In a recent North Carolina car accident case, an insurer appealed from a judgment confirming an arbitration award in favor of a plaintiff in a motor vehicle collision. The case arose from a 2013 motor vehicle collision. The insurer was the plaintiff’s uninsured motorist insurer. Under his policy, it was to pay the plaintiff compensatory damages if the plaintiff was hurt by a driver who was at fault but had insufficiently high liability coverage.
After the collision, the plaintiff settled with the defendant’s insurer and was advanced $35,000, which included the maximum medical payment and the liability limits. However, the insurer and the plaintiff couldn’t settle on the total amount of damages, so the plaintiff asked for arbitration under the policy provisions.
A panel of arbitrators awarded $110,000. This didn’t consider interest or costs in determining the award. The plaintiff moved the trial court to confirm the award. The lower court entered judgment for $110,000 plus pre-award interest and post-award interest. The insurer appealed.
It argued that the lower court did not have the authority to award the plaintiff costs, pre-award interest, and post-award or pre-judgment interest when it confirmed the arbitration award. The North Carolina Supreme Court has held that courts have limited power to modify an arbitration award and has specified that a trial court can modify an arbitration award only if the arbitrators make mathematical mistakes, mistakes related to form, or mistakes arising from an arbitrator going over their authority.
The appellate court found that the lower court had gone over its authority by determining the plaintiff could recover pre-award interest and costs. Without a policy exclusion, pre-award interest is a subset of compensatory damages for which an insurer providing uninsured coverage can be liable. Whether to provide this, however, is within the arbitrators’ authority. If an arbitration award doesn’t provide for pre-award interest, the lower court is supposed to simply confirm the award the way it was written unless there was a computing error.
A lower court is allowed to grant this interest if the court has been expressly given this discretion in the arbitrator’s award. In this case, the arbitrators didn’t defer to the lower court’s discretion. The award stated they didn’t consider interest or costs. The appellate court found that N.C. Gen. Stat. § 1-569.25 permits the lower court to include the reasonable costs of the motion to confirm the award, but not other costs. The appellate court concluded the lower court’s modification was in error.
The lower court also awarded the plaintiff post-award and pre-judgment interest that was calculated from the arbitration award date to the date of payment. The appellate court found this was within the lower court’s discretion. There were no appellate cases cited by either party addressing the lower court’s power to grant interest that accrued after the arbitration award, but before the entry confirming judgment. It explained that if there’s no decision about this interest in the arbitration award, courts have the authority to determine whether or not to award post-arbitration interest and post-judgment interest on lawsuits to confirm the arbitration award.
The appellate court affirmed the lower court’s judgment with regard to post-award interest and confirming the arbitration award, but it reversed the grant of pre-award interest and costs.
If you have been harmed due to the wrongful conduct or negligence of another party, the experienced Charlotte car accident attorneys at Maurer Law may be able to help you recover compensation. We represent clients in the Charlotte, NC metro area and also Greensboro, NC and Winston-Salem, NC. Contact us at 919-229-8359 or via our online form.
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