A Better Way Wholesale Autos, Inc. v. Gause

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A BETTER WAY WHOLESALE AUTOS, INC. v.
SHANNON GAUSE
(AC 40033)
DiPentima, C. J., and Moll and Harper, Js.
Syllabus
The plaintiff used car dealer sought to vacate an arbitration award in favor
of the defendant in connection with the defendant’s purchase of a vehicle
from the plaintiff in which the plaintiff failed to disclose that the vehicle
was a manufacturer buyback. The defendant brought an arbitration
claim against the plaintiff, alleging violations of numerous state and
federal laws related to the sale of the vehicle. The arbitration submission
was unrestricted. The arbitrator found that the vehicle did not have
a windshield sticker or any other conspicuous display disclosing the
vehicle’s status as a manufacturer buyback and that the purchase order
failed to clearly and conspicuously disclose its manufacturer buyback
status, as required by statute (§ 42-179 [g] [1]) and state regulation
(§ 42-179-9). The arbitrator concluded that the plaintiff had violated a
provision (§ 42-110b [c]) of the Connecticut Unfair Trade Practices Act
(CUTPA) and awarded the defendant compensatory damages, punitive
damages, attorney’s fees and costs. Thereafter, the plaintiff filed an
application to vacate the arbitration award pursuant to the statute (§ 52-
418 [a] [4]) governing the vacating of arbitration awards, and the defen-
dant filed a motion to confirm the award. The trial court denied the
application to vacate and granted the motion to confirm the award,
concluding that there was no manifest disregard of the law by the
arbitrator. On the plaintiff’s appeal to this court, held:
1. Contrary to the defendant’s claim that the appeal was moot because the
plaintiff failed to oppose her motion to confirm the award, the plaintiff
could have obtained practical relief through a reversal of the trial court’s
decision denying its application to vacate, as the plaintiff filed its applica-
tion to vacate prior to the defendant’s filing the motion to confirm, and
the motion to confirm would have been denied had the application to
vacate been granted; accordingly, the appeal was not moot.
2. The plaintiff could not prevail on its claim that the arbitrator’s award of
punitive damages constituted a manifest disregard of the law pursuant
to § 52-418 (a) (4): the arbitrator found and the plaintiff conceded in
its appellate brief and at oral argument before this court that the plain-
tiff’s failure to display prominently the manufacturer buyback disclosure
on the vehicle and in the purchase order constituted a per se violation
of CUTPA, and the arbitrator concluded that such violations, in addition
to the plaintiff’s actions of restricting the defendant from testing the
vehicle, inducing the defendant to execute the purchase documents
before inspection and attempting to deliver a vehicle that failed to meet
safety standards, constituted a reckless indifference of the defendant’s
rights to warrant punitive damages under CUTPA; moreover, the arbitra-
tor acted within his discretion in crediting the defendant’s evidence of
the CUTPA violations against the plaintiff’s lack of evidence in rebuttal,
and because the arbitrator’s conclusions did not indicate an extraordi-
nary lack of fidelity to established legal principles, this court could not
second-guess his conclusions.
Argued May 29—officially released September 11, 2018
Procedural History
Application to vacate an arbitration award, brought to
the Superior Court in the judicial district of Waterbury,
where the defendant filed a motion to confirm the
award; thereafter, the matter was tried to the court, M.
Taylor, J.; judgment denying the application to vacate
and granting the motion to confirm, from which the
plaintiff appealed to this court. Affirmed.
Kenneth A. Votre, for the appellant (plaintiff).
Richard F. Wareing, with whom was Daniel S. Blinn,
for the appellee (defendant).
Opinion
PER CURIAM. The plaintiff, A Better Way Wholesale
Autos, Inc., appeals from the judgment of the trial court
denying its application to vacate an arbitration award
and granting the motion to confirm that award in favor
of the defendant, Shannon Gause. The plaintiff claims
that the court erred because the arbitrator’s award of
punitive damages constituted a manifest disregard of
the law pursuant to General Statutes § 52-418 (a) (4).1
We affirm the judgment of the court.
The record reveals the following undisputed facts.
