Welch Group, Inc. v. Creative Drywall, Inc., 13844

• Decision Date: 26 June 1990
• Docket Number: No. 13844,13844
• Citation: 215 Conn. 464,576 A.2d 153
• Court: Connecticut Supreme Court
• Parties: The WELCH GROUP, INC. v. CREATIVE DRYWALL, INC.

Page 153

576 A.2d 153

215 Conn. 464

The WELCH GROUP, INC. v. CREATIVE DRYWALL, INC.

No. 13844.

Supreme Court of Connecticut.

Argued April 10, 1990.

Decided June 26, 1990.

Thomas G. Librizzi, with whom, on the brief, was Mary A. Glassman, Hartford, for appellant (plaintiff).

James N. Royster, Hartford, with whom, on the brief, was Karen W. Francolini, Canton, for appellee (defendant).

Before PETERS, C.J., and SHEA, CALLAHAN, COVELLO and HULL, JJ.

COVELLO, Associate Justice.

This is an appeal from a judgment that denied the plaintiff's application for an injunction restraining the defendant from proceeding with arbitration. The parties disagreed as to whether their dispute was arbitrable. The sole issue presented is whether the arbitrability of the dispute was to be determined by the arbitrator or by the trial court. We conclude that arbitrability, absent the parties' clear agreement to the contrary, is a factual question to be determined by the trial court. Therefore, we reverse the judgment of the trial court and remand the matter for further proceedings.

Examination of the record discloses the following factual and procedural history that is not in dispute. On February 15, 1989, the plaintiff, Tbe Welch Group, Inc., signed a contract with the defendant, Creative Drywall, Inc., whereby the defendant was to perform certain services for the plaintiff in connection with a construction project known as Bigelow Commons, Phase II, in Enfield. The parties' agreement incorporated by reference the terms of an earlier agreement between the plaintiff and Bigelow Construction Corporation, the general contractor for the project.

The incorporated text contained two paragraphs concerning disputes. The first of such paragraphs stated: "All claims, disputes and other matters in question ... arising from or relating to this Agreement or breach thereof shall be decided by any court having jurisdiction thereof...." ¹ The second paragraph providedS "All claims, disputes and other matters in question not involving more than the sum of One Hundred Thousand Dollars ($100,000) arising out of, or relating to, this Agreement or the breach thereof ... shall be decided by arbitration ... unless the parties mutually agree otherwise...."

On May 9, 1989, the defendant filed eight separate demands for arbitration with the American Arbitration Association claiming in each instance that: "It is owed money for base contract work and for numerous separate items of extra work.... The amount of money involved in this demand is less than $100,000." The plaintiff filed the instant action claiming: (1) that the disputed amount for "base contract work" was $367,198.22; (2) that the disputed amount for "extra work" was $355,891.21; and (3) that the matter was therefore not subject to arbitration since the claims were in excess of $100,000.

On September 11, 1989, following a contested hearing, the trial court concluded that the threshold issue of the arbitrability of this dispute was to be determined by the arbitrator. The trial court therefore rendered judgment denying the plaintiff's application for an injunction. The plaintiff appealed to the Appellate Court. We thereafter transferred the matter to ourselves pursuant to Practice Book § 4023.

"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." Frager v. Pennsylvania General Ins. Co., 155 Conn. 270, 274, 231 A.2d 531 (1967). "The intention to have arbitrability determined by an arbitrator can be manifested by an express provision or through the use of broad terms to describe the scope of arbitration, such as 'all questions in dispute and all claims arising out of' the contract or 'any dispute that cannot be adjuicated.' " Board of Education v. Frey, 174 Conn. 578, 581, 392 A.2d 466 (1978).

Further, "[t]he 'positive assurance' test of arbitrability ... is the law in this state.... 'Under the positive assurance test "... [a]n order to arbitrate the particular [dispute] should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute. Doubts should be resolved in favor of coverage." ' Board of Education v. Frey, supra, at 582, 392 A.2d 466." (Emphasis in original.) John A. Errichetti Associates v. Boutin, 183 Conn. 481, 488-89, 439 A.2d 416 (1981).

The defendant relying on what it characterizes as the "broad terms" of the arbitration clause, asks us to focus on the language "[a]ll claims, disputes and other matters in question ... arising out of, or relating to, this Agreement or the breach thereof ... shall be decided by...