Jump To

Top Caption Combined Opinion

Support FLP

CourtListener is a project of Free
Law Project, a federally-recognized 501(c)(3) non-profit. Members help support our work and get special access to features.

Please become a member today.

Join Free.law Now

March 12, 2026 Get Citation Alerts Download PDF Add Note

Commissioners of Public Works of the City of Greenville v. US Pipe and Foundry Company, LLC

Court of Appeals of South Carolina

• Citations: None known
• Docket Number: 2025-000520

• Precedential Status: Non-Precedential

• Opinion

• Authorities (8)

• Cited By (0)

• Summaries (0)

• Similar Cases (0)

• PDF

Combined Opinion

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

Commissioners of Public Works of the City of
Greenville, South Carolina, Respondent,

v.

United States Pipe and Foundry Company, LLC, TEC
Utilities Supply Inc., and Hayes Pipe Supply Inc.,
Defendants,

of which United States Pipe and Foundry Company, LLC
is the Appellant.

Appellate Case No. 2025-000520

Appeal from Greenville County
Perry H. Gravely, Circuit Court Judge

Unpublished Opinion No. 2026-UP-123
Heard February 10, 2026 – Filed March 12, 2026

AFFIRMED

C. Mitchell Brown, and Matthew A. Abee, both of Nelson
Mullins Riley & Scarborough, LLP, of Columbia; Beattie
B. Ashmore, of Beattie B. Ashmore, PA, of Greenville;
and Paul G. Joyce, of Buffalo, New York; all for
Appellant.
Adam Crittenden Bach, of Tonnsen Bach, LLC, of
Greenville; Justin J. Hawal, of Mentor, Ohio; Jessica
Holmes, of Chicago, Illinois; Daniel Rock Flynn, of
Chicago, Illinois; Adam J. Levitt, of Chicago, Illinois; and
John Hampton Scully, of Greenville; all for Respondent.

PER CURIAM: Appellant United States Pipe and Foundry Company, LLC (US
Pipe) challenges the circuit court's order denying its motion to compel arbitration.
We affirm.

FACTS AND PROCEDURAL HISTORY

The central issue in this case is whether an arbitration agreement between a
manufacturer and distributor can bind a downstream purchaser asserting a warranty
claim. US Pipe is a manufacturer of water and wastewater products including ductile
iron pipes. TEC Utility Supply Inc. (TEC) and Hayes Pipe Supply (Hayes)
(collectively, distributors) purchased ductile iron pipes with cement mortar lining
from US Pipe. US Pipe conditioned the sale of its products to TEC and Hayes on
acceptance of its Terms and Conditions of Sale, the contract at the center of this case.
Relevant to this appeal, the Terms and Conditions of Sale included a warranty
provision and an arbitration provision. The "Terms and Conditions of Sale" was
available on US Pipe's website.

Respondent Commissioners of Public Works of the City of Greenville, South
Carolina (Greenville Water) operates and controls water utility for Greenville
County and portions of the surrounding counties. Between October 2022 and May
2023, Greenville Water purchased ductile iron pipes with cement mortar lining
manufactured by US Pipe through distributors. According to Greenville Water, at
some point after it purchased the pipes, US Pipe issued to it a Certificate of
Compliance that certified the pipes complied with industry standards.

Distributors each have their own terms and conditions of sale that disclaim
any warranty and alert the buyer that any warranty would be provided by the goods
manufacturer. Notably, the terms and conditions of sale for TEC and Hayes are
specific to those entities, do not specifically refer to US Pipe's Terms and Conditions
of Sale, and do not include or refer to any arbitration provision. The only reference
to US Pipe specifically in the documents between distributors and Greenville Water
was in a quote from TEC to Greenville Water in August 2022 that provided,
If the pipe is not used[,] the manufacture[r] has in it[]s
terms [] a 5% cancellation fee. TEC . . . will only charge
a cancellation fee for unused pipe if the manufacture[r]
cho[o]ses to exercise said term. The [US] Pipe
representative has verbally committed that they will not do
this as there are other consumers in[]line to take said pipe.

