Justia Arbitration & Mediation Opinion SummariesArticles Posted in West Virginia Supreme Court of Appeals
Credit Acceptance Corp. v. Front
The cases underlying these consolidated appeals involved the purchase of an automobile. Plaintiffs purchased vehicles and signed retail installment contracts with three separate dealers. The dealers assigned their rights in the contract and vehicles to Credit Acceptance Corporation, who financed the purchases. All of the contracts contained arbitration clauses. Plaintiffs later commenced civil actions against Credit Acceptance in circuit court, alleging, inter alia, violations of the West Virginia Consumer Credit and Protection act (WVCCPA). Credit Acceptance filed a motion to compel arbitration and dismiss, which the circuit court denied, finding that the arbitration agreements were unconscionable based upon the unavailability of some of the arbitration forums named therein and because Plaintiffs in the agreements waived their respective rights to a jury trial. The Supreme Court reversed in both of the cases, holding that because one of the arbitration forums named in the arbitration agreements remained available to arbitrate the parties' disputes, and because an arbitration agreement is not unenforceable solely because a party to the contract waives her right to a jury trial, the causes must be remanded for entry of orders compelling arbitration. View "Credit Acceptance Corp. v. Front" on Justia Law
State ex rel. AMFM, LLC v. Circuit Court (King)
Nancy Belcher was the designated health care surrogate of decedent Beulah Wyatt. Belcher signed an arbitration agreement that was presented to her when she sought to admit Wyatt to the McDowell Nursing and Rehabilitation Center (McDowell Nursing). Wyatt died after living ten months in the nursing home. Lelia Baker subsequently filed a wrongful death suit against McDowell Nursing alleging that its negligent care of Wyatt caused and/or contributed to her death. McDowell Nursing filed a motion to dismiss and to enforce the arbitration agreement. The circuit court denied the motion and concluded that the agreement was unenforceable because Belcher did not have the authority to waive Wyatt's right to a jury trial. The Supreme Court denied McDowell Nursing's subsequent request for a writ of prohibition to prevent the circuit court from enforcing its order, holding that Belcher, as a health care surrogate, did not have the authority to enter the arbitration agreement because it was not a health care decision and was not required for Wyatt's receipt of nursing home services from McDowell Nursing. View "State ex rel. AMFM, LLC v. Circuit Court (King)" on Justia Law
Grayiel v. Appalachian Energy Partners 2001-D, LLP
This case was before the Supreme Court upon the appeal of Petitioner from an order of the circuit court granting Respondents' motion for summary judgment and dismissing Petitioner's lawsuit. The court ruled that arbitration clauses in Petitioner's investment contracts were not unconscionable and enforceable. Petitioner alleged the circuit court erred in (1) requiring him to prove the arbitration clauses in the paries' agreements were independently enforceable under federal law rather than applying West Virginia law and finding those agreements unenforceable; (2) failing to find the agreements' arbitration clauses independently unenforceable; (3) refusing to find one respondent's deposition testimony an unresponsive and evasive effort to deprive Petitioner of any opportunity to conduct meaningful discovery; and (4) failing to enforce a respondent's offer to repay Petitioner. The Supreme Court reversed, holding that the circuit court's order lacked the findings of fact and conclusions of law necessary for the Supreme Court to conduct a meaningful appellate review. View "Grayiel v. Appalachian Energy Partners 2001-D, LLP" on Justia Law
Dan Ryan Builders, Inc. v. Nelson
The United States court of appeals certified a question to the West Virginia Supreme Court that concerned two areas of state law: the law of contract formation and the doctrine of unconscionability. The question from the court of appeals arose from a contract that contained an arbitration provision requiring one party to the contract to arbitrate all of their claims but allowed the other party to file a lawsuit for some of its claims. A federal district court previously determined that the arbitration provision was not enforceable because it lacked mutuality of obligation and mutuality of consideration. The Supreme Court concluded (1) West Virginia's law of contract formation only required that a contract as a whole be supported by adequate consideration, and hence, a single clause within a multi-clause contract does not require separate consideration when the contract as a whole is supported by adequate consideration; but (2) under the doctrine of unconscionability, a trial court may decline to enforce a contract clause, such as an arbitration provision, if the obligations or rights created by the clause unfairly lack mutuality. View "Dan Ryan Builders, Inc. v. Nelson" on Justia Law
