Opinion
No. CV 08 4030653
July 30, 2008
MEMORANDUM OF DECISION
MEMORANDUM OF DECISION RE MOTION TO VACATE ARBITRATION AWARD
The pro se plaintiff, April Reiss, opened a credit card account with the defendant, Chase Bank USA, N.A. (Chase), in January of 2005. Chase claims that the account agreement includes an agreement to arbitrate any disputes, that Reiss's account became delinquent, and that it filed a claim against the plaintiff in the National Arbitration Forum, seeking to collect the monies allegedly owed to it under the account agreement. The arbitrator awarded Chase $2,150.16 in damages, and the Arbitration Forum sent notice of the arbitrator's decision on March 5, 2008. On April 7, 2008, Reiss filed the instant motion to vacate that award.
Where a layman appears pro se, the court follows a liberal policy and carefully considers a pro se party's claims as far as they are fairly presented upon the record to ensure that no injustice has been done to him under the law. See Goldstein v. Fischer, 200 Conn. 197, 198, 510 A.2d 184 (1986). Nevertheless, while the plaintiff is afforded this latitude, the court is equally cognizant that "the right of self-representation provides no attendant license not to comply with relevant rules of procedure and substantive law." New Haven v. Bonner, 272 Conn. 489, 498, 863 A.2d 680 (2004); see also Rodriguez v. Mallory Battery Co., 188 Conn. 145, 149 n. 8, 448 A.2d 829 (1982) (notwithstanding leniency accorded pro se litigants, "we cannot, and will not, entirely disregard the established rules of procedure"). Although self-represented in this case, the plaintiff acknowledges utilizing the services of an internet-based company that provides form pleadings to persons facing litigation over their credit card debt.
As grounds for her motion to vacate, the plaintiff contends that her account agreement did not contain an arbitration clause to which she was bound, and that even if the agreement contained such a clause, the arbitrator exceeded his authority in granting this award, the arbitrator's decisional process was influenced by the large amount of business Chase gives to National Arbitration Forum, and that the arbitration agreement was unconscionable. The plaintiff supported her motion with a memorandum of law, her own affidavit and copies of various documents from the arbitration proceedings. Chase filed an objection to the plaintiff's motion, attaching to its own memorandum of law the affidavit of its attorney and additional documents from the arbitration proceedings.
Chase first argues that this court is without jurisdiction to hear most of the plaintiff's claims because her complaint was not timely filed. In addition to the jurisdictional issue, it also contends that the motion to vacate should not be granted because the plaintiff has failed to meet her burden of proof with respect to the one remaining issue, her claim that the account agreement did not contain an arbitration clause. For the reasons below, the court agrees that it lacks jurisdiction to hear the plaintiff's claims regarding the arbitrator's allegedly exceeding the scope of his authority as well as those based on alleged fraud and the contention that the agreement was unconscionable. The court also concludes that there was a valid arbitration agreement between the parties, and that the motion to vacate must therefore be denied.
At the time of oral argument, the court expressed some concern that, given the absence of evidence as to when notice of the arbitrator's decision was actually received by plaintiff, it was unlikely that the defendant could prevail on its jurisdictional challenge. For the reasons expressed infra, however, the court has concluded that the 30-day period for filing such motions began on the date that notice was sent by first class mail, so that the time by which the plaintiff could validly have raised any of her claims other than the non-existence of an arbitration agreement was actually April 4. Although the motion was dated April 4, 2008, it was not filed until April 7.
