Partain v. Upstate Automotive Group
| Decision Date | 23 April 2008 |
| Docket Number | No. 4373.,4373. |
| Citation | 662 S.E.2d 426,378 S.C. 152 |
| Court | South Carolina Court of Appeals |
| Parties | Amos Keith PARTAIN, Respondent, v. UPSTATE AUTOMOTIVE GROUP, Appellants. |
Troy A. Tessier and Hannah Rogers Metcalfe, of Greenville, for Appellants.
W.N. Epps, Jr., of Anderson, for Respondent.
Upstate Automotive Group appeals the circuit court's refusal to dismiss the legal action and compel arbitration of Amos K. Partain's tort claim. We reverse.
On March 30, 2006, Amos Keith Partain (Partain) purchased a vehicle from Upstate Automotive Group (Upstate). Partain contends that he negotiated with Upstate for the purchase of a specific black 2006 Nissan truck. During the negotiations, Partain claims he visited the dealership several times and test-drove the truck he intended to buy.
Upon signing the paperwork for the purchase and after participating in a "vehicle introduction," Partain drove the truck home where he allegedly discovered that the truck in his possession was not the one he had test-driven and had intended to buy.
On April 28, 2006, Partain filed a complaint against Upstate alleging that Upstate violated the Unfair Trade Practices Act by selling Partain a different truck than the one he had negotiated to purchase. On May 8, 2006, Upstate filed a motion to dismiss and to compel arbitration consistent with an arbitration agreement the parties allegedly signed.
After a hearing, the circuit court denied the motion finding1 that the claim was not arbitrable since the claim was a tort independent of the contract and because the alleged tortious behavior was not reasonably foreseeable. The court only addressed whether the nature of the claim herein was covered by the arbitration clause and presumed the validity of the arbitration clause. This appeal followed.
Unless the parties agree otherwise, the question of the arbitrability of a claim is for judicial determination. Chassereau v. Global Sun Pools, Inc., 373 S.C. 168, 644 S.E.2d 718 (2007). While arbitrability determinations are subject to de novo review, appellate courts will not reverse a circuit court's factual findings if any evidence reasonably supports the findings. Simpson v. MSA of Myrtle Beach, Inc., 373 S.C. 14, 644 S.E.2d 663 (2007).
Upstate argues that the circuit court erred in determining that the arbitration agreement did not apply to Partain's claim. We agree.
Both federal and state public policy strongly favor the arbitration of disputes. Chassereau v. Global Sun Pools, Inc., 373 S.C. 168, 644 S.E.2d 718 (2007). A court should order arbitration, unless the court can say with positive assurance that the arbitration clause is not susceptible to any interpretation covering the dispute. Zabinski v. Bright Acres Assocs., 346 S.C. 580, 597, 553 S.E.2d 110, 118 (2001). "However, arbitration is a matter of contract, and a court cannot require a party to submit to arbitration any dispute, which he has not agreed to submit." Aiken v. World Fin. Corp. of S.C., 373 S.C. 144, 148, 644 S.E.2d 705, 708 (2007).
"To decide whether an arbitration agreement encompasses a dispute a court must determine whether the factual allegations underlying the claim are within the scope of the broad arbitration clause, regardless of the label assigned to the claim." S.C. Pub. Serv. Auth. v. Great W. Coal (Kentucky), Inc., 312 S.C. 559, 563, 437 S.E.2d 22, 25 (1993). "Any doubts concerning the scope of the arbitration clause should be resolved in favor of arbitration." Id. "A broadly-worded arbitration agreement applies to disputes that do not arise under the governing contract when a `significant relationship' exists between the asserted claims and the contract in which the arbitration clause is contained." Zabinski, 346 S.C. at 598, 553 S.E.2d at 119; see Long v. Silver, 248 F3d 309 (4th Cir.2001). However, "[b]ecause even the most broadly worded arbitration agreements still have limits founded in general principles of contract law, [courts] will refuse to interpret any arbitration agreement as applying to outrageous torts that are unforeseeable to a reasonable consumer in the context of normal business dealings." Aiken, 373 S.C. at 151, 644 S.E.2d at 709.
In the case at bar, the pertinent part of the arbitration agreement states:
Buyer/Lessee acknowledges and agrees that all claims, demands, disputes or controversies of every kind or nature that may arise between them concerning any of the negotiations leading to the sale, lease or financing of the vehicle, terms and provisions of the sale, lease or financing shall be settled by binding arbitration conducted pursuant to the provision of 9 U.S.C. section 1 et. Seq. and according to the Commercial Rules of the American Arbitration Association[.] Without limiting the generality of the forgoing, it is the intention of the buyer/lessee and the dealer to resolve by binding arbitration all disputes between them concerning the vehicle[,] its sale, lease or financing and its condition including disputes concerning the terms and condition of the sale, lease or financing, the condition of the vehicle, any damage to the vehicle, the terms and meaning of any of the documents signed or given in connection with the sale, lease or financing, any representations, promises or omissions made in connection with the negotiations for the sale, lease or financing of the vehicle, or any terms, conditions or representations made in connection with the financing, credit life insurance, disability insurance and vehicle extended warranty or service contract purchased or obtained in connection with the vehicle.
We do not construe this arbitration agreement as encompassing all claims that may arise between Partain and Upstate. Rather, we interpret this clause as applying only to disputes arising out of or relating to the underlying agreement. Accordingly, to compel arbitration, a "significant relationship" must exist between Partain's claim and the contract containing the arbitration agreement. Vestry and Church Wardens of Church of Holy Cross v. Orkin Exterminating Co., 356 S.C. 202, 209, 588 S.E.2d 136, 140 (Ct.App.2003).
Generally, regardless of the label Partain assigns to the claim, the arbitration clause will apply if the requisite relationship exists with the underlying agreement. See Great W. Coal (Kentucky), 312 S.C. at 563, 437 S.E.2d at 25. The underlying agreement between Upstate and Partain was for the sale of a vehicle. Partain's claim is that Upstate, in executing the sale of the vehicle to Partain, violated unfair trade practices.2 The facts alleged by Partain are that he negotiated the purchase of a particular black 2006 Nissan truck and subsequent to that sale, Upstate switched vehicles and transferred a different vehicle to Partain than the one he had negotiated to purchase. We find that whether Partain received the vehicle he contracted to purchase is central to the agreement between Upstate and Partain. Accordingly, a significant relationship in fact does exist between Partain's...
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