Short v. CircusTrix Holdings

IN THE COURT OF APPEALS OF NORTH CAROLINA

No. COA20-285

Filed: 17 November 2020

Buncombe County, No. 19 CVS 365

CHARLES J. SHORT, Plaintiff

v.

CIRCUS TRIX HOLDINGS, LLC; SKY ZONE LLC; SKY ZONE FRANCHISE

GROUP, LLC; SKYZONE ASHEVILLE, LLC d/b/a SKYZONE TRAMPOLINE

PARK; AND JOHN DOES 1-3, Defendants

Appeal by Defendants from an Order entered 13 September 2019 by Judge

Marvin P. Pope in Buncombe County Superior Court. Heard in the Court of Appeals

20 October 2020.

Davis Law Group, P.A., by Brian F. Davis, for plaintiff-appellee.

Cranfill Sumner & Hartzog, LLP, by John W. Ong, Meredith F. Hamilton, and

Steven A. Bader, for defendants-appellants.

HAMPSON, Judge.

Factual and Procedural Background

Circus Trix Holdings, LLC, Sky Zone, LLC, Sky Zone Franchise Group, LLC,

and Sky Zone Asheville, LLC d/b/a Sky Zone Trampoline Park (collectively,

Defendants) appeal from the trial court’s 13 September 2019 Order denying

Defendants’ Motion to Compel Arbitration where the trial court ruled there was no

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Opinion of the Court

valid agreement to arbitrate between the parties. The Record before us tends to show

the following:

On 4 April 2019, Charles J. Short (Plaintiff) filed a First Amended Complaint1

(Complaint) asserting Defendants violated North Carolina’s Device Safety Act and

were negligent in connection with injuries Plaintiff sustained while visiting

Defendants’ trampoline park in Asheville, North Carolina. Plaintiff alleged on or

about 27 January 2018, Plaintiff and his wife decided to celebrate their daughter’s

birthday at Sky Zone Asheville trampoline park. On or about that same date,

Plaintiff’s wife visited Sky Zone Asheville’s website to book the party. As part of the

online booking process, Plaintiff’s wife filled out and signed liability waivers for

Plaintiff and the couple’s three children. Plaintiff further alleged, at no time prior to

the incident in question, did Plaintiff know about his wife’s signing a waiver, nor did

he authorize her to do so. The Complaint further alleged, upon arrival at Sky Zone

Asheville, Plaintiff and his group were “checked in” by a manager, then the group

removed and stowed their shoes.

Plaintiff asserted he then began to “look around the facility to see what other

activities were offered” before making his way to the “free climb” wall. Plaintiff

claimed he asked the attendant for direction on “what to do” and the attendant

responded “just climb the wall and jump into the foam pit. Keep your feet apart when

1 Plaintiff filed an earlier Complaint on 25 January 2019 alleging Defendants’ negligence and

“wanton conduct” caused Plaintiff’s injuries.

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you jump.” Plaintiff then climbed the wall and, before jumping off, asked the

attendant: “And I can just jump off?” The attendant responded, “jump away from the

wall, land feet first. Go ahead and jump.” Plaintiff claimed he did as the attendant

instructed, and when he entered the pit and his feet impacted the floor, he fractured

both his right and left tibias.

On 16 July 2019, Defendants filed their Motions to Dismiss and Answer to

Plaintiff’s First Amended Complaint (Answer). In their Answer, Defendants alleged

“Plaintiff signed a Participant Agreement, Release and Assumption of Risk with Sky

Zone . . . contain[ing] an arbitration provision which is specifically highlighted by

requesting that the signor place an ‘X’ acknowledging that he/she read the clause.”

Defendants also argued the trial court lacked subject-matter jurisdiction based on the

signed agreement containing the arbitration clause. Defendants admitted all

customers are required to read and sign a “Participation Agreement, Release and

Assumption of Risk” (Agreement) online or at the facility prior to being allowed to use

Sky Zone Asheville’s facilities and equipment. Defendants also admitted an

Agreement “was signed by or for Plaintiff[.]” Defendants further raised a number of

affirmative defenses including: Release and Waiver; Arbitration, as set forth in the

Agreement; and Contractual Limitations.

