Opinion
No. CV 02-0814620-S
July 9, 2008
MEMORANDUM OF DECISION ON THE PLAINTIFF'S MOTION TO VACATE AND THE DEFENDANTS' MOTION TO CONFIRM THE ARBITRATION AWARD
Before the court are the plaintiff's application to vacate the arbitration award, as well as the defendants' motion to confirm the arbitration award and their motion for interest. For the following reasons, the plaintiff's motion is denied, and the defendants' motions are granted.
I. PROCEDURAL HISTORY
The plaintiff, Hartford Steam Boiler Inspection and Insurance Company (HSB), underwrote insurance policy number BMI-SA-9225738-13, a policy of boiler and machinery insurance, effective from May 1, 1991, through May 1, 1994, for the Entergy Corporation and other named insureds (HSB policy). The defendants, Underwriters at Lloyd's and Companies Collective, National Union Fire Insurance Company, International Fire Insurance Company, Aetna Casualty and Surety Company, Home Insurance Company, and Zurich Insurance Company, underwrote a program of all risks property insurance for the Entergy Corporation and other insureds, effective from June 1, 1993, to June 1, 1994 (all risks policy).
On August 11, 1993, there was a catastrophic loss event at Independence Steam Electric Station Unit Two (ISES Unit Two), a coal-fired electrical generating facility located near Newark, Arkansas, which caused in excess of $28 million in damage. The owners of ISES Unit Two, Arkansas Power and Light Company and others, promptly made claims against both the HSB policy and the all risks policy. After investigating the loss, both the plaintiff and the defendants denied coverage under their respective policies. The plaintiff contended that the cause of the loss was an explosion of gas or unconsumed fuel, a peril excluded from its coverage and covered under the all risks policy. The defendants contended that the loss was caused by the breakdown of a fired vessel, excluded from the coverage provided by the all risks policy because the event did not involve a combustion explosion that would otherwise render it, in whole or in part, a covered loss.
When faced with these reciprocal denials, the insured's invoked parallel loss adjustment endorsements found in both the HSB policy and the all risks policy. Pursuant to the endorsements, the plaintiff paid $10,933,435.86, and the defendants paid $11,880,525.33. The difference was attributable to certain amounts that the parties agreed were within their respective coverages: $948,102.27 in costs that the defendants admitted were covered by the all risks policy, and $1,012.80 in expenses that the plaintiff admitted were its responsibility under the HSB policy.
Under the terms of the loss adjustment endorsements, the coverage dispute between the plaintiff and the defendants was submitted to a panel of three arbitrators. The defendants appointed Edwin W. Whitmore to the panel. The plaintiff appointed Larry E. Gordon. Messrs. Whitmore and Gordon jointly selected Frank W. Ockerby to serve as the third arbitrator and umpire.
The arbitration was conducted pursuant to the March 1996 "procedures to govern the arbitration." The initial arbitration hearing was conducted in Memphis, Tennessee on October 21, through 25, 1996. This hearing focused on the causes and progress of the August 11, 1993 loss and on certain factual questions relating to the application of certain policy language to certain technical design aspects of ISES Unit Two. Pursuant to the request of the arbitrators, the parties stipulated to an October 25, 1996 "joint statement of issues," to be addressed by the arbitrators in their award.
On January 9, 1997, the arbitral panel issued an interim award on the factual questions set forth in the joint statement of issues, entitled "decision of arbitrators." In response to questions by the parties as to the meaning of the award, on September 22, 1997, the arbitrators issued a "supplemental clarified decision to the answer of issue no. 4 of the January 9, 1997 decision of arbitrators." As a result of the panel's resolution of these questions, the parties agreed that part of the loss fell within the coverage of the all risks policy, and part of the loss fell within the coverage of the HSB policy.
The parties were unable to agree on the manner in which repair and restoration costs were to be allocated to each policy. Accordingly, the plaintiff and defendants resubmitted the matter to the arbitration panel for resolution, subject to a July 19, 1999 stipulated "statement of issues and procedural timeline for Entergy arbitration." In connection with this submission, in August 1999, the parties and arbitrators agreed upon a set of "revised procedures to govern the phase II arbitration re: allocation issues." This phase two arbitration hearing took place on June 28, and 29, 2001, in Windsor Locks, Connecticut. Following the hearing, the parties submitted position statements advocating factual and legal positions. The panel rendered an award entitled "decision of arbitrators" on January 24, 2002.
