Kirby v. Lion Enters., Inc., No. 13–0379.

CourtSupreme Court of West Virginia
Writing for the CourtJustice KETCHUM concurs and reserves the right to file a concurring opinion.
Citation233 W.Va. 159,756 S.E.2d 493
PartiesWayne KIRBY and Joyce Kirby, Plaintiffs Below, Petitioners v. LION ENTERPRISES, INC. and T/A Bastian Homes, Defendants Below, Respondents.
Docket NumberNo. 13–0379.
Decision Date07 March 2014

233 W.Va. 159
756 S.E.2d 493

Wayne KIRBY and Joyce Kirby, Plaintiffs Below, Petitioners
v.
LION ENTERPRISES, INC. and T/A Bastian Homes, Defendants Below, Respondents.

No. 13–0379.

Supreme Court of Appeals of
West Virginia.

Submitted Jan. 28, 2014.
Decided March 7, 2014.


[756 S.E.2d 494]



Syllabus by the Court

1. “Appellate review of a circuit court's order granting a motion to dismiss a complaint is de novo.” Syl. Pt. 2, State ex rel. McGraw v. Scott Runyan Pontiac–Buick, Inc., 194 W.Va. 770, 461 S.E.2d 516 (1995).

2. “When 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).

3. “The formation of a contract with multiple clauses only requires consideration for the entire contract, and not for each individual clause. So long as the overall contract is supported by sufficient consideration, there is no requirement of consideration for each promise within the contract, or of ‘mutuality of obligation,’ in order for a contract to be formed.” Syl. Pt. 6, Dan Ryan Builders, Inc. v. Nelson, 230 W.Va. 281, 737 S.E.2d 550 (2012).

4. The law enunciated in syllabus point six of Dan Ryan Builders, Inc. v. Nelson, 230 W.Va. 281, 737 S.E.2d 550 (2012), that “the formation of a contract with multiple clauses only requires consideration for the entire contract, and not for each individual clause” modified the law set forth in Board of Education v. W. Harley Miller, Inc., 160 W.Va. 473, 236 S.E.2d 439 (1977), to the extent that an arbitration clause in a contract need not be specifically “bargained for.”

5. “The doctrine of unconscionability means that, because of an overall and gross imbalance, one-sidedness or lop-sidedness in a contract, a court may be justified in refusing to enforce the contract as written. The concept of unconscionability must be applied in a flexible manner, taking into consideration all of the facts and circumstances of a particular case.” Syl. Pt. 12, Brown ex rel. Brown v. Genesis Healthcare Corp., 228 W.Va. 646, 724 S.E.2d 250 (2011), overruled in part on other grounds sub nom. Marmet Health Care Ctr., Inc. v. Brown, ––– U.S. ––––, 132 S.Ct. 1201, 182 L.Ed.2d 42 (2012).

6. “ ‘An analysis of whether a contract term is unconscionable necessarily involves an inquiry into the circumstances surrounding the execution of the contract and the fairness of the contract as a whole.’ Syllabus Point 3, Troy Mining Corp. v. Itmann Coal Co., 176 W.Va. 599, 346 S.E.2d 749 (1986).” Syl. Pt. 13, Brown ex rel. Brown v. Genesis Healthcare Corp., 228 W.Va. 646, 724 S.E.2d 250 (2011), overruled in part on other grounds sub nom. Marmet Health Care Ctr., Inc. v. Brown, ––– U.S. ––––, 132 S.Ct. 1201, 182 L.Ed.2d 42 (2012).


Gregory T. Hinton, Esq., Fairmont, WV, for Petitioners.

Lee R. Demosky, Esq., Meyer, Darragh, Buckler, Bebenek & Eck, P.L.L.C., Greensburg, PA, for Respondents.


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/ Bastian Homes (referred to collectively

[756 S.E.2d 495]

as “Bastian 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 unconscionability.

I. Facts and Procedural History

On March 16, 2009, the Petitioners entered into a written agreement with Bastian 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

Bastian 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 Bastian 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 Bastian Homes and Dwire Plumbing.

