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Arbitration – Jury Trial Right – Litigation Participation – Attorney’s Fees

Arbitration – Jury Trial Right – Litigation Participation – Attorney’s Fees


Although G.S. § 22B-10 says it is unconscionable and unenforceable for a contract to require a party to waive his right to a jury trial, the statute goes on to say that it does not prohibit parties from entering into arbitration agreements. The parties’ arbitration rider explained that, by agreeing to arbitration, plaintiffs were giving up their right to a jury trial. This explanation did not render the contract unconscionable or unenforceable under § 22B-10.

We reverse the trial court’s denial of defendants’ motion to compel arbitration.

Even if § 22B-10 could be read as allowing arbitration clauses yet precluding waivers of jury trials, the parties’ arbitration rider is still enforceable under the Federal Arbitration Act, which the arbitration rider cites as controlling law.

Prior to demanding arbitration, defendants’ participation in litigation was limited to filing responsive pleadings and responding to discovery. These acts cannot be considered making use of the litigation machinery. And where it is unclear how much money plaintiffs expended in legal fees prior to and after defendants’ demand for arbitration, the trial court erred in concluding that plaintiffs were prejudiced by having expended $40,164.51 in litigation costs.

Reversed and remanded.

Wygand v. Deutsche Bank Trust Co. Americas (Lawyers Weekly No. 011-154-19, 17 pp.) (Philip Berger, J.) Appealed from Craven County Superior Court (Benjamin Alford, J.) Trawick Stubbs, Matthew Buckmiller and Joseph Frost for plaintiffs; Brian Rowlson for defendants. N.C. App.

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