Appeal by plaintiff from judgment entered 17 July 2006 by
Judge Abraham Penn Jones in Durham County Superior Court. Heard in
the Court of Appeals 10 September 2007.
Manning, Fulton & Skinner, PA, by John B. McMillan, Thomas C.
Kilpatrick, and Evan B. Horwitz, for plaintiff-appellant.
The Lorant Law Group, by Bree A. Lorant, for
defendants-appellees.
MARTIN, Chief Judge.
Plaintiff appeals from the trial court's order of 17 July 2006
modifying a 21 January 2006 arbitration award and denying
plaintiff's motion for reconsideration of the trial court's 8 June
2006 order. For the following reasons, we reverse the trial
court's order and remand for further proceedings consistent with
this opinion. The parties stipulate that Bree A. Lorant (“defendant”) was
employed as an associate attorney with the law firm of Faison &
Gillespie (“plaintiff”) beginning in early 2000. On 15 January
2004, defendant terminated her employment with plaintiff.
Plaintiff contends that defendant systematically removed
63,500 pages of computer data files between October 2003 and
December 2003 in anticipation of her departure from plaintiff's
firm in January 2004. With the assistance of information
technology consultants, plaintiff claims to have recovered most
files removed by defendant at a cost of $24,622.44. Plaintiff also
contends that defendant began a solo practice_The Lorant Law Group
(with Bree A. Lorant, collectively “defendants”)_and actively
solicited four clients from plaintiff's firm. Plaintiff alleges
defendants owe fees and costs for the quantum meruit value of
services rendered to those clients by plaintiff. Plaintiff further
alleges that defendant Lorant intentionally double-billed three
clients during her tenure with plaintiff's firm at a total cost of
$594.42.
One week before a scheduled trial, after all claims and
counterclaims were fully pled, the parties executed an Agreement
for Arbitration (“Agreement”) on 7 November 2005. The Agreement
included the following provisions:
D. Following the termination of employment, certain
disputes and controversies have arisen between the
parties. Such disputes and controversies_all as
more fully described in the Complaint and
Counterclaim filed by the parties_are the subjects
of a presently pending lawsuit [herein “Pending
Litigation”] . . . .
E. The parties have agreed to resolve their disputes
through binding arbitration.
. . . .
1. Submission To Binding Arbitration. The
parties hereby agree to submit all claims
arising out of the transaction at issue
in the Pending Litigation by binding
arbitration in accordance with the
Commercial Arbitration Rules of the
American Arbitration Association and the
terms of this Agreement.
2. Scope Of Arbitration. The arbitration
shall include all claims and defenses
asserted by the parties in the Pending
Litigation.
. . . .
5. Rules Of Arbitration. The arbitration
shall be governed by the Commercial
Arbitration Rules of the American
Arbitration Association [herein
“Governing Arbitration Rules”]. If any
other provisions of this Agreement
conflict with such rules, then the
provisions of this Agreement shall
control. The provisions of this
Agreement shall also control any matters
addressed by it which are not addressed
by the Governing Arbitration Rules or as
to which the Governing Arbitration Rules
permit a variation. If any procedural
issues arise that are not addressed by
the Governing Arbitration Rules or this
Agreement, then such issues shall be
resolved in accordance with the
provisions of the North Carolina Revised
Uniform Arbitration Act, N.C.G.S.
§ 1-569.1 et seq.
. . . .
9. Governing Law. The interpretation and
enforcement of this Agreement shall be
governed by the North Carolina Revised
Uniform Arbitration Act, N.C.G.S.
§ 1-569.1 et seq.
. . . .
11. Entire Agreement. The parties acknowledge
and represent that this Agreement
contains the entire agreement between the
parties regarding the matters set forth
and that it supersedes all previous
negotiations, discussions and
understandings regarding such matters.
The terms of this Agreement are
contractual and not a mere recital.