The arbitration arose from the defendant’s March 8,
2014 purchase of a 2004 Cadillac SRX automobile from
the plaintiff, an automotive dealer engaged in selling
used cars. After purchasing the vehicle, the defendant
discovered that the plaintiff had failed to disclose that
the vehicle was a manufacturer buyback.2 Upon this
discovery, the defendant requested copies of the pur-
chase order from the plaintiff but was denied. Subse-
quently, the defendant was forced to spend additional
money to repair the vehicle’s defects.
The defendant brought an arbitration claim against
the plaintiff on May 6, 2016, alleging violations of numer-
ous state and federal laws in connection with the sale.
In his decision, the arbitrator found that the vehicle did
not have a windshield sticker or any other conspicuous
display disclosing the vehicle’s status as a manufacturer
buyback, as required by General Statutes § 42-179 (g)
(1) and § 42-179-9 of the Regulations of Connecticut
State Agencies. The arbitrator also found that the pur-
chase order for the vehicle failed to clearly and conspic-
uously disclose the vehicle’s status as a manufacturer
buyback, also required by § 42-179 (g) (1) and § 42-179-
9 of the Regulations of Connecticut State Agencies.
On the basis of these findings, as well as identifying a
Federal Trade Commission violation and other defects,
the arbitrator concluded that the plaintiff had violated
the Connecticut Unfair Trade Practices Act (CUTPA),
specifically General Statutes § 42-110b (c). The arbitra-
tor awarded the defendant $1279 in compensatory dam-
ages, $5000 in punitive damages,3 and $10,817.02 in
attorney’s fees and costs, amounting to a total award
of $17,096.02.
The plaintiff subsequently filed an application to
vacate and the defendant filed a motion to confirm the
award with the Superior Court. In a memorandum of
decision dated December 30, 2016, the court found that
the factual and legal allegations the defendant made in
her arbitration submission supported the award. The
court determined that the arbitrator’s decision did not
‘‘represent an egregious misperformance of duty or a
patently irrational application of legal principles.’’
Accordingly, the court concluded that there was no
manifest disregard of the law and, subsequently,
granted the defendant’s motion to confirm the arbitra-
tion award and denied the plaintiff’s application to
vacate. This appeal followed.
Before turning to the merits of the appeal, we must
first address the defendant’s claim that this appeal is
moot because the plaintiff failed to oppose her motion
to confirm the award. We reject this argument. ‘‘It is a
well-settled general rule that the existence of an actual
controversy is an essential requisite to appellate juris-
diction; it is not the province of appellate courts to
decide moot questions, disconnected from the granting
of actual relief or from the determination of which no
practical relief can follow.’’ (Internal quotation marks
omitted.) Shays v. Local Grievance Committee, 197
Conn. 566, 571, 499 A.2d 1158 (1985).
‘‘General Statutes § 52-417 provides that in ruling on
an application to confirm an arbitration award, the
court or judge shall grant such an order confirming
the award unless the award is vacated, modified or
corrected as prescribed in [General Statutes §§ 52-418
and 52-419. . . . The trial court lacks any discretion
in confirming the arbitration award, unless the award
suffers from any of the defects described in . . . §§ 52-
418 and 52-419.’’ (Emphasis omitted; footnotes omitted;
internal quotation marks omitted.) Amalgamated Tran-
sit Union Local 1588 v. Laidlaw Transit, Inc., 33 Conn.
App. 1, 3–4, 632 A.2d 713 (1993); see also General Stat-
utes §§ 52-418 and 52-419. The plaintiff commenced this
special statutory proceeding by filing an application to
vacate pursuant to § 52-418 prior to the defendant’s
filing her motion to confirm. The motion to confirm
would have been denied had the application to vacate
been granted. Thus, the plaintiff could obtain practical
relief through a reversal of the court’s decision denying
the application to vacate. Accordingly, the plaintiff’s
claim is not moot.
We turn to the plaintiff’s claim that the arbitrator’s
award of punitive damages constituted a manifest disre-
gard of the law pursuant to § 52-418 (a) (4).4 The arbitra-
tion in this case was an unrestricted submission.5 Of
the three grounds that our Supreme Court has recog-
nized for vacating an award based on an unrestricted
submission, the plaintiff argues only that ‘‘the award
contravenes one or more of the statutory proscriptions
of § 52-418.’’ Garrity v. McCaskey, 223 Conn. 1, 6, 612
A.2d 742 (1992).
