{ "id": 8521156, "name": "MILLER BUILDING CORPORATION, Plaintiff v. COASTLINE ASSOCIATES LIMITED PARTNERSHIP, DEWAYNE H. ANDERSON, WILLIAM G. BENTON, DAVID WEIL, WILLIAM T. BAIRD, FAISON S. KUESTER, JR., and HISTORIC PRESERVATION 1988 LIMITED PARTNERSHIP, Defendants", "name_abbreviation": "Miller Building Corp. v. Coastline Associates Ltd. Partnership", "decision_date": "1992-01-07", "docket_number": "No. 915SC280", "first_page": "58", "last_page": "64", "citations": [ { "type": "official", "cite": "105 N.C. App. 58" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "25 ALR3d 1171", "category": "reporters:specialty", "reporter": "A.L.R. 3d", "opinion_index": -1 }, { "cite": "321 S.E.2d 872", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1984, "pin_cites": [ { "page": "876-77", "parenthetical": "citations omitted" } ], "opinion_index": 0 }, { "cite": "312 N.C. 224", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4757161 ], "year": 1984, "opinion_index": 0, "case_paths": [ "/nc/312/0224-01" ] }, { "cite": "329 S.E.2d 322", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1985, "pin_cites": [ { "page": "326" } ], "opinion_index": 0 }, { "cite": "313 N.C. 442", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4726125 ], "weight": 2, "year": 1985, "pin_cites": [ { "page": "448" } ], "opinion_index": 0, "case_paths": [ "/nc/313/0442-01" ] }, { "cite": "312 S.E.2d 896", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1984, "pin_cites": [ { "page": "899", "parenthetical": "citation omitted" } ], "opinion_index": 0 }, { "cite": "67 N.C. App. 284", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8526218 ], "year": 1984, "opinion_index": 0, "case_paths": [ "/nc-app/67/0284-01" ] } ], "analysis": { "cardinality": 541, "char_count": 12609, "ocr_confidence": 0.751, "pagerank": { "raw": 7.981370174452977e-08, "percentile": 0.4635608099159449 }, "sha256": "49dd43f69f849f8967de234dd6019380ac84d75f9e5ec59249c21d9ed13c4489", "simhash": "1:2b23c7b31d51f0f2", "word_count": 1970 }, "last_updated": "2023-07-14T19:24:40.355340+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges Arnold and Lewis concur." ], "parties": [ "MILLER BUILDING CORPORATION, Plaintiff v. COASTLINE ASSOCIATES LIMITED PARTNERSHIP, DEWAYNE H. ANDERSON, WILLIAM G. BENTON, DAVID WEIL, WILLIAM T. BAIRD, FAISON S. KUESTER, JR., and HISTORIC PRESERVATION 1988 LIMITED PARTNERSHIP, Defendants" ], "opinions": [ { "text": "COZORT, Judge.\nIn October 1987 plaintiff Miller Building Corporation (Miller) entered a written contract with defendant Coastline Associates Limited Partnership (Coastline) primarily for the construction of the Coastline Inn in Wilmington, North Carolina. The contract contained an arbitration provision and a provision that Coastline would be charged interest on all late monthly payments. After several late payments, in April 1988 Miller billed Coastline for interest due. Coastline did not pay the interest charge. Construction was completed in July 1989. Plaintiff continued to bill defendant for interest on late payments through February 1990, but defendant did not respond. After receiving no response to a written formal demand for payment, on 27 August 1990, Miller filed suit in New Hanover County Superior Court. By stipulation, the time for responsive pleading was extended until 31 October 1990. On 30 October 1990 defendants filed a motion to stay judicial proceedings and compel arbitration, a motion to disqualify plaintiff\u2019s counsel, and an answer. The trial court denied defendants\u2019 motion to disqualify on 27 November 1990. On 28 January 1991, the trial court denied defendants\u2019 motion to stay the judicial proceedings and compel arbitration and entered an order two days later. Defendant appeals from the trial court\u2019s denial of the motion to compel arbitration. We reverse.\nThe sole issue on appeal is whether the trial court erred in denying the motion to compel arbitration on the basis that defendants had delayed unreasonably in demanding arbitration and had waived any right to arbitration.\nIn pertinent part the General Conditions of the Contract for Construction entered into by Miller and Coastline provide\n4.5. Arbitration\n4.5.1 Controversies and Claims Subject to Arbitration. Any controversy or Claim arising out of or related to the Contract, or the breach thereof, shall be settled by arbitration ....\n4.5.4.2 A demand for arbitration shall be made . . . within a reasonable time after the Claim has arisen, and in no event shall it be made after the date when institution of legal or equitable proceedings based on such Claim would be barred by the applicable statute of limitations as determined pursuant to Paragraph 13.7. (Emphasis added)\nThe trial court made the following pertinent findings of fact and conclusions of law:\n6. In its Answer, Coastline set up several defenses to payment of interest and for the first time moved for arbitration.\n* * * *\n9. The General Conditions of the contract contained an agreement to arbitrate.