The court begins its analysis with the applicable standard of review. "Typically, judicial review of arbitration awards is narrow in scope because we favor arbitration as an alternative method of dispute resolution . . . When questions of arbitrability implicating the existence of an agreement to arbitrate arise, however, we are presented with a question of law over which [a court's] review is de novo." (Citation omitted; internal quotation marks omitted.) MBNA America Bank, N.A. v. Boata, 283 Conn. 381, 386, 926 A.2d 1035 (2007); see also HH East Parcel v. Handy Harman, 287 Conn. 189, 196, 947 A.2d 916 (2008) (questions of law are reviewed de novo by a trial court). Moreover, "[j]urisdiction of the subject-matter is the power [of the court] to hear and determine cases of the general class to which the proceedings in question belong . . . A court has subject matter jurisdiction if it has the authority to adjudicate a particular type of legal controversy . . . [O]nce the question of lack of jurisdiction of a court is raised, [it] must be disposed of no matter in what form it is presented . . . and the court must fully resolve it before proceeding further with the case." Milford Power Co., LLC v. Alstom Power, Inc., 263 Conn. 616, 624-25, 822 A.2d 196 (2003). Therefore, "if [a motion to vacate an arbitration award] is not filed within the thirty day limit, the trial court does not have subject matter jurisdiction over the motion." See Wu v. Chang, 264 Conn. 307, 312, 823 A.2d 1197 (2003); see also General Statutes § 52-420(b) ("[n]o 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").
The court's first task, therefore, is to consider its jurisdiction to hear the plaintiff's motion. The plain text of the relevant statutes and our case law make clear that courts are required "to vacate an arbitration award if the arbitrators have exceeded their powers." (Internal quotation marks omitted.) MBNA America Bank, N.A. v. Boata, supra, 283 Conn. 381; see also General Statute § 52-418(a), but such claims must comply with § 52-420(b), which requires "a party seeking an order to vacate an arbitration award on grounds of corruption, fraud or undue means — or on any other ground set forth in § 52-418 — [to] do so within the thirty day limitation period set forth in § 52-420(b). In other words, 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." (Internal quotation marks omitted.) Wv v. Chang, supra, 264 Conn. 313. Moreover, as previously noted, "if [a motion to vacate an arbitration award] is not filed within the thirty day limit, the trial court does not have subject matter jurisdiction over the motion." See Wv v. Chang, supra, 264 Conn. 312. Because this plaintiff has brought most of her claims under § 52-418(a)(4), those claims are subject to dismissal if they were filed in court within thirty days from the time of notice of the arbitrator's award.
General Statutes § 52-418(a) reads: "Upon the application of any party to an arbitration, the superior court for the judicial district in which one of the parties resides or, in a controversy concerning land, for the judicial district in which the land is situated or, when the court is not in session, any judge thereof, 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 plaintiff's motion also implies that the arbitrator's decisional process was influenced by the large amount of business Chase Bank gives to National Arbitration Forum and additionally argues that any arbitration agreement was unconscionable. With respect to the question of arbitrator corruption, that type of allegation is also encompassed by § 52-418(a), and is consequently subject to the thirty-day filing requirement of § 52-420(b). See Wu v. Chang, supra, 264 Conn. 313-14 (motion to vacate for fraud must be filed within thirty days). As for the plaintiff's unconscionability argument, our Supreme Court recently overruled its prior holding that common-law challenges to arbitration awards that are predicated on public policy concerns are not subject to the time limitation set forth in § 52-420(b). See Bloomfield v. United Electrical, Radio Machine Workers of America, Connecticut Independent Police Union, Local 14, 285Conn. 278, 292, 929 A.2d 561 (2008) ("we conclude that the thirty-day filing period set forth by § 52-420(b) applies to an application to vacate an arbitration award on the ground that it violates public policy") (overturning courts' power to vacate arbitration award on public policy grounds articulated in Wu v. Chang, supra, 264 Conn. 311 n. 8). Thus, the court is without subject matter jurisdiction to consider these claims for the same reason it is without jurisdiction to consider whether the arbitrator exceeded his authority.
There is no dispute that the plaintiff did not file her motion to vacate the award until April 7, 2008. The award states clearly that it was entered on March 4 and sent to the plaintiff on March 5, and there was no evidence presented to the contrary. The month of march having 31 days, the thirty-day deadline from the March 5 notice expired on April 4. As to those of the plaintiff's claims that are encompassed by § 52-418(a), therefore, this court is without jurisdiction to hear them.
