Flynn v. SchamensÂ
250 N.C. App. 337
N.C. Ct. App.2016Background
- Karen W. Flynn (trustee/account custodian) invested trust and personal accounts with funds managed by defendants; disputes were submitted to binding arbitration by agreement.
- Arbitrator found defendants jointly and severally liable for common-law fraud, breach of fiduciary duty, and constructive fraud, awarding Flynn $2,107,090.79 plus interest.
- Flynn moved in Mecklenburg County Superior Court to confirm the arbitration award and enter judgment; defendants moved to vacate the award.
- The trial court denied defendants’ motion to vacate but, without explanation, declared Flynn’s motion to confirm “moot.”
- Flynn sought correction; the court declined to hear it for procedural notice reasons. Flynn appealed and defendants moved to dismiss for improper service; the Court of Appeals found service proper and heard the appeal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court was required to confirm the arbitration award after denying a motion to vacate | Flynn: Denial of vacatur required the court to confirm the award and enter judgment under N.C. arbitration statutes | Defendants: Implicitly argued trial court could decline to confirm (and challenged appeal jurisdiction via service) | The court held that after denying the motion to vacate, the trial court was required to confirm the award and enter judgment; reversed and remanded for confirmation and judgment |
Key Cases Cited
- Carpenter v. Brooks, 139 N.C. App. 745 (2000) (standards for appellate review of arbitration confirmation/vacatur)
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995) (arbitration review principles)
- First Union Secs., Inc. v. Lorelli, 168 N.C. App. 398 (2005) (trial court standards confirming/vacating awards)
- Carteret Cnty. v. United Contractors of Kinston, Inc., 120 N.C. App. 336 (1995) (court must confirm unless statutory grounds to vacate or modify exist)
- FCR Greensboro, Inc. v. C & M Invs. of High Point, Inc., 119 N.C. App. 575 (1995) (same principle on confirmation absent grounds to vacate/modify)
- In re Arbitration Between State and Davidson & Jones Constr. Co., 72 N.C. App. 149 (1984) (denial of vacatur does not render confirmation moot)