Tirreno v. The Hartford ( 2015 )

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MARY TIRRENO v. THE HARTFORD
(AC 36879)
Beach, Alvord and Pellegrino, Js.
Argued October 7—officially released December 15, 2015
(Appeal from Superior Court, judicial district of
Fairfield, Hon. Richard P. Gilardi, judge trial referee.)
Sandra J. Akoury, for the appellant (plaintiff).
Meg R. Reid, with whom, on the brief, was Daniel
P. Scapellati, for the appellees (defendants).
Opinion
ALVORD, J. The plaintiff, Mary Tirreno, appeals from
the trial court’s judgment in favor of the defendants,
The Hartford Financial Services Group, Inc., and its
wholly-owned subsidiary, Trumbull Insurance Com-
pany (collectively, The Hartford).1 On appeal, Tirreno
claims that the court erred by granting The Hartford’s
motion to enforce a settlement agreement negotiated
by her prior counsel.2 Specifically, Tirreno claims that
the court improperly failed to conclude that she ‘‘lacked
the mental capacity to enter into an agreement of bind-
ing mediation or binding arbitration.’’ In the alternative,
if the agreement is valid, she claims that the parties
agreed to settle their dispute through arbitration, but
they failed to reduce their agreement to writing and,
therefore, under General Statutes § 52-408 the arbitra-
tor’s award cannot be confirmed. We affirm the judg-
ment of the trial court.
The following facts and procedural history are rele-
vant to this appeal. Tirreno alleged injuries from a motor
vehicle accident on September 27, 2010. Tirreno sought
underinsured motorist benefits from her insurer, The
Hartford. Unable to reach a resolution of her insurance
claim, Tirreno filed a breach of contract complaint
against The Hartford in March, 2012. Tirreno also sought
punitive damages, claiming that The Hartford was not
abiding by the terms of her policy and was thus violating
the Connecticut Unfair Trade Practices Act, General
Statutes § 42-110a et seq., and the Connecticut Unfair
Insurance Practices Act, General Statutes § 38a-815
et seq.
On April 24, 2013, The Hartford’s counsel sent a letter
to Tirreno’s counsel proposing to resolve the claim
through mediation. Following a pretrial conference on
April 25 and through a series of e-mails, the attorneys
negotiated the terms of a binding mediation. The parties
agreed that Tirreno would withdraw all extracontrac-
tual claims and The Hartford would permit Tirreno to
argue for damages in excess of its policy limits. The
parties selected a mediator and agreed that they would
work with the mediator to reach a settlement. If they
could not reach a settlement of their dispute in this
manner, the mediator would decide the claim and deter-
mine damages. On April 29, 2013, the parties initially
agreed that they would accept the mediator’s decision
as final and they confirmed that they would use this
method of adjudication just prior to beginning the medi-
ation session. These terms were agreed to orally, memo-
rialized in a series of e-mails exchanged between
counsel, and later testified to by counsel.3
On June 18, 2013, the parties, including Tirreno and
her husband, attended the mediation. Tirreno partici-
pated in the mediation proceedings by presenting evi-
dence of the injuries that she claimed were caused by
the 2010 motor vehicle accident. Neither Tirreno nor
her attorney raised any issues concerning her mental
capacity and her ability to participate in the mediation.
Ultimately, the parties failed to reach a settlement, thus
requiring the mediator to adjudicate their dispute.
On July 11, 2013, the mediator, in a written decision
summarizing the mediation evidence, awarded Tirreno
$75,000 in net damages. In response, The Hartford
issued a check for that amount, and on July 23, the
check was sent to Tirreno’s counsel. After several
weeks elapsed with the check not having been cashed,
The Hartford’s counsel attempted to contact Tirreno’s
counsel. On October 14, 2013, Tirreno personally
e-mailed The Hartford’s counsel, stating: ‘‘Attorney Per-
kins no longer represents me, and has not since July
27th. I [i]nstructed Atty. Perkins to return the check as
I never agreed to any settlement, as this was not in my
best interest at that time as I am in need of surgery and
further treatment as a result of the accident.’’ One week
later, the uncashed check was returned to The Hartford.
On October 25, 2013, Tirreno’s counsel filed a motion
to withdraw his appearance.
