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  "name": "BRENT S. BENNISH, Plaintiff v. THE NORTH CAROLINA DANCE THEATER, INC., Defendant",
  "name_abbreviation": "Bennish v. North Carolina Dance Theater, Inc.",
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    "judges": [
      "Judges Johnson and Parker concur."
    ],
    "parties": [
      "BRENT S. BENNISH, Plaintiff v. THE NORTH CAROLINA DANCE THEATER, INC., Defendant"
    ],
    "opinions": [
      {
        "text": "EAGLES, Judge.\nThis is an interlocutory appeal arising from the denial of defendant\u2019s motion to stay the proceedings and compel arbitration. Initially, we note that a trial court\u2019s \u201corder denying arbitration, although interlocutory, is immediately appealable because it involves a substantial right which might be lost if appeal is delayed.\u201d Prime South Homes v. Byrd, 102 N.C. App. 255, 258, 401 S.E.2d 822, 825 (1991) (citing Sims v. Ritter Constr., Inc., 62 N.C. App. 52, 302 S.E.2d 293 (1983)); G.S. \u00a7\u00a7 l-277(a) (1983), 7A-27(d)(l) (1989). Defendant contends that the contract containing the arbitration clause is \u201ca contract evidencing a transaction involving commerce\u201d within the meaning of Section 2 of the Federal Arbitration Act (FAA), 9 U.S.C. \u00a7\u00a7 1-16 (1988 & Supp. III 1991). We agree and accordingly reverse the trial court and remand for an order compelling arbitration.\nThe FAA applies to the courts of North Carolina. Board of Education v. Shaver Partnership, 303 N.C. 408, 422, 279 S.E.2d 816, 825 (1981) (\u201cThe Federal Arbitration Act, by virtue of the Supremacy Clause [U.S. Const. Article VI, Clause 2], is, as discussed, part of North Carolina law.\u201d). There is a \u201cstrong public policy in North Carolina favoring arbitration.\u201d Cyclone Roofing Co. v. LaFave Co., 312 N.C. 224, 229, 321 S.E.2d 872, 876 (1984); Servomation Corp. v. Hickory Constr. Co., 316 N.C. 543, 544, 342 S.E.2d 853, 854 (1986).\nSection 2 of the FAA provides in pertinent part:\nA written provision in ... a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.\nIn Board of Education, 303 N.C. at 417-18, 279 S.E.2d at 822, our Supreme Court set forth the following factors in determining whether a personal services contract was controlled by the FAA:\nAs Erving [v. Virginia Squires Basketball Club, 468 F.2d 1064 (2d Cir. 1972)] . . . make[s] clear, a personal service contract which contemplates substantial interstat\u00e9 activity is a contract evidencing a transaction involving commerce within the meaning of the act. We agree with the approach suggested by Judge Lumbard, concurring in Metro Industrial Painting Corp. v. Terminal Construction Co., 287 F.2d 382 (2d Cir. 1961), cert. denied, 368 U.S. 817 (1961):\n\u201cThe significant question, therefore [in determining whether a contract evidences a transaction involving commerce], is not whether, in carrying out the terms of the contract, the parties did cross state lines, but whether, at the time they entered into it and accepted the arbitration clause, they contemplated substantial interstate activity. Cogent evidence regarding their state of mind at the time would be the terms of the contract, and if it, on its face, evidences interstate traffic . . . the contract should come within \u00a7 2. In addition, evidence as to how the parties expected the contract to be performed and how it was performed is relevant to whether substantial interstate activity was contemplated.\u201d 287 F.2d at 387. (Emphasis original.)\nHere, the guidelines contained a clause limiting travel by bus or automobile to no more than ten hours per day and a clause explaining air travel. Additionally, defendant presented the affidavit of Salvatore A. Aiello, defendant\u2019s artistic director, which included an undisputed statement that defendant toured outside North Carolina for eight weeks and gave 47 performances ip 12 states during the 1990-91 season. Accordingly, we hold that the FAA is applicable because there is sufficient evidence that the contract contemplated substantial interstate activity. Section 21 of the guidelines, incorporated by reference into the contract, expressly provides that either party \u201cmay demand arbitration in writing.\u201d Defendant made this demand in writing on 24 October 1990.\nFinally, we hold that the trial court has the authority to substitute a neutral third arbitrator to insure a fair and impartial hearing. The guidelines provide that the arbitration committee shall be composed of three members: (1) a member of defendant\u2019s board of trustees, (2) a collectively appointed dancers\u2019 representative, and (3) one of defendant\u2019s staff members. To allow defendant to have two representatives, a trustee and a staff member, would make the proceedings inherently unfair and would tip the balance decidedly in favor of defendant. Accordingly, the trial court is to substitute a neutral third arbitrator for one of the defendant\u2019s representatives.\nWe direct the substitution of a neutral arbitrator in the interest of judicial economy and to preserve the purposes of the Federal Arbitration Act. A trial court\u2019s authority to appoint a neutral arbitrator is \u201cinherent when the potential bias of a designated arbitrator would make arbitration proceedings [under the FAA] simply a prelude to later judicial proceedings challenging the arbitration award.\u201d Masthead Mac Drilling Corp. v. Fleck, 549 F.Supp. 854, 856 (S.D.N.Y. 1982) (citing Erving, 468 F.2d at 1067 & n.2 (2d Cir. 1972)); see generally Annotation, Interest or Bias of Arbitrator, 56 A.L.R.3d 697 (1974 & Supp. 1992). The court emphasized in Erving, 468 F.2d at 1067-68, that \u201cthe federal law is to be implemented in such a way as to make the arbitration effective and not to erect technical and unsubstantial barriers such as were the mode in the early days when arbitration was viewed by many courts with suspicion and hostility.\u201d See Board of Education, 303 N.C. at 415-18, 279 S.E.2d at 821-22 (favorably citing Erving). We note that the arbitration clause here appears to have been nothing more than standard boilerplate in the guidelines, consisting of 9 pages and 21 different sections, which were incorporated by reference into the three page employment contract. It is doubtful that plaintiff could have negotiated the selection of arbitrators before accepting employment with defendant. Compare Thomas v. Howard, 51 N.C. App. 350, 354, 276 S.E.2d 743, 746 (1981) (non-FAA case holding that where parties separately bargain for arbitration after a dispute develops, \u201cthe disability of an arbitrator is waived if the complaining party had prior knowledge of it.\u201d).\nWe hold that the trial court erred and that the contract must be submitted to arbitration pursuant to the FAA. Accordingly, the decision of the trial court is reversed and the case remanded for proceedings not inconsistent with this opinion.\nReversed and remanded.\nJudges Johnson and Parker concur.",
        "type": "majority",
        "author": "EAGLES, Judge."
