In Re the Arbitration Between Boyte and Dickson ( 1983 )

303 S.E.2d 418 (1983)

In the Matter of the Arbitration Between Jack O. BOYTE, Architect, hereinafter referred to as "Claimant"
and
Mr. and Mrs. Clyde C. DICKSON, Jr. and C.C. Dickson Company, hereinafter referred to as "Respondents"
American Arbitration Association Case Number: 31 10 0052-81.

No. 8226SC771.

Court of Appeals of North Carolina.

June 21, 1983.

Parker Whedon, Charlotte, for claimant-appellee.

Grier, Parker, Poe, Thompson, Bernstein, Gage & Preston by Gaston H. Gage and Christian R. Troy, Charlotte, for respondents-appellants.

WELLS, Judge.

In their first argument, respondents contend that the trial court erred in failing to vacate the arbitrator's initial award because neither Mr. or Mrs. Dickson was a party to the agreement between claimant Boyte and C.C. Dickson Company and because Mrs. Dickson was not a party to either of the agreements. The record clearly shows that Mr. and Mrs. Dickson were properly served with notice of Boyte's intention to arbitrate the beach house agreement and that C.C. Dickson Company was properly served with notice of intent to arbitrate the office and warehouse agreement. None of the respondents moved to stay either arbitration, but instead agreed to consolidate the proceedings and appeared and participated in the proceedings. G.S. 1-567.3 provides the means by which a party on notice of intent to arbitrate may object to or seek to stay a demand for arbitration on the grounds that there is no agreement to arbitrate.

Sec. 1-567.3. Proceedings to compel or stay arbitration.

(a) On application of a party showing an agreement described in G.S. 1-567.2, and the opposing party's refusal to arbitrate, the court shall order the parties to proceed with arbitration, but if the opposing party denies the existence of the agreement to arbitrate, the court shall proceed summarily to the determination of the issue so raised and shall order arbitration if found for the moving party, otherwise, the application shall be denied.

(b) On application, the court may stay an arbitration proceeding commenced or threatened on a showing that there is no agreement to arbitrate. Such an issue, when in substantial and bona fide dispute, shall be forthwith and summarily tried and the stay ordered if found for the moving party. If found for the opposing party, the court shall order the parties to proceed to arbitration.

. . . . .

G.S. 1-567.13, in pertinent part, provides: Sec. 1-567.13. Vacating an award.

(a) Upon application of a party, the court shall vacate an award where:

. . . . .

(5) There was no arbitration agreement and the issue was not adversely determined in proceedings under G.S. 1-567.3 and the party did not participate in the arbitration hearing without raising the objection; but the fact that the relief was such that it could not or would not be granted by a court of law or equity is not ground for vacating or refusing to confirm the award.

. . . . .

The record in this case shows that none of the respondents, after being served with notice, applied for a stay of the proceedings, or objected to the proceedings, but rather that they consented to the consolidation of the proposed proceedings and participated, without objection as to their status as parties, in the proceedings. Under such circumstances, the trial court acted correctly in not granting respondents' motion to vacate the award on the grounds that there was no agreement between the respective respondents and claimant Boyte to arbitrate the claims asserted by Boyte.

Respondents also argue that since the trial judge found the arbitrator's award to be imperfect in a matter of form, he was without authority to remand for clarification or modification. G.S. 1-567.10 provides:

Sec. 1-567.10. Change of award by arbitrators.

On application of a party or, if an application to the court is pending under G.S. 1-567.12 [Confirmation of an award], 1-567.13 or 1-567.14 [Modification or correction of award], on submission to the arbitrators by the court under such conditions as the court may order, the arbitrators may modify or correct the award upon the grounds stated in subdivisions (1) and (3) of subsection (a) of G.S. 1-567.14, or for the purpose of clarifying the award. The application shall be made within 20 days after delivery of the award to the applicant. Written notice thereof shall be given forthwith to the opposing party, stating he must serve his objections thereto, if any, within 10 days from the notice. The award so modified or corrected is subject to the provisions of G.S. 1-567.12, 1-567.13 and 1-567.14.

Pursuant to the applications filed by both claimant and respondents, the foregoing portion of the Act clearly grants authority to the trial court to remand an award for "the purpose of clarifying the award."

All of respondents' assignments of error brought forward in their first argument are overruled.

In their second argument, respondents contend that the modified award was invalid because it did not "clarify" the first award, but changed the award to assess all the award against Mr. and Mrs. Dickson. Essentially, respondents' second argument challenges the legality of the second award, respondents contending that the arbitrator exceeded his powers. We cannot agree. The rule in such cases was stated by this Court in Fashion Exhibitors v. Gunter, 41 N.C.App. 407, 255 S.E.2d 414 (1979):

The purpose of arbitration is to settle matters in controversy and avoid litigation. It is well established that parties to an arbitration will not generally be heard to impeach the regularity or fairness of the award. Exceptions are limited to such situations as those involving fraud, misconduct, bias, exceeding of powers and clear illegality. Ordinarily, an award is not vitiated or rendered subject to impeachment because of a mistake or error of the arbitrators as to the law or facts. See 6 C.J.S., Arbitration, Sec. 149, et seq., p. 397. The general rule is that errors of law or fact, or an erroneous decision of matters submitted to the judgment of the arbitrators, are insufficient to invalidate an award fairly and honestly made. 5 Am.Jur.2d, Arbitration and Award, Sec. 167, et seq., p. 643.

See also In re Cohoon, 60 N.C.App. 226, 298 S.E.2d 729, disc. rev. denied, 307 N.C. 697, 301 S.E.2d 388 (1983). The action of the arbitrator in this case to revise his award to assess all remaining claims in the two proceedings was clearly within his authority. Mistakes of fact or law in such awards may not be reviewed by the courts. Id.

In their third argument, respondents assert that they have been deprived of their property without due process of law for lack of notice and hearing. These arguments may not prevail, for the reasons we have stated in disposition of respondents' first argument.

The judgment of the trial court must be and is

Affirmed.

HEDRICK and PHILLIPS, JJ., concur.