Bastian 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. Bastian 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

[756 S.E.2d 496]

motion.3 Bastian 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 Bastian for its work in constructing the dwelling under the contract and Bastian agreed to perform according to the contract.” (Emphasis added); see160 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 Bastian 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,

[756 S.E.2d 497]

State ex rel. 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 the 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 Both decisions, however, were rendered without the benefit of and guidance set forth in United States Supreme Court opinions 6 that followed the Harley Miller cases and addressed the applicability of the Federal Arbitration Act (“FAA”), 9 United States Code Annotated §§ 1 to 16 (West 2009), to...

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6 practice notes
  • Schumacher Homes of Circleville, Inc. v. Spencer, No. 14–0441.
    • United States
    • Supreme Court of West Virginia
    • April 24, 2015
    ...claim that a delegation provision binds the parties. Even lack of consideration is a defense. But see Kirby v. Lion Enterprises, Inc., 233 W.Va. 159, 164–65, 756 S.E.2d 493, 498–99 (2014) (clarifying that the focus should not be on whether the arbitration clause was supported by separate co......
  • Nationstar Mortg., LLC v. West, No. 15–0128.
    • United States
    • Supreme Court of West Virginia
    • April 7, 2016
    ...641 by adequate consideration. See 230 W.Va. at 283, 737 S.E.2d at 552, syl. pt. 6. Subsequently, in Kirby v. Lion Enterprises, Inc., 233 W.Va. 159, 756 S.E.2d 493 (2014), we stated: “Applying the law enunciated in Dan Ryan, so long as the construction contract in its entirety is well suppo......
  • Toney v. Eqt Corp., No. 13-1101
    • United States
    • Supreme Court of West Virginia
    • June 13, 2014
    ...305, 313, 589 S.E.2d 36, 44 (2003). In addition, in Syllabus Points three and four of Kirby v. Lion Enterprises, Inc., ___ W.Va. ___, 756 S.E.2d 493 (2014), we held as follows:"The formation of a contract with multiple clauses only requires consideration for the entire contract, and no......
  • Evans v. Bayles, No. 15–0600
    • United States
    • Supreme Court of West Virginia
    • June 1, 2016
    ...reference to precisely where in the Brokerage Agreement the arbitration clause could be found.15 See Kirby v. Lion Enterprises, Inc. , 233 W.Va. 159, 166, 756 S.E.2d 493, 500 (2014) (finding contract containing arbitration provision was valid and remanding case to circuit court for developm......
  • Request a trial to view additional results
6 cases
  • Schumacher Homes of Circleville, Inc. v. Spencer, No. 14–0441.
    • United States
    • Supreme Court of West Virginia
    • April 24, 2015
    ...claim that a delegation provision binds the parties. Even lack of consideration is a defense. But see Kirby v. Lion Enterprises, Inc., 233 W.Va. 159, 164–65, 756 S.E.2d 493, 498–99 (2014) (clarifying that the focus should not be on whether the arbitration clause was supported by separate co......
  • Nationstar Mortg., LLC v. West, No. 15–0128.
    • United States
    • Supreme Court of West Virginia
    • April 7, 2016
    ...641 by adequate consideration. See 230 W.Va. at 283, 737 S.E.2d at 552, syl. pt. 6. Subsequently, in Kirby v. Lion Enterprises, Inc., 233 W.Va. 159, 756 S.E.2d 493 (2014), we stated: “Applying the law enunciated in Dan Ryan, so long as the construction contract in its entirety is well suppo......
  • Toney v. Eqt Corp., No. 13-1101
    • United States
    • Supreme Court of West Virginia
    • June 13, 2014
    ...305, 313, 589 S.E.2d 36, 44 (2003). In addition, in Syllabus Points three and four of Kirby v. Lion Enterprises, Inc., ___ W.Va. ___, 756 S.E.2d 493 (2014), we held as follows:"The formation of a contract with multiple clauses only requires consideration for the entire contract, and no......
  • Evans v. Bayles, No. 15–0600
    • United States
    • Supreme Court of West Virginia
    • June 1, 2016
    ...reference to precisely where in the Brokerage Agreement the arbitration clause could be found.15 See Kirby v. Lion Enterprises, Inc. , 233 W.Va. 159, 166, 756 S.E.2d 493, 500 (2014) (finding contract containing arbitration provision was valid and remanding case to circuit court for developm......
  • Request a trial to view additional results

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