Red Springs Presbyterian Church v. Terminix Co. of North Carolina, Inc.

• Decision Date: 20 June 1995
• Docket Number: No. COA94-810,COA94-810
• Citation: 119 N.C.App. 299,458 S.E.2d 270
• Parties: RED SPRINGS PRESBYTERIAN CHURCH, Plaintiff, v. TERMINIX COMPANY OF NORTH CAROLINA, INC., and Franklin D. Kellett, Defendants.
• Court: North Carolina Court of Appeals

Page 270

458 S.E.2d 270

119 N.C.App. 299

RED SPRINGS PRESBYTERIAN CHURCH, Plaintiff, v. TERMINIX COMPANY OF NORTH CAROLINA, INC., and Franklin D Kellett, Defendants.

No. COA94-810.

Court of Appeals of North Carolina.

June 20, 1995.

J. Gates Harris, Red Springs, and Lee and Lee by W. Osborne Lee, Jr., Lumberton, for plaintiff-appellant/appellee.

Russ, Worth, Cheatwood & Guthrie by Walker Y. Worth, Jr., Fayetteville, for defendants-appellants/appellees.

JOHNSON, Judge.

The facts are as follows: Plaintiff is a church. Defendant Company is in the termite and pest control business. Defendant Franklin D. Kellett was an employee of defendant company.

In March 1984, the sanctuary and educational buildings of plaintiff church were severely damaged by tornados. During the next two years, the buildings were restored and renovated. When the restoration and renovation was substantially completed, defendants, acting under the license of defendant Kellett, treated the sanctuary for termite infestation. At the time of this treatment, the parties signed a contract entitled "Termite Protection Plan." Plaintiff paid for the termite treatment and for the annual fees set out in the termite contract.

In the spring of 1993, plaintiff discovered termite damage to the flooring of the vestibule, the flooring of the library, and to the stained glass windows on the south side of the sanctuary. Defendants have not made any repairs to these areas alleged to be damaged.

In April 1994, plaintiff filed this action. Plaintiff alleged in its complaint: (1) inadequate and unworkmanlike termite treatment; (2) inadequate and unworkmanlike annual inspections occurring after the original treatment; (3) failure to repair plaintiff's building as required by the contract; (4) fraud for contractually waiving "minimum" termite treatment requirements; (5) unfair and deceptive trade practices; and (6) failure "to seek in good faith a resolution" of plaintiff's claim which is alleged to constitute an unfair and deceptive trade practice. The fraud and unfair and deceptive trade practice claims concern, in part, the waivers contained in the Termite Contract. In the Termite Contract prepared by defendants, plaintiff had waived ten of the minimum requirements for treatment required by the North Carolina Structural Pest Control Committee. Plaintiff contends that by waiving these minimum standards, it was substantially certain that termites would later actively infest the sanctuary; that defendants knew this; that plaintiff did not know the importance of these waivers; that defendants knew that plaintiff did not know the importance of these waivers; that defendants had a duty to disclose this information to plaintiff; and that this failure to disclose was done fraudulently. Plaintiff also contends that defendants have fraudulently attempted to avoid their legal responsibility for the termite damage.

The Termite Contract also provided that:

It is agreed between Purchaser and Terminix that any controversy or dispute arising between them relating to: (1) any treatment or service rendered by or allegedly required to be rendered by Terminix, or (2) any damage or injury to person or to property, whether direct, incidental, or consequential, allegedly caused by Terminix, or (3) the enforcement of or any claim under the "GUARANTY AND EXCLUSIONS" provisions hereof, shall be settled and resolved exclusively by arbitration. It is further agreed the said arbitration shall be controlled by and conducted under the provisions of the North Carolina Uniform Arbitration Act, North Carolina General Statutes 1-567.1 through 1-567.20, as said statutes may be amended or replaced from time to time, and said North Carolina statutes are hereby incorporated into this Contract by reference as if fully set forth herein. It is further agreed that there shall be a total of three (3) arbitrators, one to be chosen by Purchaser, one by Terminix, and a third by the first two arbitrators. It is also agreed that the arbitrators shall render their written award or decision within thirty days after the conclusion of the arbitration hearing.

Defendants filed a motion to dismiss based upon this contractual provision requiring arbitration of disputes or claims arising between the parties. At the hearing on this motion, with the consent of plaintiffs, defendants amended their motion to seek the enforcement of the arbitration provision of the Termite Contract.

On 15 June 1994, the trial court partially allowed defendants' motion and ordered arbitration and a stay of litigation as to plaintiff's first, second, and third claims for relief, but denied the motion as to plaintiff's fourth, fifth and sixth claims for relief.

On 29 June 1994, defendants filed and served notice of appeal from that portion of the trial court's order denying arbitration in part, and on 5 July 1994, plaintiff appealed from that portion of the order allowing arbitration in part.

Because the parties are appealing from an order which denies in part and stays in part arbitration of plaintiff's claims against defendants, the appeal is interlocutory. The portion of the order denying arbitration is immediately appealable because a substantial right is involved. See Miller v. Two State Const. Co., Inc., 118 N.C.App. 412, 455 S.E.2d 678 (1995). However, an order compelling arbitration does not affect a substantial right; consequently, it is not immediately appealable. See N.C. Electric Membership Corp. v. Duke Power Co., 95 N.C.App. 123, 381 S.E.2d 896, disc. review denied, 325 N.C. 709, 388 S.E.2d 461 (1989); Bluffs v. Wysocki, 68 N.C.App. 284, 314 S.E.2d 291 (1984).

Plaintiff contends that the arbitration provision is void because it was not independently negotiated. Plaintiff cites Blow v. Shaughnessy, 68 N.C.App. 1, 313 S.E.2d 868, disc. review denied, 311 N.C. 751, 321 S.E.2d 127 (1984) and Routh v....