An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Proced ure.

NO. COA04-629

NORTH CAROLINA COURT OF APPEALS

Filed: 17 May 2005

EDWIN HOYLE SNUGGS, and
PHYLLIS C. SNUGGS,
    Plaintiffs,

v .                         Gaston County
                            No. 02 CVS 2875
ALLEN WAYNE POSTON, and
SUSAN R. POSTON,
    Defendants.

    Appeal by defendants from judgment entered 22 January 2004 by Judge Yvonne M. Evans in Gaston County Superior Court. Heard in the Court of Appeals 12 January 2005.

    Stott, Hollowell, Palmer & Windham, L.L.P., by James C. Windham, Jr. and Matthew R. Arnold, for plaintiff-appellees.

    Garlitz & Williamson, PLLC, by Thomas D. Garlitz, for defendant-appellants.

    STEELMAN, Judge.

     Plaintiffs sued defendants on a $400,000 note that was executed on 30 June 1999. On 8 July 2003, the Superior Court entered an order directing the parties to participate in court-ordered arbitration pursuant to N.C. Gen. Stat. § 7A-37.1, and sent notice to the parties that the arbitration hearing would be held on 19 September 2003. Defendants failed to appear at the 19 September 2003 hearing. After considering plaintiff's evidence, the arbitrator entered an award in the amount of $679,167.58 in favor of the plaintiffs.     On 16 October 2003, the defendants filed a request for trial de novo. On 9 January 2004, plaintiffs filed a motion for sanctions under North Carolina Rules of Court-Ordered Arbitration Rule 3(l). Judge Evans heard the motion on 20 January 2004. On 22 January 2004, the trial court entered judgment finding that the imposition of sanctions was appropriate and imposed sanctions striking the defendants request for trial de novo and entering judgment in favor of plaintiffs. From this judgment defendants appeal.
    The dispositive issue is whether the trial court had jurisdiction to order arbitration in this case. “[J]urisdiction over the subject matter of a proceeding cannot be conferred by consent, waiver, or estoppel.” In re Davis, 114 N.C. App. 253, 256, 441 S.E.2d 696, 698 (1994)(citations omitted). Issues of jurisdiction may be raised at any time, including by this Court, sua sponte, on appeal. Hayes v. Turner, 98 N.C. App. 451, 454, 391 S.E.2d 513, 515 (1990).
    N.C. Gen. Stat. § 7A-37.1 (2003), titled: “Statewide court-ordered, nonbinding arbitration in certain civil actions,” provides in section (c): “This procedure [court-ordered arbitration] may be employed in civil actions where claims do not exceed fifteen thousand dollars ($ 15,000) . . ..” N.C. Gen. Stat. § 7A-37.1(b) states: “The Supreme Court of North Carolina may adopt rules governing this procedure and may supervise its implementation and operation through the Administrative Office of the Courts.” Pursuant to the authority given it by N.C. Gen. Stat. § 7A-37.1,the Supreme Court adopted Rules for Court-Ordered Arbitration in North Carolina (the Rules), which became effective 1 January 1987. Rule 1, which determines which actions are subject to court-ordered arbitration, was amended most recently on 19 December 2002. This amendment became effective 1 January 2003.
    We note that it is clear from the record that both parties and the trial court assumed that the applicable Rules were those prior to the 19 December 2002 amendment. This assumption was incorrect. The relevant amendment of Rule 1 was effective beginning 1 January 2003. The Superior Court's order compelling civil arbitration was filed 9 July 2003, and the arbitration hearing was conducted on 19 September 2003. The 1 January 2003 amended version of Rule 1 controls in the instant case.
    Rule 1 clearly states that Superior Court actions subject to court-ordered arbitration are those where the amount in controversy does not exceed $15,000.00:
        Actions subject to arbitration.

        (a) By order of the court.

        (2) Superior Court.

        The Senior Resident Superior Court Judge may order any civil Superior Court action to arbitration, where the amount in controversy does not exceed $ 15,000, under these rules after the Court confers with the parties at a scheduling conference. The judge shall enter a written order, which finds that the action is appropriate for arbitration and that the amount in controversy does not exceed $15,000.

        (b) Arbitration by agreement.

        (2) Superior Court.
        The parties in any civil action pending in the Superior Court Division where the amount in controversy does not exceed $ 15,000 may, upon joint written motion, request to submit the action to arbitration under these rules. The Court may approve the motion if it finds that arbitration under these rules is appropriate, and the amount in controversy does not exceed $ 15,000. The consent of the parties shall not be presumed, but shall be stated by the parties expressly in writing.

N.C. Court-Ordered Arb. Rule 1 (2004).
    In this case, the complaint, on its face discloses an amount in controversy of over $400,000.00, well in excess of the $15,000.00 limit. In ordering this matter to arbitration, the Superior Court made no finding that the amount in controversy did not exceed $15,000.00. The Superior Court was without authority to order this case into arbitration pursuant to N.C. Gen. Stat. § 7A- 37.1(c) and Rule 1 of the North Carolina Rules for Court-Ordered Arbitration. It was thus inappropriate for the trial court to impose sanctions for the defendants' failure to attend the arbitration hearing. We vacate the judgment of the trial court and remand this matter for further proceedings.
    VACATED AND REMANDED.
    Judges TIMMONS-GOODSON and HUDSON concur.
    Report per Rule 30(e).

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