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Cellular Dealer's 3.24 million dollar award against Alltel for breach of the covenant of good faith and fair dealing reinstated by N. C. Court of Appeals.

On October 5, 2004, the North Carolina Court of Appeals reinstated a 3.24 million dollar AAA arbitration award against cellular phone carrier Alltel. The decision is available on the Court's web sit at: http://www.aoc.state.nc.us/www/public/coa/opinions/2004/031063-1.htm

In this case, Cellular Plus of North Carolina, Inc., a Raleigh based independent cellular dealer sued Alltel in state court but was forced into arbitration. Cellular Plus alleged many claims but ultimately prevailed on its claim for breach of the covenant of good faith and fair dealing. The ultimate award will be larger than 3.24 million because interest is accruing at the legal rate of 8% and additional attorneys fees on appeal should be awarded. The award was based upon a finding that Alltel had committed Unfair and Deceptive acts against Cellular Plus by breaching the covenant of good faith. North Carolina statutes require the trebling of actual damages for unfair trade practice. Following the conclusion of the arbitration proceeding, Alltel convinced a trial judge to reduce the damages award to one third of the original damages award. Alltel's argument was that the contract it had with Cellular Plus should be interpreted to preclude treble damages. The trial court agreed with Alltel and substituted its interpretation of the contract between Alltel and Cellular Plus for that of the arbitrators. The unanimous North Carolina Court of Appeals panel reversed and reinstated the full 3,240,140 award against Alltel and for Cellular Plus.

Alltel also tried to get the trial court judge (Ripley Rand) to refuse to confirm the arbitration award of attorneys fees. Judge Rand found that Alltel had waived this argument by not making it to the Arbitration Panel in the first place. The court of appeals agreed with Judge Rand on this issue.

Mark Finkelstein, counsel for the victorious dealer said: "We fought like cats and dogs to have this case tried before a jury. Perhaps the best thing that ever happened to us was that we lost and were forced to arbitrate. The case was extraordinarily complicated and needed experienced arbitrators to understand just how underhanded Alltel behaved and to understand the complex damages issues raised by this case."

Mark Anderson Finkelstein
Herring McBennett Mills & Finkelstein, PLLC
PO Box 1677, Raleigh, NC 27602
Phone: (919) 821-1860 x 246 Fax: 821-1816

Mr. Finkelstein provides Civil and Administrative Litigation Services and Business and Employment Law advice. These services include assistance with disputes involving Unfair Trade Practices, Breach of Fiduciary Duty, Fraud, Breach of Contract, Employment Law, Environmental Claims, Negligence and Trade Secret Protection.

Herring McBennett Mills and Finkelstein provides assistance with Business Litigation, Professional Licensing, Business Formation, Business Transactions, Real Property Transactions and Closings, Land Condemnation Issues, White Collar Criminal Defense, Administrative and Environmental Litigation, Employment Law Advice, Civil Litigation and Family Law Representation.

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