By the terms of the Agreement, all claims arising out of the
Pending Litigation between the parties were submitted to the
arbitrator, retired Superior Court Judge James M. Long.
The arbitration was conducted for two days beginning
19 December 2005. The arbitrator served his Arbitration Decision
on 21 January 2006. Plaintiff moved to confirm the Arbitration
Decision on 8 February 2006 in the superior court. Defendants
submitted a motion to the arbitrator to modify the Arbitration
Decision pursuant to N.C.G.S. § 1-569.20 on 16 February 2006. The
arbitrator denied defendants' motion to modify the Arbitration
Decision on 25 March 2006. Defendants appealed the arbitrator's
denial of their motion to modify the Arbitration Decision to the
superior court. On 8 June 2006, the superior court granted
defendants' motion to modify the Arbitration Decision, striking the
grants of interest awarded to plaintiff. On 13 June 2006,
plaintiff moved the superior court to reconsider the modification
of the Arbitration Decision, and to request that the superior court
amend its 8 June 2006 order to make findings of fact and
conclusions of law in support of the court's ruling. Defendants
filed an amended motion to confirm the superior court's order on
16 June 2006. On 17 July 2006, the superior court entered an ordergranting defendants' motion to confirm the modified Arbitration
Decision pursuant to its 8 June 2006 order.
_________________________
[1] We first consider defendants' motion to this Court to
dismiss plaintiff's appeal on the grounds plaintiff failed to
timely settle and file the record on appeal pursuant to Rules 11
and 12 of the North Carolina Rules of Appellate Procedure. We deny
the motion to dismiss plaintiff's appeal.
“'The Rules of Appellate Procedure are mandatory and failure
to follow the rules subjects an appeal to dismissal.'”
Pollock v.
Parnell, 126 N.C. App. 358, 361, 484 S.E.2d 864, 866 (1997)
(quoting
Wiseman v. Wiseman, 68 N.C. App. 252, 255, 314 S.E.2d 566,
567_68 (1984)). “The rules are designed to keep the process of
perfecting an appeal flowing in an orderly manner.”
Id. (citing
Craver v. Craver, 298 N.C. 231, 236, 258 S.E.2d 357, 361 (1979)).
However, this Court has held that “when a litigant exercises
'substantial compliance' with the appellate rules, the appeal may
not be dismissed for a technical violation of the rules.”
Spencer
v. Spencer, 156 N.C. App. 1, 8, 575 S.E.2d 780, 785 (2003).
Rule 11 of the North Carolina Rules of Appellate Procedure
provides: “Within . . . 35 days after filing of the notice of
appeal if no transcript was ordered, the parties may by agreement
entered in the record on appeal settle a proposed record on appeal
prepared by any party in accordance with Rule 9 as the record on
appeal.” N.C.R. App. P. 11(a) (2007). Rule 11 further provides
that, “[w]ithin 30 days . . . after service upon appellee ofappellant's proposed record on appeal, that appellee may serve upon
all other parties specific amendments or objections to the proposed
record on appeal, or a proposed alternative record on appeal.”
N.C.R. App. P. 11(c) (2007). Finally, Rule 12 provides that,
“[w]ithin 15 days after the record on appeal has been settled by
any of the procedures provided in Rule 11 or Rule 18, the appellant
shall file the record on appeal with the clerk of the court to
which appeal is taken.” N.C.R. App. P. 12(a) (2007).
In the present case, plaintiff filed and served Notice of
Appeal on 1 August 2006. On 6 September 2006, plaintiff timely
served its proposed record on appeal upon defendants consistent
with Rule 11(a). On 28 September 2006, defendants timely served
their proposed amendments to the record on appeal upon plaintiff
consistent with Rule 11(c). Between 11 October 2006 and 18 October
2006, plaintiff and defendants corresponded regularly by letter and
telephone to negotiate settlement of the record on appeal. After
plaintiff incorporated modifications requested by defendants,
plaintiff sent the proposed record, totaling almost 600 pages, to
defendants on 14 November 2006. The parties exchanged e-mails at
the end of November 2006. Plaintiff's counsel made several
attempts to confirm with defendants that the 14 November 2006
revised record on appeal accurately reflected the parties' intent.
