IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA24-711
Filed 3 December 2025
Surry County, No. 22CVS000233-850
W. NOAH REYNOLDS, Plaintiff,
v.
DEVOTION FAMILY, LLC and BROOK E. REYNOLDS, Defendants.
Appeal by Defendant Brook E. Reynolds from order entered 1 March 2024 by
Judge Angela B. Puckett in Surry County Superior Court. Heard in the Court of
Appeals 26 February 2025.
Robinson & Lawing, LLP, by Attorneys H. Brent Helms and Jeremy Demmitt, for the plaintiff-appellee.
Ferikes Bleynat & Cannon, PLLC, by Attorney Edward L. Bleynat, Jr., for the defendant-appellant Brook E. Reynolds.
STADING, Judge.
Brook E. Reynolds (“Defendant”) appeals from the trial court’s order granting
W. Noah Reynolds’s (“Plaintiff”) motion to confirm several interim arbitration
awards. On appeal, Defendant asserts the trial court erred by confirming the interim
awards and erred by denying her motion to vacate or modify. In turn, Plaintiff moved
to dismiss Defendant’s appeal pursuant to N.C. R. App. P. 37(a), asserting the order
appealed from is interlocutory and does not affect a substantial right. After careful REYNOLDS V. DEVOTION FAMILY, LLC
Opinion of the Court
review, we hold this Court possesses the requisite jurisdiction to consider Defendant’s
appeal. See N.C. Gen. Stat. §§ 7A-27(b)(4), 1-569.28(a)(3) (2023). Turning to the
merits, the trial court erred by denying Defendant’s motion to modify since the
Arbitrator exceeded his scope of authority by requiring the parties to resolve all
future disputes by way of arbitration. Otherwise, the Arbitrator’s actions were
proper.
I. Factual and Procedural Background
This appeal arises from arbitration between Plaintiff and Defendant over a
dispute involving Devotion Family, LLC (“Devotion”), a family-owned limited liability
company formed in 2008. The record tends to reflect that Devotion owns
approximately 4,135.09 acres of real property across Surry and Alleghany Counties,
including buildings, improvements, furniture, vehicles, farm equipment, and tools.
At the time of Devotion’s formation, William Neal Reynolds, II—the father of Plaintiff
and Defendant—was the sole owner.
Following Mr. Reynolds’ death in February 2009, Plaintiff and Defendant each
obtained a 36.30% ownership interest in Devotion, while their mother, Sandra Reid
Reynolds, retained a 27.40% interest. Mrs. Reynolds later transferred her remaining
ownership interest in Devotion to Plaintiff and Defendant equally. Following this
transfer, Plaintiff and Defendant each possessed a 50% ownership interest in
Devotion, maintaining six of the twelve voting shares respectively.
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On 23 September 2019, Devotion dissolved, ceasing its existence as a legal
entity. Following dissolution, Plaintiff and Defendant were unable to agree on “the
winding up of Devotion and the distribution of Devotion’s assets.” As a result,
Plaintiff filed a claim and demand for arbitration with the American Arbitration
Association (“AAA”) pursuant to Section 12.6 of Devotion’s Amended Operating
Agreement (the “Operating Agreement”)—the dispute resolution clause—and
concurrently filed a complaint against both Defendant and Devotion in the trial court,
asserting the following alternative claims for relief:
SECOND CLAIM FOR RELIEF (ALTERNATIVE) APPOINTMENT OF A RECEIVER FOR WINDING UP DEVOTION (N.C. GEN. STAT. § 57-D-6-07)
....
31. To the extent the matter is not resolved under the arbitration award, the Court should enter an Order appointing a receiver to wind up Devotion and distribute its assets in kind as contemplated by the Operating Agreement.
THIRD CLAIM FOR RELIEF (ALTERNATIVE) PARTITION OF REAL PROPERTY (N.C. GEN. STAT. § 46A-21)
34. If the distribution of the Property is not completely settled by the arbitrator, then [Plaintiff] would request that the Court take appropriate measures to partition the Property in kind in the manner identified on Exhibit 2 with the prior and existing easements to ensure adequate road access and that owners have the ability to traverse their respective property tracts in a convenient manner as has been the case during Devotion’s ownership of the Property
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35. [Plaintiff] would further request that the Court distribute tract C-1 to [Plaintiff] and tract C-2 to [Defendant] as identified on Exhibit 2, with any necessary owelty affixed, and further partition by sale the portions of the Property identified as Tracts A and B with either [Plaintiff] or [Defendant] being allowed to purchase either tract from the other through any private sale or listing through a public auction as determined by the Court.
Plaintiff simultaneously moved to compel arbitration and stay litigation. See N.C.
Gen. Stat. § 1-569.7 (2023).
The parties later entered a consent order, compelling arbitration and staying
“litigation pending the completion of the arbitration proceedings before the AAA.”
After reviewing the relevant materials, the Arbitrator entered three interim
arbitration awards;1 however, only the second and third awards2 are at issue in the
matter sub judice.
The second award partitioned Devotion’s property into four tracts, awarding
Tracts A and C-1 to Plaintiff, awarding Tract C-2 to Defendant, and designating Tract
1 Compare ARBITRATION AWARD, Black’s Law Dictionary (12th ed. 2024) (“A final decision by an
arbitrator or panel of arbitrators; specif., a written decision by an arbitral tribunal setting forth the final and binding determination of the merits of a claim, defense, or issue, whether or not the decision resolves the entire dispute. An arbitration award may consist merely of a grant of interim relief.”), with INTERIM AWARD, Black’s Law Dictionary (12th ed. 2024) (noting that an interim award is an “arbitral panel’s decisions on the applicable law and its jurisdiction made before the panel decides the issues in an arbitration. – Also termed partial award; preliminary award.”), and with PARTIAL AWARD, Black’s Law Dictionary (12th ed. 2024) (“An arbitral award that disposes of some but not all of the claims, defenses, or issues to be decided.”). 2 The Arbitrator entered the second and third interim arbitration awards on 11 December 2023.