\n10. Because Coaastline [sic] failed to respond to the billings for interest and failed to request arbitration, the plaintiff employed counsel and filed suit in August 1990, two years and eight months after the first late payment in December 1987. The demand for arbitration under these circumstances was not made within a reasonable time.\n11. Coastline waived any right it had to demand arbitration by its delays in seeking arbitration until after pursuing other motions and after plaintiff had incurred attorneys fees of $3,040.00, which the court finds were substantial.\nFrom the foregoing findings of fact the court makes the following Conclusions of Law:\n1. The demand for arbitration was not made in a reasonable time.\n2. Coastline waived any right to arbitrate.\nOn appeal, defendants argue that the trial court erred in denying the motion to stay judicial proceedings and compel arbitration because defendants demanded arbitration within a reasonable time and Miller was not prejudiced by the delay in the demand. We agree.\nIn Adams v. Nelsen, 67 N.C. App. 284, 312 S.E.2d 896 (1984), modified and aff\u2019d, 313 N.C. 442, 329 S.E.2d 322 (1985), plaintiff professional engineer entered a contract to perform professional design services in connection with a residence for defendants. The contract provided that demand for arbitration be made within the applicable statute of limitations. Plaintiff performed the work. Upon defendants\u2019 failure to pay, plaintiff filed suit in district court seeking to enforce a claim of lien. Defendants filed an answer and moved to dismiss the action pursuant to Rule 12(b)(6). The trial court granted the defendants\u2019 motion. On appeal, we found the trial court erred in dismissing the suit because there was no defect on the face of plaintiffs complaint and the trial court did not possess the authority to cancel plaintiff\u2019s claim of lien. We rejected defendants\u2019 argument that plaintiff\u2019s complaint was invalid since the parties had previously agreed to arbitrate all disputes. We did find, however, that both parties had waived the right to arbitration. The plaintiff indicated his intent to waive his right, we reasoned, by pursuing the action in court. We then concluded that defendants also waived the right to arbitrate based on the following reasoning:\nAccording to the contract\u2019s arbitration provision, to avoid waiver, it was necessary for a party to demand arbitration within the applicable statutory time limit. The statute of limitations governing contract disputes is three years. G.S. 1-52. Defend ants, therefore, to have invoked their right to arbitration should have demanded such within three years from the time plaintiff breached the contract\u2019s arbitration provision by instituting court action. . . . Because of their own inaction, defendants are now barred from invoking their arbitration rights.\nId. at 288, 312 S.E.2d at 899 (citation omitted) (emphasis added). Finally, we noted that it was more practical and efficient for the trial judge to determine the waiver issue. Id.\nOn appeal, the North Carolina Supreme Court affirmed and modified our decision, determining that an arbitration clause does not prevent a party from pursuing a separate legal remedy in court; a 12(b)(6) motion does not oust the court of jurisdiction nor invoke the arbitration provision; and defendant could not demand arbitration after the running of the applicable statute of limitations. Although agreeing with our final resolution of the waiver issue, the Court concluded that we were mistaken that defendants\u2019 failure to demand arbitration within the statute of limitations period constituted a waiver. The Court reasoned that, since the contract contained a time limitation for demanding arbitration, the defendants\u2019 contractual right to demand arbitration was barred by the statute of limitations, and the question of whether defendants impliedly waived their right to arbitration was not an issue in the case. Adams, 313 N.C. at 448, 329 S.E.2d at 326.\nAnalyzing the case before us in light of Adams, we find that Coastline demanded arbitration within a reasonable time as required by the provisions of the contract. Coastline demanded arbitration on 30 October 1990, approximately two months after Miller breached the contract by filing suit in superior court. Miller stipulated to the extension of time to file responsive pleadings. According to Adams, the plaintiff\u2019s breach in filing the lawsuit in superior court starts the time running for the determination of when defendant must demand arbitration; this is true whether the time period at issue is the applicable statute of limitations as in Adams or within a reasonable time of the claim arising as in the case at bar. Since defendants promptly made demand for arbitration after plaintiff filed suit to enforce the disputed claim, we find that defendants did not delay unreasonably in making that demand.\nWe also agree with defendants that the trial court erred in finding that defendants waived the right to demand arbitration by delaying the demand for arbitration \u201cuntil after pursuing other motions and after plaintiff had incurred attorneys fees of $3,040.00, which the court finds were substantial.