Opinion
No. COA12–1331.
2013-05-7
Stephen MANCUSO, Plaintiff, v. CITY OF DURHAM, Defendant.
Caitlyn H. Thomson and Lynn Fontana, for plaintiff-appellant. Senior Assistant City Attorney, Donald T. O'Toole, for defendant-appellee.
Appeal by plaintiff from order entered 11 July 2012 by Judge Orlando F. Hudson in Durham County Superior Court. Heard in the Court of Appeals 28 March 2013. Caitlyn H. Thomson and Lynn Fontana, for plaintiff-appellant. Senior Assistant City Attorney, Donald T. O'Toole, for defendant-appellee.
STEELMAN, Judge.
Where the trial court failed to enter findings of fact in its order denying plaintiff's motion to compel arbitration, we vacate the order of the trial court and remand this case for the entry of findings of fact.
I. Factual and Procedural History
Stephen Mancuso (plaintiff) was employed by the City of Durham (defendant) as a Transit Administrator from March 1997 to October 2011. In June 2010, defendant entered into a contract with Triangle Transit Authority (TTA) providing that TTA would take over the management and operation of the Durham Area Transit Authority. Plaintiff remained an employee of defendant, but was “on loan” to TTA from 1 October 2010 to 30 September 2011.
On 18 August 2010, plaintiff filed a complaint with the U.S. Department of Labor (USDOL) alleging that his rights under Section 13(c) of the Urban Mass Transportation Act, as amended, 49 U.S.C. § 5333(b), “had been violated when he was placed in a temporary position with duties that were not comparable to the duties of his prior position.” Section 13(c) requires that as a condition of the receipt of federal funds for transportation projects, fair and equitable arrangements be made to protect mass transportation employees. The basis of plaintiff's complaint was an agreement pursuant to Section 13(c) between defendant's contract administrator, Transit Management of Durham, and a local union. This agreement provided that as a condition of the receipt of federal funds for the acquisition of certain transit related assets from Duke Power, mass transit employees were given certain employment benefits. These benefits included protections for employees who were placed in a lower position or who were laid off as a result of the acquisition of Duke Power's assets. The agreement also outlined the claims process for an employee claiming rights under the agreement. Plaintiff requested USDOL delay ruling on his complaint until he determined whether his employment would be continued after 30 September 2011.
Defendant has an arrangement known in the mass transit industry as the “Memphis formula.” This arrangement occurs when a publicly owned transit system is legally prohibited from collective bargaining by state law. SeeN.C. Gen.Stat. § 95–98 (2011). It allows the city to appoint an independent company to undertake the city's contract obligations under the Section 13(c) agreement. This company manages and operates the transit system, directly employs system workers, and collectively bargains with the union.
When plaintiff was informed that his temporary position with TTA would not continue and that his position with defendant was being terminated, he notified USDOL on 11 October 2011 that he wished to resume his complaint. Plaintiff's counsel contacted the Assistant Durham City Attorney, Kimberly Grantham (Grantham). Grantham suggested the parties use the arbitration process specified in the 13(c) agreement as a framework for the resolution of plaintiff's claim, and informed plaintiff that as a city employee, defendant had no administrative remedies. Plaintiff's counsel sent Grantham an e-mail on 30 November 2011 confirming the terms of their oral arrangement. They agreed to use binding arbitration to resolve plaintiff's claim, and defendant agreed to pay for the costs of arbitration. In March 2012, Grantham advised plaintiff's counsel that she had overstepped her authority and did not have the authority to submit plaintiff's claim to binding arbitration.
On 1 April 2012, plaintiff filed the complaint in the instant action alleging the following claims: (1) breach of the protective arrangements under Section 13(c); (2) breach of the agreement to enter into binding arbitration; and (3) wrongful discharge in violation of public policy. Defendant filed its answer, asserting numerous defenses, including lack of subject matter jurisdiction. The answer also contained a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6) of the North Carolina Rules of Civil Procedure. On 13 June 2012, plaintiff filed a motion to stay his action and to compel arbitration. This matter was heard at the 11 July 2012 Session of Civil Superior Court for Durham County. The trial court denied plaintiff's motion to compel arbitration and granted defendant's motions to dismiss pursuant to Rules 12(b)(6) and 12(b)(1) of the North Carolina Rules of Civil Procedure. Plaintiff's complaint was dismissed with prejudice.
Plaintiff appeals.
II. Motion to Compel Arbitration
In his first argument, plaintiff contends that the trial court erred in denying his motion to compel arbitration. Because the order of the trial court is devoid of findings of fact, we are unable to review this assignment of error and remand this matter to the trial court for entry of an order containing proper findings of fact.
This Court has held that “an order denying a motion to compel arbitration must include findings of fact as to ‘whether the parties had a valid agreement to arbitrate’ and, if so, ‘whether the specific dispute falls within the substantive scope of that agreement.” Griessel v. Temas Eye Ctr., P.C., 199 N.C.App. 314, 317, 681 S.E.2d 446, 448 (2009) (quoting U.S. Trust Co., N.A. v. Standford Grp. Co., 199 N.C.App. 287, 290, 681 S.E.2d 512, 514 (2009)). When a trial court's order does not include findings of fact, this Court has repeatedly remanded the case to the trial court for entry of an order containing findings of fact. See, e.g., Cornelius v. Lipscomb, –––N.C.App. ––––, ––––, 734 S.E.2d 870, 872 (2012) (reversing and remanding because the “order provides no findings and no explanation for the basis of the court's decision to deny the motion to compel arbitration”); Griessel, 199 N.C.App. at 317, 681 S.E.2d at 448 (holding that where “the trial court made no finding of fact as to the existence of a valid agreement to arbitrate[,] ... we must reverse the trial court's order and remand for entry of findings of fact”); Steffes v. DeLapp, 177 N.C.App. 802, 805, 629 S.E.2d 892, 895 (2006) (“As we cannot determine the reason for the denial, we cannot conduct a meaningful review of the trial court's conclusions of law and must reverse and remand the order for further findings.”).
We vacate the order of the trial court and remand this case to the trial court for entry of a new order containing findings of fact and performing the two-step analysis noted above. Upon remand, the trial court should first determine whether the Federal Arbitration Act or the North Carolina Revised Uniform Arbitration Act, N.C. Gen.Stat. §§ 1–569.1 to 569.31, is applicable. See Hobbs Staffing Servs., Inc., v. Lumbermens Mut. Cas. Co., 168 N.C.App. 223, 226, 606 S.E.2d 708, 711 (2005) (noting that the question of which law applies “is a question of fact, which an appellate court should not initially decide”).
We do not address plaintiff's remaining arguments because we cannot address the motions to dismiss without first considering the issue of arbitration. Should the trial court hold that there was an enforceable agreement to arbitrate, the trial court would then determine whether each claim falls within the substantive scope of that agreement, and the merits of the claims would be submitted to the arbitrator and not the court. See Griessel, 199 N.C.App. at 317, 681 S.E.2d at 448 (outlining the two-step analysis).
In entering its order pertaining to whether the parties had an enforceable agreement to arbitrate, the trial court should consider the following case: Cabarrus Cty. v. Systel Bus. Equip. Co., 171 N.C.App. 423, 614 S.E.2d 596 (2005).
VACATED AND REMANDED. Judges ELMORE and STROUD concur.
Report per Rule 30(e).