Murphy v. Five Star Florence, LLC

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

Sunday Kay Murphy, individually and in a representative
capacity for all others similarly situated, Appellant,

v.

Five Star Florence, LLC, Respondent.

Appellate Case No. 2017-001720

Appeal From Florence County
Thomas A. Russo, Circuit Court Judge

Unpublished Opinion No. 2020-UP-002
Submitted November 1, 2019 – Filed January 8, 2020

AFFIRMED

Lawrence Sidney Connor, IV, of Kelaher, Connell &
Connor, P.C., of Surfside Beach, for Appellant.

John H. Tiller and Amy Foster Bower, both of
Charleston, and Sarah Patrick Spruill, of Greenville, all
of Haynsworth Sinkler Boyd, P.A., for Respondent.

PER CURIAM: Appellant Sunday Murphy (Purchaser) seeks review of the circuit
court's order denying her motion to compel class arbitration under the South Carolina
Uniform Arbitration Act (SCUAA) 1 and granting the motion of Respondent Five
Star Florence, LLC (Dealer) to compel individual arbitration under the Federal
Arbitration Act (FAA). 2 Purchaser argues (1) the first arbitration clause in the
Purchase Order for her truck requires arbitration under the SCUAA; (2) the second
arbitration clause specifying that the FAA governs arbitration is ambiguous; and (3)
the separate document signed by the parties, entitled, "Arbitration Agreement," is
invalid because it (a) is extraneous to the four corners of the Purchase Order; (b) is
unconscionable; (c) contains self-defeating language; and (d) includes a class
arbitration waiver that violates the South Carolina Regulation of Manufacturers,
Distributors, and Dealers Act (Dealers Act). 3 We affirm pursuant to Rule 220(b),
SCACR, and the following authorities:

1. As to whether the circuit court erred by concluding there was no valid
agreement to arbitrate under the SCUAA on the ground that the mandatory notice
requirements of S.C. Code Ann. § 15-48-10 (2005) were not met: Judy v. Judy, 384
S.C. 634, 646, 682 S.E.2d 836, 842 (Ct. App. 2009) ("Generally, appellate courts
will not set aside judgments due to insubstantial errors not affecting the result.").

2. As to whether the arbitration clause on the back of the Purchase Order requires
the parties' arbitration to be governed solely by the FAA: Palmetto Mortuary
Transp., Inc. v. Knight Sys., Inc., 424 S.C. 444, 460, 818 S.E.2d 724, 733 (2018)
("The cardinal rule of contract interpretation is to ascertain and give legal effect to
the parties' intentions as determined by the contract language. If the contract's
language is clear and unambiguous, the language alone determines the contract's
force and effect." (citation omitted) (quoting Schulmeyer v. State Farm Fire & Cas.
Co., 353 S.C. 491, 495, 579 S.E.2d 132, 134 (2003))); S.C. Dep't of Nat. Res. v.
Town of McClellanville, 345 S.C. 617, 623, 550 S.E.2d 299, 302–03 (2001) ("A
contract is ambiguous when the terms of the contract are reasonably susceptible of
more than one interpretation. It is a question of law for the court whether the
language of a contract is ambiguous." (citation omitted)); 9 U.S.C.A. § 5 ("If[,] in
the agreement[,] provision be made for a method of naming or appointing an
arbitrator or arbitrators or an umpire, such method shall be followed . . . ." (emphasis
added)); Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Junior Univ., 489 U.S.
468, 479 (1989) (recognizing that the FAA does not prevent the enforcement of
arbitration agreements "under different rules than those set forth in the Act itself");
id. ("[P]arties are generally free to structure their arbitration agreements as they see

1
S.C. Code Ann. § 15-48-10 to -240 (2005).
2
9 U.S.C.A. § 1 to -307 (2018 & Supp. 2019).
3
S.C. Code Ann. § 56-15-10 to -600 (2018 & Supp. 2019).
fit. Just as they may limit by contract the issues [that] they will arbitrate, so too may
they specify by contract the rules under which that arbitration will be conducted."
(citation omitted)); Idea Nuova, Inc. v. GM Licensing Grp., Inc., 617 F.3d 177, 181
(2d Cir. 2010) (holding that when a contract includes language agreeing to submit
disputes to a private forum, the language is reasonably understood to agree to
arbitration pursuant to that forum's rules and to incorporate those rules into the
parties' contract).

