United States District Court, D. South Carolina, Greenville Division
WENDELL L. HAWKINS, PA, Plaintiff,
FIDELITY NATIONAL TITLE INSURANCE COMPANY, Defendant. FIDELITY NATIONAL TITLE INSURANCE COMPANY, Plaintiff,
WENDELL L. HAWKINS, PA, Defendant.
MEMORANDUM OPINION AND ORDER DISMISSING FIDELITY
NATIONAL INSURANCE COMPANY’S PETITION WITHOUT
the arguments in these actions is Fidelity National Title
Insurance Company’s (FNTIC)’s professional
negligence claim against Wendell L. Hawkins, PA (Hawkins).
Each of the separately filed cases involves a dispute over
the propriety of whether arbitration compelled by this Court
is the proper manner in which to settle the matter.
before the Court is FNTIC’s Petition for an Order
Compelling Arbitration and Hawkins’s Motion to Stay
and/or Dismiss FNTIC’s Petition for an Order Compelling
Arbitration. Having carefully considered the petition, the
motion, the responses, the supplemental briefing, the record
in each of the cases, and the applicable law, it is the
judgment of the Court that FNTIC’s Petition for an
Order Compelling Arbitration will be dismissed without
prejudice and Hawkins’s Motion to Stay and/or Dismiss
FNTIC’s Petition for an Order Compelling Arbitration
will be rendered moot.
FACTUAL AND PROCEDURAL HISTORY
an attorney licensed in the State of South Carolina, entered
into a Title Insurance Agency Agreement with Lawyers Title
Insurance Company (LTIC) on or about June 1, 2001. Civil
Action No. 6:16-0455-MGL (Hawkins I), ECF No. 1-1.
As is applicable here, the Agreement set forth the following:
Unless prohibited by applicable law or regulation, either
[LTIC] or [Hawkins] may demand arbitration pursuant to the
Arbitration Rules of the American Arbitration Association.
Arbitrable matters may include any controversy or claim
between [LTIC] and [Hawkins] arising out of or relating to
[the agreement between [LTIC and Hawkins]. Arbitration
pursuant to th[e] Agreement shall be under the rules in
effect on the date the demand for arbitration is made.
Judgment upon the award rendered by the Arbitrator(s) may be
entered in any court having jurisdiction thereof.
Id. at 5. FNTIC is LTIC’s successor in
interest. Hawkins I, ECF No. 8 at 1.
facts of the underlying dispute are set out in the
“American Arbitration Association Online Filing
Acknowledgement, ” which states, in relevant part, that
[FNTIC] seeks indemnification for a claim it paid under the
provisions of Title Insurance Policy Number G910045489
(“Policy”) that it issued through its agent,
[Hawkins]. [Hawkins] conducted a loan closing for
Mary-Frances Liggett (“Mortgagor”) involving a
mortgage given to Greenpointe Mortgage Funding, Inc.
(“Insured”) for which real property served as
collateral (“Property”). The Mortgagor, as a
Member of Jasmine Place, LLC (“LLC”) had
previously conveyed the Property, which at the time was
titled in the name of the LLC, to herself. [Hawkins]
conducted a title search and failed to recognize that the
Property was not properly vested in the name of the
Mortgagor. Thereafter, as the result of a foreclosure action
brought by Federal National Mortgage Association
(“FNMA”), as successor in interest to the
Insured, the LLC fought the foreclosure claiming, among other
defenses, that the transfer of the Property to Mortgagor was
invalid because the LLC required all members to sign the deed
to the Mortgagor and not just one Member. [FNTIC] retained
counsel and negotiated settlement and paid a Claim under the
provisions of the Policy in the amount of $65, 000 and
incurred expenses in the amount of $9, 821.93 as a result of
the foreclosure action. Claim Amount $74, 821.93
Hawkins I, ECF No. 1-2 at 4.
procedural history is this case is somewhat unusual. FNTIC
filed its Petition for an Order Compelling Arbitration on
February 17, 2016. Civil Action No. 6:16-0531-MGL
(Hawkins II), ECF. No. 1. On the same date,
Hawkins opened a new case in which he filed his Motion to
Stay Arbitration, and/or to Dismiss FNTIC’s Petition
for an Order Compelling Arbitration on the same date.
Hawkins I, ECF No. 1. On March 10, 2016, Hawkins
filed his response in opposition to FNTIC’s Petition
for an Order Compelling Arbitration, Hawkins II, ECF
No. 6, and FNTIC responded in opposition to Hawkins’s
Motion to Stay and/or Dismiss on March 18, 2016,
Hawkins I, ECF No. 8. The Court
subsequently asked for supplemental briefing on several
issues, which the parties filed, along with their responses
in opposition to the other parties’ briefs.
STANDARD OF REVIEW
Federal Arbitration Act (FAA) provides a federal district
court with the authority to enforce an arbitration agreement
by compelling parties to arbitrate their dispute. 9 U.S.C.
§ 4 (“A party aggrieved by the alleged failure,
neglect, or refusal of another to arbitrate under a written
agreement for arbitration may petition any United States
district court which, save for such agreement, would have
jurisdiction under Title 28 . . . for an order directing that
such arbitration proceed in the manner provided for in such
agreement.”). States are vested with the same
authority. See Moses H. Cone Mem’l Hosp. v. Mercury
Constr. Corp., 460 U.S. 1, 25 (1983). Section 2 of the
FAA applies to any “contract evidencing a transaction
involving commerce to settle by arbitration a controversy
thereafter arising out of such contract, ” and it
provides that the written agreements to arbitrate contained
in such contracts “shall be valid, irrevocable, and
enforceable, save upon such grounds as exist at law or in
equity for the revocation of any contract.” 9 U.S.C.
§ 2. The United States Supreme Court has also noted a
strong federal policy favoring arbitration. See Moses H.
Cone, 460 U.S. at 24-25.
Fourth Circuit Court of Appeals recognized the FAA’s
strong federal policy favoring arbitration agreements in
Adkins v. Labor Ready, Inc., 303 F.3d 496 (4th Cir.
2002), where the court stated, “A district court . . .
has no choice but to grant a motion to compel arbitration
where a valid arbitration agreement exists and the issues in
a case fall within its purview.” Id. at 500
(citing United States v. Bankers Ins. Co., 245 F.3d
315, 319 (4th Cir. 2001)). The court further stated:
“In the Fourth Circuit, a litigant can compel
arbitration under the FAA if he can demonstrate ‘(1)
the existence of a dispute between the parties, (2) a written
agreement that includes an arbitration provision [that]
purports to cover the dispute, (3) the relationship of the
transaction, which is evidenced by the agreement, to
interstate or foreign commerce, and (4) the failure, neglect
or refusal of the defendant to arbitrate the
dispute.’” Id. at 500-01 (quoting
Whiteside v. Teltech Corp., 940 F.2d 99, 102 (4th
Cir. 1991)). Because “arbitration constitutes a more
efficient dispute resolution process than litigation . . .
‘due regard must be given to the federal policy