An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority.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. COA04-1316


Filed: 2 August 2005


v .                         Columbus County
                            No. 02 CVS 399

    Appeal by defendants from judgment entered 10 May 2004 by Judge James Floyd Ammons in Columbus County Superior Court. Heard in the Court of Appeals 13 June 2005.

    Gott & Keenan, PLLC, by Melissa Gott, Attorney for plaintiffs- appellees.

    Junius B. Lee III and Michelle FormyDuval Lynch, Attorneys for defendants-appellees.



    Janie G. Parrett and Kim Parrett (“plaintiffs”) filed this complaint on 15 March 2002 alleging causes of action for trespass on an easement, willful, wanton and malicious conduct, and slander. Plaintiffs sought a permanent injunction enjoining William D. Gore and Rose M. Gore (“defendants”) from obstructing plaintiffs' use of the easement. Plaintiffs also sought removal of any cloud on plaintiffs' title to the easement. Defendants counterclaimed alleging that plaintiffs' easement is for personal use and thatplaintiffs have tried to enlarge the easement for commercial use in violation of the law.
    On 11 February 2003, the parties appeared in open court and through counsel announced that they had agreed to submit the matter to binding arbitration. A consent order outlining the terms of the agreement for binding arbitration was signed by the trial judge and the attorneys for both parties. The parties jointly selected an arbitrator. The parties submitted memoranda concerning the issues for arbitration and participated in a two-day evidentiary hearing conducted by the arbitrator. An arbitration judgment was entered on 10 March 2004. Plaintiffs moved to confirm the arbitration judgment and defendants moved to vacate, clarify or correct the arbitration judgment. The trial court confirmed and adopted the arbitration judgment by order filed 10 May 2004. Defendants appeal the order confirming the arbitration judgment.

    The issues presented by this appeal are: (I) whether there was an agreement between the parties to enter into binding arbitration; and (II) whether any statutory ground exists to vacate the arbitration award.
    Defendants argue that the trial court erred by ordering arbitration and adopting the award of the arbitrator when there was no valid agreement to arbitrate. We disagree.
    The applicable provision of the Uniform Arbitration Act regarding the validity of arbitration agreements reads as follows:
        Two or more parties may agree in writing to submit to arbitration any controversy existingbetween 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 (2001).   (See footnote 1) 
    This Court's review of the trial court's order is de novo. Sloan Fin. Grp., Inc. v. Beckett, 159 N.C.App. 470, 477, 583 S.E.2d 325, 330 (2003). As a general rule, “public policy favors arbitration.” Raspet v. Buck, 147 N.C. App. 133, 135, 554 S.E.2d 676, 678 (2001). Before a dispute can be ordered resolved through arbitration, there must be a valid agreement to arbitrate. United Steelworkers v. Warrior & G. Nav. Co., 363 U.S. 574, 4 L. Ed.2d 1409 (1960); Sloan Fin. Grp., 159 N.C. App. at 477, 583 S.E.2d at 329; LSB Fin. Servs., Inc. v. Harrison, 144 N.C. App. 542, 547, 548 S.E.2d 574, 577-8 (2001). “Thus whether a dispute is subject to arbitration is a matter of contract law.” Sloan Fin. Grp., 159 N.C. App. at 478, 583 S.E.2d at 330. Accord Ragan v. Wheat First Sec., Inc., 138 N.C. App. 453, 531 S.E.2d 874, disc. review denied, 353 N.C. 268, 546 S.E.2d 129 (2000). “Parties to an arbitration must specify clearly the scope and terms of their agreement to arbitrate.” Id. (citing Futrelle v. Duke University,127 N.C. App. 244, 488 S.E.2d 635, disc. review denied, 347 N.C. 398, 494 S.E.2d 412 (1977). The court cannot force a party to submit to arbitration unless the party has agreed to do so. AT&T Technologies v. Communications Workers, 475 U.S. 643, 89 L. Ed. 2d 648 (1986). Although a party cannot be forced to submit a claim to arbitration if he or she has not agreed to do so, “a variety of nonsignatories of arbitration agreements have been held to be bound by such agreements under ordinary common law contract and agency principles.” LSB Financial Services, 144 N.C. App. at 547, 548 S.E.2d at 578 (quoting In re Prudential Ins. Co. of America Litigation, 133 F.3d 225, 229 (3rd Cir. 1998)).
    In the instant case, plaintiffs and defendants appeared in the trial court with their attorneys on 11 February 2003 and announced in open court that they had reached an agreement to enter into binding arbitration. The trial court entered a consent order which reads as follows:
        AND at the call of the matter for hearing the plaintiffs appeared represented by their counsel of record, Gary A. Grady from the Bladen County Bar and the defendants appeared represented by their attorney of record, Junius B. Lee, III of the Columbus County Bar.

