JOHN R. DOWNEY, JUDGE.
Background
Knight's Castle entered into an agreement with Greenwich USA, LLC (GUSA) and Dr. Tsoi on September 5, 2006 (the "Agreement"). Pursuant to the Agreement, Knight's Castle, through its owner, Mr. Knight, was to provide construction management services to GUSA and its owner, Dr. Tsoi. Under the terms of the Agreement, in the event that Knight's Castle was terminated, it was to receive severance benefits in the amount of $70,000.
Knight's Castle and Mr. Knight filed a demand for arbitration with the American Arbitration Association in accordance with the terms of the Agreement on April 13, 2007, setting forth claims of breach of contract, breach of the covenant of good faith and fair dealing, a violation of the Connecticut Unfair Trade Practices Act, alter ego and slander per se. GUSA and Dr. Tsoi filed their answering statement on May 18, 2007, setting forth various special defenses as well as several counterclaims. The parties engaged in written discovery and held numerous conferences with the arbitrator. Both parties had the opportunity to submit pre-hearing briefs.
A hearing was held in this matter over four days commencing October 9, 2007 and ending October 12, 2007. During the hearing, numerous witnesses testified, including both Mr. Knight and Dr. Tsoi. No transcript of the hearings was requested by either side. Following the hearing, the parties submitted post-hearing briefs. On December 6, 2007, the arbitrator issued an opinion in which he set forth his award. The arbitrator found in favor of defendants on all five of their counts and denied all of plaintiffs' counterclaims. In doing so, he ordered plaintiffs to pay defendants $201,485.02, plus arbitration costs of $13,600.00, for a total of $215,085.02.
Plaintiffs filed the instant motion to vacate the award on January 7, CT Page 3851 2008 on the grounds that: (1) the award is against public policy to the extent that the arbitrator found Dr. Tsoi to be the alter ego of GUSA on less than clear and convincing evidence; (2) the arbitrator is guilty of misconduct, which has prejudiced the rights of the plaintiffs; and (3) the arbitrator exceeded his powers (or so imperfectly executed them, such that a mutual final and definite award on the subject matter submitted was not made) as follows: (a) he entered an award against Dr. Tsoi who they allege was not a party to the Agreement; (b) he entered an award against Dr. Tsoi without finding alter ego by clear and convincing evidence, which they allege is against public policy; and (c) he improperly entered an award on defendants' claim of slander per se as it was not arbitrable as per the Agreement.
Law
As a matter of policy, Connecticut has long favored arbitration as a means of settling disputes with a minimal amount of judicial intrusion. Bridgeport v. Kasper Group, Inc., 278 Conn. 46b, 473-74, 899 A.2d 523 (2006). "[A] court will make every reasonable presumption in favor of the arbitration award and the arbitrator's acts and proceedings." Id., 474. "[A] party cannot object to an award which accomplishes precisely what the arbitrators were authorized to do merely because that party dislikes the results." Saturn Construction Co. v. Premier Roofing Co., 238 Conn. 293, 304, 680 A.2d 1274 (1996).
The standard of judicial review of an arbitration award depends on whether the submission is restricted or unrestricted. Industrial Risk Insurers v. Hartford Steam Boiler Inspection Ins. Co., Superior Court, judicial district of Hartford (April 29, 1999, Fineberg, J.). A submission is unrestricted where there is an absence of express language restricting the breadth of the issues, reserving explicit rights or conditioning the award on court review. Alderman Alderman v. Pollack, 100 Conn.App. 80, 85, 917 A.2d 60 (2007).
There is a clause in the Agreement regarding arbitration:
Arbitration. Any controversies arising out of the terms of this Agreement or its interpretation shall be settled in Connecticut in accordance with the rules of the American Arbitration Association, and the judgment upon award may be entered in any court having jurisdiction thereof.
See Agreement at ¶ 13.
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If a submission is unrestricted, it can only be vacated if it: (1) rules on the constitutionality of a statute; (2) violates clear public policy; or (3) contravenes General Statutes § 52-418. Harty v. Cantor Fitzgerald Co., 275 Conn. 72, 81, 881 A.2d 139 (2005). "The party challenging the award bears the burden of producing evidence sufficient to invalidate or avoid it." Bridgeport v. Kasper Group., Inc., supra, 278 Conn. 474.
The party seeking to vacate an arbitrator's award must provide evidence sufficient to support a finding that the award was defective for one of the reasons set forth in General Statutes § 52-418(a). Typically, such challenges focus on misconduct and/or exceeding the powers of the arbitrator. "Generally, any challenge to an award pursuant to General Statutes [ § 52-418(a)(4)] on the ground that the arbitrators exceeded or imperfectly performed their powers is properly limited to a comparison of the award with the submission . . . If the award conforms to the submission, the arbitrators have not exceeded their powers." Exley v. Connecticut Yankee Greyhound Racing, Inc., 59 Conn.App. 224, 228, 755 A.2d 990, cert. denied, 254 Conn. 939, 761 A.2d 760 (2000).
Discussion
The plaintiffs have not made a compelling case to overturn the award. The argument that Dr. Tsoi was not a party to the Agreement is contradicted by the first sentence of the Agreement. Dr. Tsoi was a party to the Agreement. It was explicitly so stated.
The arbitrator also found that Dr. Tsoi was the alter ego of GUSA. The award is filled with references to Dr. Tsoi's activities involving the mixing of personal and business activities. The evidence was substantial as per the review in the award.
It is also clear Dr. Tsoi sought to enforce the benefits of the Agreement by filing counterclaims which he pursued at the arbitration. The court concludes that the arbitrator had the authority to hear the slander per se claim since it would appear that the arbitration was unrestricted and because the claim grew directly out of the parties' business relationship. Furthermore, the plaintiff never objected to the arbitrator hearing that claim.
There is no case law supporting the argument that an alter ego relationship be proven by clear and convincing evidence.
Finally, there is no evidence to show arbitrator misconduct or that he exceeded his powers. CT Page 3853
Conclusion
For the foregoing reasons, the arbitrator's award is confirmed. The motion to vacate is denied and the cross motion for confirmation of the arbitration award is granted.
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