Bradley v. Brentwood Homes, Inc.
730 S.E.2d 312
S.C.2012Background
- Bradley and Brentwood Homes signed a Home Purchase Agreement on Jan 31, 2007 for a completed dwelling in North Myrtle Beach, SC, with closing on Mar 2, 2007.
- Bradley filed suit on Jul 31, 2009 alleging fraud, negligence, and breach of implied warranty; Brentwood counterclaimed arbitration issues.
- Brentwood moved to stay proceedings and compel arbitration, citing a mandatory arbitration clause and FAA applicability.
- The circuit court held the UAA requirements were not met and that the FAA did not apply since the transaction did not involve interstate commerce.
- Brentwood appealed; the court affirmed, holding the agreement was intrastate in nature and not subject to the FAA, reaffirming the strong presumption in favor of arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FAA applies given interstate commerce involvement | Brentwood contends the transaction involves interstate commerce via warranty and financing | Bradley asserts the agreement is intrastate and not subject to FAA | FAA does not apply; transaction intrastate |
| Whether arbitration clause complies with UAA requirements | Brentwood argues the clause should be enforceable under arbitration statute | Bradley argues the clause fails UAA technical requirements | UAA requirements not met; arbitration not compelled under UAA |
| Whether circuit court properly considered Terry’s affidavit | Brentwood contends the court correctly considered the affidavit | Bradley argues the affidavit is not dispositive | Court properly weighed affidavits; no FAA evidence found to establish interstate commerce |
| Whether real estate transaction is inherently intrastate under FAA real estate exception | Brentwood relies on interstate commerce indicators (nationwide warranty, out-of-state financing) | Bradley emphasizes purchase of a completed dwelling as intrastate real estate | Transaction deemed intrastate; real estate exception applies; FAA not triggered |
Key Cases Cited
- Mathews v. Fluor Corp., 312 S.C. 404 (1994) (intrastate nature of real estate transactions; FAA applicability not assumed in real estate deals)
- Zabinski v. Bright Acres Assocs., 346 S.C. 580 (2001) (FAA preemption of state rules that would invalidate arbitration when interstate commerce involved)
- Towles v. United Healthcare Corp., 338 S.C. 29 (1999) (strong policy favoring arbitration; FAA consideration)
- Episcopal Hous. Corp. v. Fed. Ins. Co., 269 S.C. 631 (1977) (construction contracts often involve interstate commerce; FAA applicability)
- Munoz v. Green Tree Fin. Corp., 343 S.C. 531 (2001) (state law preemption where interstate commerce would invalidate arbitration)
- Volt Info. Scis. v. Bd. of Trs. of Leland Stanford Jr. Univ., 489 U.S. 468 (1989) (federal policy to enforce arbitration agreements via FAA)
- Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265 (1995) (broader interpretation of 'involving commerce' for FAA)
- Marmet Health Care Ctr., Inc. v. Brown, 132 S. Ct. 1201 (2012) (FAA preempts state law that would preclude arbitration when interstate commerce is involved)
- Saneii v. Robards, N/A (2003) (discussed as persuasive; residential real estate generally not evidence of interstate commerce)
- Garrison v. Palmas Del Mar Homeowners Ass’n, 538 F. Supp. 2d 468 (D.P.R. 2008) (FAA applicability in real estate with interstate aspects)
- New Hope Missionary Baptist Church v. Paragon Builders, 379 S.C. 620 ( Ct. App. 2008) (construction contracts and interstate commerce considerations)