On November 14, 2013, The Hartford filed a motion
to enforce the settlement agreement. Represented by
new counsel, Tirreno objected to the motion to enforce
the agreement, arguing that she did not have the mental
capacity to decide to enter into a binding settlement
agreement. A hearing on the motion to enforce was
held on December 10, 2013. At the hearing, Tirreno did
not dispute that her prior attorney had agreed to binding
mediation or that she had authorized him to do so,
merely stating that she did not have the capacity to
resolve her claim in this manner. Tirreno called one
witness, her treating psychiatrist, R.S. Lowe, III, and
she submitted as an exhibit a letter that he wrote. Dr.
Lowe testified that he wrote the letter, addressed ‘‘to
whom it may concern,’’ at the request of Tirreno and
her husband, in which he stated that she lacked the
‘‘decisional capacity’’4 to enter into a legal agreement
for binding mediation.
On December 26, 2013, the court granted The Hart-
ford’s motion to enforce the settlement agreement. In
response, Tirreno filed a motion to reargue, claiming
that the settlement was actually an arbitration proceed-
ing and as such had failed to comply with applicable
statutes. On March 27, 2014, the court held a hearing
on the motion to reargue. On May 7, 2014, the court
affirmed its prior order granting The Hartford’s motion
to enforce the settlement agreement. This appeal
followed.
I
Tirreno’s first claim on appeal is: ‘‘The Plaintiff lacked
the mental capacity to enter into an agreement of bind-
ing mediation or binding arbitration.’’ We disagree with
her claim. The trial court properly concluded that the
parties had entered into a valid settlement agreement.5
‘‘A trial court has the inherent power to enforce sum-
marily a settlement agreement as a matter of law when
the terms of the agreement are clear and unambiguous.
. . . [T]o the extent that the defendant[s’] claim impli-
cates the court’s factual findings, our review is limited
to deciding whether such findings were clearly errone-
ous. . . . A finding of fact is clearly erroneous when
there is no evidence in the record to support it . . .
or when although there is evidence to support it, the
reviewing court on the entire evidence is left with the
definite and firm conviction that a mistake has been
committed. . . . In making this determination, every
reasonable presumption must be given in favor of the
trial court’s ruling.’’ (Internal quotation marks omitted.)
Kidder v. Read, 150 Conn. App. 720, 732–33, 93 A.3d
599 (2014).
‘‘[I]t is hornbook law that clients generally are bound
by the acts of their attorneys . . . . In the context of
settlement agreements, the authority to determine
whether and on what terms to settle a claim is reserved
to the client except when the client has validly author-
ized the attorney to make such decisions. . . . Thus,
an attorney with apparent authority may enter into a
settlement agreement that is binding on the client.’’
(Citations omitted; emphasis in original; internal quota-
tion marks omitted.) Ackerman v. Sobol Family Part-
nership, LLP, 298 Conn. 495, 509–10, 4 A.3d 288 (2010).
‘‘Apparent authority is derived not from the acts of the
agent but from the deliberate or inadvertent acts of the
principal. . . . Apparent authority has two elements.
First, it must appear from the acts of the principal that
the principal held the agent out as possessing sufficient
authority to embrace the act in question, or knowingly
permitted him to act as having such authority . . . .
Second, the party seeking to bind the principal must
have acted in good faith reliance on that appearance
of authority.’’ (Internal quotation marks omitted.) L &
V Contractors, LLC v. Heritage Warranty Ins. Risk
Retention Group, Inc., 136 Conn. App. 662, 669, 47 A.3d
887 (2012).
The relationship between client and attorney is gov-
erned by our Rules of Professional Conduct. Rule 1.14
(a) states: ‘‘When a client’s capacity to make or commu-
nicate adequately considered decisions in connection
with a representation is impaired, whether because of
minority, mental impairment or for some other reason,
the lawyer shall, as far as reasonably possible, maintain
a normal client-lawyer relationship with the client.’’ Sec-
tion (b) of rule 1.14 addresses what an attorney should
do if an issue of incapacity arises: ‘‘When the lawyer
reasonably believes that the client is unable to make
or communicate adequately considered decisions, is
likely to suffer substantial physical, financial or other
harm unless action is taken and cannot adequately act
in the client’s own interest, the lawyer may take reason-
ably necessary protective action, including consulting
with individuals or entities that have the ability to take
action to protect the client and, in appropriate cases,
seeking the appointment of a legal representative.’’
There is nothing in the record before us to indicate that
Tirreno’s prior counsel took any action pursuant to
rule 1.14.
