South Carolina Appeals Court Rejects Finance Company’s Attempt to Force Arbitration in Negligence Case

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It seems that everywhere one turns these days, there’s someone asking for a signature on a waiver, a release document, or a contract agreeing – in advance – to arbitration of a dispute that has not yet occurred.

The goal, of course, is to usurp the signer’s right to a trial by jury, thereby limiting or even eliminating liability for personal injuries or wrongful death caused by the negligence of the entity asking for the document.

Fortunately, not every such agreement is upheld by the courts. It all depends upon the particular situation and the language of a given document.

Facts of the Case

In a recent not-to-be published case, the plaintiff was a woman who filed a negligence suit in the Allendale County Circuit Court. The defendant was a finance company from whom the plaintiff had acquired a loan at some point prior to the act of negligence for which she sought compensation. (Although the basis for the plaintiff’s claim was not fully explained, mostly likely it was a personal injury action arising from a slip-and-fall type accident on the defendant’s premises.)

The defendant sought to compel arbitration of the dispute, pointing out that there was an arbitration clause in the loan agreement signed by the plaintiff. The trial court denied the defendant’s motion, holding that there was no significant relationship between the plaintiff’s current tort claim and the documents she signed in relation to her loan from the defendant. The court also ruled that the alleged torts were unforeseeable at the time that the plaintiff signed the loan papers.

Holding of the South Carolina Court of Appeals

The court affirmed the lower court’s decision but on different grounds. First, the court noted that, based on previous South Carolina case law, “There is no set rule as to what constitutes a waiver of the right to arbitrate; the question depends on the facts of each case.” The court then stated that there are three factors to which the courts typically look in determining such matters: the length of time between the plaintiff’s suit and the defendant’s request to arbitrate; the extent to which the parties have engaged in discovery prior to the motion; and whether the non-moving party was prejudiced by the opponent’s delay in seeking arbitration.

The court then observed that, after the defendant had filed the motion to arbitrate, several depositions had been taken, including the defendant’s deposition of the plaintiff, and the parties had even attempted mediation. According to the court, this deprived the plaintiff of not only her time (and the money required to participate in the various depositions) but also allowed the defendant to obtain information to which it might not have had access in a timely arbitration.

Thus, the court found that, under the particular facts of the case, the defendant had waived its right to seek arbitration. In so holding, the court did not express an opinion as to the validity of the arbitration agreement or its application to the plaintiff’s tort case.

An Experienced South Carolina Premises Liability Attorney

If you or a loved one has been hurt on someone else’s property, the knowledgeable South Carolina slip and fall team at the Patrick E. Knie Law Offices is here to help. To schedule a free consultation, call us at (864) 582-5118. We have offices in both Spartanburg and Greenville, from which we serve personal injury clients throughout the state.

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