On February 22, 2002, the plaintiff submitted an "application to vacate arbitration award." The defendants filed "defendants' reply to plaintiff's application to vacate arbitration award, and application to confirm the arbitration award, or, in the alternative, to refer to arbitrators for clarification." A hearing on the two applications was held on May 22, 2002, before Judge Rittenband. The court concluded that the award was insufficient: "The findings are not sufficiently specific or comprehensive to comply with the requirement that all liability and allocation issues and all coverage issues be resolved, nor do the findings contain sufficient findings of fact and conclusions regarding the interpretation of the insurance policies that are the subject of this arbitration as necessary to support the award." Hartford Steam Boiler Inspection Ins. Co v. Underwriters at Lloyds, Superior Court, judicial district of Hartford, Docket No. CV 02081462 (July 31, 2002, Rittenband, J.). Judge Rittenband ordered a remand to the panel to provide "finding of facts and interpretations of the policies so as to fully comply with the submissions." Id.
The plaintiff appealed Judge Rittenband's decision to the Connecticut Supreme Court. The Supreme Court held that the remand order did not constitute a final judgment or an appealable interlocutory order, and therefore the Court lacked subject matter jurisdiction to review the claim. Hartford Steam Boiler Inspection Ins. Co. v. Underwriters at Lloyds Cos. Collective, 271 Conn. 474, 475, 857 A.2d 893 (2004). The Court did find that the trial court had the authority to remand to the arbitration panel. Id., 493. The plaintiff appealed to the U.S. Supreme Court, which denied certiorari. Hartford Steam Boiler Inspection Ins. Co. v. Underwriters at Lloyd's Cos. Collective, 544 U.S. 974, 125 S.Ct. 1826, 161 L.Ed.2d 723 (2005).
Thereafter, on March 3, 2005, the plaintiff returned to Superior Court to seek a temporary injunction to prevent Ockerby from participating in any further arbitration proceedings because of alleged ex parte communications between Ockerby and the defendants. Judge Scholl denied the injunction on the grounds that the plaintiff did not show that the ex parte communications related to the substance of the arbitration, and because the plaintiff would have a remedy through this court's review of the clarified arbitration panel decision. Hartford Steam Boiler Inspection Ins. Co. v. Underwriters at Lloyd's Cos. Collective, Superior Court, judicial district of Hartford, Docket No. CV 02 0814620 (November 17, 2005, Scholl, J.).
The arbitration panel reconvened, issuing a decision entitled "panel meeting of July 31, 2006 August 1, 2006 to clarify the decision of arbitrators issued January 24, 2002 to include `sufficient finding of facts and interpretations of the policies' in accordance with the July 31, 2002 order of Judge Rittenband, as affirmed by the Supreme Court of Connecticut decision released on October 12, 2004" on August 1, 2006. This decision did not alter the terms of the January 24, 2002 award, but provided clarification as to how the panel reached its original division of the expenses amongst the parties. "The Panel determined based on cause of loss and policy conditions that: (i) $8,131,139.62 are directly attributable to the collapse of the coutant support structure (i.e. the "bottom" costs); (ii) $7,563,239.90 are directly attributable to explosion and/or overpressurization associated with Unit Two (i.e. the "top" costs); (iii) $948,102.77 Agreed property loss for All Risk is directly attributable to fire and firefighting. The explosion in D Mill $95,829.14 is not included. $1,012.80 Agreed Boiler loss; (iv) $11,539,066.54 are common or general project costs that are not allocable into categories (i), (ii) or (iii); (v) None." In total, the panel found $14,489,833.52 was attributable to the boiler and machine, and $7,375,012.59 was attributable to the all risk carriers.
