Bullard v. Tall House Bldg. Co., Inc., COA08-839.

• Citation: 676 S.E.2d 96
• Decision Date: 05 May 2009
• Docket Number: No. COA08-839.,COA08-839.
• Court: Court of Appeal of North Carolina (US)
• Parties: Dennis E. BULLARD, M.D. and Wendy W. Bullard, Petitioners, v. TALL HOUSE BUILDING COMPANY, INC., a North Carolina Corporation, Respondent.

676 S.E.2d 96

Dennis E. BULLARD, M.D. and Wendy W. Bullard, Petitioners, v. TALL HOUSE BUILDING COMPANY, INC., a North Carolina Corporation, Respondent.

No. COA08-839.

Court of Appeals of North Carolina.

May 5, 2009.

Appeal by respondent from amended order entered 18 April 2008 by Judge Orlando F. Hudson, Jr. in Superior Court, Wake County. Heard in the Court of Appeals 14 January 2009.

Troutman Sanders, LLP, by Gary S. Parsons and D. Kyle Deak, Raleigh, for petitioners-appellees.

Patterson Dilthey, LLP by Ronald C. Dilthey, Raleigh and Hedrick, Gardner, Kincheloe & Garofalo, L.L.P., by Scott Lewis, Wilmington, for respondent-appellant.

STROUD, Judge.

As the trial court ordered further arbitration, the order from which defendants appeal is interlocutory, and we therefore dismiss this appeal.

I. Background

On or about 10 March 2003, Dennis and Wendy Bullard ("the Bullards") entered into a Building Agreement with Tall House Building Company ("Tall House"). The Building Agreement included an arbitration provision which read,

Any claim, controversy or dispute arising out of or related to this Agreement, or the breach thereof, not resolved by mediation, shall be settled by arbitration in accordance with the Construction Industry Arbitration by a panel of three (3) arbitrators, one selected by each party and the third by the two appointed arbitrators, rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrator or arbitrators may be entered in any court having jurisdiction thereof. Prior to arbitration, the parties shall endeavor to resolve their disputes by mediation per Section XIII hereof. Notice of demand for arbitration shall be filed in writing with the other party to this Agreement and with the American Arbitration Association.

....

A party who files a notice of demand for arbitration must assert in the demand all claims then known to that party on which arbitration is permitted to be demanded. When a party fails to include a claim through oversight, inadvertence or excusable neglect, or when a claim has matured or been acquired subsequently, the arbitrators may permit amendment.

The award rendered by the arbitrators shall be final, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof.

On or about 24 January 2006, the Bullards and Tall House entered into an Arbitration Agreement which read, "The parties agree to submit all disputes to private arbitration in accordance with the Contract for Construction dated March 2003...." On or about 14 February 2006, the Bullards submitted a "Demand for Arbitration" regarding various defects with the house constructed pursuant to the Building Agreement. (Original in all caps.) On or about 4 August 2006, the arbitrators entered an award addressing the issues presented in the Bullards' "Demand for Arbitration[.]" (Original in all caps.)

On or about 19 December 2006, the Bullards filed a "Motion For Partial Vacation of Arbitration Award" with the trial court and a "Demand for Arbitration and/or Amendment to the Original Demand for Arbitration" with the arbitration panel. (Original in all caps.) The Bullards alleged the arbitration award should be partially vacated because of fraudulent concealment and misrepresentations on the part of Tall House which kept them from discovering defects with the floor framing. The Bullards requested that "[i]f Respondent contends that Petitioners are prohibited from litigating the floor framing issues before the arbitration panel" that the trial court "vacate that portion of the arbitration panel's award that addresses flooring issues so as to permit floor framing issues to be heard[.]"

On 19 January 2007, Tall House responded to the Bullards' Motion to Vacate requesting "the Court deny Petitioners' Motion for Vacation of the Arbitration Award in its entirety and allow the Arbitration Panel to whom the parties have agreed to submit this matter to decide on the questions of whether any new claims should be heard[.]" On or about 23 August 2007, the arbitration panel concluded that

[t]he evidence also does not support the contention that respondent concealed any structural defects. In fact, at the hearings before the initial award, it was very clear that there were potential structural problems, and the panel even inquired about those issues. All of the issues addressed in the "new" demand could have been discovered, albeit with some effort, prior to the first round of hearings. The initial award was intended—both by the panel and the parties—to resolve all issues that were raised or could have been raised at the time. All issues subsequently raised could have been discovered and presented earlier, and are barred by the prior award.

