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Department of Transportation v. White Oak Corp.

Supreme Court of Connecticut

August 20, 2019

DEPARTMENT OF TRANSPORTATION
v.
WHITE OAK CORPORATION

          Argued November 8, 2018

         Procedural History

         Application to vacate, correct or modify an arbitration award, brought to the Superior Court in the judicial district of Hartford, where the defendant filed an application to confirm the award; thereafter, the case was tried to the court, Hon. Richard M. Rittenband, judge trial referee, who, exercising the powers of the Superior Court, rendered judgment denying the application to vacate, correct or modify, and granting the application to confirm, from which the plaintiff appealed to the Appellate Court, Gruendel, Beach and Peters, Js., which reversed the judgment of the trial court and remanded the case with direction to vacate the arbitration award, and the defendant, on the granting of certification, appealed to this court; subsequently, this court reversed the judgment of the Appellate Court and remanded the case to that court with direction to affirm the judgment of the trial court; thereafter, the court, Robaina, J., denied the defendant's motion seeking a determination as to whether the judgment had been satisfied, and the defendant appealed. Affirmed.

          Kerry M. Wisser, with whom, on the brief, was Sarah Black Lingenheld, for the appellant (defendant).

          Christine Jean-Louis, assistant attorney general, with whom, on the brief, was George Jepsen, former attorney general, for the appellee (plaintiff).

          Palmer, McDonald, Mullins, Kahn and Ecker, Js.

          OPINION

          MULLINS, J.

         After an arbitration proceeding, the defendant, White Oak Corporation (White Oak), was awarded a money judgment against the plaintiff, the Department of Transportation (department) in the amount of $8, 362, 308.41 plus interest. In paying that judgment on behalf of the department, the Office of the State Comptroller (comptroller) withheld $1, 642, 312.14 for taxes White Oak had owed to the state. As a result of this withholding, White Oak filed a motion with the trial court seeking a determination as to whether the judgment had been satisfied. In its motion, White Oak asserted that the department did not fully satisfy its judgment because, during a prior arbitration proceeding between the parties, the department had alleged but failed to prove its claim for taxes owed to the state and that, thus, the doctrine of collateral estoppel precluded the comptroller from reducing the payment by any amount for taxes owed.

         The trial court rejected White Oak's claim and determined that the judgment had been satisfied. The defendant now appeals from the trial court's determination, again alleging that collateral estoppel precluded the comptroller from withholding the taxes owed to the state. We agree with the trial court that the department satisfied its judgment to White Oak because General Statutes § 12-39g imposed a mandatory obligation on the comptroller to reduce the amount paid to White Oak by the amount of taxes owed to the state as those taxes were not the subject of a timely filed administrative appeal. Accordingly, we affirm the judgment of the trial court.

         The record reveals the following facts and procedural history. In 1994, the parties, White Oak and the department, entered into a contract for construction of the Tomlinson Bridge in New Haven. Nearly three years later, the parties entered into a second contract for reconstruction of the Yellow Mill Pond Bridge in Bridgeport. Both projects were beset by considerable delays and conflicts between the parties. As a result, in 2000, the parties entered into an agreement to reassign the contracts to a different contractor. Thereafter, White Oak filed notices of claims and corresponding demands for arbitration for each project pursuant to General Statutes § 4-61 (b)[1] claiming, inter alia, wrongful termination of each contract.

         The matter relating to the Tomlinson Bridge was the first to proceed to arbitration (Tomlinson arbitration). In its answer to White Oak's revised amended demand, the department asserted various setoffs and counterclaims, only one of which is relevant here. The relevant counterclaim alleged that ‘‘[White Oak] presently has a tax debt due and owing to the state.'' During arbitration, no evidence was adduced regarding the tax claim and neither party addressed it during oral argument. In 2004, the Tomlinson arbitration panel issued its award, rejecting White Oak's wrongful termination claim and awarding the department $1, 169, 648.33 in damages. With regard to the department's claim for a tax debt owed to the state, the panel ruled that ‘‘[the department] introduced no credible evidence of a tax debt due to the [state] and therefore failed to carry its burden of proof.''

         The matter relating to the Yellow Mill Pond Bridge subsequently proceeded to arbitration (Bridgeport arbitration). In 2009, the panel issued an award to White Oak in the amount of $8, 362, 308.41 plus interest. In response, the department filed an application to vacate, correct or modify that award pursuant to General Statutes §§ 52-418, 52-419, and 52-420, and White Oak filed an application to confirm the arbitration award pursuant to General Statutes § 52-417. The trial court denied the department's application to vacate, correct or modify the award and granted White Oak's application to confirm the award. The department appealed from the judgment of the trial court to the Appellate Court. The Appellate Court reversed the judgment of the trial court and remanded the case with direction to vacate the arbitration award. White Oak then filed a petition for certification to appeal to this court, which was granted. In Dept. of Transportation v. White Oak Corp., 319 Conn. 582, 623, 125 A.3d 988 (2015), this court reversed the judgment of the Appellate Court and remanded the case to that court with direction to affirm the judgment of the trial court, thereby confirming the arbitration award in favor of White Oak.

         Following this court's decision, White Oak sought payment of the judgment from the comptroller. The comptroller complied with White Oak's request for payment, however, when issuing the payment on behalf of the department, the comptroller reduced the amount paid by $1, 642, 312.14 for taxes owed to the state pursuant to § 12-39g.[2] Specifically, the comptroller reduced the amount paid by $1, 231, 350.36 for taxes White Oak owed to the Department of Revenue Services and by $410, 961.78 for taxes it owed to the Department of Labor.

         Thereafter, White Oak filed a motion seeking a determination as to whether the judgment had been satisfied. In that motion, White Oak asserted that the department did not fully satisfy its judgment because the comptroller reduced the amount paid by the amount of taxes owed. White Oak claimed that, because the Tomlinson arbitration panel determined that the department had not proven its claim for taxes owed to the ...


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