2007 Ct. Sup. 6070
Docket No. HDSP-134463Connecticut Superior Court Judicial District of District of Hartford, Housing Session
May 18, 2007
MEMORANDUM OF DECISION PLAINTIFF’S AFFIDAVIT RE: NONCOMPLIANCE WITH STIPULATION AND APPLICATION FOR IMMEDIATE EXECUTION DEFENDANT’S MOTION TO SET ASIDE
BENTIVEGNA, J.
I STATEMENT OF CASE
This is a commercial summary process action based on nonpayment of rent and lapse of time. The plaintiff seeks an execution based on the defendant’s failure to pay an arbitration award. The defendant seeks to set aside the award.
II FINDINGS OF FACT / PROCEDURAL HISTORY
The following facts and procedural history are relevant to the resolution of this matter.
The original complaint was served on September 6, 2005. On November 16, 2006, the parties entered into a stipulated agreement, in which, the parties agreed to submit to arbitration. The agreement stated:
Judgment of possession in favor of the Plaintiff with a final stay of execution until the earlier of the Lease Execution Date, defined below, or the Payment Default date, defined below, but in no event later than April 17, 2007, upon the following conditions:
1. The parties agree that they will submit their dispute about rental arrearage and/or use and occupancy arrearage to Attorney Tim Johnston for CT Page 6071 binding arbitration of that dispute. The commercial rules of the AAA will control, but the AAA is not required to administer said arbitration. In the event Amsden does not pay the arrearage determined by the arbitrator, Lyons may have the award entered as a judgment in the superior court.
2. The parties agree that they will act in good faith to expedite scheduling said arbitration and will conclude said arbitration as soon as possible, but not later than March 17, 2007 in order to give the arbitrator 30 days to render an award.
3. Amsden shall pay any arrearage determined by the arbitrator within 10 days of said award. If Amsden fails to make payment within 10 days, the Payment Default Date, the stay of execution above shall terminate and Lyons may apply for an immediate execution.
4. Provided Amsden pays the arrearage, if any, awarded by the arbitrator, the parties will execute a lease substantially in the form of the Exhibit A attached hereto within 10 days of payment, the Lease Execution Date, in which case the judgment of possession shall be null and void, and Lyons will consent to and facilitate the opening of the judgment to reflect the same.
5. Amsden agrees to pay use an occupancy commencing on December 1, 2006 until the Lease Execution Date.”
On March 27, 2007, the arbitrator awarded the plaintiff the sum of $6,014.35 as back rent and/or use and occupancy. The defendant did not pay the award within the time required. On April 11, 2007, the plaintiff filed an affidavit re: noncompliance with stipulation and application for immediate execution. On April 12, 2007, the defendant filed a motion to set aside. A plaintiffs opposition to defendant’s motion to set aside was filed on April 20, 2007.
CT Page 6072 III DISCUSSION A Arbitration
“Arbitration is the voluntary submission . . . of an existing or future dispute to a disinterested person or persons for final determination. . . . Arbitration affords a contractual remedy with a view toward expediting disputes. . . . Because arbitration is a matter of contract, no one may be compelled to arbitrate a dispute outside the scope of the agreement, which constitutes the charter of the entire arbitration proceeding and defines and limits the issues to be decided by the arbitrators. . . . Arbitration is favored by the courts because it is intended to avoid the formalities, delay, expense and vexation of ordinary litigation. . . . The autonomy of voluntary submission to arbitration requires a minimum of judicial intrusion.” (Citations omitted; internal quotation marks omitted.)Total Property Services of New England, Inc. v. Q.S.C.V, Inc., 30 Conn. App. 580, 585-86, 621 A.2d 316 (1993).
“Agreements that end lawsuits are contracts. . . .” (Internal quotation marks omitted.) Audubon Parking Associates Ltd. Partnership v. Barclay Stubbs, Inc., 225 Conn. 804, 811, 626 A.2d 729 (1993); Se Industrial Risk Insurers v. Hartford Steam Boiler Inspection Ins. Co., 258 Conn. 101, 779 A.2d 737 (2001). In Industrial Risk Insurers, the parties agreed to submit to arbitration to settle pending civil lawsuits. Industrial Risk Insurers v. Hartford Steam Boiler Inspection Ins. Co., supra, 258 Conn. 105.