Although, at oral argument, this court wondered aloud whether the 30-day period might begin at the time of the receipt of notice of the award, it is now satisfied that the requirement to provide notice of an arbitrator's award under § 52-420(b) is met when a copy of the award is issued and mailed to the parties. See, e.g., Wu v. Chang, supra, 264 Conn. 309 ("[t]he arbitrator sent the parties notification of the award on or about April 6, 2001, the day that the award was issued"); see also Asselin Connolly, Attorneys, LLC v. Heath, 108 Conn.App. 360, 366, 947 A.2d 1051 (2008) ("[t]he plaintiff [in Bloomfield v. United Electrical, Radio Machine Workers of America, Connecticut Independent Police Union, Local 14, supra, 285 Conn. 280], however, filed its application to vacate more than thirty days following the issuance of the arbitration award"); Drysdale v. Drysdale, Superior Court, judicial district of Litchfield, Docket No. FA 03 0089597 (August 24, 2006, Prescott, J.) (date that decision of arbitrator's award was mailed is date that notice was served for purposes of § 52-420(b)). The practice of official notice being provided through the mail is not novel, to be sure. By way of example, notice of an administrative agency's decision is provided by mail; see General Statute 4-180(c) ("final decision shall be effective when personally delivered or mailed"); as is the final judgment of a superior court. See Practice Book Sec. 63-1(b) ("[i]f notice is given only by mail, the appeal period shall begin on the day that notice was mailed to counsel and pro se parties of record by the trial court clerk"). Thus, for purposes of § 52-420(b), the relevant date of notice used to calculate the beginning of the thirty-day window to file a motion to vacate is the date on which notice of the arbitrator's award was mailed to the parties, and not when that notice was received by the parties. The stamped "acknowledgment and certificate of service" on the face of the award, which certifies that copies of the award were sent to the parties via first class mail, meets that criterion.
The remaining issue, the existence of an agreement to arbitrate, is of course fundamental to the defendant's entitlement to having the arbitrator's award sustained, and the plaintiff's claim that no such agreement existed is not precluded by the passage of the 30-day filing period that rendered her other claims beyond the court's jurisdiction. Our Supreme Court has clarified that:
the issue of whether an agreement to arbitrate exists, as opposed to whether an arbitrator has disregarded the limits of an arbitration agreement, is not one of the grounds enumerated in § 52-418 and, thus, is not subject to the timeliness provision codified in § 52-420[b]. (Internal quotation marks omitted.) Bloomfield v. United Electrical, Radio and Machine Workers of America, Connecticut Independent Police Union, Local 14, 285 Conn. 278. 290, 929 A.2d 561 (2008).
Indeed, "[i]t is well established that [a]rbitration is a creature of contract . . . [A] person can be compelled to arbitrate a dispute only if, to the extent that, and in the manner which, he has agreed so to do . . . Because arbitration is based on a contractual relationship, a party who has not consented cannot not be forced to arbitrate a dispute. Moreover, even if the parties to a dispute agree to arbitrate, [i]t is the province of the parties to set the limits of the authority of the arbitrators, and the parties will be bound by the limits they have fixed . . . Therefore, the arbitration provision in an agreement is effectively an agreement that is separate and distinct from the broader contract, and a court of law may enforce only those agreements that the parties actually make . . . Accordingly, because an arbitrator's jurisdiction is rooted in the agreement of the parties . . . a party who contests the making of a contract containing an arbitration provision cannot be compelled to arbitrate the threshold issue of the existence of an agreement to arbitrate." (Citations omitted; internal quotation marks omitted.) MBNA America Bank, N.A. v. Boata, supra, 283 Conn. 386-87.