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B for sale.3 The second award also required the parties to enter a Declaration of
Easements, Covenants, and Restrictions (“DECR”), establishing obligations related
to road maintenance, reservoir restoration, easement negotiation, and mandatory
arbitration of future disputes. Finally, the second award concluded that
“[s]ubsequent orders may be entered to finalize the winding up of Devotion and to
complete this arbitration proceeding including a Third Interim Order dealing with
[Defendant’s] Objections to the DECR.”
The third award addressed several objections raised by Defendant regarding
the DECR. Defendant contested, inter alia, that the DECR distributed “rights
unfairly, burdening [her] property and benefiting [Plaintiff’s] property[.]” She also
asserted that “given the transactions and occurrences between the [Plaintiff and
Defendant] over the course of this arbitration it is unfair to expect future cooperation
to achieve resolution of business ventures such as hunting and fishing rights, road
maintenance and use of the water reservoir.” After consideration, the Arbitrator
overruled Defendant’s objections in the third interim award.
On 19 December 2023, Plaintiff moved the trial court to confirm the second
and third interim awards. In response, Defendant moved the trial court to vacate or
3 We note a minor discrepancy in the record. The second interim award states: “Devotion . . . will execute deeds to transfer tract A and C-1 to [Plaintiff.]” On the other hand, the trial court’s order states: “The second interim award . . . distributes tracts C-1 and C-2 to the parties; requires tracts A and B to be sold[.]” Thus, it is unclear whether Tract A was awarded to Plaintiff in the second interim award or was designated for sale. In any event, neither party raises the issue, and the distinction is immaterial to our analysis.
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modify both awards. After considering the parties’ arguments, the trial court granted
Plaintiff’s motion to confirm the second and third awards. The trial court denied
Defendant’s motion to vacate or modify, reasoning:
10. Defendant . . . contends that both the Second Interim Arbitration Award and the Third Interim Arbitration Award should be vacated in whole or in part or modified because the Arbitrator exceeded his authority, in various ways, in violation of N.C. Gen. Stat. § 1-569.23(a)(4).
11. . . . the Court finds and concludes that the Arbitrator did not exceed his authority in any of the manners contended by Defendant . . . . Rather, the issues that the Arbitrator addressed and ruled upon in both . . . [awards] were either jointly submitted by the parties or were otherwise within the Arbitrator’s scope of authority.
12. As the Arbitrator did not exceed his authority, there are no grounds to vacate or modify either the Second Interim Arbitration Award or the Third Interim Arbitration Award, and Defendant[’s] . . . Motion is DENIED.
Defendant timely appealed from the trial court’s order. Defendant also moved
the trial court to stay execution of the trial court’s order pending resolution of her
appeal. N.C. Gen. Stat. §§ 1A-1, Rule 62(d) and 1-291 (2023). The parties later
entered a consent order, granting Defendant’s motion to stay.
II. Jurisdiction
As a preliminary matter, we must address whether this Court has jurisdiction
to consider Defendant’s appeal from an interlocutory order. Defendant argues that
she has a statutory right to immediate appeal under N.C. Gen. Stat. §§ 7A-27(b)(4)
and 1-569.28(a)(3) because she appealed from an order confirming an arbitration
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award. Alternatively, Defendant maintains this Court has jurisdiction to consider
her appeal pursuant to N.C. Gen. Stat. § 7A-27(b)(3)(a) (2023), as it concerns an
appeal from an interlocutory order that affects a substantial right. In response,
Plaintiff moved this Court to dismiss Defendant’s appeal, asserting she does not have
a statutory right to appeal and failed to demonstrate the implication of a substantial
right. See N.C. R. App. P. 37 (“Motions in Appellate Courts”).
“An interlocutory order is one made during the pendency of an action, which
does not dispose of the case, but leaves it for further action by the trial court in order
to settle and determine the entire controversy.” Hanesbrands Inc. v. Fowler, 369 N.C.
216, 218, 794 S.E.2d 497, 499 (2016) (quoting Veazey v. City of Durham, 231 N.C. 357,
362, 57 S.E.2d 377, 381 (1950)). Generally, interlocutory orders are not immediately
appealable. Turner v. Hammocks Beach Corp., 363 N.C. 555, 558, 681 S.E.2d 770,
773 (2009). “The purpose of this rule is ‘to prevent fragmentary and premature
appeals that unnecessarily delay the administration of justice and to ensure that the
trial divisions fully and finally dispose of the case before an appeal can be heard.’”
Sharpe v. Worland, 351 N.C. 159, 161, 522 S.E.2d 577, 578–79 (1999) (citation
omitted).
Defendant asserts that a plain reading of N.C. Gen. Stat. § 1-569.28(a)(1)–(6)
allows for appeals from both interlocutory orders and final judgments since the
statute uses the disjunctive conjunction “or,” and subsection (a)(6) enumerates a
separate category for appeals from final judgments. Absent such a construction,
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Defendant maintains that subsection 1-569.28(a)(6) would be rendered meaningless.
We agree.
We begin with a pertinent observation—whether Defendant maintains a direct
right to appeal an interlocutory order under N.C. Gen. Stat. §§ 7A-27(b)(4) and 1-
569.28(a)(3) is a question that has not been directly resolved by our jurisprudence.
Cf. Ruffin Woody & Assocs., Inc. v. Person Cnty., 92 N.C. App. 129, 132, 374 S.E.2d
165, 167 (1988) (noting that “the specific instances in which an appeal may be taken
from an arbitration order are set out in G.S. 1-567.18, and the statute does not permit
an appeal to be taken from the denial of an application to stay arbitration”); Laws v.
Horizon Hous., Inc., 137 N.C. App. 770, 771, 529 S.E.2d 695, 696 (2000) (citation
omitted) (holding that G.S. 1-567.18 “does not provide for an immediate appeal from
an order compelling arbitration, and . . . ‘that there is no immediate right of appeal
from an order compelling arbitration’”); Bullard v. Tall House Bldg. Co., 196 N.C.
App. 627, 676 S.E.2d 96 (2009), abrogated in part by Stokes v. Crumpton, 369 N.C.
713, 719, 800 S.E.2d 41, 45 (2017) (holding that “an appeal can be justified under
section 7A-27 even if there is no right to appeal under the relevant arbitration
statute,” and “[t]o the extent Bullard suggests otherwise, it is abrogated”); Bluffs, Inc.
