King v. Bryant

Citation737 S.E.2d 802
Decision Date05 February 2013
Docket NumberNo. COA12–918.,COA12–918.
PartiesRobert E. KING and wife, Jo Ann O'Neal, Plaintiffs v. Michael S. BRYANT, M.D. and Village Surgical Associates, P.A., Defendants.
CourtCourt of Appeal of North Carolina (US)

OPINION TEXT STARTS HERE

Appeal by defendants from order entered 23 March 2012 by Judge Lucy N. Inman in Cumberland County Superior Court. Heard in the Court of Appeals 13 December 2012.

Patterson Harkavy LLP, by Burton Craige and Narendra K. Ghosh, and Beaver Holt Sternlicht & Courie P.A., by Mark A. Sternlicht, for plaintiff-appellee.

Walker, Allen, Grice, Ammons & Foy, L.L.P., by O. Drew Grice, Jr., for defendant-appellants.

HUNTER, JR., ROBERT N., Judge.

Michael S. Bryant, M.D. (Dr. Bryant) and Village Surgical Associates, P.A. (collectively, Defendants) appeal from an order of the Cumberland County Superior Court denying their Motion to Stay Proceedings and Enforce Arbitration Agreement.” For the following reasons, we reverse and remand.

I. Factual and Procedural History

This appeal arises out of a medical malpractice suit brought by Robert E. King and his wife, Jo Ann O'Neal (collectively, Plaintiffs). On 14 May 2009, Mr. King underwent a surgical procedure to repair a bilateral inguinal hernia at Fayetteville Ambulatory Surgery Center. During the procedure, Dr. Bryant inserted a trochar into Mr. King's abdomen and injured his aorta, causing extensive bleeding. Dr. Bryant was able to stop the bleeding and repair the injured aorta. After the surgery, Mr. King was transferred to Cape Fear Valley Health Systems for further care, including an additional surgical procedure to address complications from the injury to his aorta. Mr. King remained hospitalized until 26 May 2009.

Plaintiffs filed suit on 28 September 2011, alleging medical malpractice on the part of Dr. Bryant and seeking recovery from Defendants for medical expenses, lost wages, physical injuries, pain and suffering, and Ms. O'Neal's loss of consortium. In response to Plaintiffs' complaint, Defendants filed their answer and a Motion to Stay Proceedings and Enforce Arbitration Agreement.” In it, Defendants sought enforcement of an “Agreement to Alternative Dispute Resolution” (“the Agreement”) executed by Mr. King prior to his hernia surgery. The Agreement read in pertinent part as follows:

Agreement To Alternative Dispute Resolution

In accordance with the terms of the Federal Arbitration Act, 9 USC 1–16, I agree that any dispute arising out of or related to the provision of healthcare services by me, by Village Surgical Associates, PA, or its employees, physician members and agents, shall be subject to final and binding resolution through private arbitration.

The parties to this Agreement shall agree upon three Arbitrators and at least one arbitrator of the three shall be a physician licensed to practice medicine and shall be board certified in the same specialty as the physician party. The remaining Arbitrators either shall be licensed to practice law in NC or licensed to practice medicine in NC. The parties shall agree upon all rules that shall govern the arbitration, but may be guided by the Health Care Claim Settlement Procedures of the American Arbitration Association, a copy of which is available to me upon request. I understand that this agreement includes all health care services which previously have been or will in the future be provided to me, and that this agreement is not restricted to those health care services rendered in connection with any particular treatment, office or hospital admission. I understand that this agreement is also binding on any individual or entity and not a precondition to receiving health care services.

On 6 November 2011, Plaintiffs filed a response to Defendants' motion, arguing that the Agreement is unenforceable. Defendants' filed their Motion to Compel Arbitration on 13 February 2012, and a hearing was held on 12 March 2012. At the conclusion of the hearing, the trial court denied Defendants' motion, concluding as a matter of law that a contract had not been formed between the parties. In its order, the trial court reasoned that:

3. The Agreement to Alternative Dispute Resolution contains provisions regarding the selection of three arbitrators and the rules that shall govern the arbitration, each of which is a material term in the formation of a contract in this case.

4. The Agreement to Alternative Dispute Resolution leaves material portions open to future agreements by providing, inter alia, that the parties shall agree upon three arbitrators and that the parties shall agree upon all rules that shall govern the arbitration.

5. At most, the Agreement to Alternative Dispute Resolution is an “agreement to agree” that is indefinite and depends on one or more future agreements. [citation omitted]

6. The Agreement to Alternative Dispute Resolution is not a binding contract and is not enforceable.

The trial court [did] not address or rule upon any issues that pertain to plaintiffs' alternative claims that the Agreement ... is unenforceable due to procedural and substantive unconscionability,” or the issue of whether Ms. O'Neal's loss of consortium claim would be subject to the Agreement if it were enforceable. Defendants gave timely written notice of appeal on 10 April 2012.

