Starboard Resources, Inc. v. Henry , 178 Conn. App. 820 ( 2017 )

***********************************************
The “officially released” date that appears near the be-
ginning of each opinion is the date the opinion will be pub-
lished in the Connecticut Law Journal or the date it was
released as a slip opinion. The operative date for the be-
ginning of all time periods for filing postopinion motions
and petitions for certification is the “officially released”
date appearing in the opinion.
All opinions are subject to modification and technical
correction prior to official publication in the Connecticut
Reports and Connecticut Appellate Reports. In the event of
discrepancies between the advance release version of an
opinion and the latest version appearing in the Connecticut
Law Journal and subsequently in the Connecticut Reports
or Connecticut Appellate Reports, the latest version is to
be considered authoritative.
The syllabus and procedural history accompanying the
opinion as it appears in the Connecticut Law Journal and
bound volumes of official reports are copyrighted by the
Secretary of the State, State of Connecticut, and may not
be reproduced and distributed without the express written
permission of the Commission on Official Legal Publica-
tions, Judicial Branch, State of Connecticut.
***********************************************
CHARLES HENRY III ET AL. v. GREGORY
IMBRUCE ET AL.
STARBOARD RESOURCES, INC. v. CHARLES
HENRY III ET AL.
(AC 39155)
DiPentima, C. J., and Sheldon and Mullins, Js.
Syllabus
The plaintiffs, investors and limited partners in certain limited partnerships,
brought actions against the defendant G and the defendant limited liabil-
ity companies that acted as general partners of three limited partner-
ships, alleging claims for, inter alia, fraud and breach of fiduciary duty,
and seeking injunctive relief and monetary damages. Thereafter, the
matters were referred to arbitration before an arbitrator, who issued
an award in favor of the plaintiffs. Subsequently, the trial court granted
the plaintiffs’ motion to confirm the arbitration award and denied the
defendants’ motion to vacate the award, and rendered judgment thereon,
from which the defendants appealed to this court. Held:
1. The defendants could not prevail on their claim that the trial court improp-
erly failed to vacate the arbitration award, which was based on their
claim that the arbitrator failed to disclose a conflict of interest stemming
from the fact that she had arbitrated the divorce of an attorney, V, who
had represented certain of the defendants in a separate malpractice
action: the fact that the arbitrator had arbitrated the personal divorce
of an attorney who represented two of the defendants, including G, in
a separate malpractice action did not give rise to a material relationship
with a party that would require disqualification, as the divorce arbitration
involving V did not involve any of the parties, attorneys or witnesses
to the arbitration in the present case, concerned an unrelated matter
and involved V, who did not participate in the arbitration in the present
case, and the fact that the arbitrator rendered an adverse decision in V’s
divorce did not, standing alone, amount to evidence of bias; moreover,
although the defendants claimed that the arbitrator’s initial disclosures
of certain previous arbitrations involving one of the parties’ law firms
required the disclosure of all previous similar arbitrations, the purported
conflict involved in the present case concerned the arbitrator’s involve-
ment in two unrelated matters and was trivial, and, therefore, the trial
court did not err in declining to vacate the arbitration award for evi-
dent partiality.
2. The defendants could not prevail on their claim that the trial court erred
in confirming the arbitration award where the arbitrator failed to order
production of relevant and probative evidence from the plaintiffs and
allowed the plaintiffs to amend their counterclaim to allege new claims
for which discovery was not allowed: the defendants failed to establish
that they were substantially prejudiced by the arbitrator’s failure to
compel the plaintiffs to turn over certain evidence that allegedly was
central to the defendants’ claim of damages, as the arbitrator found that
the plaintiffs were not liable to the defendants and, thus, any evidence
or lack thereof as to the defendants’ damages would not have affected
the award; even if the arbitrator erred in concluding that certain docu-
ments that included statements made by the plaintiffs’ attorney to the
Department of Banking were privileged, or by not compelling the produc-
tion of certain communications involving the plaintiffs and their attor-
ney, the defendants were unable to demonstrate substantial prejudice
resulting in a violation of their right to a full and fair hearing, as the
defendants’ speculative assertions about what the requested documents
and communications may have contained did not demonstrate prejudice;
and the defendants’ claim that they were prejudiced by the arbitrator’s
decision to allow the plaintiffs to amend their counterclaim after the
conclusion of discovery and less than three weeks before the hearing
was unavailing, as the arbitrator had broad discretion to allow the
amendment to the pleadings, and the defendants could not demonstrate
that the arbitrator’s decision substantially prejudiced them such that
the arbitration was fundamentally unfair, as they had long been on
notice of the allegations in the amended counterclaims, which were
based on the same factual allegations present in the plaintiffs’ original
complaint, and the arbitrator had allowed mutual amendments to the
parties’ claims, expressly conditioned on closure of discovery.
3. The defendants’ claim that the arbitrator lacked the authority to enter
an award against G individually was unavailing, as G assumed the obliga-
tion to arbitrate and was responsible for the award rendered against him,
the demand for arbitration included G as a named party, G repeatedly
represented himself both at the trial court and in the arbitration as
involved in and bound by the arbitration, and he did not argue that he
was not a party until after the arbitrator rendered her award; moreover,
there was no merit to the defendants’ claim that the arbitrator exceeded
her authority under the arbitration agreements by apportioning costs
and imposing attorney’s fees, as the arbitrator’s interpretation of the
scope of the arbitration agreements had to stand where the submission
to arbitration contained no express restrictions as to those issues, and
the parties agreed to expand the scope of the arbitration beyond the
original agreements.
Argued September 18—officially released December 26, 2017
Procedural History
Actions to recover damages for, inter alia, fraud, and
for other relief, brought to the Superior Court in the
judicial district of Stamford-Norwalk where the actions
were consolidated; thereafter, the matter was trans-
ferred to the Complex Litigation Docket, where the
court, Genuario, J., granted the defendants’ motion to
stay the proceedings pending arbitration; subsequently,
the plaintiffs filed a motion to confirm an arbitration
award; thereafter, the defendants filed a motion to
vacate an arbitration award; subsequently, the court
held a hearing on the motions; thereafter, the court
granted the plaintiffs’ motion to confirm the arbitration
award and denied the defendants’ motion to vacate
the arbitration award and rendered judgments thereon,
from which the defendants appealed to this court.
