Hamilton v. Mortg. Info. Servs., Inc

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An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure. NO. COA12-584 NORTH CAROLINA COURT OF APPEALS Filed: 18 December 2012 KAY R. HAMILTON, on behalf of herself and all others similarly situated, Plaintiff, v. Wake County No. 08 CVS 15102 MORTGAGE INFORMATION SERVICES, INC., AND FIRST AMERICAN TITLE INSURANCE COMPANY, Defendants. Appeal by defendants from order entered 27 January 2012 by Judge Lucy N. Inman in Wake County Superior Court. Heard in the Court of Appeals 24 October 2012. Puryear and plaintiff. Lingle, Ellis & Winters, defendant. P.L.L.C., L.L.P., by by David Matthew B. W. Puryear, for Sawchak, for Bailey & Dixon, L.L.P., by Adam N. Olls, for defendant. ELMORE, Judge. Mortgage Information Services, Inc. (MIS) and First American Title Insurance Co. (First American) appeal from an order denying their combined motions to stay and to compel -2arbitration and to decertify the plaintiff class. After careful review, we affirm the trial court s order. I. Background On 22 April 2005, Kay R. Hamilton (plaintiff) refinanced her mortgage Mortgage debt Company by procuring (Ameriquest). a home In loan order from gain to Ameriquest financing, plaintiff was required to purchase a title insurance policy on behalf of Ameriquest as beneficiary. Ameriquest retained MIS to provide settlement services and issue an American Land Title Association insurance $175,500.00. provision. policy. The policy ALTA (ALTA policy First American was policy) in contained the an amount of arbitration the underwriter for the ALTA Plaintiff was neither a named insured, nor did she sign the ALTA policy, negotiate its terms, or have knowledge of the arbitration provision at closing. In exchange for its services, plaintiff paid MIS various fees from the proceeds of her loan, including a premium of $371.60 for the ALTA policy. On 25 August 2008, plaintiff filed a complaint in Wake County Superior Court against First American and MIS (together defendants) alleging that they engaged in unfair and deceptive trade practices certified her pursuant complaint to as N.C. a Gen. class Stat. action § and 75-1.1. She specifically -3challenged the following seven fees: 1) $325.00 closing fee to MIS, 2) the $225.00 title search fee to MIS, 3) the $75.00 title clearing fee to MIS, 4) the $50.00 title insurance binder fee to MIS, 5) the $250.00 signing fee to Mobile Closings, 6) the $371.60 title insurance fee, and 7) the $60.00 courier fee to MIS. On 10 November 2009, the trial court granted defendants dismissal motions certification in motion part in and part. granted plaintiff s Thereafter, class defendants made combined motions to stay and compel arbitration of plaintiff s remaining claims and to decertify plaintiff s class as to the extent that it asserted any claims against them. court denied said motions. The trial Accordingly, the existence of the ALTA policy and the application of the arbitration agreement contained therein that serve as the subjects of this appeal. I. Motion to Compel Arbitration The only issue on appeal is whether the trial court erred by denying defendants motions to compel arbitration. Defendants argue that plaintiff s claims stated in her complaint are subject to arbitration. We disagree. The denial of a motion to compel arbitration is generally interlocutory in nature. See Raspet v. Buck, 147 N.C. App. 133, -4135, 554 S.E.2d 676, 677 (2001). While an interlocutory order is generally not directly appealable, such an order will be considered if the trial court s decision deprives the appellant of a substantial right which would be lost absent immediate review. Howard v. Oakwood Homes Corp., 134 N.C. App. 116, 118, 516 S.E.2d 879, 881 (1999) (citations and quotations omitted). However, we have held that because [t]he right to arbitrate a claim is a substantial right which may be lost if review is delayed, . . . an order immediately appealable. denying Id. arbitration is therefore Accordingly, we will address the merits of defendants appeal. Our Supreme Court has held that 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. . . . Conclusions of law drawn by the trial court from its findings of fact are reviewable de novo on appeal. Tillman v. Commercial Credit Loans, Inc., 362 N.C. 93, 100-01, 655 S.E.2d 362, 369 (2008) (quoting Lumbee River Elec. Membership Corp. v. City of Fayetteville, 309 N.C. 726, 741, 309 S.E.2d 209, 219 (1983) and Carolina Power & Light Co. v. City of Asheville, 358 N.C. 512, 517, 597 S.E.2d 717, 721 (2004)). The determination of [w]hether a dispute is subject to arbitration -5involves a two pronged analysis; the trial court must ascertain both (1) whether the parties had a valid agreement to arbitrate, and 2) whether the specific dispute falls within the substantive scope of that agreement. Raspet v. Buck, 147 N.C. App. 133, 136, 554 S.E.2d 676, 678 (2001). Because the duty to arbitrate is contractual, the parties must have agreed to submit said dispute to arbitration. See Coach Lines v. Brotherhood, 254 N.C. 60, 67-68, 118 S.E.2d 37, 43 (1961). As the defendants do not challenge the trial court s conclusion that plaintiff is not a party to the arbitration agreement, we shall not address prong one above. A. Estoppel In the arbitration context, a party may be estopped from asserting that the lack of his signature on a written contract precludes enforcement of the contract s arbitration clause when he has consistently maintained that other provisions of the same contract should be enforced to benefit him. Ellen v. A.C. Schultes of Md., Inc., 172 N.C. App. 317, 321, 615 S.E.2d 729, 732 (2005). direct Therefore, when a party is seeking or receives a benefit arbitration from clause[,] he [the] will abide by the arbitration clause. contract be estopped containing from [the] refusing to Id. at 321, 615 S.E.2d at 732 -6(2005) (quoting Anlagen, 206 Inter. F.3d original)). Paper v. Schwabedissen 418 (4th such, As 411, Cir. our inquiry 2000) shall Maschinen (alterations focus on & in whether plaintiff is seeking or has received a direct benefit