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Rogers v. Clayton Homes Florence

United States District Court, D. South Carolina, Florence Division

December 5, 2019

Casey Ervin Rogers, Plaintiff,
Clayton Homes Florence; Southern Energy Homes, Inc.; CMH Homes, Inc., Defendants.



         This matter is before the Court on Defendants' Motion to Dismiss and Compel Arbitration. ECF No. 5. Plaintiff filed a Response in Opposition, and Defendants filed a Reply. ECF Nos. 7, 8.


         On or about February 13, 2017, Plaintiff purchased “The Louis” mobile home from Southern Homes of Florence. ECF No. 1-1 at 15. Defendant Clayton Homes of Florence[1]arranged delivery and set-up of the mobile home. Id. Defendant Southern Energy Homes, Inc. manufactured the mobile home. ECF Nos. 1-1 at 16, 5-1 at 2.

         Plaintiff contends that the mobile home was damaged significantly during transport. ECF No. 1-1 at 16. He asserts that the “ceilings were cracked, exposed beams in the home were broken, walls were broken and falling, light fixtures had fallen out of the ceiling, crown molding and trim was missing, and the vinyl siding was damaged.” Id. Plaintiff alleges that a crew sent by one or all of the Defendants came to repair the mobile home, and he and his family moved in sometime in March 2017. Id. at 16-17. He contends that, after they moved in, several problems with the mobile home became apparent, including but not limited to the plumbing, the patio, the carpeting, the vinyl, the trim and molding, and the walls. Id. at 16-19.

         The Retailer Closing Agreement and Sales Agreement are silent regarding arbitration. See ECF No. 5-2, 7-2. However, included as part of the sales transaction with Defendant CMH Homes, Inc., was a document labeled “Binding Dispute Resolution Agreement” (“the DRA”). ECF No. 5-6. The DRA includes an arbitration provision which states, in relevant part:

The Parties agree to mandatory, binding arbitration (“Arbitration”) of all Claims that are not resolved in Mediation . . . . This Agreement applies to all pre-existing, present, or future disputes, claims, controversies, grievances, and causes of action against Seller, including, but not limited to, common law claims, contract and warranty claims, tort claims, statutory claims, administrative law claims, and any other matter in question, not otherwise excepted herein, arising out of or relating to (i) the modular or manufactured home(s) purchased, sold, owned, occupied, and/or delivered in any transaction with Buyer or Beneficiaries . . ., (ii) the documents related to the purchase and sale of the Home (including but not limited to the Retailer Closing Agreement, any Purchase or Sales Agreement, buyer's order, supplemental invoice, and other instruments and agreement whereby Seller purports to convey or receive any goods or services to or from Buyer or Beneficiaries . . .), (iii) any products goods services, insurance, supplemental warranty, service contract, and real property . . . sold under or referred to in the Contract, (iv) any events leading up to the Contract, (v) the collection and servicing of the Contract, (vi) the design and construction of the Home, and (vii) the interpretation, scope, validity and enforceability of the Contract . . . .

ECF No. 5-6 at 2.[2]

         This action was filed in the Williamsburg County Court of Common Pleas and was removed to this Court on February 26, 2019. ECF No. 1. Plaintiff brings claims for breach of contract, negligent construction and repairs, breach of warranty, and unfair trade practices. ECF No. 1-1 at 19-24.


         The Federal Arbitration Act (“FAA”) establishes a “strong federal public policy in favor of enforcing arbitration agreements” and is designed to “ensure judicial enforcement of privately made agreements to arbitrate.” Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 217, 219 (1985). The FAA was enacted “in 1925 in order ‘to reverse the longstanding judicial hostility to arbitration agreements that had existed at English common law and had been adopted by American courts, and to place arbitration agreements on the same footing as other contracts.'” Snowden v. CheckPoint Check Cashing, 290 F.3d 631, 639 (4th Cir. 2002) (quoting Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24 (1991)). “Underlying this policy is Congress's view that arbitration constitutes a more efficient dispute resolution process than litigation.” Adkins v. Labor Ready, Inc., 303 F.3d 496, 500 (4th Cir. 2002) (citation omitted).

         The FAA provides that arbitration clauses in contracts involving interstate commerce “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. Under the FAA, a district court must compel arbitration and stay court proceedings if the parties have agreed to arbitrate their dispute. Id. §§ 2, 3. But, if the validity of the arbitration agreement is in issue, a district court must first decide if the arbitration clause is enforceable against the parties. Id. § 4. “‘[A]s a matter of federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration.'” Drews Distrib., Inc. v. Silicon Gaming, Inc., 245 F.3d 347, 349 (4th Cir. 2001) (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983)). “A court should not deny a request to arbitrate an issue ‘unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.'” Id. at 349-50 (quoting United Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582- 83 (1960)). Nevertheless, “a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.” Warrior & Gulf Navigation Co., 363 U.S. at 582.

         A party seeking to compel arbitration must do so by establishing the following four elements: (1) the existence of a dispute between the parties; (2) a written agreement that includes an arbitration provision purporting to cover the dispute; (3) the relationship of the transaction, as evidenced by the agreement, to interstate or foreign commerce; and (4) the failure, neglect, or refusal of a party to arbitrate the dispute. Am. Gen. Life & Accident Ins. Co. v. Wood, 429 F.3d 83, 87 (4th Cir. 2005); see also Whiteside v. Teltech Corp., 940 F.2d 99, 102 (4th Cir. 1991); Energy Absorption Sys. v. Carsonite Int'l, 377 F.Supp.2d 501, 504 (D.S.C. 2005). “[E]ven though arbitration has a favored place, there still must be an underlying agreement between the parties to arbitrate.” Adkins, 303 F.3d at 501 (internal quotations and citation omitted). “Whether a party agreed to arbitrate a particular dispute is a question of state law governing contract formation.” Id. (citing First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944 (1995)). “[T]he party resisting arbitration bears the burden of proving that the claims at issue are ...

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