791 S.E.2d 128
S.C.2016Background
- JWH purchased ~65 acres in 2002 for a residential subdivision on land previously used for textile-related industrial activity and removed visible evidence of the site.
- The Parsons bought a home on the development in 2007–2008 and signed a purchase agreement that incorporated the JWH Warranty and its arbitration clause in paragraph O.
- Parsons received a Homeowner Handbook with the Warranty and acknowledged receipt, including the arbitration provision.
- In 2008, Parsons discovered buried industrial pipes and a metal box with hazardous sludge; JWH executed and funded a cleanup under DHEC supervision.
- Parsons filed suit in 2011 alleging disclosure failures, contamination, and related contract and tort claims; JWH moved to compel arbitration and dismiss.
- Circuit Court denied arbitration, ruling the clause was limited to Warranty claims and barred by outrageous-torts exception; Court of Appeals affirmed the scope ruling; this Court reversed on scope, addressing Concepcion-era principles and unconscionability later in the opinion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the arbitration clause applies to Parsons’ claims | Parsons argues clause limited to Warranty claims and not all housing-deal disputes. | JWH argues clause covers all disputes arising from purchase and property, not limited by location in Warranty. | Arbitration clause covers all disputes arising under the contract; not limited by Warranty location. |
| Validity of the outrageous torts exception after Concepcion | Parsons contends exception should bar arbitration for outrageous, unforeseeable conduct. | JWH contends exception remains viable to defeat arbitration for outrageous conduct. | Outrageous torts exception remains viable in this jurisdiction and can bar arbitration. |
| Unconscionability as a ground to deny arbitration | Parsons argues the clause is unconscionable due to unequal bargaining power and housing context. | JWH contends unconscionability defenses are not supported by facts. | Unconscionability argument rejected; arbitration remains enforceable. |
Key Cases Cited
- Zabinski v. Bright Acres Assocs., 346 S.C. 580, 553 S.E.2d 110 (2001) (scope and significance of arbitration in relation to contract terms)
- Jackson Mills, Inc. v. BT Capital Corp., 312 S.C. 400, 440 S.E.2d 877 (1994) (arbitration clauses are separable from embedded contracts)
- AT&T Mobility, L.L.C. v. Concepcion, 563 U.S. 333 (2011) (FAA preempts state rules that impede arbitration on grounds applicable only to arbitration)
- DIRECTV, Inc. v. Imburgia, 136 S. Ct. 463 (2015) (Supreme Court on federal arbitration framework and state-law limitations)
- Volt Info. Scis., Inc. v. Board of Trs. of Leland Stanford Jr. Univ., 489 U.S. 468 (1989) (arbitration agreements on equal footing with other contracts)
- Kennedy v. Columbia Lumber & Mfg. Co., 299 S.C. 335, 384 S.E.2d 730 (1989) (homebuyer protections in residential construction)