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A Better Way Wholesale Autos, Inc. v. Paul

Court of Appeals of Connecticut

September 3, 2019

A BETTER WAY WHOLESALE AUTOS, INC.
v.
JAMES SAINT PAUL ET AL.

          Argued May 21 and October 10, 2018

         Procedural History

         Application to vacate anarbitration award, brought to the Superior Court in the judicial district of Waterbury, where the defendants filed motions to confirm the award and for attorney's fees, and to dismiss the application to vacate the award; thereafter, the matter was tried to the court, M. Taylor, J.; judgment dismissing the application to vacate, and granting the motions to confirm and for attorney's fees, from which the plaintiff appealed to this court. Affirmed.

          Kenneth A. Votre, for the appellant (plaintiff).

          Richard F. Wareing, withwhom was Daniel S. Blinn, for the appellees (defendants).

          DiPentima, C. J., and Lavine, Sheldon, Keller, Elgo, Bright, Moll and Lavery, Js. [*]

          OPINION

          MOLL, J.

         The plaintiff, A Better Way Wholesale Autos, Inc., appeals from the judgment of the trial court dismissing its application to vacate an arbitration award issued in favor of the defendants, James Saint Paul and Julie J. Saint Paul, and granting the defendants' application to confirm the arbitration award. On appeal, the plaintiff contends that the court improperly (1) dismissed its application to vacate as untimely, (2) engaged thereafter in a review of the substance of the plaintiff's application to vacate and concluded that the arbitration award did not manifest an egregious or patently irrational application of the law, and (3) awarded the defendants $2185 in supplemental attorney's fees. We conclude that the court properly dismissed the plaintiff's application to vacate as untimely and did not abuse its discretion in awarding supplemental attorney's fees. In light of our conclusion that the court properly dismissed the plaintiff's application to vacate as untimely, we also conclude that the court erred by reviewing the substance of the application but that such error was harmless. Accordingly, we affirm the judgment of the trial court.

         The following undisputed facts and procedural history are relevant to this appeal. In early 2015, the defendants purchased a motor vehicle from the plaintiff, a motor vehicle dealer located in Naugatuck. To finance their purchase, the defendants entered into a financing agreement with the plaintiff. The agreement contains an arbitration provision that provides, in part, that any dispute arising out of or relating to the purchase of the defendants' vehicle shall be resolved by binding arbitration. The agreement also contains a general choice of law clause, which provides that ‘‘[f]ederal law and the law of the state of our address shown on the front of this contract apply to this contract.'' The front of the financing agreement shows an address in Naugatuck. The arbitration section of the financing agreement contains a specific choice of law provision, which provides in relevant part: ‘‘[1] Any arbitration under this Arbitration Provision shall be governed by the Federal Arbitration Act [(FAA)] (9 U.S.C. § 1 et seq. [2012]) and not by any state law concerning arbitration. [2] Any award by the arbitrator shall be in writing and will be final and binding on all parties, subject to any limited right to appeal under the [FAA].'' The arbitration section further provides in part that ‘‘[a]ny court having jurisdiction may enter judgment on the arbitrator's award.''

         On December 15, 2015, the defendants filed an arbitration demand with the American Arbitration Association, claiming that the plaintiff required the defendants to purchase an oil change contract and a service contract as a condition of financing in violation of the federal Truth in Lending Act (TILA), 15 U.S.C. § 1601 et seq. (2012), and the Connecticut Unfair Trade Practices Act, General Statutes § 42-110a et seq. On July 21, 2016, following an evidentiary hearing, [1] the arbitrator issued a so-called ‘‘unreasoned award'' in favor of the defendants in the amount of $8797.81, which included $2297.81 in actual damages, $2000 in statutory damages under TILA, and $4500 in attorney's fees and costs. The arbitrator concluded that the plaintiff violated TILA by failing to include the oil change contract and the service contract in the finance charge disclosure provision of the agreement.