Greenville Water alleged it discovered in May 2023, during a construction
project, that the cement mortar lining in the interior of the ductile pipes did not
comply with industry standards. Greenville Water then commenced the underlying
action against US Pipe, TEC, and Hayes. Against US Pipe specifically, Greenville
Water alleged breach of express warranty, breach of implied warranty of
merchantability, breach of implied warranty of fitness for a particular purpose,
breach of implied contract, violations of South Carolina's Unfair Trade Practices
Act, and unjust enrichment. Greenville Water's breach of warranty causes of action
all relied on warranties created by law under the South Carolina Uniform
Commercial Code—Sales (UCC).1 The breach of implied contract claim relied on
US Pipe's marketing and promotional materials and the Certificate of Compliance
representing that the allegedly defective pipes were compliant with the industry
standards when, in fact, the pipes did not comply. Greenville Water sought
declaratory relief, "benefit of the bargain damages," consequential damages, and
punitive damages.

US Pipe filed a motion to compel arbitration and dismiss the action or, in the
alternative, stay the action pending arbitration. The circuit court denied the motion,
finding there was no arbitration agreement between the parties. This appeal
followed.

1
See S.C. Code Ann. § 36-2-313 (1)(a) (2003) ("Any affirmation of fact or promise,
including those on containers or labels, made by the seller to the buyer, whether
directly or indirectly, which relates to the goods and becomes part of the basis of the
bargain creates an express warranty that the goods conform to the affirmation or
promise."); § 36-2-314(1) ("[A] warranty that the goods shall be merchantable is
implied in a contract for their sale if the seller is a merchant with respect to goods of
that kind."); § 36-2-315 ("Where the seller at the time of contracting has reason to
know any particular purpose for which the goods are required and that the buyer is
relying on the seller's skill or judgment to select or furnish suitable goods, there is
unless excluded or modified . . . an implied warranty that the goods shall be fit for
such purpose.").
STANDARD OF REVIEW

"Appeal from the denial of a motion to compel arbitration is subject to de novo
review." Chassereau v. Global-Sun Pools, Inc., 363 S.C. 628, 631, 611 S.E.2d 305,
307 (Ct. App. 2005), aff'd on other grounds, 373 S.C. 168, 644 S.E.2d 718 (2007).
"Under de novo review, a circuit court's factual findings will not be reversed on
appeal if any evidence reasonably supports those findings." Wilson v. Willis, 426
S.C. 326, 335, 827 S.E.2d 167, 172 (2019).

LAW/ANALYSIS

I. Existence of the Arbitration Agreement under the UCC

US Pipe argues that pursuant to the UCC, the unsigned arbitration provision
in the Terms and Conditions of Sale is binding against Greenville Water because the
UCC binds downstream purchasers even when there is no direct contractual
relationship between the parties. US Pipe asserts that because Greenville Water is
pursuing warranty and contract claims, it must accept the contractual limitations
placed on the warranties under the Terms and Conditions of Sale. We disagree.

"An arbitration agreement, of course, is a contract. The elements necessary
for the formation of any contract are (1) an offer, (2) acceptance of the offer, and (3)
the mutual exchange of benefits . . . ." Lampo v. Amedisys Holding, LLC, 445 S.C.
305, 311, 914 S.E.2d 139, 142 (2025) (citation omitted). "A party seeking to compel
arbitration must demonstrate the existence of a valid contract to arbitrate by
establishing these three elements." Id. "When deciding a motion to compel
arbitration under the [South Carolina Uniform Arbitration Act] or the [Federal
Arbitration Administration (FAA)], the court should look to the state law that
ordinarily governs the formation of contracts in determining whether a valid
arbitration agreement arose between the parties." Smith v. D.R. Horton, Inc., 403
S.C. 10, 14, 742 S.E.2d 37, 40 (Ct. App. 2013).