Here, it was not the role of the trial court to determine
Tirreno’s mental capacity; rather, the court only needed
to determine if her prior counsel had the authority to
enter into a settlement agreement. There was no dispute
that she was represented by counsel in April, 2013,
when attorneys for the parties agreed to use binding
mediation as the method of adjudication. It was also
undisputed that her counsel had the authority to enter
into a settlement agreement on Tirreno’s behalf. Thus,
Tirreno was bound to the agreement that her counsel
had negotiated and accepted. See Ackerman v. Sobol
Family Partnership, LLP, supra, 298 Conn. 510. Tir-
reno’s attendance at, and participation in, the mediation
validated the parties’ understanding that counsel had
the authority to agree to the resolution of the claim by
mediation. See L & V Contractors, LLC v. Heritage
Warranty Ins. Risk Retention Group, Inc., supra, 136
Conn. App. 669. In an e-mail exchange, Tirreno’s coun-
sel advised that he needed his client’s approval before
agreeing to binding mediation.6 Under the protection
of the attorney-client privilege, Tirreno’s counsel
declined to testify about the conversations he had with
his client, but when the court asked whether he would
‘‘independently agree to a binding arbitration for any
of [his] clients without their permission?’’ Counsel
answered: ‘‘No.’’ Based on these facts, it was reasonable
for The Hartford to believe that counsel was acting as
an agent of Tirreno and that he had the authority to
enter into a settlement agreement on behalf of his client.
The Hartford relied on this authority; the company
agreed to forgo application of the contractual policy
limit and to accept the final damages amount awarded
by the mediator in July, 2013. If there was an issue
of mental capacity, as was first claimed in counsel’s
November, 2013 objection to the motion to enforce the
settlement agreement, it was a matter between Tirreno
and her prior attorney. The court properly granted The
Hartford’s motion to enforce the settlement agreement.
II
In Tirreno’s second claim on appeal, she argues:
‘‘There was no agreement signed between the parties to
submit the matter to binding mediation or arbitration,’’
which deprived the arbitrator of subject matter jurisdic-
tion and, therefore, the motion to enforce was improp-
erly granted. After authorizing her attorney to agree to
binding mediation as the method of adjudicating her
dispute with her insurer, participating in the mediation
proceeding, belatedly rejecting the decision that
resulted from the proceeding, and finally failing to pre-
vail before the trial court in her argument that she
did not have the mental capacity to agree to binding
mediation, Tirreno now represents that she was actually
an unwilling participant in an arbitration proceeding.7
She claims that § 52-408 requires that any agreement
to arbitrate must be reduced to writing8 and that her
agreement with The Hartford was not. We disagree that
this binding mediation process was an arbitration pro-
ceeding.
As a preliminary matter, it is important to clarify the
court’s ruling as to whether this was an arbitration
proceeding. After receiving the motion to reargue, the
trial court held a hearing to determine whether an arbi-
tration proceeding had taken place, and if so, whether
there had been compliance with the state’s arbitration
statutes. At the conclusion of the hearing, the court did
not make a finding as to what type of dispute resolution
procedure had been undertaken by these parties.
Instead, the court issued a memorandum of decision
which reiterated its judgment granting The Hartford’s
motion to enforce the settlement agreement. In its mem-
orandum of decision, the court did not analyze whether
the parties agreed to arbitration. Rather, for the sake
of the argument, the court addressed whether the proce-
dures required by the state’s arbitration statutes had
been satisfied, if in fact, an arbitration proceeding
had occurred.
In review, we first address whether the trial court
erred by not concluding that this agreed upon method
of adjudication was an arbitration proceeding. ‘‘[T]he
scope of [a contract’s] terms are questions of fact to
be determined by the trier on the basis of all the evi-
dence . . . and are thus subject to a limited scope of
review by this court.’’ (Citation omitted; internal quota-
tion marks omitted.) Harry Skolnick & Sons v. Hey-
man, 7 Conn. App. 175, 178, 508 A.2d 64, cert. denied,
200 Conn. 803, 510 A.2d 191 (1986). ‘‘[W]e are mindful
that [q]uestions of fact are subject to the clearly errone-
ous standard of review.’’ (Internal quotation marks
omitted.) Burns v. Adler, 158 Conn. App. 766, 802, 120
A.3d 555, cert. granted on other grounds, 319 Conn.
931, 932, A.3d (2015). Because we conclude
that the parties did not agree to arbitrate their dispute,
we do not address whether the court’s granting of the
motion to enforce a settlement agreement also con-
formed with our statutory arbitration procedures.
‘‘Although there is no particular form of words
required to form an agreement to arbitrate, the intent
of the parties that arbitration be the exclusive method
for the settlement of disputes arising under the contract
must be clearly manifested. This express intent by both
parties to enter into the arbitration agreement is essen-
tial to its existence.’’ (Emphasis in original; internal
quotation marks omitted.) Harry Skolnick & Sons v.