On August 11, 2006, the defendants filed a "motion for order confirming arbitration award" seeking confirmation of the January 24, 2002 award as well as an award of interest. The plaintiff filed an "application to vacate arbitration award" on September 1, 2006. On October 3, 2006, the defendants filed a motion to strike the plaintiff's application; Judge Scholl denied the motion, however, because the arbitration decision was not final until the panel released its clarified decision in August 2006, and therefore, the plaintiff's motion was timely filed. Hartford Steam Boiler Inspection Ins. Co. v. Underwriters at Lloyd's Cos. Collective, Superior Court, judicial district of Hartford, Docket No. CV 02 0814620 (April 19, 2007, Scholl, J.).
The plaintiff filed a brief in support of its application to vacate and in opposition to the motion to confirm on July 9, 2007. The defendants filed a brief in opposition to the application to vacate the arbitration award on August 10, 2007. On August 24, 2007, the plaintiff filed a reply brief. This court heard arguments on these motions on September 20, 2007, and May 7, 2008.
The plaintiff seeks to vacate the arbitration award on several grounds. First, it argues that the arbitrators exceeded their powers because they failed to provide sufficient findings of fact and conclusions of law regarding the interpretation of the insurance policies to support their award. Second, as to the "top" costs, the plaintiff argues that the panel manifestly disregarded the law and instead issued an arbitrary allocation that lacked any basis in the evidence. Specifically, the plaintiff argues that the 2006 award does not include legal authority or factual findings to support the allocation of thirty percent of the "top" costs to the plaintiff.
Third, the plaintiff argues that Ockerby demonstrated an evident partiality in favor of the defendants and engaged in unauthorized ex parte communications with the defendants when he assisted them with preparations for the 2002 hearing before Judge Rittenband. Fourth, the plaintiff argues that the panel made an evident material miscalculation when it failed to include "property" costs, which were charged in full to the defendants, in calculating the ratio for the general project costs. Finally, the plaintiff argues that the defendants are not entitled to prejudgment interest because the plaintiff did not wrongfully detain payment, nor did it conduct itself in bad faith.
The defendants respond to each of the plaintiff's arguments in its brief opposing the motion to vacate. First, the defendants argue that the plaintiff has failed to satisfy the legal standard to establish that the arbitrators exceeded their powers and manifestly disregarded the law. Second, Judge Scholl already determined that there was no "evident partiality" on the part of Ockerby, and that this is the law of the case. Third, the plaintiff cannot prevail on its evident material miscalculation argument because it is arguing an error in the method of the panel's allocation of "property" costs, not a mathematical calculation error. Finally, the defendants argue they are entitled to an interest award because the plaintiff was fully aware at the time of Judge Rittenband's decision that the panel's allocation of liability would remain the same, and that it was just providing additional findings to support its conclusion.
Additionally, the defendants reassert their argument that the plaintiff's attorney waived its right to findings of fact and conclusions of law based upon statements he made before the panel during the phase two hearing in July 2001. The plaintiff argues in response that there is no reason to disturb Judge Rittenband's ruling that there was no waiver.
CT Page 11276
II. STANDARD OF REVIEW
"A submission to arbitration, sometimes referred to as an agreement for submission, is a contract . . . whereby two or more parties agree to settle their respective legal rights and duties by referring the disputed matters to a third party, by whose decision they agree to be bound. Technical precision in making a submission is not required and submissions are given a liberal construction in furtherance of the policy of deciding disputes by arbitration and in light of the surrounding facts and circumstance. 4 Am.Jur.2d 143, Alternative Dispute Resolution § 85 (1995). A submission to arbitrate must embrace everything necessary to give the arbitrators jurisdiction over the parties and the matter in dispute . . . Since the award is limited by the submission, the submission agreement should show clearly what disputes are to be arbitrated. However, it will be presumed that the parties intended to grant to the arbitrators such powers as are reasonably necessary to settle the dispute fully. Id., 144, § 86." (Internal quotation marks omitted.) Alderman Alderman v. Pollack, 100 Conn.App. 80, 82-83, 917 A.2d 60 (2007).
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 . . . 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 . . . 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 . . .
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 . . .
The significance . . . 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 . . .