         On August 26, 2016, the plaintiff filed in the Superior Court an application to vacate the arbitration award pursuant to the FAA, claiming therein that the arbitrator exceeded his powers. On September 28, 2016, pursuant to General Statutes § 52-417, [2] the defendants filed an omnibus ‘‘motion to confirm arbitration award, opposition to plaintiff's application to vacate arbitration award, and motion for supplemental attorney's fees'' (application to confirm). On November 9, 2016, the defendants filed a supplemental memorandum of law in opposition to the plaintiff's application to vacate, arguing therein that the plaintiff's application to vacate should be dismissed for lack of subject matter jurisdiction because it was not timely filed pursuant to 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''). On December 7, 2016, the plaintiff filed a memorandum of law in support of its application to vacate, which did not address the timeliness issue raised by the defendants.

         On December 30, 2016, following a hearing, the trial court dismissed the plaintiff's application to vacate as untimely filed pursuant to § 52-420 (b) and granted the defendants' application to confirm, including the defendants' request therein for $2185 in supplemental attorney's fees under TILA. This appeal followed.[3] Additional facts will be set forth as necessary.

         I

         As a threshold matter, we address the defendants' claim that the plaintiff's appeal should be dismissed as moot. The defendants argue that, because the plaintiff failed to file in the Superior Court an opposition to their application to confirm and did not address in this court the application to confirm, this court can no longer grant the plaintiff any practical relief. We disagree.

         ‘‘Mootness is a question of justiciability that must be determined as a threshold matter because it implicates [a] court's subject matter jurisdiction . . . . A case is considered moot if [the] court cannot grant . . . any practical relief through its disposition of the merits . . . .'' (Internal quotation marks omitted.) Glaston-bury v. Metropolitan District Commission, 328 Conn. 326, 333, 179 A.3d 201 (2018). ‘‘Because mootness implicates our subject matter jurisdiction . . . it is a proper basis upon which to seek the dismissal of an appeal.'' (Citation omitted.) Sovereign Bank v. Licata, 178 Conn.App. 82, 96-97, 172 A.3d 1263 (2017).

         In the present case, the question of mootness is inextricably intertwined with the principal substantive issue that the plaintiff raises on appeal, namely, whether the trial court improperly dismissed the plaintiff's application to vacate on timeliness grounds. See Argent Mortgage Co., LLC v. Huertas, 288 Conn. 568, 575-76, 953 A.2d 868 (2008). Notwithstanding the plaintiff's failure to file an opposition to the application to confirm in the Superior Court and its failure to address such application in its appellate brief, this court could afford the plaintiff practical relief by reversing the court's dismissal of the plaintiff's application to vacate on timeliness grounds. See General Statutes § 52-417 (‘‘[t]he court or judge shall grant such an order confirming the award unless the award is vacated, modified or corrected as prescribed in sections 52-418 and 52-419'' [emphasis added]). Therefore, we conclude that the plaintiff's appeal is not moot.[4]

         II

         We turn now to the merits of the plaintiff's claims on appeal. The plaintiff first claims that the court erred in dismissing its application to vacate as untimely under our state law on the ground that it was filed beyond the thirty day limitation period set forth in § 52-420 (b).[5] According to the plaintiff, the arbitration provision contained in the parties' financing agreement requires the application of the FAA in all respects, including its three month limitation period to file an application to vacate. See 9 U.S.C. § 12 (2012).[6] The defendants maintain that our state law governs the timeliness question presented, and, therefore, the trial court properly dismissed the plaintiff's application to vacate as untimely under § 52-420 (b). We agree with the defendants.

         In the present case, it is uncontested that the plaintiff filed its application to vacate after the expiration of the thirty day limitation period set forth in § 52-420 (b) but within the three month limitation period set forth in 9 U.S.C. § 12. Whether the court properly dismissed the plaintiff's application to vacate as untimely depends on whether state or federal law controls the limitation period in which the plaintiff was required to file such application. Therefore, the question before us is a legal one. ‘‘[W]e review a [trial] court's decision to confirm or vacate an arbitration award de novo on questions of law . . . .'' (Internal quotation marks omitted.) Henry v. Imbruce, 178 Conn.App. 820, 828, 177 A.3d 1168 (2017).

