Strategic Resources v. Bcs Life Ins. Co.
| Decision Date | 06 March 2006 |
| Docket Number | No. 26022.,26022. |
| Citation | 627 S.E.2d 687 |
| Court | South Carolina Supreme Court |
| Parties | STRATEGIC RESOURCES COMPANY, Gerald D. Peterson, Continental Assurance Company, Continental Casualty Company, and CNA Group Life Insurance Company, Respondents, v. BCS LIFE INSURANCE COMPANY, BCS Insurance Company, and American Arbitration Association, Inc., Defendants, of whom BCS Life Insurance Company and BCS Insurance Company are Appellants. |
Charles E. Carpenter, Jr., and S. Elizabeth Brosnan, of Richardson, Plowden, Carpenter & Robinson, P.A., of Columbia; D. Clay Robinson, of Robinson, McFadden & Moore, P.C., of Columbia; and Mark E. Wilson, of Kerns, Pitrof, Frost & Pearlman, L.L.C., of Chicago, IL, for appellants.
C. Mitchell Brown and Kevin A. Hall, of Nelson Mullins Riley & Scarborough, L.L.P., of Columbia; Gray T. Culbreath and Eric Fosmire, of Collins & Lacy, of Columbia; J. Edward Bradley, of Moore, Taylor & Thomas, P.A., of West Columbia; Michael L. McCluggage, R. John Street, and Michael A. Kaeding, of Wildman, Harrold, Allen & Dixon, L.L.P., of Chicago, IL, for respondents.
ORDERRespondents filed a petition for rehearing and Appellants filed a return in opposition. We deny the petition for rehearing, withdraw the former opinion, and substitute the attached opinion in its place.
IT IS SO ORDERED.
/s/ James E. Moore, A.C.J
/s/ John H. Waller, Jr., J
/s/ E.C. Burnett, III, J
/s/ Costa M. Pleicones, J
/s/ J. Cordell Maddox, A.J.
Acting Chief Justice MOORE:
This case involves a dispute over how the American Arbitration Association (AAA) administered the selection of an arbitrator.
FACTUAL/PROCEDURAL BACKGROUND
BCS Life Insurance Company and BCS Insurance Company (appellants) brought a lawsuit in an Illinois state court against Strategic Resources, Gerald D. Peterson, Continental Assurance Company, Continental Casualty Company, and CNA Group Life Insurance Company (respondents) after a business deal went astray. The Illinois court compelled the parties to arbitrate pursuant to the parties' prior written agreement.
The agreement provided that any dispute would be submitted to a panel of three arbitrators, two to be selected by the parties (party arbitrators) and a third (neutral arbitrator) to be selected by the party arbitrators. The party arbitrators were selected but were unable to agree on who would serve as the neutral arbitrator. Appellants then declared that the party arbitrators had reached an impasse and sought assistance from the AAA to make the selection.1
Once respondents became aware that appellants sought the AAA's assistance, a disagreement ensued as to which set of AAA rules was applicable. Appellants argued that the AAA's Supplementary Rules for the Resolution of Intra-Industry United States Reinsurance and Insurance Disputes (Supplementary Rules) applied. However, respondents contended that the AAA's Commercial Rules applied.2 The AAA issued a list of proposed arbitrators according to the Supplementary Rules and required the parties to "strike and rank" those candidates listed by July 18, 2003.
Respondents objected to the list provided by the AAA and the parties were unable to compromise. On July 17, 2003, one day before the "strike and rank" deadline, respondents initiated these proceedings.
The trial court found that appellants had engaged in a variety of wrongful conduct, including, but not limited to, manipulating the AAA, violating the rules of the AAA, improperly communicating with the AAA, and making inconsistent statements to the trial court at hearings and in documents filed with the court. As a result, the trial court enjoined the AAA from following the Supplementary Rules and directed the AAA to devise a list of arbitrators according to the Commercial Rules. Appellants appealed. This case was certified from the Court of Appeals pursuant to Rule 204(b), SCACR.
ISSUE
Did the trial court err by enjoining the AAA?
DISCUSSION
An order granting or denying an injunction is reviewed for abuse of discretion. County of Richland v. Simpkins, 348 S.C. 664, 560 S.E.2d 902 (Ct.App.2002). An abuse of discretion occurs when the trial court's decision is unsupported by the evidence or controlled by an error of law. Id.
The power of the court to grant an injunction is in equity. Doe v. South Carolina Med. Malpractice Liability Joint Underwriting Ass'n, 347 S.C. 642, 557 S.E.2d 670 (2001). The court will reserve its equitable powers for situations when there is no adequate remedy at law. Santee Cooper Resort, Inc. v. South Carolina Pub. Serv. Comm'n, 298 S.C. 179, 379 S.E.2d 119 (1989). The party seeking an injunction has the burden of demonstrating facts and circumstances warranting an injunction. Calcutt v. Calcutt, 282 S.C. 565, 320 S.E.2d 55 (Ct.App. 1984). The remedy of an injunction is a drastic one and ought to be applied with caution. Forest Land Co. v. Black, 216 S.C. 255, 57 S.E.2d 420 (1950). In deciding whether to grant an injunction, the court must balance the benefit of an injunction to the plaintiff against the inconvenience and damage to the defendant, and grant an injunction which seems most consistent with justice and equity under the circumstances of the case. Id.
For a preliminary injunction to be granted, the plaintiff must establish that (1) it would suffer irreparable harm if the injunction is not granted; (2) the party seeking injunction will likely succeed in the litigation; and (3) there is an inadequate remedy at law. Scratch Golf Co. v. Dunes West Residential Golf Props., Inc., 361 S.C. 117, 603 S.E.2d 905 (2004).
In its order granting the injunction, the trial court held that respondents should not be required to wait until the arbitration has concluded before challenging the proceedings, because it would be wasteful to arbitrate pursuant to inapplicable rules and with an improperly selected neutral arbitrator.
Appellants argue the trial court erred by granting injunctive relief because respondents have an adequate remedy at law according to South Carolina common law.3 We agree.
Respondents are not entitled to an injunction because they have the right to appeal the results of the arbitration, which is an adequate remedy at law.4 Cf. Scratch Golf Co., supra (); Riverwoods, LLC,...
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