Grant v. Magnolia Manor-Greenwood, Inc., 678 S.E.2d 435 (S.C. 2009). · Go Syfert
Grant v. Magnolia Manor-Greenwood, Inc., 678 S.E.2d 435 (S.C. 2009). Cases Citing This Book View Copy Cite
“where the designation of a particular set of rules 'has implications that may substantially affect the substantive outcome of the resolution,' the parties' selection of those rules is integral to the agreement to arbitrate”
86 citation events (86 in the last 25 years) across 14 distinct courts.
Strongest positive: Debra Lynn B. Peele v. Greenville Retirement Properties, LLC (scctapp, 2023-03-15)
Treatment trajectory · 2009 → 2026 · click a year to view as-of
2009 2017 2026
Top citers, strongest first. 20 distinct citers.
examined Cited as authority (verbatim quote) Debra Lynn B. Peele v. Greenville Retirement Properties, LLC (2×) also: Cited as authority (quoted)
S.C. Ct. App. · 2023 · quote attribution · 2 verbatim quotes · confidence high
he specific designation of as arbitrator is an integral term of arbitration agreement.
examined Cited as authority (verbatim quote) York v. Dodgeland of Columbia, Inc. (4×) also: Cited as authority (rule), Cited "see"
S.C. Ct. App. · 2013 · signal: see · quote attribution · 1 verbatim quote · confidence high
where designation of a specific arbitral forum has implications that may substantially affect the substantive outcome of the resolution, we believe that it is neither 'logistical' nor 'ancillary.
discussed Cited as authority (verbatim quote) Miller v. GGNSC Atlanta, LLC
Ga. Ct. App. · 2013 · quote attribution · 1 verbatim quote · confidence high
here designation of a specific arbitral forum has implications that may substantially affect the substantive outcome of the resolution, we believe that it is neither 'logistical' nor 'ancillary
discussed Cited as authority (verbatim quote) Michael Miller v. Ggnsc Atlanta, LLC
Ga. Ct. App. · 2013 · quote attribution · 1 verbatim quote · confidence high
here designation of a specific arbitral forum has implications that may substantially affect the substantive outcome of the resolution, we believe that it is neither 'logistical' nor 'ancillary
examined Cited as authority (verbatim quote) Riley v. Extendicare Health Facilities, Inc.
Wis. Ct. App. · 2012 · signal: see · quote attribution · 1 verbatim quote · confidence high
where the designation of a particular set of rules 'has implications that may substantially affect the substantive outcome of the resolution,' the parties' selection of those rules is integral to the agreement to arbitrate
discussed Cited as authority (quoted) Rita St. Aubin v. THI of South Carolina at Camp Care, LLC (2×) also: Cited as authority (rule)
S.C. Ct. App. · 2023 · quote attribution · 1 verbatim quote · confidence low
in order to have a valid and enforceable contract, there must be a meeting of the minds between the parties with regard to all essential and material terms of the contract.
discussed Cited as authority (rule) Patricia Damico and Lenna Lucas v. Lennar Carolinas, LLC, Spring Grove Plantation Development, Inc
S.C. · 2022 · signal: cf. · confidence medium
Cf. Grant v. Magnolia Manor-Greenwood, Inc., 383 S.C. 125 , 131–32, 678 S.E.2d 435, 439 (2009) (discussing when a term is integral to a contract, as compared to an "ancillary logistical concern," and explaining courts must look to the "essence" of the arbitration agreement; "[w]here [a particular term] has implications that may substantially affect the substantive outcome of the resolution, we believe that it is neither 'logistical' nor 'ancillary.'" (emphasis added)).
discussed Cited as authority (rule) Berry v. Spang (2×)
S.C. Ct. App. · 2021 · confidence medium
"In order to have a valid and enforceable contract, there must be a meeting of the minds between the parties with regard to all essential and material terms of the contract." Grant v. Magnolia Manor-Greenwood, Inc., 383 S.C. 125, 130 , 678 S.E.2d 435, 438 (2009). "[O]nly if the choice of forum is an integral part of the agreement to arbitrate, rather than an 'ancillary logistical concern[,]' will the failure of the chosen forum preclude arbitration." Id. at 131 , 678 S.E.2d at 438 (quoting Brown v. ITT Consumer Fin.
discussed Cited as authority (rule) Parmar v. Minhas
S.C. Ct. App. · 2019 · confidence medium
Code Ann. §15-48-90 (b) (2005) ("A party waives the objection that an award was not made within the time required unless he notifies the arbitrators of his objection prior to the delivery of the award to him."); Grant v. Magnolia Manor-Greenwood, Inc., 383 S.C. 125, 131 , 678 S.E.2d 435, 438 (2009) (requiring strict adherence to the arbitration rules of the agreement where the selection of the rules was an integral part of the arbitration agreement and not merely an ancillary concern).
discussed Cited as authority (rule) Joyce Green v. U.S. Cash Advance Illinois (2×)
7th Cir. · 2013 · confidence medium
