Board of Ed. of Berkeley County v. W. Harley Miller, Inc.
Citation | 160 W.Va. 473,236 S.E.2d 439 |
Decision Date | 05 July 1977 |
Docket Number | No. CC899,CC899 |
Parties | The BOARD OF EDUCATION OF the COUNTY OF BERKELEY v. W. HARLEY MILLER, INC., a corp. |
Court | Supreme Court of West Virginia |
Syllabus by the Court
1. Where parties to a contract agree to arbitrate either all disputes, or particular limited disputes arising under the contract, and where the parties bargained for the arbitration provision, such provision is binding, and specifically enforceable, and all causes of action arising under the contract which by the contract terms are made arbitrable are merged, in the absence of fraud, into the award of the arbitrators.
2. Where, in the absence of fraud, an arbitration award has been made by arbitrators pursuant to a bargained-for arbitration provision, the award is enforceable by a motion for summary judgment upon a complaint setting forth the contract, the arbitration provision, and the award of the arbitrators.
3. It is presumed that an arbitration provision in a written contract was bargained for and that arbitration was intended to be the exclusive means of resolving disputes arising under the contract; however, where a party alleges that the arbitration provision was unconscionable or was thrust upon him because he was unwary and taken advantage of, or that the contract was one of adhesion, the question of whether an arbitration provision was bargained for and valid is a matter of law for the court to determine by reference to the entire contract, the nature of the contracting parties, and the nature of the undertakings covered by the contract.
Robert M. Steptoe, Martinsburg, Herbert G. Underwood, Clarksburg, for plaintiff.
Rice, Hannis & Douglas, Lacy I. Rice, Jr., Martin & Seibert, Clarence E. Martin, Jr., Martinsburg, for defendant.
The Court granted this appeal for the purpose of settling the law of arbitration in this State. The exact issues before us were raised and discussed in the majority opinion by Justice Haden and the concurring opinion by this writer when the case first appeared before us two years ago. See Board of Ed., etc. v. W. Harley Miller, Inc., W.Va., 221 S.E.2d 882 (1975). The basic issue before us now is to what extent and in what manner a court should enforce an arbitration award, which is rendered without fraud pursuant to a standard arbitration provision in a commercial contract.
This appeal is a certified question which asks whether the circuit court has jurisdiction to enforce an arbitration award upon a motion for summary judgment by the party prevailing at arbitration. The Circuit Court of Berkeley County held that it did not have such jurisdiction, and we reverse.
The factual context in which the issues were presented involves a dispute between the Berkeley County Board of Education (Board), as owner, and W. Harley Miller, Inc. (Miller), as contractor, over Miller's excavation and removal of rock from the North Berkeley High School construction site. Miller claimed the Board owed him a substantial sum of money above the agreed contract price for this work. The Board resisted Miller's claim by asserting Miller did not follow the contract's procedures for computing the volume of rock in place. To settle the dispute Miller demanded arbitration pursuant to a standard arbitration provision contained in the construction contract with the Board. That contract provision is:
All claims, disputes and other matters in question arising out of, or relating to this Contract or the breach thereof, * * * shall be decided by arbitration in accordance with the Construction Industry Arbitration Rules of the American Arbitration Association then obtaining unless the parties mutually agree otherwise. This agreement to arbitrate shall be specifically enforceable under the prevailing arbitration law. The award rendered by the arbitrators shall be final and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction thereof.
The Board responded to Miller's demand for arbitration by filing a declaratory judgment action in the Circuit Court of Berkeley County and by seeking a preliminary injunction restraining Miller from proceeding to arbitration. The preliminary injunction issued against Miller, pending the outcome of the declaratory judgment action. Following the Circuit Court's denial of Miller's motion to dissolve the preliminary injunction, Miller appealed the injunction order to this Court where we reversed the circuit court and remanded the case with instructions to dissolve the preliminary injunction and to abate the action so that the parties could proceed to arbitration, Board of Ed., etc. v. W. Harley Miller, supra.