         A

         We first turn our attention to the fundamental question of whether parties can, as a matter of law, agree to have the FAA's three month limitation period set forth in 9 U.S.C. § 12 apply to a vacatur proceeding filed in Connecticut state court so as to supplant or override the thirty day limitation period in § 52-420 (b). For the reasons that follow, we conclude that they cannot.

         We begin with a brief review of the purposes and limitations of the FAA. In 1925, Congress enacted the FAA ‘‘[t]o overcome judicial resistance to arbitration''; Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 443, 126 S.Ct. 1204, 163 L.Ed.2d 1038 (2006); and to declare ‘‘ ‘a national policy favoring arbitration' of claims that parties contract to settle in that manner.'' Preston v. Ferrer, 552 U.S. 346, 353, 128 S.Ct. 978, 169 L.Ed.2d 917 (2008), quoting Southland Corp. v. Keating, 465 U.S. 1, 10, 104 S.Ct. 852, 79 L.Ed.2d 1 (1984). In that connection, § 2 of the FAA provides that arbitration agreements in contracts ‘‘involving commerce'' are ‘‘valid, irrevocable, and enforceable.'' 9 U.S.C. § 2 (2012). The FAA was designed to place agreements to arbitrate ‘‘upon the same footing as other contracts . . . .'' (Citation omitted; internal quotation marks omitted.) Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior University, 489 U.S. 468, 474, 109 S.Ct. 1248, 103 L.Ed.2d 488 (1989) (Volt). The FAA ‘‘ ‘creates a body of federal substantive law,' '' and ‘‘the substantive law the [FAA] created [is] applicable in state and federal courts.'' Southland Corp. v. Keating, supra, 12, quoting Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 25 n.32, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983). The United States Supreme Court has stated that ‘‘[t]he FAA contains no express pre-emptive provision, nor does it reflect a congressional intent to occupy the entire field of arbitration. . . . But even when Congress has not completely displaced state regulation in an area, state law may nonetheless be pre-empted to the extent that it actually conflicts with federal law- that is, to the extent that it stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.'' (Citation omitted; internal quotation marks omitted.) Volt, supra, 477.

         The FAA does not create independent federal jurisdiction. The United States Supreme Court has described the nonjurisdictional nature of the FAA as follows: ‘‘As for jurisdiction over controversies touching arbitration, the [FAA] does nothing, being ‘something of an anomaly in the field of federal-court jurisdiction' in bestowing no federal jurisdiction but rather requiring an independent jurisdictional basis.'' Hall Street Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576, 581-82, 128 S.Ct. 1396, 170 L.Ed.2d 254 (2008), citing Moses H. Cone Memorial Hospital v. Mercury Construction Corp., supra, 460 U.S. 25 n.32. ‘‘While the [FAA] creates federal substantive law requiring the parties to honor arbitration agreements, it does not create any independent federal-question jurisdiction under 28 U.S.C. § 1331 or otherwise.''Southland Corp. v. Keating, supra, 465 U.S. 15 n.9.

         ‘‘Given the substantive supremacy of the FAA, but [its] nonjurisdictional cast, state courts have a prominent role to play as enforcers of agreements to arbitrate.'' Vaden v. Discover Bank, 556 U.S. 49, 59, 129 S.Ct. 1262, 173 L.Ed.2d 206 (2009), superseded by statute in part on other grounds as stated in Vermont v. MPHJ Technology Investments, LLC, 803 F.3d 635, 643-44 (Fed. Cir. 2015), cert. denied, U.S., 136 S.Ct. 1658, 194 L.Ed.2d 766 (2016), and cert. denied, MPHJ Technology Investments, LLC v. Vermont, U.S., 136 S.Ct. 1660, 194 L.Ed.2d 766 (2016). Accordingly, despite its expansive reach, the FAA does not extend so far as to preempt the procedural rules governing state court proceedings in the absence of an actual conflict with the purposes of Congress. That is because, as the United States Supreme Court has made clear, ‘‘[t]here is no federal policy favoring arbitration under a certain set of procedural rules; the federal policy is simply to ensure the enforceability, according to their terms, of private agreements to arbitrate.'' Volt, supra, 489 U.S. 476.