The transaction here is analyzed under the UCC. See § 36-2-102 (providing
that the UCC applies to transactions in goods); § 36-2-105(1) (defining "goods" as
"all things (including specially manufactured goods) which are movable at the time
of identification to the contract for sale other than the money in which the price is to
be paid"). The UCC imposes obligations on sellers by establishing express and
implied warranties covering goods sold on the market. See § 36-2-313(1)(a)
(express warranty by seller's affirmation or promise); § 36-2-314(1) (implied
warranty of merchantability); § 36-2-315 (implied warranty of fitness for a particular
purpose). However, a seller or manufacturer may exclude or disclaim the created
warranty and may limit the remedies available for breach of such warranties. See §
36-2-316 (explaining how a seller or manufacturer may limit the remedies available
for breach of warranty and exclude or disclaim warranties).

The UCC traditionally governs sales of goods and contracts for the sale of
goods solely between the seller and the buyer. However, section 2-318 provides that
the UCC-established warranty rights flow with the product regardless of privity and
that a subsequent user or purchaser with no privity may enforce those warranty rights
against the seller or manufacturer. See § 36-2-318 ("A seller's warranty whether
express or implied extends to any natural person who may be expected to use,
consume[,] or be affected by the goods and whose person or property is damaged by
breach of the warranty."); U.C.C. § 2-318, cmt. 2 (Am. L. Inst. & Unif. L. Comm'n
1977) ("[A]ny beneficiary of a warranty may bring a direct action for breach of
warranty against the seller whose warranty extends to him."). The UCC extends
warranty rights only as they are defined when the product enters the market. See
U.C.C. § 2-318, cmt. 1 (Am. L. Inst. & Unif. L. Comm'n 1977) (providing that a
seller is not precluded from excluding or disclaiming a warranty or limiting the
remedies of the original purchaser and any beneficiaries and these provisions would
be "equally operative against beneficiaries of warranties" under section 2-318). Put
another way, when a manufacturer or seller places a product in the market that is
subject to UCC-created warranties, the limitations, disclaimers, and exclusions
associated with that product's warranties flow with the product and can be enforced
against the manufacturer or seller regardless of privity with subsequent users or
purchasers.

US Pipe reads the extension of warranties and their limitations to subsequent
users or purchasers under section 2-318 to include any agreement to arbitrate
existing between the original buyer and seller. US Pipe's reading of 2-318 ignores
that it is the limitations of remedies that extend to subsequent users. See U.C.C. §
2-318, cmt. 1 (Am. L. Inst. & Unif. L. Comm'n 1977) (providing that a seller is not
precluded from excluding or disclaiming a warranty or limiting the remedies of the
original purchaser and any beneficiaries and these provisions would be "equally
operative against beneficiaries of warranties" under section 2-318). Arbitration is
not a remedy. See Munoz v. Green Tree Fin. Corp., 343 S.C. 531, 542, 542 S.E.2d
360, 365 (2001) ("An agreement providing for arbitration does not determine the
remedy for a breach of contract but only the forum in which the remedy for the
breach is determined.").
Importantly, section 2-318 was designed to grant a subsequent user or
purchaser the power to enforce warranty rights independent of a contract. See
Recold, S.A. de C.V. v. Monfort of Colorado, Inc., 893 F.2d 195, 198–99 (8th Cir.
1990) ("The [UCC] does not require [the downstream purchaser] to sue under the
[manufacturer and distributor's] contract, but rather gives [the downstream
purchaser] warranty rights against [the manufacturer] independent of any contract.").
US Pipe's exclusions, disclaimers, and limitations to remedies associated with
warranties in the Terms and Conditions of Sale—which governed the transactions
between it and distributors—are operative against Greenville Water. However, the
presence of the warranty provision in the same contract as an arbitration agreement
does not attach the arbitration provision to Greenville Water's power to enforce
warranty rights under statute.

For these reasons, we affirm the circuit court because there is not a valid
arbitration agreement between US Pipe and Greenville Water under the UCC.

II. Direct Benefits Estoppel

US Pipe argues direct benefits estoppel applies because Greenville Water's
claims arise "solely from the contractual relationship that Greenville Water allege[d]
to have with" US Pipe. US Pipe asserts that the performance of delivering the goods
to distributors was "a direct benefit to Greenville Water" and the assertion that the
pipes did not meet the specifications "establishes sufficient reliance on the Terms
[and Conditions of Sale]" to apply direct benefits estoppel. Finally, US Pipe asserts
that estoppel must be applied to prevent injustice because it is necessary to prevent
other downstream purchasers from ignoring their arbitral responsibilities. We
disagree.

