United States District Court, D. Connecticut
RULING AND ORDER ON PETITION TO VACATE
ARBITRATOR'S AWARD, CROSS-PETITION TO CONFIRM
ARBITRATOR'S AWARD, AND MOTION FOR SANCTIONS
A. BOLDEN UNITED STATES DISTRICT JUDGE.
Piacentini (“Petitioner”) has petitioned the
Court to vacate an arbitrator's award in favor of Edward
Giacomazzo (“Individual Respondent”) and Bimbo
Foods Bakeries Distribution, LLC, and Bimbo Bakeries USA,
Inc. (“BFBD” or “Respondent”)
have cross-petitioned the Court to confirm the arbitration
have also moved the Court to impose sanctions on Mr.
Piacentini under 28 U.S.C. § 1927, or, alternatively,
under Federal Rule of Civil Procedure 11.
following reasons, the petition to vacate the arbitration
award is DISMISSED. The cross-petition to
affirm the arbitration award is DISMISSED.
motion for sanctions is DENIED.
FACTUAL AND PROCEDURAL BACKGROUND
The Distribution Agreement
September 20, 2004, Mr. Piacentini, an independent
contractor, purchased from BFBD-which was then called George
Western Bakeries Distribution, Inc. (‘GWBD'),
Resp't Cross-Pet. at 2-exclusive distribution rights of
BFBD food products within a defined geographical area,
Pet'r's Pet. ¶ 5; see generally
Distribution Agreement (“Agreement”),
Pet'r's Pet., Ex. A, ECF No. 1-1 at 2.
relevant portion of the Agreement states:
§ 11.12 DAMAGES: Notwithstanding anything to
the contrary contained in this Agreement, in no event shall
either party be liable to the other for any consequential,
incidental, indirect or special damages, including lost
profits and punitive damages.
Agreement § 11.12.
November 15, 2010, BFBD sold the exclusive distribution
rights to the Bridgeport Correctional Center (BCC) to
independent contractor, Edward Giacomazzo, who then began to
sell BFBD products to the BCC and has allegedly done so ever
since. Resp't's Cross-Pet. at 2. On November 15,
2010, BFBD sold the distribution rights to the area
surrounding BCC-but not the BCC-to independent contractor,
John Balzi. Id. The sale area inadvertently failed
to exclude the BCC as an exception. Id. at 3. All
parties to the transaction understood Mr. Balzi did not own
the distribution rights to the BCC, which were sold to Mr.
Giacomazzo the same day, and thus Mr. Balzi never sold or
even attempted to sell products to the BCC. Id.
14, 2011, by way of a Bill of Sale, Mr. Balzi sold his
distribution rights to Mr. Piacentini, Pet'r's Pet.,
Ex. B, ECF No. 1-1 at 24, and, by amendment to the Agreement,
the parties agreed to enlarge the geographical areas in which
Mr. Piacentini had the exclusive right to distribute
BFBD's baked goods, Pet'r's Pet., Ex. C, ECF No.
1-1 at 31. Due to the inadvertent omission of the BCC
exception in the original Balzi transaction, the same
omission carried over to this transaction. Resp't
Cross-Pet. at 3. Thus, the BCC distribution rights were not
included in the purchase price, as expected, since Mr.
Balzi's distribution rights did not in fact include the
BCC; instead, Mr. Giacomazzo owned the BCC rights and had
been selling BFBD food products consistent with these rights.
The Arbitration Amendment
Piacentini participated in class-action settlement of a
federal lawsuit, captioned: Alhquist v. Bimbo Foods
Bakeries Association, Inc., No. 3:12-cv-12727 (SRU).
Pet'r's Pet. at 1, Ex. C, ECF No. 1-1 at 36. As part
of the settlement, settlement beneficiaries, including Mr.
Piacentini, agreed to amend their respective distribution
agreements to include a provision for mandatory dispute
resolution by arbitration. Id.
relevant part, the arbitration agreement provides:
§ 1.6 Remedies: Subject to the parties'
right to appeal or seek vacatur under applicable law, the
parties acknowledge and agree that the decision of the
arbitrator will be final and binding on the parties and that
the arbitrator is authorized to award any party the full
remedies that would be available to such party if the Covered
Claim had been filed in a court of competent jurisdiction,
including actual and reasonable attorneys' fees and
costs, if any.
Resolution Agreement § 1.10, Pet'r's Pet. Ex. C,
ECF No. 1-1 at 64.
the BCC omission came to light, BFBD revealed it to Mr.
Piacentini, sought his cooperation with issuing corrected
documents, and as consideration for such cooperation, BFBD
offered a nominal payment to Mr. Piacentini. Id. Mr.
Piacentini accepted payment, Ahlquist Check, Pet'r's
Pet. Ex. B, ECF No. 1-1 at 58,  and filed a lawsuit in
Connecticut Superior Court, Puma Ltr. at 1, Pet'r's
Pet. Ex. C, ECF No. 1-1 at 36, seeking lost profits that
would have accrued in Mr. Piacentini's favor but for the
BCC omission. Resp't's Cross-Pet. Id. at
3-4. When BFBD sought arbitration or else damages under the
liquidated damages clause of the amended Agreement, Mr.
Piacentini dismissed the state-court action. Id. at
March 21, 2016, Mr. Piacentini filed a demand for arbitration
asserting that he, not Mr. Giacomazzo, was the true owner of
the BCC distribution rights and that Mr. Piacentini was owed
payment for lost profits from the BCC location for the
previous five years. Id. at 4.
American Arbitration Association selected the Honorable John
R. Downey, former Connecticut Superior Court Judge, to
preside over the dispute. Pet'r's Pet. ¶ 9. The
parties then engaged in motion practice. On September 26,
2016, BFBD filed a letter brief in support of its motion to
dismiss, or, in the alternative, for summary judgment,
Resp't's Cross-Pet. at 4, to which Mr. Piacentini
objected, and BFBD replied. Id. at 4-5. On January
4, 2017, BFBD and Mr. Piacentini filed individual pre-hearing
submissions. Id. at 5.
January 12, 2017, and continued the following day,
former-Judge Downey took testimony and documentary evidence
from the parties. Pet'r's Pet. ¶ 10. After the
hearing, Mr. Piacentini and BFBD submitted post-hearing
briefs. Id. at 5-6. On February 17, 2017,
former-Judge Downey issued a written decision.
Resp't's Cross-Pet. at 6. He found that Mr. Balzi
sold to Mr. Giacomazzo the right to service the BBC, and
that, by mutual mistake, the BBC “stop” was
included as part of the transaction. Id. Therefore,
according to former-Judge Downey, Mr. Balzi could not convey
rights that he did not properly hold. Id. The mutual
mistake with respect to the BCC was remedied by reformation
to reflect the parties' intention, and former-Judge
Downey awarded Mr. Piacentini distribution rights to several
locations that had been serviced by Mr. Giacomazzo.
Id. at 7; Pet'r's Pet. at 3. Downey further
found that under the terms of the Agreement, lost profits
were foreclosed as a ...