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v. Wysocki, 68 N.C. App. 284, 285, 314 S.E.2d 291, 293 (1984) (noting that “there is
no right of appeal from an order compelling arbitration” under G.S. 1-567.18).4
That said, when determining whether a court possesses jurisdiction to consider
an appeal from an arbitration order or award, our analysis begins with assessing
whether the appellant possesses a statutory right of appeal under the relevant
arbitration statute; if unavailable, we then conduct a substantial rights analysis
under N.C. Gen. Stat. § 7A-27:
In Bluffs, Inc. v. Wysocki, 68 N.C. App. 284, 314 S.E.2d 291 (1984), the threshold issue before the court was whether there is an immediate right to appeal an order compelling arbitration under the Uniform Arbitration Act (UAA), which the court held did not exist. The court began its analysis by reviewing the bases for appeal enumerated in N.C.G.S. § 1-567.18(a) and concluding that an order compelling arbitration does not fall under the statute. After reaching this conclusion, the court then addressed whether the order affected a substantial right. Ultimately, the court held that an order compelling arbitration is not appealable under either the UAA or section 7A-27.
Subsequent Court of Appeals cases relying on Wysocki have followed a similar analytical framework—conducting a substantial rights analysis under section 7A-27 after concluding that the order at issue did not fall under the enumerated bases for appeal set out in the relevant arbitration statute. See, e.g., Smith v. Shipman, 153 N.C. App. 200, 569 S.E.2d 34, 2002 N.C. App. LEXIS 2342, 2002 WL 31055991 (2002) (unpublished); N.C. Elec. Membership
4 N.C. Gen. Stat. § 1-567.18 is the predecessor of N.C. Gen. Stat. § 1-569.28 with respect to the statutory right to appeal from arbitration orders or awards. See Laws, 137 N.C. App. at 771, 529 S.E.2d at 696 (providing the six enumerated grounds on which an appeal may be taken from an arbitration order or award under G.S. 1-567.18). The language contained in the former version of the statute is nearly identical to the statute’s current form. Compare id., with N.C. Gen. Stat. § 1- 569.28(a)(1)–(6).
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Corp. v. Duke Power Co., 95 N.C. App. 123, 381 S.E.2d 896, disc. rev. denied, 325 N.C. 709, 388 S.E.2d 461 (1989). Wysocki and its progeny do not explicitly address the relationship between appeals under an arbitration statute and interlocutory appeals under section 7A-27. Implicit in these cases, however, is support for the conclusion that a right to appeal can be based on section 7A-27 even if there is no right to appeal under the arbitration statute.
Stokes v. Crumpton, 369 N.C. 713, 717–18, 800 S.E.2d 41, 44–45 (2017) (citations
omitted). We therefore consider whether Defendant possesses a direct right to appeal
pursuant to the Revised Uniform Arbitration Act (“RUAA”). See N.C. Gen. Stat. 1-
569.1 et seq. (2023).
“In construing . . . statutory language, we are guided by long-standing rules of
statutory interpretation. . . . [I]f a statute is clear and unambiguous, no construction
of the legislative intent is required[,] and the words are applied in their normal and
usual meaning.” Misenheimer v. Burris, 360 N.C. 620, 623, 637 S.E.2d 173, 175
(2006); Belmont Ass’n v. Farwig, 381 N.C. 306, 310, 873 S.E.2d 486, 489 (2022)
(quoting Correll v. Div. of Soc. Servs., 332 N.C. 141, 144, 418 S.E.2d 232, 235 (1992))
(“Statutory interpretation properly begins with an examination of the plain words of
the statute.”). But “if the plain reading of a statute leads to a result so absurd that
no reasonable legislator could have intended it, we can ignore that absurd
interpretation and find a reasonable one.” C Invs. 2, LLC v. Auger, 277 N.C. App.
420, 430, 860 S.E.2d 295, 302 (2021).
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Our Courts have previously determined that “the disjunctive [conjunction] ‘or’
is used to indicate a clear alternative. The second alternative is not a part of the first,
and its provisions cannot be read into the first.” Aman v. Nicholson, 288 N.C. App.
1, 11, 885 S.E.2d 100, 108 (2023) (quoting In re Duckett’s Claim, 271 N.C. 430, 437,
156 S.E.2d 838, 844 (1967)) (brackets in original). Additionally, “it is a fundamental
principle of statutory interpretation that courts should ‘evaluate [a] statute as a
whole and . . . not construe an individual section in a manner that renders another
provision of the same statute meaningless.” Lunsford v. Mills, 367 N.C. 618, 628, 766
S.E.2d 297, 304 (2014) (alterations in original) (citation omitted).
The RUAA is codified under Chapter 1, Article 45C of the North Carolina
General Statutes. See N.C. Gen. Stat. § 1-569.1 et seq. Relevant here, subsection 1-
569.28(a)(1)–(6) of the RUAA enumerates the circumstances where an arbitration
order or award may be directly appealed:
(a) An appeal may be taken from:
(1) An order denying a motion to compel arbitration;
(2) An order granting a motion to stay arbitration;
(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
(6) A final judgment entered pursuant to this Article.
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(b) An appeal under this section shall be taken as from an order or a judgment in a civil action.
(emphasis added). The RUAA expressly provides a right to appeal from “an order
confirming . . . an award[.]” Id. § 1-569.28(a)(3). Separated by the disjunctive
conjunction “or,” the statute further provides a right to appeal from a “final judgment”
entered pursuant to the RUAA. Id. § 1-569.28(a)(6).
Read in pari materia, N.C. Gen. Stat. § 7A-27(b)(4) allows a party to directly
appeal to the North Carolina Court of Appeals from “any other order or judgment of
the superior court from which an appeal is authorized by statute.” Unlike subsections
7A-27(b)(1) and (2), subsection 7A-27(b)(4) does not require that the order or
judgment being appealed be a “final judgment.”5 Compare id. § 7A-27(b)(1), (2), with
id. § 7A-27(b)(4). And unlike subsection 7A-27(b)(3)—which is expressly limited to
interlocutory orders and judgments—subsection 7A-27(b)(4) allows for an appeal
“[f]rom any other order or judgment.” Compare id. § 7A-27(b)(3), with id. § 7A-27(b)(4)
(emphasis added).
