Opinion
No. FST CV 08 4013440 S
September 11, 2008
MEMORANDUM OF DECISION
This short calendar matter, involving an attack upon an arbitration result, arose due to the refusal of the lead arbitrator ("umpire") to sign the award result, which had been fully decided, until he was paid. The law would appear to command a result which would now require a full or partial do-over of the arbitration, with a likely repeated challenge to it. However, too much law would have to be bent or ignored to avert this abhorrent result.
In an effort to remove a bit of confusion from the factual narrative the court will simply refer to the homeowner's insurance as the "carrier" and the homeowner as such. In the actual setting, the carrier is the nominal plaintiff-movant, but legal readers would traditionally associate the homeowner as plaintiff in a matter involving a fire-ravaged home and the carrier insuring it.
Following a residential total fire loss on August 4, 2005, homeowner and carrier failed to agree on the amount of loss.
The parties agreed to an "Appraisal," and each selected appraisers to separately determine the full replacement cost of the fire loss, and an umpire, appointed by both appraisers, to resolve the difference with a binding decision. The carrier's appraiser presented a figure of $356,758.81, and the homeowner's appraiser set an amount of $473,950.28. On February 23, 2007, the umpire promulgated a result in which the umpire determined: a replacement cost of $395,000; a full cost of repair of $404,001.63; and an actual cash value of loss of $316,489.03. On that same day, the homeowner's appraiser accepted and agreed with the determination.
The court temporarily refrains from here using the word "award," as the task before the bench essentially requires a pronouncement whether an "award" occurred or fully matured.
Three days later, on February 26, 2007, the umpire indicated that he would not sign the result for filing until he received payment for services performed. Each party was responsible for half of the payment. On March 30, 2007, the carrier issued a check for half of the payment to the umpire. The umpire received payment from the homeowner on January 30, 2008 and on February 4, 2008, the umpire affixed his signature and forwarded copies to both appraisers, apparently received on February 26, 2008, by the parties.
On March 3, 2008, the carrier filed an Application to Vacate Appraisal Award (which created this court file) on the grounds that the umpire "exceeded his powers by issuing a late and untimely award without mutual agreement from the parties to extend the deadline and because the award was rendered more than thirty days after the final hearing and submission of the documents set forth in Connecticut General Statutes § 52-416." (See, infra).
The homeowner then moved to dismiss the plaintiff's Application (which brought it to the short calendar) on the grounds that the court does not have subject matter jurisdiction because the carrier failed to file the Application to Vacate Appraisal Award within 30 days of the umpire's February 23, 2007 rendering of his written decision (as required by § 52-420(b)).
"A motion to dismiss . . . properly attacks the jurisdiction of the court, essentially asserting that the plaintiff cannot as a matter of law and fact state a cause of action that should be heard by the court . . . A motion to dismiss tests, inter alia, whether on the face of the record, the court is without jurisdiction." (Internal quotation marks omitted.) Cox v. Aiken, 278 Conn. 204, 210-11 (2006).
"The plaintiff bears the burden of proving subject matter jurisdiction, whenever and however raised." (Internal quotation marks omitted.) Fort Trumbull Conservancy, LLC v. New London, 265 Conn. 423, 430 n. 12 (2003). "When issues of fact are necessary to the determination of the court's jurisdiction, [however] due process requires a trial like hearing be held, in which an opportunity is provided to present evidence . . ." (Internal quotation marks omitted.) Gordon v. H.N.S. Management Co., 272 Conn. 81, 92 (2004).
As noted, the homeowner urges that the court is without subject matter jurisdiction over the Application because the carrier failed to file its 2008 Application within the thirty-day limitation set forth in § 52-420. The homeowner attests that the umpire's award was final and definite on February 23, 2007 the day the unsigned result was promulgated and that the carrier's application to vacate was required to be filed within thirty days of the "rendering" of the award on February 23, 2007. According to the homeowners, the umpire's failure to sign the award and provide copies of the award to the parties until February 4, 2008 has no bearing on the fact that the arbitrators and the umpire determined and "rendered" the final award on February 23, 2007.
In response, the carrier argues that as a result of the umpire's failure to file the signed, written award within thirty days of the final hearing, the umpire exceeded his powers and the award has no legal effect. The carrier further argues that the bill for services sent to the parties on February 26, 2007 did not satisfy the requirements of § 52-416(b) and did not provide the parties with the required notification of the award.
Section 52-420(b) provides: "No motion to vacate, modify or correct an award may be made after thirty days from the notice of the award to the party to the arbitration who makes the motion." Once the thirty-day limitation period of § 52-420(b) has passed, "the award may not thereafter be attacked on any of the grounds specified in § 52-418." Amalgamated Transit Union Local 1588 v. Laidlaw Transit, Inc., 33 Conn.App. 1, 4 (1993). "52-420(b) requires that a motion to vacate an arbitration award be filed within thirty days of the notice of the award to the moving party. If the motion is not filed within the thirty day time limit, the trial court does not have subject matter jurisdiction over the motion." Middlesex Ins. Co. v. Castellano, 225 Conn. 339 (1993).
General Statutes 52-418(a) provides in pertinent 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: . . . (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."
Section 52-420 must be read with § 52-416 and our courts have held the requirements of § 52-416 to be mandatory rather than discretionary. Marsala v. Valve Corp. of America, 157 Conn. 362, 369 (1969). Section 52-416 provides: (a) "[i]f the time within which an award is rendered has not been fixed in the arbitration agreement, the arbitrator or arbitrators or umpire shall render the award within thirty days from the date the hearing or hearings is completed . . . An award made after that time shall have no legal effect unless the parties expressly extend the time in which the award may be made by an extension or ratification in writing" and; (b) "The award shall be in writing and signed by the arbitrator or arbitrators, or a majority of them, or by the umpire. Written notice of the award shall be given to each party." The thirty-day limit for rendering the award is equally applicable to the notice of that award. See Hayes v. Travelers Indemnity Co., 26 Conn.App. 418 (1992) (holding that the thirty-day time limit for rendering the award is equally applicable to the notice of that award).