Affirmed.
Richard S. Gora, for the appellants (defendants).
Scott M. Harrington, with whom, on the brief, were
Jonathan P. Whitcomb and Bridgitte E. Mott, for the
appellees (plaintiffs).
Opinion
DiPENTIMA, C. J. The defendants1 appeal from the
judgments of the trial court confirming an arbitration
award in favor of the plaintiffs.2 On appeal, the defen-
dants claim that the court erred in denying their motion
to vacate the award and in granting the plaintiffs’ motion
to confirm the award because the arbitrator failed to
disclose a conflict of interest, failed to order production
of certain evidence and exceeded her powers under the
arbitration agreements. We disagree. Accordingly, we
affirm the judgments of the trial court.
The following facts, as set forth by the trial court in its
April 11, 2016 memorandum of decision, and procedural
history are relevant to this appeal. ‘‘These consolidated
cases3 arise out of the plaintiffs’ investment in three
limited partnerships: Giddings Oil & Gas, L.P. (Giddings,
L.P.), Hunton Oil Partners, L.P. (Hunton, L.P.), and
ASYM Energy Fund III, L.P. (ASYM, L.P.). The plaintiffs
are investors and limited partners in each of these lim-
ited partnerships. Each of the limited partnerships had
a general partner which is a limited liability company:
Giddings Genpar, LLC (Giddings Genpar), Hunton Oil
Genpar, LLC (Hunton Genpar), and ASYM [Capital] III,
LLC (ASYM Genpar), respectively.
‘‘Each of the limited liability companies that served
as a general partner of a limited partnership had a
manager; the manager of Giddings Genpar was Giddings
Investments, LLC, the manager of Hunton Genpar was
Glenrose Holdings, LLC, and the manager of ASYM
Genpar was ASYM Energy Investments, LLC. The plain-
tiffs in their complaint alleged that the individual defen-
dant Gregory Imbruce . . . exercised complete
control over the managers and therefore over the gen-
eral partners and over the limited partnerships. The
various companies which acted as general partners and/
or managers, as well as Imbruce individually, will be
collectively referred to as the . . . defendants. The
plaintiffs brought this action individually and deriva-
tively on behalf of the three limited partnerships.
‘‘In their second amended complaint4 (in docket num-
ber CV-12-6014987-S) the plaintiffs alleged various fact
patterns pursuant to which they asserted that the . . .
defendants have made misrepresentations in the mar-
keting of the investments, that the . . . defendants
have violated the provisions of the Connecticut Uniform
Securities Act (CUSA), [General Statutes § 36b-2 et
seq.], and that the . . . defendants have wrongfully
diverted assets of the various limited partnerships to
their own purposes or accounts. The second amended
complaint sounds in [eleven] counts which seek both
injunctive relief and monetary damages, alleging counts
that sound in fraud, breach of fiduciary duty, conver-
sion, civil theft, and violation of the Connecticut Unfair
Trade Practices Act (CUTPA), General Statutes § 42-
110b et seq., among other theories of relief. The prayer
for relief in the second amended complaint seeks both
equitable relief and monetary damages.
‘‘The case of Starboard Resources, Inc. v. Henry,
Superior Court, judicial district of Stamford, Docket No.
CV-12-6015112-S (Starboard case), is an interpleader
action in which Starboard Resources, Inc. (Starboard),
seeks, inter alia, an order of the court authorizing it
to deposit the disputed shares in court and a judicial
determination regarding the relative rights of the parties
to those shares.
‘‘On July 11, 2014, the court granted the motion of
the . . . defendants to stay these actions pending com-
pletion of arbitration proceedings, some of which had
already begun. . . . Consistent with the court order
staying this action, the parties proceeded to arbitration
and by subsequent agreement broadened the arbitration
beyond that which they had previously agreed to in their
limited partnership agreements.5 The parties proceeded
with the arbitration before a single arbitrator.
‘‘On September 10, 2015, the arbitrator rendered an
award in favor of the plaintiffs herein, who as respon-
dents in the arbitration proceeding had filed a counter-
claim, including allegations similar in nature to the
allegations of the second amended complaint pre-
viously described. The award consisted of declaratory
awards, monetary damages, awards of [attorney’s] fees,
interest, injunctive relief requiring an accounting, post-
judgment interest, as well as awards of arbitration fees
and costs.’’ (Footnotes added and omitted.)
On September 14, 2015, the plaintiffs filed a motion
in the trial court to confirm the arbitration award. On
October 13, 2015, the defendants filed an objection to
the plaintiffs’ motion to confirm the award and a cross
motion to vacate the award accompanied by scores of
exhibits. A flurry of procedural and substantive filings
followed, until, on February 8, 2016, the court held a
hearing on the parties’ respective motions. The court,
after further briefing, rendered judgments in accor-
dance with the arbitrator’s decision on April 11, 2016,
confirming the arbitral award. This appeal followed.
Additional facts and procedural history will be set forth
as necessary.
We begin with applicable legal principles. The court
found, and the parties agree, that these cases, though
brought in state court, are governed by the federal Arbi-
tration Act, 9 U.S.C. §§ 1 through 16 (arbitration act),
because the underlying contracts involve interstate
commerce.6 ‘‘Arbitration is essentially a creature of con-
tract, a contract in which the parties themselves charter
a private tribunal for the resolution of their disputes.
. . . Arbitration agreements are contracts and their
meaning is to be determined . . . under accepted rules
of [state] contract law . . . .
‘‘Judicial construction of an arbitration agreement,
however, is not guided solely by the principles of rele-
vant state contract law. The arbitration act; 9 U.S.C.