“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. . . .
“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. . . . Under an unrestricted submission, CT Page 6073 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. . . . The resulting award can be reviewed, however, to determine if the award conforms to the submission. . . . Such a limited scope of judicial review is warranted given the fact that the parties voluntarily bargained for the decision of the arbitrator and, as such, the parties are presumed to have assumed the risks of and waived objections to that decision. . . . It is clear that a party cannot object to an award which accomplishes precisely what the arbitrators were authorized to do merely because that party dislikes the results. . . . The significance, therefore, of a determination that an arbitration submission was unrestricted or restricted is not to determine what the arbitrators are obligated to do, but to determine the scope of judicial review of what they have done. Put another way, the submission tells the arbitrators what they are obligated to decide. The determination by a court of whether the submission was restricted or unrestricted tells the court what its scope of review is regarding the arbitrators’ decision.” (Citations omitted; internal quotation marks omitted.) Industrial Risk Insurers v. Hartford Steam Boiler Inspection Ins. Co., supra, 258 Conn. 109-110. “Furthermore, in applying this general rule of deference to an arbitrator’s award, [e]very reasonable presumption and intendment will be made in favor of the [arbitral] award and of the arbitrators’ acts and proceedings.” (Citations omitted; internal quotation marks omitted.) State v. New England Health Care Employees Union, 271 Conn. 127, 134, 855 A.2d 964 (2004).
“A submission is unrestricted unless otherwise agreed by the parties.” (Internal quotation marks omitted.) Industrial Risk Insurers v. Hartford Steam Boiler Inspection Ins. Co., supra, 258 Conn. 112. If “neither the submission formulated by the arbitrator, nor the issues suggested by the parties, contained conditional language, the submission at issue is unrestrictive.” (Internal quotation marks omitted.) Id.
“If the parties engaged in voluntary arbitration, the trial court’s standard of review, provided that the submission was unrestricted, would be limited to whether the award conformed to the submission. . . . If the parties engaged in voluntary, but restricted, arbitration, the trial court’s standard of review would be broader depending on the specific restriction. For example, a typical restriction is that the arbitrators’ award must conform to the law. Had the parties restricted the authority of the arbitrators by including in their arbitration agreement a proviso CT Page 6074 that the arbitrators’ award must not be contrary to law, the court would have been bound to enforce the restriction.” (Citation omitted; internal quotation marks omitted.) Maluszewski v. Allstate Ins. Co., 34 Conn. App. 27, 32, 640 A.2d 129 (1994), cert. denied, 229 Conn. 921, 642 A.2d 1214 (1994). “If the parties engaged in compulsory arbitration . . . the reviewing court must conduct a de novo review of the interpretation and application of the law by the arbitrators.” (Internal quotation marks omitted.) Connecticut Ins. Guaranty Assn. v. Zasun, 52 Conn. App. 212, 222, 725 A.2d 406 (1999).
In the present matter, the parties voluntarily entered into a stipulated agreement to resolve the summary process action. The agreement states in part: “The parties agree that they will submit their dispute about rental arrearage and/or use and occupancy arrearage to Attorney Tim Johnston for binding arbitration of that dispute. The commercial rules of the AAA will control, but the AAA is not required to administer said arbitration.” The stipulation did not contain any express conditional language restricting the submission, including language restricting the breadth of issues, reserving explicit rights or conditioning the award on court review. Accordingly, the submission in this case was voluntary and unrestricted.
B Motion to Set Aside (1) Applicability of Practice Book § 17-4
The defendant has moved to set aside the arbitration award pursuant to Practice Book § 17-4.[1] Under this section, any civil judgment or decree may be opened or set aside if a motion to open or set aside is filed within four months of the entry of judgment.
The plaintiff argues that the defendant’s motion to set aside is defective because Practice Book § 17-4 applies to setting aside or opening judgments, not an arbitration decision. The appropriate avenue to set aside or vacate an arbitration award is General Statutes §52-420, titled “Motion to confirm, vacate or modify award.”