\u201d In Cyclone Roofing Co. v. LaFave Co., 312 N.C. 224, 321 S.E.2d 872 (1984), the North Supreme Court addressed the issue of waiver:\nBecause of the reluctance to find waiver, we hold that a party has impliedly waived its contractual right to arbitration if by its delay or by actions it takes which are inconsistent with arbitration, another party to the contract is prejudiced by the order compelling arbitration.\nA party may be prejudiced if, for example, it is forced to bear the expenses of a lengthy trial; evidence helpful to a party is lost because of delay in the seeking of arbitration^] a party\u2019s opponent takes advantage of judicial discovery procedures not available in arbitration[;] or, by reason of delay, a party has taken steps in litigation to its detriment or expended significant amounts of money thereupon.\nId. at 229, 230, 321 S.E.2d at 876-77 (citations omitted).\nAnalyzing the case at bar in light of Cyclone, we find that Coastline did not waive the right to arbitration because Miller was not prejudiced by the order compelling arbitration. Miller did not have to bear the expenses of a lengthy trial. There is nothing in the record or Miller\u2019s brief to indicate that evidence was lost because of any delay in seeking arbitration. Coastline did not take advantage of judicial discovery procedures not available in arbitration since no discovery was conducted.\nMiller argues that it was prejudiced by being forced to take steps in litigation and to expend significant amounts of money in filing suit and in defending the motion to disqualify its counsel. The trial court agreed. Defendants point out, and plaintiff does not dispute, that defendants made only two motions; one to disqualify plaintiff\u2019s counsel, and one to stay the judicial proceedings and compel arbitration. There is nothing in the record to contradict defendants\u2019 representation. In order to constitute prejudice, plaintiff would have had to expend funds because of defendants\u2019 delay in demanding arbitration. We find that the funds expended in defending the motion to disqualify were not due to the two-month period between plaintiff\u2019s breach and defendants\u2019 motion to compel arbitration. As defendants point out, plaintiff would have incurred such expenses whether the case was litigated or arbitrated. Similarly, since plaintiff opted to pursue the claim in court, the funds expended in preparation for litigation were not connected in any fashion to the delay between Miller\u2019s filing and Coastline\u2019s response. We find that Coastline did not, through its actions, impliedly waive its contractual right to arbitrate and that an order compelling arbitration would not prejudice Miller.\nFor the reasons set forth above, the order of the trial court is reversed, and the cause is remanded for entry of an order compelling arbitration.\nReversed and remanded.\nJudges Arnold and Lewis concur.", "type": "majority", "author": "COZORT, Judge." } ], "attorneys": [ "Marshall, Williams & Gorham, hy Lonnie B. Williams and John D. Martin, for plaintiff appellee.", "Deborah L. Nowachek for defendant appellants." ], "corrections": "", "head_matter": "MILLER BUILDING CORPORATION, Plaintiff v. COASTLINE ASSOCIATES LIMITED PARTNERSHIP, DEWAYNE H. ANDERSON, WILLIAM G. BENTON, DAVID WEIL, WILLIAM T. BAIRD, FAISON S. KUESTER, JR., and HISTORIC PRESERVATION 1988 LIMITED PARTNERSHIP, Defendants\nNo. 915SC280\n(Filed 7 January 1992)\nArbitration and Award \u00a7 17 (NCI4th)\u2014 motion to compel arbitration \u2014 no unreasonable delay \u2014 right not waived\nThe trial court erred in denying defendant\u2019s motion to compel arbitration on the basis that defendant had delayed unreasonably in demanding arbitration since plaintiff\u2019s breach in filing the lawsuit in superior court started the time running for the determination of when defendant must demand arbitration, and defendant demanded arbitration approximately two months after plaintiff breached the contract by filing suit. Furthermore, defendants did not waive any right to arbitration by delaying the demand until after pursuing other motions and after plaintiff had incurred attorney fees which the court found were substantial, since plaintiff was not prejudiced by the order compelling arbitration and did not have to bear the expense of a lengthy trial, there was no indication that . evidence was lost because of any delay in seeking arbitration, defendant did not take advantage of judicial discovery procedures not available in arbitration as no discovery was conducted, and funds expended by plaintiff were not the result of any delay in defendant\u2019s demand for arbitration.\nAm Jur 2d, Arbitration and Award \u00a7\u00a7 51, 52.\nDelay in asserting contractual right to arbitration as precluding enforcement thereof. 25 ALR3d 1171.\nAPPEAL by defendants from Order entered 30 January 1991 by Judge Napoleon B. Barefoot in New HANOVER County Superior Court. Heard in Wilmington before the Court of Appeals on 16 October 1991.\nMarshall, Williams & Gorham, hy Lonnie B. Williams and John D. Martin, for plaintiff appellee.\nDeborah L. Nowachek for defendant appellants." }, "file_name": "0058-01", "first_page_order": 86, "last_page_order": 92 }