In the instant case, a plain reading of N.C. Gen. Stat. § 1-569.28(a)(3) grants
Defendant a right to appeal from the trial court’s interlocutory order. Misenheimer,
360 N.C. at 623, 637 S.E.2d at 175. That is, notwithstanding its interlocutory nature,
Defendant appealed from the trial court’s civil order that confirmed the second and
5 “A final judgment is one which disposes of the cause as to all the parties, leaving nothing to be
judicially determined between them in the trial court.” Atkins v. Beasley, 53 N.C. App. 33, 36, 279 S.E.2d 866, 869 (1981) (citation omitted).
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third interim arbitration awards. Cf. Stokes, 369 N.C. at 717–18, 800 S.E.2d at 44–
45. A plain reading of the statute shows the use of the disjunctive conjunction “or,”
which indicates that no individual provision possesses a bearing on the other. Aman,
288 N.C. App. at 11, 885 S.E.2d at 108 (citation omitted); see also Antonin Scalia &
Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 116 (2012) (“Under
the conjunctive/disjunctive canon, and combines items while or creates
alternatives.”). For that reason, the statute expressly provides that an appeal from
a “final judgment entered pursuant to this Article” is a clear alternative to an appeal
from an order confirming an arbitration award. Compare N.C. Gen. Stat. § 1-
569.28(a)(6), with id. § 1-569.28(a)(3). Moreover, the enabling statute—N.C. Gen.
Stat. § 7A-27(b)(4)—possesses no express requirement that the order or judgment
being appealed from be a final order or judgment.
We recognize our common law’s longstanding mandate, that generally,
interlocutory orders are not immediately appealable. Turner, 363 N.C. at 558, 681
S.E.2d at 773. However, interpreting N.C. Gen. Stat. § 1-569.28 in any other manner
would render its individual provisions meaningless—in particular, subsection 1-
569.28(a)(6)—and contravene a plain reading of the statute. Lunsford, 367 N.C. at
628, 766 S.E.2d at 304; Auger, 277 N.C. App. at 426, 860 S.E.2d at 300 (“The intent of
the General Assembly may be found first from the plain language of the statute, then
from the legislative history, the spirit of the act and what the act seeks to
accomplish.”). Moreover, our Supreme Court in Stokes contemplated the scenario
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whereby an appellant could possess a direct right to appeal an interlocutory order
under a corresponding arbitration statute. 369 N.C. at 718–19, 800 S.E.2d at 45. For
all these reasons, we hold that Defendant’s appeal is properly before this Court and
deny Plaintiff’s motion to dismiss.
III. Analysis
Defendant argues the trial court erred by granting Plaintiff’s motion to confirm
the second and third interim arbitration awards because “an arbitrator’s authority is
specifically limited to what the agreement to arbitrate allows.” Defendant maintains
the Arbitrator exceeded his scope of authority by imposing the following provisions
in the DECR: (1) requiring Defendant to financially contribute to the rehabilitation
of a shared water reservoir on Tract C-2; (2) requiring the parties to submit to a traffic
count mechanism to allocate maintenance costs; (3) requiring the parties to negotiate
a utilities easement; and (4) requiring the parties to resolve all future disputes under
the DECR pursuant to arbitration with the AAA. As such, Defendant contends the
trial court should have granted her motion to vacate or modify the interim awards.
See N.C. Gen. Stat. §§ 1-569.23 and 1-569.24 (2023).
After careful consideration, we disagree with Defendant’s first three
arguments: The arbitration clause contained in the Operating Agreement does not
preclude the actions complained about, and the parties submitted those issues and
requests for relief to the Arbitrator. See Faison & Gillespie v. Lorant, 187 N.C. App.
567, 578, 654 S.E.2d 47, 54 (2007). Defendant also fails to establish how any of the
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remedies provided contravene North Carolina law and how the arbitration clause
unequivocally precludes them. See R.E.M. Constr. v. Cleveland Constr., Inc., 285 N.C.
App. 167, 173, 876 S.E.2d 851, 855 (2022) (citation omitted). Notwithstanding, the
Arbitrator exceeded his authority by mandating future arbitration under the DECR.
The trial court therefore erred by denying Defendant’s motion to modify the interim
awards on this basis under N.C. Gen. Stat. § 1-569.24(a)(2).
“When reviewing a trial court’s decision to confirm or vacate an arbitration
award, ‘we accept findings of fact that are not clearly erroneous and review
conclusions of law de novo.’” Flynn v. Schamens, 250 N.C. App. 337, 338, 792 S.E.2d
833, 835 (2016) (quoting Carpenter v. Brooks, 139 N.C. App. 745, 750, 534 S.E.2d 641,
645 (2000)) (citation omitted); First Union Secs., Inc. v. Lorelli, 168 N.C. App. 398,
400, 607 S.E.2d 674, 676 (2005). “Under a de novo review, the court considers the
matter anew and freely substitutes its own judgment for that of the lower tribunal.”
Lynn v. Fannie Mae, 235 N.C. App. 77, 81, 760 S.E.2d 372, 375 (2014) (citation
“After a party to an arbitration receives notice of an award, the party may
make a motion to the court for an order confirming the award” under the RUAA. N.C.
