v. Rodriguez

• Decision Date: 12 September 2017
• Docket Number: (AC 38839).
• Citation: 169 A.3d 292,176 Conn.App. 392
• Court: Connecticut Court of Appeals
• Parties: A BETTER WAY WHOLESALE AUTOS, INC. v. Kiara RODRIGUEZ et al.

176 Conn.App. 392

169 A.3d 292

A BETTER WAY WHOLESALE AUTOS, INC.

v.Kiara RODRIGUEZ et al.

(AC 38839).

Appellate Court of Connecticut.

Argued April 17, 2017

Officially released September 12, 2017

Kenneth A. Votre, for the appellant (plaintiff).

Daniel S. Blinn, for the appellee (named defendant).

Proloy K. Das, with whom was Melissa A. Federico, for the appellee (defendant American Credit Acceptance, LLC).

Mullins, Beach and Harper, Js.

MULLINS, J.

The plaintiff, A Better Way Wholesale Autos, Inc. (A Better Way), appeals from the judgment of the trial court denying its application to vacate an arbitration award and granting the motions to confirm the arbitration award filed by the defendants, Kiara Rodriguez and American Credit Acceptance, LLC (finance company). A Better Way also appeals from the court's judgment modifying the arbitration award to include attorney's fees and costs to the finance company for its defense of the award in the Superior Court. On appeal, A Better Way claims that the trial court erred in (1) denying its application to vacate the award on the ground that the arbitrator's decision was beyond the scope of the parties' submission, and (2) ordering A Better Way to pay the attorney's fees and costs of the finance company in defending the arbitrator's award in the Superior Court.¹ We affirm the judgment of the trial court.

The following facts, as set forth by the trial court in its January 14, 2016 memorandum of decision and procedural history inform our review. "The underlying arbitration between the parties arises from the sale of a used 2006 Toyota Scion [vehicle] by A Better Way to ... Rodriguez. In this dispute, Rodriguez included [the finance company] as a defendant in its role as the assignee of the financing agreement in her retail installment sales contract with A Better Way.

"Rodriguez initiated the arbitration process by a written demand, dated June 4, 2014, for damages and the rescission of her purchase and sale agreement with A Better Way, as well as her financing agreement with [the finance company]. In the demand letter, she [stated that she] ‘revokes her acceptance of the vehicle,’ asserting, inter alia, a warranty violation. Importantly, the vehicle was left in the possession of A Better Way. She previously had written to A Better Way on March 21, 2014, stating that ‘[i]f you are unable to fix my car, then I would like to cancel the sale ....’ [Rodriguez'] letters were submitted, along with her demand for arbitration, to the American Arbitration Association on June 27, 2014.... In accordance with the agreement of the parties, the arbitration was conducted by the American Arbitration Association, with Attorney John R. Downey serving as arbitrator." (Citation omitted.)

"Rodriguez made her submission to arbitration pursuant to an arbitration clause with A Better Way which, in relevant part, provides: ‘Any claim or dispute, whether in contract, tort, statute or otherwise (including the interpretation and scope of this ... clause, and the arbitrability of the claim or dispute), between you and us or our employees, agents, successors or assigns, which arises out of or relates to your credit application, purchase or condition of this vehicle, this contract or any resulting transaction or relationship (including any such relationship with third parties who do not sign this contract) shall, at your or our election, be resolved by neutral, binding arbitration and not by a court action.’ ... Although the arbitration submission was made by Rodriguez pursuant to her retail installment sales contract with A Better Way, she included [the finance company] as a defendant because it was specifically identified in her contract as the assignee of the financing agreement."² (Citation omitted.)

"During the pendency of the arbitration process, Rodriguez settled with [the finance company] and, based upon alleged violations of their Dealer Agreement, [the finance company] brought cross claims against A Better Way.³ ... In its proposed findings and orders filed after the conclusion of the arbitration hearing, [the finance company] proposed the return of the [vehicle] to A Better Way. ...

"On May 12, 2015, Attorney Downey entered an Award of Arbitrator in favor of Rodriguez and [the finance company]. ... The award provides for the following payments to Rodriguez: (1) [Truth in Lending Act, 15 U.S.C. § 1601 et seq. (TILA) ] statutory damages of $1000; (2) [Connecticut Unfair Trade Practices Act, General Statutes § 42–110a et seq. (CUTPA) ] damages of $1000; (3) punitive damages of $2000; and (4) attorney's fees of $12,500. The award also provides for the following [as to the finance company]: (1) arbitration costs of $3700; (2) legal fees of $25,000; and (3) [the finance company's] return of the [vehicle] to A Better Way." (Citations omitted; footnotes altered.)