The dispute was then submitted to a duly selected panel of arbitrators, who rendered their award for $323,291.52 in favor of Miller in November 1976. After receiving the award, Miller filed a Petition to Enforce Award of Arbitrators in the abated declaratory judgment action. On motion of the parties, Miller's petition was taken as a motion for summary judgment and the Board's answer to the petition was taken as an affidavit in opposition to the summary judgment motion. The circuit court then refused to grant the motion for summary judgment, on the ground it lacked jurisdiction, and the circuit court certified the jurisdictional question to this Court.
The Court has read a large number of conflicting cases on arbitration in this State, 1 the mother Commonwealth of Virginia, and other jurisdictions. Arbitration, apparently, has an enormous potential both for good and for evil. As the concurring opinion recognized in the first Board v. Miller case, supra, litigation is a poor way to resolve controversies. It is expensive, time consuming, and tends to engender ill will which jeopardizes continuing business relationships. Consequently, where both parties are concerned with speedy, economical, conflict resolution, and harmonious business relations, they will often prefer arbitration to litigation, and incorporate this preference in their contracts. This writer in his concurring opinion in the first Miller case, supra, tended to emphasize the advantages of arbitration without giving sufficient attention to its disadvantages. Board v. Miller, supra, 221 S.E.2d at 886.
Many of the disadvantages of arbitration are detailed in the factual contexts of earlier West Virginia cases which denied enforcement of arbitration agreements. While the results in these prior West Virginia cases may be correct, the legal reasoning is confusing and gives no clear answer to the problem at hand.
The early cases draw directly on Vynior's Case, 8 Co. 80a, 81b (1609), decided by Lord Coke. This case is the basic authority for the proposition that at common law a submission to arbitration may be revoked. 2 Kill v. Hollister, 1 Wilson 129 (K. B. 1746), followed up on Vynior's Case by explaining the rationale for the doctrine of revocability: arbitration agreements, it seemed, ousted courts of their jurisdiction. This rationale has persisted into modern common law arbitration cases, with perhaps one significant modification, the doctrine of condition precedent. Scott v. Avery, 5 H.L.Cas. 811 (1856) is the foremost English authority on this doctrine, holding that parties may agree that no cause of action arise upon their contract until after there has been arbitration of contractual disputes. The Commonwealth of Virginia, before West Virginia became a state, had incorporated the doctrine of Scott v. Avery as well as the underlying doctrine of revocability into her common law which then passed into our own law. See Condon v. South Side R. Co., 55 Va. (14 Grat.) 302 (1858).
Very little illumination with regard to the proper rule for arbitration and the underlying social policy supporting that rule can be gleaned from the prior West Virginia cases because they talk in terms of "jurisdiction," "conditions precedent", "implied conditions precedent", and "revocability". Most of the prior West Virginia cases indulge in what this writer would call a rule selection process, and contain little cogent functional analysis.
The basic problem in all arbitration cases could probably best be explained not in terms of legal characterizations such as "conditions precedent," "ousting courts of their jurisdiction," or "revocability," but rather by a hypothetical case in the tradition of the ancient fableist Aesop. Let us assume for a minute that for some reason all the rabbits and all the foxes decided to enter into a contract for mutual security, one provision of which were that any disputes arising out of the contract would be arbitrated by a panel of foxes. Somehow that shocks our consciences, and it doesn't help the rabbits very much either.
Now, what happens if we have the same contract with the same arbitration provision, except that disputes will be arbitrated by a panel of wolves? Is there such a community of interest among foxes and wolves that the wolves cannot be impartial? Possibly. Now what happens if disputes will be resolved by a panel composed of one squirrel, one elephant, and one wolf? One might conclude that squirrels look like rabbits, wolves look like foxes, and elephants ought surely to be impartial.
Animal law becomes procedurally very complex if for a moment we assume arguendo that we will absolutely prohibit an arbitration provision which provides for arbitration by a panel of foxes, and that we will also prohibit arbitration by a panel of wolves in recognition of their community of interest with foxes. What happens then if there is a sincere effort to obtain a fair panel of arbitrators, as for example the squirrel, elephant, and wolf, and the decision in a forthcoming dispute is expected legitimately to go against the rabbits?
The rabbits, whom we may logically assume will have retained the services of some sharks to represent them, will go into court and plead "wolfery",...
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