On 15 October 2007 Tall House filed an amendment to its response to the Bullards' motion to vacate. The amendment noted:

1. Subsequent to Petitioners' Motion filed herein on December 19, 2006, seeking an order to vacate a portion of the original Award of the Arbitration Panel dated August 4, 2006, and the Orders of the Panel dated September 21, 2006, and October 25, 2006, the Arbitration Panel conducted an additional hearing on motions and requests of Petitioners' on June 22, 2007, and then issued a final, dispository AWARD dated August 23, 2007....

2. In its four (4) page AWARD, the Arbitration Panel concluded: "The Panel denies any and all other claims for relief presented by Petitioners. All costs of these proceedings shall be taxed equally to the parties." ....

On 18 October 2007, the Bullards requested from the trial court

an order (1) confirming in part and vacating in part the August 23, 2007, Arbitration Award rendered in the private arbitration proceeding between parties, and (2) compelling Respondent to arbitrate those issues set forth in Petitioners December 19, 2006, and May 25, 2007, Amended and Supplemental Demands for Arbitration.

On 13 November 2007, Tall House responded to the Bullards' 18 October 2007 request and "respectfully move[d] the Court that the Petitioner's Motion to Vacate in Part and Confirm in Part Arbitration Award and Motion to Compel Arbitration be Denied."

On 27 March 2008, the trial court entered an order regarding the Bullards' motions. On 10 April 2008, the Bullards filed a motion "to correct a clerical mistake" in the trial court order. On 18 April 2008, the trial court amended its order granting the Bullards' "Motion for Partial Vacation of the August 4, 2006, Arbitration Award[,]" "Motion to Vacate in Part and to Confirm in Part the August 23, 2007, Arbitration Award[,]" and "Motion to Compel Arbitration[.]" From the amended order, Tall House appeals.

II. Applicable Law

The parties entered into their Building Agreement which contained a provision requiring arbitration on 10 March 2003. On 24 January 2006, the parties entered into an Arbitration Agreement which controlled the specifics of their arbitration, modifying their Building Agreement, but explicitly stating that the Building Agreement remained "in full force and effect" where it did not conflict with the Arbitration Agreement. In its 18 April 2008 amended order, the trial court referenced and quoted the Revised Uniform Arbitration Act ("RUAA") as the applicable law.

The RUAA is only applicable to agreements to arbitrate "made on or after January 1, 2004" or "made before January 1, 2004, if all parties to the agreement or to the arbitration proceeding agree in a record that this Article applies." N.C. Gen.Stat. § 1-569.3 (2005). Here, the parties have not assigned error to the trial court's use of the RUAA as the applicable law and both parties have also cited the RUAA as applicable law in various documents, including memorandum of law and briefs to this Court. Accordingly, we conclude that the RUAA controls this case.

III. Motion to Dismiss

A. The Parties' Contentions

On 29 July 2008 the Bullards filed a motion to dismiss this appeal. The Bullards argue Tall House's appeal should not be heard pursuant to N.C. Gen.Stat. § 1-569.28(a) which reads (a) An appeal may be taken from:

(1) An order denying a motion to compel arbitration;

(2) An order granting a motion to stay arbitration;

(3) An order confirming or denying confirmation of an award;

(4) An order modifying or correcting an award;

(5) An order vacating an award without directing a rehearing; or

(6) A final judgment entered pursuant to this Article.

N.C. Gen.Stat. § 1-569.28(a) (2005). The Bullards argue "N.C.G.S. § 1-569.28(a)(5) expressly provides that an appeal does not lie from an order vacating an award which also directs a rehearing. Rather, the statute permits an immediate appeal only from `an order vacating an award without directing a rehearing.'"

On or about 8 August 2008, Tall House filed a response to the Bullards' motion to dismiss arguing

1. Respondent-appellant's appeal from the trial court's modification of the Arbitration Awards involving the Pyrolave counters is not interlocutory pursuant to G.S. 1-569.28(4).

2. Respondent-appellant's appeal from the remainder of the trial court's Amended Order is not interlocutory pursuant to G.S. 1-569.28(5).

3. In the alternative, if the Court finds the appeal is interlocutory in whole or in part, the Amended Order affects a substantial right and Respondent has the right of immediate appeal.

Both the Bullards and Tall House argue that certain provisions within N.C. Gen.Stat. § 1-569.28(a) apply. The Bullards argue that the trial court vacated an award and directed a rehearing. Tall House argues the trial court modified an award and did not order a rehearing as the hearing the trial court ordered was intended to address new issues which had not yet been considered. We agree in part with Tall House as the trial court did indeed modify an award and did not direct a rehearing, but rather a new hearing; however, we disagree with Tall House that these conclusions render the...