"[E]quitable estoppel . . . estops a nonsigner from refusing to comply with an
arbitration provision of a contract if (1) the nonsigner's claim arises from the
contractual relationship, (2) the nonsigner has 'exploited' other parts of the contract
by reaping its benefits, and (3) the claim relies solely on the contract terms to impose
liability." Weaver v. Brookdale Senior Living, Inc., 431 S.C. 223, 230, 847 S.E.2d
268, 272 (Ct. App. 2020) (quoting Wilson, 426 S.C. at 340–44, 827 S.E.2d at
175–77). "[W]here plaintiffs sue and seek relief based on contracts containing
arbitration clauses, courts have applied equitable estoppel." Wilson, 426 S.C. at 344,
827 S.E.2d at 177 (citing Int'l Paper Co. v. Schwabedissen Maschinen & Anlagen
GMBH, 206 F.3d 411, 417–18 (4th Cir. 2000)). Effectively, direct benefits estoppel
requires a plaintiff relying on a contract to take the entire contract and not cherry
pick the parts that benefit it.
We hold the circuit court did not err by determining that direct benefits
estoppel did not apply because Greenville Water did not seek any benefits under the
Terms and Conditions of Sale and did not rely on the contract to impose liability.
Warranties are often embedded in contracts and plaintiffs may seek to enforce
warranties under the contract or be third party beneficiaries to the contract. That is
not the case here.

The sources of Greenville Water's warranty and implied contract claims are
the UCC, Certificate of Compliance, and promotional and marketing materials
created by US Pipe, not the Terms and Conditions of Sale. At no point does
Greenville Water allege that US Pipe breached an obligation expressed in the Terms
and Conditions of Sale. Weaver, 431 S.C. at 230, 847 S.E.2d at 272 ("[E]quitable
estoppel . . . estops a nonsigner from refusing to comply with an arbitration provision
of a contract if (1) the nonsigner's claim arises from the contractual
relationship . . . ." (quoting Wilson, 426 S.C. at 340–44, 827 S.E.2d at 175–76)). The
Terms and Conditions of Sale may be invoked by US Pipe as evidence that it
excluded or disclaimed warranties and limited remedies for breach. Critically
though, Greenville Water's claims still would flow from the UCC. Wilson, 426 S.C.
at 344, 827 S.E.2d at 177 ("[W]here plaintiffs sue and seek relief based on contracts
containing arbitration clauses, courts have applied equitable estoppel.").

Accordingly, we affirm the circuit court's finding that direct benefits estoppel
did not apply because Greenville Water has not exploited the Terms and Conditions
of Sale and does not seek to impose liability based on the contract.

We need not address the remaining issues on appeal because our ruling on the
arbitration agreement's existence is dispositive. See Futch v. McAllister Towing of
Georgetown, Inc., 335 S.C. 598, 613, 518 S.E.2d 591, 598 (1999) (holding an
appellate court need not address an issue when a decision on another issue is
dispositive). 2

2
US Pipe also argues that this court must reverse and remand because the circuit
court erred by (1) resolving factual disputes without holding a summary trial as
required by the FAA; (2) making factual findings about Greenville Water's reliance
on the Certificate of Compliance; (3) not deciding the terms of the parties'
agreement; and (4) failing to fix transcript errors. All these arguments relate to the
circuit court's findings in the order denying the motion to compel. US Pipe did not
raise these arguments to the circuit court. Consequently, these issues are not
preserved and thus, are not properly before this court. See Smith, 318 S.C. at 455,
For the foregoing reasons the circuit court's order is

AFFIRMED.

GEATHERS, HEWITT, and CURTIS, JJ., concur.

458 S.E.2d at 429 (1995) ("[A]n appellate court cannot address an issue unless it
was raised to, and ruled upon by, the trial court.").