§§ 1 through 16; governs written arbitration agreements
that pertain to contracts involving interstate commerce.
. . . The arbitration act creates a body of federal sub-
stantive law of arbitrability, applicable to any arbitra-
tion agreement within the coverage of the [a]ct . . . .
As federal substantive law . . . the arbitration act is
to be applied by state courts as well as by federal
courts. . . .
‘‘The purpose of the arbitration act is to ensure that
private agreements to arbitrate are enforced according
to their terms. . . . The arbitration act establishes a
strong federal policy favoring arbitration. . . . [W]hen
Congress passed the [a]rbitration [a]ct in 1925 . . . [i]t
intended courts to enforce [arbitration] agreements into
which parties had entered . . . and to place such
agreements upon the same footing as other contracts
. . . .’’ (Citations omitted; footnote omitted; internal
quotation marks omitted.) Hottle v. BDO Seidman, LLP,
268 Conn. 694, 701–703, 846 A.2d 862 (2004).
Accordingly, the court’s review of an arbitration
award is ‘‘extremely limited.’’ Burns International
Security Services, Inc. v. International Union, United
Plant Guard Workers of America (UPGWA) and its
Local 537, 47 F.3d 14, 17 (2d Cir. 1995). Courts may
vacate an arbitrator’s decision ‘‘only in very unusual
circumstances.’’ First Options of Chicago, Inc. v.
Kaplan, 514 U.S. 938, 942, 115 S. Ct. 1920, 131 L. Ed.
2d 985 (1995). ‘‘Following issuance of an arbitration
award, § 9 of the [arbitration act] provides that a party
may apply to a [trial] court ‘for an order confirming the
award, and thereupon the court must grant such an
order unless the award is vacated, modified, or cor-
rected as prescribed in sections 10 and 11 of this title.’ ’’
STMicroelectronics, N.V. v. Credit Suisse Securities
(USA), LLC, 648 F.3d 68, 74 (2d Cir. 2011). ‘‘Only a
barely colorable justification for the outcome reached
by the arbitrators is necessary to confirm the award.’’
(Internal quotation marks omitted.) D.H. Blair & Co. v.
Gottdiener, 462 F.3d 95, 110 (2d Cir. 2006). Accordingly,
‘‘[a] party petitioning a . . . court to vacate an arbitral
award bears the heavy burden of showing that the
award falls within a very narrow set of circumstances
delineated by statute and case law.’’ Duferco Interna-
tional Steel Trading v. T. Klaveness Shipping A/S, 333
F.3d 383, 388 (2d Cir. 2003). Specifically, under the
arbitration act, an arbitration award may be vacated
only ‘‘(1) where the award was procured by corruption,
fraud, or undue means; (2) where there was evident
partiality or corruption in the arbitrators, or either of
them; (3) where the arbitrators were guilty of miscon-
duct in refusing to postpone the hearing, upon sufficient
cause shown, or in refusing to hear evidence pertinent
and material to the controversy; or of any other misbe-
havior by which the rights of any party have been preju-
diced; or (4) where the arbitrators exceeded their
powers, or so imperfectly executed them that a mutual,
final, and definite award upon the subject matter sub-
mitted was not made.’’ 9 U.S.C. § 10 (a) (2012).7
Given these limitations on a court’s review of the
arbitration award, ‘‘[w]e review a [trial] court’s decision
to confirm or vacate an arbitration award de novo on
questions of law and for clear error on findings of fact.’’
National Football League Management Council v.
National Football League Players Assn., 820 F.3d 527,
536 (2d Cir. 2016); see also Kellogg v. Middlesex Mutual
Assurance Co., 326 Conn. 638, 645, 165 A.3d 1228 (2017)
(reviewing trial court’s vacatur de novo). We turn now
to the defendants’ claims.
I
The defendants first claim that the court should have
vacated the arbitration award because the arbitrator
failed to disclose a conflict of interest. Specifically, the
defendants argue that the arbitrator was required to
disclose the fact that she had arbitrated the personal
divorce of an attorney, Kenneth Votre, who represented
Imbruce and Glenrose Holdings, LLC, in a separate but
related malpractice action. We do not agree.
An arbitration award may be vacated ‘‘where there
was evident partiality or corruption in the arbitrators
. . . .’’ 9 U.S.C. § 10 (a) (2) (2012). ‘‘Evident partiality
may be found only where a reasonable person would
have to conclude that an arbitrator was partial to one
party to the arbitration. . . . Although a party seeking
vacatur must prove evident partiality by showing some-
thing more than the mere appearance of bias . . .
[p]roof of actual bias is not required. . . . Rather, par-
tiality can be inferred from objective facts inconsistent
with impartiality. . . . A showing of evident partiality
must be direct and not speculative.’’ (Citations omitted;
internal quotation marks omitted.) Kolel Beth Yechiel
Mechil of Tartikov, Inc. v. YLL Irrevocable Trust, 729
F.3d 99, 104 (2d Cir. 2013). The party seeking vacatur
must prove evident partiality by ‘‘clear and convincing
evidence.’’ Id., 106. ‘‘[T]he evident-partiality standard
[is] not satisfied because the undisclosed relationship
at issue was too insubstantial to warrant vacating the
award. . . . [W]here an undisclosed matter is not sug-
gestive of bias, vacatur based upon that nondisclosure
cannot be warranted under an evident-partiality the-
ory.’’ (Citations omitted; internal quotation marks omit-
ted.) Scandinavian Reinsurance Co. Ltd. v. Saint Paul
Fire & Marine Ins. Co., 668 F.3d 60, 72–73 (2d Cir. 2012).
Indeed, ‘‘there is no duty to disclose if the relationship
is trivial.’’ Uhl v. Komatsu Forklift Co., Ltd., 512 F.3d
294, 307 (6th Cir. 2008). Nevertheless, ‘‘arbitrators must
take steps to ensure that the parties are not misled into
believing that no nontrivial conflict exists. It therefore
follows that where an arbitrator has reason to believe
that a nontrivial conflict of interest might exist, he must
(1) investigate the conflict . . . or (2) disclose his rea-
sons for believing there might be a conflict and his
intention not to investigate. . . . [A] failure to either
investigate or disclose an intention not to investigate
is indicative of evident partiality.’’ (Citations omitted.)
