Thompson v. SpellerÂ
256 N.C. App. 748
N.C. Ct. App.2017Background
- Lee Vander Thompson (Plaintiff) was injured in a 2013 car collision; North Carolina Farm Bureau (Farm Bureau) was his underinsured motorist (UIM) carrier.
- Plaintiff settled with the tortfeasor’s insurer and Farm Bureau advanced $35,000 (medical payment plus tortfeasor limits) but disagreed with Plaintiff on total damages.
- Plaintiff demanded arbitration under the UIM policy; a three-member panel awarded $110,000 and expressly stated it did not consider interest or costs.
- Plaintiff moved in superior court to confirm the award and sought pre-award interest, post-award/pre-judgment interest, and costs.
- The trial court confirmed the $110,000 award, added $8,000 pre-award interest, ~$805 post-award/pre-judgment interest, and about $1,100 in costs; Farm Bureau appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether trial court may add pre-award (prejudgment) interest to an arbitration award that did not include interest | Thompson argued pre-award interest is part of compensatory damages and should be awarded | Farm Bureau contended the trial court lacked authority to modify the arbitration award by adding pre-award interest | Reversed: trial court exceeded authority; pre-award interest is for arbitrators to award unless arbitrators expressly deferred the issue to the court |
| Whether trial court may add costs (including litigation and discovery costs) when arbitration award did not provide them | Thompson sought costs incurred in the underlying action and arbitration-related expenses | Farm Bureau argued the court could not modify the award to add costs beyond costs of the confirmation motion | Reversed: trial court improperly awarded those costs; statute allows court to award only reasonable costs of the confirmation motion |
| Whether trial court may award post-award/pre-judgment interest (from arbitration award date to judgment/payment) when arbitrators did not include interest | Thompson requested interest from award date until payment | Farm Bureau argued court lacked authority to add any interest after the award | Affirmed in part: court may grant post-award/pre-judgment interest; trial court acted within authority to compensate for time value between award and payment |
Key Cases Cited
- Nucor Corp. v. General Bearing Corp., 333 N.C. 148 (court emphasized limited judicial authority to vacate/modify arbitration awards under the Uniform Arbitration Act)
- Cyclone Roofing Co. v. David M. LaFave Co., 312 N.C. 224 (judicial review of arbitration awards confined to statutory grounds)
- Baxley v. Nationwide Mut. Ins. Co., 334 N.C. 1 (prejudgment interest may be part of UIM damages absent policy exclusion)
- Hamby v. Williams, 196 N.C. App. 733 (applying Baxley in arbitration context; arbitrators decide pre-award interest)
- Sprake v. Leche, 188 N.C. App. 322 (arbitration panel had authority to award pre-award interest; trial court properly confirmed award)
- Faison & Gillespie v. Lorant, 187 N.C. App. 567 (arbitrator did not exceed authority by including pre-award interest)
- Palmer v. Duke Power Co., 129 N.C. App. 488 (trial court must confirm award as written absent statutory grounds for modification)
- Lovin v. Byrd, 178 N.C. App. 381 (court may add pre-award interest when arbitrators expressly defer interest to the court)
- Eisinger v. Robinson, 164 N.C. App. 572 (trial court lacked authority to add pre-award interest and costs when not authorized by arbitrators)
- Patton v. Garrett, 116 N.C. 847 (historic principle that courts generally cannot correct arbitrator mistakes of law or fact)