        AND at the call of the matter for hearing the parties announced that all matters and things in controversy between them, for the purpose of this hearing, had been resolved by an agreement to enter into binding arbitration in this cause. The parties further announced that under the terms of binding arbitration the following specific terms will apply:

        1. Within thirty (30) days from the date that this order is entered in open court, or on or before March 13, 2003, the parties shall jointly select a single arbitrator to decidethis case, or if unable to do so, shall each select an arbitrator to serve in this cause. If the parties cannot agree on a single arbitrator, then the two (2) arbitrators so selected by each of the parties shall select a third arbitrator and the three arbitrators shall act together to hear evidence and make a binding decision.

        2. Within ninety (90) days from the date of the entry of this order, the parties shall schedule the arbitration subject to the rules for the same as provided by the American Arbitration Association.

        3. Within thirty (30) days thereafter, the arbitrator/arbitrators shall report their decision to the court and the same shall be binding to the same extent as a court order or a decision by a jury in this cause, subject to such other and further orders of this court as are necessary to enforce the same.

        4. The parties agree that there will be no appeal from this arbitration decision except under those limited circumstances provided by law for binding arbitration.

The consent order was signed: “Approved as to Terms, Gary A. Grady, Attorney for Plaintiffs” and “Approved as to Terms, Junius B. Lee, III, Attorney for Defendants.”
    Defendants contend there was never a valid arbitration agreement in this case as the only “agreement” was the order of the court signed by the parties' attorneys as neither plaintiffs nor defendants signed an agreement to arbitrate.
    “[T]here is a presumption in North Carolina in favor of an attorney's authority to act for the client he professes to represent.” Harris v. Ray Johnson Constr. Co., 139 N.C. App. 827, 829, 534 S.E.2d 653, 654-5 (2000). Principles of agency are applicable to the attorney-client relationship. Id. When theagent acts within the scope of his actual authority, the principal is liable on the contract. Foote & Davies, Inc. v. Arnold Craven, Inc., 72 N.C. App. 591, 595, 324 S.E.2d 889, 892 (1985). “[T]he authorities seem to sustain the view that it is presumed that the attorneys had the necessary authority from their clients.” Keen v. Parker, 217 N.C. 378, 389, 8 S.E.2d 209, 216 (1940). In the case sub judice, the consent order expressly states that the parties appeared in court and through their attorneys announced they had reached an agreement to enter into binding arbitration. The consent order sets out the terms of the arbitration agreement. We note that defendants complied with the terms of the Consent Order by participating in the selection of an arbitrator and submitting a memorandum concerning the issues for arbitration. We also note that defendants participated in a two-day evidentiary hearing before the arbitrator without objecting to the hearing. Defendants raise the issue of the validity of the arbitration agreement for the first time on appeal. We hold that the consent order which sets forth the terms of the parties' agreement for binding arbitration executed by the parties' attorneys in this case is a valid written agreement for binding arbitration under the Uniform Arbitration Act.
    Defendants next argue that the trial court erred in adopting the judgment of the arbitrator, because the arbitration judgment contains inconsistent rulings that are unenforceable, and is contrary to state law.     “Judicial review of an arbitration award is confined to [a] determination of whether there exists one of the specific grounds for vacation of an award under the arbitration statute.” Semon v. Semon, 161 N.C. App. 137, 141, 587 S.E.2d 460, 463 (2003)(quoting Fashion Exhibitors v. Gunter, 41 N.C. App. 407, 410-11, 255 S.E.2d 414, 417-18 (1979)). “An arbitration award is presumed valid and the burden of proving specific grounds for vacating an award rests on the party attacking it.” Turner v. Nicholson Properties, Inc., 80 N.C. App. 208, 212, 341 S.E.2d 42, 45, cert. denied, 317 N.C. 714, 347 S.E.2d 457 (1986). A court may only vacate such an award for the reasons enumerated in North Carolina General Statutes § 1-567.13. Scholar Bus. Assocs. v. Davis, 138 N.C. App 298, 301, 531 S.E.2d 236, 239 (2000).
    Section 1-567.13(a) of the North Carolina General Statutes provides as follows:
        Upon application of a party, the court shall vacate an award where:

        (1) The award was procured by corruption, fraud or other undue means;

        (2) There was evident partiality by an arbitrator appointed as a neutral or corruption in any of the arbitrators or misconduct prejudicing the rights of any party;

        (3) The arbitrators exceeded their powers;
        (4) The arbitrators refused to postpone the hearing upon sufficient cause being shown therefor or refused to hear evidence material to the controversy or otherwise so conducted the hearing, contrary to the provisions of G.S. 1-567.6, as to prejudice substantially the rights of a party; or
        (5) There was no arbitration agreement and the issue was not adversely determined in proceedings under G.S. 1-567.3 and the party did not participate in the arbitration hearing without raising the objection; but the fact that the relief was such that it could not or would not be granted by a court of law or equity is not ground for vacating or refusing to confirm the award.

N.C. Gen. Stat. § 1-567.13(a) (2001). Unless an objective showing can be made that one of the statutory grounds exists for vacating the arbitration award, the court must confirm the award. FCR Greensboro, Inc. v. C&M Investments, 119 N.C. App. 575, 578, 459 S.E.2d 292, 294, cert. denied, 341 N.C. 648, 462 S.E.2d 510 (1995); Wilson Building Co. v. Thorneburg Hosiery Co. Inc., 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). "If an arbitrator makes a mistake, either as to law or fact . . ., it is the misfortune of the party . . . . There is no right of appeal and the court has no power to revise the decisions of 'judges who are of the parties own choosing.'" Cyclone Roofing Co. v. LaFave Co., 312 N.C. 224, 236, 321 S.E.2d 872, 880 (1984)(quoting Fashion Exhibitors, 41 N.C. App. at 415, 255 S.E.2d at 420. In addition, N.C. Gen. Stat. § 1-567.13(a)(5) provides, "the fact that the relief was such that it could not or would not be granted by a court of law or equity is not ground for vacating or refusing to confirm the award." Thus an award “may not be vacated because the arbitrator erred as to law or fact.” Smith v. Young Moving and Storage, Inc., ___N.C. App.____,___, 606 S.E.2d 173, 175 (2004).    In the instant case, defendants do not argue any of the specific grounds enumerated in N.C. Gen. Stat. § 1-567.13 exist and we find no statutory ground exists for vacating the arbitration award. Therefore we affirm the order of the trial court adopting the arbitration award.
    For the reasons stated, we affirm the order and judgment confirming the arbitration award pursuant to N.C. Gen. Stat. § 1-567.12.
    Chief Judge MARTIN and Judge BRYANT concur.
    Report per Rule 30(e).

Footnote: 1
    N.C. Gen. Stat. §§ 1-567.1 through 1-567.20 were repealed by the North Carolina General Assembly in 2003; however, the statutory changes only affect agreements made on or after 1 January 2004.

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