Applied Industrial Materials Corp. v. Ovalar Makine
Ticaret Ve Sanayi, A.S., 492 F.3d 132, 138 (2d Cir. 2007).
The defendants argue that the purported conflict was
nontrivial and that the arbitrator misled them into
believing that no nontrivial conflict existed. Specifi-
cally, the defendants contend that they were misled
because the arbitrator’s initial disclosures at the start
of the arbitration suggested that she considered any
prior arbitral relationships to be per se nontrivial, but
the arbitrator then failed to disclose her arbitral rela-
tionship with Attorney Votre. We are not persuaded.
The conflict here alleged, if one existed, was merely
trivial—regardless of the substance of the arbitrator’s
initial disclosures.
In its memorandum of decision, the court found that
‘‘[t]he divorce arbitration did not involve any of the
parties to the subject arbitration. The divorce arbitra-
tion did not involve any of the attorneys or witnesses
to the subject arbitration. The divorce arbitration
involved an attorney who did not participate in the
subject arbitration and did not represent any of the
defendants or any other parties in the subject arbitra-
tion. The divorce arbitration involved an attorney who
represented some of the defendants in a completely
unrelated matter.’’
The defendants argue, however, that the arbitrator’s
adverse decision in Attorney Votre’s divorce, and the
Superior Court’s subsequent vacatur8 thereof, evince
such bias against Attorney Votre that a reasonable per-
son would have to conclude that the arbitrator was
predisposed to rule against any party tangentially affili-
ated with him. We are not persuaded. The United States
Court of Appeals for the Second Circuit has ‘‘repeatedly
said that adverse rulings alone rarely evidence partial-
ity, whether those adverse rulings are made by arbitra-
tors . . . or by judges . . . .’’ (Citations omitted.)
Scandinavian Reinsurance Co. Ltd. v. Saint Paul
Fire & Marine Ins. Co., supra, 668 F.3d 75; see also
Burton v. Mottolese, 267 Conn. 1, 49, 835 A.2d 998 (2003)
(‘‘adverse rulings do not amount to evidence of bias’’),
cert. denied, 541 U.S. 1073, 124 S. Ct. 2422, 158 L. Ed.
2d 983 (2004). The Superior Court’s vacatur of the arbi-
trator’s award in Attorney Votre’s divorce does not give
substance to the defendants’ speculative claim, espe-
cially where the vacatur was premised on a statutory
ground other than evident partiality. See footnote 8 of
this opinion.
There being no indicia of bias, the arbitrator’s involve-
ment in her professional capacity in a ‘‘completely unre-
lated matter’’ is too attenuated to be of any consequence
in the underlying arbitration. The Second Circuit has
held that ‘‘to disqualify any arbitrator who had profes-
sional dealings with one of the parties (to say nothing
of a social acquaintanceship) would make it impossible,
in some circumstances, to find a qualified arbitrator
at all.’’ Morelite Construction Corp. v. New York City
District Council Carpenters Benefit Funds, 748 F.2d
79, 83 (2d Cir. 1984). The arbitrator’s prior arbitration
involving Attorney Votre did not give rise to a material
relationship with a party that would require disqualifica-
tion. Scandinavian Reinsurance Co. Ltd. v. Saint Paul
Fire & Marine Ins. Co., supra, 668 F.3d 74 (‘‘overlapping
arbitral service [is] not a material relationship with a
party . . . such as a family connection or ongoing busi-
ness arrangement with a party or its law firm—circum-
stances in which a reasonable person could reasonably
infer a connection between the undisclosed outside
relationship and the possibility of bias for or against a
particular arbitrating party’’ [citation omitted; internal
quotation marks omitted]).
Nevertheless, the defendants argue that the arbitra-
tor’s initial disclosures defined what kind of relation-
ship is nontrivial for the purposes of this arbitration.
That is, the defendants argue that the arbitrator’s disclo-
sure of some previous arbitrations involving one of the
parties’ law firms necessitates the disclosure of all pre-
vious arbitrations involving one of the parties’ law firms.
In support of this contention, the defendants rely princi-
pally on Applied Industrial Materials Corp. v. Ovalar
Makine Ticaret Ve Sanayi, A.S., supra, 492 F.3d 132,
and New Regency Productions, Inc. v. Nippon Herald
Films, Inc., 501 F.3d 1101 (9th Cir. 2007). Their reliance
is misplaced. In the former, the United States Court of
Appeals for the Second Circuit vacated an arbitration
award because the arbitrator, the chief executive officer
of a third party corporation, having first disclosed that
he had become aware of contract negotiations between
his subsidiary and a party’s parent company, failed to
investigate and disclose that, in fact, a contract already
existed. Applied Industrial Materials Corp. v. Ovalar
Makine Ticaret Ve Sanayi, A.S., supra, 138. In the latter,
the United States Court of Appeals for the Ninth Circuit
vacated an arbitration award where the arbitrator, hav-
ing disclosed past negotiations on behalf of a previous
employer with people who later became executives of
one of the parties, failed to disclose his new employer’s
past negotiations with a film producer who was affili-
ated with one of the parties. New Regency Productions,
Inc. v. Nippon Herald Films, Inc., supra, 1110 (‘‘it is
precisely against the background of previously dis-
closed information that [the arbitrator’s] failure to dis-
close his new position might have ‘misled’ [the
defendant] ‘into believing that no nontrivial conflict
exist[ed],’ ’’ citing Applied Industrial Materials Corp.
v. Ovalar Makine Ticaret Ve Sanayi, A.S., supra, 137).
