Cornelius v. Lipscomb
734 S.E.2d 870
N.C. Ct. App.2012Background
- Plaintiff Cornelius sues Lipscomb and Sunset for fraud, breach of fiduciary duties, loyalty, unfair trade practices, and securities violations related to IMH Secured Loan Fund ownership.
- Defendants move to compel arbitration and stay proceedings, attaching an arbitration agreement signed by plaintiff.
- Hearing includes Lipscomb’s testimony about discussions of the arbitration clause; plaintiff offers no contrary evidence.
- Trial court denies both the motion to compel arbitration and to dismiss, but provides no factual findings to support the denial.
- Defendants appeal, arguing the court erred in denying arbitration and that no findings of fact were made.
- Court discusses interlocutory appealability and states the FAA vs. state arbitration law applicability must be resolved by the trial court on remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Arbitration findings of fact | No findings required under Rule 52. | Order must include findings on validity and scope of arbitration. | Order lacks findings; reversed and remanded for factual findings. |
| FAA versus state arbitration law applicability | Not necessary to decide FAA applicability on remand. | FAA applicability should be decided if arbitration exists. | Remand to resolve whether FAA or state act applies. |
| Interlocutory appealability | Challengeto interlocutory denial lacks appealability. | Order denying arbitration is immediately appealable. | Interlocutory denial of arbitration is immediately appealable. |
Key Cases Cited
- Griessel v. Temas Eye Ctr., PC., 199 N.C. App. 314 (2009) (need findings of fact on arbitration validity and scope)
- U.S. Trust Co. v. Stanford Grp. Co., 199 N.C. App. 287 (2009) (necessity of findings and scope in arbitration rulings)
- Pineville Forest Homeowners Ass’n v. Portrait Homes Constr. Co., 175 N.C. App. 380 (2006) (reversal for findings supporting arbitration ruling)
- Barnhouse v. Am. Express Fin. Advisors, Inc., 151 N.C. App. 507 (2002) (foundational rule that findings may be required even without request)
- Sillins v. Ness, 164 N.C. App. 755 (2004) (FAA applicability if interstate commerce; preemption considerations)
- Edwards v. Taylor, 182 N.C. App. 722 (2007) (interlocutory orders denying arbitration are appealable)