noting that whether to stay nonarbitrable claims while arbitration of other claims is pending is in the discretion of the trial court
How later courts described this case
- noting that whether to stay nonarbitrable claims while arbitration of other claims is pending is in the discretion of the trial court
- declining to reverse and remand trial court's order in light of party's argument that trial court failed to apply the FAA, when the analysis was virtually identical and the same conclusion would be reached under either federal or state law
- noting that, had the arbitration clause been in the partnership agreement instead of an operating agreement, the partners would have been required to arbitrate a series of non-contract claims
- "[W]hether a dispute is subject to arbitration is a matter of contract law."
Written by the judges who cited it.
The opinion
WYNN, Judge
dissenting.
In this appeal, defendants Beckett and Mamboleo contend the trial court erred by denying their motion to compel arbitration. Though “mindful of the presumption in favor of arbitration,” the majority holds that “[i]t is unreasonable to compel arbitration in this case.” As I strongly disagree with the majority’s application of the relevant law, I am compelled to respectfully dissent.
*486 Under the Federal Arbitration Act (“FAA”), codified in Title IX of the United States Code,
A written provision in any . . . 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.
9 U.S.C. § 2 (2002). Our Supreme Court recognized in Burke County Pub. Sch. Bd. of Educ. v. Shaver Partnership, 303 N.C. 408, 422 , 279 S.E.2d 816, 825 (1981), that “[t]he Federal Arbitration Act, by virtue of the Supremacy Clause [of the United States Constitution], is . . . part of North Carolina law.”
The United States Supreme Court has repeatedly emphasized that:
in enacting § 2 of the [FAA], Congress declared a national policy favoring arbitration and withdrew the power of the states to require a judicial forum for the resolution of claims which the contracting parties agreed to resolve by arbitration .... Section 2 . . . embodies a clear federal policy of requiring arbitration unless the agreement to arbitrate is not part of a contract evidencing interstate commerce or is revocable upon such grounds as exist at law or in equity for the revocation of any contract.
Perry v. Thomas, 482 U.S. 483, 489 (1987). See also Southland Corp. v. Keating, 465 U.S. 1, 11-12 (1984); Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 24 (1983).
As noted by the majority, however, the United States Supreme Court has also held that “[t]he question whether the parties have submitted a particular dispute to arbitration, i.e., the ‘question of arbi-trability,’ is an issue for judicial determination unless the parties clearly and unmistakably provide otherwise.” Howsam v. Dean Witter Reynolds, 537 U.S. 79 (2002) (citations omitted). In Howsam , Justice Breyer emphasized, notwithstanding, that the question of arbitrability is only “applicable in the kind of narrow circumstance where contracting parties . . . are not likely to have thought that they had agreed” to arbitrate the matter, and where court action would have the effect of “forcing parties to arbitrate a matter that they may well not have agreed to arbitrate.” Id.
In this case, neither the majority nor the parties dispute that the contract evidenced a transaction involving commerce. Instead, the *487 majority holds that the complaint contained counts which, as Section 2 and Howsam provide, were not “arising out of such contract or transaction,” and, thus, were not arbitrable.
My review of the record, however, indicates that this entire controversy involves the alleged mismanagement of monies flowing into and out of the New Africa Opportunity Fund. The Fund is a limited partnership, with only one general partner: New Africa Investment Management. Defendant Beckett was sued because he was the President, General Manager, and member of New Africa Investment Management. Defendant Mamboleo is a member of New Africa Investment Management. As the New Africa Investment Management agreement contained an express arbitration clause — a clause which extended its reach to “the fullest extent permitted by law” — I do not believe that an order compelling arbitration would force the “parties to arbitrate a matter that they may well not have agreed to arbitrate.” Howsam v. Dean Witter Reynolds, 537 U.S. 79 . As this is the only plausible basis for the majority’s holding, I am compelled to respectfully dissent.