from the ALTA policy. Defendants assert that plaintiff received a direct benefit from the mere existence of the ALTA policy because, without such, her cause of action would cease to exist. Additionally, defendants argue that plaintiff seeks to enforce the price term contained in the ALTA policy while simultaneously disavowing the arbitration clause. We disagree recognized that with the defendants. disputed In contract Ellen, provided this part Court of the foundation for the plaintiffs complaint; however, we concluded that the plaintiffs were not estopped from refusing to arbitrate because they did not seek a direct benefit from the contract. As such, plaintiffs allegations of unfair and deceptive trade practices . . . [did not] depend upon the contracts containing the arbitration clause. Both of the claims [were] dependent upon legal duties imposed by North Carolina statutory or common law rather S.E.2d than 729, contract 732-33 law. (2005). 172 N.C. In App. Ellen 317, we 320-22, 615 distinguished -7Schwabedissen, a case in which nonsignatory International Paper gained a direct benefit from the Wood-Schwabedissen contract because it provided part of the factual foundation for every claim asserted by International Paper against Schwabedissen. Id. at 322, International 615 S.E.2d Paper s at 732. entire We case concluded hinge[d] that on its because asserted rights under the Wood-Schwabedissen contract[,] it [could not] seek to enforce those contractual contract s [arbitration] requirement. rights and avoid the Id. The case sub judice is analogous to Ellen. Here, five of plaintiff s remaining claims allege that defendant-MIS s and/or defendant-First American s violations of N.C. Gen. Stat § 248(d) contravened public policy and constituted unfair and deceptive trade practices pursuant to N.C. Gen. Stat § 71-1.1. The sixth claim alleges that defendants failed to offer the reissue rate set forth in First American s rate filing at the North Carolina Department of Insurance. court granted class certification Additionally, the trial with respect to four of plaintiff s remaining claims, including (1) whether the signing fee imposed by defendant-MIS was in excess of that prescribed by the Notary Public Act, (2) whether defendants failed to provide the services associated with the signing fee, (3) whether -8defendants violated the filed rate doctrine by failing to offer the correct reissue rate for a title insurance policy, and (4) whether defendant-MIS failed to provide the services associated with the courier fee. A close look at plaintiff s claims shows that they are not dependent upon the ALTA policy; instead, they stem from legal duties imposed by North Carolina statutory law. find no evidence that plaintiff consistently Furthermore, we maintained that certain provisions within the ATLA policy, including the price term, should be enforced to benefit her. As such, plaintiff never received direct benefit from the mere existence of the ALTA policy. Accordingly, plaintiff is not estopped to deny that she is required to participate in arbitration. B. Scope Defendants argue that plaintiff s claims fall within the scope of the arbitration clause. We disagree. [W]hether a claim falls within the scope of an arbitration clause . . . depends not on the characterization of the claim as tort or contract, but on the relationship of the claim to the subject matter of the arbitration clause. Inc. v. (1985). McQueen, 76 Accordingly, N.C. App. 16, we must look Rodgers Builders, 24, 331 S.E.2d 726, at the language in 731 the -9agreement, viz., the arbitration clause, and ascertain whether the claims fall within its scope. In so doing, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration. Here, the Id. arbitration clause provides in part that [a]rbitrable matters may include, but are not limited to, any controversy or claim between the Company and the insured arising out of or relating to this policy, and service of the Company in connection with its issuance or the breach of a policy provision or other obligation. Defendants argue that because other jurisdictions have concluded that similar arbitration provisions have a broad reach, plaintiff s claims accordingly fit[] comfortably within the scope of the arbitration provision. We agree with defendants in that both our courts and courts of other jurisdictions have interpreted similar arbitration provisions to encompass a wide variety of claims. See, e.g., Bass v. Pinnacle Custom Homes, Inc., 163 N.C. App. 171, 176, 592 S.E.2d 606, 609 (2004); Pierson v. Dean, Witter, Reynolds, 742 F.2d 334 (7th Cir. Ill. 1984); Bos Material Handling, Inc. v. Crown Controls Corp., 137 Cal. App. 3d 99 (Cal. App. 3d Dist. 1982). We also note that North Carolina has no legislative bar to the arbitration of claims based on unfair and deceptive trade -10practices provided that such claims arise out of or relate to the contract or its breach. Rodgers at 23, 331 S.E.2d at 731. However, here we conclude that plaintiff s claims do not fall within the scope of the arbitration provision as plaintiff s claims are statutorily based and do not arise out of or relate provision to the refers contract. to any Furthermore, controversy or claim Company and the insured (emphasis added). of the arbitration plaintiff s required provision claims. premium was Finally, did not not between intended the arbitration the Thus, the language plaintiff s trigger the to encompass payment of the enforcement of the arbitration provision as she neither signed nor negotiated the contract and was unaware of the arbitration provision contained therein. After carefully reviewing the record, we conclude that plaintiff s claims fall outside of the scope of the arbitration agreement. Accordingly, we decline to address defendants remaining issues on appeal. III. Conclusion In sum, plaintiff s claims do not fall within the scope of the arbitration provision and she is not estopped from denying the arbitration of her claims. Accordingly, we affirm. -11Affirmed. Judges STROUD and BEASLEY concur. Report per Rule 30(e).

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