First, the court disagrees with the homeowner's contention that the award was rendered on February 23, 2007, and that the carrier failed to move to vacate within thirty days of that date. There is evidence that the appraisers and the umpire met on February 23, 2007, and agreed on the amount of the award; however, the umpire failed to sign the award and provide written notice to both parties on that date. Although the homeowner attached for the court the affidavits of Ladden (umpire) and Kolb (appraiser), they failed to provide the exhibits that were referenced by the affidavits. Thus, Ladden's statement that he "provided a copy of the written award to [the plaintiff's appraiser] as provided in the spreadsheet, attached hereto as Exhibit 3," does not provide the court with the substance of the notice, which is necessary to determine whether the such notice satisfied § 52-416. The umpire also states that a bill for services was sent to the parties, however there is no indication that the bill for services included any details of the award. It was not until February 4, 2008 that the umpire signed the award, and it was not until February 6, 2008 that both parties were in possession of a copy of the signed, written award. Then, as noted, the carrier sought to vacate it on March 3, 2008, within 30 days.
Although the parties were forwarded a bill for the services of the umpire, this cannot be said to satisfy the written notice requirement of § 52-416(a), nor can this be used against the parties as evidence of waiver. See Hayes v. Travelers Indemnity Co., supra, 26 Conn.App. 418, (a bill for services does not provide the parties with required notification of the award, as the parties were not provided with the specificity required to enable the parties either to seek to have the award confirmed or vacated or to decide otherwise to commence the appeal process). The umpire, therefore, failed to satisfy the requirements § 52-416. It follows that the umpire's failure to meet the requirements of § 52-416 results in the arbitration award having no legal effect and thus, the carrier was not required, in 2007, to file a motion to vacate under § 52-420(b). See, Remax Right Choice v. Aryeh, 100 Conn.App. 373 (2007).
Even if, as the homeowner suggests, the actions taken by the umpire on February 23, 2007, were construed as rendering the award, proper notice was not made. As stated by the court in Hayes, the purpose of the bill for services is "not to provide the required notification of the award . . . [t]he rights and obligations if the parties were not fixed by the bill . . ." Id.
In Remax Right Choice v. Aryeh, supra, 100 Conn.App. 373, the court held that the arbitration award had no legal effect as a result of the arbitrator's failure to render the award within the statutory time frame and remanded the case with direction to vacate the arbitration award. The court stated that "§ 52-416(a) requires that the parties, in writing, expressly extend the thirty day time frame. A thorough review of the record reveals no evidence of such waiver . . . Under these facts and circumstances, we conclude that resolution of this appeal is controlled by Marsala v. Valve Corp. of America, 157 Conn. 362, 369 (1969).] . . . Absent evidence of an express extension . . . there is nothing to support [a] finding of waiver." Id., 384. As a result of the parties' failure to expressly waive the thirty-day time frame, the arbitrator's 2007 "award" was untimely and had no legal effect. Furthermore, because the award had no legal effect, no valid arbitration award was presented to this court.
This court finds the reasoning in Remax persuasive and dispositive. It is true that a party must file a motion to vacate a valid arbitration award within thirty days of notice of the award pursuant to § 52-420(b) and on the basis of a ground set forth in § 52-418. As in Remax, a valid arbitration award was not in the hands of these litigants in 2007. The award had no legal effect as a result of the umpire's failure to render the award within the time limit of § 52-416(a) and the absence of waiver by the parties. Although the umpire uses the term "rendered" when referring to the final meeting on February 23, 2007 where the arbitrators and the umpire determined the final value of the award, this language carries no legal effect. As noted, it was not until February 6, 2008 that notice of a signed, written award was sent to the parties.
Although the homeowner argues that the failure to object to an untimely award waives one's right to subsequently challenge the award on timeliness, this court must follow the express wording of the statute, which requires a waiver of the thirty-day time frame to be in writing. As a result of the umpire's failure to file a signed award on time and failing to provide proper notice, the arbitration award has no legal effect and the plaintiff was not required, in 2007, to file a motion to vacate within the time frame set forth in § 52-420(b).
The present challenge, however, was timely (in its assertions of earlier untimeliness) and the court accordingly denies the homeowner's motion to dismiss the carrier's motion to vacate the award (a 2008 motion timely filed against a 2008 untimely award).
This hollow result is ineluctable. The motion, in its skeletal persona, leaves still standing the carrier's attack upon the "award," for the court has denied homeowner's attack upon it. The result on that motion would appear to be foreordained, for the 2007 and the 2008 "awards" are each burdened by their own distinct flaws. It is hoped and suggested that the parties read the wall's handwriting and agree to the vacating of the "awards" of 2007 and 2008, in order to avoid the necessity of a formal separate step and opinion vacating the award.
The court has termed this result both abhorrent and hollow, causing what one must suppose is an intolerable delay for the homeowner, all because of the monkey wrench created by the umpire's withholding of a proper finish to await payment. Now the parties may not know whether to re-enact the play with the same actors, or to begin entirely anew. If it is exactly replicated, they and this court then must plow through a substantive attack, this time on evidence, of the award. A total rehash creates even more delay. The only fair next step would be an advance by the carrier of an amount they would have conceded, but the court cannot compel that.
Homeowner's motion to dismiss the carrier's motion to vacate award is denied.