However, according to the sworn affidavit of 5 June 2007,
defendants could not be reached to address this matter. Further,
defendant Lorant was on secured leave between 21 December 2006 and
4 January 2007. One business day after returning from securedleave, plaintiff confirmed with defendants that the proposed record
on appeal was satisfactory and filed the settled record on appeal
with the Court of Appeals on 10 January 2007.
Defendants contend that the record on appeal was settled on
18 October 2006. For this reason, in order to comply with
Rule 12(a), defendants contend that plaintiff should have filed the
record on appeal with this Court no later than 2 November 2006,
more than two months prior to plaintiff's filing date of 10 January
2007.
However, we conclude that plaintiff acted in good faith to
verify that all modifications to the proposed record were
incorporated to defendants' satisfaction, and promptly filed the
record two days after verifying with defendants that the record was
settled. Therefore, defendants' Motion to Dismiss is denied.
_________________________
[2] Plaintiff contends on appeal that the trial court's 8 June
and 17 July 2006 orders “striking each award for payment of
interest to [p]laintiff [in the Arbitration Decision], including
contractual and pre-judgment interest” were not consistent with
facts or law. Plaintiff argues the arbitrator was within the scope
of his authority to award interest as a remedy for the claims
before him, and that the interest awarded in the Arbitration
Decision was an element of damages on claims properly before the
arbitrator, pursuant to the parties' Agreement, which included
claims for withholding fees based on the quantum meruit value of
services rendered, tortious destruction of plaintiff's computerdata, double-billing client expense reimbursements, and breach of
contract. Defendants argue that the award of interest is not an
element of a remedy, but a separate claim beyond the scope of the
parties' private arbitration agreement. After careful
consideration, we agree with plaintiff.
Our Supreme Court has long held that the right to appeal an
arbitration award is limited.
If an arbitrator makes a mistake, either as to law or
fact, it is the misfortune of the party, and there is no
help for it. 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.” An award is intended to
settle the matter in controversy and thus save the
expense of litigation. If a mistake be a sufficient
ground for setting aside an award, it opens a door for
coming into court in almost every case; for in nine cases
out of ten some mistake either of law or fact may be
suggested by the dissatisfied party. Thus the object of
references would be defeated and arbitration instead of
ending would tend to increase litigation.
Patton v. Garrett, 116 N.C. 497, 504, 21 S.E. 679, 682_83 (1895).
For these reasons, “'[a]n [arbitration] award is ordinarily
presumed to be valid, and the party seeking to set it aside has the
burden of demonstrating an objective basis which supports his
allegations that one of the[] grounds [for setting it aside]
exists.'”
G.L. Wilson Bldg. Co. v. Thorneburg Hosiery Co., Inc.,
85 N.C. App. 684, 686, 355 S.E.2d 815, 817 (1987).
“If the dispute [resolved by the arbitrator] is within the
scope of the arbitration agreement, then the [trial] court must
confirm the [arbitration] award unless one of the statutory grounds
for vacating or modifying the award exists” pursuant to N.C.G.S.§§ 1-569.23 and 1-569.24.
Carteret County v. United Contractors of
Kinston, Inc., 120 N.C. App. 336, 346, 462 S.E.2d 816, 823 (1995)
(citing
FCR Greensboro, Inc. v. C & M Investments, 119 N.C. App.
575, 577, 459 S.E.2d 292, 294 (1995)). “'[O]nly awards reflecting
mathematical errors, errors relating to form, and errors resulting
from arbitrators exceeding their authority shall be modified or
corrected by the reviewing courts.'”
Palmer v. Duke Power Co.,
129 N.C. App. 488, 496_97, 499 S.E.2d 801, 807 (1998) (quoting
Carolina Virginia Fashion Exhibitors, Inc. v. Gunter, 41 N.C. App.
