite award was not made. We disagree.

Our Supreme Court in Industrial Risk Insurers stated: "In our construction of § 52-418 (a) (4), we have, as a general matter, looked to a comparison of the award with the submission to determine whether the arbitrators have exceeded their powers. . . . [A]n award that manifests an egregious or patently irrational application of the law is an award that should be set aside pursuant to § 52-418 (a) (4) because the arbitrator has exceeded [his] powers or so imperfectly executed them that a mutual, final and definite award upon the subject matter submitted was not made." (Citations omitted; internal quotation marks omitted.) Id., 94-95. In this case, the arbitrator was bound to abide by the construction industry arbitration rules of the association. The arbitrator did not exceed his powers under those rules or so imperfectly execute them that a mutual, final and definite award was not made.

A

Haverson claims that the arbitrator failed to render an award within the time frame required by the submission. Rule 42 of the construction industry arbitration rules provides that "[t]he award shall be made promptly by the arbitrator and, unless otherwise agreed by the parties or specified by law, no later than 30 calendar days from the date of closing the hearing, or, if oral hearings have been waived, from the date of the [association's] transmittal of the final statements and proofs to the arbitrator." The arbitrator informed the parties on March 22, 2004, that the hearing would be closed on March 29, 2004, therefore requiring him to render an award by April 28, 2004. Haverson contends that the closing date should have been on March 16, 2004, when the briefs were transmitted to the arbitrator, rather than on March 29, 2004. The arbitrator, however, did not exceed his powers under the association's rules when he chose March 29 as the official closing date. Rule 36 provides that "the arbitrator shall declare the hearing closed" when he is satisfied that the parties' presentation is complete. "[T]he hearing shall be declared closed as of the final date set by the arbitrator for the receipt of documents, responses [as provided in rule 33],³ or briefs." Here, it was reasonable for the arbitrator to choose March 29, 2004, as the closing date.⁴ It appears that on the final day of hearings, the arbitrator expressly permitted the parties to take additional time, if necessary, to submit further documentary evidence. The parties did not inform the arbitrator that they agreed not to file further documents.⁵

Haverson additionally claims that the arbitrator improperly extended the time allowed for the award under rule 39.⁶ The arbitrator did not, however, extend the thirty day time frame for rendering the award; he merely set the closing date to allow for the submission of additional documents. The arbitrator acted within the rules governing such submission and did not exceed his powers.

The Shores claim that Haverson waived any objection for noncompliance with the association's rules. They argue that under rule 38,⁷ if a party knows that one of the rules has not been complied with, he waives his ability to object on that ground unless he states his objection in writing before proceeding with the arbitration. The association's letter of March 22, 2004, stated that the hearing would be closed as of March 29, 2004, and that the deadline for the award was April 28, 2004. Haverson did not raise any objection to the March 29, 2004 closing date until after the arbitrator rendered the award. We agree that Haverson was too late to raise its objection after the award had been rendered.

Our Supreme Court in Diamond Fertiliser & Chemical Corp. v. Commodities Trading International Corp., 211 Conn. 541, 560 A.2d 419 (1989), held that the plaintiff had waived any...