State ex rel. Johnson Controls, Inc. v. Circuit Court (Tucker)
At issue in this construction lawsuit was whether the circuit court erred in refusing to compel a plaintiff corporation to arbitrate its claims against three defendant corporations. The circuit court had previously entered two orders in which it found the arbitration clauses in Defendants' contracts with Plaintiff were unconscionable. Further, the circuit court found it would be inequitable to fracture Plaintiff's lawsuit into multiple "piecemeal" arbitrations and lawsuits against Defendants. Defendants petitioned the Supreme Court for a writ of prohibition to halt enforcement of the circuit court's orders and to compel Plaintiff to arbitrate its claims. The Court granted the requested writ of prohibition as moulded, holding (1) the arbitration agreements were not unconscionable, and therefore, the circuit court erred in refusing to enforce the agreements; (2) the FAA requires that if a lawsuit presents multiple claims, some subject to an arbitration agreement and some not, the former claims must be sent to arbitration even if this leads to piecemeal litigation; and (3) the circuit court's refusal to enforce the arbitration clauses ran afoul of the FAA. View "State ex rel. Johnson Controls, Inc. v. Circuit Court (Tucker) " on Justia Law
Brown v. Genesis Healthcare Corp.
This case was a consolidation of three separate wrongful death lawsuits. Each lawsuit arose from a nursing home's attempt to compel a plaintiff to participate in arbitration pursuant to a clause in a nursing home admission contract. The Supreme Court (1) ruled that the arbitration clauses were unconscionable and unenforceable in two of the cases, and (2) held that the Nursing Home Act could not be relied upon to bar enforcement of the arbitration clause in the third case. The U.S. Supreme Court reversed and remanded to consider whether the arbitration clauses were enforceable under state common law principles that were not specific to arbitration and pre-empted by the FAA. On remand, the Supreme Court (1) held that the doctrine of unconscionability that the Court explicated in Brown I was a general, state, common-law, contract principle that was not specific to arbitration and did not implicate the FAA; (2) reversed the trial courts' prior orders compelling arbitration in two of the cases and permitted the parties to raise arguments regarding unconscionability anew before the trial court; and (3) found the issue of unconscionability in the third case was not considered by the trial court but may be raised on remand. View "Brown v. Genesis Healthcare Corp." on Justia Law
State ex rel. Richmond Am. Homes v. Jefferson County Circuit Court (Sanders)
Petitioner, a constructor, was sued by several people living in new homes built by Petitioner (Residents). Residents claimed they were injured by radon gas leaking into their homes because of improper construction by Petitioner. Petitioner argued that the agreement to purchase the new homes required Residents to arbitrate their claims, whether they signed the agreement or not. The circuit court found the arbitration provision ambiguous and unconscionable and refused to compel Residents into arbitration. Petitioner subsequently sought a writ of prohibition to compel Residents to arbitrate their claims. The Supreme Court denied the writ, holding that the circuit court was within its authority to refuse to enforce the arbitration clause against Residents because the arbitration provision was ambiguous, unconscionable, and unenforceable. View "State ex rel. Richmond Am. Homes v. Jefferson County Circuit Court (Sanders)" on Justia Law
Brown v. Genesis Healthcare Corp.
In three cases consolidated for review, the facts were similar. A person was admitted to a nursing home, and a family member signed an admission agreement containing an arbitration clause. After the person died, a family member filed suit against the nursing home, alleging the nursing home negligently caused injuries leading to the person's death. The nursing home sought to dismiss the lawsuit and compel the family member to participate in binding arbitration. The family members asserted the arbitration clauses were unenforceable, alleging (1) the clauses violated the West Virginia Nursing Home Act, and (2) were unconscionable under the common law. After reviewing the relevant laws, the Supreme Court held that (1) the Nursing Home Act, which states any that waiver by a nursing home resident of his right to sue for injuries sustained in a nursing home shall be void as contrary to public policy, is preempted by the Federal Arbitration Act; and (2) in the context of pre-injury nursing home admission agreements, where a personal injury or wrongful death occurred after the signing of the contract, arbitration clauses are unenforceable to compel arbitration of a dispute concerning negligence that results in a personal injury or wrongful death.