Opinion
No. 30243
July 2, 2004
MEMORANDUM OF DECISION RE DEFENDANTS' MOTION TO STAY
Presently before the court is the defendants' motion to stay the instant summary process action until the conclusion of arbitration proceedings. For the reasons set forth below, the court grants the defendants' motion to stay.
The plaintiff, Watson Enterprises, Inc. (WEI), is the owner of certain property on West Putnam Avenue in Greenwich, Connecticut (the premises). Pursuant to a lease executed in 1993 with WEI, Greenwich Cadillac-Oldsmobile, Inc. (Greenwich Cadillac) and Jack Grassi (Grassi) (collectively, the defendants) operate a car dealership on the premises. After the defendants exercised a five-year renewal option, the lease, by its express terms, expired on January 31, 2004. Neither Grassi, Greenwich Cadillac, nor General Motors Corporation, the majority shareholder in Greenwich Cadillac, were able to negotiate a new lease or extension of the prior lease with WEI. The defendants failed to vacate the premises on January 31, 2004, and are currently holdover tenants on a month-to-month basis pursuant to the terms of the lease.
Paragraph eighteen of the Lease provides that "[n]otwithstanding any provision of law or any judicial decision to the contrary, no notice shall be required from either party to terminate this Lease on the expiration date herein specified and, anything herein contained or implied to the contrary notwithstanding, a holding over by the Lessee, its assignee or sublessee beyond the expiration of said term shall give rise to a tenancy from month to month only."
Prior to the expiration of the lease, Greenwich Cadillac instituted an arbitration proceeding to determine whether WEI is entitled to immediate possession of the premises and whether Greenwich Cadillac is entitled to equitable and monetary relief in light of WEI's alleged conduct during lease negotiations. Shortly after the expiration of the lease, WEI commenced a summary process action (first summary process action) to evict the defendants. See Watson Enterprises, Inc. v. Greenwich Cadillac-Oldsmobile, Inc., Superior Court, judicial district of Stamford-Norwalk at Norwalk Housing Session, Docket No. 29976. The court, Cocco, J., denied the defendants' motion to stay the first summary process action pending arbitration, and ultimately dismissed the case because of a defective notice to quit.
Greenwich Cadillac-Oldsmobile, Inc. and Watson Enterprises, Inc., AAA Case No. 12 115 00085 04.
The plaintiff commenced the present action seeking to evict the defendants after curing the defects from the first summary process action. The defendants move to stay the present action pending arbitration pursuant to General Statutes § 52-409. The motion to stay is opposed by the plaintiff on the following grounds: the motion is barred by collateral estoppel because the court denied a virtually identical motion to stay in the first summary process action; and a motion to stay is not appropriate because the issues involved in the arbitration proceeding are not subject to arbitration, nor is the arbitration clause the exclusive remedy for dispute resolution pursuant to the terms of the lease. The defendants maintain that the issues are within the scope of the clause and that the arbitrators decide the issue of arbitrability, not the court. A threshold issue is whether the present motion to stay is barred by collateral estoppel because of the denial of a virtually identical motion to stay in the first summary process action. "The fundamental principles underlying the doctrine of collateral estoppel are well established. The common-law doctrine of collateral estoppel, or issue preclusion, embodies a judicial policy in favor of judicial economy, the stability of former judgments and finality . . . Collateral estoppel means simply that when an issue of ultimate fact has once been determined by a valid and final judgment, that issue cannot again be relitigated between the same parties in any future lawsuit . . . Issue preclusion arises when an issue is actually litigated and determined by a valid and final judgment, and that determination is essential to the judgment." (Internal quotation marks omitted.) DaCruz v. State Farm Fire Casualty Co., 268 Conn. 675, 686, 846 A.2d 849 (2004). It is equally well-established that there are exceptions to this general rule. The Connecticut Supreme Court has "adopted the view of the Restatement (Second), Judgments § 28(1) that although an issue is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, relitigation of the issue in a subsequent action between the parties is not precluded [when the] party against whom preclusion is sought could not, as a matter of law, have obtained review of the judgment in the initial action . . . Such cases can arise, for example . . . because the law does not allow review of the particular category of judgments." (Citation omitted; internal quotation marks omitted.) Water Pollution Control Authority v. Keeney, 234 Conn. 488, 494-95, 622 A.2d 124 (1995).
General Statutes § 52-409 provides: "Stay of proceedings in court. 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."
In denying the motion to stay in the first summary process action, the court held that arbitrability of an issue is for the court to decide and found that the issues involved in that action were not subject to arbitration. (Plaintiff's Memorandum of Law in Opposition to Motion to Stay, Appendix Tab 9, p. 6.) Section 61-1 of the Rides of Appellate Procedure provides that "[a]n aggrieved party may appeal from a final judgment, except as otherwise provided by law." (Emphasis added.) "Because . . . a civil action must be pending for a § 52-409 order to be issued, [the Supreme Court has] held that such an order is interlocutory and, therefore, not appealable." Success Centers, Inc. v. Huntington Learning Centers, Inc., 223 Conn. 761, 769, 613 A.2d 1320 (1992). Moreover, "a party that prevails in the trial court is not aggrieved." Cadle Co. v. D'Addario, 268 Conn. 441, 443, 844 A.2d 836 (2004). The defendants could not have appealed the denial of the motion to stay in the first summary process action because the denial was an interlocutory ruling. Nor could they have appealed the ruling after the case was dismissed because they were no longer aggrieved by the denial. Because the defendants were unable, as a matter of law, to appeal the denial of the motion to stay in the first summary process action, they are not precluded from relitigating the same issue in the present summary process action. This court will therefore entertain the motion to stay in the present summary process action.
