This article first appeared in The Connecticut Lawyer, is copywritten by the Connecticut Bar Association and is being reprinted with permission of The Connecticut Lawyer.

In these difficult economic times, the primary consideration in evaluating a potential client’s claim may not be whether the client is likely to prevail, but whether there will be anything available to collect after judgment has entered.  Fortunately, Connecticut law authorizes pre-judgment attachment remedies somewhat liberally and without significant expense or burden on the moving party.  Plaintiffs in arbitration matters have no less of an interest in ensuring that their future arbitration award will be collectible, but the road that must be taken to obtain such an attachment is not quite so smooth. This article addresses the sometimes unforeseen complications that arise when an arbitration clause governs, provides guidance on the filing requirements for pre-arbitration award attachments and identifies some solutions to potential obstacles to these attachments.

It is not widely known that pre-award attachments may be sought in Connecticut courts while a dispute is pending in arbitration.  While some litigation attorneys are aware that the option exists, many have never personally undertaken the task.  It is to some extent uncharted territory, as evidenced by the lack of a clearly articulated procedure for requesting this type of attachment.  To further complicate matters, a recent Superior Court decision has strictly construed the statute authorizing such attachments, Conn. Gen. Stat. § 52-422, making the availability of attachments a bit trickier.

Attorneys should not shy away from seeking these attachments, however, simply because they might need to jump through a few extra hoops.  The importance of prejudgment remedies cannot be overemphasized, particularly since the Connecticut Supreme Court determined in at least one instance that the failure to seek a prejudgment remedy that results in a failure to collect on a default judgment constituted legal malpractice. 1

The Connecticut statute that authorizes pre-arbitration award attachments, Section 52-422, titled “Order Pendente Lite,” provides as follows, in relevant part:

At any time before an award is rendered pursuant to an arbitration under this chapter, the superior court . . . upon application of any party to the arbitration, may make forthwith such order or decree, issue such process and direct such proceedings as may be necessary to protect the rights of the parties pending the rendering of the award and to secure the satisfaction thereof when rendered and confirmed.

The ambit of Section 52-422 is not limited to prejudgment remedies.  In fact, the statute’s language does not even use the term “prejudgment remedy,” nor does it refer to the procedural guidelines for prejudgment remedies in civil actions, set forth in Conn. Gen. Stat. § 52-278a, et seq.  Yet, the primary purpose for which it is used is to “secure the satisfaction” of an arbitration award when rendered and confirmed.

In accordance with Section 52-422, a party to a pending arbitration action may file with the Superior Court an Application for an Order Pendente Lite.  Our Supreme Court has noted that an Application for an Order Pendente Lite under Section 52-422 is a “special statutory proceeding” that confers jurisdiction upon a judge where the essential conditions prescribed by the statute are met. 2  Connecticut courts have interpreted the statute as requiring that an arbitration proceeding must already be pending at the time the application for Order Pendente Lite is made.  Therein lies the first major distinction between a “garden variety” civil Prejudgment Remedy Application and an Application for Order Pendente Lite in aid of arbitration. Whereas traditional Prejudgment Remedy Applications usually (but not always) are submitted with an unsigned complaint, applications for an attachment Order Pendente Lite require the party seeking the order to represent that an arbitration demand already has been made and that the arbitration is pending.  Notably, the arbitration need not be pending in Connecticut, or even the United States.  A recent Connecticut District Court decision determined that it could not find any support “in the language of § 52-422, its legislative history, or Connecticut case law to suppose that the General Assembly intended to prevent Connecticut courts from issuing provisional remedies affecting parties who were properly before those courts, solely because the situs of the arbitration involving those parties was located in another state, or in this case, out  of the country.” 3

Although Conn. Gen. Stat. § 52-422 does not specifically adopt the procedures applicable to Prejudgment Remedy Applications in civil actions, these procedures were enacted to satisfy procedural due process requirements and, thus, cannot be ignored. Accordingly, it is recommended that an Application for an Order Pendente Lite for prejudgment remedy include the following:

• Application for Order Pendente Lite for Prejudgment Remedy Pursuant to C.G.S. § 52-422:  Alleging that an arbitration demand has been made and attaching a copy of the demand as an exhibit; alleging that there is probable cause that an award in the amount requested for attachment will be rendered in the Plaintiff’s favor; and alleging that “extraordinary circumstances” exist warranting the granting of the Order Pendente Lite, which is “necessary” to protect the Plaintiff’s rights pending the rendering of the arbitration award in that such rights may be lost irretrievably in the absence of judicial intervention.

