Stokes v. Crumpton, 800 S.E.2d 41

Thomas Stokes and Catherine Crumpton agreed to arbitrate equitable distribution and child support under the Family Law Arbitration Act (FLAA); the arbitration awarded Crumpton her DSA stock in exchange for payments to Stokes.
During pre-arbitration discovery, Crumpton denied knowledge of any sale offers or intent to sell Drug Safety Alliance, Inc. (DSA); no documents evidencing offers or buy-sell agreements were produced.
After the award and its district-court confirmation, Crumpton signed a letter of intent (July 2012) and sold DSA (Aug. 2012) for $28 million; Stokes claims he learned of the sale from the media.
Stokes filed a timely motion to vacate the arbitration award under FLAA §50-54, alleging fraud and requesting limited post-confirmation discovery about the negotiations and documents relating to the DSA sale.
The trial court denied Stokes’ motion for leave to conduct discovery; the Court of Appeals dismissed an interlocutory appeal. The North Carolina Supreme Court granted review.

Issue	Stokes’ Argument	Crumpton’s Argument	Held
Whether the trial court’s interlocutory order denying discovery was immediately appealable	Denial affected a substantial right because limited discovery was highly material to proving fraud on a motion to vacate	No appeal under FLAA; denial did not affect a substantial right under §7A-27	Appealable: §7A-27 may provide a route even if FLAA does not; denial affected a substantial right and was immediately appealable
Whether the trial court had discretion to order post-confirmation discovery on a timely motion to vacate under the FLAA	A timely motion to vacate based on fraud triggers §50-54 and permits the court to allow discovery necessary to prove fraud	FLAA does not allow post-confirmation discovery or the alternative path applies only pre-confirmation	Trial court has discretion to order limited post-confirmation discovery when a timely §50-54 motion alleging fraud is pending

MCI Constructors, LLC v. City of Greensboro, 610 F.3d 849 (4th Cir. 2010) (vacatur for fraud/undue means requires clear and convincing evidence)
Trafalgar House Constr., Inc. v. MSL Enters., 128 N.C. App. 252 (N.C. Ct. App. 1998) (vacatur for fraud standard and proof issues)
Sharpe v. Worland, 351 N.C. 159 (N.C. 1999) (interlocutory appeals require showing the order affects a substantial right)
Dworsky v. Travelers Ins., 49 N.C. App. 446 (N.C. Ct. App. 1980) (orders denying discovery are appealable when requested discovery is highly material and not unduly burdensome)
Tenn.-Carolina Transp., Inc. v. Strick Corp., 291 N.C. 618 (N.C. 1977) (standards for when discovery orders affect substantial rights)
Bluffs, Inc. v. Wysocki, 68 N.C. App. 284 (N.C. Ct. App. 1984) (discusses interplay of arbitration statutes and interlocutory appeal)
Bullard v. Tall House Building Co., 196 N.C. App. 627 (N.C. Ct. App. 2009) (analyzes appealability under arbitration statute and §7A-27)