G.L. Wilson Bldg. Co. v. Thorneburg Hosiery Co., Inc.

• Decision Date: 19 May 1987
• Docket Number: No. 8622SC1074,8622SC1074
• Citation: 85 N.C.App. 684,355 S.E.2d 815
• Parties: G.L. WILSON BUILDING COMPANY v. THORNEBURG HOSIERY CO., INC.
• Court: North Carolina Court of Appeals

Page 815

355 S.E.2d 815

85 N.C.App. 684

G.L. WILSON BUILDING COMPANY v. THORNEBURG HOSIERY CO., INC.

No. 8622SC1074.

Court of Appeals of North Carolina.

May 19, 1987.

Avery, Crosswhite & Whittenton by William E. Crosswhite, Statesville, and Foster, Conner, Robson & Gumbiner, P.A. by C. Allen Foster, Greensboro, for appellee, G.L. Wilson Building Co.

Tucker, Hicks, Moon, Hodge and Cranford, P.A. by John E. Hodge, Jr. and Robert B. Tucker, Jr., Charlotte, for appellant, Thorneburg Hosiery Co., Inc.

HEDRICK, Chief Judge.

Appellant Thorneburg contends the trial court erred in confirming the arbitration award and denying its motions to vacate modify, correct or remand the award. Thorneburg argues in support of this contention that the arbitrators exceeded their authority in awarding Wilson $656,050.93, because this sum must include amounts for items which are not subject to arbitration.

The purpose of arbitration is to reach a final settlement of disputed matters without litigation, and the parties, who have agreed to abide by the decision of the arbitrators, will not generally be heard to attack the regularity or fairness of an award. McNeal v. Black, 61 N.C.App. 305, 300 S.E.2d 575 (1983). In Poe & Sons, Inc., v. University, 248 N.C. 617, 625, 104 S.E.2d 189, 195 (1958), our Supreme Court, citing Patton v. Garrett, 116 N.C. 848, 21 S.E. 679 (1895), stated,

If an arbitrator makes a mistake, either as to law or fact, it is a 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'.... If a mistake be a sufficient ground for setting aside an award, it opens the door for coming into court in almost every case; for in nine cases out of ten some mistake of law or fact may be suggested by the dissatisfied party.

G.S. 1-567.13 and G.S. 1-567.14 provide the exclusive grounds for vacating, modifying or correcting an arbitration award. Crutchley v. Crutchley, 306 N.C. 518, 293 S.E.2d 793 (1982). An 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 these grounds exists. Thomas v. Howard, 51 N.C.App. 350, 276 S.E.2d 743 (1981).

In the present case, Thorneburg filed numerous motions in the superior court seeking to vacate, modify, correct or remand the award. The trial court did not err in denying these motions, save and except for the motion to remand the award to the arbitrators for modification or clarification pursuant to G.S. 1-567.10. We hold that the arbitrators had the authority to make the award, with the exception of any award for counsel fees. Thorneburg's contentions that the arbitrators had no authority to award sums, costs of delays caused by Thorneburg, certain fees and expenses of arbitration, or compensation for "transferring the proprietary right to the design of the knitting & seaming vacuum system" are without merit. The arbitrators are authorized to include these items in the award under the provisions of the parties' contract and the Uniform Arbitration Act. Thorneburg's contention that the arbitrators exceeded their authority in including counsel fees in the award, if such fees were included, however, has merit. This does not mean that Wilson is not entitled to recover attorney's fees under the contract, but only that the arbitrators had no authority to include such fees in the arbitration award.

G.S. 1-567.11 provides as follows:

Unless 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.

We hold that counsel fees are not a subject of arbitration, even though the contract in this case provides that "[t]he Owner will pay reasonable attorney's fees incurred by the Contractor for the collection of any defaulted payment due to the Contractor by the Owner as a result of this contract." In North Carolina, such attorneys' fees are collectible only under G.S. 6-21.2 which provides as follows:

Obligations to pay attorneys' fees upon any note, conditional sale contract or other evidence of indebtedness, in addition to the legal rate of interest or finance charges specified therein, shall be valid and enforceable, and collectible as part of such debt, if such note, contract or other evidence of indebtedness be collected by or through an attorney at law after maturity, subject to the following provisions:

....

(2) If such note, conditional sale contract or other evidence of indebtedness provides for the payment of reasonable attorneys' fees by the debtor, without specifying any specific percentage, such provision shall be construed to mean fifteen percent (15%) of the "outstanding balance" owing on said note, contract or other evidence of indebtedness.

....

(5) The holder of an unsecured note or other writing(s) evidencing an unsecured debt, ... or his attorney at law, shall, after maturity of the obligation by default or otherwise, notify the maker, debtor, account debtor, endorser or party sought to be held on said obligation that the provisions relative to payment of attorneys' fees in addition to the "outstanding balance" shall be enforced and that such maker, debtor, account debtor, endorser or party sought to be held on said obligation has five days from the mailing of such notice to pay the "outstanding balance" without the attorneys' fees. If such party shall pay the "outstanding balance" in full before the expiration of such time, then the obligation to pay the attorneys' fees shall be void, and no court shall enforce such provisions.

The term ...