Simpson v. World Finance Corp. of Sc, No. 4059.

• Court: United States State Supreme Court of South Carolina
• Writing for the Court: Beatty
• Citation: 623 S.E.2d 877
• Parties: Tawanda SIMPSON, Respondent, v. WORLD FINANCE CORPORATION OF SOUTH CAROLINA and World Acceptance Corporation, Appellants.
• Docket Number: No. 4059.
• Decision Date: 19 January 2006

623 S.E.2d 877 Tawanda SIMPSON, Respondent,
v.
WORLD FINANCE CORPORATION OF SOUTH CAROLINA and World Acceptance Corporation, Appellants. No. 4059. Court of Appeals of South Carolina. Heard November 9, 2005. Decided December 12, 2005. Rehearing Denied January 19, 2006.

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Judson K. Chapin, III, of Greenville, for Appellants.

Matthew Price Turner, of Laurens; Rhett D. Burney, of Laurens; for Respondent.

BEATTY, J.:

World Finance Corporation of South Carolina and World Acceptance Corporation ("Appellants") appeal the circuit court's order denying their motion to compel arbitration. We affirm.

FACTS

Beginning in March 2001 through July 2002, Tawanda Simpson entered into a series of consumer loan transactions with Appellants. In conjunction with each of these loan agreements, Simpson signed an arbitration agreement, which provided that the parties agreed to settle all disputes and claims through arbitration.

In late 2002, after Simpson had paid her loan in full, former employees of Appellants used Simpson's personal financial information to illegally procure loans and embezzle the proceeds from those loans.¹ Upon discovering the misuse of her personal information, Simpson filed suit against Appellants seeking a jury trial for damages arising out of the following causes of action: intentional infliction of emotional distress; negligence; negligent hiring/supervision; and unfair trade practices. In response, Appellants denied the allegations and filed a motion to dismiss pursuant to Rule 12(b)(6), SCRCP, and a motion to compel arbitration.

After a hearing, the circuit court denied Appellants' motions to dismiss and to compel arbitration. In reaching this decision, the court found the creditor/debtor relationship between Appellants and Simpson ended once

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Simpson satisfied her loan in full. As a result, the court concluded the "effectiveness of the arbitration clause ceased when the relationship of the parties ceased." The court also held the tort claims raised by Simpson were not subject to arbitration because the acts of Appellants' employees were "completely independent of the loan agreement." This appeal followed.

STANDARD OF REVIEW

"The question whether a claim is subject to arbitration is a matter of judicial determination, unless the parties have provided otherwise. Appeal from the denial of a motion to compel arbitration is subject to de novo review." Chassereau v. Global-Sun Pools, Inc., 363 S.C. 628, 631, 611 S.E.2d 305, 307 (Ct.App.2005) (citations omitted).

DISCUSSION

Appellants argue the circuit court erred in denying their motion to compel arbitration.² Specifically, they contend that once the court determined that an arbitration agreement existed between the parties, the court's "decisional function" was completed and any decisions regarding the validity of the agreement and the arbitrability of Simpson's claims were to be decided by an arbitrator. Even if the circuit court was authorized to determine the effectiveness of the agreement, Appellants claim the broad terms of the arbitration agreement encompassed any disputes beyond the expiration of the underlying loan transactions between the parties.

As a threshold matter, we find Appellants' argument that the circuit court's authority was strictly limited to determining whether the parties entered into an arbitration agreement is not properly before this court. First, Appellants did not raise this precise argument in their motion to compel arbitration or during the hearing before the circuit court. Secondly, the circuit court did not address this issue in its order, but instead, only ruled on the effectiveness of the arbitration agreement. Appellants did not file a motion pursuant to Rule 59 of the South Carolina Rules of Civil Procedure to challenge this omission. See Lucas v. Rawl Family Ltd. P'ship, 359 S.C. 505, 511, 598 S.E.2d 712, 715 (2004) (recognizing that in order for an issue to be preserved for appellate review, with few exceptions, it must be raised to and ruled upon by the trial court); Hawkins v. Mullins, 359 S.C. 497, 502, 597 S.E.2d 897, 899 (Ct.App.2004) (noting an issue is not preserved where the trial court does not explicitly rule on an argument and the appellant does not make a Rule 59(e) motion to alter or amend the judgment).

In terms of the merits of Appellants' motion to compel arbitration, we turn to recently established precedent. "Arbitration is a matter of contract, and the range of issues that can be arbitrated is restricted by the terms of the agreement." Palmetto Homes, Inc. v. Bradley, 357 S.C. 485, 492, 593 S.E.2d 480, 484 (Ct.App.2004), cert. denied (July 8, 2005). Our supreme court has outlined the analytical framework for determining whether a particular claim is subject to arbitration. Zabinski v. Bright Acres Assocs., 346 S.C. 580, 597, 553 S.E.2d 110, 118-19 (2001). In Zabinski, the court stated:

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. Hinson v. Jusco Co., 868 F.Supp. 145 (D.S.C.1994); S.C. Pub. Serv. Auth. v. Great W. Coal, 312 S.C. 559, 437 S.E.2d 22 (1993). Any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration. Towles, supra. Furthermore, unless the court can say with positive assurance that the arbitration clause is not susceptible to an interpretation that covers the dispute, arbitration should be ordered. Great W. Coal, 312 S.C. at 564, 437 S.E.2d at 25. A motion to compel arbitration made pursuant to...