Even in the case of an unrestricted submission, [the Supreme Court] ha[s] . . . recognized three grounds for vacating an award: (1) the award rules on the constitutionality of a statute . . . (2) the award violates clear public policy . . . [and] (3) the award contravenes one or more of the statutory proscriptions of [General Statutes] § 52-418.
(Internal quotation marks omitted.) Harty v. Cantor Fitzgerald Co., 275 Conn. 72, 80-81, 881 A.2d 139 (2005); see also Bridgeport Fire Fighters Local 998 v. City of Bridgeport, 106 Conn.App. 92, 95, 940 A.2d 868 (2008). General Statutes § 52-418(a) provides in relevant part: "Upon the application of any party to an arbitration, the superior court for the judicial district in which one of the parties resides . . . 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 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 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." Garrity v. McCaskey, 223 Conn. 1, 5, 612 A.2d 742 (1992).
Our Supreme Court recently reiterated that
[i]n essence [the law of the case doctrine] expresses the practice of judges generally to refuse to reopen what [already] has been decided . . . New pleadings intended to raise again a question of law which has been already presented on the record and determined adversely to the pleader are not to be favored . . . Where a matter has previously been ruled upon interlocutorily, the court in a subsequent proceeding in the case may treat that decision as the law of the case, if it is of the opinion that the issue was correctly decided, in the absence of some new or overriding circumstance . . .
A judge is not bound to follow the decisions of another judge made at an earlier stage of the proceedings, and if the same point is again raised he has the same right to reconsider the question as if he had himself made the original decision . . . This principle has been frequently applied to an earlier ruling during the pleading stage of a case . . . According to the generally accepted view, one judge may, in a proper case, vacate, modify, or depart from an interlocutory order or ruling of another judge in the same case, upon a question of law.
(Citation omitted; internal quotation marks omitted.) Johnson v. Atkinson, 283 Conn. 243, 249, 926 A.2d 656 (2007).
In this case, neither party argues in their respective briefs whether the submission is restricted or unrestricted. Although Judge Rittenband found that the submissions were not unrestricted, there is no "express language" in the "Statement of Issues and Procedural Timeline for Entergy Arbitration" or the "Revised Procedures to Govern the Phase II Arbitration Re: Allocation Issues" that restricts the breadth of issues, nor is there an explicit reservation of rights or a conditioning of the award on court review. The relevant language appears in the latter document: "The arbitration award shall be in writing and shall contain findings of fact and conclusions regarding the interpretation of the insurance policies that are the subject of this arbitration as necessary to support the award." This court finds this submission to be unrestricted, and therefore the scope of review is limited.
III. DISCUSSION A. The Arbitration Panel Did Not Exceed Their Powers
The plaintiff first argues that the panel exceeded its powers when it failed to include sufficient conclusions regarding the interpretation of the insurance policies in the 2006 clarified decision. The plaintiff contends that the panel failed to provide "findings of fact and conclusions regarding the interpretation of the insurance policies that are the subject of this arbitration as necessary to support the award," as required by the submission. Specifically, the plaintiff argues that the panel should have provided legal authority, principles of insurance practice or factual bases to justify its allocation of the top costs. Further, the panel did not provide any basis for its proration of the general project costs.
The defendants argue that the decision responds to the submission by resolving all liability and allocation issues when it responded to each of the five questions in the submission. Further, it argues that the panel's written findings and conclusions are irrelevant under Garrity v. McCaskey, supra, 223 Conn. 8 n. 6 (1992) ("We emphasize that we do not hold that this review centers on an arbitrator's memorandum of decision, or that all arbitration decisions require such a memorandum.").
If "the award fails to conform to the submission, or, in other words, falls outside the scope of the submission," the arbitrators have exceeded their powers under General Statutes § 52-418(a)(4). Harty v. Cantor Fitzgerald Co., supra, 275 Conn. 85. The Court went on to explain the scope of review: "Our review is limited to a comparison of the award to the submission. Our inquiry generally is limited to a determination as to whether the parties have vested the arbitrators with the authority to decide the issue presented or to award the relief conferred. With respect to the latter, we have explained that, as long as the arbitrator's remedies were consistent with the agreement they were within the scope of the submission . . . In making this determination, the court may not engage in fact-finding by providing an independent interpretation of the contract, but simply is charged with determining if the arbitrators have ignored their obligation to interpret and to apply the contract as written." (Citation omitted; internal quotation marks omitted.) Id., 85-86.
