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Faced with a public policy challenge to an arbitration award entered in a home improvement dispute, a Connecticut trial court remanded the matter to the arbitrator for clarification because the indeterminate basis for the award was determinative of whether the award violated public policy.
In Tierney v. Murray, No. CV065002655S, 2007 WL 1675338 (Conn. Super. May 23, 2007), the Tierneys hired Murray to remodel their home. The Tierneys claimed that Murray's work had significant defects and refused to pay the last several installments due under the contract.
The dispute was submitted to arbitration. The arbitrator found that Murray was not properly licensed to perform contracting services but nevertheless awarded damages in his favor.
The Tierneys moved to vacate the award, arguing that the award showed manifest disregard of the law and was contrary to public policy. In support of this argument, the Tierneys cited Connecticut's Home Improvement Act (the Act), which provides that an unlicensed contractor cannot be awarded damages. See C.G.S.A. § 20-249(a)(8).
In ruling on the motion for vacatur, the Court reasoned that "[t]he matter is complicated by the absence of explanation in the arbitrator's decision." On one hand, the arbitrator's award could have been based on a premise which violated Connecticut public policy in regards to the requirement for licensure.
On the other hand, the award could have been based on a premise which did not violate public policy. If the Tierneys were not "owners" as defined by the act, Murray could still be awarded damages as an unlicensed contractor. Alternatively, Murray may have been awarded quantum meruit damages, which are permissible under some sections of the Act.
Ultimately, the premise on which the arbitrator based the award was determinative of whether the award manifestly disregarded the law or violated public policy. Accordingly, the Court remanded the matter to the arbitrator for clarification of the award, holding that without clarification, it would be improper to either confirm or vacate the award.
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