• Affidavit of Plaintiff in support of Motion for Order Pendente Lite: setting forth the factual basis for finding probable cause and for the conclusion that judicial intervention in the arbitration is “necessary.”

• Order for Hearing and Notice 

• Notice to Defendants

• Motion for Disclosure of Assets and proposed Order

• Proposed Order Pendente Lite for Prejudgment Remedy; and

• Direction for Attachment

Most attorneys are familiar with the “probable cause” standard that applies to prejudgment remedies in Connecticut. 4   Likewise, most attorneys are well-aware that the probable cause standard is relatively easy to satisfy to obtain an attachment on a Defendant’s assets.  However, when your client seeks an attachment in aid of arbitration, there is an additional—and much higher—hurdle that is presented:  Necessity. 

The requirement that an applicant under Section 52-422 prove that the requested judicial intervention is “necessary” was imposed by the Connecticut Supreme Court in the case of New England Pipe Corporation v. Northeast Corridor Foundation, et   al. 5  Although the Court in New England Pipe examined a request for judicial intervention to enjoin the arbitration panel from hearing expert testimony offered by the defendants, as opposed to a prejudgment remedy application, the Court’s analysis of Section 52-422 dealt with the language of the statute, which affects all actions brought under its authority.  The Court noted that the term “necessary” as used in Section 52-422 was not defined therein, or anywhere else in Chapter 909 of the General Statutes, entitled “Arbitration Proceedings.” 6  Accordingly, the Court construed the term “necessary” in accordance with its common usage and adopted its dictionary definition:  “[something] that cannot be done without: that must be done or had: absolutely required:  essential, indispensable . . . .”  7   The Court concluded that the Plaintiff had not shown that judicial intervention was “absolutely required,” and denied the Plaintiff’s request for injunctive relief. 8

An additional wrinkle was added recently by the Connecticut Superior Court decision Savanna Investors, LLC v. Vaughn. 9  In this case, Judge Alfred J. Jennings interpreted the “necessity” requirement under Section 52-422 as it applies to applications for prejudgment remedies.  The Court found it significant that the parties’ arbitration agreement specified that it was to be conducted under the AAA Commercial Arbitration Rules, which contain a provision allowing for “Interim Measures” to be taken prior to the rendering of an arbitration award.  Relying on New England Pipe, the Court determined that because the Plaintiff was permitted to apply for interim relief to the arbitrator, it failed to demonstrate that judicial intervention was “necessary” as the case did not present an “extraordinary situation” where the Plaintiff’s rights to security would be irretrievably lost.  Further, the Court concluded that if there had been a delay in appointing the full panel of arbitrators, the AAA’s “Optional Rules” (Rule O-2) give AAA the power to appoint a single emergency arbitrator to hold a hearing at the request of a party demonstrating need for emergency relief.

Judge Jennings’ decision in Savanna Investors is notable because many arbitration clauses designate a specific tribunal to conduct the arbitration (such as the AAA or JAMS) and specifically adopt the rules of that tribunal regarding the arbitration. 10   Pursuant to Judge Jennings’ decision, the availability of an interim remedy from the arbitration forum impacts greatly on the determination of the “necessity” element.  How should an attorney proceed, then, if the arbitration demand has been filed and an attachment is deemed necessary, but the arbitration panel has not yet been appointed?  According to Savanna Investors, the proper course of action would be to seek an emergency hearing in the arbitration forum for interim relief.  Notably, however, the AAA’s “Optional Rules” state that they apply only where the parties have “by special agreement” or in their arbitration clause specifically adopted the rules for emergency measures.  It remains to be seen whether the adoption of AAA’s Arbitration Rules by means of a standard arbitration clause necessarily encompasses these “optional rules.”  It certainly can be argued that the Optional Rules must be specially adopted in order to apply. 