This court finds that the award conforms to the submission. The submission requires "findings of fact and conclusions" that are "necessary to support the award." Unfortunately for the plaintiff, this language is rather broad, and the court's review is limited in that it can only examine whether the panel has complied; the court cannot look to the sufficiency of the panel's explanation. The plaintiff's concerns could have been mitigated with a more specific submission. However, this court cannot impose upon the panel a requirement to make further conclusions than those that it made in its 2006 clarified decision.
B. The Arbitration Panel's Allocation of "Top" Costs Does Not Reflect a Manifest Disregard for the Law
The plaintiff argues that the arbitration panel's allocation of thirty percent of the top costs to the HSB policy is a manifest disregard of the law "in light of the undisputed nature of the evidence at the second-phase arbitration hearing." The plaintiff contends that under the all risks policy, there was a presumption of coverage unless the defendants could specifically show the loss was excluded, whereas the HSB policy is presumed not to cover a loss unless it is shown that the loss fell within the specific boiler and machinery coverage.
The defendants respond that there is no evidence that the panel disregarded the controlling law. Further, the defendants argue that the plaintiff has failed to satisfy any of the elements from the three-part test articulated by our Supreme Court to show manifest disregard of the law. Additionally, the defendants contend that the plaintiff made this exact argument before the arbitration panel, which specifically rejected it in the 2006 supplemental decision.
"[Section] 52-418(a)(4) provides that an arbitration award shall be vacated 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 . . .
So delimited, the principle of vacating an award because of a manifest disregard of the law is an important safeguard of the integrity of alternate dispute resolution mechanisms. Judicial approval of arbitration decisions that so egregiously depart from established law that they border on the irrational would undermine society's confidence in the legitimacy of the arbitration process . . . Furthermore, although the discretion conferred on the arbitrator by the contracting parties is exceedingly broad, modern contract principles of good faith and fair dealing recognize that even contractual discretion must be exercised for purposes reasonably within the contemplation of the contracting parties . . .
In Garrity [ v. McCaskey, 223 Conn. 1, 9, 612 A.2d 742 (1992)], [the Supreme Court] adopted the test enunciated by the United States Court of Appeals for the Second Circuit in interpreting the federal equivalent of § 52-418(a)(4) . . . The test consists of the following three elements, all of which must be satisfied in order for a court to vacate an arbitration award on the ground that the arbitration panel manifestly disregarded the law: (1) the error was obvious and capable of being readily and instantly perceived by the average person qualified to serve as an arbitrator; (2) the arbitration panel appreciated the existence of a clearly governing legal principle but decided to ignore it; and (3) the governing law alleged to have been ignored by the arbitration panel is well defined, explicit, and clearly applicable . . .
Therefore, an award that manifests an egregious or patently irrational application of the law is an award that should be set aside pursuant to § 52-418(a)(4) because the arbitrator has exceeded [his] powers or so imperfectly executed them that a mutual, final and definite award upon the subject matter submitted was not made. [The Supreme Court] emphasize[d], however, that the manifest disregard for the law ground for vacating an arbitration award is narrow and should be reserved for circumstances of an arbitrator's extraordinary lack of fidelity to established legal principles.
(Citations omitted; emphasis added; internal quotation marks omitted.) Economos v. Liljedahl Bros., Inc., 279 Conn. 300, 306-07, 901 A.2d 1198 (2006). The Court went on to note that since articulating the test in Garrity, it has never found a manifest disregard for the law. Id., 307-08 n. 8.
It is not this court's role to delve into an analysis of the two insurance policies and assess the evidence submitted by both parties to determine the coverage allocation as the plaintiff argues. Instead, the court must determine whether the plaintiff has satisfied the three-part test. It is not clear that the arbitration panel made an error of law, nor that it ignored the law. In fact, it seems more likely that the opposite occurred. In the 2006 clarified decision, the panel quoted relevant language of the specific policies and based its allocation "on policy language and testimony." Neither the submission, nor Judge Rittenband's remand order required the panel to provide a detailed analysis of the policies under the operative law. If the plaintiff sought such findings, it could have bargained for them when the original submission was drafted. This court must defer to the panel's expertise on this matter as there is no clear indication that the panel disregarded any principles of insurance law.
