Appeal by plaintiff from order entered 27 December 2002 by
Judge Daniel R. Green in Superior Court, Gaston County. Heard in
the Court of Appeals 14 January 2004.
Don H. Bumgardner for plaintiff-appellant.
Baucom, Claytor, Benton, Morgan and Wood, P.A., by Richard F.
Kronk, for defendant-appellee.
McGEE, Judge.
Robert J. Eisinger, Jr. (plaintiff) filed suit against Kenneth
R. Robinson (defendant) on 19 July 2000 for damages arising from a
14 October 1998 automobile collision.
Nationwide Insurance(Nationwide) provided underinsured motorists (UIM) coverage in the
amount of $100,000 and Discovery Insurance (Discovery) provided
primary coverage. Discovery tendered its full coverage in the
amount of $25,000 on 7 August 2000, without filing an answer.
Nationwide was notified of the tender of the primary coverage by
letter on 9 August 2000. Nationwide did not advance any funds to
plaintiff. Plaintiff accepted Discovery's tender on 13 September
2000. Plaintiff requested binding arbitration on 2 January 2001
and the case was removed from the docket on 8 January 2001.
An arbitration hearing was held on 25 June 2002 to determine
the value of plaintiff's claim for personal injuries arising from
the collision. Plaintiff and defendant agreed at the time of the
hearing that the award would be only for the value of the personal
injury claim and would not include interest or costs. The amount
of the arbitration award was $45,000.
Nationwide paid plaintiff $20,000, being the difference
between the arbitration award and the $25,000 paid by Discovery.
Plaintiff agreed that with the payment of the $20,000, there would
be no claim for interest arising after 25 June 2002. Plaintiff
filed a motion for interest and costs on 15 July 2002. After a
hearing on 22 July 2002, the trial court denied plaintiff's motion
for interest and costs in an order filed 27 December 2002.
Plaintiff appeals.
[1] Plaintiff argues in his first assignment of error that the
trial court erred in applying the "North Carolina Arbitration Act"
to the arbitration in this case. At the time of plaintiff's and
defendant's agreement to arbitrate, the Uniform Arbitration Act, asset forth in N.C. Gen. Stat. § 1-567.1 et seq. (2001), was in
effect. We note that North Carolina has now adopted the Revised
Uniform Arbitration Act, which applies to agreements to arbitrate
entered into on or after 1 January 2004. N.C. Gen. Stat. § 1-569.1
et seq. (2003).
The Uniform Arbitration Act, which pertains to this case,
states that
[t]wo or more parties may agree in writing to
submit to arbitration any controversy existing
between them at the time of the agreement, or
they may include in a written contract a
provision for the settlement by arbitration of
any controversy thereafter arising between
them relating to such contract or the failure
or refusal to perform the whole or any part
thereof. Such agreement or provision shall be
valid, enforceable, and irrevocable except
with the consent of all the parties, without
regard to the justiciable character of the
controversy.
N.C. Gen. Stat. § 1-567.2(a).
Further, the Uniform Arbitration Act
does not apply to "(1) [a]ny agreement or provision to arbitrate in
which it is stipulated that this Article shall not apply or to any
arbitration or award thereunder; [and] (2) [a]rbitration agreements
between employers and employees or between their respective
representatives, unless the agreement provides that this Article
shall apply." N.C. Gen. Stat. § 1-567.2(b).
In the case before us, plaintiff and Nationwide had an
agreement to arbitrate. The agreement stated that if Nationwide
and plaintiff disagreed over whether plaintiff was entitled to
recover compensatory damages from the owner or driver of an
underinsured vehicle or over the amount of damages, plaintiff could
"demand to settle the dispute by arbitration."
The arbitrationagreement also set forth specific arbitration procedures. This
agreement between Nationwide and plaintiff is the type of agreement
contemplated by N.C. Gen. Stat. § 1-567.2(a) in that it is a
"provision for the settlement by arbitration of any controversy
. . . arising between them relating to [their] contract[.]" N.C.
Gen. Stat. § 1-567.2(a). Further, the exclusions in subsection (b)
do not apply in this case. The trial court, therefore, did not err
in applying the Uniform Arbitration Act. Accordingly, assignment
of error number one is without merit.
[2] Plaintiff next argues in assignment of error number two
that the trial court erred in finding that the trial court could
not award costs in an arbitration under an underinsurance policy
because the costs were not awarded by the arbitrator. The Uniform
Arbitration Act addresses fees and expenses in N.C. Gen. Stat. § 1-
567.11, which states that "[u]nless otherwise provided in the
agreement to arbitrate, the arbitrators' expenses and fees,
together with other expenses, not including counsel fees, incurred
in the conduct of the arbitration, shall be paid as provided in the
award." In this case, the parties did address the issue of fees in
the actual arbitration agreement. The applicable provision in the
agreement states, "[e]ach party will pay its chosen arbitrator.
Each will pay half of all other expenses of arbitration. Fees to
lawyers and expert witnesses are not considered arbitration
expenses and are to be paid by the party hiring these persons."
In plaintiff's motion for interest and costs, he requests
reimbursement of expenses related to expert testimony. Plaintiff's
request includes a deposition fee and expert witness fee for bothDr. Matthew T. Matthew and Dr. Robert Brown. Plaintiff's other
requests are for deposition costs of another doctor, a highway
patrolman, and plaintiff himself. The arbitration agreement states
expert witness fees are not recoverable by plaintiff. Further,
whether plaintiff is entitled to partial reimbursement for the
other fees is not relevant in light of our determination below as
to the trial court's authority to modify or correct awards.
