Opinion
UWYCV166031772S
06-26-2018
Natalie VILLAR et al. v. A BETTER WAY WHOLESALE AUTOS, INC.
UNPUBLISHED OPINION
Brazzel-Massaro, J.
INTRODUCTION
The plaintiff filed this legal action on or about August 8, 2016. The defendant filed a motion to stay and submit to arbitration. The defendant relied upon paragraph 9 in the Retail Purchase Agreement which states: "Any claim or dispute whether in contract, tort, statute, or otherwise including the interpretation and scope of this clause and the arbitrability of the claim or dispute between you and us or our employees, agents, successors, or assigns which arise out of or relate to your credit application, purchase or condition of this vehicle, this contract, or any resulting transaction or relationship (including any such relationship with third parties who do not sign this contract) shall at your or our election be resolved by neutral, binding arbitration and not by a court action." The court granted the motion and the action was submitted to Arbitration.
The Arbitrator made findings and an award on July 17, 2017 in favor of the plaintiff. The plaintiff filed a Motion to Confirm Arbitration Award and Motion for Offer of Compromise Interest dated July 17, 2017. The defendant filed a Motion to Vacate the Arbitration award dated August 18, 2017.
This matter came to the court for argument.
II. DISCUSSION
A. Arbitration Award
In their submission for arbitration, the plaintiffs Natalie Villar and Jeffrey DeLarosa asserted that A Better Way Wholesale (ABW) violated the Connecticut Unfair Trade Practices (CUTPA) as to both plaintiffs for the sale of the Avalon and separately as to Natalie Villar for the sale of the BMW and also violated the Truth In Lending Act as to the Second Contract. The plaintiff, Natalie Villar purchased two automobiles from the defendant. The first purchase was a Toyota Avalon purchased on or about January 10, 2015. In August 2015, the Avalon was involved in an accident and deemed a total loss. As a result of this, the plaintiff Villar approached the defendant concerning the GAP insurance and they entered into an agreement to purchase a second car (the BMW) using the refund credit from the GAP insurance. The plaintiffs contended that the defendant falsely represented that each of the contracts required them to purchase GAP insurance at an additional cost for financing purposes and also a life contract for oil changes to the automobiles. The plaintiff, Villar, also claimed that the defendant violated the Truth in Lending Act because it imposed the condition of GAP Insurance as a condition to extending credit and thereafter included the charge for GAP insurance costs as part of the finance charge although failing to disclose that the cost of GAP insurance was added to the purchase price for financing.
The arbitrator found that the defendant, ABW violated CUTPA. He stated that the "Respondent’s failure to disclose the extra services and their respective charges in the initial Purchase Orders constituted material omissions and Albano’s statements regarding the necessity of the extra services were material misrepresentations." The arbitrator went on to address additional evidence presented to him in relation to the claim that such behavior is not isolated and he found that: "Judge Huddleson’s decision in Freemen v. A Betterway Wholesale Autos, CV-13-6045900-S, the several arbitration awards appended to Claimants’ Pre-Hearing Memorandum and the three Initial Purchase Orders involving consumers other than Claimants Villar produced at the hearing (Cl. Ex. 25) suggest that Respondent’s conduct in dealing with Villar was not isolated but was part of a regular practice." The arbitrator found that the totality of ABW’s behavior evinced a disregard of Villar’s rights and that it employed a deceptive sales practice not once, but twice, to induce Villar to purchase services she did not want and from which she did not benefit- services from which Respondent, on the other hand derived a substantial economic benefit. The arbitrator also found that the defendant violated the Truth in Lending Act in that it imposed GAP Insurance as a condition to extending credit and rendered the charge for GAP Insurance part of the finance charge.
The arbitrator awarded $1,955.44 for compensatory damages. Thereafter he entered an award for punitive damages in an amount equal to approximately five times compensatory damages to be in the amount of $10,000. The arbitrator made an award of attorneys fees for both CUTPA and TILA combined in the amount of $21,752.50 as reasonable and consistent with rates charged in the community for similar services performed by attorneys and paralegals of comparable skill and experience. Lastly the arbitrator awarded pursuant to the TILA claim $601.52 as damages.
B. Standard
In reviewing the language of the arbitration agreement as noted above, the court concludes that the parties’ submission to arbitration was unrestricted. The applicable standard for determining whether to vacate an unrestricted arbitration award has been set forth in Saturn Construction Co. v. Premier Roofing Co., 298 Conn. 293, 608 A.2d 1274 (1996). The court provided in part: "Even in the case of an unrestricted admission, we have ... 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 § 52-418." Id., 94.
