Flexon v. PHC-Jasper, Inc., 776 S.E.2d 397

Background

In 2006 Flexon (a Georgia-based physician) signed a five-year employment agreement to work for PHC (a Lifepoint subsidiary) in Hardeeville, SC; the agreement contained an arbitration clause (with limited court carve-outs) and a South Carolina venue clause.
After Flexon began work, Lifepoint sold PHC to Tenet; Tenet’s attempted assignment of the Agreement was rejected by Flexon, and disputes followed about equipment, referrals, and patient care across the Georgia–South Carolina border.
Flexon sued Coastal (PHC successor), Lifepoint, and Tenet for breach of contract alleging Lifepoint failed to disclose negotiations with Tenet and made misrepresentations regarding resources; Coastal moved to compel arbitration under the Agreement and argued the Federal Arbitration Act (FAA) applied because the transaction implicated interstate commerce.
The trial court denied Coastal’s motion; the Court of Appeals affirmed in Flexon I, holding the Agreement and facts did not implicate interstate commerce so the FAA did not apply.
After remand Lifepoint delayed, then took Flexon’s deposition which showed he provided services in both GA and SC; Lifepoint renewed its motion to compel arbitration and Coastal sought Rule 60(b) relief asserting the deposition was newly discovered evidence.
The second circuit court judge denied Lifepoint’s renewed motion and relief from judgment, finding Flexon I was the law of the case and that the deposition evidence should have been developed earlier; this appeal followed and the court affirmed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Preservation of right to seek arbitration	Lifepoint: consent orders preserved its ability to move later; discovery did not waive arbitration	Court: Lifepoint delayed and failed to timely protect its own arbitration right	Denied — Lifepoint failed to preserve/acted untimely; denial not reversed
Applicability of law-of-the-case	Lifepoint: deposition produced substantially different facts so prior appellate ruling should not bind	Court/Coastal: prior appellate decision controls unless substantially different evidence was presented earlier	Affirmed — law of the case applies; deposition evidence should have been presented earlier
Whether deposition created "substantially different" evidence	Lifepoint: deposition shows Flexon’s obligations required providing services in both states, altering interstate-commerce analysis	Court: deposition facts were not sufficiently new because they could have been developed earlier; Lifepoint had opportunity to depose/join motion earlier	Denied — not a valid exception to law-of-the-case or waiver; Lifepoint bound by prior ruling
Need to decide FAA applicability	Lifepoint: FAA should apply because services affected interstate commerce (commerce-in-fact test)	Court: unnecessary to reach FAA because law-of-the-case/waiver dispositive	Court did not address FAA — appeal resolved on procedural/law-of-the-case grounds

Key Cases Cited

Flexon v. PHC-Jasper, Inc., 399 S.C. 83, 731 S.E.2d 1 (Ct. App. 2012) (prior appellate decision finding Agreement did not implicate interstate commerce)
Proctor v. Steedley, 398 S.C. 561 (Ct. App.) (de novo review of legal questions)
Zabinski v. Bright Acres Assocs., 346 S.C. 580 (Ct. App.) (arbitrability is for judicial determination absent agreement otherwise)
Gissel v. Hart, 382 S.C. 235 (Ct. App.) (determination of arbitrability reviewed de novo; factual findings reviewed for supporting evidence)
Dean v. Heritage Healthcare of Ridgeway, LLC, 408 S.C. 371 (Sup. Ct.) (parties may waive arbitration; waiver depends on facts and prejudice)
Nelson v. Charleston & W. Carolina Ry. Co., 231 S.C. 351 (S.C. 1957) (law-of-the-case inapplicable where facts are materially different)
Christianson v. Colt Indus. Operating Corp., 486 U.S. 800 (U.S. 1988) (policy and purpose behind law-of-the-case doctrine)
United States v. U.S. Smelting Ref. & Mining Co., 339 U.S. 186 (U.S. 1950) (law-of-the-case fosters finality and efficiency in litigation)