C. Arbitrator Ockerby Did Not Demonstrate an "Evident Partiality"
The plaintiff alleges that conduct on the part of Ockerby warrants a vacation of the arbitration award because he demonstrated an evident partiality toward the defendants. Ockerby assisted the defendants in preparation for the hearing before Judge Rittenband in 2002, by serving as their paid witness and consultant. The plaintiff argues that this behavior constitutes improper ex parte communications. The defendants respond that this court has already considered and rejected this argument when Judge Scholl denied the plaintiff's temporary injunction, and therefore this court should not reexamine the issue under the law of the case doctrine, discussed in Part II above.
"An allegation that an arbitrator was biased, if supported by sufficient evidence, may warrant the vacation of the arbitration award. Schwarzschild v. Martin, 191 Conn. 316, 327, 464 A.2d 774 (1983); Local 530, AFSCME, Council 15 v. New Haven, 9 Conn.App. 260, 267, 518 A.2d 941 (1986). The burden of proving bias or evident partiality pursuant to [General Statutes] § 52-418(a)(2) rests on the party making such a claim, and requires more than a showing of an appearance of bias. Local 530, AFSCME, Council 15 v. New Haven, supra, 265, 274. In construing § 52-418(a)(2), th[e] [Appellate] [C]ourt concluded that evident partiality will be found where a reasonable person would have to conclude that an arbitrator was partial to one party to the arbitration. To put it in the vernacular, evident partiality exists where it reasonably looks as though a given arbitrator would tend to favor one of the parties. Id., 274." (Internal quotation marks omitted.) Vincent Builders, Inc. v. American Application Systems, Inc., 16 Conn.App. 486, 494-95, 547 A.2d 1381 (1988).
Although it is undisputed that Ockerby engaged in ex parte communications with the defendants, all of the incidents occurred after the January 2002 award. It is also undisputed that the procedures governing the arbitration prohibited ex parte communications. There is nothing to suggest, however, that the ex parte communication ban continues in perpetuity. At the time of these ex parte communications, the award was finalized, if imperfect. The plaintiff contends that the January 2002 award was not a proper award because it did not contain the requisite findings of fact and conclusions of law. However, it is clear from Judge Rittenband's decision that the panel could not change the actual financial award. Rather, the court ordered the panel to provide the requisite information to explain how the panel arrived at the particular numbers. Even with the remand, there was nothing the panel could do to benefit one party or the other because they were only ordered to provide justification and could not modify the award amounts. The plaintiff does not point to any case law that suggests that ex parte communications between an arbitrator and a party are prohibited after the award is made. All of the cases cited by the plaintiff involve ex parte communications that occurred prior to the issuance of the award. The plaintiff is asking this court to extend the doctrine barring ex parte communications between arbitrators and parties months after a finalized arbitration award; this court declines to do so.
It is also worth noting that the plaintiff was aware of the ex parte communications at the time of the hearing before Judge Rittenband. During the May 2008 hearing before this court, the plaintiff's attorney explained that he did not want to raise the issue until further investigation was conducted.
D. The Award Amount Does Not Contain an Evident Material Miscalculation
The plaintiff argues that the panel miscalculated the property cost allocation amongst the parties. Specifically, the plaintiff contends that the panel should have included the property cost allocation when calculating the overall percentage of responsibility for each of the parties. Instead, the panel aggregated each party's top and bottom costs and calculated the overall ratio: for the plaintiff, $8,131,139.62 (bottom) plus $2,268,971.97 (top) totaling $10,400,111.59, and $5,294,267.93 (top only) for the defendants. This resulted in 66.27 percent of costs attributable to the plaintiff and 33.73 percent of costs attributable to the defendants; these percentages were applied to the $21,182,561.13 paid under the joint loss agreement. The plaintiff contends that the division of property costs should have been likewise distributed based upon the overall percentage of responsibility. The defendants respond that this calculation goes to the merits of the dispute by asking this court to review the allocation method selected by the panel, and is thus beyond this court's scope of review.