‘‘[A] claim that the arbitrators have exceeded their
powers may be established under § 52-418 in either one
of two ways: (1) the award fails to conform to the
submission, or, in other words, falls outside the scope
of the submission; or (2) the arbitrators manifestly dis-
regarded the law.’’ (Internal quotation marks omitted.)
Harty v. Cantor Fitzgerald & Co., 275 Conn. 72, 85,
881 A.2d 139 (2005). ‘‘A trial court’s decision to vacate
an arbitrator’s award under § 52-418 involves questions
of law and, thus, we review them de novo.’’ Bridgeport
v. Kasper Group., Inc., 278 Conn. 466, 475, 899 A.2d
523 (2006).
To vacate an arbitration award on the ground that
the arbitrator manifestly disregarded the law, three ele-
ments must be met: ‘‘(1) the error was obvious and
capable of being readily and instantly perceived by the
average person qualified to serve as an arbitrator; (2)
the arbitration panel appreciated the existence of a
clearly governing legal principle but decided to ignore
it; and (3) the governing law alleged to have been
ignored by the arbitration panel is well defined, explicit,
and clearly applicable.’’ (Internal quotation marks omit-
ted.) Industrial Risk Insurers v. Hartford Steam Boiler
Inspection & Ins. Co., 273 Conn. 86, 95, 868 A.2d 47(2005).
Applying these elements, we disagree with the plain-
tiff that the award of punitive damages constituted a
manifest disregard of the law. Awarding punitive dam-
ages under CUTPA is discretionary. General Statutes
§ 42-110g (a).6 The arbitrator found that the plaintiff’s
failure to display prominently the manufacturer buy-
back disclosure on the vehicle and in the purchase
order constituted a per se violation of CUTPA. The
plaintiff conceded that this failure constituted a statu-
tory violation, both in its appellate brief and during oral
argument before this court. The arbitrator concluded
that such violations, in addition to the plaintiff’s actions
of restricting the defendant from testing the vehicle,
inducing the defendant to execute the purchase docu-
ments before inspection, and attempting to deliver a
vehicle that failed to meet safety standards, constituted
a reckless indifference of the defendant’s rights to war-
rant punitive damages under CUTPA. See Ulbrich v.
Groth, 310 Conn. 375, 446, 78 A.3d 76 (2013) (punitive
damages under CUTPA warranted where ‘‘bank’s failure
to inform the plaintiffs that . . . personal property
located at the . . . facility at the time of the auction
was not included in the sale . . . involved a conscious
decision to disregard acknowledged business norms’’).
Furthermore, the arbitrator acted within his discretion
in crediting the defendant’s evidence of the CUTPA
violations against the plaintiff’s lack of evidence in
rebuttal. Thus, because the arbitrator’s conclusions do
not indicate an ‘‘extraordinary lack of fidelity to estab-
lished legal principles,’’ we cannot second-guess his
conclusions. Garrity v. McCaskey, supra, 223 Conn. 10;
see, e.g., Industrial Risk Insurers v. Hartford Steam
Boiler Inspection & Ins. Co., supra, 273 Conn. 96 (‘‘[a]s
we have stated . . . courts do not review the evidence
or otherwise second-guess an arbitration panel’s factual
determinations when the arbitration submission is
unrestricted’’). We therefore conclude the court prop-
erly confirmed the arbitration award and denied the
application to vacate the award.
The judgment is affirmed.
1
The plaintiff additionally claims that the award of a nearly 4 to 1 punitive
to compensatory damages ratio ‘‘border[s] on a constitutional deprivation
of property.’’ During oral argument before this court, the plaintiff conceded
that this ratio claim was not raised before the trial court; accordingly, the
claim is unpreserved, and we will not address it. See, e.g., MBNA America
Bank, N.A. v. Bailey, 104 Conn. App. 457, 468, 934 A.2d 316 (2007) (‘‘[g]ener-
ally, claims neither addressed nor decided by the trial court are not properly
before an appellate tribunal’’).