The plaintiff is correct. Nevertheless, for the sake of judicial economy, the court will consider the defendant’s motions as a request to vacate the arbitration award pursuant to General Statutes § 52-420.[2]
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(2) Vacating an Arbitration Award
Pursuant to the November 16, 2006 stipulation, the parties agreed to resolve the eviction action by submitting to arbitration. On March 27, 2007, the arbitrator issued an award in favor of the plaintiff in the amount of $6,014.35. The defendant refused to pay the award in the time required. She now argues that the arbitration award should be vacated because “the arbitrator’s decision was inconsistent with the facts and law to be applied . . .”
“The well established general rule is that [w]hen 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. . . .
“A challenge of the arbitrator’s authority is limited to a comparison of the award to the submission. . . . Where the submission does not otherwise state, the arbitrators are empowered to decide factual and legal questions and an award cannot be vacated on the grounds that the construction placed upon the facts or the interpretation of the agreement by the arbitrators was erroneous. Courts will not review the evidence nor, where the submission is unrestricted, will they review the arbitrators’ decision of the legal questions involved. . . . The party challenging the award bears the burden of producing evidence sufficient to demonstrate a violation of § 52-418.” (Citations omitted; internal quotation marks omitted.) Industrial Risk Insurers v. Hartford Steam Boiler Inspection Ins. Co., supra, 258 Conn. 114-115.
General Statutes § 52-418 (a), titled “Vacating award,” provides: “Upon the application of any party to an arbitration, the superior court for the judicial district in which one of the parties resides or, in a controversy concerning land, for the judicial district in which the land is situated or, when the court is not in session, any judge thereof, shall make an order vacating the award if it finds any of the following defects: (1) If the award has been procured by corruption, fraud or undue means; (2) if there has been evident partiality or corruption on the part of any arbitrator; (3) if the arbitrators have been guilty of CT Page 6076 misconduct in refusing to postpone the hearing upon sufficient cause shown or in refusing to hear evidence pertinent and material to the controversy or of any other action by which the rights of any party have been prejudiced; or (4) 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.”
The courts also recognize “two narrow common-law bases, as opposed to statutory bases under General Statutes § 52-418, for vacating an award rendered pursuant to an unrestricted submission: (1) the award rules on the constitutionality of a statute; and (2) the award violates clear public policy.” (Internal quotation marks omitted.) State v. New England Health Care Employees Union, supra, 271 Conn. 134.
(3) Analysis
With these legal principles in mind, the court examines the arbitration award in this case.
The defendant argues that the award should be set aside because the decision was not consistent with the facts and the applicable law. The court finds that the reason proffered by the defendant is an insufficient basis to vacate the award. The parties bargained for arbitration. They both assumed the risks involved. The submission was voluntary and unrestricted. An arbitrator is empowered to decide legal and factual questions. The award conforms to the submission. The defendant cannot now object to the award because she dislikes the results. The defendant has neither sustained its burden of producing evidence sufficient to establish that the award did not conform to the submission, nor proved any of the statutory or common law bases to vacate the arbitration award.
At the May 14, 2007 hearing, the defendant presented evidence that a certificate of occupancy was never issued for a permit. The parties were provided with a copy of a recent Supreme Court decision, A and M Towing and Recovery, Inc. v. Bernard Guay Et Al., SC 17717 (2007), and asked to comment. The defendant argued on public policy grounds that the plaintiff was not able to recover rent without a certificate of occupancy. The plaintiff argued, in part, that this issue is not relevant to whether an arbitration award should be vacated. Nonetheless, in light of A and M Towing and Recovery, Inc., the court will address this issue. Based on the evidence presented, the court finds that the CT Page 6077 defendant has failed to demonstrate that the plaintiff’s failure to obtain a certificate of occupancy materially affected the health and safety of persons on the premises. The court is not persuaded by the defendant’s public policy argument.
For all these reasons, the court must deny the defendant’s motion to set aside.
