Norwalk Medical Group, P.C. v. Yee

NORWALK MEDICAL GROUP, P.C. et al. v. Arthur YEE, M.D.

Arthur Yee, M.D. v. The Norwalk Medical Group, P.C. et al.

Nos. CV186037634S, CV186037671S

Superior Court of Connecticut, Judicial District of Stamford-Norwalk, Stamford

January 3, 2019

UNPUBLISHED OPINION

TAGGART D. ADAMS, JUDGE TRIAL REFEREE

I. PRELIMINARY INFORMATION

The two cases captioned above have been consolidated by order of the Honorable Robert Genuario. See Dkt Entry (DE) 105.01 in case CV 18-6037634 and DE 101.01 in case CV 186037671. The former case is an application by The Norwalk Medical Group (NMG) and thirteen of its former member doctors to vacate an arbitration award (Award). The latter case is an application by Arthur Yee, M.D., also a former member of NMG, to confirm the same Award.^[1]

The Award arises out of Dr. Yee’s Shareholder Employment Agreement (SEA) with NMG. Dr. Yee retired from the practice of medicine in 2017; NMG went out of business at the same time, and apparently Dr. Yee’s retirement was precipitated by NMG’s ceasing to do business. Dr. Yee claimed his retirement triggered a buy-out provision in his SEA. The Award was issued by an arbitrator in proceeding under the auspices of the American Arbitration Association. The Arbitrator was John R. Downey, a retired Connecticut Superior Court Judge. His initial decision was dated May 22, 2018 and found in favor of Dr. Yee and against NMG in the principal amount of $ 220 242.00, interest and reasonable attorneys fees. All Dr. Yee’s claims against the former member doctors were denied. No attorneys fees were awarded to any party, as to those claims by Yee. The four-page Award is found at Exhibit T to the affidavit of Attorney Thomas O’Connor, who represents NMG. The affidavit of O’Connor is DE 101.00 in CV 18-6037634. NMG and the former member doctors, moved to modify the Award to include attorneys fees, arbitration fees, and other expenses as prevailing parties on the arbitration claims by Yee against them. O’Connor Aff., Ex. W. This motion was denied by the Arbitrator on June 15, 2018. Id., Ex. X. On July 9, 2018 the Arbitrator issued an "Amended Decision Re Attorneys Fees" awarding Dr. Yee $ 149, 903, a reduction of more than $ 12, 000 from the fee amount requested by Yee. Id., Ex., CC.

II. SCOPE OF REVIEW

Connecticut law includes a strong and oft-stated policy favoring agreements to arbitrate, and there is such an agreement in this case. In what appears to be the standard NMG SEA signed by Dr. Yee, Paragraph 30 thereof requires arbitration of any "controversy, claim or breach arising out of or relating to this agreement" to be submitted for resolution to the American Arbitration Association "before one arbitrator" in the City of Norwalk. O’Connor Affidavit, Ex. B. Although the SEA did not specifically give the arbitrator authority to impose punitive or exemplary damages, the arbitrator could award "reasonable attorneys fees to the prevailing party." SEA, Section 30. A significant aspect of the state policy favoring arbitration is the somewhat limited scope of judicial review of arbitration decisions applied by Connecticut courts. See e.g., Comprehensive Orthopaedics, LLC v. Axtmayer, 293 Conn. 748, 760, 980 A.2d 297 (2009) ("expanded judicial review is contrary to our well settled and deferential policy favoring arbitration"); Caldor, Inc. v. Thornton, 191 Conn. 336, 345 n.6, aff’d 472 U.S. 703 (1985) ("because of the public policy favoring expeditious dispute resolution in the informal context of arbitration ... we have always respected the autonomy of the arbitration process, and the attendant authority to decide questions of law and fact consistent with the submission"); Harty v. Cantor Fitzgerald & Co., 275 Conn. 72, 80, 881 A.2d 139 (2005) ("Because we favor arbitration as a means of settling private disputes, we undertake judicial review of arbitration awards in a manner designed to minimize interference with an efficient and economical system of alternate dispute resolution ...").

However, Connecticut law does not completely eliminate the Superior Court’s authority to review and approve or disapprove arbitration awards. General Statutes § 52-418(a) provides that an arbitration award may be vacated by a Superior Court.

(1) If the award has been procured by corruption, fraud or undue means; (2) if there has been evident partiality or corruption on the part of any arbitrator; (3) if the arbitrators 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 any other action by which the rights of any party have been prejudiced; or (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.

III. DISCUSSION OF THE PARTIES’ CONTENTIONS

In their motion to vacate NMG and the individual medical doctor members thereof contend that the Arbitrator did not make a mutual, final and definite award on the subject matter in that he did not allocate arbitration fees, expenses and compensation as required by AAA rules, citing Rule 39(d) of the AAA Employment Arbitration Rules which provides:

The arbitrators shall, in the award, assess arbitration fees, expenses and compensation as provided in Rules 43, 44 and 45 in favor of any party and, in the event any administrative fees or expenses are the AAA, in favor of the AAA.

O’Connor Aff, Ex. EE, p.29. NMG and the doctors argue that although this purported omission was brought to the Arbitrator’s attention, it was not cured. Therefore, according to NMG et al., the Award is incomplete and not "mutual, final and definite."

This contention is not very persuasive. The AAA’s "Employment Arbitration Rules" are found at Exhibit EE of the O’Connor Affidavit. Rules 43, 44 and 45 deal with administrative fees charged by the AAA (R-43) arbitrator compensation (R-44) and witness and arbitrator expenses (R. 45). Specifically, witness expenses are owed by the party calling the witness. These rules appear to have been respected by the parties. Frankly, neither side has offered compelling arguments in favor of either vacating or confirming the Award based on the contention that AAA Rule 39(d) was or was not violated, and the court will not vacate the award on these nebulous arguments and counter-arguments.

NMG and the doctors further contend that the Arbitrator did not issue a "reasoned" fee award as required by the AAA Employment Arbitration Rule 39(c) which states the award shall "provide the written reasons for the award." Further, they contend the fee award was in "manifest disregard of the law" and therefore proscribed by Section 52-418(a)(4) citing Design Tech, LLC v. Moriniere, 146 Conn.App. 60, 67 (2013). In opposition to the arguments of NMG and the individual doctors, Dr. Yee contends the Arbitrator followed the AAA rules and provided a reasoned fee award.

As to this contention, in SBD Kitchens, LLC v. Jefferson, 157 Conn.App. 731 (2015) the Appellate Court observed there was "no Connecticut authority" defining a reasoned award under the AAA rules. Id., 148. The Appellate Court continued by noting several federal court decisions holding...