The designation of an arbitration forum “has wide-ranging substantive implications that may affect, inter alia, the arbitrator-selection process, the law, procedures, and rules that govern the arbitration, the enforcement of the arbitral award, and the cost of the arbitration.” Grant v. Magnolia Manor-Greenwood, Inc., 383 S.C. 125 , 678 S.E.2d 435, 439 (2009) (affirming denial of section 5 motion where designated forum had withdrawn from arbitrating the parties’ type of dispute), quoting Singleton v. Grade A Market, Inc., 607 F.Supp.2d 333, 340 (D.Conn.2009).
cited Cited as authority (rule) Keller v. ING Financial
S.C. Ct. App. · 2013 · confidence medium
Id. at 131 , 678 S.E.2d at 438 (approving of In re Salomon Inc., 68 F.3d 554 (2d Cir. 1995)).
discussed Cited as authority (rule) tennctapp 2012
Tenn. Ct. App. · 2012 · confidence medium
See Covenant Health & Rehabilitation of Picayune, LP v. Moulds, 14 So.3d 695, 707 (Miss. 2009) (observing that no other state court had held that an arbitration may go forward if the arbitration agreement requires AAA administration); Grant v. Magnolia Manor-Greenwood, Inc., 678 S.E.2d 435, 439 (S.C. 2009) (holding that if the designation of forum in an arbitration clause “has wide-ranging substantive implications that may affect, inter alia, the arbitrator-selection process, the law, procedures, and rules that govern the arbitration, the enforcement of the arbitral award, and the cost of th…
cited Cited as authority (rule) ESAB Group, Incorporated v. Zurich Insurance PLC
4th Cir. · 2012 · confidence medium
Grant v. Magnolia Manor-Greenwood, Inc., 383 S.C. 125 , 678 S.E.2d 435, 437 (2009).
discussed Cited as authority (rule) Licata v. GGNSC Malden Dexter, LLC
Mass. Super. Ct. · 2012 · confidence medium
Cf. Covenant Health & Rehabilitation of Picayune, LP v. Estate of Moulds, 14 So.3d 695, 708-09 (Miss. 2009) (nursing home arbitration agreement was unenforceable where it required arbitration by AAA, but AAA voluntarily stopped conducting nursing home arbitrations unless parties signed post-dispute arbitration agreement); Grant v. Magnolia Manor-Greenwood, Inc., 678 S.E.2d 435, 439 (S.C. 2009) (nursing home arbitration agreement was unenforceable where essence of agreement was arbitration by AHLA, which stopped conducting personal injury arbitrations based on pre-dispute agreements).
examined Cited as authority (rule) Geneva-Roth, Capital, Inc. v. Edwards (4×) also: Cited "see, e.g."
Ind. Ct. App. · 2011 · confidence medium
The court rejected the argument that the unavailability of the parties’ named arbitration provider constituted “a lapse in the naming of an arbitrator” within the meaning of Section 5. 8 Id. at 561, 678 S.E.2d 435 .
examined Cited as authority (rule) Rivera v. American General Financial Services, Inc. (4×) also: Cited "see, e.g."
N.M. · 2011 · confidence medium
Co., 621 F.3d 931, 940 (9th Cir.2010); Carr v. Gateway, Inc., 241 Ill.2d 15 , 348 Ill.Dec. 374 , 944 N.E.2d 327, 336-37 (2011) (holding that § 5 of the FAA could “not be utilized to select a substitute arbitrator” because “the designation of the NAF as the arbitral forum was integral to the parties’ agreement to arbitrate”); Stewart v. GGNSC-Canonsburg, L.P., 9 A.3d 215, 221 (Pa.Super.Ct.2010) (concluding that “the plain language of the arbitration agreement [w]as the sole evidence of the parties’ intent” and “delineating] the NAF ... as the exclusive arbitrators”); Grant,…
cited Cited as authority (rule) Clerk v. First Bank of Delaware
E.D. Pa. · 2010 · confidence medium
Corp., 211 F.3d 1217 , 1222 (11th Cir.2000); Zechman, 742 F.Supp. at 1364 ; Grant v. Magnolia Manor-Greenwood, Inc., 383 S.C. 125 , 678 S.E.2d 435, 439 (2009).
cited Cited as authority (rule) Carr v. Gateway, Inc.
Ill. App. Ct. · 2009 · confidence medium
Grant v. Magnolia Manor-Greenwood, Inc., 383 S.C. 125, 130-31 , 678 S.E.2d 435, 438 (2009).
cited Cited as authority (rule) Carr v. Gateway, Inc.
Ill. App. Ct. · 2009 · confidence medium
Grant v. Magnolia Manor-Greenwood, Inc., 383 S.C. 125, 130-31 , 678 S.E.2d 435, 438 (2009).
examined Cited "see" Dean v. Heritage Healthcare of Ridgeway, LLC (4×) also: Cited "see, e.g."
S.C. · 2014 · signal: see · confidence high
See Grant, 383 S.C. at 131-32 , 678 S.E.2d at 439 (“[O]nly [when] the choice of forum is an integral part of the agreement to arbitrate, rather than an ancillary logistical concern, will the failure of the chosen forum preclude arbitration.” (quoting Brown v. ITT Consumer Fin.
James O. GRANT, Individually and as Personal Representative of the Estate of Lessie Mae P. Grant, Respondent,
v.
MAGNOLIA MANOR-GREENWOOD, INC.; THI of South Carolina at Greenwood, LLC; THI of South Carolina, LLC; THI of Baltimore Management, Inc.; THI Holdings, LLC; Trans Healthcare, Inc; ABE Briarwood Corporation; And Jane Doe 1-10, Appellants
26668.
Supreme Court of South Carolina.
Jun 15, 2009.
678 S.E.2d 435
Perry D. Boulier and Ginger D. Goforth, both of Holcombe B ornar, of Spartanburg, for appellants., Fred Thompson, III and Kimberly D. Barone, both of Motley Rice, LLC, of Mount Pleasant, for respondent.
Toal, Waller, Beatty, Kittredge, Pleicones.
Cited by 25 opinions  |  Published
2 passages pin-cited by 2 cases
Pinpoint authority: bottom 78%
Citer courts: Court of Appeals of South Caro… (2)
Chief Justice TOAL:

