State ex rel. Johnson Controls, Inc. v. Tucker

729 S.E.2d 808, 229 W. Va. 486, 2012 WL 2226342, 2012 W. Va. LEXIS 306
CourtWest Virginia Supreme Court
DecidedJune 13, 2012
DocketNo. 11-1515
StatusPublished
Cited by29 cases

This text of 729 S.E.2d 808 (State ex rel. Johnson Controls, Inc. v. Tucker) is published on Counsel Stack Legal Research, covering West Virginia Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State ex rel. Johnson Controls, Inc. v. Tucker, 729 S.E.2d 808, 229 W. Va. 486, 2012 WL 2226342, 2012 W. Va. LEXIS 306 (W. Va. 2012).

Opinion

KETCHUM, Chief Justice:

In this construction lawsuit we are asked to examine a circuit court order refusing to compel a plaintiff corporation to arbitrate its claims against three defendant corporations. The circuit court entered two orders in which it found that the arbitration clauses in the [491]*491defendants’ contracts with the plaintiff were unconscionable. Further, the circuit court found that it would be inequitable to fracture the plaintiffs lawsuit into multiple “piecemeal” arbitrations and lawsuits against the defendants.

The defendants have petitioned this Court for a writ of prohibition to halt enforcement of the circuit court’s orders, and to compel the plaintiff to arbitrate its claims. After consideration of the record, and the briefs and the arguments of the parties, we grant the requested writ of prohibition as moulded.

I. Facts and Procedural Background

Respondent (and plaintiff below) Glenmark Holding, LLC (“Glenmark”), owns an office building in Morgantown, West Virginia, called the “Suncrest Executive Office Plaza” or “United Center.” Glenmark alleges that it took delivery of the newly constructed building in August 2004 and immediately began experiencing serious problems with the heating, ventilation and air-conditioning (“HVAC”) system.

On June 13, 2011, Glenmark brought a lawsuit claiming that the HVAC system had been improperly designed, that it had been improperly constructed, that the HVAC equipment used in the system was defectively designed or manufactured, or that the system had been improperly maintained. Glenmark named seven defendants, including the general contractor that oversaw construction of the building (petitioner Morgan Keller, Inc.), and the two companies that manufactured and later maintained the HVAC equipment (petitioner York International Corporation and its parent corporation, petitioner Johnson Controls, Inc., hereafter called the “York petitioners”).1 The seven defendants filed cross-claims against one another. The three petitioners — Morgan Keller and the two York petitioners— now assert, separate from the other four defendants, that Glenmark is contractually bound to arbitrate its claims.

On August 8, 2011, petitioner Morgan Keller, Inc., filed a motion to compel Glenmark to arbitrate its claims against Morgan Keller. Morgan Keller asserted that the duty to arbitrate arose from a contract Morgan Keller signed with Glenmark on August 1, 2003, to construct the office building. The contract was on a form drafted by the American Institute of Architects and was titled “ALA Document A101-1997, Standard Form of Agreement Between Owner and Contractor.” The contract incorporates by reference the “General Conditions of the Contract for Construction,” also known as “ALA Document A201-1997.” Document A201-1997 contains an express arbitration clause which states, “Any Claim arising out of or related to the Contract ... shall ... be subject to arbitration.” 2

Likewise, the two York petitioners filed a separate motion to compel Glenmark to separately arbitrate all of its claims against the York petitioners. The York petitioners manufactured some of the HVAC equipment that was in Glenmark’s office building; among various theories in its complaint, Glenmark now asserts that the equipment was “defective, ineffective, inefficient, and not suitable for use on that building[.]” However, after construction of the building was completed, in December 2004, Glenmark entered into a “Preventative Maintenance Agreement” with the York petitioners for periodic inspections of and routine maintenance on the HVAC system. The maintenance agreement has an arbitration clause that states, in part;

All claims, disputes and controversies arising out of or relating to this contract, or the breach thereof, shall, in lieu of court action, be submitted to arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association[.]

Glenmark asserts that the York petitioners breached the maintenance agreement and carelessly failed to keep the HVAC equipment in working order.