Neither case is analogous to the present one; the
conflicts in those cases are material, substantial busi-
ness relationships in which the arbitrator had a specific,
material interest. The purported conflict here is arbitral
service in two completely unrelated matters. Logically,
for an arbitrator to ‘‘mislead’’ a party into believing that
no nontrivial conflict exists, a nontrivial conflict must
in fact exist. As we have stated, any purported conflict
here is trivial, as a reasonable person would not have
to conclude that it made the arbitrator partial to one
party to the arbitration. See Kolel Beth Yechiel Mechil
of Tartikov, Inc. v. YLL Irrevocable Trust, supra, 729
F.3d 106. Accordingly, the trial court did not err in
declining to vacate the arbitration award for evident
partiality.
II
The defendants next claim that the court erred in
confirming the arbitration award where the arbitrator
failed to order production of relevant and probative
evidence from the plaintiffs and allowed the plaintiffs
to amend their counterclaim to allege new claims for
which discovery was not allowed. The defendants argue
that each of these errors individually, or, in the alterna-
tive, that all of these errors together, amounted to mis-
conduct in violation of 9 U.S.C. § 10 (a) (3). We do
not agree.
‘‘Courts have interpreted [§] 10 (a) (3) to mean that
except where fundamental fairness is violated, arbitra-
tion determinations will not be opened up to evidentiary
review. In making evidentiary determinations, an arbi-
trator need not follow all the niceties observed by the
federal courts. . . . However, although not required to
hear all the evidence proffered by a party, an arbitrator
must give each of the parties to the dispute an adequate
opportunity to present its evidence and argument. . . .
Federal courts do not superintend arbitration proceed-
ings. Our review is restricted to determining whether
the procedure was fundamentally unfair. See Team-
sters, Chauffeurs, Warehousemen, Helpers & Food
Processors, Local Union 657 v. Stanley Structures,
Inc., 735 F.2d 903, 906 (5th Cir. 1984); accord Concourse
Beauty School, Inc. v. Polakov, 685 F. Supp. 1311, 1318
(S.D.N.Y. 1988) ([t]he misconduct must amount to a
denial of fundamental fairness of the arbitration pro-
ceeding in order to warrant vacating the [award, quot-
ing] Transit Casualty Co. v. Trenwick Reinsurance Co.
Ltd., 659 F. Supp. 1346, 1354 [S.D.N.Y. 1987], aff’d mem.,
841 F.2d 1117 [2d Cir. 1988]).’’ (Citations omitted; inter-
nal quotation marks omitted.) Tempo Shain Corp. v.
Bertek, Inc., 120 F.3d 16, 20 (2d Cir. 1997). ‘‘Under the
[arbitration act’s] extremely limited standard of review
for vacatur requests, [trial] courts are not empowered
to second-guess such decisions—procedural or sub-
stantive—even if there is evidence that the arbitrator
erred.’’ ARMA, S.R.O. v. BAE Systems Overseas, Inc.,
961 F. Supp. 2d 245, 264 (D.D.C. 2013).
The Connecticut Supreme Court has held that arbitral
misconduct violates a party’s right to a fundamentally
fair arbitration hearing if that misconduct is substan-
tially prejudicial. ‘‘[T]o vacate an arbitrator’s award on
the ground of misconduct under [General Statutes] § 52-
418 (a) (3),9 the moving party must establish that it was
substantially prejudiced by the improper ruling. . . .
This requirement that the moving party establish sub-
stantial prejudice is consistent with the showing that
this court requires to order a new trial when a trial
court makes an improper evidentiary ruling in a civil
trial. . . .
‘‘Federal case law considering whether an arbitrator’s
evidentiary ruling deprived a party of a fair hearing is
consistent with requiring the moving party to demon-
strate substantial prejudice to vacate an award on this
ground. One federal court analogized to the standard
of review accorded trial courts’ evidentiary rulings and
declined to vacate an arbitrator’s award because ‘it
cannot be said as a matter of law that [the excluded
evidence] was decisive or that its exclusion was seri-
ously harmful in the light of the other evidence in the
case.’ ’’ (Citations omitted; footnote added.) Bridgeport
v. Kasper Group, Inc., 278 Conn. 466, 476–77, 899 A.2d
523 (2006), quoting Newark Stereotypers’ Union No. 18
v. Newark Morning Ledger Co., 397 F.2d 594, 599 (3d
Cir.), cert. denied, 393 U.S. 954, 89 S. Ct. 378, 21 L. Ed.
2d 365 (1968).
The defendants argue that the arbitrator should have
(1) ordered production of documents relating to the
valuation of Starboard, (2) ordered production of the
statements made by the plaintiffs’ attorney to the
Department of Banking, (3) ordered production of com-
munications between and among the plaintiffs and their
attorney and (4) denied the plaintiffs’ motion to amend
their counterclaim or at least allowed further discovery
thereon. Because the defendants cannot demonstrate
substantial prejudice, and, therefore, a denial of funda-
mental fairness, we are not persuaded.
A
First, the defendants argue that the arbitrator should
have compelled the plaintiffs to turn over documents
pertinent to the valuation of Starboard because its value
was central to the defendants’ claim of damages. The
arbitrator, however, found that the plaintiffs were not
liable to the defendants. As a result, any evidence—or
lack thereof—as to the defendants’ damages would not
have affected the award. The defendants, therefore,
cannot establish substantial prejudice. See Odeon Capi-
tal Group, LLC v. Ackerman, 864 F.3d 191, 194 (2d
Cir. 2017) (holding that petitioner must demonstrate
material nexus between allegation of fraud under 9
U.S.C. § 10 [a] [1], and award); Karppinen v. Karl Kiefer
Machine Co., 187 F.2d 32, 34–35 (2d Cir. 1951) (affirming
arbitration award where perjured material evidence
was nonetheless ‘‘extremely remote’’); Rintin Corp.,
S.A. v. Domar, Ltd., 374 F. Supp. 2d 1165, 1170 (S.D.