3. As to whether the parties' choice of the American Arbitration Association
(AAA) to administer the arbitration implies their consent to class arbitration: Lamps
Plus, Inc. v. Varela, 139 S. Ct. 1407, 1416 (2019) (holding that courts "may not infer
consent to participate in class arbitration absent an affirmative 'contractual basis for
concluding that the party agreed to do so.'" (first emphasis added) (quoting
Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., 559 U.S. 662, 684 (2010)); id. at 1419
("Courts may not infer from an ambiguous agreement that parties have consented to
arbitrate on a classwide basis."); id. at 1416 ("Our reasoning in Stolt-Nielsen controls
the question we face today. Like silence, ambiguity does not provide a sufficient
basis to conclude that parties to an arbitration agreement agreed to 'sacrifice[ ] the
principal advantage of arbitration.'" (quoting AT&T Mobility LLC v. Concepcion,
563 U.S. 333, 348 (2011))); id. (stating that the principal advantage of arbitration is
its informality).

4. As to whether the separate Arbitration Agreement is invalid because it is
extraneous to the four corners of the Purchase Order: Palmetto Mortuary, 424 S.C.
at 460, 818 S.E.2d at 733 ("The cardinal rule of contract interpretation is to ascertain
and give legal effect to the parties' intentions as determined by the contract language.
If the contract's language is clear and unambiguous, the language alone determines
the contract's force and effect." (citation omitted) (quoting Schulmeyer, 353 S.C. at
495, 579 S.E.2d at 134)).

5. As to whether the separate Arbitration Agreement is invalid because the terms
are unconscionable: I'On, L.L.C. v. Town of Mt. Pleasant, 338 S.C. 406, 422, 526
S.E.2d 716, 724 (2000) ("If the losing party has raised an issue in the lower court,
but the court fails to rule upon it, the party must file a motion to alter or amend the
judgment in order to preserve the issue for appellate review."); York v. Dodgeland
of Columbia, Inc., 406 S.C. 67, 85, 749 S.E.2d 139, 148 (Ct. App. 2013) ("In South
Carolina, unconscionability is 'the absence of meaningful choice on the part of one
party due to one-sided contract provisions, together with terms that are so oppressive
that no reasonable person would make them and no fair and honest person would
accept them.'" (quoting Simpson v. MSA of Myrtle Beach, Inc., 373 S.C. 14, 24–25,
644 S.E.2d 663, 668 (2007))); id. ("Thus, unconscionability is 'due to both an
absence of meaningful choice and oppressive, one-sided terms.'" (quoting Simpson,
373 S.C. at 25, 644 S.E.2d at 669)).

6. As to whether the separate Arbitration Agreement is invalid because it
includes a class arbitration waiver that violates the Dealers Act: York, 406 S.C. at
93–94, 749 S.E.2d at 152–53 (holding that (1) our supreme court's reinstatement of
its opinion in Herron v. Century BMW, 387 S.C. 525, 535–36, 693 S.E.2d 394, 399–
400 (2010), on remand from the United States Supreme Court did not signify a post-
Concepcion position that the Dealers Act was immune to FAA preemption and (2)
in light of Concepcion, a provision in the parties' arbitration agreement banning class
arbitration could not "be invalidated based upon public policy considerations
embodied within state law").

7. As to whether the separate Arbitration Agreement is invalid because it
contains self-defeating language: Palmetto Mortuary, 424 S.C. at 460, 818 S.E.2d
at 733 ("The cardinal rule of contract interpretation is to ascertain and give legal
effect to the parties' intentions as determined by the contract language. If the
contract's language is clear and unambiguous, the language alone determines the
contract's force and effect." (citation omitted) (quoting Schulmeyer, 353 S.C. at 495,
579 S.E.2d at 134)); York, 406 S.C. at 93–94, 749 S.E.2d at 152–53 (holding that (1)
our supreme court's reinstatement of its opinion in Herron on remand from the
United States Supreme Court did not signify a post-Concepcion position that the
Dealers Act was immune to FAA preemption and (2) in light of Concepcion, a
provision in the parties' arbitration agreement banning class arbitration could not "be
invalidated based upon public policy considerations embodied within state law").

AFFIRMED. 4

SHORT, THOMAS, and GEATHERS, JJ., concur.

4
We decide this case without oral argument pursuant to Rule 215, SCACR.