Opinion
KNLCV166027983S
06-20-2017
Asselin & Vieceli Partnership, LLC v. Steven T. Washburn dba J& S Washburn Construction dba Washburn Construction & Design
UNPUBLISHED OPINION
RULING ON DEFENDANT'S MOTION FOR STAY IN ORDER TO ARBITRATE
Robert F. Vacchelli, Judge.
This case is an action in three counts by the plaintiff, Asselin & Vieceli Partnership, LLC, against the defendant, Steven T. Washburn, dba J& S Washburn Construction, dba Washburn Construction & Design (" Washburn"), over the construction of a replacement bulkhead retaining wall and wale at a marina on plaintiff's property at 6 Bank Road in Old Lyme, CT. Pending before the court is a motion by the defendant, pursuant to General Statutes § 52-409, for a stay of the proceedings claiming that the contract between the parties provided for arbitration of the issues in this case. The plaintiff objects, asserting that the subject contract is not between the plaintiff and the defendant. Alternatively, it argues that the defendant waived any right to arbitration. For the following reasons, the court finds that the plaintiff is bound by the arbitration clause, and the defendant's rights were not waived. Accordingly, and pursuant to General Statutes § 52-409, the case is stayed until arbitration has been had in compliance with the agreement.
General Statutes § 52-409 provides:
I
It is undisputed that the subject contract provided for arbitration. It states, " Any claims or disputes between the Contractor and the Owner arising from this Agreement shall be resolved by arbitration in accordance with the construction industry Arbitration Rules of the American Arbitration Association unless both parties agree otherwise." It is also undisputed that the defendant is ready and willing to arbitrate, and the issues are referable to arbitration. However, a cursory review of the contract shows that the contract was between Washburn Construction & Design (the Contractor under the contract) and Four Mile River Marina, [Inc.]. (the Owner under the contract). Asselin & Vieceli Partnership, LLC, the party Washburn seeks to bring to arbitration, was not named in the contract. Since the plaintiff in this case was not a party to the contract, it cannot be compelled to arbitrate, plaintiff argues.
The contract refers to that party as an " LLC" rather than an " Inc., " an apparent scrivener's error.
Ordinarily, that circumstance would be a bar to arbitration. " No one can be forced to arbitrate a contract dispute who has not previously agreed to do so." (Citation omitted, internal quotation marks omitted.) State of Connecticut v. Philip Morris, Inc., 289 Conn. 633, 642, 959 A.2d 997 (2008). " Courts of law can enforce only such agreements as the parties actually make." (Citation omitted.) Connecticut Union of Telephone Workers, Inc. v. Southern New England Telephone Co., 148 Conn. 192, 197, 169 A.2d 646 (1961). Only written agreements to arbitrate are valid. General Statutes § 52-408; Bennett v. Meader, 208 Conn. 352, 359, 545 A.2d 553 (1988).
However, there is an exception to this rule. One who is a third-party beneficiary of a contract containing an arbitration provision can enforce, or be bound by, such a provision. 4 Am.Jur.2d, Alternative Dispute Resolution § 60. That general principle has been discussed with approval, or effectively applied, in Connecticut. See, e.g., Gaudet v. Safeco Ins. Co., 219 Conn. 391, 397 n.7, 593 A.2d 1362 (1997); Wesleyan University v. Rissil Constr. Associates, Inc., 1 Conn.App. 351, 355, 472 A.2d 23, cert. denied, 193 Conn. 802, 474 A.2d 1259 (1984); Litevich v. Legalzoom.com, Inc., Superior Court, judicial district of Hartford, Doc. No. X04 HHD CV 14-6055757 (Jan. 8, 2016, Sheridan, J.) [61 Conn.L.Rptr. 596, ] (" A party cannot seek the benefits of a contract, either directly or as [an intended] beneficiary, and then avoid the imposition of the arbitration clause contained therein"). The proper test to determine whether a contract creates a third-party beneficiary relationship is whether the parties intended to create a direct obligation from one party to the third party. The Gateway Company v. DiNoia, 232 Conn. 223, 231, 654 A.2d 342 (1995). That intent is to be determined from the terms of the contract read in the light of the circumstances attending its making, including the motives and purposes of the parties. Dow and Condon, Inc. v. Brookfield Dev. Corp., 266 Conn. 572, 580, 833 A.2d 908, 914 (2003). The issue is fact sensitive. See, e.g. Knapp v. New Haven Road Construction Co., 150 Conn. 321, 327, 189 A.2d 386 (1963). Thus, the court must determine whether Washburn and Four Mile River Marina, Inc. intended Washburn to assume a direct obligation to Asselin & Vieceli Partnership, LLC.