We note that the trial court has limited power after an
arbitration award is entered. The trial court can vacate, modify,
or correct an arbitration award only under specified conditions.
In fact, N.C. Gen. Stat. § 1-567.13 and N.C. Gen. Stat. § 1-567.14
"provide the exclusive grounds for vacating, modifying or
correcting an arbitration award."
Wilson Building Co. v.
Thorneburg Hosiery Co., 85 N.C. App. 684, 686, 355 S.E.2d 815, 817,
disc. review denied, 320 N.C. 798, 361 S.E.2d 75 (1987).
N.C. Gen. Stat. § 1-567.13 allows a trial court to vacate an
award. However, plaintiff in this case did not ask that the award
be vacated. Rather, plaintiff requested that costs be awarded in
addition to the compensatory award. N.C. Gen. Stat. § 1-567.14,
which allows for modification or correction of an award, is
therefore relevant. However, the statute allows for modification
of an award only where
(1) [t]here was an evident miscalculation of
figures or an evident mistake in the
description of any person, thing or
property referred to in the award;
(2) [t]he arbitrators have awarded upon a
matter not submitted to them and the
award may be corrected without affecting
the merits of the decision upon the
issues submitted; or
(3) [t]he award is imperfect in a matter of
form, not affecting the merits of the
controversy.
N.C. Gen. Stat. § 1-567.14(a). An award of costs does not fit
within the parameters of the trial court's authority to modify an
award. Accordingly, the trial court did not err in denying
plaintiff's motion for costs and this assignment of error is
without merit.
[3] Plaintiff argues in assignment of error number three that
the trial court erred in holding that prejudgment interest could
not be awarded in an arbitration arising out of an underinsurance
policy. Plaintiff essentially argues that the arbitration award
should be treated the same as a jury verdict. This exact argument
was asserted by the plaintiff in
Palmer v. Duke Power Co., 129 N.C.
App. 488, 499 S.E.2d 801 (1998). Our Court held that "[w]e
similarly reject plaintiff's argument that the arbitrator's award
should be treated like a jury verdict, upon which a judge could
then award prejudgment interest in entering judgment on that
verdict. Plaintiff references and we have found no citation of
authority for this proposition."
Palmer, 129 N.C. App. at 498, 499
S.E.2d at 807. Similarly, in the case before our Court, plaintiff
cites no authority for his argument that arbitration awards should
be treated the same as jury verdicts. Rather, plaintiff argues
that the policy provision stating, "[j]udgment upon award may be
entered in any proper court" indicates that the arbitration award
is analogous to a jury award. However, we find this argument
unpersuasive.
Plaintiff's reliance on
Beaver v. Hampton, 333 N.C. 455, 427S.E.2d 317 (1993) is misplaced.
Beaver involved a motor vehicle
collision in which the plaintiff was injured. The defendants'
liability carrier paid its policy limits into the Office of the
Clerk of Court. The jury entered an award for the plaintiff. The
trial court deducted the amount previously paid by the defendants'
liability carrier and awarded prejudgment interest only on the
remaining amount.
Beaver, 333 N.C. at 456, 427 S.E.2d at 317. Our
Supreme Court affirmed this Court's holding that it was error for
the trial court not to award prejudgment interest on the full
amount of the jury award.
Id. at 457, 427 S.E.2d at 318. Although
prejudgment interest was proper in
Beaver, the case before us is
distinguishable and the same result is not warranted.
Beaver
involved a jury award, rather than an arbitration award, and
Beaver
is therefore not controlling.
Through his motion for interest and costs, plaintiff
essentially asked the trial court to modify the arbitration award
which had been entered. As we noted above, "North Carolina General
Statutes section 1-567.14 provides the sole means by which a party
may have an award modified or corrected."
Palmer, 129 N.C. App.
at 496, 499 S.E.2d at 806. This statute allows for modification of
an award by a court in only three limited situations: (1) evident
miscalculation or evident mistake in a description, (2) arbitrators
awarded upon a matter not submitted to them, or (3) the award was
imperfect in form. Plaintiff's request for interest does not fall
within any of these grounds permitting modification. Just as in
Palmer, "the arbitrator's failure to include prejudgment interest
was not due to mathematical error, error relating to form, or errorresulting from his exceeding his authority[.]"
Palmer, 129 N.C.
App. at 498, 499 S.E.2d at 808. Thus, the trial court was without
authority to modify the award to include prejudgment interest.
This case is similar to
Sentry Building Systems v. Onslow
County Bd. of Education, 116 N.C. App. 442, 448 S.E.2d 145 (1994).
In
Sentry, the parties agreed to arbitrate a dispute concerning a
construction contract.
Sentry, 116 N.C. App. at 443, 448 S.E.2d at
145-46. The award was in favor of the plaintiff and the defendant
specifically asked whether the award included interest.
Id. at
443, 448 S.E.2d at 146. The arbitrator stated that interest was
not included. The plaintiff filed a motion for interest in
superior court.
Id. The trial court awarded interest but this
Court reversed, stating that "the trial court erred by concluding
that N.C. Gen. Stat. § 1-567.14 did not apply to the instant case
and by reviewing the arbitration award when the plaintiff had not
made a proper application as provided by the statute."
Id. at 444-
45, 448 S.E.2d at 146. Likewise, in the case before this Court,
the trial court lacked authority to modify the award. Thus, we
hold that the trial court did not err in denying plaintiff's motion
to award prejudgment interest and this assignment of error is
without merit.
Affirmed.
Judges HUNTER and GEER concur.
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