Gen. Stat. § 1-569.22 (2023). When such a motion is made, “the court shall issue a
confirming order unless the award is modified or corrected pursuant to G.S. 1-569.20
or G.S. 1-569.24 or is vacated pursuant to G.S. 1-569.23.” Id. (emphasis added); FCR
Greensboro v. C & M Invs., 119 N.C. App. 575, 577, 459 S.E.2d 292, 294 (1995)
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(“Generally, parties who have agreed to abide by an arbitrator’s decision will not be
heard to attack the regularity or fairness of an award, . . . and the trial court must
confirm the award unless grounds exist to either vacate or modify the award.”).6
Relevant here, an award “shall” be vacated if “[a]n arbitrator exceeded the
arbitrator’s powers[.]” N.C. Gen. Stat. § 1-569.23(a)(4). On the other hand, an award
“shall” be modified if:
(1) There was an evident mathematical miscalculation or an evident mistake in the description of a person, thing, or property referred to in the award;
(2) The arbitrator has made an award on a claim not submitted to the arbitrator, and the award may be corrected without affecting the merits of the decision on the claims submitted; or
(3) The award is imperfect in a matter of form not affecting
6 Our Courts have demonstrated a longstanding policy of upholding arbitral awards and resolving doubts as to the scope of arbitrable issues in favor of arbitration. See Carolina Virginia Fashion Exhibitors, Inc. v. Gunter, 41 N.C. App. 407, 415, 255 S.E.2d 414, 420 (1979) (first quoting T.W. Poe & Sons, Inc. v. Univ. of N.C., 248 N.C. 617, 625, 104 S.E. 2d 189, 195 (1958)) (then quoting Patton v. Garrett, 116 N.C. 847, 858, 21 S.E. 679, 682 (1895)) (“If an arbitrator makes a mistake, either as to law or fact, it is the misfortune of the party, and there is no help for it. There is no right of appeal and the Court has no power to revise the decisions of “‘judges who are of the parties’ own choosing.’” An award is intended to settle the matter in controversy, and thus save the expense of litigation. If a mistake be a sufficient ground for setting aside an award, it opens a door for coming into court in almost every case; for in nine cases out of ten some mistake either of law or fact may be suggested by the dissatisfied party. Thus . . . arbitration, instead of ending would tend to increase litigation.”); see also R.E.M. Constr. v. Cleveland Constr., Inc., 285 N.C. App. at 172, 876 S.E.2d at 854 (quoting W.M.S., Inc. v. Weaver, 166 N.C. App. 352, 357, 602 S.E.2d 706, 709 (2004)) (“Since this appeal arises from a decision on a motion to confirm an arbitration award, we first note that a strong policy supports upholding arbitration awards.”); see also Servomation Corp. v. Hickory Constr. Co., 316 N.C. 543, 544, 342 S.E.2d 853, 854 (1986) (“There is a strong public policy favoring the settlement of disputes by arbitration, and doubts concerning the scope of arbitrable issues will be resolved in favor of the party seeking arbitration.”); see also Epic Games, Inc. v. Murphy-Johnson, 247 N.C. App. 54, 62, 785 S.E.2d 137, 143 (2016) (quoting Johnston Cty. v. R.N. Rouse & Co., 331 N.C. 88, 91, 414 S.E.2d 30, 32 (1992)) (“[O]ur strong public policy requires that the courts resolve any doubts concerning the scope of arbitrable issues in favor of arbitration.”).
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the merits of the decision on the claims submitted.
N.C. Gen. Stat. 1-569.24(a)(1)–(3) (2023); FCR Greensboro, 119 N.C. App. at 577, 459
S.E.2d at 294 (citation omitted) (noting that only “awards reflecting mathematical
errors, errors relating to form, and errors resulting from arbitrators exceeding their
authority shall be modified or corrected by the reviewing courts”); Howell v. Wilson,
136 N.C. App. 827, 830, 526 S.E.2d 194, 196 (2000) (providing that “an arbitrator
exceeds his authority when he arbitrates additional claims and matters not properly
before him”). That said, “[a]n award is ordinarily presumed to be valid, and the party
seeking to set it aside has the burden of demonstrating an objective basis which
supports his allegations that one of these grounds exists.” G. L. Wilson Bldg. Co. v.
Thorneburg Hosiery Co., 85 N.C. App. 684, 686, 355 S.E.2d 815, 817 (1987).
With respect to an arbitrator exceeding his or her scope of authority, “[t]he
duty to arbitrate is contractual, therefore, only disputes which the parties agreed to
submit to arbitration may be resolved.” FCR Greensboro, 119 N.C. App. at 577, 459
S.E.2d at 294. “To determine whether the parties agreed to submit a particular
dispute or claim to arbitration, we must look at the language in the agreement, viz.,
the arbitration clause, and ascertain whether the claims fall within its scope.”
Rodgers Builders, Inc. v. McQueen, 76 N.C. App. 16, 23–24, 331 S.E.2d 726, 731
(1985); see also, e.g., Thomasville Chair Co. v. United Furniture Workers, 233 N.C. 46,
49, 62 S.E.2d 535, 537 (1950) (noting that the “power and authority of the arbitrators
here was limited by the terms of the agreement and the grievance submitted, and the
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scope of the inquiry and decision must be determined in accord with that standard.
The question is not whether the arbitrators decided wisely but whether they went
beyond the limits established by the agreement between the Company and the
Union.”). “[W]hether a claim falls within the scope of an arbitration clause and is
thus subject to arbitration depends not on the characterization of the claim as tort or
contract, but on the relationship of the claim to the subject matter of the arbitration
clause.” Rodgers Builders, 76 N.C. App. at 24, 331 S.E.2d at 731.
The same logic applies to the remedies an arbitrator may fashion—an
arbitrator possesses the latitude to grant any remedy he deems appropriate unless
the arbitration clause specifically limits the types of relief he may grant:
[A]bsent clearly restrictive language, an arbitrator must be allowed latitude in fashioning an appropriate remedy. By submitting to arbitration, it is implied that the arbitrator has the power to order an appropriate remedy, even though the contract may be silent as to any specific or general relief the arbitrator may grant. . . . If a contract specifically limits the authority of the arbitrator to grant a particular type of relief, then the remedies are confined to what is stated, but an arbitrator is allowed flexibility in formulating remedies . . . where the contract requiring arbitration was not explicit on the subject of remedies and did not prohibit the arbitrator’s use of a specific remedy.
Lorant, 187 N.C. App. at 576, 654 S.E.2d at 53 (citation omitted). Indeed, “this Court
has recognized with regard to the award of remedies that ‘an arbitrator does not
exceed his powers if (1) state law allows the remedy for the specified cause of action,
and (2) the arbitration contract does not unequivocally preclude it[.]’” R.E.M. Constr.,
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285 N.C. App. at 173, 876 S.E.2d at 855 (quoting Weaver, 166 N.C. App. at 359, 602
S.E.2d at 711). Rule 49 of the AAA similarly provides that an arbitrator may grant
any remedy he deems just and equitable if the matter falls within the scope of the
parties’ arbitration agreement: “The arbitrator may grant any remedy or relief that
the arbitrator deems just and equitable and within the scope of the agreement of the
parties, including, but not limited to, specific performance of a contract.” Am. Arb.