Also on 16 July 2019, Defendants filed a Motion to Compel Arbitration and

Stay Proceedings (Arbitration Motion). Defendants attached an Affidavit of Sky Zone

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(Defendants’ Affidavit)—completed by Sky Zone Asheville General Manager Travis

Wilson Fowler—and a copy of the Agreement purportedly signed by Plaintiff.

Defendants alleged Plaintiff “electronically signed the agreement for himself” and

“entered into the Agreement in consideration of Plaintiff being allowed to use the Sky

Zone Asheville facilities and equipment . . . .” The Agreement’s arbitration clause

states:

I understand that by agreeing to arbitrate any dispute . . . I am waiving

my right, and the right(s) of the minor child(ren) above, to maintain a

lawsuit against [Defendants] . . . for any and all claims covered by this

Agreement. By agreeing to arbitrate, I understand that I will NOT have

the right to have my claim determined by a jury . . . .

In Defendants’ Affidavit, Travis Fowler stated he became the general manager

in January 2018 and was the general manager at the time Plaintiff was injured.

Fowler then explained Sky Zone Asheville’s policies and procedures regarding

Participation Agreements and customers using Sky Zone Asheville’s facilities.

Fowler stated all participants must sign an Agreement before entering and using the

facilities. In addition, “all participants had to check in and be provided with a

temporary sticker” in order to confirm they “had signed and acknowledged the

Agreement.” According to Fowler, temporary stickers were not “provided to those

individuals who had not executed the Agreement, either online or in person.”

Fowler stated Sky Zone Asheville’s “online system for the execution of the

Agreement” recorded information about the participant and this information “was

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then used when the participant arrived in order to confirm their execution of the

agreement.” Fowler also asserted, on the day of Plaintiff’s injury, Plaintiff would

have been asked if [he] had completed the Agreement online.” Those who had not

completed the agreement online would have been directed to a “Waiver Station Kiosk”

where they would complete the Agreement and receive a receipt. A participant would

then take this receipt to the check-in counter where the participant would buy a ticket

and receive a temporary sticker. Participants who advise they completed the

Agreement online are directed to the check-in counter where a Sky Zone Asheville

employee checks the online system to confirm completed Agreements before

participants buy a ticket and receive a sticker. Moreover, Fowler stated in January

2018, there were Guest Responsibility signs placed throughout the facility advising

participants they were required to execute the Agreement and of other warnings.

On 28 August 2019, Plaintiff filed a Response to Defendants’ Motion to Compel

Arbitration and Stay Proceedings (Response). In this Response, Plaintiff asserted he

did not sign the Agreement; Plaintiff’s wife signed the Agreement for him without

Plaintiff’s “permission or authorization;” at no time “before, during, or after his

arrival at Sky Zone Asheville did Plaintiff expressly or impliedly enter into any

agreements with Sky Zone Asheville;” and there “was never a mutual agreement, or

meeting of the minds, between the parties.” Plaintiff submitted affidavits from

himself and his wife with this Response.

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In his affidavit, Plaintiff asserted he went to Sky Zone Asheville on 27 January

2018, to celebrate, as part of a group totaling approximately twenty-six people, his

daughter’s birthday. According to Plaintiff, as the group entered Sky Zone Asheville,

“a male employee approached [the group] and inquired if we had signed up and

purchased tickets online.” Plaintiff’s wife, and some of the other adults, replied they

had signed up online and the employee took them to a counter to “complete the check-

in process.” Another employee approached Plaintiff, some of the remaining adults,

and the fourteen children and led them to an area where the group could remove and

stow their socks and shoes. Then, Plaintiff’s wife approached from the check-in

counter and handed Plaintiff socks for use in the facility. Plaintiff’s affidavit then

recounted the events alleged in the Complaint leading up to and including his injury.

