Episcopal Housing Corp. v. Federal Ins. Co., No. 20559

CourtUnited States State Supreme Court of South Carolina
Writing for the CourtPER CURIAM
Citation269 S.C. 631,239 S.E.2d 647
PartiesEPISCOPAL HOUSING CORPORATION, Appellant, v. FEDERAL INSURANCE COMPANY, McCrory-Sumwalt Construction Company, Inc., and Lafaye Associates, Inc., of whom McCrory-Sumwalt Construction Company, Inc., and Lafaye Associates, Inc. are, Respondents.
Docket NumberNo. 20559
Decision Date06 December 1977

Page 647

239 S.E.2d 647
269 S.C. 631
EPISCOPAL HOUSING CORPORATION, Appellant,
v.
FEDERAL INSURANCE COMPANY, McCrory-Sumwalt Construction
Company, Inc., and Lafaye Associates, Inc., of
whom McCrory-Sumwalt Construction
Company, Inc., and Lafaye
Associates, Inc.
are, Respondents.
No. 20559.
Supreme Court of South Carolina.
Dec. 6, 1977.

Page 648

[269 S.C. 632] Bowers & Barnhill, Columbia, and Leatherwood, Walker, Todd & Mann, Greenville, for appellant.

Graydon, Suber & Adams, Columbia, for respondent McCrory-Sumwalt.

[269 S.C. 633] Nelson, Mullins, Grier & Scarborough, Columbia, for respondent Lafaye Associates, Inc.

PER CURIAM:

Careful consideration of the record and the briefs in this submitted case convinces us that the lower court properly disposes of all issues addressed by it except for the modification contained in an Addendum at the foot of the decree of the lower court. Accordingly, the decree of Judge Bristow, here appealed from, together with the Addendum, as published herewith, are adopted as the opinion of this Court.

ORDER OF JUDGE BRISTOW

This matter is before the Court upon the plaintiff's petition and Rule to Show Cause why the defendants Lafaye Associates, Inc. (Lafaye) and McCrory-Sumwalt Construction Co. (McCrory) should not be enjoined from continuing in pursuit of the arbitration proceedings that Lafaye and McCrory have instituted. This matter is also before the court upon Lafaye's and McCrory's Petition and Rule to Show Cause why the plaintiff's suit in this Court should not be stayed pending the outcome of the arbitration proceedings. This Order will dispose of all the aforementioned petitions and rules to show cause.

Page 649

The pertinent facts concerning the arbitrability of the issues in dispute between Lafaye and McCrory and the Episcopal Housing Corporation (EHC) (are) as follows:

1. On March 4, 1970, and on July 22, 1971, Lafaye and EHC entered into a contract for the construction of a housing project for the elderly, now known as the Finlay House. On July 22, 1971, McCrory and EHC also entered into a contract for the construction of the Finlay House.

2. Construction commenced on or about July 28, 1971, and the project was completed on or about January 23, 1973. Thereafter Lafaye and McCrory were advised that water was discovered leaking into the building and continual negotiations commenced between Lafaye, McCrory and [269 S.C. 635] EHC until a Summons (Complaint Not Served) was filed on or about January 14, 1975.

3. Negotiations between all three parties in an effort to resolve all problems with the construction of the Finlay House continued until a Complaint was served on or about August 30, 1976, and have continued to date.

4. On January 20, 1977, McCrory demanded arbitration of EHC, and on February 22, 1977, EHC received from the American Arbitration Association a letter with the demand for arbitration attached. The arbitration proceedings were enjoined on March 1, 1977, pending a hearing into the arbitrability of the disputes between the parties.

5. On April 11, 1977, this Court enjoined further proceedings in this Court pending a hearing into the issue of the arbitrability of the disputes between the parties.

6. On March 3, 1977, Lafaye served its Demand for Arbitration pursuant to the contractual agreements between Lafaye and EHC. The arbitration proceedings were enjoined on March 10, 1977, pending a hearing in to the issue of the arbitrability of the disputes between the parties.

7. On March 10, 1977, Lafaye served its Answer and Counterclaim upon EHC, alleging as an affirmative defense that the disputes between Lafaye and EHC were specifically enforceable under the Federal Arbitration Act and that the appropriate Demand for Arbitration had already been served on EHC. On April 11, 1977, this Court enjoined further proceedings in this Court pending a hearing into the issue of the arbitrability of the disputes between the parties.

This matter came to be heard before the undersigned on April 11, 1977, and the following issues emerged as necessary to determine whether the disputes between the parties are properly arbitrable: (1) does the Federal Arbitration Act, 9 U.S.C. § 1 et seq., supersede the common law of South Carolina? and, (2) does the Federal Arbitration Act apply to the facts of this case?

[269 S.C. 636] I.

