Opinion
HHDCV176084277S
08-07-2018
Mark A. MONROE dba Delta Bail Bonds v. DIRECTORY ASSISTANTS, INC.
UNPUBLISHED OPINION
File Date: August 8, 2018
OPINION
MATTHEW D. GORDON, J.
The applicant, Mark A. Monroe, d/b/a Delta Bail Bonds ("Monroe"), seeks an order pursuant to General Statutes § § 52-418 and 52-420 vacating an October 11, 2017 arbitration award issued by Richard Castiglio, an arbitrator with American Dispute Resolution Center, Inc. ("ADR Center"), in favor of the respondent, Directory Assistants, Inc. ("DAI"). DAI has filed a cross application to confirm the award and for attorneys fees.
The basis for the arbitration award was that Monroe engaged in vexatious litigation against DAI in two matters: (1) a Connecticut application proceeding to confirm a prior arbitration award arising from a contractual dispute between Monroe and DAI (Docket No. HHD-CV15-6063305-S); and (2) a Texas lawsuit, filed by CMMM Management Corporation ("CMMM") against DAI while the previous Connecticut application was pending (originally filed in the 44th Judicial District Court of Dallas County, Texas on December 1, 2015, and later removed to the United States District Court, Northern District of Texas, Docket No. 3:16-cv-00306).
The arbitrator found that DAI was entitled to damages based on Monroe’s vexatious conduct in Connecticut in the amount of $51,742.00, and Monroe’s vexatious conduct in Texas in the amount of $64,084.00. The arbitrator also found that DAI was entitled to $12,410.45 for the legal fees it incurred in connection with the arbitration, as well as $9,276.52 in costs. The total amount of the arbitration award to DAI, including costs, was $137,512.97, plus $1,054.47 in fees to be paid directly to the ADR Center. DAI seeks confirmation of the arbitration award, as well as additional attorney fees in the amount of $16,048.50 pursuant to the terms of a Contingency Contract for Advertising Savings ("Contingency Contract") signed by the parties on March 12, 2013.
Monroe claims that the arbitration award violates clear public policy and manifestly disregards the law in violation of General Statutes § 52-418(a)(4). As for that part of the award based on Monroe’s vexatious conduct in Connecticut, Monroe claims that a claim for vexatious litigation must be based on a civil action, and that Waterbury v. Waterbury Police Union, Local 1237, 176 Conn. 401, 406, 407 A.2d 1013 (1979) supports the proposition that a proceeding brought pursuant to General Statutes § 52-420 to confirm, modify or vacate an arbitration award is not a civil action within the meaning of title 52. As for that part of the award based on Monroe’s vexatious conduct in Texas, Monroe claims that the award violates "long-established principles of jurisdictional, business entity and contract law" because the damages were awarded personally against Monroe based on the actions of CMMM, a corporation with which Monroe was affiliated.
Connecticut courts have "recognized three grounds for vacating an arbitration 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 § 52-418 ... General Statutes § 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." Blakeslee Arpaia Chapman, Inc. v. Dept. of Transportation, 273 Conn. 746, 756, 873 A.2d 155, 161 (2005). "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) ..." Id. The standard for vacating an award pursuant to § 52-418(a)(4) is "manifest disregard of the law," which "should be reserved for circumstances of an arbitrator’s extraordinary lack of fidelity to established legal principles." Id., 757. As first set forth in Garrity v. McCaskey, 223 Conn. 1, 612 A.2d 742 (1992), to prove that an award constitutes manifest disregard of the law and should be vacated, a party must prove all of the following elements: "(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." Id.
Having carefully considered the pleadings, exhibits, and other documents submitted by the parties, as well as the arguments made by the parties during oral argument on July 16, 2018, the court concludes that Monroe has not sustained his burden of proving that the arbitration award must be vacated.