The remainder of Plaintiff’s affidavit states “at no time prior to the incident in

this case,” did any Sky Zone Asheville employee ask Plaintiff if he had signed an

online agreement or waiver or direct Plaintiff to a “Waiver Station Kiosk.” Plaintiff

further asserted at no time prior to the incident did he notice the “Waiver Station

Kiosk” or “anything inside Sky Zone Asheville . . . that alerted [Plaintiff] to the need

and/or requirement for signing any agreement and/or waiver.” Plaintiff asserted he

did not know, nor did he “have reason to know,” his wife had completed an online

agreement waiving any of his legal rights, and he did not authorize his wife, expressly

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or impliedly, to do so. Moreover, according to Plaintiff, his wife did not seek his

permission to sign any agreement or waiver.

For her part, Plaintiff’s wife, Deanna Short, stated in her affidavit she “went

online to Sky Zone’s website and filled out the required paperwork” for Plaintiff and

their children. Plaintiff’s wife stated she did not ask Plaintiff’s permission to do so,

nor did she tell or notify Plaintiff she had signed the Agreement for Plaintiff.

According to Plaintiff’s wife, when the group entered Sky Zone Asheville, an employee

“approached us and inquired if we had signed up and purchased tickets on-line.”

Plaintiff’s wife said she had, as did some of the other adults, and the employee took

her to the check-in counter. Plaintiff’s wife asserted the employee asked her if she

had completed the paperwork online and she said she had, but did not recall “being

given any tickets and/or any temporary stickers by the Sky Zone employee . . . .”

Plaintiff’s wife further asserted the employee did not ask if Plaintiff had signed the

Agreement, nor did the employee ask her to “go get [Plaintiff] . . . so that he could

confirm that he had electronically signed the agreement and/or waiver[.]” Plaintiff’s

wife then recounted handing Plaintiff socks for the group and being alerted to

Plaintiff’s injury.

The trial court heard Defendants’ Motion at a 3 September 2019 hearing.

Almost immediately after the hearing began, the trial court stated, “what it boils

down to, correct me if I’m wrong, it boils down to whether or not Mr. Short signed the

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arbitration.” The trial court continued: “If [Plaintiff] signed it, okay, he’s subject to

arbitration. If he didn’t sign it, he’s not subject to arbitration.” The trial court then

asked if Defendants had any evidence showing Plaintiff, in fact, signed the

Agreement and counsel replied they did not. However, Defendants’ counsel stated

the affidavits showed Plaintiff’s wife did sign the Agreement for Plaintiff as—

Defendants claimed—his agent. Defendants’ counsel asserted Plaintiff “knew,

according to his affidavit, that [Plaintiff’s wife] responded in the affirmative that she

had signed up and purchased tickets online. He was also aware that she went to

complete the check-in process while he was there.” Counsel further stated Plaintiff

was only allowed entry after Plaintiff’s wife completed the check-in process and that

there were signs posted alerting participants “must have completed and signed the

agreement.” Defendants’ counsel continued to reiterate Plaintiff’s wife completed the

check-in process, with Plaintiff’s knowledge, and Plaintiffs wife told Sky Zone

Asheville employees she had “completed the paperwork online[.]”

Plaintiff’s counsel responded saying, based on the affidavits, Plaintiff did not

enter into any agreement with Defendants and that Plaintiff hearing his wife

“sign[ed] up and [bought] tickets online” was not sufficient to alert Plaintiff she had

signed the Agreement for him. Counsel further asserted: “at no time did [Plaintiff],

either through implication or an express agreement or apparent agency situation, . .

. ever say you have my permission to sign an agreement for me.” Both Plaintiff’s and

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Defendants’ counsel continued to argue whether the affidavits showed there was an

agreement, whether Plaintiff was aware of the requirement to sign a waiver or

agreement, and whether Plaintiff’s wife acted as his agent—to include signing the

Agreement.

At the close of oral arguments, the trial court denied Defendants’ Motion.

Defendants’ counsel asked the court to include “factual findings in the denial;” the

trial court agreed, and Plaintiff’s counsel stated he would draft the Order and

findings. The trial court told Plaintiff’s counsel to “do findings of fact as to what

transpired with everything.”

