United States District Court, D. South Carolina, Florence Division
BRYAN HARWELL UNITED STATES DISTRICT JUDGE
matter is before the Court for a ruling on Defendant Delilah
Lewis's motion to compel arbitration and dismiss the
action or, in the alternative, stay the action pending
arbitration. See ECF No. 7. The Court denies the
motion for the reasons herein.
complaint, Plaintiff Jenifer Weber alleges she was injured in
an automobile accident on May 20, 2016, when Defendant
Delilah Lewis crashed into her vehicle on U.S. Highway 501 in
Horry County, South Carolina. See ECF No. 1 at
¶¶ 5-7. Plaintiff is an Illinois citizen, and
Defendant is a South Carolina citizen. Id. at
¶¶ 1-2. Plaintiff asserts two causes of action
against Defendant Lewis: negligence and negligence per se.
Id. at ¶¶ 8-14.
time of the accident, Plaintiff's parents maintained an
insurance policy through Safeco Insurance Company of Illinois
(“Safeco”) providing underinsured motorist
(“UIM”) coverage. See ECF No. 7-2 at pp.
51-56. The Safeco Policy contains an arbitration provision
providing that “either party may make a written demand
for arbitration” if Safeco and the insured do not agree
to the amount of damages and that “arbitration will
take place in the county in which the insured lives.”
Id. at p. 56. Plaintiff also had additional UIM
coverage available under a personal excess liability policy
issued by Federal Insurance Company. See ECF No. 13
at p. 1.
the accident, Defendant Lewis's liability insurer
tendered its $25, 000 liability limits in exchange for a
covenant not to execute. See ECF No. 7-1. Plaintiff
then submitted a claim to Safeco for UIM benefits demanding
the policy limits of $250, 000, but Plaintiff and Safeco were
unable to settle the claim. ECF No. 13 at p. 3.
January 30, 2018, Plaintiff filed the instant action against
Defendant Lewis in this Court invoking diversity jurisdiction
pursuant to 28 U.S.C. § 1332. See ECF No. 1.
Pursuant to S.C. Code Ann. §§ 15-9-270 and
38-77-160, Plaintiff served the summons and complaint on
Safeco and Federal. ECF No. 13 at p. 3. Pursuant to §
38-77-160,  counsel for Safeco filed a notice of
appearance on February 21, 2018, and counsel for Federal
filed a notice of appearance on March 30, 2018. See
ECF No. 5.
March 5, 2018, Defendant Lewis filed the instant motion,
which is captioned “Defendant Delilah Lewis's, By
and Through Safeco Insurance Company, Motion to Dismiss and
Compel Arbitration Or, Alternatively, Stay Litigation Pending
Arbitration.” See ECF No. 7. Plaintiff filed a
response in opposition to the motion, and Defendant Lewis
filed a reply to Plaintiff's response. See ECF
Nos. 13 & 19.
mentioned above, Safeco has appeared and is defending in the
name of Defendant Delilah Lewis pursuant to S.C. Code Ann.
§ 38-77-160, and Defendant Lewis has filed the instant
motion “by and through Safeco Insurance Company.”
ECF No. 7 at p. 1. The motion seeks to enforce the
arbitration provision in the Safeco Policy providing UIM
coverage and compel arbitration pursuant to the Federal
contends arbitration cannot be compelled in this action for
several reasons. Most significant is Plaintiff's argument
that Defendant Delilah Lewis-the only named defendant in this
action- cannot compel or enforce arbitration pursuant to the
Safeco Policy because Defendant Lewis herself is not a party
to that policy/contract (i.e., that Defendant Lewis has no
standing to compel arbitration). ECF No. 9 at pp. 1-2, 9, 18.
The Court agrees with this argument and will therefore deny
Defendant Lewis's motion.
must rigorously enforce arbitration agreements according to
their terms, including terms that specify with whom
the parties choose to arbitrate their disputes, and the rules
under which that arbitration will be conducted.”
Am. Exp. Co. v. Italian Colors Rest., 570 U.S. 228,
233 (2013) (internal quotation marks, citations, and brackets
omitted). “As a general matter, arbitration is a matter
of contract interpretation and a party cannot be required to
submit to arbitration any dispute which he has not agreed so
to submit.” Am. Bankers Ins. Grp., Inc. v.
Long, 453 F.3d 623, 626-27 (4th Cir. 2006) (internal
quotation marks and brackets omitted).
number of courts have held that because the right to compel
arbitration derives from a contractual right, one who is not
a party to the contract lacks standing to compel
arbitration.” Goer v. Jasco Indus., Inc., 395
F.Supp.2d 308, 312 (D.S.C. 2005). “It is
well-established, however, that a nonsignatory to an
arbitration clause may, in certain situations, compel a
signatory to the clause to arbitrate the signatory's
claims against the nonsignatory despite the fact that the
signatory and nonsignatory lack an agreement to
arbitrate.” Am. Bankers, 453 F.3d at 627.
“This happens when theories arising out of common law
principles of contract and agency law are used to bind
nonsignatories to arbitration agreements.” R.J.
Griffin & Co. v. Beach Club II Homeowners Ass'n,
384 F.3d 157, 160 (4th Cir. 2004) (internal quotation marks
omitted). Here, Defendant Lewis asserts Plaintiff should be
equitably estopped from avoiding the Safeco Policy's
arbitration provision. See ECF No. 19 at pp. 4-5.
signatory to an arbitration agreement may be bound by a
nonsignatory through the doctrine of equitable
estoppel.” Brantley v. Republic Mortg. Ins.
Co., 424 F.3d 392, 395 (4th Cir. 2005).
“[E]quitable estoppel allows a nonsignatory to compel
arbitration in two different circumstances”: when a
signatory to the agreement with the arbitration clause (1)
“must rely on the terms of the written agreement in
asserting its claims against the nonsignatory” or (2)
“raises allegations of substantially interdependent and
concerted misconduct by both the non-signatory and one or
more of the signatories to the contract.” Id.
at 395-96 (internal quotation marks, brackets, and ellipsis
omitted). “Because this legal test examines the nature
of the signatory's underlying allegations against the
nonsignatory, courts should examine the underlying complaint
to determine whether estoppel should apply.” Am.
Bankers, 453 F.3d at 627. “[E]stoppel is
appropriate if in substance the signatory's ...