Unlike subject matter jurisdiction, the authority of an arbitrator to resolve disputes under the terms of a contract can be waived by either party. See MBNA America Bank, N.A. v. Boata, supra, 283 Conn. 390-91. In this case, however, it is undisputed that the plaintiff has preserved her right to challenge the arbitrability of her account agreement.
Before considering the existence of a binding arbitration agreement in this case, it is useful to recall that a court's determination of the existence of an arbitration contract is de novo. MBNA America Bank, N.A. v. Boata, supra, 283 Conn. 386. "When questions of arbitrability implicating the existence of an agreement to arbitrate arise . . . we are presented with a question of law over which [a court's] review is de novo") (Citation omitted; internal quotation marks omitted.). The justification underpinning this review standard finds its basis in the axiomatic rules governing contract law. "[B]ecause an arbitrator's jurisdiction is rooted in the agreement of the parties . . . a party who contests the making of a contract containing an arbitration provision cannot be compelled to arbitrate the threshold issue of the existence of an agreement to arbitrate. Only a court can make that decision." Nussbaum v. Kimberly Timbers, Ltd., 271 Conn. 65, 72-73, 856 A.2d 364 (2004). The court therefore determines the existence or nonexistence of a valid arbitration agreement without reliance on the findings of the arbitrator regarding this question.
With these principles in mind, the court now addresses which body of law is appropriate to determine the existence of an arbitration agreement. "[W]hile the [federal arbitration act] creates a body of federal substantive law of arbitrability, applicable to any arbitration agreement within the coverage of the [a]ct . . . in [cases] evaluating whether the parties have entered into a valid arbitration agreement, the court must look to state law principles . . . As a result, prior to compelling arbitration, the [trial] court must first determine two threshold issues that are governed by state rather than federal law: (1) Did the parties enter into a contractually valid arbitration agreement? and (2) If so, does the parties' dispute fall within the scope of the arbitration agreement?" (Citations omitted; internal quotation marks omitted.) Hottle v. BDO Seidman, LLP, 268 Conn. 694, 704-05, 846 A.2d 862 (2004). Moreover, in Connecticut, "[i]t is a fundamental principle of contract law that the existence and terms of a contract are to be determined from the intent of the parties . . . The parties' intentions manifested by their acts and words are essential to the court's determination of whether a contract was entered into and what its terms were." (Internal quotation marks omitted.) MD Drilling and Blasting v. MLS Construction, LLC, 93 Conn.App. 451, 454, 889 A.2d 850 (2006).
In this case, the court concludes that there was a valid contract to arbitrate disputes between the plaintiff and Chase arising from the account agreement at issue. The plaintiff has not provided this court with a copy of the account agreement that she contends governed any disputes between her and Chase regarding her credit card, although she nevertheless maintains that she is certain that the agreement did not have an arbitration clause in it. By contrast, Chase has proffered copies of the account agreements that it claims govern the plaintiff's credit card, and these agreements explicitly state that "any dispute may be resolved by binding arbitration." Although the plaintiff argues that the account agreement provided by Chase was not the same agreement that she received when she accepted her credit card, she provides the court with no credible evidence in support of that position. The court therefore finds as fact that the parties intended to enter into a credit card account agreement that was governed by the terms attested to by Chase, and the court further finds that the credit card account agreement included a binding arbitration clause that covers the disputed account delinquency at issue in the arbitration proceeding that has led to the present litigation.
The court recognizes that it is in fact highly unlikely that this plaintiff, or, for that matter, the majority of persons who enter into credit card agreements, actually read the agreement in full and understood all of its terms. The fact remains, however, that she intended to enter into this credit card agreement and had the opportunity to read it, and the agreement contained an arbitration clause which binds both parties.
Having concluded that there was a valid arbitration clause that governed the disputed account, and that this was the only issue raised by the plaintiff that this court has jurisdiction to consider, the court denies the plaintiff's motion to vacate.