"Summary process is a special statutory procedure designed to provide an expeditious remedy." (Internal quotation marks omitted.) Young v. Young, 249 Conn. 482, 487, 733 A.2d 835 (1999). "Although arbitration proceedings are unusual in the summary process context, they are not unheard of and are conceptually possible. See, e.g., Mayron's Bake Shops, Inc. v. Arrow Stores, Inc., 149 Conn. 149, 154[, 176 A.2d 574] (1961). Especially where the language of the agreement to submit disputes to arbitration is phrased broadly and inclusively, arbitration is favored and doubts are to be resolved in favor of submission to arbitration. Board of Education v. Frey, 174 Conn. 578, 582[, 392 A.2d 466] (1978). If the circumstances indicate that the stay has been requested largely for purposes of delay, a stay may be denied . . . and if the scope of the submission is specific and narrowly drawn, matters outside the specific area of agreement will not be referred to arbitration." (Citations omitted.) Banford v. Maroon, Superior Court, judicial district of Hartford-New Britain Housing Session, Docket No. CVN 9701 1597 (May 20, 1997, Beach, J.) ( 23 Conn. L. Rptr. 148).
To obtain a stay of proceedings pursuant to § 52-409, "a movant must establish the following facts: (1) that both it and the plaintiff in the action sought to be stayed are parties to a written arbitration agreement; (2) that at least one issue involved in the action sought to be stayed is referable to arbitration under the agreement; and (3) that the movant is ready and willing to proceed with the arbitration." American Materials Corp. v. Eagle Crusher Co., Superior Court, judicial district of Hartford, Docket No. CV 03 0827738 (December 16, 2003, Sheldon, J.). Furthermore, "[a] stay of court action is appropriate in cases in which the parties have agreed to arbitrate disputes but have not agreed that arbitration shall be a condition precedent to instituting a lawsuit." (Internal quotation marks omitted.) Zymol Enterprises, Inc v. Sheppard, Mullin, Richter Hampton, LLP, Superior Court, judicial district of Middlesex at Middletown, Docket No. CV 03 0102646 (December 24, 2003, Silbert, J.) ( 36 Conn. L. Rptr. 282).
Neither the plaintiff nor the defendants dispute the validity of the arbitration clause. In addition, the defendants have filed a demand for arbitration and have moved this court to compel the plaintiff's participation in those proceedings, thus demonstrating their willingness to proceed with arbitration. The only remaining question therefore is whether any issue involved in the present summary process action is referable to arbitration under the terms of the lease.
The sole relief being sought by the plaintiff in the present summary process action is possession of the premises pursuant to the terms of the lease. The plaintiff and defendants disagree whether the issue of possession of the premises is subject to arbitration. The ultimate issue before the court therefore is whether disputes over the arbitrability of an issue are subject to arbitration. "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 . . . 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 adjudicated.'" (Internal quotation marks omitted.) White v. Kampner, 229 Conn. 465, 472, 641 A.2d 1381 (1994).
Paragraph thirty-two of the lease, the arbitration clause, provides in relevant part that " any dispute between the parties hereto arising out of or relating to this Lease shall be settled in accordance with the Commercial Arbitration Rules, as applicable, of the American Arbitration Association, and judgment upon the award, which shall be binding and conclusive upon the parties hereto, may be entered in any court having jurisdiction thereof." (Emphasis added.) The language providing for arbitration of "any dispute . . . arising out of or relating to this Lease" is essentially the same as the language used in other arbitration clauses found to include the issue of arbitrability. See, e.g., Lupone v. Lupone, 83 Conn.App. 72, 76, 848 A.2d 539 (2004) (arbitration clause providing arbitration of "[a]ny dispute, difference, disagreement, or controversy among the Partners arising out of or in connection with the Partnership" was found to be broad enough to include the issue of arbitrability); International Marine Holdings, Inc. v. Stauff, 44 Conn.App. 664, 668-69, 691 A.2d 1117 (1997) (issue of arbitrability included when arbitration is directed for "[a]ny controversy or claim arising out of or relating to this Agreement, or any breach thereof"). Based on the broad language of the arbitration clause to include "any dispute" and the general tendency of the courts in favoring arbitration, the court finds that the issue of arbitrability is itself subject to arbitration pursuant to the terms of the arbitration clause. The defendants' motion to stay the present summary process action pending the conclusion of arbitration proceedings is therefore granted.
WILLIAM F. HICKEY, JTR