Opinion
CV176011107
08-25-2017
Kaman Aerospace Corp. v. TD Development, LLC
UNPUBLISHED OPINION
MEMORANDUM OF DECISION ON MOTION TO DISMISS (#102)
John D. Boland, Senior Judge.
Defendant moves to dismiss the complaint in this action on the basis that this court " is without subject matter jurisdiction." Specifically, defendant claims, " the Plaintiff's instant choice of forum is inconvenient to the Defendant, " a conclusion dependent upon this party's argument that the " parties must arbitrate their claims pursuant to mutually agreed upon forum selection clause." Plaintiff objects to the motion.
When a party challenges a court's subject matter jurisdiction over a cause of action, it is imperative that the court resolve that challenge before proceeding further with the case; Schaghticoke Tribal Nation v. Harrison, 264 Conn. 829, 839, n.6, 826 A.2d 1102 (2003). " A motion to dismiss admits all facts well pleaded and invokes any record that accompanies the motion, including supporting affidavits that contain undisputed facts . . . A ruling on a motion to dismiss is neither a ruling on the merits of the action . . . nor a test of whether the complaint states a cause of action." Pitruzello v. Muro, 70 Conn.App. 309, 312, 798 A.2d 469 (2002).
According to the Amended Verified Complaint of April 10, 2017, to which this motion is addressed, the facts well pleaded are that plaintiff and defendant are, respectively, a Delaware corporation and an Ohio limited liability company. Their dispute arises out of a contract under which plaintiff would sell to defendant a parcel of commercial real estate situated in the town of Plainfield, CT. Plainfield is within the judicial district of Windham. The complaint alleges that substantial environmental degradation had occurred upon the land over its lifetime of commercial use, and recites in considerable detail the provisions of the purchase and sale agreement requiring remediation by defendant over a five-year period and plaintiff's monetary participation in that process. Instead of satisfactorily performing, plaintiff claims, defendant breached the agreement in multiple ways warranting compensatory and punitive damages and other relief.
Both the face of the motion and its supporting memorandum make it evident that defendant's primary concern regards arbitration of the contract issues, although the complaint is utterly silent as to the availability of that process. Without any affidavit, and without requesting an evidentiary hearing, first defendant and then plaintiff have supplied additional information highlighting the issue of arbitration. Defendant attached to its motion and relies upon language in an " Environmental Escrow Agreement" and in the " Purchase and Sale Agreement" to which that escrow agreement is a companion. Each provides for arbitration of any dispute arising out of the parties' relationship, to be conducted in Hartford, CT, and to be governed by Connecticut law. For its part, plaintiff admits as much in its opposing memorandum, and, with similar informality, submits correspondence relative to the arbitration option from both defendant and from the American Arbitration Association.
Notwithstanding the relaxed manner in which this topic has entered this case, the various documents described appear to be genuine renditions of the governing contractual arrangement and subsequent correspondence. It is therefore safe to conclude for the sake of the present argument that the parties' contract does provide for arbitration as a means of resolving their disputes over the land purchase and remediation efforts. That being said, it is clear that the defendant has improperly resorted to a motion to dismiss as a vehicle for invoking the arbitration process. In Catrini v. Erickson, 113 Conn.App. 195, 966 A.2d 275 (2009), the court reversed a trial court decision granting defendant's motion to dismiss, based on a claim that the parties' agreement to arbitrate deprived the court of subject matter jurisdiction. It did so reasoning that since General Statutes § 52-409 allows a court to enter a stay in a matter involving an arbitration agreement, the legislation implicitly acknowledges that the court has jurisdiction to do so:
If the existence of an arbitration agreement in a contract implicated the court's jurisdiction to hear an action, then a court would, accordingly, not have jurisdiction to stay such a matter because, in the absence of jurisdiction, the court may only dismiss a matter. In short, because the power to order a stay implies that the court has jurisdiction over a matter, the legislature could not have empowered the court to enter a stay in such a matter unless the court has jurisdiction over it. Accordingly, the court improperly granted the defendants' motion to dismiss for lack of subject matter jurisdiction.113 Conn.App. 195, 197, 966 A.2d 275.
In another case examining whether a party with a contractual option of arbitration had waived that process, the court observed that when a contract provides for arbitration, but one party instead institutes a civil action to resolve the dispute, " [t]he party desiring arbitration can then seek a stay of the civil action"; MSO, LLC v. Desimone, 313 Conn. 54, 63, 94 A.3d 1189 (2014).
Coincidentally, this state's rule corresponds with the Second Circuit's understanding of similar provisions of the Federal Arbitration Act. In Katz v. Cellco Partnership, 794 F.3d 341, cert denied, 136 S.Ct. 596, 193 L.Ed.2d 471 (2015), the court held that the statute provides for a stay rather than a dismissal of an action in which arbitration is an available option, and that the district courts lack discretion to dismiss an action in lieu of entering such a stay. In Celltrace Communications Ltd. v. Acacia Research Corp., 16-2006, 16-2326, 689 Fed.Appx. 6 (April 25, 2017), the same court vacated a district court's order dismissing a complaint when arbitration was provided as an alternative dispute resolution method, and remanded to that court for entry of a stay.
Defendant has supplied the court with no contrary authority.
The question has been raised whether the motion to dismiss ought to be construed as a motion for a stay and adjudicated accordingly. The answer is no. In Nicosia v. Amazon.com, Inc., 834 F.3d 220 (2d Cir. 2016), the court reversed a trial court order dismissing a compliant on the basis that arbitration was available, but affirmed that court's decision refusing to sua sponte order the parties to proceed to arbitration. For one thing, the decision noted, neither party had formally requested the court to enter such an order. For another, the standards by which a dismissal versus an order compelling arbitration could be evaluated on appeal were not identical, and thus confusion might ensue in such event. In the present case, an application for an order to arbitrate is conspicuously lacking. Furthermore, if a stay were issued here without a hearing, confusion could well ensue since the court has previously entered pendente lite orders upon plaintiff's application, and has before it an as-yet undetermined application for prejudgment remedies. Such orders are contemplated by statute; see General Statutes § 52-422 (" At any time before an award is rendered pursuant to an arbitration . . . the superior court . . . in a controversy concerning land, for the judicial district in which the land is situated . . . upon application of any party to the arbitration, may make forthwith such order or decree, issue such process and direct such proceedings as may be necessary to protect the rights of the parties pending the rendering of the award and to secure the satisfaction thereof when rendered and confirmed"). If this court is to enter a stay, the effect it might have upon such previous or subsequent pendente lite orders is a necessary part of the deliberations and the parties should be heard on that point.
For the foregoing reasons, the motion to dismiss is denied.