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2012-UP-128 - McCauley v. McCauley

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 Court of Appeals

Denise McCauley, Respondent,

v.

JSP Consulting, LLC d/b/a The Neutrino Group, Appellant.


Appeal From Charleston County
J.C. Nicholson, Jr., Circuit Court Judge


Unpublished Opinion No.  2012-UP-128
Heard February 15, 2012 – Filed February 29, 2012


REVERSED AND REMANDED


William B. Jung, of Mt. Pleasant, for Appellant.

Denise McCauley, pro se, of Mt. Pleasant, for Respondent.

PER CURIAM:  JSP Consulting, LLC d/b/a The Neutrino Group (JSP) appeals the circuit court's denial of its motion to compel arbitration in a dispute arising from McCauley's purchase of stenography equipment.  JSP argues the circuit court erred in concluding that the parties' arbitration agreement was unconscionable.  We reverse and remand for an order compelling arbitration.

South Carolina courts must examine two factors to determine whether an agreement is unconscionable: (1) whether the party opposing the agreement lacked a meaningful choice in entering into the agreement and (2) whether the agreement's terms are "so oppressive that no reasonable person would make them and no fair and honest person would accept them."  Simpson v. MSA of Myrtle Beach, Inc., 373 S.C. 14, 24-25, 644 S.E.2d 663, 668 (2007).  Furthermore, "the Fourth Circuit has instructed courts to focus generally on whether the arbitration clause is geared towards achieving an unbiased decision by a neutral decision-maker" when considering whether an arbitration agreement is unconscionable.  Id. at 25, 644 S.E.2d at 668-69 (citing Hooters of Am., Inc. v. Phillips, 173 F.3d 933, 938-40 (4th Cir. 1999)). 

JSP concedes that the arbitration agreement is an adhesion contract because it was offered on a "take-it-or-leave-it" basis with terms that were not negotiable.  See Simpson, 373 S.C. at 26-27, 644 S.E.2d at 669 (defining the term "adhesion contract").  However, JSP argues that the agreement does not fall within the second prong of unconscionability, i.e., the agreement's terms "are so oppressive that no reasonable person would make them and no fair and honest person would accept them."  Simpson,  373 S.C. at 24-25, 644 S.E.2d at 668.  We agree.

In finding the arbitration agreement oppressive, the circuit court concluded that its requirement to arbitrate issues in Colorado was unfair.  However, the agreement allows McCauley to select one of the following alternatives to an in-person hearing: a hearing by submission of documents; a telephone hearing; or an online hearing.  Further, nothing in the record suggests the agreement's language is not geared toward achieving an unbiased decision by a neutral arbitrator.  The agreement requires the arbitration to be governed by the rules of the National Arbitration Forum (NAF), which provide a neutral process for the selection of an arbitrator.  Therefore, McCauley's selection of an alternative to an in-person hearing would not place her at a disadvantage.     

The circuit court also concluded that the costs associated with arbitration are unfair.  While the arbitration agreement provides that the party pursuing a claim pays his own costs, it also acknowledges the prevailing party may request an award of costs. 

Based on the foregoing, the circuit court erred in concluding that the arbitration agreement was oppressive.  Therefore, we need not address JSP's alternative argument concerning the severability of the forum selection clause.  See Futch v. McAllister Towing of Georgetown, Inc., 335 S.C. 598, 613, 518 S.E.2d 591, 598 (1999) (noting an appellate court need not address appellant's remaining issues when its determination of a prior issue is dispositive).

REVERSED and REMANDED.

PIEPER, KONDUROS, and GEATHERS, JJ., concur.