Cameron v. Griffith

370 S.E.2d 704 (1988)

In the Matter of the Arbitration between Archie C. CAMERON, Claimant, and Richard Sheppard GRIFFITH and wife, Ann West Griffith, Respondents.

No. 8712DC1246.

Court of Appeals of North Carolina.

August 16, 1988.

Ray Colton Vallery, Fayetteville, for claimant-appellee.

McCoy, Weaver, Wiggins, Cleveland & Raper by Richard M. Wiggins and Jeffrey N. Surles, Fayetteville, for respondent-appellants.

PHILLIPS, Judge.

Respondents argue that their contract for the corporate stock is governed by the four-year statute of limitations provided for in G.S. 25-2-725 and the arbitration was not authorized since the claim was barred by that statute. Under the view of the appeal that we take whether the four-year statute is the correct one is irrelevant and we do not determine it; for by its terms the limitations period stated in G.S. 25-2-725 applies only to an "action," which is a "judicial proceeding," G.S. 25-1-201(1); and an arbitration is neither an "action" nor a "judicial proceeding," but a non-judicial, out-of-court proceeding which makes an action or judicial proceeding unnecessary.

The parties' contract does not limit the period in which arbitration can be demanded and no statute or court decision of this State of which we are aware does so either. Respondents' contention that it was held in *705 Adams v. Nelsen, 313 N.C. 442, 329 S.E.2d 322 (1985) that defendant's right to demand arbitration was barred because not filed before the three-year statute of limitations expired is mistaken; for in that case the parties' contract explicitly provided that a demand for arbitration could not be made "after the date when such dispute would be barred by the applicable statute of limitations." Ibid at 447-448, 329 S.E.2d at 325. Since the contract in this case contains no such stipulation, we conclude that the claimant's right to an arbitration hearing was not barred by the statute of limitations. Nor should it be, in our opinion; because the contract to arbitrate was freely entered into with the implied or express knowledge that arbitrators are not bound to follow the law but may decide controversies according to what is good and equitable, Robbins v. Killebrew, 95 N.C. 19 (1886), and that an arbitrator's mistake either as to law or fact is "the misfortune of the party." Cyclone Roofing Co., Inc. v. David M. LaFave Co., Inc., 312 N.C. 224, 236, 321 S.E.2d 872, 880 (1984). Thus, the arbitrators' mistake, if any, as to the statute of limitations was a hazard that respondents assumed when they agreed to arbitration, and we know of no authority that entitles them to be relieved thereof.

Affirmed.

WELLS and BECTON, JJ., concur in the result.

BECTON, Judge, concurring in the result.

The powers of arbitrators are not unlimited. They, too, must follow the law. Their mistakes about the law are not ordinarily reviewable; however, their mistakes about their authority are reviewable. N.C. Gen.Stat. Sec. 1-567.13(a)(3). For example, when arbitrators fail to enforce express provisions regarding time limits, they have exceeded their authority.

Given the fact that the agreement to arbitrate in this case did not limit the period in which arbitration could be demanded, I concur in the result. As a separate basis for concurring in the result, I deem it significant that the record does not show that the respondents ever raised the defense of laches or implied waiver in any proceeding below.