II
The undisputed facts in this case show that the work in this case was to be done on property in Old Lyme, CT owned by Asselin & Vieceli Partnership, LLC. Asselin & Vieceli Partnership, LLC was renting the property to Four Mile River Marina, Inc. Four Mile River Marina, Inc. operated a marina at the site. Under the lease, Four Mile River Marina, Inc. was obligated to maintain the structural improvements at the marina. In fulfillment of that duty, Four Mile River Marina, Inc. entered into the subject contract with Washburn for repair of the bulkhead. The contract was signed by Bob Asselin for Four Mile River Marina, Inc. Bob Asselin is an officer in Four Mile River Marina, Inc. He is also a member of Asselin & Vieceli Partnership, LLC. The court finds that the work to be performed would make permanent improvements to Asselin & Vieceli Partnership, LLC's property. Thus, the work would benefit Asselin & Vieceli Partnership, LLC. However, in order that a person become a third-party beneficiary, it is necessary that it appear that the parties making the contract intended not only to benefit the person by the contract, but rather that the promisor should assume a direct obligation to him. Howe v. Merritt-Chapman & Scott, Corp., 4 Conn.Supp. 378, 380 (1936). In the instant case, the parties do not dispute that Washburn owed an obligation under its contract with Four Mile River Marina, Inc. to Asselin & Vieceli Partnership, LLC. Washburn considered Four Mile River Marina, Inc. and Asselin & Vieceli Partnership, LLC to be interrelated and one and the same identity, to wit, Bob Asselin; and himself to be responsible to the Asselin & Vieceli Partnership, LLC for that reason. And, Asselin & Vieceli Partnership, LLC agrees that Washburn owed it duties under the contract as it was a third-party beneficiary under that contract. Accordingly, the court finds that Asselin & Vieceli Partnership, LLC is bound by the arbitration clause in the contract.
III
Alternatively, the plaintiff argues that the litigation should not be stayed pending arbitration because Washburn waived the right by engaging in extensive litigation. On this point, the court finds that on July 27, 2015, Washburn filed a mechanic's lien against the marina property on the land records of the Town of Old Lyme. On October 9, 2015, the plaintiff filed an application for discharge of that lien in Asselin & Vieceli Partnership, LLC v. Washburn Construction & Design, Superior Court, judicial district of New London, Doc. No. 15-6025153. After two hearing dates, the court discharged the lien on February 22, 2016. That terminated the lien, but not the dispute. The parties agreed that the litigation would continue in a lawsuit to be commenced by Washburn with a counterclaim by the plaintiff. However, Washburn did not file suit. After tiring of waiting, the plaintiff commenced the instant action on September 12, 2016. Washburn immediately took steps to try to compel arbitration. He first filed a motion to dismiss, but that was denied by the court on December 29, 2016. See Order on Doc. No. 101.00. He next filed the instant Motion for Stay on January 13, 2017. Doc. No. 104.00.
" Notwithstanding the decided public policy in favor of arbitration, our case law is clear that an arbitration clause may be waived by the parties or by the one entitled to its benefit." (Internal quotation marks omitted; citation omitted.) MSO, LLC v. DeSimone, 313 Conn. 54, 63-64, 94 A.3d 1189 (2014). " Waiver is the intentional relinquishment or abandonment of a known right or privilege . . . Waiver does not have to be express, but may consist of acts or conduct from which waiver may be implied. [U]njustifiable delay in seeking arbitration may warrant a finding of waiver . . . The same result follows from going to trial without insisting upon the arbitration condition . . . Indeed, our courts have found waiver when a party engages in substantial litigation without asserting its right to arbitrate." (Citations omitted; internal quotation marks omitted.) Id., 64. " [A] party opposing arbitration on the ground of waiver must demonstrate that it will be prejudiced by enforcement of the arbitration clause." Id., 68.
Our Supreme Court in MSO identified " [a] nonexhaustive list of some other relevant factors that our courts have considered in deciding waiver includ[ing] participating in lengthy pretrial discovery or fact-finding, engaging in extensive pleading or motion practice, initiating continuances, and moving for arbitration on the eve of trial . . . invoking arbitration to avoid an unfavorable disposition . . . electing a jury determination of issues falling within an agreement to arbitrate . . . causing an opposing party to expend undue time and expense in litigation prior to seeking arbitration . . . and attempting to utilize the advantages derived from litigation in a later arbitration, including discovery that is unavailable in arbitration." Id., 68 n.14
In the instant case, the court is not persuaded that Washburn has waived his right to arbitration due to the litigation history between the parties. The court observes that all of it was commenced by the plaintiff, not Washburn; that the mechanic's lien dissolution application was resolved relatively quickly, but it did not resolve the contract dispute; and that Washburn acted promptly to assert his arbitration rights in the instant case. While there has been a considerable delay between the time this dispute arose and the time Washburn sought to assert his arbitration rights, there is no persuasive evidence of extensive litigation, and the court is not persuaded that the plaintiff has been prejudiced.
IV
For all of the foregoing reasons, the court finds that the plaintiff is bound by the arbitration clause, and the defendant's rights were not waived. Accordingly, and pursuant to General Statutes § 52-409, the case is stayed until arbitration has been had in compliance with the agreement.
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.