407, 414, 255 S.E.2d 414, 419 (1979)) (alteration in original).
An arbitrator's ability to act is both created and limited by
the authority conferred on him by the parties' private arbitration
agreement.
See Calvine Cotton Mills, Inc. v. Textile Workers
Union, 238 N.C. 719, 722, 79 S.E.2d 181, 183 (1953) (citing
Thomasville Chair Co. v. United Furniture Workers, 233 N.C. 46,
62 S.E.2d 535 (1950)) (“[A]n arbitrator must act within the scope
of the authority conferred on him by the arbitration agreement, and
his award is subject to attack for that he, acting under a mistake
of law, exceeded his authority . . . .”
).
Only those claims
submitted to the arbitrator may be decided by him.
Because the duty to arbitrate is contractual, only those
disputes which the parties agreed to submit to
arbitration may be so resolved.
See Coach Lines v.
Brotherhood, 254 N.C. 60, 67_68, 118 S.E.2d 37, 43
(1961). To determine whether the parties agreed to
submit a particular dispute or claim to arbitration, we
must look at the language in the agreement,
viz., the
arbitration clause, and ascertain whether the claims fall
within its scope.
Rodgers Builders, Inc. v. McQueen, 76 N.C. App. 16, 23_24,
331 S.E.2d 726, 731 (1985).
In the present case
, the trial court struck the interest
granted to plaintiff in the Arbitration Decision pursuant to
N.C.G.S. § 1-596.24(a)(2) of the Revised Uniform Arbitration Act.
Section 1-596.24(a)(2) provides:
(a) Upon motion made within 90 days after the moving
party receives notice of the award pursuant to G.S.
1-569.19 or within 90 days after the moving party
receives notice of a modified or corrected award
pursuant to G.S. 1-569.20, the court shall modify
or correct the award if:
. . . .
(2) The arbitrator has
made an award on a
claim not submitted to the arbitrator,
and the award may be corrected without
affecting the merits of the decision on
the claims submitted . . . .
N.C. Gen. Stat. § 1-569.24(a)(2) (2005) (emphasis added). In other
words, the trial court determined that the arbitrator made an award
“on a claim not submitted to” him, thereby exceeding the scope of
his authority conferred by the parties' Agreement.
“[A]n [arbitration] award is always open to attack on the
ground that the arbitrators exceeded their powers.”
Thomasville
Chair Co., 233 N.C. at 48, 62 S.E.2d at 537. However, “[t]here
have been 'only a few cases in which our courts have held that an
arbitrator exceeded his powers.'”
Smith v. Young Moving & Storage,
Inc., 167 N.C. App. 487, 490, 606 S.E.2d 173, 176 (2004) (quoting
Howell v. Wilson, 136 N.C. App. 827, 830, 526 S.E.2d 194, 196
(2000)). This Court summarized these exceptional cases as follows: In
Wilson Building Co. v. Thorneburg Hosiery Co., 85 N.C.
App. 684, 355 S.E.2d 815
(1987), we concluded that,
because the amount of attorney's fees for debts and
obligations is set by statute, the arbitrator exceeded
his authority by ordering fees in excess of that amount.
More instructive, however, is the case of
FCR Greensboro,
Inc. v. C & M Investments, 119 N.C. App. 575, 459 S.E.2d
292
(1995). In that case, the parties submitted for
arbitration the amount of liquidated damages caused by
the defendant completing construction of a building after
the agreed-upon date. The arbitrator awarded plaintiff
these damages, but then also awarded plaintiff two other
kinds of damages: (1) liquidated damages caused by
delays in starting construction; and (2) reimbursement
for certain changes plaintiff made to the sprinkler
system that was installed. We held that the arbitrator
exceeded his powers by making these additional awards.
These two cases illustrate that an arbitrator exceeds his
authority when he arbitrates
additional claims and
matters not properly before him.
