Garvin v. Homes of CSRA, Inc.

THE STATE OF SOUTH CAROLINA

In The Court of Appeals

Sharon Garvin,       
Respondent,

v.

Homes of CSRA, Inc., d/b/a The Groves, and Dynasty Homes, Inc.,       
Defendants,

Of whom Dynasty Homes, Inc., is,       
Appellant.

Appeal From Orangeburg County

O. Davie Burgdorf, Special Circuit Judge

Unpublished Opinion No. 2003-UP-061

Submitted September 9, 2002 - Filed January 21, 2003

AFFIRMED

Eugene L. Ott, of Orangeburg, for appellant.

Virgin Johnson, Jr. and Glenn Walters, both of Orangeburg, for respondent.

PER CURIAM: Dynasty Homes, Inc. appeals the trial court's
denial of its motion to compel arbitration. We affirm.

FACTS/PROCEDURAL HISTORY

In December 1996, Sharon Garvin purchased a manufactured home from Homes of
the CSRA, Inc. The sales contract expressly stated it was subject to arbitration.
On April 30, 1998, Garvin filed this action against Homes of the CSRA alleging
damages as a result of several defects in the home. On December 28, 1998, Homes
of the CSRA filed a motion to dismiss, or, in the alternative, to join a necessary
party. By order filed March 12, 1999, the trial court ordered Garvin to amend
her complaint and join the home's manufacturer as a defendant.

The amended complaint, filed June 11, 1999, added Dynasty Homes, Inc., the
manufacturer of Garvin's home, as a defendant and alleged causes of action for
breach of contract, violation of the South Carolina Unfair Trade Practices Act,
breach of the implied warranty of habitability, breach of the implied warranty
of merchantability, breach of an express warranty, breach of warranty for a
specific purpose, and breach of contract with fraudulent intent. Both defendants
filed answers denying the allegations. In addition, Homes of the CSRA cross-claimed
against Dynasty for indemnification.

On May 1, 2000, Homes of the CSRA filed a motion to stay the proceedings and
compel arbitration, which Dynasty joined. By order dated May 16, 2000, the trial
court denied the motion. Dynasty appeals.

LAW/ANALYSIS

Standard of Review

In reviewing the denial of a motion to stay pending arbitration, the trial
court's decision regarding the waiver of a party's right to arbitrate is "a
legal conclusion subject to de novo review." Gen. Equip. & Supply Co. v.
Keller Rigging & Constr., S.C., Inc., 344 S.C. 553, 556, 544 S.E.2d 643,
645 (Ct. App. 2001) (quoting Liberty Builders, Inc. v. Horton, 336 S.C. 658,
664, 521 S.E.2d 749, 753 (Ct. App. 1999)). The factual findings underlying the
trial court's conclusion, however, "will not be overruled if there is any evidence
reasonably supporting them." Id. (quoting Liberty, 336 S.C. at 665, 521 S.E.2d
at 753).

LAW/ANALYSIS

Dynasty argues the trial court erred in finding it waived the right to compel
arbitration, arguing Garvin failed to show the required prejudice. We disagree.

The policy of South Carolina favors the arbitration of disputes. Heffner v.
Destiny, Inc., 321 S.C. 536, 471 S.E.2d 135 (1995); Tritech Elec., Inc. v. Frank
M. Hall & Co., 343 S.C. 396, 540 S.E.2d 864 (Ct. App. 2000). However, it
is well settled that "[t]he right to enforce an arbitration clause may be waived."
Liberty, 336 S.C. at 665, 521 S.E.2d at 753; see Keller, 344 S.C. at 556, 544
S.E.2d at 645. The question of waiver depends on the facts of each case, and
the determinative factor is "the presence or absence of prejudice." Sentry Eng'g
& Constr., Inc. v. Mariner's Cay Dev. Corp., 287 S.C. 346, 351, 338 S.E.2d 631, 634 (1985). Thus, the party asserting waiver must show an undue
burden caused by the other party's delay in making an arbitration demand. Id.;
see Liberty, 336 S.C. at 665, 521 S.E.2d at 753.

The present case has been pending since April 30, 1998 and Dynasty was joined
as a necessary party by order dated March 9, 1999. Although Dynasty answered
on July 29, 1999, it did not move the court to compel arbitration until May
1, 2000, some nine months after filing an answer and just before a trial on
the merits was scheduled to begin in June. By this time, the parties had exchanged
interrogatories and Garvin had been deposed.

Dynasty contends this case is analogous to Keller, wherein we reversed the
trial court's denial of a motion to compel. Keller, however, involved parties
in litigation for less than eight months whose activities were limited to "routine
administrative matters and limited discovery which did not involve the taking
of depositions or extensive interrogatories." Keller, 344 S.C. at 557, 544 S.E.2d
at 645. To the contrary, we find the facts of this case more closely resemble
those extant in Liberty, where the court affirmed the denial of compelled arbitration
in part because the parties had participated in pre-trial discovery. In particular,
the court noted Liberty's delay in demanding arbitration not only placed an
undue burden on the opposing party, it also "enabled Liberty to 'test the water
before taking the swim.'" Liberty, 336 S.C. at 666, 521 S.E.2d at 753 (quoting
Homes Gas Corp. of Mass., Inc. v. Walter's of Hadley, Inc., 532 N.E.2d 681,
685 (Mass. 1989)).

We therefore agree with the trial court's decision and find Dynasty prejudiced
Garvin and thereby waived its right to enforce the arbitration clause by serving
and answering interrogatories, by deposing Garvin, and by waiting until approximately
one month before trial to join a motion to compel arbitration filed by its co-defendant.

AFFIRMED.

GOOLSBY, HOWARD, and SHULER, JJ., concur.