To err on the side of caution, parties seeking a pre-award attachment where the arbitration clause at issue designates a specific tribunal that has rules providing for interim relief should apply for interim relief concurrently with the Motion for Order Pendente Lite.  First, it is unlikely that the arbitration tribunal’s rules will impact on the Superior Court’s jurisdiction to hear the matter.  For example, AAA’s Interim Measures Rule for Commercial Arbitrations provides, in relevant part: “(c) A request for interim measures addressed by a party to a judicial authority shall not be deemed incompatible with the agreement to arbitrate or a waiver of the right to arbitrate.”  Second, if the arbitrator refuses to act on the application for interim measures, fails to act promptly, or has no power to attach assets of parties that may reside in a foreign jurisdiction, the Court may conclude that the “necessary” standard has been met because the party seeking the attachment has exhausted all other available methods for attachment without success. 11

In summary, a pre-arbitration award attachment is not impossible to attain, whether it is ordered by the arbitration tribunal or the Connecticut Superior Court.  When in doubt as to whether to file a Motion for Order Pendente Lite under Conn. Gen. Stat. §52-422 or an application for interim measures with the tribunal, it is advisable to file both to ensure that your client’s request for attachment is not delayed.  It is also recommended that prior to filing any request for pre-award attachments, a search for any post-Savanna Investors decisions be conducted to determine how the “necessary” standard has been applied and interpreted going forward, if at all.

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1 Margolin v. Kleban & Samor, P.C., et al., 275 Conn. 765 (2005)

2 Goodson v. State, 232 Conn. 175, 180 (1995).

3 Bahr. Telcoms. Co. v. DiscoveryTel, Inc., 476 F. Supp. 2d 176, 185-186 (D. Conn. 2007).

4 The probable cause standard applied to applications for prejudgment remedies is well-settled:  “Proof of probable cause as a condition of obtaining a prejudgment remedy is not as demanding as proof by a fair preponderance of the evidence. . .   The legal idea of probable cause is a bona fide belief in the existence of the facts essential under the law for the action and such as would warrant a man of ordinary caution, prudence and judgment, under the circumstances, in entertaining it. . . .  Probable cause is a flexible common sense standard. It does not demand that a belief be correct or more likely true than false. . . .  Under this standard, the trial court's function is to determine whether there is probable cause to believe that a judgment will be rendered in favor of the plaintiff in a trial on the merits.”  (Citations omitted; internal quotation marks omitted.)  TES Franchising. LLC v. Feldman, 286 Conn. 132, 137 (2008).

5 271 Conn. 329 (2004).  

6 Id., 336

7 Id., 336-37.  

8 Id., 337-338.

9 Docket No. X08CV084012896S, Judicial District of Stamford-Norwalk, 2008 Conn. Super. LEXIS 1975 (Conn. Super. Jul. 30, 2008) (Jennings, J.).

10 Subsections (d) and (e) of Rule 24 of JAMS Comprehensive Arbitration Rules and Procedures set forth the scope of the “Interim Measures” that may be requested.  Specifically, subsection (d) provides that “[i]n addition to a Final Award or Partial Final Award, the Arbitrator may make other decisions, including interim or partial rulings, orders and Awards” and subsection (e) provides as follows:  “Interim Measures. The Arbitrator may take whatever interim measures are deemed necessary, including injunctive relief and measures for the protection or conservation of property and disposition of disposable goods. Such interim measures may take the form of an interim Award, and the Arbitrator may require security for the costs of such measures. Any recourse by a Party to a court for interim or provisional relief shall not be deemed incompatible with the agreement to arbitrate or a waiver of the right to arbitrate.”  JAMS Rules do not contain any provisions for “emergency relief” as set forth in AAA’s Optional Rules.

11 See Bahrain Telecommunications Co. v. Discoverytel, Inc., supra, 476 F. Supp.2d 176 (D.Conn. 2007).