Howell, 136 N.C. App. at 830, 526 S.E.2d at 196 (citations
omitted). In other words, the arbitrators in these earlier cases
acted contrary to the express authority conferred on them by
statute and by the language of the parties' private arbitration
agreement. However, we do not find this to be true in the present
case.
In their arbitration agreement, the parties “agree[d] to
submit
all claims arising out of the transaction at issue in the
Pending Litigation” which “include[d]
all claims and defenses
asserted by the parties in the Pending Litigation.” (Emphasis
added.) The Pending Litigation included “disputes and
controversies” pled in plaintiff's filed Amended Complaint and
defendants' Answer and Counterclaims. Since the language of the
parties' Agreement unambiguously submitted “all claims” for the
parties to binding arbitration, and incorporated by reference allremedies requested by the parties in their filed pleadings, we
conclude there were no claims nor remedies pled which could not be
decided by the arbitrator.
Defendants argue, however, that, like
FCR Greensboro
referenced above, the arbitrator exceeded his authority because the
award of interest to plaintiff was an award of damages neither
expressly pled nor authorized by the parties' Agreement. We
disagree.
Our Supreme Court has stated that “'[t]he prayer for relief
does not determine what relief ultimately will be awarded.'
Instead, 'the court should grant the relief to which a party is
entitled, whether or not demanded in his pleading.'”
Holloway v.
Wachovia Bank & Trust Co., N.A., 339 N.C. 338, 346, 452 S.E.2d 233,
237_38 (1994) (citation omitted); 61B Am. Jur. 2d
Pleading § 935
(1999) (“A prayer for general equitable relief justifies a court in
granting relief beyond what is asked for in specific prayers, as
long as such relief is consistent with the pleadings and the
evidence does not surprise the opposing party.”). Here, while
neither party specifically requested damages that expressly
included interest, both parties' filings, which were incorporated
by reference in the Agreement, sought discretionary relief which
prayed “[f]or such other and further relief as the Court deems just
and proper.”
Further, the parties agreed that the “interpretation and
enforcement of this Agreement shall be governed by the North
Carolina Revised Uniform Arbitration Act.” The Revised UniformArbitration Act, codified in Article 45C of the North Carolina
General Statutes, applies to agreements to arbitrate entered into
on or after 1 January 2004.
See generally N.C. Gen. Stat.
§§ 1-569.1 to 1-569.31 (2005).
N.C.G.S. § 1-569.21(c) of the Revised Uniform Arbitration Act
provides:
As to all remedies other than those authorized by
subsections (a) [(addressing punitive damages)] and
(b) [(addressing attorneys' fees, which may
only be
awarded if authorized by law and if the arbitration
agreement
expressly provides for such an award)] of this
section, an arbitrator may order
any remedies the
arbitrator considers just and appropriate under the
circumstances of the arbitration proceeding. The fact
that a remedy could not or would not be granted by the
court is not a ground for refusing to confirm an award
under G.S. 1-569.22 or for vacating an award under
G.S. 1-569.23.
N.C. Gen. Stat. § 1-569.21(c) (2005) (emphasis added).
This rule follows cases holding that absent clearly
restrictive language, an arbitrator must be allowed
latitude in fashioning an appropriate remedy. By
submitting to arbitration, it is implied that the
arbitrator has the power to order an appropriate remedy,
even though the contract may be silent as to any specific
or general relief the arbitrator may grant. . . . If a
contract specifically limits the authority of the
arbitrator to grant a particular type of relief, then the
remedies are confined to what is stated, but an
arbitrator is allowed flexibility in formulating remedies
. . . where the contract requiring arbitration was not
explicit on the subject of remedies and
did not prohibit
the arbitrator's use of a specific remedy.
21 Samuel Williston,
A Treatise on the Law of Contracts § 57:111,
at 575_76 (Richard A. Lord ed., 4th ed. 2001) (emphasis added)
(footnotes omitted).