The defendant argues that the arbitration award should be vacated because "[t]he arbitrator in this case so imperfectly exceeded his powers that a mutual final and definite award upon the subject matter was not made and the arbitrator exhibited bias. The actual facts found and reported by the Arbitrator do not support the legal conclusions and the ultimate finding made by the Arbitrator. The Arbitrator’s findings are simply inconsistent and a manifest disregard of the law ..." (Defendant’s Memorandum at page 5.) This is a claim pursuant to General Statutes § 52-418(a)(4).
The plaintiff counters that the court should confirm the arbitration award because the parties agreed to the arbitration and if the court does not find grounds to vacate, modify or correct the award and the court should enter an order granting the motion to confirm in accordance with C.G.S. § 52-418 and 52-419. D.H. Blair & Co., Inc. v. Gottdiener, 462 F.3d 95, 110 (2d Cir. 2006). The plaintiff also argues in opposition to the motion to vacate that the defendant cannot satisfy the high burden necessary to show that the arbitrator manifestly disregarded the law. The plaintiff argues that the defendant’s motion is no more than a request to have the court reconsider the claims to arrive at a different result and as such is a request for de novo review. The plaintiff included the submissions and the findings of the arbitrator to demonstrate that the defendant failed to provide any supporting facts and attempts to expand the decision to information which was not part of the facts either submitted or found by the arbitrator.
See list of items that were part of the Arbitration Hearing attached to the Affidavit of Lori Miner.
The defendant has submitted with their memorandum a number of documents as exhibits that were not presented during the arbitration. Therefore, the court will not consider for purposes of the motion the documents that were not part of the arbitration hearing and thus not utilized for purposes of arriving at an award.
The plaintiff argues that exhibits B11-12, B16-17, B40, B44-46 and B48-50 were not introduced at the arbitration hearing.
C. CUTPA
CUTPA provides that "no person shall engage in unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce." General Statutes Section 42-110b. The test used in determining whether a defendant’s action constitutes an unfair or deceptive trade practice is the three part criteria known as the "cigarette rule." McLaughlin v. Ford Motor Co., 192 Conn. 558, 567-68, 473 A.2d 1185 (1984). The three criteria are: "(1) [W]hether the practice, without necessarily having been previously considered unlawful, offends public policy as it has been established by statutes, the common law, or otherwise- whether, in other words, it is within at least the penumbra of some common law, statutory, or other established concept of unfairness; (2) whether it is immoral, unethical, oppressive, or unscrupulous; (3) whether it causes substantial injury to consumers [competitors or businessmen]." (Internal quotation marks omitted.) Journal Publishing Co. v. Hartford Courant Co., 261 Conn. 673, 695, 804 A.2d 823 (2002).
The arbitrator outlined his findings in regard to the claim including specifically finding that "Villar credibly testified that when she told Albano she did not want these extra services, he said all contracts for vehicles Respondent sold included Oil Changes and GAP Insurance was necessary to obtain financing. Based on Albano’s statements and the ‘NO REFUND OF DEPOSIT’ admonition in the Initial Purchase Orders, Villar reasonably believed she would forfeit her deposits if she refused to accept these extra services." The defendant suggests by its argument that the findings of the arbitrator were false or unfounded but no such evidence of this exists.
The defendant in their memorandum in support of the motion to vacate submits facts which actually contradict the factual findings contained in the Arbitration Award. For instance, the defendant represents two times that ABW did not make any misrepresentation to Villar, and that ABW did not force or otherwise require Villar to purchase add-ons as a condition of purchasing the two motor vehicles. Instead, as was clear from Villar’s own testimony, she did not care to take the time to read the contracts fully, felt overwhelmed by the amount of information but did not ask ABW to reiterate or clarify any question, and did not pay attention to nor ask the (sic) ABW repeat the details of the contract despite ABW’s hour-long conversation outlining the contract. The defendant then states in its’ memorandum that: "If Villar did not want to purchase the GAP insurance or oil service changes, she did not have to do so" which completely ignores the finding of the arbitrator that, "Reasonably believing her deposits to be at risk, Villar unhappily acceded to Albano’s representation and purchased the undesired extra services."