         We now turn to our state law procedures governing an application to vacate an arbitration award brought in Connecticut state court. ‘‘A proceeding to vacate an arbitration award is not a civil action, but is rather a special statutory proceeding. . . . Section 52-420(b) requires that a motion to vacate an arbitration award be filed within thirty days of the notice of the award to the moving party.'' (Citations omitted.) Middlesex Ins. Co. v. Castellano, 225 Conn. 339, 344, 623 A.2d 55 (1993).

         Our Supreme Court repeatedly has held that the thirty day limitation period set forth in § 52-420 (b) is subject matter jurisdictional. See id. (‘‘[i]f the motion is not filed within the thirty day time limit, the trial court does not have subject matter jurisdiction over the motion''); see also Wu v. Chang, 264 Conn. 307, 312, 823 A.2d 1197 (2003); Rosenthal Law Firm, LLC v. Cohen, 165 Conn.App. 467, 471, 139 A.3d 774, cert. denied, 322 Conn. 904, 138 A.3d 933 (2016); Petrucelli v. Travelers Property Casualty Ins. Co., 146 Conn.App. 631, 640-41, 79 A.3d 895 (2013), cert. denied, 311 Conn. 909, 83 A.3d 1164 (2014). Indeed, in Angersola v. Radiologic Associates of Middletown, P.C., 330 Conn. 251, 267-68, 193 A.3d 520 (2018), our Supreme Court recently reaffirmed the principle of legislative acquiescence, which, as applied to the present case, serves to buttress the court's long-standing interpretation of the limitation period set forth in § 52-420 (b) as subject matter jurisdictional. See id., 268 (‘‘the legislature has never seen fit to overrule our conclusion that compliance with the repose period [in General Statutes § 52-555, this state's wrongful death statute] is a jurisdictional prerequisite to suit'').[7] ‘‘[A]s an intermediate appellate court, we are bound by Supreme Court precedent and are unable to modify it . . . . [W]e are not at liberty to overrule or discard the decisions of our Supreme Court but are bound by them. . . . [I]t is not within our province to reevaluate or replace those decisions.'' (Internal quotation marks omitted.) State v. Montanez, 185 Conn.App. 589, 605 n.5, 197 A.3d 959 (2018).

         It is, of course, a bedrock principle that parties cannot agree to confer subject matter jurisdiction on a court, nor can they waive the lack of subject matter jurisdiction. Angersola v. Radiologic Associates of Middletown, P.C., supra, 330 Conn. 265-66 (statutory time limitation that is jurisdictional may not be waived); Rayhall v. Akim Co., 263 Conn. 328, 337, 819 A.2d 803 (2003) (‘‘[a]lthough both parties agree that this court has jurisdiction, a subject matter jurisdictional defect may not be waived . . . [or] conferred by the parties, explicitly or implicitly'' [internal quotation marks omitted]); Manning v. Feltman, 149 Conn.App. 224, 236, 91 A.3d 466 (2014) (‘‘subject matter jurisdiction cannot be conferred by waiver or consent'').

         The foregoing well settled principles require us to conclude that, as a matter of law, parties cannot contract around, by way of a choice of law provision, the subject matter jurisdictional nature of § 52-420 (b), applicable to any application to vacate an arbitration award brought in Connecticut state court. Therefore, the limitation period set forth in § 52-420 (b) applies to the plaintiff's application to vacate. It is not disputed that, if § 52-420 (b) is deemed to be the applicable limitation period, the plaintiff's application was ...


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