Ass’n, Commercial Arbitration Rules & Mediation Procedures, R. 49(a) (2022).
A. Water Reservoir, Traffic Count, & Utilities
Defendant asserts the Arbitrator exceeded his scope of authority by “imposing
obligations on [her] to contribute as much as $60,000.00” to the rehabilitation of a
water reservoir shared between Plaintiff and Defendant. Defendant maintains
“nothing in the Operating Agreement or its arbitration clause allows such massive
and comprehensive future obligations to be imposed on [her.]” Defendant further
contends that the Arbitrator exceeded his scope of authority by requiring the parties
“to submit to a traffic count mechanism to allocate maintenance costs,” and by
requiring the parties to negotiate the terms and conditions of a new utilities
easement.
However, Defendant has failed to demonstrate how these claims or remedies
are precluded by the arbitration clause contained in the Operating Agreement.
R.E.M. Constr., 285 N.C. App. at 173, 876 S.E.2d at 855 (providing that an arbitrator
does not exceed his powers if “(1) state law allows the remedy for the specified cause
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of action, and (2) the arbitration contract does not unequivocally preclude it”);
Rodgers Builders, 76 N.C. App. at 23–24, 331 S.E.2d at 731 (“To determine whether
the parties agreed to submit a particular dispute or claim to arbitration, we must look
at the language in the agreement . . . , the arbitration clause, and ascertain whether
the claims fall within its scope.”); Lorant, 187 N.C. App. at 578, 654 S.E.2d at 54 (“An
arbitrator’s award cannot be modified for error of law unless that error caused the
arbitrator to act beyond the scope of his authority. . . . [And] an award may not be
vacated merely because the arbitrator erred as to law or fact.”).
Here, the arbitration clause provides:
Any dispute arising out of or in connection with this Agreement or the breach thereof shall be decided by arbitration to be conducted in North Carolina in accordance with the then prevailing Commercial Arbitration Rules of the American Arbitration Association, and judgment may be entered in any court having jurisdiction thereof. The prevailing party in arbitration shall receive immediate reimbursement from the non- prevailing party of the reasonable costs (including reasonable attorneys’ fees) associated with the arbitration.
The arbitration clause thus provides a broad scope for the resolution of disputes, as
it plainly states, “[a]ny dispute arising out of or in connection with” the Operating
Agreement “shall be decided by arbitration[.]” See Bass v. Pinnacle Custom Homes,
Inc., 163 N.C. App. 171, 176, 592 S.E.2d 606, 609 (2004) (citation omitted) (“[P]arties
can draft a contract provision which makes arbitration the method of resolving any
controversy related to the contract. This Court has interpreted that to mean that
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‘there is no legislative bar to arbitration of these claims as long as they arise out of or
relate to the contract.’”); see also Rodgers Builders, 76 N.C. App. at 25, 331 S.E.2d at
732 (“[T]he language of the arbitration clause here is sufficiently broad to include any
claims which arise out of or are related to the contract or its breach, regardless of the
characterization of the claims as tort or contract.”); see also Epic Games, 247 N.C.
App. at 63, 785 S.E.2d at 143 (“These broad phrases indicate the drafter, Epic Games,
intended for an extensive range of issues relating to Johnson’s employment or the
Employment Agreement to fall within the arbitration clause’s scope.”).
Moreover, the arbitration clause grants the Arbitrator broad discretion in
fashioning remedies since it is silent on the subject outside of incorporating the AAA’s
rules. See, e.g., Lorant, 187 N.C. App. at 576, 654 S.E.2d at 53 (“[A]n arbitrator is
allowed flexibility in formulating remedies . . . where the contract requiring
arbitration was not explicit on the subject of remedies and did not prohibit the
arbitrator’s use of a specific remedy.”); see also R.E.M. Constr., 285 N.C. App. at 173,
876 S.E.2d at 855–56 (“The Subcontracts do not explicitly preclude the equitable
remedy that the panel fashioned; rather, they expressly vest the arbitration panel
with broad discretion to craft equitable remedies through the specific adoption of the
AAA Rules[.]”).
Defendant overlooks the fact that the arbitration clause allows for the
resolution of these claims and does not preclude the fashioning of these remedies.
Rodgers Builders, 76 N.C. App. at 23–24, 331 S.E.2d at 731; Lorant, 187 N.C. App. at
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576, 654 S.E.2d at 53. Additionally, the remedies fashioned are permitted by
subsection 1-569.21(c) and Rule 49(a) of the AAA. See R.E.M. Constr., 285 N.C. App.
at 173, 876 S.E.2d at 855; see also N.C. Gen. Stat. § 1-569.21(c); see also Am. Arb.
Ass’n, Commercial Arbitration Rules & Mediation Procedures, R. 49(a). And through
their pleadings, Plaintiff and Defendant requested the Arbitrator to grant such relief
as he deemed appropriate, which our Court previously determined allows an
arbitrator to grant relief beyond what is expressly asked for in the prayer for relief
sections of the parties’ pleadings. Lorant, 187 N.C. App. at 575, 654 S.E.2d at 53
(citation omitted) (“A prayer for general equitable relief justifies a court in granting
relief beyond what is asked for in specific prayers, as long as such relief is consistent
with the pleadings and the evidence does not surprise the opposing party.”).
Additionally, Defendant, through her responsive pleading, requested that the
Arbitrator resolve the dispute over access to the water reservoir:
Regarding the rights to the water reservoir located on Tract C-2, following the division, the owners of B and C-1 would have no right to access the reservoir system on Tract C-2 and no right to go onto Tract C-2 to inspect the pipes on that property, etc. As part of the division, Tract C-2 would not be granting any water utility easement to Tract B or Tract C-1. Tract B and Tract C-1 will make their own arrangements for water.
