Originally from Dispute Resolution Journal

COMMERCIAL-ENFORCEMENT OF ARBITRATION AGREEMENT -FEDERAL ARBITRATION ACT- SOUTH CAROLINA

Even though a nursing home was a division of a Delaware limited partnership that markets its services to persons outside the state, hires employees from outside the state and obtains goods and supplies from outside the state, the court found that there was an insufficient relationship with interstate commerce to render the controversy subject to the Federal Arbitration Act (FAA).

Dora Timms was a resident at the Greenwood Health Care Center which contracted with Mary Greene to provide hair care services to residents. Timms sustained injuries which allegedly occurred while she was left unattended under a hair dryer at the Center. Greene was providing services to Timms at the time of her injuries. Timms sued Greene and the Center. Greene moved to dismiss the action on the ground that the contract between Timms and the Center required that the matter be submitted to arbitration. The trial court denied Greene's motion and she appealed.

According to Greene, the trial court erred in failing to find that the express terms of the parties' contract subjects Timms' claims to the FAA under applicable case law. She also argued that interstate commerce was involved because of the Center's acceptance of federal insurance payments and that the contract's terms imply that the Center obtains equipment, services and materials from outside the state. The appellate court disagreed. Although the Center is a division of a Delaware limited partnership that markets its services to persons outside the state, hires employees from outside the state, and obtains goods and supplies from outside the state, the court found that the relationship of these factors to the agreement between the Center and Timms is insufficient to form the basis of the contract between the parties. The court held that the arbitration agreement was unenforceable and that the FAA was inapplicable.

Timms v. Greene, 427 S.E.2d 642 (S.C. 1993).