Dan Ryan Builders, Inc. v. Williams

• Decision Date: 06 November 2020
• Docket Number: No. 18-0579,18-0579
• Court: West Virginia Supreme Court
• Parties: Dan Ryan Builders, Inc., Dan Ryan Builders Realty, Inc., DRB Enterprises, Inc., Monocacy Home Mortgage, LLC, Christopher Rusch, and Crystal Rankin, Defendants Below, Petitioners, v. Frank M. Williams, and Diana P. Williams, et al., Plaintiffs Below, Respondents.

Dan Ryan Builders, Inc., Dan Ryan Builders Realty, Inc.,DRB Enterprises, Inc., Monocacy Home Mortgage, LLC, Christopher Rusch, andCrystal Rankin, Defendants Below, Petitioners, v. Frank M. Williams, and Diana P. Williams, et al., Plaintiffs Below, Respondents.

No. 18-0579

STATE OF WEST VIRGINIA SUPREME COURT OF APPEALS

November 6, 2020

(Harrison County No. 09-C-57-1)

MEMORANDUM DECISION

Petitioners Dan Ryan Builders, Inc., Dan Ryan Builders Realty, Inc., DRB Enterprises, Inc., Monocacy Home Mortgage, LLC, Christopher Rusch, and Crystal Rankin, by counsel Avrum Levicoff and Julie Brennan, appeal the May 30, 2018 order of the Circuit Court of Harrison County denying petitioners' motion to compel arbitration ("renewed motion" or "renewed motion to compel arbitration"). Respondents Frank M. Williams, and Diana P. Williams, et al., by counsel James A. Varner, Sr., Debra Tedeschi Varner, James N. Riley, and Michael J. Romano filed a response in support of the circuit court's order. On appeal, petitioners argue that the circuit court erred in failing to compel arbitration in this case.

After considering the parties' written and oral arguments, as well as the appendix record on appeal and the applicable law, this Court finds no substantial question of law and no prejudicial error. For these reasons, a memorandum decision affirming the circuit court's order is appropriate under Rule 21 of the Rules of Appellate Procedure.

A brief examination of the factual and procedural posture of this case is necessary to understand our resolution of this appeal. The case began more than eleven years ago and arose out of the construction of a residential community known as "Crystal Ridge" located in Bridgeport, West Virginia. See Dan Ryan Builders, Inc. v. Crystal Ridge Dev., Inc., 239 W. Va. 549, 803 S.E.2d 519 (2017) (discussing underlying facts). The land used for the Crystal Ridge development was owned by members of the Robert S. Lang family, including Robert and his brothers (referred to as "the Langs").¹ On June 30, 2005, the Langs entered into a "Lot Purchase Agreement" with Dan Ryan Builders ("Dan Ryan")² as part of a plan to create 143 single-family house lots. See id.at 552, 803 S.E.2d at 522. By August 2006, Dan Ryan purchased its first lots in Crystal Ridge pursuant to the Lot Purchase Agreement, and almost immediately began selling the lots and constructing homes thereon for the purchasers. See id. at 552-53, 803 S.E.2d at 522-23. By March, 2007, fill slope behind certain lots began to move, causing the opening of large fissures in the ground and resultant damages to lots and homes. See id. at 553, 803 S.E.2d at 523.

On February 9, 2009, respondents, who are purchasers of lots and homes in Crystal Ridge, filed a lawsuit against petitioners³ alleging various tort and property claims due to development-wide soil movement, which caused damage to respondents' properties.

Almost thirteen months after the original complaint was filed,⁴ petitioners filed "Defendants' Motion to Dismiss Complaint and Compel Arbitration." The basis for petitioners'motion was language contained in the standardized form Agreements of Sale ("Sales Agreements") and an enrollment form of a Limited Warranty Agreement,⁵ which were used by petitioners in respondents' purchase of their respective lots and homes in Crystal Ridge. Specifically, the Sales Agreements contained the following arbitration provision, in part:

19. ARBITRATION.

(a) Any dispute arising under or pursuant to this Agreement, or in any way related to the Property and/or with respect to any claims arising by virtue of any representations alleged to have been made by Us, or any agents and/or employees thereof, (with the exception of "Consumer Products" as defined by the Magnuson-Moss Warranty Federal Trade Commission Improvements Act, 15 U.S.C. Section 2301 et seq. and the regulations promulgated thereunder) shall be settled and finally determined by arbitration and not in a court of law, irrespective of whether or not such claim arises prior to or after Settlement hereunder, pursuant to the Construction Industry Arbitration Rules and the Supplementary Procedures for Residential Construction Disputes of the American Arbitration association ("AAA") then in effect. . . .

