Opinion
No. CV 07 5006999
August 24, 2011
MEMORANDUM OF DECISION RE MOTION FOR ORDER [#136]
FACTS
On November 13, 2007, the plaintiff, James Muscarella, filed a six-count complaint against the defendants, Ted Mish and T.M. Builders, LLC, for damages arising from a contractual dispute between the parties. The plaintiff alleges that the parties entered a written contract, dated March 14, 2007, whereby the defendants were to perform certain renovations to the plaintiff's residence. On February 4, 2009, the defendants filed a motion to dismiss or stay for arbitration on the grounds that the contract entered into between the parties provided for disputes to be resolved by way of binding arbitration. On February 18, 2009, this court, Martin, J., entered an order granting a stay on the pending action pursuant to the contract's arbitration provision.
In May 2009, the parties entered into an arbitration agreement. An evidentiary hearing was held before the arbitrator, attorney Frank Manfredi, on September 24, 2009, and on September 25, 2009. On October 30, 2009, the arbitrator issued a decision in which he awarded the plaintiff the sum of $4,677.58. The arbitrator further determined that a per se violation of the Connecticut Unfair Trade Practices Act (CUTPA), General Statutes § 42-110a et seq., existed because the contract failed to include a notice of the owner's cancellation rights in violation of the Home Improvement Act, General Statutes § 20-429 et seq. Although the arbitrator found that the plaintiff had not suffered ascertainable damages related to the CUTPA violation, he determined that an award of attorneys fees was proper pursuant to Jacques All Trade Corp. v. Brown, 42 Conn.App. 124, 679 A.2d 27 (1996), aff'd, 240 Conn. 654, 692 A.2d 809 (1997), and granted the plaintiff an opportunity to submit evidence regarding attorneys fees.
The plaintiff filed an application for attorneys fees in the amount of $12,360 on November 13, 2009. On November 18, 2009, the defendants filed an objection to the plaintiff's claim for attorneys fees on the ground that the plaintiff should not be awarded attorneys fees because he sustained no damages as a result of the CUTPA violation. The plaintiff submitted a response to the defendants' objection on December 10, 2009. On December 16, 2009, the defendants filed a reply to the plaintiff's response. The arbitrator issued a supplemental decision awarding attorneys fees to the plaintiff in the amount of $8,240 on January 22, 2010.
On February 2, 2010, the defendants filed a motion to reconsider the arbitrator's award of attorneys fees in which the defendants argued that no ascertainable loss was established pursuant to the CUTPA violation. The plaintiff filed an objection to the defendants' motion to reconsider on March 2, 2010. On March 22, 2010, the arbitrator issued a decision vacating his award of attorneys fees pursuant to Scrivani v. Vallombroso, 99 Conn.App. 645, 916 A.2d 827, cert. denied, 282 Conn. 904, 920 A.2d 309 (2007) (the arbitration award).
The plaintiff filed a motion to confirm, in part, and vacate and/or modify the arbitration award on April 20, 2009, requesting the court to vacate the arbitration award, modify the award to include an award of attorneys fees, and confirm the prior decisions made by the arbitrator dated October 30, 2009, and January 22, 2009. On April 29, 2009, the defendants filed an objection to the plaintiff's motion, and an application to confirm the arbitration award.
On August 17, 2010, this court, Martin, J., denied the plaintiff's motion to confirm, in part, and vacate and/or modify the arbitrator's award, and granted the defendants' application to confirm the arbitration award. The plaintiff filed a motion to reconsider the court's decision on August 30, 2010, which this court, Martin, J., granted on October 5, 2010. On February 22, 2011, the plaintiff filed a motion for order regarding the merits of the plaintiff's motion to reconsider. The defendants filed an objection to the motion on March 2, 2011. On March 3, 2011, the plaintiff filed a reply to the defendants' objection.
DISCUSSION I
This court must initially determine the standard of review to be applied to the arbitration award for purposes of deciding the plaintiff's motion for order. The plaintiff first argues that the parties' arbitration submission was restricted because the parties reserved the right of court review for issues of law. The defendants counter that the parties' arbitration submission was unrestricted because the agreement left no issues of fact or law to be determined by a party other than the arbitrator, and the arbitrator's decision was final and binding.
"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 . . . 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." (Internal quotation marks omitted.) Economos v. Liljedahl Brothers, Inc., 279 Conn. 300, 305, 901 A.2d 1198 (2006).
"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 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 . . . In other words, [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." Teamsters Local Union No. 677 v. Board of Education of Danbury, 122 Conn.App. 617, 622, 998 A.2d 1239 (2010).
"The significance . . . of a determination that an arbitration submission was unrestricted or restricted is not to determine what the arbitrators were 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." (Internal quotation marks omitted.) Harty v. Cantor Fitzgerald Co., 275 Conn. 72, 80-81, 881 A.2d 139 (2005). "[T]he restrictions in the submission define the scope of our judicial review . . . When the submission to the arbitrator contains express language restricting the breadth of issues, reserving explicit rights, or conditioning the award on court review, the submission is deemed restricted and we engage in de novo review." (Citation omitted, internal quotation marks omitted.) Office of Labor Relations v. New England Health Care Employees Union, District 1199, AFL-CIO, 288 Conn. 223, 229, 951 A.2d 1249 (2008).
The arbitration agreement provides in relevant part: "All decisions of the arbitrator shall be final and binding, except for any claim(s) that the award is not in compliance with the laws, legal precedents and public policy of the State of Connecticut . . . The award is subject to review on these grounds in Court, and as otherwise provided by [General Statutes] § 52-408, et seq." (Emphasis added.) Pursuant to the aforementioned case law, the court finds that the parties have reserved court review on issues of law, and therefore, the scope of the arbitration submission is restricted. As a result, the court will perform a de novo review of whether the arbitration award is inconsistent with Connecticut law, legal precedent and public policy.