[492]*492In response to the motions by Morgan Keller and the York petitioners, Glenmark asserted that the arbitration clauses were unconscionable and unenforceable, and asked the circuit court to deny the motions. Additionally, three defendants — who were not parties to any arbitration agreement and who had filed cross-claims against Morgan Keller and the York petitioners — filed briefs asserting that the motions should be denied so all of the claims and cross-claims of the parties could be litigated in one forum, in one proceeding.

The circuit court conducted a hearing on the petitioners’ two motions on September 8, 2011. The circuit court acknowledged that arbitration is preferred over litigation because of its supposed “expeditious, economic resolution of issues.” The circuit court noted, however, that by granting the petitioners’ motions that the petitioners would expend additional, not fewer, resources responding to the parties’ claims and cross-claims. Granting the motions would sever one individual lawsuit by Glenmark against seven defendants into at least three proceedings: (1) one lawsuit against six defendants, including the York petitioners for defective HVAC equipment; (2) one arbitration proceeding with Morgan Keller, for negligent general contracting services; and (3) one arbitration proceeding with the York petitioners over negligent maintenance of the HVAC equipment. Further, the petitioners and the other defendants (none of whom were parties to the arbitration agreements) would have to resolve their cross-claims in circuit court.3

In an order dated October 5, 2011, the circuit court denied the York petitioners’ motion to compel arbitration. In an order dated October 19, 2011, the circuit court similarly denied petitioner Morgan Keller’s motion. In both orders, the circuit court determined that compulsory arbitration would be insufficient and inequitable to resolve all of Glen-mark’s claims against the petitioners, and “would result in an unnecessarily delayed ‘piecemeal’ resolution of this conflict and the waste of judicial resources.” Because of the claims and cross-claims of the parties, compelling arbitration “would permit neither the Plaintiff nor the Defendants to fully and effectively adjudicate their various claims and defenses.” The circuit court went on to find that the arbitration clauses in both contracts were unconscionable and, therefore, unenforceable.

On November 3, 2011, petitioner Morgan Keller and the two York petitioners filed a petition for a writ of prohibition with this Court. The petitioners ask that we halt enforcement of the circuit court’s orders, and that we halt all proceedings by Glenmark against the petitioners before the circuit court. As we discuss below, we grant the requested writ as moulded.

II. Standard of Review

A petition for a writ of prohibition is an appropriate method to obtain review by this Court of a circuit court’s decision to deny or compel arbitration.4 As it is an extraordinary remedy, “[pjrohibition lies only to restrain inferior courts from proceeding in causes over which they have no jurisdiction, or, in which, having jurisdiction, they are exceeding- their legitimate powers and may not be used as a substitute for writ of error, appeal or certiorari.”5

Free access — add to your briefcase to read the full text and ask questions with AI

Related

McCumbee v. M Pizza, Inc.
N.D. West Virginia, 2023
Allen v. Chevron U.S.A. Inc.
N.D. West Virginia, 2023
US Methanol, LLC v. Chase
S.D. West Virginia, 2020
Hampden Coal, LLC and Oliver Hunt v. Michael R. Varney
810 S.E.2d 286 (West Virginia Supreme Court, 2018)
Blackrock Capital Investment Corp. v. Jerry Fish
799 S.E.2d 520 (West Virginia Supreme Court, 2017)
Geological Assessment & Leasing v. Michael C. and Dierdre J. O'Hara, etc.
780 S.E.2d 647 (West Virginia Supreme Court, 2015)
Chesapeake Appalachia v. Cecil L. HIckman, etc.
781 S.E.2d 198 (West Virginia Supreme Court, 2015)
United States ex rel. TBI Investments, Inc. v. BrooAlexa, LLC
119 F. Supp. 3d 512 (S.D. West Virginia, 2015)
McFarland v. Wells Fargo Bank, N.A.
19 F. Supp. 3d 663 (S.D. West Virginia, 2014)
Robinson v. Quicken Loans Inc.
988 F. Supp. 2d 615 (S.D. West Virginia, 2013)
State ex rel. U-Haul Co. v. Zakaib
752 S.E.2d 586 (West Virginia Supreme Court, 2013)

Cite This Page — Counsel Stack

Bluebook (online)
729 S.E.2d 808, 229 W. Va. 486, 2012 WL 2226342, 2012 W. Va. LEXIS 306, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-johnson-controls-inc-v-tucker-wva-2012.