During oral argument, counsel for Monroe and DAI both acknowledged that there is no clearly governing legal principle on the specific issue of whether an arbitration award can include damages for vexatious conduct occurring during a prior application proceeding to confirm a different and prior arbitration award. Monroe relies on Waterbury to support its position that the arbitration award must be set aside, but that case involved the different question of whether a proceeding to confirm an arbitration award was a civil action for purposes of an award of attorney fees and costs under General Statutes § 31-72- not whether a proceeding to confirm or vacate an arbitration award is a civil action for purposes of imposing damages for vexatious litigation. Given the dearth of authority on that specific legal issue, the court cannot conclude that the arbitrator "appreciated the existence of a clearly governing legal principle but decided to ignore it." Blakeslee Arpaia Chapman, Inc., supra, 273 Conn. 757. Nor can the court conclude that the alleged error of the arbitrator was "obvious and capable of being readily and instantly perceived by the average person qualified to serve as an arbitrator," or that "the governing law alleged to have been ignored by the arbitration panel [was] well defined, explicit, and clearly applicable." Id.
In addition, both parties conceded at oral argument that "whether the arbitrator manifestly disregarded the law [is] a claim on which litigants have yet to prevail in our courts ... exceptionally high burden for proving a claim of manifest disregard of the law under § 52-418[a][4] is demonstrated by the fact that, since the test was first outlined in Garrity [v. McCaskey, 223 Conn. 1, 612 A.2d 742 (1992) ], [the Connecticut Supreme] court has yet to conclude that an arbitrator manifestly disregarded the law." (Citation omitted, internal quotation marks omitted.) AFSCME, Council 4, Local 2663 v. Dept. of Children & Families, 317 Conn. 238, 251, n.7, 117 A.3d 470 (2015). See also Design Tech, LLC v. Moriniere, 146 Conn.App. 60, 68, 76 A.3d 712 (2013). While it is certainly possible that a case will eventually arise where a Connecticut court will find that an arbitrator has manifestly disregarded the law, this is not that case.
As for Monroe’s claim that the award relating to the Texas litigation was legally untenable because the award was issued against Monroe individually, the arbitrator specifically found that "the conduct of [Monroe] ... in the Texas federal litigation was vexatious" and that "Mark Monroe, based on the Parties’ agreement, is personally liable for the conduct of CMMM." As set forth above, the standard for vacating an arbitration award is extraordinarily high, and it is not for this court to second guess the arbitrator’s factual and legal determination that vexatious damages against Monroe were appropriate when there is no indication that the arbitrator acted in manifest disregard of the law in making this determination.
As for DAI’s request for additional attorney fees, the Contingency Contract mandates that: "If DAI has to incur any expense seeking to collect any amount due, confirming an award, converting an award to a judgment, domesticating a judgment or defending any judicial action (whether DAI prevails or not), DAI will be awarded all costs and expenses incurred, including all legal fees (at least $350 per hour)." "In reviewing a claim that attorneys fees are authorized by contract, we apply the well established principle that [a] contract must be construed to effectuate the intent of the parties, which is determined from [its] language ... interpreted in the light of the situation of the parties and the circumstances connected with the transaction." Total Recycling Services of Connecticut, Inc. v. Connecticut Oil Recycling Services, LLC, 308 Conn. 312, 327, 63 A.3d 896 (2013) (quoting FCM Group, Inc. v. Miller, 300 Conn. 774, 811, 17 A.3d 40 (2011) ). "[A] contract clause providing for reimbursement of ‘incurred’ fees permits recovery upon the presentation of an attorney’s bill, so long as that bill is not unreasonable upon its face and has not been shown to be unreasonable by countervailing evidence or by the exercise of the trier’s own expert judgment." Storm Associates, Inc. v. Baumgold, 186 Conn. 237, 246, 440 A.2d 306 (1982).
In its March 12, 2018 memorandum in opposition to the application to vacate arbitration award (# 105), DAI seeks "fees in the amount of $16,048.50, together with the fees for the cost of the hearing on [Monroe’s] application ..." At the July 16, 2018 hearing, DAI submitted invoices as documentation in support of this request. The court has reviewed the invoices submitted by DAI and finds that although they are reasonable, they only support a claim for attorneys fees and costs in the amount of $13,386.60, not the $16,048.50 requested in the opposition. The court therefore awards DAI attorneys fees only in the amount of $13,386.60.
For all of the forgoing reasons, Monroe’s application to vacate the arbitration award is denied, DAI’s cross application to confirm the award is granted. Judgment entered in favor of DAI against Monroe in the total amount of $151,954.04, which includes $13,386.60 in attorney fees, and $1,054.47 in fees to be paid directly to the ADR Center.