A Connecticut Superior Court held that a letter from one party to another confirming an oral agreement to arbitrate upon failure to settle the dispute did not constitute an enforceable written agreement where the parties did not agree to details of the arbitration process.

In Paley v. PMC Design Builders, No. CV040491201, 2008 WL 2313309 (Conn. Super. Ct. May 15, 2008), Denise Paley and Eric Tibere ("the Plaintiffs") filed a complaint against PMC regarding alleged defective construction of the Plaintiffs’ home. The parties orally agreed to arbitrate the matter during a mediation session, assuming they were unable to reach a settlement.

This agreement was memorialized in a letter by Plaintiffs’ attorney to PMC and provided a timeline for arbitration and a method to select an arbitrator. PMC did not reply to this letter and also did not provide the names of any potential arbitrators after given the opportunity.

Plaintiffs chose an arbitrator and notified PMC. Again, PMC did not respond. After PMC failed to respond to the arbitrator’s request to schedule a walk through of the allegedly defectively constructed home, the arbitrator issued an award in favor of the Plaintiffs. Plaintiffs moved to confirm the award.

In ruling on that motion, the Court determined that no enforceable written agreement to arbitrate had been made between the parties because the letter did not constitute a sufficient writing under Connecticut law. See Conn. Gen. Stat. § 52-408.

Importantly, although it was agreed by the parties that they would arbitrate their dispute if settlement negotiations failed, the details of arbitration laid out in the Plaintiffs’ letter were never agreed to by PMC. Moreover, the letter was sent prior to the end of settlement negotiations between the parties.

Further, the Court rejected the Plaintiffs argument that PMC’s conduct had estopped them from arguing that the arbitration agreement was not valid.

Unlike in Alexson, PMC did not participate throughout the arbitration process and later argue that the agreement to arbitrate was unenforceable at appeal. See Alexson v. Foss, 887 A.2d 872 (2006). Rather, despite it being clear that PMC was aware of the Plaintiffs’ unilateral choice of an arbitrator and the inspection of the house, PMC did not agree to the arbitrator, nor did it participate in the arbitration process at all.

Accordingly, as no enforceable arbitration agreement existed between the parties, the Court denied the Plaintiffs’ motion to confirm the award.