Lorant, 187 N.C. App. at 573, 654 S.E.2d at 51 (citations omitted) (“An arbitrator’s
ability to act is both created and limited by the authority conferred on him by the
parties’ private arbitration agreement. Only those claims submitted to the arbitrator
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may be decided by him.”); N.C. Gen. Stat. § 1-569.24(a)(2) (providing “the court shall
modify or correct the award if . . . [t]he arbitrator has made an award on a claim not
submitted to the arbitrator”). And with respect to the traffic count and utilities
easement provisions, the Arbitrator imposed these remedies in response to the
parties’ joint request to partition the real property equitably:
[Plaintiff] and [Defendant], in their respective pleadings, have requested the Arbitrator divide and partition part of the real property between themselves and to sell part of the real property. In light of the unique circumstances of the real property, the mutual desire of [Plaintiff] and [Defendant], and the authority to both sell and distribute the property in kind under sections 11.1(d) and 11.5 of [the Operating Agreement], the Arbitrator has elected to divide Devotion’s real property . . . .
Defendant maintains the shared water reservoir maintenance provision is
erroneous because requiring her to make capital contributions for the rehabilitation
project violates Sections 8.2 and 11.3 of the Operating Agreement. Defendant,
however, neither cites authority in support of how sharing maintenance costs
constitutes a capital contribution nor defines such a legal term of art. Instead,
Defendant provides general citations to the North Carolina Limited Liability
Company Act’s winding up, judicial dissolution, and marshaling of assets provisions.
See generally N.C. Gen. Stat. §§ 57D-6-03, -07, and -08 (2023). As it is not this Court’s
task to make arguments for an appellant, we deem this argument to be abandoned.
See N.C. R. App. P. 28(b)(6); see also K2HN Constr. N.C., LLC v. Five D Contractors,
Inc., 267 N.C. App. 207, 215, 832 S.E.2d 559, 565 (2019) (citation omitted) (noting “it
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is not the role of this Court to create an appeal for an appellant or to supplement an
appellant’s brief with legal authority or arguments not contained therein”).
Defendant also argues that the shared water reservoir maintenance and
utilities provisions run afoul of Swaim v. Simpson, but that case dealt with whether
a trial court “increasing the extent and scope of” an ingress and egress easement
comported with the original grantor’s intent. 120 N.C. App. 863, 863–64, 463 S.E.2d
785, 786–87 (1995). We fail to see the relevance of the Swaim decision to this case.
Moreover, “[a]n arbitrator’s award cannot be modified for error of law unless that
error caused the arbitrator to act beyond the scope of his authority. . . . [And] an
award may not be vacated merely because the arbitrator erred as to law or fact.”
Lorant, 187 N.C. App. at 578, 654 S.E.2d at 54.
As to the traffic count provision, Defendant maintains the remedy runs afoul
of North Carolina law under Foxx v. Davis, Tr. Of Walter Glen Davis, Jr. Revocable
Living Trust, 289 N.C. App. 473, 482, 890 S.E.2d 519, 526 (2023). Yet, that case dealt
with a trial court’s review of a motion for summary judgment that asked, inter alia, 7
whether paving a road “constituted an improvement” under the plain language of an
easement created by deed. Id. at 481, 890 S.E.2d at 526. We fail to see the relevance
of the Foxx decision to the matter sub judice. Furthermore, after providing a cursory
reference to the Foxx decision, Defendant made no argument as to how the traffic
7 We only address this portion of the Foxx case as it is the only passage cited in Defendant’s appellate
brief.
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count mechanism violated Foxx or other established North Carolina law. See N.C. R.
App. P. 28(b)(6); see also K2HN Constr., 267 N.C. App. at 215, 832 S.E.2d at 565.
As Plaintiff correctly observes, this Court’s decision in R.E.M. Constr. v.
Cleveland Constr., Inc., 285 N.C. App. 167, 876 S.E.2d 851 (2022) is particularly
instructive. That decision arose “out of an arbitration proceeding” under the AAA
between REM Construction and Cleveland Construction (“CCI”). Id. at 168, 876
S.E.2d at 853. The arbitral panel entered an award, determining that “REM shall be
entitled to monetary compensation from CCI in accordance with the terms of the
Subcontracts.” Id. Upon reviewing the Subcontracts, the arbitral panel concluded
there was insufficient evidence to determine REM’s actual direct cost. Id. at 170, 876
S.E.2d at 853–54. The arbitral panel thus fashioned an equitable remedy pursuant
to the AAA’s provisions. Id. REM later moved the trial court to confirm the award,
and CCI moved to modify or partially vacate the award. Id. at 171, 876 S.E.2d at 854.
The trial court ultimately granted REM’s motion to confirm the award and denied
CCI’s motion to modify or partially vacate. Id.
On appeal, CCI argued, “the trial court should have vacated the panel’s award
of damages under N.C. Gen. Stat. § 1-569.23(a)(4), which provides that a trial court
may vacate an arbitration award where ‘[a]n arbitrator exceeded the arbitrator’s
powers[.]’” Id. at 172, 876 S.E.2d at 855 (alterations in original) (citation omitted).
CCI maintained that the panel “exceeded its authority” by fashioning a remedy
“outside of what was contemplated in the negotiated contract[.]” Id. at 172–73, 876
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S.E.2d at 855. Upon review, this Court upheld the trial court’s confirmation of the
arbitration award, reasoning that: (1) the Subcontracts did not “explicitly preclude[ ]
the equitable remedy fashioned by the panel”; (2) “AAA Rule 48(a), which the
Subcontracts specifically adopt[ed], authorize[d] the arbitration panel to ‘grant any
remedy or relief that the arbitrator deem[ed] just and equitable and within the scope
of the agreement of the parties, including, but not limited to, equitable relief”; (3) “the
arbitration panel did not provide REM with any of the forms of compensation
prohibited by the Subcontracts”; and (4) the “parties could have—but did not—write
into the contract a limiting provision forbidding the arbitration panel from fashioning
this specific remedy.” Id. at 173–75, 876 S.E.2d at 856 (cleaned up). The Court thus
concluded that “the arbitration panel did not act contrary to the express authority
conferred on them by statute and by the language of the parties’ private arbitration
agreement.” Id. at 175, 876 S.E.2d at 856.