In this case, the circuit court denied Appellants’ motion to enforce arbitration on the grounds that the designated arbitrator had become unavailable and that the unavailability voided the arbitration agreement. Appellants appealed, and we certified this case pursuant to Rule 204(b), SCACR.

Factual/Procedural Background

Respondent James O. Grant (“Respondent”) is the surviving husband of Lessie Mae P. Grant (“Grant”) and the personal representative of her estate. On December 4, 2003, at the age of 72, Grant was admitted to the Magnolia Manor-Greenwood nursing home. Upon admission, Respondent executed an admission contract as a “fiduciary party” on behalf of Grant, who was unable to sign the contract herself. The admission contract contained an arbitration provision, which states as follows:

[*128] VI: Arbitration
Pursuant to the Federal Arbitration Act, any action, dispute, claim, or controversy of any kind (e.g., whether in contract or in tort, statutory or common law, legal or equitable, or otherwise) now existing or hereafter arising between the parties in any way arising out of, pertaining to or in connection with the provision of health care services, any agreement between the parties, the provision of any other goods or service by the Health Care Center or other transactions, contracts or agreements of any kind whatsoever, any past, present, or future incidents, omission, acts errors, practices, or occurrence causing injury to either party whereby the other party or its agents, employees or representatives may be liable, in whole or in part, or any other aspect of the past, present, or future relationships between the parties shall be resolved by binding arbitration administered by the National Health Lawyers Association (the “NHLA”). [1]

On January 1, 2004, the AHLA amended its rules for arbitrating health care liability claims. Under the new rules, the AHLA would only arbitrate claims pursuant to arbitration agreements entered into after the alleged injury occurred. The parties did not modify the admission contract to reflect the AHLA policy change.

