Wayne and Joyce Kirby v. Lion Enterprises, Inc.

756 S.E.2d 493, 233 W. Va. 159, 2014 W. Va. LEXIS 166
West Virginia Supreme Court·Decided March 7, 2014·No. 13-0379·Published·Cited by 7 cases

Opinions

WORKMAN, Justice:

This case is before the Court upon the appeal of the Petitioners, Wayne Kirby and Joyce Kirby, from the March 15, 2013, order entered by the Circuit Court of Marion County, West Virginia, granting a motion to dismiss and compelling arbitration in favor of the Respondents Lion Enterprises, Inc., and T/A/ Bastían Homes (referred to collectively [161]*161as “Bastían Homes”). The Petitioners argue that the circuit court erred in concluding that: 1) the arbitration provision was “bargained for”; 2) the arbitration provision was “fairly negotiated”; and 3) the Petitioners’ claims are within the terms of the arbitration provision. Based upon a review of the parties’ briefs and oral arguments, the appendix record, and all other matters submitted before the Court, we affirm the decision of the circuit court, in part, and reverse, in part, and remand for further development on the issue of uneonscionability.

I. Facts and Procedural History

On March 16,2009, the Petitioners entered into a written agreement with Bastían Homes for the construction of a new home in Fairmont, West Virginia. The agreement contained an arbitration clause, which required that

[t]he parties hereby agree and acknowledge that in the event any disagreement or dispute shall arise pertaining to the terms of this Agreement, all matters and controversies shall be submitted to a board of arbitrators, which shall consist of three (3) members one of whom shall be chosen by the Contractor, one of whom shall be chosen by the Owner and the third shall be chosen by the two designees.1

Bastían Homes, in turn, subcontracted with Ed Dwire, doing business as Dwire Plumbing (“Dwire Plumbing”), to provide the plumbing service necessary for the home being constructed. Before the new home was fully constructed, there was a water leak that allegedly substantially damaged major portions of the partially-constructed home.

On February 3, 2012, the Petitioners filed a complaint against Bastían Homes and Dwire Plumbing, alleging that when their home was under construction it sustained substantial damage and there was a ten-month delay in completion of the home caused completely by the joint negligence of Bastían Homes and Dwire Plumbing.

Bastían Homes moved to dismiss the complaint on the basis that the arbitration clause in the construction contract required the parties to submit the matter to arbitration. Bastían Homes relied upon this Court’s decision in Board of Education v. W. Harley Miller, Inc., 160 W.Va. 473, 236 S.E.2d 439 (1977) (“Harley Miller II”)2 in support of its [162]*162motion.3 Bastían Homes argued that under Harley Miller II, “the contract between the parties was bargained for and each party has provided consideration for the contract. Specifically, the Kirbys agreed to pay Bastían for its work in constructing the dwelling under the contract and Bastían agreed to perform according to the contract.” (Emphasis added); see 160 W.Va. at 473-74, 236 S.E.2d at 440-41; see also supra note 3.

The Petitioners filed a memorandum in opposition to the motion to dismiss. The Petitioners argued, based upon Harley Miller II, that the arbitration clause at issue was not “bargained for” and was therefore invalid. In support of their position, the Petitioner Wayne Kirby stated in an affidavit that he was presented with the contract containing the arbitration clause, that he “raised objection” to the arbitration clause with William Burkett of Bastían Homes and that he was “told not to worry about it because they were bonded.” Further, he stated that “it was pointed out to me that Bastion [sic] Homes would correct or repair any defects in workmanship if discovered by either of us and submitted to Bastion [sic] Homes within a year of possession of said home____”4

The parties agreed to the circuit court deciding the motion to dismiss without any hearing. In an order entered March 15, 2013, the circuit court, relying upon Harley Miller II, determined that the Petitioner’s claims were subject to arbitration. The circuit court found that “[a]fter reviewing the entire contract, the nature of the contracting parties and the parties’ bargaining positions, ... the arbitration provision was fairly negotiated and is not unconscionable, having not been presented with evidence sufficient for overcoming the general presumption that all arbitration provisions are bargained for.” This appealed followed.

II. Standard of Review

“Appellate review of a circuit court’s order granting a motion to dismiss a complaint is de novo." Syl. Pt. 2, State ex [163]*163rel. McGraw v. Scott Runyan Pontiac-Buick, Inc., 194 W.Va. 770, 461 S.E.2d 516 (1995). Further,

[w]hen a trial court is required to rule upon a motion to compel arbitration pursuant to the Federal Arbitration Act, 9 U.S.C. §§ 1-307 (2006), the authority of the trial court is limited to determining the threshold issues of (1) whether a valid arbitration agreement exists between the parties; and (2) whether the claims averred by the plaintiff fall within the substantive scope of that arbitration agreement.

Syl. Pt. 2, State ex rel. TD Ameritrade, Inc. v. Kaufman, 225 W.Va. 250, 692 S.E.2d 293 (2010).

Applying the foregoing standard of review, we consider the parties’ arguments.

III. Discussion

A. Improper Application of Harley Miller II

We first address the issue of whether the circuit court correctly found that the arbitration provision was “bargained for” under the law established in Harley Miller II. See 160 W.Va. at 473-74, 236 S.E.2d at 440-41, Syl. Pts. 1 and 3. The Petitioners argued that there was no valid arbitration agreement between the parties because the arbitration agreement was not “bargained for.” In resolving the issue, we acknowledge that in Harley Miller II, the Court held in 1977 that an arbitration provision contained within a contract must be “bargained for.” See id.; see also supra note 3 (setting forth full text of syllabus point). The Court also established a presumption that when “an arbitration provision in a written contract was bargained for ... that arbitration was intended to be the exclusive means of resolving disputes arising under the1 contract[.]” Id., Syl. Pt. 3; see supra note 3 (setting forth full text of syllabus point).

Harley Miller I and Harley Miller II were important decisions insofar as they greatly advanced the law of arbitration in this State in the 1970s.5

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Wayne and Joyce Kirby v. Lion Enterprises, Inc., 756 S.E.2d 493, 233 W. Va. 159, 2014 W. Va. LEXIS 166 (W. Va. 2014).

756 S.E.2d 493 (Wayne and Joyce Kirby v. Lion Enterprises, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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