Fla. 2005) (‘‘[p]laintiff has not shown how the discovery
it claims it was unable to obtain is relevant, or would
have affected the Award in any material respect’’), aff’d,
476 F.3d 1254 (11th Cir. 2007). Thus, even if we assume,
arguendo, that the arbitrator erred in refusing to compel
discovery of the valuation material, such error did not
affect the award. The arbitrator’s refusal to compel
discovery of it, therefore, is not substantially prejudicial
and, thus, is not fundamentally unfair.
B
Second, the defendants have admitted that they have
‘‘no idea’’ what the communications with the Depart-
ment of Banking, which may have been relevant to the
defendants’ defenses against the plaintiffs’ CUSA claim,
contain. The defendants speculate that the documents
may reveal ‘‘impeachment material, damaging admis-
sions by the [p]laintiffs, contradictions or other facts
which were and remain unknown to the [defendants].’’
The arbitrator concluded that these documents were
privileged. The defendants nevertheless argue that
because they were deprived of the opportunity to exam-
ine these documents, they were denied a full and fair
hearing. This argument is unavailing.
‘‘The [arbitration act] does not bestow on a party the
right to receive information about every matter that it
might consider important or useful in presenting its
case.’’ Scandinavian Reinsurance Co. Ltd. v. Saint
Paul Fire & Marine Ins. Co., supra, 668 F.3d 77. The
defendants’ speculative assertions about what the
requested documents may have contained do not dem-
onstrate prejudice, and, thus, fundamental unfairness.
The defendants had ample opportunity to challenge
the plaintiffs’ CUSA counterclaim in the arbitration.
Throughout the preliminary stages of arbitration and
in the hearing itself, the defendants offered several
defenses, produced testimony as to those defenses,
introduced numerous exhibits in support thereof, and
thoroughly cross-examined the plaintiffs’ witnesses.
Thus, the court correctly concluded that the defendants
were not deprived of a fair hearing. See Tempo Shain
Corp. v. Bertek, Inc., supra, 120 F.3d 20. Therefore,
even if we assume, without deciding, that the arbitrator
erred in concluding that the documents were privileged,
the defendants are unable to demonstrate substantial
prejudice resulting in a violation of their right to a full
and fair hearing.
C
Third, the defendants argue that they were prejudiced
by the arbitrator’s decision not to compel production
of communications between and among the plaintiffs,
their attorney, Jonathan Whitcomb, and erstwhile plain-
tiff, William Pettinati, who later aligned with Imbruce.
The defendants contend that there was no privilege
protecting these communications, and that even if there
was, Pettinati waived the privilege by filing a grievance
against Attorney Whitcomb. Additionally, the defen-
dants argue that the arbitrator clearly was biased
because she ordered discovery of their own communi-
cations with their former law firm, Levett Rockwood,
P.C. The plaintiffs counter that the documents remained
privileged because they were created in the then com-
mon interest of the plaintiffs, Pettinati and Attorney
Whitcomb, an interest that the plaintiffs still hold in
common with their attorney. The plaintiffs also argue
that the defendants filed a malpractice claim against
Levett Rockwood, and thereby waived any privilege.
Once more, the arbitrator’s conclusions are entitled
to great deference. See ARMA, S.R.O. v. BAE Systems
Overseas, Inc., supra, 961 F. Supp. 2d 264. Even if we
assume, without deciding, that the arbitrator erred in
her application of the legal principles underlying the
various privileges and waivers asserted, the defendants
cannot demonstrate substantial prejudice, and, thus,
fundamental unfairness: They again admit that the con-
tents of the communications at issue are unknown to
them, arguing only that they are ‘‘potentially relevant
and dispositive’’ without demonstrating how or why.
Indeed, the defendants are merely disputing the merits
of the arbitrator’s conclusion rather than whether the
conclusion resulted from the violation of their right to
a fundamentally fair hearing. This is not the evidence
of misconduct the arbitration act requires.
D
Fourth, the defendants argue that they were preju-
diced by the arbitrator’s decision to allow the plaintiffs
to amend their counterclaim after the conclusion of
discovery and less than three weeks before the hearing.
Specifically, the defendants contend that the plaintiffs
waived and/or withdrew several claims they then real-
leged, namely, a CUTPA claim, a civil theft claim and
alter ego claims against Imbruce personally. We are
not persuaded.
The arbitrator has broad discretion to allow amend-
ments to pleadings. See Saphir v. Neustadt, 177 Conn.
191, 206, 413 A.2d 843 (1979) (‘‘a trial court may allow,
in its discretion, an amendment to pleadings before,
during, or . . . after trial to conform to the proof’’);
see also Certain Underwriters at Lloyd’s London v.
Ashland, Inc., 967 A.2d 166, 175 (D.C. 2009) (‘‘we note
that pleading requirements in arbitration proceedings
are generally relaxed’’). That discretion notwithstand-
ing, the defendants still cannot demonstrate that the
arbitrator’s decision substantially prejudiced them such
that the arbitration was fundamentally unfair. The
amended counterclaims at issue were based on the
same factual allegations present in the plaintiffs’ origi-
nal complaint. The defendants had long been on notice
of these allegations. See Briere v. Greater Hartford
Orthopedic Group, P.C., 325 Conn. 198, 206–10, 157
A.3d 70 (2017) (reasserting relation back doctrine, by
which pleadings may be amended if same operative
facts control). Moreover, the arbitrator allowed mutual
amendments to the parties’ claims, expressly condi-
tioned on closure of discovery. Accordingly, the defen-
dants cannot demonstrate substantial prejudice
resulting in fundamental unfairness.
For those reasons, the arbitration proceedings culmi-
nated in a hearing that was not fundamentally unfair,
during which both sides had an adequate opportunity
to present their evidence and arguments. We therefore
conclude that the court did not err in granting the plain-
tiffs’ motion to confirm the arbitration award and deny-
ing the defendants’ motion to vacate it for arbitral
misconduct under 9 U.S.C. § 10 (a) (3).
III
Finally, the defendants claim that the court should
have vacated the arbitration award pursuant to 9 U.S.C.