On January 11, 2005, Grant fell and sustained a large hematoma above her left eye. Five days later, Grant died as a result of this injury. Respondent instituted this action against Appellants for survival, wrongful death, and loss of consortium.

Appellants filed a motion to enforce arbitration and stay the proceedings. Respondent contested Appellants’ motion on the grounds that the AHLA no longer arbitrated personal injury claims arising under pre-injury arbitration agreements and that the arbitration clause was therefore unenforceable. Appellants argued in reply that Section 5 of the Federal Arbitration Act (“FAA”) allowed for the appointment of a replacement arbitrator when the designated arbitrator became unavailable. Following oral arguments, the circuit court entered[*129] an order denying Appellants’ motion to enforce arbitration and stay the proceedings. In reviewing the arbitration agreement, the circuit court found that the AHLA had become unavailable as an arbitrator, found that the designation of the AHLA as arbitrator was a material term of the agreement, and declined to appoint a new arbitrator because “there would no longer be a meeting of the minds between the parties.” Appellants present the following questions for review:

I. Did the circuit court err in finding the arbitration agreement void and unenforceable because of the unavailability of the designated arbitrator?
II. Did the circuit court err in failing to appoint a substitute arbitrator or in failing to allow the parties to consent to a substitute arbitrator in accordance with Section 5 of the Federal Arbitration Act?

Standard of Review

Determinations of arbitrability are subject to de novo review. Stokes v. Metropolitan Life Ins. Co., 351 S.C. 606, 609, 571 S.E.2d 711, 713 (Ct.App.2002). However, the circuit court’s factual findings will not be overruled if there is any evidence reasonably supporting them. Liberty Builders, Inc. v. Horton, 336 S.C. 658, 664-665, 521 S.E.2d 749, 753 (Ct.App.1999).

Law/Analysis

Appellants argue that the circuit court erred in denying their motion to enforce arbitration due to the AHLA’s unavailability to act as arbitrator. We disagree.

We observe at the outset that it is the policy of this state to favor the arbitration of disputes. Toler’s Cove Homeowners Ass’n, Inc. v. Trident Const. Co., Inc., 355 S.C. 605, 612, 586 S.E.2d 581, 585 (2003). Accordingly, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration. Zabinski v. Bright Acres Assocs., 346 S.C. 580, 597, 553 S.E.2d 110, 118 (2001). A motion to compel arbitration made pursuant to an arbitration clause in a written contract should only be denied where the clause is not susceptible to any interpretation which would cover the asserted dispute. Id. at 597, 553 S.E.2d at 118-119.

[*130] Nevertheless, arbitration is a matter of contract, and our evaluation of the enforceability of an arbitration agreement is guided by general principles of contract law. Munoz v. Green Tree Fin. Corp., 343 S.C. 531, 538, 542 S.E.2d 360, 364 (2001). The parties to an arbitration agreement are at liberty to choose the terms under which they will arbitrate. Dowling v. Home Buyers Warranty Corp., II, 311 S.C. 233, 236, 428 S.E.2d 709, 710 (1993). In order to have a valid and enforceable contract, there must be a meeting of the minds between the parties with regard to all essential and material terms of the contract. Player v. Chandler, 299 S.C. 101, 105, 382 S.E.2d 891 (1989).

The parties’ arbitration agreement provides that the arbitration shall be administered pursuant to the FAA. Section 5 of the FAA states in part:

If in the agreement provision be made for a method of naming or appointing an arbitrator or arbitrators or an umpire, such method shall be followed; but if no method be provided therein, or if a method be provided and any party thereto shall fail to avail himself of such method, or if for any other reason there shall be a lapse in the naming of an arbitrator or arbitrators or umpire, or in filling a vacancy, then upon the application of either party to the controversy the court shall designate and appoint an arbitrator or arbitrators or umpire, as the case may require, who shall act under the said agreement with the same force and effect as if he or they had been specifically named therein....

9 U.S.C. § 5 (2007).

Appellants argue that the unavailability of AHLA has created a “lapse ... in filling a vacancy” that Section 5 was designed to remedy. We disagree.

