Emmanuel African Methodist Episcopal Church v. Reynolds Construction Co.
718 S.E.2d 201
N.C. Ct. App.2011Background
- Plaintiff Emmanuel African Methodist Episcopal Church contracted RCC as general contractor for construction, and Reynolds as architect, in November 2006.
- After completion, plaintiff alleged defects and sought corrections; disputes remained unresolved between the parties.
- Plaintiff filed suit in Durham County Superior Court on December 17, 2009; mediation attempts were unsuccessful.
- Defendants moved to dismiss or compel arbitration and stay proceedings; the trial court denied arbitration, September 14, 2010.
- Defendants appealed the denial of arbitration; the issue was reviewed as an interlocutory appeal due to the substantial right to arbitrate.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the contracts contain valid arbitration agreements. | Arbitration is not mandatory; mediation terms create an option to go to court. | Arbitration clauses clearly require arbitration for claims arising under the contracts. | Yes; the agreements contain valid arbitration clauses that require arbitration. |
| Whether mediation language defeats arbitration absent mutual waiver. | Mediation as a condition precedent implies potential court proceedings after mediation. | There was no mutual waiver to arbitration; arbitration remains the required path. | No; mediation language does not create a mutual waiver, so arbitration is required. |
| Whether the denial of arbitration is reviewable on interlocutory appeal and the standard of review. | N/A | Interlocutory order denying arbitration is appealable due to the substantial right to arbitrate. | Interlocutory appeal proper; the court reviews de novo the existence and scope of arbitration agreements. |
Key Cases Cited
- Sloan Fin. Grp., Inc. v. Beckett, 159 N.C.App. 470 (2003) (burden to prove mutual agreement to arbitrate)
- Pressler v. Duke Univ., 199 N.C.App. 586 (2009) (two-pronged test: existence of arbitration agreement and scope of arbitration)
- International Paper Co. v. Corporex Constructors, Inc., 96 N.C.App. 312 (1989) (contract interpretation favors giving effect to plain, unambiguous language)
- Johnston County v. R. N. Rouse & Co., 331 N.C. 88 (1992) (courts give effect to plain and unambiguous contract language)