§ 10 (a) (4) because the arbitrator exceeded her author-
ity. Specifically, the defendants argue that the arbitrator
lacked the authority (1) to render an award against
Imbruce individually, and (2) to apportion costs and
impose attorney’s fees. We disagree.
A
The defendants first contend that the arbitrator
lacked the authority to enter an award against Imbruce
individually. This argument is close to frivolous. In its
memorandum of decision, the trial court found the fol-
lowing: ‘‘[I]n [their] original motion to stay this litigation
in favor of arbitration the defendants, including
Imbruce, asserted and represented to the court ‘defen-
dants are ready and willing to proceed with the arbitra-
tion of the plaintiffs’ claims.’ . . . In the demand for
arbitration Imbruce is named as a claimant and in his
amended demand he also includes himself as a claim-
ant. At the time he made the [m]otion to [s]tay and
asserted that he was willing to proceed with the arbitra-
tion of [the] plaintiffs’ claims, he knew the plaintiffs
were asserting claims against him individually based
upon the filed complaint. At no time did he expressly
or impliedly suggest that the arbitration should exclude
claims against him individually. In fact, the filings
express the opposite position.
‘‘While he voluntarily submitted his claims to arbitra-
tion and by his representations expressed that he was
willing to arbitrate the plaintiffs’ claims, he did not
assert in any way lack of jurisdiction of the arbitrator
to hear the plaintiffs’ counterclaims against him person-
ally, as he would have been required to do under the
rules of the American Arbitration Association and, par-
ticularly, Rule 7c.’’
We turn now to applicable legal standards. ‘‘[A] party
cannot be required to submit to arbitration any dispute
which he has not agreed so to submit. Yet, to be consis-
tent with congressional policy in favor of settlement
of disputes by the parties through the machinery of
arbitration, the judicial inquiry . . . must be strictly
confined to the question [of] whether the reluctant party
did agree to arbitrate . . . or did agree to give the arbi-
trator power to make the award he made.’’ United Steel-
workers of America v. Warrior & Gulf Navigation Co.,
363 U.S. 574, 582, 80 S. Ct. 1347, 4 L. Ed. 2d 1409 (1960).
There are ‘‘five theories for binding nonsignatories to
arbitration agreements: 1) incorporation by reference;
2) assumption; 3) agency; 4) veil-piercing/alter ego; and
5) estoppel.’’ Thomson-CSF, S.A. v. American Arbitra-
tion Assn., 64 F.3d 773, 776 (2d Cir. 1995).
Although the plaintiffs claim that all five theories
are implicated here, they focus their argument on the
assumption and alter ego theories. Because we agree
that Imbruce assumed the obligation to arbitrate, we
do not consider the other theories. ‘‘In the absence of
a signature, a party may be bound by an arbitration
clause if its subsequent conduct indicates that it is
assuming the obligation to arbitrate.’’ Id., 777, citing
Gvozdenovic v. United Air Lines, Inc., 933 F.2d 1100,
1105 (2d Cir.), cert. denied, 502 U.S. 910, 112 S. Ct. 305,
116 L. Ed. 2d 248 (1991). Here, as the facts previously
indicated, Imbruce’s conduct belies his claim that he
is not bound by the arbitration. The demand for arbitra-
tion included Imbruce as a named party, and he repeat-
edly represented himself both at the trial court and in
the arbitration as involved in and bound by the arbitra-
tion. Despite being on notice that the plaintiffs were
asserting claims against him, Imbruce did not argue
that he was not a party until after the arbitrator rendered
her award. Imbruce therefore assumed the obligation
to arbitrate and is responsible for the award rendered
against him.
B
The defendants next contend that the arbitrator
exceeded her authority under the arbitration
agreements by apportioning costs and imposing attor-
ney’s fees. Specifically, the defendants argue that the
parties agreed only to arbitrate the partnership
agreements, which were silent as to costs and fees, and
that the plaintiffs made no claim for costs and fees
under the release agreement. This also borders on
the frivolous.
The trial court found that both parties ‘‘asserted
claims for fees and costs that they incurred.’’ ‘‘If both
parties sought attorney’s fees . . . then both parties
agreed pro tanto to submit that issue to arbitration, and
the arbitrators had jurisdiction to consider that issue
and to award them.’’ U.S. Offshore, Inc. v. Seabulk Off-
shore, Ltd., 753 F. Supp. 86, 92 (S.D.N.Y. 1990); see also
Commercial Arbitration Rules of the American Arbitra-
tion Association Rule R-47 (d) (‘‘[t]he award of the
arbitrator(s) may include . . . an award of attorneys’
fees if all parties have requested such an award or it
is authorized by law or their arbitration agreement’’).10
Moreover, once bound to arbitration, ‘‘[a] party seek-
ing relief under [§ 10 (a) (4)] bears a heavy burden. It
is not enough . . . to show that the [arbitrator] com-
mitted an error—or even a serious error. . . . Because
the parties bargained for the arbitrator’s construction
of their agreement, an arbitral decision even arguably
construing or applying the contract must stand, regard-
less of a court’s view of its (de)merits . . . . Only if the
arbitrator act[s] outside the scope of his contractually
delegated authority . . . may a court overturn his
determination. . . . So the sole question for [the appel-
late court] is whether the arbitrator (even arguably)
interpreted the parties’ contract, not whether he got its
meaning right or wrong.’’ (Citations omitted; internal
quotation marks omitted.) Oxford Health Plans, LLC
v. Sutter, U.S. , 133 S. Ct. 2064, 2068, 186 L. Ed.
2d 113 (2013). Under this standard, we do not disturb
an arbitrator’s interpretation of her authority over an
unrestricted submission. Here, the submission con-
tained no express restrictions as to these issues, and
we note that the parties agreed to expand the scope
of the arbitration beyond the original agreements. See
footnote 5 of this opinion. Accordingly, the arbitrator’s
interpretation of the scope of the arbitration
agreements, including whether she was empowered to
award attorney’s fees and costs, must stand.