II
The plaintiff argues that attorneys fees are proper in the present case because actual damages need not be proven where a CUTPA violation exists in order to support such an award. The defendants counter that an award of attorneys fees is not appropriate here on the grounds that a prevailing party must demonstrate ascertainable loss caused by the CUTPA violation itself, and the plaintiff in the present case did not suffer actual damages as a result of the defendants' failure to include notice of the homeowner's cancellation rights in the parties' contract.
The Home Improvement Act provides in relevant part: "No home improvement contract shall be valid or enforceable against an owner unless it . . . contains a notice of the owner's cancellation rights in accordance with the provisions of chapter 740 . . ." General Statutes § 20-429(a)(6). Failure to comply with the Home Improvement Act's requirements constitutes a per se violation of CUTPA pursuant to General Statutes § 20-427(c). A Secondino Son, Inc. v. LoRicco, 215 Conn. 336, 343, 576 A.2d 464 (1990). "However, merely because a per se violation of CUTPA is found, based upon the violations of the Connecticut Home Improvement Act, does not mean that the plaintiff necessarily prevails." Crowley v. Morrow, Superior Court, judicial district of Ansonia-Milford, Docket No. CV 08 5005602 (May 9, 2011, Radcliffe, J.).
General Statutes § 20-427(c) provides in relevant part: "A violation of any of the provisions of this chapter shall be deemed an unfair or deceptive trade practice under subsection (a) of [§]42-110b.
The court in Murillo v. John's Gutter Cleaning, LLC, Superior Court, judicial district of Hartford, Docket No. CV 08 5018320 (April 15, 2011, Peck, J.), recently addressed a similar set of factual circumstances as the present case. In Murillo, the plaintiff homeowner entered into a contract with the defendant contractor that failed to contain an owner's right of cancellation in violation of the Home Improvement Act, and the plaintiff sought attorneys fees pursuant to a CUTPA violation. Id. The Murillo court found that "it would be improper to award attorneys fees on the basis of CUTPA violations that are unrelated to damages. Scrivani v. Vallombroso, 102 Conn.App. 668, 670, 927 A.2d 920 (2007). [I]n order to prevail in a CUTPA action, a plaintiff must establish both that the defendant has engaged in a prohibited act and that, as a result of this act, the plaintiff suffered an injury. The language as a result of requires a showing that the prohibited act was the proximate cause of a harm to the plaintiff . . ." Scrivani v. Vallombroso, 99 Conn.App. 645, 652, 916 A.2d 827, cert. denied, 282 Conn. 904, 920 A.2d 309 (2007). In Scrivani, our Appellate Court remanded the case and directed "the [Superior] [C]ourt to articulate whether in awarding attorneys fees and punitive damages under CUTPA, it considered the per se CUTPA violations on the basis of violations of the Home Improvement Act, in conjunction with the other CUTPA violations, and if so, to articulate the basis for its finding that the defendant's failure to comply with the Home Improvement Act contributed to the plaintiffs' harm." Id., 654-55. Cf. Taylor v. King, Superior Court, judicial district of New London, Docket No. CV 07 5002674 (September 24, 2008, Peck, J.), rev'd in part on other grounds, 121 Conn.App. 105, 994 A.2d 330 (2010) (wherein the plaintiff proved, by preponderance of evidence, that he suffered ascertainable loss specifically as a result of defendants failure to obtain signed agreement and defendant's failure to document changes to contract in writing, as required by Home Improvement Act) . . .
"In Scrivani, on remand, the Superior Court articulated that the plaintiff's financial loss was caused by other CUTPA violations, not the per se violations. Scrivani v. Vallombroso, Superior Court, judicial district of New Haven, Docket No. CV 00 0441476 (April 20, 2007, Hadden, Jr., J.), aff'd, 102 Conn.App. 668, 927 A.2d 920 (2007). The Appellate Court concluded: Because the [Superior] [C]ourt did not base its award of punitive damages and attorneys fees on the per se CUTPA violations that were based on violations of the Home Improvement Act . . . the court did not improperly determine that the defendant violated CUTPA on the basis of violations of the Home Improvement Act that were unrelated to damages." Scrivani v. Vallombroso, supra, 102 Conn. 670." Murillo v. John's Gutter Cleaning, LLC, supra, Docket No. CV 08 5018320. As a result, the court in Murillo found that because "none of the evidence or factual findings show that the plaintiff's damages were caused by the defendant's failure to include notice of the homeowner's cancellation rights in the contract," the plaintiff was not entitled to attorneys fees. Id.; see also Crowley v. Morrow, supra, Docket No. CV 08 5005602 (finding plaintiff could not prevail on CUTPA claim where per se CUTPA violations resulting from defendant's failure to adhere to provisions of Home Improvement Act did not cause plaintiff to sustain any damages).
Similarly, in the present case, there is nothing in the record indicating that the plaintiff's damages resulted from the defendants' failure to include notice of the homeowner's cancellation rights in the parties' contract. Furthermore, unlike the court in Scrivani v. Vallombroso, supra, Docket No. CV 00 0441476, this court finds no evidence demonstrating that the plaintiff's loss was caused by other CUTPA violations. As a result, the arbitrator's decision to vacate his award of attorneys fees pursuant to Scrivani v. Vallombroso, supra, 99 Conn.App. 645, is not inconsistent with Connecticut law, legal precedent and public policy. Therefore, the court reaffirms its original decision to grant the defendants' application to confirm the arbitration award.
CONCLUSION
Based on the foregoing, the court hereby denies the plaintiff's motion to confirm, in part, and vacate and/or modify the arbitrator's award, and hereby grants the defendants' application to confirm the arbitration award.