As in R.E.M. Constr., the Arbitrator in the instant case adhered to the scope of
the arbitration clause, subsection 1-569.21(c), and AAA Rule 49(a) when fashioning
remedies. See N.C. Gen. Stat. § 1-569.21(c) (“As to all other remedies . . . an arbitrator
may order any remedies the arbitrator considers just and appropriate under the
circumstances of the arbitration proceeding. The fact that a remedy could not or
would not be granted by the court is not a ground for refusing to confirm an award
under G.S. 1-569.22 or for vacating an award under G.S. 1-569.23.”); see also Am. Arb.
Ass’n, Commercial Arbitration Rules & Mediation Procedures, R. 49(a). Indeed, like
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R.E.M. Constr., the arbitration clause in question does not explicitly preclude the
remedies Defendant complains of on appeal, and the arbitration agreement
incorporates the AAA’s rules. Had the parties intended to limit the remedies
available via arbitration proceedings or the claims which could be resolved, it could
have expressly written such a limiting provision into the arbitration clause. R.E.M.
Constr., 285 N.C. App. at 175, 876 S.E.2d at 856 (quoting Lorant, 187 N.C. App. at
577, 654 S.E.2d at 54) (“‘[T]he parties could have—but did not—write into the
contract a limiting provision’ forbidding the arbitration panel from fashioning this
specific remedy.”); accord Calvine Cotton Mills, Inc. v. Textile Workers Union, 238
N.C. 719, 723, 79 S.E.2d 181, 184 (1953).
For all these reasons, we hold the Arbitrator did not exceed his authority when
evaluating these claims and imposing these remedies. In turn, the trial court did not
err by confirming the interim awards and denying Defendant’s motion to modify or
vacate on these bases.
B. Mandatory Arbitration Clause
Last, Defendant asserts the Arbitrator exceeded his authority by requiring the
parties to address all future disputes concerning the DECR through arbitration.
Defendant maintains that the scope of the arbitration was “to wind up the affairs of
an insolvent limited liability company and to terminate its very existence.” We agree.
As noted above, an arbitrator’s authority to act is derived from the underlying
arbitration agreement as well as the claims the parties submitted. Lorant, 187 N.C.
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App. at 573, 654 S.E.2d at 51 (citations omitted); see also, e.g., Thomasville Chair Co.,
233 N.C. at 49, 62 S.E.2d at 537. Additionally, the duty to arbitrate is contractual in
nature, meaning that parties may only be subjected to arbitral proceedings by way of
mutual agreement. FCR Greensboro, 119 N.C. App. at 577, 459 S.E.2d at 294 (“The
duty to arbitrate is contractual, therefore, only disputes which the parties agreed to
submit to arbitration may be resolved.”); Rodgers Builders, 76 N.C. App. at 23, 331
S.E.2d at 731 (“[P]arties ‘may include in a written contract a provision for the
settlement by arbitration of any controversy thereafter arising between them relating
to such contract or the failure or refusal to perform the whole or any part thereof.’”).
Indeed, arbitration agreements merely provide the mechanism by which the agreeing
parties obtain the “contractual right to arbitrate a dispute[.]” T.M.C.S., Inc. v. Marco
Contractors, Inc., 244 N.C. App. 330, 340, 780 S.E.2d 588, 595 (2015).
Here, the Arbitrator exceeded his scope of authority by according relief on a
matter not submitted to him. Lorant, 187 N.C. App. at 573, 654 S.E.2d at 51 (citations
omitted). In initiating arbitration, Plaintiff never requested the Arbitrator to ensure
that future disputes—following the closure of Devotion and distribution of its
assets—would be subject to a certain type of legal proceeding, forum, or law. Nor did
Defendant in her responsive pleadings. Instead, the parties requested that the
Arbitrator distribute the property equitably minimizing owelty due between them, as
indicated in the parties’ stipulation:
The parties agree to request that the arbitrator make a
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division of the remaining real property of Devotion Family, LLC in a manner that minimizes and attempts to avoid, to the extent possible, any owelty due from one party to the other, and further avoids to the extent possible any division where an owelty would be affixed to either remaining tract due to insufficient funds being available from the sale of Tract A, Tract B, and the personal property.
Nevertheless, the Arbitrator imposed a mandatory obligation to resolve all future
disputes under the DECR via arbitration with the AAA:
Arbitration. Any controversy or claim arising out of or relating to this Declaration, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.
As in Thomasville Chair Co., the “power and authority of the arbitrators here was
limited by the terms of the agreement and the grievance submitted, and the scope of
the inquiry and decision must be determined in accord with that standard.” 233 N.C.
at 49, 62 S.E.2d at 537 (emphasis added).
Although “an arbitrator is allowed flexibility in formulating remedies,” Lorant,
187 N.C. App. at 576, 654 S.E.2d at 53, this latitude is not unlimited. And as
Defendant aptly noted in her objections to the second interim award: “With the
completion of this Arbitration proceeding . . . the arbitration clause governing the
parties’ rights will have been fulfilled and no longer be operative.” Accordingly, we
hold the trial court erred by denying Defendant’s motion to modify the interim awards
to the extent that the imposition of the mandatory arbitration clause exceeded the
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Arbitrator’s authority. See FCR Greensboro, 119 N.C. App. at 577, 459 S.E.2d at 294
(citation omitted) (“[E]rrors resulting from arbitrators exceeding their authority shall
be modified or corrected by the reviewing courts.”); see also N.C. Gen. Stat. § 1-
569.24(a)(2) (providing that “the court shall modify or correct the award if” the
arbitrator “made an award on a claim not submitted to the arbitrator, and the award
may be corrected without affecting the merits of the decision on the claims
submitted”).
IV. Conclusion
After careful consideration, we conclude the Arbitrator exceeded his authority
by requiring the parties to submit to arbitration for all future disputes concerning the
DECR; we thus vacate this portion of the trial court’s order. Otherwise, the
Arbitrator’s actions were well within his realm of authority. Therefore, we affirm the
trial court’s order confirming the second and third interim arbitration awards in part
and remand in part for correction under N.C. Gen. Stat. § 1-569.24(a)(2).
AFFIRMED IN PART, VACATED IN PART, AND REMANDED.
Judges CARPENTER and MURRY concur.
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