A Better Way, specifically pursuant to General Statutes § 52–418,⁴ filed an application to vacate the portion of the award that ordered the finance company to return the vehicle to A Better Way on the grounds that "[t]he parties to the arbitration did not state that possession of the vehicle was at issue in any of the pleadings before the arbitrator ... [and] the submission did not include a determination of the ownership of the vehicle." A Better Way contended that the arbitrator, therefore, had exceeded his powers in determining ownership of the vehicle.⁵ Rodriguez and the finance company each filed a motion to confirm the award; the finance company moved pursuant to the Federal Arbitration Act, 9 U.S.C. § 9, and Rodriguez moved pursuant to General Statutes § 52–417. The finance company also requested that it be reimbursed $28,245.92 for the legal fees and costs it incurred in defending the award in the Superior Court in light of A Better Way's application to vacate. At the time of the hearing, the finance company also argued that it anticipated incurring an additional $3840 in fees and costs for the hearing.

In a January 14, 2016 memorandum of decision, the court granted the motions to confirm the award, and it denied the application to vacate. Specifically, the court determined that title and possession of the vehicle always were at issue, and that this was evidenced by Rodriguez' original letter in which she sought to rescind the entire agreement. The court, therefore, found no basis upon which to vacate the award. As to the finance company's request for the payment of the attorney's fees it incurred in defending the award, the court found that, pursuant to section 25 of the dealer agreement and General Statutes § 52–419(b),⁶ the finance company was entitled to such reimbursement. The court then ordered that A Better Way reimburse the finance company $621.92 in costs and expenses and $20,000 in attorney's fees within thirty days. This appeal followed.⁷ Additional facts will be set forth as necessary.

I

A Better Way claims that the trial court erred in denying its application to vacate the award on the ground that the arbitrator's decision was beyond the scope of the parties' submission in that the title to the vehicle was not within that submission. It further contends that the award should be considered in a way similar to the mosaic rule⁸ in a family matter and that it must be vacated in its entirety because the order that the finance company return the vehicle to A Better Way was outside the scope of the parties' submission. Accordingly, A Better Way argues, the court improperly denied its application to vacate the award. The finance company and Rodriguez argue that the court made a proper determination that the submission was unrestricted and that possession and title to the vehicle always was at issue, and, therefore, the arbitrator acted within his authority in determining who should take possession of the vehicle.⁹ We agree that the court properly denied A Better Way's application to vacate the award of the arbitrator.

We set forth the standard of review. "Arbitration is a creature of contract and the parties themselves, by the terms of their submission, define the powers of the arbitrators. ... The authority of an arbitrator to adjudicate the controversy is limited only if the agreement contains express language restricting the breadth of issues, reserving explicit rights, or conditioning the award on court review. In the absence of any such qualifications, an agreement is unrestricted." (Citation omitted; emphasis added; internal quotation marks omitted.) LaFrance v. Lodmell , 322 Conn. 828, 850–51, 144 A.3d 373 (2016).

"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. ...

Garrity v. McCaskey , 223 Conn. 1, 4–5, 612 A.2d 742 (1992). Accordingly, the factual findings of the arbitrator ... are not subject to judicial review. Burr Road Operating Co. II, LLC v. New England Health Care Employees Union, District 1199 , 316 Conn. 618, 638, 114 A.3d 144 (2015) ; see also Harty v. Cantor Fitzgerald & Co. , 275 Conn. 72, 80, 881 A.2d 139 (2005) ( [u]nder an unrestricted submission, the arbitrators' decision is considered final and binding; thus the courts will not review the evidence considered by the arbitrators nor will they review the award for errors of law or fact ...)." (Internal quotation marks omitted.) Norwalk Police Union, Local 1727, Council 15, AFSCME, AFL–CIO v. Norwalk , 324 Conn. 618, 628–29, 153 A.3d 1280 (2017).

"The resulting award can be reviewed, however, to determine if the award conforms to the submission. ... Garrity v. McCaskey , supra, 223 Conn. at 4, 612 A.2d 742. Such a limited scope of judicial review is warranted given the fact that the parties voluntarily...