In conclusion, therefore, the court did not err in grant-
ing the plaintiffs’ application to confirm the arbitration
award and denying the defendants’ application to vacate
it. The defendants cannot demonstrate that the arbitra-
tor’s conduct amounted either to evident partiality, mis-
conduct or an excess of authority. See 9 U.S.C. § 10 (a)
(2012). Where none of these claimed statutory grounds
for vacatur exists, the arbitration act requires a
reviewing court to confirm the arbitration award. The
court properly did so.
The judgments are affirmed.
In this opinion the other judges concurred.
1
The defendants-appellants are: Gregory Imbruce; Giddings Investments,
LLC; Giddings Genpar, LLC; Hunton Oil Genpar, LLC; ASYM Capital III,
LLC; Glenrose Holdings, LLC, and ASYM Energy Investments, LLC. The
defendants were the claimants in the underlying arbitration. For the sake
of clarity, the parties will be identified by their respective posture in the
trial court, and will be referred to collectively as the defendants.
2
The plaintiffs-appellees are: Charles Henry III; Ahmed Ammar; John P.
Vaile; John P. Otieno; Bradford Higgins; William Mahoney; Edward M. Con-
rads; William F. Conrads; SOSVentures, LLC; Giddings Oil & Gas, L.P.; Hun-
ton Oil Partners, L.P.; and ASYM Energy Fund III, L.P.
3
This appeal was taken from three consolidated cases: Henry v. Imbruce,
Superior Court, judicial district of Stamford, Complex Litigation Docket,
Docket Nos. X08-CV-12-6014987-S and X08-CV-12-5013927-S; and Starboard
Resources, Inc. v. Henry, Superior Court, judicial district of Stamford, Com-
plex Litigation Docket, Docket No. X08-CV-12-6015112-S.
4
The plaintiffs filed their second amended complaint on July 31, 2012,
and a third amended complaint by consent on June 6, 2013. These pleadings,
however, are superseded for the purposes of this appeal by the plaintiffs’
counterclaims as respondents in the arbitration.
5
The Hunton, L.P., partnership agreement contains no arbitration clause.
The ASYM, L.P., and Giddings, L.P., agreements contain the following lan-
guage: ‘‘Any dispute, controversy or claim (‘Dispute’) arising out of, relating
to or in connection with this Agreement, including any question regarding
its existence, validity or termination, or regarding a breach hereof which
cannot be resolved by good faith discussions among the Partners and/or
Partnership within thirty (30) days (or such longer period as may be agreed
by such Partners and/or Partnership) shall be referred by any Party to,
and shall finally settled by, arbitration under and in accordance with the
Commercial Arbitration Rules of the American Arbitration Association (‘the
Rules’).’’ The mutual release agreement between one of the plaintiffs, SOS-
Ventures, LLC, and Imbruce contained a similarly broad clause (with some
restrictions for equitable relief under the release agreement but also allowing
for the recovery of costs and fees). The parties later agreed to submit the
Hunton claims to arbitration as well.
6
‘‘Section 1 of the [arbitration] act defines ‘commerce’ to include ‘com-
merce among the several States . . . .’ 9 U.S.C. § 1. The United States
Supreme Court has construed § 1 broadly. The court has explained that
‘involving commerce’ is the equivalent of ‘affecting commerce,’ and accord-
ingly, the term ‘signals an intent to exercise Congress’ commerce power to
the full.’ . . . Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265, 277,
115 S. Ct. 834, 130 L. Ed. 2d 753 (1995).’’ Hottle v. BDO Seidman, LLP, 74
Conn. App. 271, 276, 811 A.2d 745 (2002), aff’d, 268 Conn. 694, 846 A.2d
862 (2004).
In this case, speculators in California, Connecticut, Illinois and Texas
invested capital in Delaware companies (headquartered in Connecticut and
Texas) that exploit mineral rights in Texas and Oklahoma.
7
Concomitant with those statutory provisions, the United States Court
of Appeals for the Second Circuit has acknowledged an additional ground
for vacatur, the so-called ‘‘manifest disregard’’ standard. It is implicated
where the award ‘‘was rendered in manifest disregard of the law,’’ or where
the award was rendered in manifest disregard of ‘‘the terms of the [parties’
relevant] agreement[s].’’ (Internal quotation marks omitted.) Schwartz v.
Merrill Lynch & Co., 665 F.3d 444, 451–52 (2d Cir. 2011). Although the
defendants made a claim of manifest disregard below, they make no such
claim on appeal.
8
See Votre v. Maisano-Votre, Superior Court, judicial district of Ansonia-
Milford, Docket No. FA-12-4017418-S, 2015 WL 2473188, *9 (May 4, 2015)
(‘‘In summation, what appears to have occurred here is that the arbitrator
. . . turned the arbitration hearing into a mediation event and used proce-
dures implemented ad hoc to complete the proceeding. . . . The receipt
and considerable reliance upon evidence not offered into the record is,
as elsewhere, particularly troubling to the court. Consequently, the court
believes that the motion to vacate should be granted under [General Statutes]
§ 52-418 [a] [3].’’).
Section 52-418 (a) (3) provides, in relevant part: ‘‘Upon the application
of any party to an arbitration, the superior court . . . shall make an order
vacating the award if it finds any of the following defects . . . if the arbitra-
tors have been guilty of misconduct in refusing to postpone the hearing
upon sufficient cause shown or in refusing to hear evidence pertinent and
material to the controversy or of any other action by which the rights of
any party have been prejudiced . . . .’’
9
‘‘[Section] 52-418 (a) (3) essentially tracks the language of the federal
statute governing arbitral misconduct.’’ O & G/O’Connell Joint Venture v.
Chase Family Ltd. Partnership No. 3, 203 Conn. 133, 150 n.12, 523 A.2d
1271 (1987). See footnote 8 of this opinion.
10
We note also that CUTPA expressly authorizes attorney’s fees. See
General Statutes § 42-110g (d) (‘‘[i]n any action brought by a person under
this section, the court may award . . . costs and reasonable attorneys’
fees . . . .’’).