      }
    ],
    "attorneys": [
      "David F. Williams and Kenneth L. Harris for plaintiff-appellee.",
      "Robinson, Bradshaw & Hinson, P.A., by J. Daniel Bishop, for defendant-appellant."
    ],
    "corrections": "",
    "head_matter": "BRENT S. BENNISH, Plaintiff v. THE NORTH CAROLINA DANCE THEATER, INC., Defendant\nNo. 9126SC872\n(Filed 3 November 1992)\n1. Arbitration and Award \u00a7 43 (NCI4th) \u2014 order denying arbitration \u2014 appealability\nA trial court\u2019s order denying arbitration, although interlocutory, is immediately appealable because it involves a substantial right which might be lost if appeal is delayed.\nAm Jur 2d, Appeal and Error \u00a7 856.\n2. Arbitration and Award \u00a7 6 (NCI4th)\u2014 personal services contract \u2014 transaction involving commerce \u2014arbitration required\nAn employment agreement which contained an arbitration clause and which provided for plaintiff to perform as a dancer for defendant during one season was \u201ca contract evidencing a transaction involving commerce\u201d within the meaning of Section 2 of the Federal Arbitration Act, and the trial court therefore erred in failing to enter an order compelling arbitration, since a personal services contract which contemplates substantial interstate activity is a contract evidencing a transaction involving commerce, and the contract in question would have required plaintiff to tour outside North Carolina for eight weeks, giving 47 performances in twelve states during the season.\nAm Jur 2d, Arbitration and Award \u00a7 42.\nContract containing arbitration agreement as subject to the stay and enforcement provisions of the United States Arbitration Act \u2014federal cases. 18 L. Ed. 2d 1685.\n3. Arbitration and Award \u00a7 11 (NCI4th) \u2014 authority of trial court to substitute arbitrator\nIn a proceeding to compel arbitration of a contract dispute involving a dancer in defendant\u2019s company, the trial court is ordered to substitute a neutral third arbitrator to insure a fair and impartial hearing, since to allow defendant, pursuant to the contract, to have two representatives, a trustee and a staff member, would make the proceedings inherently unfair.\nAm Jur 2d, Arbitration and Award \u00a7\u00a7 86, 87.\nDisqualification of arbitrator by court or stay of arbitration proceedings prior to award, on ground of interest, bias, prejudice, collusion, of fraud of arbitrators. 65 ALR2d 755.\nAPPEAL by defendant from order signed 14 May 1991 by Judge Robert Lewis in MECKLENBURG County Superior Court. Heard in the Court of Appeals 17 September 1992.\nOn 30 May 1990, the parties entered a \u201c1990-91 Employment Agreement\u201d (the contract) for plaintiff to perform as a dancer for defendant during the 1990-91 season. Section III of the contract incorporated by reference the \u201cNorth Carolina Dance Theater 1990-91 Dancer Guidelines\u201d (the guidelines). The last section of the guidelines contained the following provision:\n21. Arbitration-. Any controversy or claim arising out of or relating to the ARTIST\u2019S Employment AGREEMENT or the breach or interpretation thereof, may be settled by arbitration. Either the Dance Theater or Artist may demand arbitration in writing. Arbitration shall be by a committee of three (3): one member of the DANCE THEATER\u2019S Board of Trustees, a dancers\u2019 representative, and a staff member, and shall not be held later than two (2) weeks following the date of a written request therefore. The decision of such committee shall be announced not later than one (1) week following the hearing, and shall be binding upon both parties.\nOn 27 July 1990, defendant terminated plaintiff\u2019s employment effective 14 August 1990. Defendant claims the termination occurred because the staff \u201cdetermined that Bennish\u2019s levels of artistic ability, effort, and commitment were below the minimal requirements.\u201d Plaintiff claims he was terminated because of defendant\u2019s \u201cinability to meet its financial obligations.\u201d Plaintiff demanded compensation; defendant countered on 24 October 1990 by sending plaintiff a letter demanding arbitration pursuant to the arbitration provision in the guidelines. Plaintiff refused arbitration and on 22 January 1991 filed a complaint in superior court alleging breach of contract and misrepresentation. On 21 March 1991, defendant made a motion in superior court to compel arbitration and stay the proceedings pending arbitration. Defendant\u2019s motion was denied on 14 May 1991. Defendant appeals.\nDavid F. Williams and Kenneth L. Harris for plaintiff-appellee.\nRobinson, Bradshaw & Hinson, P.A., by J. Daniel Bishop, for defendant-appellant."
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