It is well established in South Carolina that general arbitration agreements which oust the South Carolina circuit court from jurisdiction are unenforceable as against public policy. See, e. g., Childs v. Allstate Insurance Co., 237 S.C. 455, 117 S.E.2d 867 (1961); Jones v. Enoree Power Co., 92 S.Ct. 263, 75 S.E. 452 (1912). It is equally true, however, that under the supremacy clause of the United States Constitution, Article VI, Clause 2, this Court must recognize that federal statutes enacted pursuant to the United States Constitution are the supreme law of the land. The Federal Arbitration Act was enacted pursuant to the commerce clause, thereby superseding the South Carolina common law. The Federal Arbitration Act has been accorded supremacy over the common law of numerous states by the federal courts. See, e. g., Prima Paint Corporation v. Flood & Conklin Manufacturing Co., 360 F.2d 315 (2d Cir. 1966), aff'd, 388 U.S. 395, 87 S.Ct. 1801, 18 L.Ed.2d 1270 (1967); Robert Lawrence Co. v. Devonshire Fabrics, Inc., 271 F.2d 402 (2nd Cir. 1959), cert. granted, 362 U.S. 909, 80 S.Ct. 682, 4 L.Ed.2d 618, cert. dismissed, 364 U.S. 801, 81 S.Ct. 27, 5 L.Ed.2d 37 (1960); Warren Brothers Company v. Community Building Corporation of Atlanta, 386 F.Supp. 656 (M.D.N.C.1974); Home Indemnity

Page 650

Company v. Multiplex Building Corp., Civil Action No. 74-296 (D.S.C.1974); Younker Brothers, Inc. v. Standard...

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42 practice notes
  • Southern Systems, Inc. v. Torrid Oven Ltd., No. 99-2089-DV.
    • United States
    • United States District Courts. 6th Circuit. Western District of Tennessee
    • July 25, 2000
    ...of the FAA to a contract requires the satisfaction of four specific criteria. See, e.g., Episcopal Hous. Corp. v. Federal Ins. Co., 269 S.C. 631, 239 S.E.2d 647, 650 (1977). First, there must be a written provision for arbitration in the contract. 9 U.S.C. § 2. There is no disagreement in t......
  • Burke County Public Schools Bd. of Ed. v. Shaver Partnership, No. 94
    • United States
    • North Carolina United States State Supreme Court of North Carolina
    • July 8, 1981
    ...Inc. v. Louisville & Jefferson County[303 N.C. 424] Air Board, 269 F.2d 811 (6th Cir. 1959); Episcopal Housing Corp. v. Federal Ins. Co., 269 S.C. 631, 239 S.E.2d 647 (1977). But see Standard Co. v. Elliott Const. Co., Inc., 363 So.2d 671 (La.1978). We conclude therefore that the choice of ......
  • Ex parte Alabama Oxygen Co., Inc., BORG-WARNER
    • United States
    • Supreme Court of Alabama
    • May 13, 1983
    ...255 N.E.2d 774 (1970) cert. denied 398 U.S. 939, 90 S.Ct. 1844, 26 L.Ed.2d 272 (1970); Episcopal Housing Corp. v. Federal Insurance Co., 269 S.C. 631, 239 S.E.2d 647 (1977); Burke County Pub. Schools Bd. of Ed. v. Shaver Partnership, 303 N.C. 408, 279 S.E.2d 816 (1981); Mamlin v. Susan Thom......
  • Mercury Const. Corp., In re, Nos. 81-1009
    • United States
    • United States Courts of Appeals. United States Court of Appeals (4th Circuit)
    • June 1, 1981
    ...Const. Co. v. Knox County Hospital Ass'n., 164 Ind.App. 121, 326 N.E.2d 844, 851 (1975); Episcopal Housing Corp. v. Federal Ins. Co., 269 S.C. 631, 636, 239 S.E.2d 647 (1977). In determining these principles of "substantive federal law," which govern the application of the Federal Act, the ......
  • Request a trial to view additional results
42 cases
  • Southern Systems, Inc. v. Torrid Oven Ltd., No. 99-2089-DV.
    • United States
    • United States District Courts. 6th Circuit. Western District of Tennessee
    • July 25, 2000
    ...of the FAA to a contract requires the satisfaction of four specific criteria. See, e.g., Episcopal Hous. Corp. v. Federal Ins. Co., 269 S.C. 631, 239 S.E.2d 647, 650 (1977). First, there must be a written provision for arbitration in the contract. 9 U.S.C. § 2. There is no disagreement in t......
  • Burke County Public Schools Bd. of Ed. v. Shaver Partnership, No. 94
    • United States
    • North Carolina United States State Supreme Court of North Carolina
    • July 8, 1981
    ...Inc. v. Louisville & Jefferson County[303 N.C. 424] Air Board, 269 F.2d 811 (6th Cir. 1959); Episcopal Housing Corp. v. Federal Ins. Co., 269 S.C. 631, 239 S.E.2d 647 (1977). But see Standard Co. v. Elliott Const. Co., Inc., 363 So.2d 671 (La.1978). We conclude therefore that the choice of ......
  • Ex parte Alabama Oxygen Co., Inc., BORG-WARNER
    • United States
    • Supreme Court of Alabama
    • May 13, 1983
    ...255 N.E.2d 774 (1970) cert. denied 398 U.S. 939, 90 S.Ct. 1844, 26 L.Ed.2d 272 (1970); Episcopal Housing Corp. v. Federal Insurance Co., 269 S.C. 631, 239 S.E.2d 647 (1977); Burke County Pub. Schools Bd. of Ed. v. Shaver Partnership, 303 N.C. 408, 279 S.E.2d 816 (1981); Mamlin v. Susan Thom......
  • Mercury Const. Corp., In re, Nos. 81-1009
    • United States
    • United States Courts of Appeals. United States Court of Appeals (4th Circuit)
    • June 1, 1981
    ...Const. Co. v. Knox County Hospital Ass'n., 164 Ind.App. 121, 326 N.E.2d 844, 851 (1975); Episcopal Housing Corp. v. Federal Ins. Co., 269 S.C. 631, 636, 239 S.E.2d 647 (1977). In determining these principles of "substantive federal law," which govern the application of the Federal Act, the ......
  • Request a trial to view additional results

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