Arbitration – Motion to Compel Arbitration – Contract Interpretation

The contract’s arbitration clause applied only to disputes seeking specific performance, not Plaintiff’s damages claim, and because Defendant failed to respond to requests for admissions admitting breach and damages, summary judgment for Plaintiff was proper.

We affirmed the grant of summary judgment and the judgment in favor of Advisor Law.

The case arose from a dispute over unpaid legal fees for services related to expunging regulatory termination disclosures from public securities databases.

Defendant, an SEC-registered investment advisor, was terminated by Fifth Third Securities in 2019, and the termination was reported in the SEC’s IAPD and FINRA’s BrokerCheck databases. Seeking to remove these disclosures, Defendant retained Plaintiff Advisor Law LLC in September 2020. Their contract required a $15,000 retainer and hourly billing for services, and it included a narrow arbitration clause providing that disputes “that include specific performance as the primary or non-primary claim” would be arbitrated in Denver, Colorado under Colorado law.

Defendant paid the $15,000 retainer, which Advisor Law applied to its initial invoice. Advisor Law continued billing for services, and by July 2022 it demanded payment of an outstanding balance of $44,847.33. Various attempts by both sides to initiate arbitration in Colorado forums failed. In December 2023, Advisor Law filed suit in North Carolina for breach of contract seeking monetary damages, attorney’s fees, and costs. Defendant, proceeding pro se, answered but did not respond to discovery, including requests for admissions.

In May 2024, Defendant moved to compel arbitration, and Advisor Law moved for summary judgment. The trial court denied arbitration and granted summary judgment for Advisor Law. On appeal, Defendant argued the arbitration clause required the dispute to be arbitrated and that the trial court therefore erred in reaching the merits.

North Carolina law governed contract interpretation because the contract was executed in North Carolina and did not contain a general choice-of-law or forum-selection clause. The arbitration provision applied only to disputes that “include specific performance” as a remedy. Because Advisor Law’s lawsuit sought only money damages for breach of contract and did not request specific performance, the clause was unambiguous and inapplicable. Reading the contract as a whole, we refused to broaden the clause in a way that would render its limiting language meaningless, and we affirmed the denial of the motion to compel arbitration.

We then turned to summary judgment. Advisor Law had served requests for admissions on Defendant at his home address, the same address he used throughout the case. Defendant did not respond, and under Rule 36, the matters were deemed admitted, including the existence of a valid contract, Defendant’s breach, and resulting damages. Those admissions conclusively established the elements of breach of contract and left no genuine issue of material fact. Because the trial court properly concluded the case was not subject to arbitration, it was procedurally proper to rule on summary judgment.

Affirmed.

Advisor Law LLC v. Holland (Lawyers Weekly No. 011-030-26, 16 pp.) (Jeff Carpenter, J.) Appealed from Union County Superior Court (Matthew B. Smith, J.) Hamilton Stephens Steele + Martin, PLLC, by M. Aaron Lay, Robert J. Shelton, and Zachary M. Perhach, for Plaintiff-Appellee. Cranfill Sumner, LLP, by Steven A. Bader, for Defendant-Appellant. North Carolina Court of Appeals