II. Jurisdiction & Standard of Review

North Carolina law generally permits a party to appeal only from a final judgment of the superior court. See Veazey v. Durham, 231 N.C. 357, 361–63, 57 S.E.2d 377, 381–82 (1950). A final judgment is defined as ‘one which disposes of the cause as to all the parties, leaving nothing to be judicially determined between them in the trial court.’ Duval v. OM Hospitality, LLC, 186 N.C.App. 390, 392, 651 S.E.2d 261, 263 (2007) (quoting Veazey, 231 N.C. at 361–62, 57 S.E.2d at 381). However, the North Carolina General Statutes additionally permit an aggrieved party in a civil proceeding to appeal [f]rom any interlocutory order or judgment of a superior or district court which ... [a]ffects a substantial right.” N.C. Gen.Stat. § 7A–27(d)(1) (2011).

Here, the trial court's order is not a final disposition of this case; thus, it is interlocutory. See Veazey, 231 N.C. at 362, 57 S.E.2d at 381. However, our courts have held “that the denial of a motion to compel arbitration, although interlocutory, is nevertheless immediately appealable, as it affects a substantial right.” See Barnhouse v. Am. Express Fin. Advisors, Inc., 151 N.C.App. 507, 508, 566 S.E.2d 130, 131 (2002). Therefore, we have jurisdiction to hear Defendants' appeal.

A trial court's determination that an action is subject to arbitration is a conclusion of law which we review de novo. See Carter v. TD Ameritrade Holding Corp., ––– N.C.App. ––––, ––––, 721 S.E.2d 256, 260 (2012). ‘Under a de novo review, the court considers the matter anew and freely substitutes its own judgment’ for that of the lower tribunal.” State v. Williams, 362 N.C. 628, 632–33, 669 S.E.2d 290, 294 (2008) (quoting In re Greens of Pine Glen, Ltd. P'ship, 356 N.C. 642, 647, 576 S.E.2d 316, 319 (2003)).

III. Analysis

Preliminarily, we note that the trial court made no determination in its order as to whether state or federal arbitration law governs administration of the Agreement. This Court has recently explained that it is incumbent upon a trial court when considering a motion to compel arbitration to “address whether the Federal Arbitration Act (‘FAA’) or the North Carolina Revised Uniform Arbitration Act [ (‘NCRUAA’) ] applies” to any agreement to arbitrate. Cornelius v. Lipscomb, ––– N.C.App. ––––, ––––, 734 S.E.2d 870, 872 (2012) (citing Sillins v. Ness, 164 N.C.App. 755, 757, 596 S.E.2d 874, 876 (2004) (noting that a determination as to whether the FAA applies “is critical because the FAA preempts conflicting state law”)).

Congress enacted the FAA, 9 U.S.C. § 1 et seq., [t]o overcome judicial resistance to arbitration,” Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 443, 126 S.Ct. 1204, 163 L.Ed.2d 1038 (2006), and to declare “a national policy favoring arbitration of claims that parties contract to settle in that manner.” Preston v. Ferrer, 552 U.S. 346, 353, 128 S.Ct. 978, 169 L.Ed.2d 917 (2008) (quotation marks and citation omitted). The FAA “is enforceable in both state and federal courts,” Perry v. Thomas, 482 U.S. 483, 489, 107 S.Ct. 2520, 96 L.Ed.2d 426 (1987), and “will apply if the contract evidences a transaction involving interstate commerce.” Hobbs Staffing Servs., Inc. v. Lumbermens Mut. Cas. Co., 168 N.C.App. 223, 226, 606 S.E.2d 708, 711 (2005); see also Allied–Bruce Terminix Co. v. Dobson, 513 U.S. 265, 273–81, 115 S.Ct. 834, 130 L.Ed.2d 753 (1995) (discussing factors to consider in determining whether an agreement “involves interstate commerce”). If the FAA is applicable, courts must apply it, even in the face of contractual provisions calling for the application of state law. See Burke Cty. Bd. of Educ. v. Shaver P'ship, 303 N.C. 408, 424, 279 S.E.2d 816, 825 (1981) (We conclude ... the choice of law provision in the contract does not preclude application of the Federal Arbitration Act.”).

“Whether a contract evidenced a transaction involving commerce within the meaning of the [FAA] is a question of fact” for the trial court. Eddings v. S. Orthopaedic & Musculoskeletal Assocs., 167 N.C.App. 469, 474, 605 S.E.2d 680, 683 (2004) (quotation marks and citation omitted) (alteration in original). Accordingly, this Court typically “cannot make th[e] determination [as to what law applies] in the first instance on appeal; it is a question to be decided by the trial court.” Cornelius, ––– N.C.App. at ––––, 734 S.E.2d at 872.

In the instant case however, it is clear that the FAA governs the parties' agreement, for even if we apply state law, the parties' choice of law is controlling. Our courts have long recognized that [t]he parties' choice of law is generally binding on the interpreting court as long as they had a reasonable basis for...

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16 cases
  • King v. Bryant
    • United States
    • North Carolina Supreme Court
    • January 27, 2017
    ...of Appeals filed an opinion reversing the March 2012 order and remanding this case for further proceedings, King v. Bryant , 225 N.C.App. 340, 737 S.E.2d 802 (2013) ( King I ), on the grounds "that the trial court erred in concluding the Agreement between the parties was too indefinite to b......
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