C Affidavit re: Noncompliance with Stipulation and Applicationfor Immediate Execution
Practice Book § 17-53, tiltled “Summary Process Executions,” provides: “Whenever a summary process execution is requested because of a violation of a term in a judgment by stipulation or a judgment with a stay of execution beyond the statutory stay, a hearing shall be required. If the violation consists of nonpayment of a sum certain, an affidavit with service certified in accordance with Sections 10-12
through 10-17 shall be accepted in lieu of a hearing unless an objection to the execution is filed by the defendant prior to the issuance of the execution. The execution shall issue on the third business day after the filing of the affidavit.”
The court must evaluate the equitable considerations in determining whether an execution should issue. In East Hartford Housing Authority v. Parker, Superior Court, judicial district of Hartford, Docket No. SPH 91 1163027 (August 7, 1992, Holzberg, J.) (7 Conn. L. Rptr. 422), the court set forth the following analytic framework for evaluating post-judgment equity issues: 1) Whether, in the absence of equitable relief, the defendant will suffer a loss wholly disproportionate to the plaintiff? 2) Whether the injury to the plaintiff is reparable?
3) What is the reason for the noncompliance and the defendant’s responsibility?; and 4) What is the extent to which the defendant has demonstrated good faith in its dealing with the plaintiff?
(1) Balancing of Respective Hardships
CT Page 6078 The court must determine whether, in the absence of equitable relief, the defendant will suffer a loss wholly disproportionate to the plaintiff. The defendant is faced with being evicted from the subject property after operating a business there for many years. She would obviously suffer a significant loss from eviction. The defendant wants to be reinstated.
On the other hand, the plaintiff has been pursuing this action since on or about August 23, 2005, when the notice to quit was served. The defendant has failed to make all the rent/use and occupancy payments. The agreement provided for reinstatement conditioned on the defendant paying any arbitration award. The arbitrator has issued a decision in the plaintiff’s favor that the defendant has refused to pay. Given these circumstances, the plaintiff would suffer a significant loss if the defendant is reinstated.
Balancing the respective hardships, the court finds that the defendant’s loss resulting from eviction is comparable to the plaintiff’s loss resulting from the defendant’s reinstatement. On balance, the hardships do not tip decidedly in favor of the defendant.
(2) Repairability of Plaintiffs Injury
Whether the injury to the plaintiff is reparable must be considered by the court.
The plaintiff has suffered a significant financial loss due to the defendant’s failure to pay rent/use and occupancy. The defendant has refused to pay the arbitration award. Under these circumstances, the plaintiff’s injury is not readily repairable.
(3) Reason/Responsibility for Noncompliance
The reason for the noncompliance and the defendant’s responsibility must also be examined.
The defendant agreed to resolve the eviction case by entering into arbitration. The risk that the arbitrator might rule in the plaintiff’s favor was evident. The defendant now does not agree with the award. However, “[i]t is clear that a party cannot object to an award which CT Page 6079 accomplishes precisely what the arbitrators were authorized to do merely because that party dislikes the results.” (Internal quotation marks omitted.) Industrial Risk Insurers v. Hartford Steam Boiler Inspection Ins. Co., supra, 258 Conn. 110. The defendant’s conduct has not been merely negligent. Rather, the defendant has willfully failed to comply with the stipulated agreement.
(4) Good Faith
Finally, the court must assess the extent to which the defendant has demonstrated good faith in its dealing with the plaintiff.
The clean hands doctrine is “[t]he principle that a party cannot seek equitable relief or assert an equitable defense if that party has violated an equitable principle, such as good faith. Such a party is described as having `unclean hands.'” Black’s Law Dictionary (8th ed. 2004)
The defendant agreed to submit to arbitration but now refuses to pay the award because she dislikes the results. Under the totality of the circumstances, the court finds that the defendant has not acted in good faith in its dealings with the plaintiff.
IV CONCLUSION AND ORDER
For the above-stated reasons, the court enters the following orders. The defendant’s motion to set aside is denied. As to the plaintiff’s affidavit re: noncompliance with stipulation and application for immediate execution, the court finds that the defendant has failed to comply with the November 16, 2006 Stipulated Agreement. The equitable considerations do not decidedly favor the defendant. Under the circumstances of this particular case, invocation of the equitable doctrine against forfeiture is not appropriate to bar the issuance of an execution. Having considered the law and equity, the court orders that an execution may issue with a final stay of execution through May 31, 2007. The eviction of a tenant from a commercial property is subject to General Statutes § 47a-42a.[3]
CT Page 6080 (a) Unless otherwise provided by law and except in such cases in which the court has continuing jurisdiction, any civil judgment or decree rendered in the superior court may not be opened or set aside unless a motion to open or set aside is filed within four months succeeding the date on which notice was sent. The parties may waive the provisions of this subsection or otherwise submit to the jurisdiction of the court.
