Sullivan v. Bright

• Citation: 129 N.C.App. 84,497 S.E.2d 118
• Decision Date: 17 March 1998
• Docket Number: No. COA97-73,COA97-73
• Court: North Carolina Court of Appeals
• Parties: Lester Wayne SULLIVAN, Jr., Plaintiff, v. Annie Maude BRIGHT, Defendant.

Page 118

497 S.E.2d 118

129 N.C.App. 84

Lester Wayne SULLIVAN, Jr., Plaintiff, v. Annie Maude BRIGHT, Defendant.

No. COA97-73.

Court of Appeals of North Carolina.

March 17, 1998.

Appeal by plaintiff from order entered 21 October 1996 by Judge Clifton W. Everett, Jr. in Beaufort County Superior Court. Heard in the Court of Appeals 17 September 1997.

Braxton H. Bell, CPCU by Braxton H. Bell, Rocky Mount, and Mario E. Perez, Greenville, for plaintiff-appellant.

Harris, Shields, Creech and Ward, P.A. by Robert S. Shields, Jr. and Charles E. Simpson, Jr., New Bern, for unnamed defendant-appellee North Carolina Farm Bureau Mutual Insurance Company.

Herrin & Morano by Mickey A. Herrin, Greenville, for unnamed defendant-appellee Nationwide Mutual Insurance Company.

TIMMONS-GOODSON, Judge.

Plaintiff Lester Wayne Sullivan, Jr., appeals from an order to stay and prohibit arbitration, on the ground that the trial court erred in concluding that he had impliedly waived the right to arbitrate. The relevant facts are as follows: On 20 September 1993, plaintiff filed a personal injury action against defendant Annie Maude Bright arising out of an automobile accident that occurred on 1 November 1990. Plaintiff served Integon Insurance Company (Integon), defendant's liability carrier, with a copy of the complaint. Plaintiff also mailed copies of the complaint to North Carolina Farm Bureau Mutual Insurance Company (Farm Bureau) and Nationwide Insurance Company (Nationwide), plaintiff's underinsured motorist (UIM) carriers. Defendant filed an answer on 16 November 1993, denying the material allegations of the complaint and asserting an affirmative defense. On 6 December 1993, plaintiff replied, and on 7 February 1994, Farm Bureau filed an answer, appearing as an unnamed party for the purpose of representing defendant. Thereafter, plaintiff, Integon and Farm Bureau participated in some discovery through interrogatories, requests for production of documents, and depositions. Nationwide, however, did not file any responsive pleadings, nor did it engage in any discovery.

On 20 September 1995, Integon tendered its liability coverage limit and, by court order entered 19 February 1996, was relieved of any further duty to defend this action. On 22 August 1996, after noticing and conducting additional depositions, plaintiff filed a Notice of Arbitration with Farm Bureau and Nationwide, pursuant to the provisions of their respective policies. Farm Bureau filed an Objection and Motion to Prohibit Arbitration on 13 September 1996. In response, plaintiff filed a Motion to Compel Arbitration on 20 September 1996. The matter was heard, and, after considering the arguments of counsel for plaintiff, Farm Bureau, and Nationwide, the trial court entered an Order to Stay and Prohibit Arbitration on 10 October 1996. Plaintiff appeals.

Before we proceed further, we think it wise to specify which parties are appropriately before this Court regarding the present appeal. It seems that plaintiff and Nationwide have mistakenly expanded the scope of the trial court's order so as to implicate plaintiff's right to arbitrate against Nationwide. We recognize that a UIM carrier is entitled to appear in defense of a claim for damages resulting from the operation of an underinsured vehicle. N.C.Gen.Stat. § 20-279.21(b)(4) (1993). Indeed, to that end, a UIM insurer may, "without being named as a party therein, ... participate in the suit as fully as if it were a party." Id. Although counsel for Nationwide appeared and presented arguments at the hearing on Farm Bureau's Motion to Prohibit Arbitration, the order granting the motion contains no findings or conclusions pertaining to Nationwide. In short, the order speaks exclusively to the matter of plaintiff's right to arbitrate against Farm Bureau. We must, therefore, disregard all arguments concerning Nationwide, and the sole question presented by this appeal is whether plaintiff waived his right to compel arbitration against Farm Bureau. We hold that he has not.

First, we note that while an order denying arbitration is interlocutory, it is subject to immediate appeal, "because it involves a substantial right which might be lost if appeal is delayed." Hackett v. Bonta, 113 N.C.App. 89, 95, 437 S.E.2d 687, 690 (1993). Turning, then, to the merits of this appeal, plaintiff argues that the trial court erred in concluding that he had impliedly waived the right to arbitration. As the basis for this argument, plaintiff asserts that Farm Bureau failed to show that it was prejudiced by plaintiff's delay in seeking arbitration and by the discovery he undertook after Integon tendered its policy limits. We agree.

The parties to a contract may agree to settle any dispute arising therefrom by way of mandatory arbitration, and such an agreement "shall be valid, enforceable, and irrevocable except with the consent of all the parties[.]" N.C.Gen.Stat. § 1-567.2(a) (1996). Since arbitration is a contractual right, it may be waived. Cyclone Roofing Co. v. LaFave Co., 312 N.C. 224, 321 S.E.2d 872 (1984). Whether waiver has occurred is a question of fact. Id. at 229, 321 S.E.2d at 876. Generally, factual findings made by the trial court are conclusive on appeal, if they are supported by the evidence. Humphries v. City of Jacksonville, 300 N.C. 186, 187, 265 S.E.2d 189, 190 (1980)....