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2010-MO-031 - AAW Travel LLC v. Cola 20, LLC

THIS OPINION HAS NO PRECEDENTIAL VALUE.  IT SHOULD NOT BE CITED OR RELIED ON AS PRECEDENT IN ANY PROCEEDING EXCEPT AS PROVIDED BY RULE 268(d)(2), SCACR.

THE STATE OF SOUTH CAROLINA
In The Supreme Court


AAW Travel Center, L.L.C., Alexis P. Kisteneff, Sr., and Elvira Kisteneff, Appellants,

v.

Cola 20, L.L.C. d/b/a Columbia 20 Travel Center, L.L.C., Adkins, L.P., Adkins Real Estate Holdings L.L.C., Michael J. Adkins, Vernis Adkins, Barbara Adkins, Richard Griffin, Griffin & Associates, P.C., David Blinder, Jack Mester, and Colony United Business Brokers, Inc., Defendants,

Of Whom Colony United Business Brokers, Inc., Jack Mester, and David Blinder are Respondents.


Appeal from Richland County
J. Michelle Childs, Circuit Court Judge


Memorandum Opinion No. 2010-MO-031
Heard October 5, 2010 – Filed November 8, 2010  


REVERSED AND REMANDED


Richard Gleissner and Robert B. Phillips, of Finkel Law Firm, of Columbia, for Appellants.

Brian  Dumas, of Peake, Fowler & Associates, of Columbia, for Respondents.


PER CURIAM:  The appellants, AAW Travel Center, L.L.C., Alexis P. Kisteneff, Sr., and Elvira Kisteneff ("Buyer") appeal from a circuit court order holding them in contempt for failing to commence arbitration proceedings against the respondents, Colony United Business Brokers, Inc., Jack Mester, and David Blinder ("Broker").  We reverse the finding of contempt and remand the matter to the circuit court for entry of an order of dismissal.

I.

The initial dispute in this case arose out of the purchase of a truck stop in Richland County.  The Buyer filed a complaint alleging fraud and misrepresentation against the sellers, the Broker, and others involved in the transaction.  The circuit court stayed the action and ordered arbitration as to any claims against the Broker. 

When the Buyer did not file an application to commence arbitration proceedings, the Broker filed one with the American Arbitration Association ("AAA") and listed the Buyer as the claimant.  A disagreement subsequently arose as to who was the initiating party responsible for paying the filing fee, and the application ultimately was returned to the Broker by the arbitration organization because of the parties' failure to pay the fee. 

The Broker then moved in the circuit court to have the Buyer held in contempt, and it also sought dismissal of the civil action for the Buyer's failure to arbitrate.  The circuit court found the Buyer was in contempt of the prior arbitration order based on its failure to commence arbitration proceedings and ordered the Buyer to file its arbitration claim and pay the filing fee within sixty days or face dismissal of its civil action.  The Buyer appeals from this order.

II.

We reverse the finding of contempt and hold dismissal of the civil action is the more appropriate remedy in this case. 

The Buyer notified AAA, with a copy to the Broker's counsel, that it would not be paying the required filing fee because it was not the party seeking arbitration.  The letter stated in pertinent part as follows:

We have made no demand for arbitration and will not be paying for any arbitration.  Mr. Dumas' clients [the Broker] desire to arbitrate, not my clients.  If he wants to arbitrate, he can pay for it.  If he doesn't want to pay for it, we will move before the Circuit Court of South Carolina to have the case restored to the active docket and consider his demand for arbitration as waived. 

At oral argument before this Court, the Buyer's counsel acknowledged that arbitration of its claims against the Broker was required by the parties' agreements in this case, and that arbitration was, therefore, appropriately ordered.  Since the circuit court had already ordered arbitration, there was no legal basis by which the Buyer could have asked the circuit court to "restore" the civil case to the active docket and consider arbitration to be "waived."  The circuit court tried to provide the Buyer with additional time to comply with its order compelling arbitration by holding the Buyer in contempt and then allowing it additional time to commence arbitration as had been previously ordered.  However, we hold there is no clear and convincing evidence that the Buyer's actions in failing to prosecute its claims against the Broker warranted a contempt finding; rather, under the circumstances presented here, the more appropriate result for the failure of the claims to proceed to arbitration as ordered is dismissal of the Buyer's civil action against the Broker.  

III.

Based on the foregoing, we reverse the circuit court's order and remand the matter to the circuit court for entry of an order of dismissal of the civil action pursuant to Rule 220(b)(1), SCACR and the following authorities:  Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79 (2002) (stating procedural questions that grow out of a dispute and bear on its final disposition are presumptively not for the judge, but for the arbitrator to decide); Durlach v. Durlach, 359 S.C. 64, 71, 596 S.E.2d 908, 912 (2004) ("Civil contempt must be proved by clear and convincing evidence."); Spartanburg County Dep't of Soc. Servs. v. Padgett, 296 S.C. 79, 82-83, 370 S.E.2d 872, 874 (1988) (observing willful disobedience of a court order may result in a finding of contempt and stating "[a] willful act is defined as one 'done voluntarily and intentionally with the specific intent to do something the law forbids, or with the specific intent to fail to do something the law requires to be done; that is to say, with bad purpose either to disobey or disregard the law'" (quoting Black's Law Dictionary 1434 (5th ed. 1979)); Miller v. Miller, 375 S.C. 443, 652 S.E.2d 754 (Ct. App. 2007) (stating a finding of contempt is a serious matter, and it should be imposed sparingly); see also Frazier v. Dreyfuss, 14 So. 3d 1183 (Fla. Dist. Ct. App. 2009) (noting the plaintiff's court case was dismissed for failure to arbitrate); Merrifield v. Hadlock, 961 A.2d 1107 (Me. 2009) (holding where the parties impeded the alternative dispute resolution process, dismissal of the complaint was the proper remedy).

REVERSED AND REMANDED.

TOAL, C.J., PLEICONES, BEATTY, KITTREDGE and HEARN, JJ., concur.