Joshua Phillips v. Renu Energy Solutions

THIS OPINION HAS NO PRECEDENTIAL VALUE. IT SHOULD NOT BE
CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING
EXCEPT AS PROVIDED BY RULE 268(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA
In The Court of Appeals

Joshua Phillips, Respondent,

v.

Renu Energy Solutions, LLC, Appellant.

Appellate Case No. 2024-000338

Appeal From Darlington County
Michael S. Holt, Circuit Court Judge

Unpublished Opinion No. 2025-UP-225
Heard June 5, 2025 – Filed July 2, 2025

REVERSED

James Edward Bradley, of Moore Bradley Myers, PA, of
West Columbia, for Appellant.

Andrew Marvin Connor, of Connor Law, PC, of Mount
Pleasant, for Respondent.

PER CURIAM: Renu Energy Solutions, LLC (Renu) appeals the circuit court's
orders denying its motions for dismissal and to compel arbitration. We reverse.1

1
The contract at issue involves interstate commerce; therefore, the Federal
Arbitration Act (FAA) controls the agreement at issue.
We hold the arbitration agreement in question is not unconscionable and reverse
the circuit court's denial of the motion to compel arbitration. See Simpson v. MSA
of Myrtle Beach, Inc., 373 S.C. 14, 22, 644 S.E.2d 663, 667 (2007) ("Arbitrability
determinations are subject to de novo review."); Sanders v. Savannah Highway
Auto. Co., 440 S.C. 377, 383, 892 S.E.2d 112, 115 (2023) ("[A]rbitration
agreements 'may be invalidated by generally applicable contract defenses, such as
fraud, duress, or unconscionability.'" (quoting Rent-A-Ctr., W., Inc. v. Jackson, 561
U.S. 63, 68 (2010))); Simpson, 373 S.C. at 25, 644 S.E.2d at 668 ("In analyzing
claims of unconscionability in the context of arbitration agreements, the Fourth
Circuit has instructed courts to focus generally on whether the arbitration clause is
geared towards achieving an unbiased decision by a neutral decision-maker."); id.
at 25, 644 S.E.2d at 669 ("It is under this general rubric that we determine whether
a contract provision is unconscionable due to both an absence of meaningful
choice and oppressive, one-sided terms.").

First, we find the circuit court erred in finding Phillips lacked meaningful choice
because solar panels are not a necessity. "Whether one party lacks a meaningful
choice in entering the arbitration agreement at issue typically speaks to the
fundamental fairness of the bargaining process." Smith v. D.R. Horton, Inc., 417
S.C. 42, 49, 790 S.E.2d 1, 4 (2016). "Contracts of adhesion are 'standard form
contract[s] offered on a 'take-it-or-leave-it' basis with terms that are not
negotiable.'" 315 Corley CW LLC v. Palmetto Bluff Dev., LLC, 444 S.C. 521, 531,
908 S.E.2d 892, 897 (Ct. App. 2024) (quoting Simpson, 373 S.C. at 26–27, 644
S.E.2d at 669). However, "[a]dhesion contracts . . . are not per se unconscionable."
Id. at 532, 908 S.E.2d at 897 (quoting Simpson, 373 S.C. at 27, 644 S.E.2d at 669).
Instead, "adhesive contracts are not unconscionable in and of themselves so long as
the terms are even-handed." Id. (emphases removed) (quoting Damico v. Lennar
Carolinas, LLC, 437 S.C. 596, 614, 879 S.E.2d 746, 756 (2022)). Like in Simpson,
we hold that the contract at issue is an adhesion contract. However, the contract
was not for a necessity, such as a car. Instead, it was for the purchase and
installation of a solar panel system, which is not "critically important" to everyday
life. We further find any alleged inconspicuousness of the arbitration provisions
did not deprive Phillips of a meaningful choice. The FAA does not require an
arbitration provision to be bolded, underlined, or typed in all caps.

Second, we hold the arbitration agreement does not contain oppressive one-sided
terms. See 315 Corley, 444 S.C. at 533, 908 S.E.2d at 898 ("Turning to the second
prong of unconscionability, terms are unconscionably oppressive and one-sided
when they are such that 'no reasonable person would make them and no fair and
honest person would accept them.'" (quoting Damico, 437 S.C. at 611, 879 S.E.2d
at 754)). We hold the circuit court's finding that the arbitration agreement imposed
excessive costs was unduly speculative; the arbitration provision provides for
multiple methods of selecting arbitrators and Renu stipulated to applying the
AAA's consumer rules, which are more cost-effective than its construction rules.
See Green Tree Fin. Corp.-Alabama v. Randolph, 531 U.S. 79, 92 (2000) (holding
that when "a party seeks to invalidate an arbitration agreement on the ground that
arbitration would be prohibitively expensive, that party bears the burden of
showing the likelihood of incurring such costs"). Additionally, we hold there is no
lack of mutuality of remedy in the arbitration provision and the circuit erred in
finding such. The arbitration provision exempts Renu from arbitrating any claims
for collection of payment or the return of equipment. Phillips is not prevented
from receiving any remedy under the arbitration agreement; instead, he is only
required to pursue his remedy in an alternative forum—arbitration. See Munoz v.
Green Tree Fin. Corp., 343 S.C. 531, 542, 542 S.E.2d 360, 365 (2001) ("An
agreement providing for arbitration does not determine the remedy for a breach of
contract but only the forum in which the remedy for the breach is determined."). In
any event, "lack of mutuality of remedy in an arbitration agreement, on its own,
does not make the arbitration agreement unconscionable." Simpson, 373 S.C. at 31,
644 S.E.2d at 672. See id. ("The primary basis for this conclusion . . . [is] that
requiring one party to seek a remedy through arbitration rather than the judicial
system [does] not deprive that party of a remedy altogether.").

Finally, we hold the circuit court erred in finding section 15-7-120 of the South
Carolina Code (2005) prohibited Renu from naming Charlotte as the arbitration
venue because section 15-7-120(B) is preempted by the FAA and unenforceable
against contracts that involve interstate commerce. See Tritech Elec., Inc. v. Frank
M. Hall & Co., 343 S.C. 396, 400, 540 S.E.2d 864, 866 (Ct. App. 2000) ("Where a
contract evidencing interstate commerce contains an arbitration clause, the FAA
preempts conflicting state arbitration law."); id. (holding the trial court erred by
enforcing section 15-7-120(B) against a contract involving interstate commerce
that required arbitration in Georgia).

As to whether Renu waived arbitration by participating in discovery, we hold it did
not. Renu did not wait an extensive amount of time prior to filing its motion to
compel arbitration, engage in extensive discovery, or avail itself of the circuit
court's assistance. Instead, Renu filed its motion to compel arbitration concurrently
with its answer (only 68 days after Phillips filed his complaint). See Toler's Cove
Homeowners Ass'n, Inc. v. Trident Const. Co., 355 S.C. 605, 612, 586 S.E.2d 581,
585 (2003) ("It is generally held that the right to enforce an arbitration clause may
be waived."); Gen. Equip. & Supply Co. v. Keller Rigging & Const., SC, Inc., 344
S.C. 553, 557, 544 S.E.2d 643, 645 (Ct. App. 2001) (holding a party did not waive
its right to arbitrate because the "litigation consisted of routine administrative
matters and limited discovery which did not involve the taking of depositions or
extensive interrogatories"); id. ("[T]he parties were involved in litigation for less
than eight months" and "neither party availed itself of the circuit court's assistance
in such a manner as to cause a lengthy delay.").

Accordingly, the circuit court's orders are REVERSED.

WILLIAMS, C.J., and GEATHERS and TURNER, JJ., concur.