(b) Upon the filing of a motion to open or set aside a civil judgment, except a judgment in a small claims or juvenile matter, the moving party shall pay to the clerk the filing fee prescribed by statute unless such fee has been waived by the judicial authority.”
(a) Any application under section 52-417, 52-418 or 52-419 shall be heard in the manner provided by law for hearing written motions at a short calendar session, or otherwise as the court or judge may direct, in order to dispose of the case with the least possible delay.
(b) No motion to vacate, modify or correct an award may be made after thirty days from the notice of the award to the party to the arbitration who makes the motion.
(c) For the purpose of a motion to vacate, modify or correct an award, such an order staying any proceedings of the adverse party to enforce the award shall be made as may be deemed necessary. Upon the granting of an order confirming, modifying or correcting an award, a judgment or decree shall be entered in conformity therewith by the court or judge granting the order.”
(a) Whenever a judgment is entered against a defendant pursuant to section 47a-26, 47a-26a, 47a-26b or 47a-26d for the possession or occupancy of nonresidential property, such defendant and any other occupant bound by the judgment by subsection (a) of section 47a-26h
shall forthwith remove himself or herself, such defendant’s or occupant’s possessions and all personal effects unless execution has been stayed pursuant to sections 47a-35 to 47a-41, inclusive. If execution has been stayed, such defendant or occupant shall forthwith remove himself or herself, such defendant’s or occupant’s possessions and all personal effects upon the expiration of any stay of execution. If the defendant or occupant has not so removed himself or herself upon entry of a judgment pursuant to section 47a-26, 47a-26a, 47a-26b or CT Page 6081 47a-26d, and upon expiration of any stay of execution, the plaintiff may obtain an execution upon such summary process judgment, and the defendant or other occupant bound by the judgment by subsection (a) of section 47a-26h and the possessions and personal effects of such defendant or other occupant may be removed as provided in this section.
(b) The state marshal charged with executing upon any such summary process judgment shall, at least twenty-four hours prior to the date and time of the eviction, use reasonable efforts to locate and notify the defendant or occupant of the date and time such eviction is to take place. Such notice shall include service upon each defendant and upon any other person in occupancy, either personally or at the premises, of a true copy of the summary process execution. Such execution shall be on a form prescribed by the Judicial Department, shall be in clear and simple language and in readable format, and shall contain, in addition to other notices given to the defendant or occupant in the execution, a conspicuous notice, in large boldface type, that a person who claims to have a right to continue to occupy the premises should immediately contact an attorney. Such execution shall contain a notice advising the defendant or occupant that if he or she does not remove such defendant’s or occupant’s possessions and personal effects from the premises by the date and time set for the eviction and thereafter fails to claim such possessions and personal effects from the landlord and pay any removal and storage costs within fifteen days after the date of such eviction, such possessions and personal effects will be forfeited to the landlord.
(c) The state marshal who served the execution upon the defendant or occupant as provided in subsection (b) of this section shall return to the premises at the date and time such eviction is to take place. If the defendant or occupant has not removed himself or herself from the premises, the state marshal shall remove such defendant or occupant. If the defendant or occupant has not removed such defendant’s or occupant’s possessions and personal effects from the premises, the plaintiff, in the presence of the state marshal, shall prepare an inventory of such possessions and personal effects and provide a copy of such inventory to the state marshal. The plaintiff shall remove and store such possessions or personal effects or shall store the same in the premises. Such removal and storage or storage in the premises shall be at the expense of the defendant. If such possessions and effects are not called for by the defendant or occupant and the expense of such removal and storage or storage in the premises is not paid to the plaintiff within fifteen days after such eviction, the defendant or occupant shall forfeit such possessions and personal effects to the plaintiff and the plaintiff may dispose of them as the plaintiff deems appropriate.”
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