On 13 September 2019, the trial court issued an Order denying Defendants’

Motions to Dismiss and Compel Arbitration. The Order contained Findings of Fact

including: Plaintiff’s wife completed the online check-in process and paperwork on

Sky Zones Asheville’s website; Plaintiff’s wife “checked” the clause in the Agreement

titled “Arbitration of Disputes;” Plaintiff’s wife typed Plaintiff’s name into the end of

the Agreement form; and Plaintiff did not know his wife completed the Agreement

form by entering Plaintiff’s name and information. The trial court accepted the

sequence of events beginning with Plaintiff and his family arriving at Sky Zone

Asheville and ending with the completion of the check-in process as stated in

Plaintiff’s and his wife’s affidavits. The trial court also found Plaintiff did not see the

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signs alerting participants of the need to sign waivers as referenced in Defendants’

affidavit.

Based on the affidavits and oral arguments, the trial court concluded there was

“no mutual agreement and no meeting of the minds between Plaintiff . . . and

Defendants[,]” necessary for a valid agreement to arbitrate under North Carolina law.

The trial court further concluded: “Because Plaintiff . . . had not read the Agreement,

Sky Zone’s attempt to bind him to the arbitration clause is not sufficient to prove the

necessary mutual agreement between the parties.” Accordingly, the trial court held

the Agreement’s arbitration clause was “unenforceable against” Plaintiff.

On 11 October 2019, Defendants timely filed a written Notice of Appeal from

the trial court’s 13 September Order denying Defendants’ Motion to Compel

Arbitration.

Issue

The dispositive issue on appeal is whether the trial court’s Findings of Fact

adequately resolve the factual disputes between the parties as to the existence of a

valid arbitration clause to support its denial of Defendants’ Motion to Compel

Arbitration.

Analysis

Defendants’ appeal of the trial court’s Order is interlocutory. “Generally, there

is no right of immediate appeal from interlocutory orders and judgments.” Goldston

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v. Am. Motors Corp., 326 N.C. 723, 725, 392 S.E.2d 735, 736 (1990). However,

“immediate appeal is available from an interlocutory order or judgment which affects

a substantial right.” Sharpe v. Worland, 351 N.C. 159, 162, 522 S.E.2d 577, 579

(1999) (quotation marks omitted). “[T]he right to arbitrate a claim is a substantial

right which may be lost if review is delayed, and an order denying arbitration is

therefore immediately appealable.” U.S. Trust Co., N.A. v. Stanford Grp. Co., 199

N.C. App. 287, 289-90, 681 S.E.2d 512, 514 (2009) (citation and quotation marks

omitted). Accordingly, Defendants’ appeal is properly before us.

“When a party disputes the existence of a valid arbitration agreement, the trial

judge must determine whether an agreement to arbitrate exists.” Sciolino v. TD

Waterhouse Investor Servs., Inc., 149 N.C. App. 642, 645, 562 S.E.2d 64, 66 (2002).

When reviewing the denial of a motion to compel arbitration, findings of fact made

by the trial judge are conclusive on appeal if supported by competent evidence, even

if there is evidence to the contrary. Bookman v. Britthaven, Inc., 233 N.C. App. 454,

457, 756 S.E.2d 890, 893 (2014). “Accordingly, upon appellate review, we must

determine whether there is evidence in the record supporting the trial court’s findings

of fact and if so, whether these findings of fact in turn support the conclusion that

there was no agreement to arbitrate.” Id. (citation and quotation marks omitted).

Moreover, when deciding pretrial motions, “[i]f the trial court chooses to decide the

motion based on affidavits, the trial judge must determine the weight and sufficiency

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of the evidence presented in the affidavits much as a juror.” Banc of Am. Secs. LLC

v. Evergreen Int’l Aviation, Inc., 169 N.C. App. 690, 694,611 S.E.2d 179, 183 (2005).

In this case, the parties dispute the existence of a valid arbitration agreement.