Petitioners argued, inter alia, that the relevant arbitration provisions were valid and enforceable, were not contracts of adhesion, and were not unconscionable. In sharp contrast, respondents argued that the Sales Agreements were contracts of adhesion, and the arbitration provision in those agreements was unfair, unconscionable and unenforceable, and lacked neutrality in the selection and composition of the forum/tribunal for dispute resolution.

After extensive briefing on the issues raised in petitioners' motion, the circuit court initially issued a letter ruling dated December 5, 2011, stating that after reviewing the entirety of the parties' filings, it found that the Sales Agreements, which contained the arbitration provision, were contracts of adhesion; and further that the arbitration provision in the Sales Agreements was "not bargained for" and was "unconscionable and invalid." On February 6, 2012, the circuit court entered its Order Denying Defendants' Motions to Dismiss Complaint and Lifting Stay of Discovery, setting forth specific findings of fact and conclusions of law supporting its determination that the arbitration provision was unenforceable.

On March 21, 2012, the circuit court entered an Agreed Order reflecting a series of stipulations entered between the parties during a Status Conference, which allowed for the case to proceed while affording petitioners an opportunity to pursue appellate review of the order denying the motion to compel arbitration. The parties agreed that during this period of time, petitioners would not incur any negative consequences, such as waiver or estoppel, of their "contention that the case should be ordered to arbitration[]" by their participation in discovery during the appeal process. As the Agreed Order reflects, "participation by the defendants in discovery and other pretrial phases of the case in this Court will not preclude the defendants from seeking appellatereview of the Court's arbitration ruling . . . ." The circuit court, however, reiterated its prior ruling that "the plaintiffs' claims against Dan Ryan Builders will not be ordered to arbitration." This Agreed Order was entered with the full understanding that petitioners were going to undertake either an appeal or propose certified questions, as the order also contains provisions for handling any discovery "[i]n the event that the appellate process should result in a reversal of this Court's arbitration ruling, and/or in the vacation of this Court's written Order of February 6, 2012[.]" Finally, the circuit court directed in the Agreed Order that "[a]t the request of the defendants, the parties will endeavor to confer and agree upon wording for a certified question . . . regarding the arbitration ruling. . . . Upon submission, the Court may then certify for interlocutory appeal such agreed question or questions. . . ." Despite extensive discussions, the parties were unable to agree on the wording of any certified question and no other procedural measures for appellate review, either by direct appeal or petition of writ of prohibition, were taken by petitioners regarding the circuit court's February 6, 2012 order.

On March 25, 2012, Dan Ryan Builders filed a third-party complaint against Crystal Ridge Development, Robert Lang, Lang Brothers, Inc., and Horner Brothers Engineers alleging claims for contribution, contractual indemnification and breach of contract.⁶ In addition to pursuing these third-party claims, the appendix record demonstrates that petitioners have engaged in numerous depositions and other proceedings, and never appealed or pursued any other mechanism for appellate review by this Court of the February 6, 2012 order.

Six years later, on January 8, 2018, petitioners filed "Defendants' Motion to Compel Arbitration" ("renewed motion"). While petitioners failed to specify, procedurally, under what West Virginia Rule of Civil Procedure their renewed motion was based, the circuit court treated the motion as one filed pursuant to Rule 60(b), wherein petitioners were seeking relief from its February 6, 2012, order denying petitioners' motion to compel arbitration.⁷ The circuit court denied petitioners' motion, sua sponte, finding that it lacked timeliness. It is from this order that petitioners now appeal.

This case involves our review of the circuit court's order denying petitioners' renewed motion to compel arbitration filed pursuant to West Virginia Rule of Civil Procedure 60(b).⁸According to syllabus point two of Powderidge Unit Owners Ass'n v. Highland Properties, Ltd., 196 W. Va. 692, 474 S.E.2d 872 (1996),

[w]hen a party filing a motion for reconsideration does not indicate under which West Virginia Rule of Civil Procedure it is filing the motion, the motion will be considered to be either a Rule 59(e) motion to alter or amend a judgment or a Rule 60(b) motion for relief from a judgment order. If the motion is filed within ten days of the circuit court's entry of judgment, the motion is treated as a motion to alter or amend under Rule 59(e). If the motion is filed outside the ten-day limit, it can only be addressed under Rule 60(b).

In so holding, Justice Cleckley, noted that

the weight of the authority supports the view that Rule 60(b) motions which seek merely to relitigate legal issues heard at the underlying proceeding are without merit. . . . In other words, a Rule 60(b) motion to reconsider is simply not an opportunity to reargue facts and theories upon which a court has already ruled.

Powderidge, 196 W.Va. at 705-06, 474 S.E.2d at 885-86 (footnote and citations omitted).

As we have previously held, "[a]n appeal of the denial of a Rule 60(b) motion brings to consideration for review only the order...