D. Attorneys Fees
The defendant argues the award of attorneys fees was excessive in light of the action and the result. Based upon the arbitrator’s findings of CUTPA and TILA violations, attorneys fees are applicable in the discretion of the arbitrator. In the instant arbitration there was an award of the amount of fees submitted by Attorney Blinn for $21,752.50. In awarding the sum, the arbitrator found that counsel for the plaintiff provided a detailed and cogent itemization of the time that he and his staff devoted to this arbitration. The arbitrator found the expenditures were reasonable and the hourly rates charged were within the rates of the legal community for similar services from counsel with comparable skill and experience. "Section 42-110g(d) provides in relevant part that ‘the court may award ... costs and reasonable attorneys fees based on the work reasonably performed by an attorney and not on the amount of recovery ..." This statute clearly states that it is within the trial court’s discretion in deciding whether to award attorneys fees and that the award is not to be based on the amount of the actual recovery to the party but rather on the work the attorney performed." Jacques All Trades Corp. v. Brown, 57 Conn.App. 189, 197, 752 A.2d 1098 (2000). Therefore under CUTPA "[a]n award of attorneys fees is not a matter of right. Whether any award is to be made and the amount thereof lies within the discretion of the trial court, which is in the best position to evaluate the particular circumstances of a case." (Internal quotation marks omitted.) Heller v. D.W. Fish Realty Co., 93 Conn.App. 727, 734-35, 890 A.2d 113 (2006). The statute rejects proportionality, thereby enabling consumers with modest damages to retain qualified counsel who can be paid reasonable fees for the work necessary to vindicate their rights. In calculating reasonable attorneys fees under CUTPA, our courts have followed the guidelines set forth in Johnson v. Georgia Highway Exp., Inc., 488 F.2d 714, 720 (5th Cir. 1974), abrogated by Blanchard v. Bergeron, 489 U.S. 87 (1909) (a contingency fee agreement should not operate as a cap on reasonable attorneys fees under Johnson). "The guidelines set forth in Johnson for calculating reasonable attorney fees are appropriate in CUTPA litigation because, similar to Title VII, CUTPA seeks to create a climate in which private litigants help to enforce the ban on unfair or deceptive trade practices or acts ... [R]eview of whether the trial court correctly applied the guidelines and set a reasonable award of attorneys fees is limited to a consideration of whether the court abused its discretion." (Citation omitted; internal quotation marks omitted.) Steiger v. J.S. Builders, Inc., 39 Conn.App. 32, 39, 663 A.2d 432 (1995). In Johnson ... [t]he Circuit Court of Appeals set out twelve guidelines for the district Court to consider on remand in setting reasonable attorneys fees: (1) the time and labor required; (2) the novelty and difficulty of the questions; (3) the skill requisite to perform the legal service properly; (4) the preclusion of other employment by the attorney due to acceptance of the case; (5) the customary fee for similar work in the community; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputations and ability of the attorneys; (10) the ‘undesirability’ of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases." (Citations omitted; footnote omitted.) Id., at 38, 663 A.2d 432.
The defendant argues that this court should not consider the lodestar rate. The award of the arbitrator does refer to a lodestar in reference to the reasonable rate and the hours but the arbitrator also makes clear that the fees are based upon the work reasonably performed. In this regard the factors set forth in Johnson do have some impact of the discretion of the court in determining the reasonableness of the attorney fees. This finding involved not only the exploration of the facts and circumstances in this scenario but also recognizing the skill of counsel to address the CUTPA claim with all of the nuances and discovery demands. This counsel succeeded in obtaining a finding that there is an ongoing pattern from a number of cases and not just the present action as well as accepting a case which because of the minimal monetary damages as compared to the great impact on a number of citizens would not be accepted by many counsel. These factors noted as numbers 1, 2, 3, 5, 8, 9, and 10 as set forth in Johnson play a large role in affirming the reasonableness of the fee of $21,752.50.
This fee of $21,752.50 is approximately ten times the award of compensatory damages as specifically noted by the parties. However, when viewing the award with the finding of the arbitrator concerning the conduct of not one but two violations by the defendant and a pattern of the behavior of violating the law certainly supports the discretionary award which is within the guidelines for hours, expense and more so attracting counsel to bring these actions on behalf of those who cannot afford counsel or to whom the small amount claimed has had an enormous impact.
The court in Steiger v. J.S. Builders, Inc., 39 Conn.App. 32, 36, also ruled that whether to award attorneys fees under CUTPA is an exercise of such discretion which will not ordinarily be interfered with on appeal unless the abuse is manifest or injustice appears to have been done. In Med Val USA Health Program, Inc. v. Member Works, Inc., 109 Conn.App. 308, 316, 951 A.2d 26 (2008), the court also found that the awarding of attorney fees under CUTPA is discretionary and the exercise of such discretion will not ordinarily be interfered with unless the abuse is manifest or injustice appears to have been done.