Heyman, supra, 7 Conn. App. 179.
Here, there is no indication that the parties intended
that their method of adjudicating their dispute would
be considered an arbitration and, thus, subject to the
provisions of the arbitration statutes. Our review of the
record shows that the parties did not refer to their
proposed method of adjudication as arbitration. In the
initial e-mail exchanges that contemplated reaching a
third party assisted resolution, the counsel for The Hart-
ford termed the undertaking a mediation, and proposed
that the mediator would take on an additional responsi-
bility of assigning a ‘‘final number’’ if a settlement was
not reached. The only reference to arbitration was in
the caption used by the mediator on his decision; he
labeled it ‘‘Arbitration Award.’’ Formal words are not
required to create an agreement to arbitrate, but the
lack of such words aids us in determining the intent of
the parties. See id., 178.
In deciding whether the agreement manifested a clear
and direct intent to arbitrate, we also consider whether
the method employed by the parties to resolve this
dispute resembled arbitration. Here, although the pro-
cess arguably fit the general definition of arbitration in
that the parties’ final determination would be made by
a disinterested person, the parties specifically contem-
plated that their resolution process would differ from
statutory arbitration. In an e-mail to Tirreno’s prior
counsel, The Hartford’s counsel stated: ‘‘It would be
similar to arbitrating the case, but would not be as time-
consuming and less expensive.’’ The process here was
to begin with mediation between the parties, and it
would only evolve to resemble ordinary arbitration, in
the sense that the mediator would assign a binding
dollar amount, if the parties could not reach a facilitated
agreement.9 Before this court, Tirreno conceded that
the procedures employed by the mediator did not
resemble a typical arbitration proceeding with her rep-
resentation that: ‘‘The problem is [that] the arbitration
was not a regular arbitration in which there was evi-
dence presented [or] expert testimony given on either
side.’’ Finally, it is telling that, after the mediator
awarded damages to Tirreno, neither party availed
themselves of arbitration’s statutory mechanisms.10 The
Hartford filed a motion to enforce the settlement
agreement, not an application to confirm the award;
and Tirreno’s counsel objected, claiming that she did
not have the capacity to enter into a settlement
agreement, but counsel did not file an application to
vacate an arbitration award.
We conclude that trial court did not err when it
refused to categorize the parties’ chosen method of
adjudication of their dispute as an arbitration proceed-
ing and subsequently granted the motion to enforce the
settlement agreement. There was not a clear and direct
manifestation, among their words, writings, or actions
that indicated that the parties intended to adjudicate
their dispute through arbitration. See Harry Skolnick &
Sons v. Heyman, supra, 7 Conn. App. 179. The parties’
agreement was to mediate and then, if they could not
agree, to be bound by the mediator’s figure. Our arbitra-
tion statutes may not be used as a sword to subvert a
mutually agreed upon adjudication procedure or as a
weapon of further court litigation.
The judgment is affirmed.
In this opinion the other judges concurred.
1
Tirreno originally commenced this action by naming ‘‘The Hartford’’ as
the defendant. Subsequently, the court granted the plaintiff’s motion to cite
in as defendants The Hartford Financial Services Group, Inc., which she
asserted was doing business as The Hartford, and Trumbull Insurance
Company.
2
Tirreno raises two issues on appeal that were not raised at any stage in
the trial court. First, she claims that any agreement between the parties
was nonbinding, and second, ‘‘the mediator [failed] to consider pertinent
evidence regarding her lack of capacity.’’ Because Tirreno did not raise
either of these issues before the trial court, we decline to consider them
now. See J. Wm. Foley, Inc. v. United Illuminating Co., 158 Conn. App.
27, 46–47 n.13, 118 A.3d 573 (2015) (‘‘[t]o review claims articulated for the
first time on appeal and not raised before the trial court would be nothing
more than a trial by ambuscade of the trial judge’’ [internal quotation
marks omitted]).
3
Under oath, Tirreno’s counsel, Jonathan Perkins, summarized the sub-
stance of the e-mails between himself and The Hartford’s counsel, Daniel
Scapellati: ‘‘You’d indicated that you wanted to have an agreement, that if
the agreement could not be reached based on the mediation that the mediator
would be asked to put a number on the case and both sides would agree
to live with that.’’ Later in the hearing, Scapellati asked Perkins about an
e-mail in which he had asked Perkins to confirm that both sides would be
bound by the mediator’s decision:
‘‘[Scapellati]: [I]n response to my e-mail that I sent to you on the day
before mediation saying I want to make sure we’re both on the same page—
‘‘[Perkins]: I said agreed.
