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HH EAST PARCEL, LLC v. HANDY AND HARMAN, INC. (SC 18055)
Norcott, Palmer, Vertefeuille, Zarella and Schaller, Js. Argued February 8--officially released June 3, 2008

John F.X. Peloso, Jr., with whom was Thomas J. Donlon, for the appellant (defendant). Andrew J. McDonald, with whom were Timothy G. Ronan and, on the brief, Cara Ann Ceraso, for the appellee (plaintiff).

Opinion

NORCOTT, J. In this appeal, we consider the appropriate level of deference that the courts, in performing their de novo review of whether an arbitration award violates public policy, should give to the arbitrator's factual findings. The defendant, Handy and Harman, Inc., appeals1 from the judgment of the trial court granting the application of the plaintiff, HH East Parcel, LLC, to confirm, and denying the defendant's application to vacate, an arbitration award rendered in favor of the plaintiff. On appeal, the defendant claims that the trial court, in confirming the award, improperly deferred to the arbitrator's factual findings when the court concluded that a per diem provision in a contract for the sale and remediation of real estate was a valid liquidated damages clause, rather than a penalty clause, the enforcement of which would violate the public policy of Connecticut. We conclude that the trial court properly deferred to the arbitrator's factual findings in determining that the award did not violate public policy. Accordingly, we affirm the judgment of the trial court. The record reveals the following undisputed background facts and procedural history. On or about December 31, 2003, the defendant sold real property located in Fairfield to the plaintiff for $8 million. The purchase and sale agreement (purchase agreement) required the defendant to demolish all existing buildings and structures on the property, and to remediate all environmental contamination on the property by December 31, 2004. The purchase agreement also provided that time was of the essence with regard to the remediation. Sections 14 and 15 of the purchase agreement contained a per diem clause that required the defendant to pay to the plaintiff $5000 for each day after December 31, 2004, that the defendant had failed to complete the demolition and remediation as specified therein. Although the plaintiff paid the defendant $8 million and received title to the property, the defendant failed to complete the remediation by December 31, 2004, as agreed to by the parties. The defendant also failed to pay the necessary contractors and subcontractors for remediation services rendered by December 31, 2004, and they placed various mechanic's liens on the property. Thus, the parties then entered into an environmental indemnification agreement (indemnification agreement) that required the defendant to indemnify and hold harmless the plaintiff for the losses caused by the defendant's failure to complete the remediation. Thereafter, on April 5, 2005, the plaintiff filed a demand for arbitration with the American Arbitration Association (association) pursuant to

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Connecticut Law