Yet Another Arbitration Ruling From The COA
Kiell v. Kiell, filed Sept. 5, addresses whether a plaintiff has a right to a jury trial on "gateway" issues relating to the enforceability of an arbitration agreement. The short answer: "no."
After the plaintiff filed suit, the defendant moved to compel arbitration on the basis that the parties' agreement had an arbitration clause. The plaintiff opposed the motion, contending that the arbitration agreement was not enforceable. Specifically, she contended she was fraudulently induced to enter the arbitration agreement and that even if the agreement was not void she was entitled to rescission since the defendant himself had breached the agreement. The plaintiff claimed that she was entitled to a jury trial on those issues (fraudulent inducement and breach) -- even though the NC Uniform Arbitration Act (UAA) requires that a trial judge (as opposed to a jury) must summarily determine whether a valid arbitration agreement exists. The trial court bought the plaintiff's argument, holding that the UAA's requirement was unconstitutional as applied to her claims of fraudulent inducement and breach of contract, because the plaintiff had a constitutional right to a jury trial on those issues.
The COA reversed on multiple grounds. One was particularly interesting as it was not raised by the parties. The COA observed that the enforceability of the arbitration agreement was a separate issue from the merits of the plaintiff's suit; no matter how the enforceability issue was decided, it wouldn't resolve the merits of her underlying claims. Citing NC Supreme Court precedent from 1939 (a case neither party cited), the COA held that the right to a jury trial does not extend to issues that "form no part of the ultimate relief sought and do not affect the final rights of the parties." The case reminds us that the jury right is not as broad as many are led to believe. (The case also reminds us that Judge Geer, the author of the opinion, does her own legal research.)
After the plaintiff filed suit, the defendant moved to compel arbitration on the basis that the parties' agreement had an arbitration clause. The plaintiff opposed the motion, contending that the arbitration agreement was not enforceable. Specifically, she contended she was fraudulently induced to enter the arbitration agreement and that even if the agreement was not void she was entitled to rescission since the defendant himself had breached the agreement. The plaintiff claimed that she was entitled to a jury trial on those issues (fraudulent inducement and breach) -- even though the NC Uniform Arbitration Act (UAA) requires that a trial judge (as opposed to a jury) must summarily determine whether a valid arbitration agreement exists. The trial court bought the plaintiff's argument, holding that the UAA's requirement was unconstitutional as applied to her claims of fraudulent inducement and breach of contract, because the plaintiff had a constitutional right to a jury trial on those issues.
The COA reversed on multiple grounds. One was particularly interesting as it was not raised by the parties. The COA observed that the enforceability of the arbitration agreement was a separate issue from the merits of the plaintiff's suit; no matter how the enforceability issue was decided, it wouldn't resolve the merits of her underlying claims. Citing NC Supreme Court precedent from 1939 (a case neither party cited), the COA held that the right to a jury trial does not extend to issues that "form no part of the ultimate relief sought and do not affect the final rights of the parties." The case reminds us that the jury right is not as broad as many are led to believe. (The case also reminds us that Judge Geer, the author of the opinion, does her own legal research.)
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