It is also relevant that the parties contracted to submit to
“binding arbitration in accordance with the Commercial ArbitrationRules of the American Arbitration Association [(“AAA Rules”)] and
the terms of this Agreement,” and provided that, “[i]f any other
provisions of this Agreement conflict with [the AAA R]ules, then
the provisions of this Agreement shall control.” In other words,
according to the express language of the parties' Agreement, the
Agreement and the AAA Rules were to be read together, and only in
the face of a conflict should the Agreement control to the
exclusion of the AAA Rules.
Paralleling the language of
N.C.G.S. § 1-569.21(c),
Rule 43 of
the AAA Rules provides, in part:
(a) The arbitrator may grant any remedy or relief that
the arbitrator deems just and equitable and within
the scope of the agreement of the parties,
including, but not limited to, specific performance
of a contract.
. . . .
(d) The award of the arbitrator(s) may include:
(i) interest at such rate and from such date
as the arbitrator(s) may deem
appropriate; and
(ii) an award of attorneys' fees if all
parties have requested such an award or
it is authorized by law or their
arbitration agreement.
Am. Arb. Ass'n, Commercial Arbitration Rules & Mediation
Procedures, R. 43 (2005), 2005 WL 5314564 (amended Sept. 1, 2007)
(language of relevant rule is unchanged by 2007 amendments). The
AAA Rules, like N.C.G.S
§
1-569.21, allow the arbitrator to grant
“any remedy” the arbitrator deems “just” and appropriate, with the
exception of attorneys' fees, which must be expressly agreed upon
by the parties and specifically submitted to the arbitrator forconsideration. Additionally, in the AAA Rules
, as in the North
Carolina General Statutes, there is no limiting or conditional
language regarding an arbitrator's decision to award interest to a
party_i.e., the parties do not have to expressly agree to submit a
remedy of interest to the arbitrator for the arbitrator to have the
power to grant such a remedy, provided that an award of interest as
a remedy is not expressly limited by the language of the parties'
arbitration agreement.
Just as our Supreme Court did in
Calvine Cotton Mills, we
conclude that “[t]he parties could have_but did not_write into the
contract a[] limiting provision [on the discretionary remedies
available to the arbitrator].”
Calvine Cotton Mills, Inc.,
238 N.C. at 723, 79 S.E.2d at 184
. “In making his award the
arbitrator construed the contract, as it was his right and duty to
do. He added nothing to the agreement. Instead, he based his
conclusions on a permissible construction of the written
instrument.”
Id.
Here, the arbitrator awarded backward-looking interest “at the
legal rate of 8% per annum” on (1) expenses for recovery of
plaintiff's deleted computer records, (2) amounts double-billed to
clients, and (3) fees withheld for quantum meruit value of services
rendered by defendant while employed by plaintiff. This interest
was calculated to begin on the date on which each breach occurred,
and to end on the date of the Arbitration Decision, and totaled
$41,874.93. Additionally, the arbitrator awarded forward-lookinginterest on the total award of $360,541.10 calculated
“at the rate
of 8% per annum from the date of this decision until paid.”
Defendants argue that
N.C.G.S.
§
24-5 only applies to amounts
of judgments which bear interest after “the date of entry of
judgment under G.S. 1A-1, Rule 58,”
see N.C. Gen. Stat. § 24-5(a),
(b) (2005), and not to arbitration awards that have not yet been
confirmed and entered by a trial court.
See N.C. Gen. Stat.
§§ 1-569.22, 1-569.25 (2005);
Palmer, 129 N.C. App. at 498,
499 S.E.2d at 807 (
“We 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. . . . [W]e have found no citation of
authority for this proposition.”
)
.
While defendants do not address
the language regarding breaches of contract actions under N.C.G.S.
§
24-5(a) which
is consistent with the arbitrator's award,
see N.C.