General Statutes § 52-419 provides in relevant part: "Upon the application of any party to an arbitration, the superior court for the judicial district in which one of the parties resides shall make an order modifying or correcting the award if it finds any of the following defects: (1) If there has been an evident material miscalculation of figures or an evident material mistake in the description of any person, thing or property referred to in the award . . . (b) The order shall modify and correct the award, so as to affect the intent thereof and promote justice between the parties." Generally, courts find "evident material miscalculation of figures" when there is a calculation error. See, e.g., Milford v. Coppola Construction Co., 93 Conn.App. 704, 717-18, 891 A.2d 31 (2006) (declining to examine factual matters of how the award was calculated because there was no miscalculation on the face of the award); Dulman v. State Farm Fire Casualty Co., Superior Court, judicial district of New London, Docket No. 517202 (December 23, 1992, Hurley, J.) (trial court corrected award amount because arbitrator erroneously subtracted a credit twice for coverage provided by another insurance carrier).
In this case, there is nothing in the submission that suggests the formula that the plaintiff requests. Additionally, the panel states in the 2006 clarified decision that it consciously chose the formula that it applied:
Since the Parties were unable to agree on various components of the costs involved, . . . the Panel reallocated the amount of the Joint Loss of $21,864,846.11 as shown on Exhibit 5 [a spreadsheet titled "Allocation of Joint Loss Amount" that shows the panel's calculations of the allocation of the joint loss agreement amount]. The Panel used its best judgment in considering the testimony and its many years of experience in the commercial property claims adjusting industry. The reallocation was on a percentage basis for the "top" and "bottom" costs as determined by the Panel.
Because there is no evidence of a mathematical error, nor an application of an erroneous formula, the plaintiff cannot prevail on its evident material miscalculation argument.
E. Waiver
The defendants next reassert their argument that the plaintiff waived its right to findings of fact and conclusions of law from the arbitration panel based upon an interlocutory between one of the plaintiff's attorneys and the arbitrators during the phase two hearing. The defendants raised this issue during the hearing before Judge Rittenband on their motion to confirm the award. Judge Rittenband concluded in his decision that the plaintiff did not waive its right.
In his 2002 decision, Judge Rittenband stated:
Courts should indulge every reasonable presumption against waiver. Barker v. Wingo, 407 U.S. 514, 525, 33 L.Ed.2d 101, 92 S.Ct. 2182 (1972). Waiver presupposes a full knowledge of an existing right or a privilege and something done designedly or knowingly to relinquish it either directly or by reasonable inference. (Emphasis added.) Reinke v. Greenwich Hospital Ass'n., 175 Conn. 24, 27, 392 A.2d 966 (1978). Defendants have cited statements made by the plaintiff's counsel at the hearing of June 28, 2001, before the arbitrators. Attorney Stockman for the plaintiff stated on page 269 "The end point from the Panel is a statement that someone pays someone and how much they pay." The Court considers that an offhand remark which is not all inclusive and does not amount to a waiver of an existing right done designedly or knowingly to relinquish it either directly or by reasonable inference. (Emphasis added.) Defendants also claim that the submission by the plaintiff to the Panel of its Decision Matrix is also a waiver by the plaintiff. This Court finds that the submission of said Matrix is not a waiver of an existing right or privilege and does not fit the category of something done designedly or knowingly to relinquish it. Reinke, supra. There was no intent to relinquish any rights either directly or by inference. Therefore, the answer to the question posed above is "No." The plaintiff did not waive its present claims.
(Internal quotation marks omitted.) Hartford Steam Boiler Inspection Ins. Co. v. Underwriters at Lloyd's, Superior Court, judicial district of Hartford, Docket No. CV 02 081462 (July 31, 2002, Rittenband, J.).
