Denise M. Petersen v. DCTCL LP

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

Denise M. Petersen, individually and as Trustee of the
Denise M. Petersen 2005 Recovable Trust Dated
November 9, 2005, as Trustee of the 601 Ocean
Boulevard Residence Trust Dated November 30, 2012,
and as Trustee of the 601 Ocean Boulevard Residence
Trust II Dated December 7, 2012, Plaintiffs,

v.

DCTCL, L.P. d/b/a Buffington Homes, L.P., Donnix
Construction, LLC, Hunt Brothers Construction, Inc.,
Island Exteriors and Siding, Inc., Plastering Surfaces,
LLC, A Unique Design, Inc., Berkeley Heating and Air
Conditioning, Inc., Energyone America, LLC, Aqua Blue
Pools of Charleston, Inc., Sunnyside Farms, Inc.,
TAMKO Building Products, LLC, Haddigan Electrical
Contractors, LLC and John Doe Contractors 3 through
50, Defendants,

of which Donnix Construction is the Respondent and
TAMKO Building Products, LLC is the Appellant.

Appellate Case No. 2022-000938

Appeal From Charleston County
Benjamin H. Culbertson, Circuit Court Judge

Unpublished Opinion No. 2024-UP-324
Submitted September 1, 2024 – Filed October 2, 2024
AFFIRMED IN PART, REVERSED IN PART, AND
REMANDED

Richard Hood Willis, John Gwilym Tamasitis, and Ruth
Ann Levy, all of Williams Mullen, of Columbia, for
Appellant.

Patrick J. McDonald, of Resnick & Louis, P.C., of Daniel
Island, for Respondent.

PER CURIAM: TAMKO Building Products, LCC (Tamko) appeals the circuit
court's order denying its motion to dismiss and compel arbitration. On appeal,
Tamko argues the circuit court erred by finding it could not compel Donnix
Construction, LLC (Donnix) to arbitrate its crossclaims against Tamko based upon
the arbitration clause in Tamko's express limited warranty because Donnix did not
sign a contract containing the arbitration clause. We affirm in part, reverse in part,
and remand.

We hold the circuit court erred in refusing to compel arbitration; thus, we reverse
and remand. Donnix filed a crossclaim against Tamko for breach of implied and
express warranty. Tamko's express limited warranty also included an arbitration
clause. See Pearson v. Hilton Head Hosp., 400 S.C. 281, 286, 733 S.E.2d 597, 599
(Ct. App. 2012) ("Determinations of arbitrability are subject to de novo review, but
if any evidence reasonably supports the circuit court's factual findings, this court
will not overrule those findings."); Wilson v. Willis, 426 S.C. 326, 338, 827 S.E.2d
167, 174 (2019) ("South Carolina has recognized several theories that could bind
nonsignatories to arbitration agreements under general principles of contract and
agency law, including . . . estoppel."); Pearson, 400 S.C. at 290, 733 S.E.2d at 601
("[A] party may be estopped from asserting that the lack of his signature on a
written contract precludes enforcement of the contract's arbitration clause when he
has consistently maintained that other provisions of the same contract should be
enforced to benefit him." (quoting Int'l Paper Co. v. Schwabedissen Maschinen &
Anlagen GMBH, 206 F.3d 411, 418 (4th Cir. 2000))); id. at 295, 733 S.E.2d at 604
("[A] party may not 'rely on the contract when it works to its advantage, and
repudiate it when it works to its disadvantage.'" (quoting Jackson v. Iris.com, 524
F. Supp. 2d 742, 749 (E.D. Va. 2007))). Furthermore, we hold Donnix received a
direct benefit from the contract containing the arbitration provision. See id. at 295,
733 S.E.2d at 604 ("When 'a signatory seeks to enforce an arbitration agreement
against a non[]signatory, the doctrine [of estoppel] estops the non[]signatory from
claiming that he is not bound to the arbitration agreement when he receives a
'direct benefit' from a contract containing an arbitration clause.'" (quoting Jackson,
524 F. Supp. 2d at 749-50)). Donnix directly benefitted from the express limited
warranty because the contract created the right for Donnix to assert its claim for
breach of warranty. The benefit of the warranty "flow[ed] directly" from the
express limited warranty containing the arbitration clause because the right to
assert a breach of warranty was created by the express limited warranty. See
Wilson, 426 S.C. at 343, 827 S.E.2d at 176 ("When a claim depends on the
contract's existence and cannot stand independently—that is, the alleged liability
'arises solely from the contract or must be determined by reference to it'—equity
prevents a person from avoiding the arbitration clause that was part of that
agreement." (quoting Jody James Farms, JV v. Altman Grp., Inc., 547 S.W.3d 624,
637 (Tex. 2018))); id. at 343, 827 S.E.2d at 176 ("[W]hen the benefits to a
nonsignatory are merely indirect, arbitration cannot be compelled. . . . A benefit is
direct if it flows directly from the agreement.").

We hold Donnix's remaining causes of action should also be addressed in
arbitration because the claims "relat[e] to or aris[e] out of" the product. See
Wilson, 426 S.C. at 337, 827 S.E.2d at 173 ("[T]he presumption in favor of
arbitration applies to the scope of an arbitration agreement . . . ." (quoting Carr v.
Main Carr Dev., LLC, 337 S.W.3d 489, 496 (Tex. App. 2011))); Landers v. Fed.
Deposit Ins. Corp., 402 S.C. 100, 109, 739 S.E.2d 209, 213 (2013) ("A clause
which provides for arbitration of all disputes 'arising out of or relating to' the
contract is construed broadly."). Therefore, we reverse the circuit court's denial of
Tamko's motion to compel arbitration.

However, we hold the circuit court did not err in denying Tamko's motion to
dismiss because the appropriate relief is to stay the case pending the outcome of
arbitration; thus, we affirm the circuit court's denial of Tamko's motion to dismiss
and remand to the circuit court to stay the action pending the outcome of
arbitration. See Widener v. Fort Mill Ford, 381 S.C. 522, 525, 674 S.E.2d 172,
174 (Ct. App. 2009) (finding the dismissal of claims pending arbitration "finally
determined the rights of the parties" and remanding to allow the court "to vacate its
dismissal . . . and to enter an order staying [the] action pending the outcome of the
arbitration proceedings").
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED. 1

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

1
We decide this case without oral argument pursuant to Rule 215, SCACR.