Gen. Stat. § 24-5(a) (“[T]he amount awarded on the contract bears
interest
from the date of breach.”) (emphasis added),
we do not
need to reach that issue here.
An arbitrator's award cannot be modified for error of law
unless that error caused the arbitrator to act beyond the scope of
his authority.
“Indeed, 'an arbitrator is not bound by substantive
law or rules of evidence, [and] an award may not be vacated merely
because the arbitrator erred as to law or fact.'”
Smith, 167 N.C.
App. at 489, 606 S.E.2d at 175 (quoting
Sholar Bus. Assocs. v.
Davis, 138 N.C. App. 298, 301, 531 S.E.2d 236, 239 (2000));
Gunter,
41 N.C. App. at 411, 255 S.E.2d at 417_18
(
“The general rule isthat errors of law or fact, or an erroneous decision of matters
submitted to the judgment of the arbitrators, are insufficient to
invalidate an award fairly and honestly made.”).
Again, as our
Supreme Court held in
Patton:
If an arbitrator makes a mistake, either as to law or
fact, it is the misfortune of the party, and there is no
help for it. 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.”
Patton, 116 N.C. at 504, 21 S.E. at 682.
In the present case
, the arbitrator might have presumed that
pre-judgment interest applies to arbitration awards, or might have
determined that an award of backward-looking interest was within
his discretionary, contractual, and statutory authority. However,
the rationale underlying the arbitrator's decision to award
interest, and the determination of whether or not the arbitrator
acted
under mistake of law, are not issues before this Court. We
conclude only that the arbitrator did not act under any mistake of
law which resulted in his acting in excess of his authority.
Therefore,
we hold that, by inviting the arbitrator to award
discretionary relief it “deem[ed] just and proper,” coupled with
the parties' express incorporation of the AAA Rules and
the North
Carolina General Statutes which permit an arbitrator to award
remedies it deems “just and appropriate
under the circumstances of
the arbitration proceeding
,”
the arbitrator's award of the interest
did not exceed the authority expressly conferred on him by the
parties' private arbitration agreement.
In the alternative, defendants argue the interest awarded by
the arbitrator was not a remedy, but a separate claim not before
him under the Agreement. However, we conclude the interest awarded
in the Arbitration Decision was an element of the remedies sought,
rather than a separate claim.
“Interest is the compensation allowed by law, or fixed by the
parties, for the use, or forbearance, or detention of money.”
Members Interior Constr. v. Leader Constr. Co., 124 N.C. App. 121,
125, 476 S.E.2d 399, 402 (1996) (internal quotation marks omitted).
“'[I]nterest . . . means compensation allowed by law as additional
damages for the
lost use of money during the time between the
accrual of the claim and the date of the judgment.'”
Id. (second
alteration in original); 25 Samuel Williston,
A Treatise on the Law
of Contracts § 66:109, at 126_29 (Richard A. Lord ed., 4th ed.
2002) (“[Interest] may be awarded by the law as damages although no
agreement for interest has been made by the parties. . . . The
purpose of allowing interest as damages is to give the aggrieved
party full indemnity for its loss.”) (footnotes omitted).
In his Arbitration Decision, the arbitrator identified the
pled claims and the corresponding values upon which the interest
would apply. Further, the interest calculations appeared in the
section of the Arbitration Decision in which the damage awards were
listed, which also came after the sections addressing plaintiff's
claims and defendants' counterclaims. Therefore, the interest
awarded in this case was not a separate claim, but an element ofthe remedies sought, assessed on values awarded on claims properly
before the arbitrator.
For the reasons given, we reverse the trial court's 17 July
2006 order modifying the arbitrator's award, and remand to the
Superior Court of Durham County for entry of an order confirming,
and entering judgment on, the 21 January 2006 Arbitration Decision
in its original form. Our decision renders unnecessary our
consideration of plaintiff's remaining assignments of error, and we
do not address them.
Reversed.
Judges STROUD and ARROWOOD concur.
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