The allegation that the award of attorneys fees are significantly more than the award in the instant case does not in and of itself provide a basis to vacate the attorneys fees even if the sum is well more that the award especially in the instant action in which counsel was able to demonstrate that there were two violations by the defendant of CUTPA as well as a violation of TILA. In addition, the arbitrator refers to the ongoing practice by the defendant as demonstrated in other court findings which counsel was able to produce. Therefore, this court will not interfere with the discretion of the arbitrator in awarding the fees as supported by the plaintiff’s counsel in accordance with the law.
E. Exculpatory Clause
The defendant also contends that the award is improper because the arbitrator ignored the "Exculpatory Cause" of the contracts. The findings of the arbitrator clearly stated that "CUTPA and TILA rights cannot be waived or released by contract. T.D. Bank, N.A. v. Nutmeg Investments, LLC, No. X 02UWYCV085009473S, 2010 WL 4277552, at *10; ... Mills v. Equity Group, Inc., 871 F.Supp. 1482, 1485-86 (D.D.C. 1994)." The law clearly indicates that such a clause will not waive the claims made by this plaintiff and as such no further facts are needed. The defendant’s argument in this regard is frivolous.
F. Vacating an Arbitration Award Under General Statutes § 52-418
The defendant argues that pursuant to General Statutes § 52-418(a)(4) the arbitration should be vacated. This provision permits the vacating of the arbitration award 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." Pursuant to this provision of the General Statutes, ABW asserts that the arbitration award should be vacated because the arbitrator exceeded her powers or so imperfectly executed them such that no mutual final and definite award was made, in manifest disregard for the law.
"In our construction of § 52-418(a)(4), we have, as a general matter looked to a comparison of the award with the submission to determine whether the arbitrators have exceeded their powers ... We have also recognized, however, that an arbitrator’s egregious misperformance of duty may warrant rejection of the resulting award. In Darien Education Ass’n v. Board of Education, 173 Conn. 434, 437-38, 374 A.2d 1081 (1977), we noted the ‘[i]f the memorandum of an arbitrator revealed that he had reached his decision by consulting a ouija boards, surely it should not suffice that the award conformed to the submission ...’ [A]n 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 [her] powers or so imperfectly executed them that a mutual, final and definite award upon the subject matter submitted was not made.’ We emphasize, however, that the ‘manifest disregard of 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."
"In Garrity [v. McCaskey, 223 Conn. 1, 2 (1992) ], we 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 was well defined, explicit, and clearly applicable." (Citations omitted; internal quotation marks omitted.) Industrial Risk Insurers v. Hartford Steam Boiler Inspection & Ins. Co., 273 Conn. 86, 94-95 (2005).
In the instant action, the arbitrator applied the appropriate law to the submission for arbitration of the parties and the governing principles of the CUTPA and TILA claims were not ignored. The decision of the arbitrator was based upon the evidence and testimony submitted as well as the evaluation of the credibility of the parties. The attorney fees submitted are reasonable based upon the work required and the result obtained by very qualified and experienced counsel who provided an affidavit that offered a sufficient basis for the hours spent and the hourly rate in accordance with similar work in the community.
III. APPLICATION TO CONFIRM/OFFER OF COMPROMISE
The plaintiff Natalie Villar has filed an application to confirm the arbitration award in this case. General Statutes 52-417 provides: "The court or judge shall grant ... an order confirming the award unless the award is vacated, modified or corrected as prescribed in sections 52-418 and 52-419." As there was no substantive basis for the ABW’s application to vacate the award pursuant to General Statutes § 52-418(a)(3) & (4), the court determines that the application to confirm should be granted. Therefore the arbitration award of $34,477.76 is confirmed.
The plaintiff has also submitted in the application to confirm the request to award interest pursuant to General Statutes § 52-192a(b). This statute provides that: "After trial the court shall examine the record to determine whether the plaintiff made an offer of compromise which the defendant failed to accept. If the court ascertains from the record that the plaintiffs have recovered an amount equal to or greater than the sum certain specified in the plaintiffs’ offer of compromise, the court shall add to the amount so recovered eight percent annual interest on said amount." The plaintiff was awarded compensatory damages of $1,995.44, punitive damages of $10,000 and attorneys fees of $21,752.50. The plaintiff submitted an offer of compromise in the amount of $6,500. The calculation for purposes of determining the issue of the offer of compromise includes the attorneys fees. Yeager v. Alvarez, 302 Conn. 772, 782 (2011). Therefore, the plaintiff is entitled to the interest at the rate of eight percent of the amount received. The plaintiff has calculated the sum. However, the amounts provided are not current and thus the plaintiff is to submit the current amount for interest to the court to be included within the judgment. The plaintiff’s request for additional attorneys fees for the submission of this motion is denied.
IV. CONCLUSION
Based upon the foregoing, the application to vacate the award is denied. The application to confirm the award is granted.