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Publications
Connecticut Appellate Court Rules That Absence of Written Agreement Precludes Mandatory Arbitration
Insurance Law Update
February 2010
By:
Diana Tremback
Appellate Court of Connecticut
In Farrell v. Twenty-First Century Ins. Co, 118 Conn.App. 757 (Conn. App. Ct. January 12, 2010), the Connecticut Appellate Court held that an informal agreement to arbitrate was unenforceable because there was no written contract that specified the terms of the arbitration, and the insurer never manifested an intent to be bound by the informal agreement.
Plaintiffs filed suit against Twenty-First Century Insurance Company (TFCI) following a car accident with TFCI’s insured. A pretrial conference was held, during which two of the plaintiffs and TFCI agreed in principal to arbitrate the claims. Subsequently, plaintiffs brought an action to compel arbitration. TFCI filed a motion for summary judgment, contending that there was no written agreement to arbitrate. In opposition, plaintiffs submitted 14 letters exchanged between the parties’ counsel and argued that the letters cumulatively constituted a written and enforceable arbitration agreement. The trial court rejected plaintiffs’ arguments and entered summary judgment for TFCI.
The Appellate Court affirmed. The court cited Connecticut case law for the proposition that arbitration is a creature of contract, arbitration agreements are strictly construed, and only written arbitration agreements are enforceable. The court found that the parties had only an informal agreement to arbitrate, that they had never agreed to the terms of arbitration terms, and that TFCI never manifested an intent to be bound by the informal agreement. Although TFCI sent two draft arbitration agreements and “urged” plaintiffs to execute a binding arbitration agreement, plaintiffs failed to respond in writing to the draft agreements. Thus, the court held that a written contract to arbitrate did not exist.
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