‘‘[Scapellati]: You said you were in agreement; correct?
‘‘[Perkins]: Correct.’’
4
During testimony, Dr. Lowe defined ‘‘decisional capacity’’ as ‘‘the ability
to understand the problem, the risk [or] the benefits. . . . And then it’s the
ability to actually make the decision.’’
5
Tirreno does not challenge the trial court’s legal conclusion that the
settlement agreement was summarily enforceable. ‘‘Agreements that end
lawsuits are contracts, sometimes enforceable in a subsequent suit, but in
many situations enforceable by entry of a judgment in the original suit. A
court’s authority to enforce a settlement by entry of judgment in the underly-
ing action is especially clear where the settlement is reported to the court
during the course of a trial or other significant courtroom proceedings. . . .
When parties agree to settle a case, they are effectively contracting for the
right to avoid a trial.’’ (Citations omitted; emphasis in original; internal
quotation marks omitted.) Audubon Parking Associates Ltd. Partnership
v. Barclay & Stubbs, Inc., 225 Conn. 804, 811–12, 626 A.2d 729 (1993). ‘‘The
existence of a contract is a question of fact to be determined by the trier
on the basis of all of the evidence. . . . To form a valid and binding contract
in Connecticut, there must be a mutual understanding of the terms that are
definite and certain between the parties. . . . In order for an enforceable
contract to exist, the court must find that the parties’ minds had truly
met. . . . If there has been a misunderstanding between the parties, or a
misapprehension by one or both so that their minds have never met, no
contract has been entered into by them and the court will not make for
them a contract which they themselves did not make.’’ (Citation omitted;
internal quotation marks omitted.) Rosenblit v. Laschever, 115 Conn. App.
282, 288, 972 A.2d 736 (2009).
During the December 10, 2013 hearing to enforce the settlement
agreement, Tirreno conceded that there was an agreement and it was
binding:
‘‘[The Plaintiff’s Counsel]: There was an agreement.
‘‘The Court: To enter into binding arbitration?
‘‘[The Plaintiff’s Counsel]: To enter into—well, it says mediation but—
‘‘The Court: Binding mediation?
‘‘[The Plaintiff’s Counsel]: Yes.’’
On the basis of these admissions, the court’s enforcement of the settlement
agreement was legally and logically correct and supported by facts set out
in the memorandum of decision. See Kidder v. Read, 150 Conn. App. 720,
733, 93 A.3d 599 (2014).
6
In the e-mail Tirreno’s prior counsel stated: ‘‘I will only be able to give
you a final okay on 5/23 when I meet with my client . . . and will have her
sign off on that approval.’’
7
Undercutting her own argument, Tirreno’s counsel argued before this
court that an application to vacate the arbitration award was not filed in
the trial court because: ‘‘If it wasn’t an arbitration, there was no reason to
do that.’’
8
General Statutes § 52-408 provides in relevant part: ‘‘An agreement in
any written contract, or in a separate writing executed by the parties to
any written contract, to settle by arbitration any controversy thereafter
arising out of such contract . . . or an agreement in writing between two
or more persons to submit to arbitration any controversy existing between
them at the time of the agreement to submit . . . shall be valid, irrevocable
and enforceable, except when there exists sufficient cause at law or in
equity for the avoidance of written contracts generally.’’
9
We note that alternative dispute resolution methodologies are evolving
and, thus, are not limited to standardized formats. The process here seems
to comport with what legal commentators have labeled, mediation-arbitra-
tion or ‘‘med-arb.’’ ‘‘Ordinary interest arbitration is normally a somewhat
judicial procedure in which the neutral [arbitrator] takes evidence and then
drafts the parties’ agreement in the loneliness of his own study. In med-arb
[however] the neutral [arbitrator] customarily works out solutions in the
presence of and with input from the parties.’’ (Internal quotation marks
omitted.) Glastonbury Education Assn. v. Freedom of Information Com-
mission, 234 Conn. 704, 716–17, 663 A.2d 349 (1995).
10
For parties who agree to engage in an arbitration, the statutory benefits
and protections of that process include: subpoena power, court ordered
depositions, judicial advice on questions of law, notice requirements, and
restrictions on appeals. General Statutes §§ 52-412, 52-415, 52-416 and 52-418.