North Carolina Electric Membership Corp. v. Duke Power Co.

381 S.E.2d 896, 95 N.C. App. 123, 1989 N.C. App. LEXIS 678
CourtCourt of Appeals of North Carolina
DecidedAugust 15, 1989
DocketNo. 8810SC1340
StatusPublished
Cited by11 cases

This text of 381 S.E.2d 896 (North Carolina Electric Membership Corp. v. Duke Power Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
North Carolina Electric Membership Corp. v. Duke Power Co., 381 S.E.2d 896, 95 N.C. App. 123, 1989 N.C. App. LEXIS 678 (N.C. Ct. App. 1989).

Opinion

JOHNSON, Judge.

Plaintiff instituted this action on 21 April 1988 by the filing of its complaint which alleged inter alia that defendant was in default under a contract known as the “interconnection agreement” which constitutes part of plaintiff’s purchase from defendant of an interest in the Catawba nuclear generating station. Defendant responded on 15 June by serving a notice of intention to arbitrate issues raised in plaintiff’s complaint. The notice also stated defendant’s intent to arbitrate the issue of the applicability of arbitration to the issues raised by plaintiff. On 24 June, defendant filed motions to compel arbitration and to stay the court action. On 1 July, plaintiff filed a motion to stay the arbitration proceeding and a motion for a preliminary injunction and a temporary restraining order. Plaintiff was granted the temporary restraining order that day.

On 11 July, the trial court denied plaintiff’s motion for preliminary injunction and ordered plaintiff to respond to defendant’s [125]*125demand for arbitration. Plaintiff so responded. On 9 September, after considering arguments of counsel, briefs and affidavits, the trial court denied plaintiff’s motion to stay arbitration and granted defendant’s motion to stay the court action and compel arbitration. Plaintiff was ordered to arbitrate pursuant to G.S. sec. l-567.3(a). The order also held that the arbitrator must decide the arbitrability of the issues raised by plaintiff’s complaint.

Plaintiff filed an appeal on the 9 September order to this Court in apt time. On 12 September, plaintiff moved the trial court to stay its previous order of 9 September. This motion was denied on 22 September. On 21 October, plaintiff filed with this Court a petition for writ of -certiorari to review the 9 September order and for writ of supersedeas to stay that order pending review. Both writs were denied.

Plaintiff North Carolina Electric Membership Corporation (“NCEMC”) is a cooperative electric member corporation organized under North Carolina law. Defendant Duke Power Company (“Duke”) is a public utility serving customers in both North and South Carolina.

NCEMC and Duke entered into three contracts in 1980 arising from Duke’s sale of a 56.25% undivided interest in unit number one of the Catawba nuclear station near York, South Carolina to NCEMC. One of those contracts, the interconnection agreement (the “agreement”) is the subject of this action.

Pursuant to the agreement, the energy produced by plaintiff’s entitlement to power is known as “retained capacity and energy” when it is used by plaintiff. Plaintiff sells this retained capacity and energy to its member cooperatives. A portion of plaintiff’s capacity and energy entitlement is sold to defendant and is designated under the agreement “purchased capacity and energy.” One of the exhibits to the interconnection agreement sets forth the methodology for arriving at prices for purchased capacity and energy. All of the breaches of contract alleged by NCEMC relate to the pricing of purchased capacity.

The following provisions are relevant to the parties’ dispute regarding the price of purchased capacity and the arbitrability of the discrepancies claimed by plaintiff. Section 17.3 of the agreement provides that “Duke shall compute the charge for Purchased Capacity actually due and payable to NCEMC for the preceding calendar year. ... If NCEMC successfully challenges Duke’s com[126]*126putation pursuant to Article 24 and ... a higher payment is determined, Duke shall make such payment to NCEMC.”

Article 24 deals with challenges and dispute resolution. Section 24.1 states in part the following:

(A) the classification, computation, and other actions and determinations called for by this Agreement are subject to challenge by any party not initially making such decision or taking such action. Except as provided in Section 24.1(B) hereof, any unresolved dispute arising out of or relating to the matters set forth in this Agreement shall be settled by arbitration in accordance with the procedures set forth in this Article, ... In addition, disputes relating to the arbitration provisions of this Agreement, including without limitation disputes as to the applicability of such provisions to a particular dispute, shall be submitted to arbitration. (Emphasis added.)
(B)(2) Any dispute arising out of or relating to Article 22 or 23 shall not be submitted to or determined by arbitration unless the affected parties agree to do so in writing.

The article 23 referred to above concerns defaults under the agreement.

On 7 August 1987, plaintiff wrote defendant a letter it termed a “notice of default” stating that defendant had incorrectly calculated the payments due plaintiff for purchased capacity for 1985 and 1986. In October of 1987, plaintiff again wrote defendant as to the amounts it considered to be due for 1985, 1986 and 1987. Plaintiff enclosed its recalculation of the purchased capacity charges, demanded payment of the difference, and informed Duke that plaintiff considered it to be in default.

NCEMC asserts in this civil action arising out of Duke’s refusal to pay the purchased capacity charges as recalculated by NCEMC that the nonpayment constitutes an “Event of Default” which under section 23.1(A) of the parties’ agreement is not subject to arbitration. Defendant, on the other hand, urges that plaintiff is actually challenging defendant’s calculation of purchased capacity charges and that such a dispute is arbitrable under section 24.1(a) of their agreement.

[127]*127The initial question before us is whether plaintiff has the right to appeal an order compelling arbitration. We hold that the order is interlocutory and plaintiff has no right of appeal.

The 9 September 1988 order from which plaintiff seeks appeal compelled plaintiff to participate in arbitration proceedings pursuant to G.S. sec. l-567.3(a). This precise question of the appealability of an order compelling arbitration has previously been decided by a different panel of this Court in The Bluffs, Inc. v. Wysocki, 68 N.C. App. 284, 314 S.E.2d 291 (1984). This Court in The Bluffs held that an order compelling arbitration was interlocutory and did not affect a substantial right. We find the reasoning in The Bluffs persuasive and its holding dispositive of the case before us. Further, we are bound by it as precedent. In the Matter of Appeal from Civil Penalty, 324 N.C. 373, 379 S.E.2d 30 (1989).

In The Bluffs, this Court analyzed relevant portions of the Uniform Arbitration Act as enacted by North Carolina in Article 45A. It noted that there are six situations under the Act in which an appeal may be taken:

(1) An order denying an application to compel arbitration made under G.S. 1-567.3;
(2) An order granting an application to stay arbitration made under G.S. l-567.3(b);
(3) An order confirming or denying confirmation of an award;
(4) An order modifying or correcting an award;
(5) An order vacating an award without directing a rehearing; or

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Bluebook (online)
381 S.E.2d 896, 95 N.C. App. 123, 1989 N.C. App. LEXIS 678, Counsel Stack Legal Research, https://law.counselstack.com/opinion/north-carolina-electric-membership-corp-v-duke-power-co-ncctapp-1989.