Court Opinion

ID: 9585938
Source: CourtListenerOpinion
Date Created: 2023-08-21 23:05:21.85817+00
Date Added: 2024-06-11T17:24:17.332079
License: Public Domain

Chief Judge VAUGHN
dissenting.
In view of the policy underlying the recently adopted Uniform Arbitration Act, G.S. 1-567.1, et seq., favoring arbitration as a means of dispute resolution, I respectfully dissent.
The parties here contractually agreed to resolve disputes through arbitration. Such agreement was valid, enforceable and irrevocable. G.S. 1-567.2; see Sims v. Ritter Construction, Inc., 62 N.C. App. 52, 302 S.E. 2d 293 (1983). Waiver of such an agreement is not to be lightly inferred. In re Mercury Const. Corp., 656 F. 2d 933, reh. denied, 664 F. 2d 936 (4th Cir. 1981), affirmed, — U.S. —, 103 S.Ct. 927, 74 L.Ed. 2d 765 (1983). After reviewing the record, I do not believe that appellee, LaFave Company, waived its right to arbitration.
*283I do not agree with the majority herein that participation in litigation constitutes an automatic waiver of a contractual right to arbitration. Rather, to find such a waiver, I would require, as have many other jurisdictions, not only participation in litigation or other action inconsistent with the right to arbitration, but also prejudice to the party opposing the motion for arbitration. See e.g., Charter Air Center v. Florida P.S.C., 503 F. Supp. 243 (N.D. Fla. 1980); Weight Watch, of Quebec Ltd. v. Weight W. Int., Inc., 398 F. Supp. 1057 (E.D.N.Y. 1975); Brothers Jurewicz, Inc. v. Atari Inc., 296 N.W. 2d 422 (Minn. 1980).
I would, thus, find a waiver of arbitration rights in these situations:
(1) When the parties have contractually agreed to arbitrate their disputes, but then pursue an action in court, with neither party referring to their previous arbitration agreement. See Hargett v. Delisle, 229 N.C. 384, 49 S.E. 2d 739 (1948).
(2) When a civil suit is already filed and pending at the time the parties enter into an agreement to arbitrate their dispute. See Crutchley v. Crutchley, 306 N.C. 518, 293 S.E. 2d 793 (1982).
(3) When, although the parties have previously agreed to arbitration, one party takes action (i.e. substantially participates in a civil suit) which are inconsistent with his right to arbitration and the other party is prejudiced thereby.
I find no prejudice to appellees, the Fryes, resulting from appellant LaFave Company’s actions in this case. On 5 March 1980, the subcontractor, who is no longer a party, instituted action against both parties herein. On 7 July 1980, appellant answered and cross-claimed against the appellees. Approximately one month later, on 11 August 1980, appellant moved to stay litigation pending arbitration. Since I do not believe the litigation had been pursued enough to cause prejudice to the appellees, I would affirm the trial court order directing the parties to proceed to arbitration.