General Statutes § 52-418 (a) provides in relevant part: ‘‘Upon the applica-
tion of any party to an arbitration, the superior court for the judicial district
in which one of the parties resides . . . shall make an order vacating the
award if it finds any of the following defects . . . (4) if the arbitrators have
exceeded their powers or so imperfectly executed them that a mutual, final
and definite award upon the subject matter submitted was not made.’’
2
Manufacturer buyback refers to a nonconforming motor vehicle, com-
monly referred as a ‘‘lemon,’’ which is returned to the manufacturer due to
a defect. General Statutes § 42-179; see Cagiva North America, Inc. v.
Schenk, 239 Conn. 1, 6, 680 A.2d 964 (1996) (‘‘The Lemon Law [§ 42-179 et
seq.] is a remedial statute that protects purchasers of new passenger motor
vehicles. It was designed to compel manufacturers of passenger motor
vehicles to fulfill all express warranties made to consumers, and to facilitate
a consumer’s recovery against the manufacturer of a defective vehicle should
a dispute arise.’’).
3
The actual award of damages was $5000 in punitive damages and $1279
compensatory damages, which was slightly less than the 4 to 1 ratio that
the plaintiff asserts in its appellate brief.
4
The defendant additionally argues that the plaintiff failed to preserve
the claim regarding the punitive damages awarded, thus precluding this
court from reviewing that claim. We disagree and determine that the plaintiff
sufficiently preserved this claim pursuant to Practice Book § 60-5. ‘‘[B]ecause
our review is limited to matters in the record, we . . . will not address
issues not decided by the trial court.’’ (Internal quotation marks omitted.)
Burnham v. Karl & Gelb, P.C., 252 Conn. 153, 171, 745 A.2d 178 (2000).
Although the plaintiff did not discuss the issue of punitive damages in its
memorandum of law supporting its application to vacate, it did identify the
awarding of punitive damages as an area of concern during oral argument
on the application and the motion to confirm. Thus, such arguments are in
the record.
Furthermore, we can properly review the plaintiff’s argument because it
is an argument, not a claim. See Michael T. v. Commissioner of Correction,
319 Conn. 623, 635 n.7, 126 A.3d 558 (2015) (‘‘[w]e may . . . review legal
arguments that differ from those raised before the trial court if they are
subsumed within or intertwined with arguments related to the legal claim
raised at trial’’ [internal quotation marks omitted]). In the present case, the
plaintiff’s argument regarding punitive damages is subsumed within its legal
claim raised before the trial court that the arbitrator’s award was a manifest
disregard of the law. See id.; see also State v. Fernando A., 294 Conn. 1, 31
n.26, 981 A.2d 427 (2009) (‘‘[although] the plaintiff did not [previously] raise
. . . all of the theories that he raises in his writ . . . those theories are
related to a single legal claim, and . . . there is substantial overlap between
these theories under the case law’’ [internal quotation marks omitted]). As
such, this argument is sufficiently intertwined with previous claims and
properly preserved for appeal.
To the extent that the plaintiff contends that its ratio claim; see footnote
1 of this opinion; is also subsumed or intertwined with its punitive damages
claim, we disagree. The ratio claim is of a constitutional due process nature
and not an argument within its claim under § 52-418. See, e.g., BMW of North
America, Inc. v. Gore, 517 U.S. 559, 580–83, 116 S. Ct. 1589, 134 L. Ed. 2d
809 (1996).
5
Unrestricted submission refers to the type of arbitration agreement
entered into by the parties. ‘‘A submission is unrestricted when . . . the
parties’ arbitration agreement contains no language restricting the breadth of
issues, reserving explicit rights, or conditioning the award on court review.’’
(Internal quotation marks omitted.) Industrial Risk Insurers v. Hartford
Steam Boiler Inspection & Ins. Co., 273 Conn. 86, 89 n.3, 868 A.2d 47 (2005).
6
General Statutes § 42-110g (a) provides: ‘‘Any person who suffers any
ascertainable loss of money or property, real or personal, as a result of the
use or employment of a method, act or practice prohibited by section 42-
110b, may bring an action in the judicial district in which the plaintiff or
defendant resides or has his principal place of business or is doing business,
to recover actual damages. Proof of public interest or public injury shall
not be required in any action brought under this section. The court may, in
its discretion, award punitive damages and may provide such equitable relief
as it deems necessary or proper.’’