Plaintiff contends he never signed the Agreement himself and he did not know his

wife signed the Agreement, nor did he authorize her to do so. At the hearing,

Defendants argued Plaintiff’s wife signed the Agreement as Plaintiff’s agent and

Defendant Sky Zone Asheville relied on that authority. Defendants’ counsel admitted

there was not evidence Plaintiff signed the Agreement himself, but there was

evidence Plaintiff was aware his wife signed Plaintiff up online. Defendants’ counsel

also argued there was evidence Plaintiff was, or should have been, aware the sign up

and check-in process included waivers as there were signs posted in the facility

alerting customers of this requirement. Plaintiff’s affidavit asserts he did not recall

seeing such signs.

Based on these arguments and the affidavits in the Record, the trial court

found: (1) Plaintiff’s wife signed the Agreement for him, without Plaintiff’s

knowledge; (2) Plaintiff did not sign the Agreement; and (3) Plaintiff was not aware

of the need to sign the Agreement. The trial court then concluded as a matter of law:

(1) because Plaintiff did not sign the Agreement, there was no “mutual agreement

and no meeting of the minds” between Plaintiff and Defendants; (2) because Plaintiff

had not read the Agreement, there was no mutual agreement to which Defendants

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could bind Plaintiff; and therefore (3) the Agreement’s arbitration clause was

unenforceable against Plaintiff.

However, “[t]he law of contracts governs the issue of whether an agreement to

arbitrate exists.” Brown v. Centex Homes, 171 N.C. App. 741, 744, 615 S.E.2d 86, 88

(2005). An agent may contractually bind a principal to a third party if the third party

can establish an agency relationship between the principal and agent. Bookman, 233

N.C. App. at 457-58, 756 S.E.2d at 893-94. “An agent’s authority to bind [a] principal

. . . can be shown only by proof that the principal authorized the acts to be done or

that, after they were done, [the principal] ratified them.” Id. “Apparent authority is

that authority which the principal has held the agent out as possessing or which he

has permitted the agent to represent [the agent] possesses[,]” and the principal’s

liability “must be determined by what authority the third person in the exercise of

reasonable care was justified in believing” the principal conferred to the agent. Id. at

458, 756 S.E.2d at 894.

At the motion hearing, Defendants argued, generally, such an agency

relationship existed between Plaintiff and his wife, and Defendants relied on

Plaintiff’s manifestations holding his wife out as his agent. For its part, the trial

court made no findings of fact as to whether an agency relationship existed between

Plaintiff and his wife on any of the above agency theories. The trial court’s findings

only addressed the uncontested fact Plaintiff did not sign the Agreement. The trial

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court did not address the central factual disputes as to whether an agency

relationship between Plaintiff and his wife existed such that Plaintiff’s wife could

bind him to the Agreement. The trial court accepted the affidavits as true without

weighing the parties’ incompatible narratives on what those affidavits proved as to

agency.

On appeal, Plaintiff argues no such agency relationship existed and we should

presume the trial court found there was no agency relationship. Defendants argue

Plaintiff’s wife had actual and/or apparent authority to bind Plaintiff to the

Agreement, or in the alternative, the trial court made no such findings which we can

review. The Record—through affidavits and oral arguments—reflects a number of

factual disputes regarding agency. Because the trial court did not decide the key

factual issue of agency, we cannot, in turn, decide the issue as a matter of law. See

Parker v. Town of Erwin, 243 N.C. App. 84, 99, 776 S.E.2d 710, 722 (2015) (“the trial

judge had the responsibility of acting as a fact-finder . . . and was responsible for

determining the weight and sufficiency of the evidence” (citations and quotation

marks omitted)). Accordingly, we vacate the trial court’s Order and remand to the

trial court for appropriate findings of fact to resolve the parties’ factual disputes

regarding agency and to support its conclusion as to whether the parties mutually

agreed to arbitration. See Bookman, 233 N.C. App. at 461, 756 S.E.2d at 896

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(reversing and remanding a trial court’s denial of a motion to compel arbitration

because the trial court made no findings of fact concerning apparent authority).

Conclusion

Accordingly, for the foregoing reasons, we vacate the trial court’s Order and

remand this matter to the trial court for additional proceedings on the question of

agency.

VACATED AND REMANDED.

Judges BRYANT and DIETZ concur.

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