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Town of Belville v. Urban Smart Growth, LLC

Court of Appeals of North Carolina

February 21, 2017

TOWN OF BELVILLE, Plaintiff,
v.
URBAN SMART GROWTH, LLC, and MICHAEL WHITE, Defendants.

          Heard in the Court of Appeals 26 January 2017.

         Appeal by plaintiff from order entered 13 April 2016 by Judge Gary E. Trawick in Brunswick County Superior Court No. 15 CVS 1217.

          Brooks, Pierce, McLendon, Humphrey & Leonard, LLP, by Andrew L. Rodenbough and Charles S. Baldwin, IV, and Eldridge Law Firm, PC, by James E. Eldridge, for plaintiff-appellant.

          Hamlet & Associates, PLLC, by H. Mark Hamlet, for defendant-appellee.

          BERGER, JUDGE.

         The Town of Belville ("Plaintiff") appeals the April 13, 2016 order entered by the Honorable Gary Trawick in Brunswick County Superior Court. The order denied Plaintiff's motion to compel Urban Smart Growth, LLC ("Defendant") to submit to binding arbitration and to stay all other proceedings in the dispute between these parties. Plaintiff argues in this interlocutory appeal that it has the contractual right to demand arbitration. However, after careful review, we affirm the trial court's order denying this motion because Plaintiff took actions contrary to its contractual rights and waived any right to arbitration.

         Factual & Procedural Background

         In October 2007, Plaintiff entered into an agreement ("Agreement") with Defendant concerning a revitalization project in the town of Belville, North Carolina. The project would include a "large-scale mixed use development to be constructed in multiple phases extending over a period of 20 years, and which may include multi-family homes and/or other residential uses; professional space; recreational and/or entertainment events park; and, a multi-purpose municipal building that will include a gathering hall and administrative offices."

         Pursuant to Section 8.05 of the Agreement, any dispute, claim or controversy between the parties was to be resolved first through negotiation, and then through arbitration. This section set forth the necessary procedures, requirements and time-frames to conduct arbitration. Either party could initiate negotiations by notifying the other party in writing the subject of the dispute and the relief sought. The party that received such a writing had ten days to respond with their position on and recommended solution to the dispute. If this did not resolve the dispute, then a representative of each party would meet within 30 days to attempt a resolution. If at this point there is still no resolution, the matter would be resolved through binding arbitration. Following arbitration, the party who was determined to be in default by breaching the Agreement had 120 days to cure or begin the process to cure any such default.

         On May 30, 2013, Plaintiff notified Defendant by letter that it was in default, and enumerated the reasons for default. Plaintiff further notified Defendant that, because of this default, Plaintiff wished to either renegotiate or terminate the Agreement. Plaintiff had taken the first step outlined by Section 8.05 to resolve any dispute, but the parties never engaged in negotiations or arbitration.

         On July 7, 2015, more than two years later, Plaintiff filed an Application and Order Extending Time to File Complaint to assert claims against Defendant for breach of contract by non-performance and breach of contract by repudiation of the Agreement. Plaintiff stated it was seeking damages in excess of $100, 000.00, a jury trial, attorney's fees, and costs, and any further relief the court determined to be necessary and proper. The order extending time was granted.

         On July 27, 2015, Plaintiff filed a complaint in this action alleging breach of contract, non-performance, anticipatory repudiation, and wrongful interference with contract. Plaintiff's prayer for relief included compensatory damages, attorney's fees, costs, and a demand for a jury trial.

         On September 24, 2015, Defendant filed an Answer to Plaintiff's Complaint and Counterclaims. Defendant asserted multiple defenses, along with a counterclaim in which it alleged breach of contract and breach of duty of good faith by Plaintiff, and sought specific performance.

         On October 7, 2015, Plaintiff and Defendant filed a joint motion for Recommendation for Designation of Exceptional Civil Case pursuant to Rule 2.1 of the General Rules of Practice for Superior and District Courts due to the complex evidentiary and legal issues involved in the case, as well as the voluminous amount of pretrial discovery anticipated by the parties. The Honorable Ola M. Lewis, Senior Resident Superior Court Judge for Brunswick County, entered an order on October 8, 2015, recommending the designation of this case as exceptional to the Honorable Mark D. Martin, Chief Justice of the North Carolina Supreme Court. On October 13, 2015, Chief Justice Martin ...


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