There is a dispute in the case law as to whether Section 5 applies in cases where, as here, the parties have specified an exclusive arbitral forum, but that forum is no longer available. Some courts, particularly the United States Court of Appeals for the Second Circuit, have held that Section 5 does not apply in such instances. See In re Salomon Inc. S’holders’ Derivative Litig., 68 F.3d 554, 560 (2d Cir.1995) (defining the term “lapse” in Section 5 to mean “a lapse in time in the naming of the arbitrator or in the filling of a vacancy on a panel of arbitrators, or some other mechanical breakdown in the arbi[*131] trator selection process” and holding that Section 5 is therefore inapplicable to cases where the specifically designated arbitrator becomes unavailable); Dover Ltd. v. A.B. Watley, Inc., No. 04-7366, 2006 WL 2987054, *6 (S.D.N.Y. Oct.18, 2006) (recognizing that “Section 5 ... is inapplicable when the parties have specified an exclusive arbitral forum, but that forum is no longer available”).

Other jurisdictions have interpreted Section 5 so as to generally allow for the appointment of new arbitrators when the named arbitrator could not or would not proceed. See Ex parte Warren, 718 So.2d 45, 48 (Ala.1998) (expressing the general rule that, “where the arbitrator named in the arbitration agreement cannot or will not arbitrate the dispute, a court does not void the agreement but instead appoints a different arbitrator.”); Zechman v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 742 F.Supp. 1359, 1364 (N.D.Ill.1990) (same). However, these cases have also identified an exception to this rule, which provides that “[ojnly if the choice of forum is an integral part of the agreement to arbitrate, rather than an ‘ancillary logistical concern’ will the failure of the chosen forum preclude arbitration.” Brown v. ITT Consumer Fin. Corp., 211 F.3d 1217, 1220 (11th Cir.2000). Importantly, “[n]one of these cases ... stand for the proposition that district courts may use § 5 to circumvent the parties’ designation of an exclusive arbitral forum.” In re Salomon Inc., 68 F.3d at 561.

We see great merit in the Second Circuit’s view that Section 5 does not apply in cases where a specifically designated arbitrator becomes unavailable. However, we may assume without deciding that Section 5 applies in the present case and reach the same result because, in our view, the specific designation of the AHLA as arbitrator is an integral term of this arbitration agreement.

To determine whether a named arbitrator is an integral part of the agreement or an ancillary logistical concern, courts look to the “essence” of the arbitration agreement. Warren, 718 So.2d at 49 (citing Zechman, 742 F.Supp. at 1364). Under the AHLA policy, the parties may not vary the rules on communications, service, counting of days, publication and form of the award, release of documents, or administration. The parties are bound by a panel of arbitrators[*132] selected by the service. In our view, the parties’ waiver of this set of rights in agreeing to arbitrate before the AHLA reflects their specific intent to arbitrate exclusively before that body. Furthermore, the designation of a forum such as the AHLA “has wide-ranging substantive implications that may affect, inter alia, the arbitrator-selection process, the law, procedures, and rules that govern the arbitration, the enforcement of the arbitral award, and the cost of the arbitration.” Singleton v. Grade A Market, Inc., 607 F.Supp.2d 333, 339 (D.Conn. 2009). Where designation of a specific arbitral forum has implications that may substantially affect the substantive outcome of the resolution, we believe that it is neither “logistical” nor “ancillary.” See Smith Barney, Inc. v. Critical Health Systems of North Carolina, Inc., 212 F.3d 858, 862 (4th Cir.2000) (“It is far better to interpret the agreement based on what is specified, rather than attempt to incorporate other remote rules by reference.”); Wall Street Associates v. Becker Paribas, Inc. 818 F.Supp. 679, 683 (S.D.N.Y.1993), affd. 27 F.3d 845 (2d Cir.1994) (“[A]n agreement to arbitrate before a particular forum is as integral a term of a contract as any other, which courts must enforce.”). Accordingly, we hold that the arbitration agreement is unenforceable and that the circuit court did not err in refusing to appoint a substitute arbitrator pursuant to Section 5.

Conclusion

For the foregoing reasons, we affirm the judgment of the circuit court and remand for further proceedings.

WALLER, BEATTY and KITTREDGE, JJ., concur. PLEICONES, J., concurring in result.
1

. The NHLA has since become the American Health Lawyers Association (the "AHLA”) and hereinafter will be referred to by that name.