COMPREHENSIVE ORTHOPAEDICS AND MUSCULOSKELETAL CARE, LLC, et al. v. ALFREDO L. AXTMAYER, M.D., et al., SC 18304

Judicial District of New Haven

 

      Arbitration; Motion to Vacate Arbitration Award; Whether Arbitrator Exceeded Powers in Finding that Plaintiff did not Prevail on Claims Under Arbitration Agreement. The parties entered into an arbitration agreement to decide whether the defendant Axtmayer violated the noncompete clause of his employment contract with Comprehensive Orthopaedics and Musculoskeletal Care, Inc. (COMC), thereby entitling COMC to liquidated damages of $150,000.  The arbitration agreement specified that attorney's fees were to be awarded to COMC only if it prevailed on its claims under the noncompete clause.  The arbitrator found that the defendant violated the noncompete clause but concluded that the liquidated remedy of $150,000 was too harsh under the circumstances and reformed the restrictive covenant to reduce the liquidated damages to $75,000.  In view of the reformation, the arbitrator declined to award attorney's fees to COMC.  The plaintiffs filed an application, pursuant to General Statutes § 52-418, to partially vacate the arbitration award, claiming that the arbitrator exceeded his powers in declining to award attorney's fees.  The court denied the application.  In deciding that the arbitrator did not exceed his powers, it examined whether the award conformed to the arbitration agreement.  Since it found that the arbitration agreement at issue was in the form of an unrestricted submission, the court explained that the arbitrator might "fashion any remedy that is rationally related to a plausible interpretation of the agreement."  It determined, based on the arbitrator's finding that COMC was entitled to only fifty percent of the amount sought as liquidated damages, that the arbitrator implicitly decided that COMC did not prevail on its noncompete clause claims.  The court decided that the arbitrator's decision not to award attorney's fees in light of that determination was within his province and could not be disturbed.  On appeal, the plaintiffs contend that the court failed to apply a de novo standard of review to their claim, as required by this court's decision in Harty v. Cantor Fitzgerald & Co., 275 Conn. 72 (2005).  They further argue that, applying de novo review, the court should have found that the award was not consistent with the arbitration agreement because, under Connecticut law, COMC unambiguously prevailed on its claim that Axtmayer violated the noncompete clause of the employment agreement.