Stone Harbour Construction, LLC v. Nations Roof of New England, LLC

• Decision Date: 29 January 2020
• Docket Number: FSTCV196041222S
• Court: Superior Court of Connecticut
• Parties: Stone Harbour Construction, LLC v. Nations Roof of New England, LLC

Stone Harbour Construction, LLC v. Nations Roof of New England, LLC

No. FSTCV196041222S

Superior Court of Connecticut, Judicial District of Stamford-Norwalk, Stamford

January 29, 2020

UNPUBLISHED OPINION

Judge (with first initial, no space for Sullivan, Dorsey, and Walsh): Krumeich, Edward T., J.

MEMORANDUM OF DECISION

Krumeich, J.

Defendant Nations Roof of New England, LLC ("Nations") has moved to stay this action pursuant to C.G.S. § 52-409 pending arbitration. Nations cites the arbitration provision in its proposal to plaintiff Stone Harbour Construction, LLC ("Stone Harbour") as the basis for this motion. Stone Harbour asserts it never agreed to arbitrate and argues that the proposal was never incorporated into the subcontract between the parties. A hearing was held on January 27, 2020, at which each party presented evidence in support of its position.

Connecticut General Statutes Section 52-409 provides:

If any action for legal or equitable relief or other proceeding is brought by any party to a written agreement to arbitrate, the court in which the action or proceeding is pending, upon being satisfied that any issue involved in the action or proceeding is referable to arbitration under the agreement, shall, on motion of any party to the arbitration agreement, stay the action or proceeding until an arbitration has been had in compliance with the agreement, provided the person making application for the stay shall be ready and willing to proceed with the arbitration.

Nations is ready and willing to arbitrate the dispute. The question to be decided is whether Stone Harbour ever agreed to arbitrate the disputes relating to the construction project alleged in the complaint in the written subcontract between the parties.^[1] See Salomon Smith Barney, Inc. v Controne, 81 Conn.App. 761, 770 (2004) ("the task of the court is to determine whether the parties did, in fact, enter into an agreement and whether the agreement provides for arbitration") quoting Success Centers, Inc. v. Huntington Learning Centers, Inc., 223 Conn. 761, 770 (1992). The arbitrability of the disputes is an issue for the Court to decide as a matter of law, where, as here, the arbitration provision does not reserve the issue of arbitrability to the arbitrator. See e.g., Stack v. Hartford Distributors, Inc., 179 Conn.App. 22, 28 (2017).

It is well settled that "arbitration is a creature of contract" and no person may be compelled to arbitrate a dispute unless he or she has agreed to do so. See e.g., Board of Education v. New Milford Educational Assoc., 331 Conn. 524, 541 (2019)." ‘[A party] can be compelled to arbitrate a dispute only if, to the extent that, and in the manner which, [it] has agreed so to do ... Because arbitration is based on a contractual relationship, a party who has not consented cannot be forced to arbitrate a dispute ..." Id. (citation omitted).

"The issue of whether the parties to a contract have agreed to arbitration is controlled by their intention ... The parties’ intent is determined from the language used interpreted in the light of the situation of the parties and the circumstances connected with the transaction ... [T]he intent of the parties is to be ascertained by a fair and reasonable construction of the written words and ... the language used must be accorded its common, natural, and ordinary meaning and usage where it can be sensibly applied to the subject matter of the contract ... Where the language of the contract is clear and unambiguous, the contract is to be given effect according to its terms ..." State v. Philip Morris, Inc., 289 Conn. 633, 642-43 (2008) (citations omitted). "Although the intention of the parties typically is a question of fact, if their intention is set forth clearly and unambiguously, it is a question of law." Id. (citation omitted).

The arbitration provision in the terms and conditions of the proposal is broad: "[a]ny controversy or claim arising out of or relating to this work order, or the breach thereof, shall be settled by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association ..." The complaint alleges Nations breached the subcontract by walking off the project after a dispute about payment and in failing to complete the work in a reasonable and workmanlike manner. These claims would be arbitrable if the proposal’s arbitration provision is included in the subcontract. See generally Sacred Heart Teachers’ Assoc. v. Sacred Heart High School Corp., 65 Conn.App. 195, 200 (2001) ("positive assurance" test).

Gerard Kiley ("Kiley"), the President and owner of Stone Harbour, testified he signed the subcontract and did not intend the terms to include the arbitration provision in the proposal. He testified he never would agree to accept a subcontractor’s terms and conditions, that the general contractor’s terms and conditions apply, and they do not include binding arbitration. The subcontract is signed on behalf of Stone Harbour in two places, a two-page document headed "Subcontract Agreement (Contractor/Subcontractor)," which Kiley testified was required by the insurance company, and the Subcontract cover sheet. Kiley did not sign the "Customer Acceptance" signature line in the proposal. He did not initial any of the pages in the packet of documents behind the Subcontract cover sheet that was sent by Stone Harbour to Nations on January 13, 2017 as the "Fully executed Contract."

In construing a contract a court ordinarily ascertains the parties’ intentions from the language used by the parties to the contract and the surrounding circumstances rather than a parties’ subjective perceptions. See generally Kaplan v. Scheer, 182 Conn.App. 488, 495-99 (2018). Where, as here, a contract is claimed to consist of separately drafted documents the intention of the parties to incorporate them into a single contract may be gleaned from the language used in the contract documents that refer to the other to comprise the understanding of the parties. See e.g., Allstate Life Ins. Co. v. BFA Limited Partnership, 287 Conn. 307, 324 (2008).^[2] In addition, "[w]hen there are multiple writings regarding the same transaction, the writings should be considered together" in construing the contract. United Illuminating Co. v. Wisvest-Connecticut, LLC, 259 Conn. 665, 671 (2002).^[3] "Construing multiple agreements together may be appropriate when the contracts are ‘connected by reference and subject-matter ... ‘" Georgetown Mill Residential, 2009 WL 1706891 *4 (citation omitted). A court may also consider whether there is a "significant interrelationship between separate documents, without conflicting provisions ..." such as where they concern the same parties and subject matter and are drafted and exchanged contemporaneously. See Thurston v. Thurston Associates, LLC, 2019 WL 3248551 *3 (Conn.Super. 2019) (Wilson, J.) [68 Conn.L.Rptr. 746].

Here the circumstances under which the documents were drafted and exchanged is compelling evidence the parties intended them to be construed as parts of a single subcontract. On or about October 20, 2016, Nations sent Stone Harbour its proposal to do the roofing work. Evidently during the period leading up to execution of the subcontract certain documents were provided by Stone Harbour to Elms with the expectation they would be included in the subcontract to be executed. On or about January 11, 2017, Kevin Elms ("Elms") of Nations sent to Stone Harbour the following documents that were returned by Stone Harbour as the "Fully executed Contract" on January 13, 2017: (1) the subcontract cover sheet prepared by Stone Harbour that generally described the work as "Roof & Deck insulation (sic)" and stated the "subcontract amount" of $223, 700, which was signed by Elms on January 11, 2017 and by Kiley on January 13, 2017; (2) the October 20, 2016 proposal from Nations, initialed by Elms, that described the work, inclusions, exclusions, alternates and unit prices and also stated the terms and conditions under which Nations undertook the project; (3) "Exhibit A-Scope of Work" that was a list of specifications of the work on which the proposal was based, prepared by Stone Harbour on September 9, 2016, initialed by Elms and signed by him on December 5, 2016; (4) "Current Drawing...