Dean v. Heritage Healthcare of Ridgeway, LLC, 759 S.E.2d 727

Background

Tanglewood (a South Carolina skilled nursing facility owned by Appellants) entered a residency agreement with patient Louise Porter; Respondent (Darlene Dean, the patient's daughter) signed a separate voluntary arbitration agreement referencing the AAA rules the same day.
The arbitration agreement required disputes “follow the rules of the AAA,” stated arbitration would be at/near the facility, and included a severability clause and a bold statement that signing was voluntary.
The patient suffered falls, had hip surgeries, and died; Respondent (as personal representative) filed a medical-malpractice NOI, engaged in statutorily required mediation, then sued for survival and wrongful death.
Appellants moved to compel arbitration; the circuit court denied the motion, holding the agreement invalid because the AAA (the named forum) would not accept post-injury personal-injury claims, relying on Grant v. Magnolia Manor.
The South Carolina Supreme Court granted review and considered: (1) whether the FAA applies; (2) whether specifying the AAA rules (when AAA will not administer these claims) voids the arbitration clause; and (3) whether Appellants waived arbitration by participating in pre-suit mediation and discovery.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Does the FAA apply (interstate commerce)?	Timms controls; residency contract is intrastate, so FAA inapplicable.	Residency agreement requires provision of meals/supplies shipped interstate → implicates commerce.	FAA applies; Timms overruled; residency agreements implicate interstate commerce.
Does AAA unavailability (AAA policy refusing post-injury individual claims) invalidate agreement?	The clause selecting AAA was an exclusive forum selection; because AAA won’t hear these claims, the forum failed and the whole agreement is unenforceable.	The clause adopts AAA rules ("in accordance with"), not exclusive administration; courts can enforce arbitration under AAA rules with a different administrator.	Agreement enforceable; specifying AAA rules is not an integral term that voids arbitration; remand to address other defenses.
Did Appellants waive the right to arbitrate by participating in mediation and limited discovery?	Appellants delayed and litigated, causing prejudice; thus waived arbitration.	Participation was part of statutorily required pre-suit mediation; motion to compel was timely after complaint; no prejudice.	No waiver; presumption favors arbitration and Respondent showed no prejudice from delay.
Is the agreement valid given patient did not sign and Respondent lacked health-care POA?	Agreement invalid because patient did not sign and Respondent lacked authority.	(Appellants disputed but the court must consider these facts.)	Not decided on appeal—case remanded for circuit court to address these and meeting-of-the-minds issues.

Key Cases Cited

Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265 (1995) (FAA applies when agreement involves interstate commerce; broad Commerce Clause reach)
Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79 (2000) (party resisting arbitration bears burden to show arbitration is unsuitable)
Marmet Health Care Ctr., Inc. v. Brown, 132 S. Ct. 1201 (2012) (states may not categorically exempt wrongful-death claims from arbitration)
Grant v. Magnolia Manor-Greenwood, Inc., 383 S.C. 125 (S.C. 2009) (forum selection integral where clause requires arbitration be administered by a specific provider)
Bradley v. Brentwood Homes, Inc., 398 S.C. 447 (S.C. 2012) (arbitrability determinations reviewed de novo; FAA preemption principles)
Meskill v. GGNSC Stillwater Greeley, L.L.C., 862 F. Supp. 2d 966 (D. Minn. 2012) (distinguishing "administered by" from "in accordance with" clauses; majority view enforces arbitration where only rules are adopted)
Brown v. ITT Consumer Fin. Corp., 211 F.3d 1217 (11th Cir. 2000) (discussion on when a chosen forum is integral vs. ancillary)