This court agrees with Judge Rittenband that the comment made by the plaintiff's attorney was an offhand, justifiably exasperated remark made at a hearing held over eight years after the incident. Additionally, the law of the case doctrine, discussed in Part II above, is relevant here as well. This court is disinclined to reexamine this issue as it was argued before and decided by Judge Rittenband in 2002. The defendants do not appear to put forward any new evidence or legal argument. Given that this issue was fully litigated in 2002, this court will not overrule the decision of another Superior Court judge.
F. Prejudgment Interest
The defendants have renewed their motion for award of interest originally filed May 22, 2002. They seek an award of interest from the date of the original award, January 24, 2002, at a rate of ten percent per year pursuant to General Statutes 37-3a. The defendants argue that the plaintiff has "done everything in its power to avoid paying the monies awarded" by pursuing its motions to vacate and subsequent appeals. The plaintiff argues that it has made its motion to vacate and the subsequent appeals in good faith based on "substantial arguments," and therefore an award of interest is not called for here. Further, even if interest is awarded, the plaintiff argues that it should not begin until after the clarified award in 2006, because the January 2002 award "did not comply with the submission, and was not enforceable."
The Connecticut General Statutes provide for the award of prejudgment interest in certain cases. "Except as provided in sections 37-3b, 37-3c and 52-192a, interest at the rate of ten per cent a year, and no more, may be recovered and allowed in civil actions or arbitration proceedings under chapter 909, including actions to recover money loaned at a greater rate, as damages for the detention of money after it becomes payable." General Statutes § 37-3a(a). "The decision of whether to grant interest under § 37-3a is primarily an equitable determination and a matter lying within the discretion of the trial court." (Emphasis added; internal quotation marks omitted.) MedVal USA Health Programs, Inc. v. Memberworks, Inc., 273 Conn. 634, 666, 872 A.2d 423 (2005).
"In Chmielewski v. Aetna Casualty Surety Co., 218 Conn. 646, 675-76, CT Page 11287 591 A.2d 101 (1991), the Supreme Court stated: [A] trial court has discretion, under General Statutes § 37-3a, to award prejudgment interest on an arbitration award retroactively to some date prior to the date of the trial court's judgment affirming the award . . . Implicit in that determination is the conclusion that the prior date may be the date of the arbitration award. [The Supreme Court] also reasserted the well established propositions that § 37-3a provides for interest on money detained after it becomes due and payable, that the question under that statute is whether the money was wrongfully withheld, and that the ultimate determination is one to be made in view of the demands of justice rather than through the application of any arbitrary rule." (Citations omitted; emphasis added; internal quotation marks omitted.) Spearhead Construction Corp. v. Bianco, 39 Conn.App. 122, 136, 665 A.2d 86, cert. denied, 235 Conn. 928, 667 A.2d 554 (1995). "Whether interest may be awarded depends on whether the money involved is payable . . . and whether the detention of the money is or is not wrongful under the circumstances." (Citation omitted; internal quotation marks omitted.) Maluszewski v. Allstate Ins. Co., 34 Conn.App. 27, 39, 640 A.2d 129, cert. denied, 229 Conn. 921; 642 A.2d 1214 (1994).
The court concludes that interest from January 24, 2002, to the date of today's judgment is warranted in this case. Although it does not appear that the plaintiff made its motions and appeals in bad faith, the plaintiff would receive an unfair advantage if it were allowed to retain this money while the defendants were deprived of its use and the opportunity to earn interest upon it for the past six years. The plaintiff knew the award amount on January 24, 2002, and also knew this amount would not change following Judge Rittenband's remand to the panel for clarification of the award. The court notes that the parties in this matter are engaged in a business that assesses and manages risks, not in a vacuum, but rather along a continuum of time. Therefore, an award of interest is equitable under the circumstances. To do otherwise would in effect mean that the plaintiff profits by disagreeing with its perceived loss in arbitration, while the defendants lose any benefit they were to receive by virtue of the arbitration.
IV. CONCLUSION
For the foregoing reasons, the plaintiff's motion to vacate the arbitration award is denied, the defendants' motion to confirm the arbitration award is granted. The defendants' motion for interest is also granted, and the plaintiff is ordered to pay prejudgment interest dating from January 24, 2002 to the date of this decision at the rate of ten percent per year.
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