Toney v. Eqt Corp., 13-1101

• Decision Date: 13 June 2014
• Docket Number: No. 13-1101,13-1101
• Court: Supreme Court of West Virginia
• Parties: Gregory Toney, Plaintiff, Petitioner v. EQT Corporation, and Daniel Crowe, individually, Defendants, Respondents

Gregory Toney, Plaintiff, Petitioner v. EQT Corporation, and Daniel Crowe, individually, Defendants, Respondents

No. 13-1101

STATE OF WEST VIRGINIA SUPREME COURT OF APPEALS

ISSUED: June 13, 2014

(Kanawha County 12-C-834)

MEMORANDUM DECISION

Petitioner Gregory Toney, by counsel Mark L. French and Sean W. Cook, appeals the Circuit Court of Kanawha County's "Order Granting Defendants' Renewed Motion to Dismiss and Compel Arbitration and Denying Plaintiff's Motion for Stay of Arbitration," entered on August 29, 2013. Respondents EQT Corporation ("EQT") and Daniel Crowe, by counsel Kevin L. Carr, Lewis G. Brewer, and Ellen J. Vance, filed a response. Petitioner filed a reply.

This Court has considered the parties' briefs and the record on appeal. The facts and legal arguments are adequately presented, and the decisional process would not be significantly aided by oral argument. Upon consideration of the standard of review, the briefs, and the record presented, the 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.

Facts and Procedural Background

Petitioner was employed by EQT for several years prior to his termination in January of 2012. Respondent Daniel Crowe had served as petitioner's immediate supervisor since 2008. On May 9, 2012, following his termination from employment, petitioner filed a civil action against respondents alleging age discrimination, hostile work environment based on age, retaliatory discharge, hostile work environment and unlawful retaliation based on petitioner reporting alleged violations of the West Virginia Human Rights Act, breach of express and/or implied employment contract, breach of implied covenant of good faith and fair dealing in employment, violation of West Virginia Wage Payment and Collection Act, and intentional and reckless infliction of emotional distress.

On April 22, 2013, respondents filed a renewed¹ motion to dismiss petitioner's civil action and to compel arbitration based upon an Alternative Dispute Resolution Agreement("ADR Agreement") executed between petitioner and respondents on March 7, 2007. The ADR Agreement covered "any claim that is related in any way to an individual's employment with Equitable [now EQT] that is recognized in the federal or state courts where the employee works," with certain exclusions not relevant to this case.² Petitioner filed a response to respondents' motion, and the circuit court held a hearing thereon on August 13, 2013.³ The circuit court granted respondents' motion and compelled arbitration by order entered on August 29, 2013. Petitioner now appeals the August 29, 2013, order to this Court.

In compelling arbitration,⁴ the circuit court found that by signing the ADR Agreement, petitioner agreed to submit specified employment related disputes to arbitration, and EQT likewise became (1) mutually obligated to be bound by the result of arbitration, and (2) mutually obligated to submit specified disputes it had with petitioner to arbitration. Additionally, in exchange for signing the ADR Agreement in March 2007, petitioner became eligible to participate in EQT's 2007 Short Term Incentive Plan ("STIP") and future STIPs offered by EQT. The STIP is an incentive program that provides employees who meet certain performance goals with cash bonuses. Had petitioner not signed the ADR Agreement, he would not have beeneligible to participate in the 2007 STIP or future STIPs.⁵ However, the circuit court found that petitioner would have continued his employment with EQT had he refused to sign, but he would not have been eligible to receive the bonuses provided by the STIP.

At the time petitioner signed the ADR Agreement, EQT had already determined that he was eligible to receive a cash bonus pursuant to the 2007 STIP. The only remaining eligibility requirement for petitioner's participation in the STIP was his execution of the ADR Agreement. As a direct result of his signing the ADR Agreement, petitioner received a gross bonus of $8,475 under the 2007 STIP. The circuit court also found that because petitioner remained eligible for subsequent STIPs as a result of his signing the ADR Agreement in 2007, he received additional gross bonuses totaling $59,035 for the subsequent years until his termination in 2012.

The circuit court concluded that because petitioner's claims in his civil action fell within the substantive scope of the ADR Agreement, pursuant to the Federal Arbitration Act, such claims must be arbitrated according to the terms of the ADR Agreement. The circuit court concluded that because both EQT and petitioner agreed to submit their respective "employment disputes" to arbitration and to be bound by the results thereof, petitioner had been provided adequate consideration supporting the ADR Agreement. The circuit court further concluded that participation in the STIPs, and the additional compensation petitioner received as a result of his participation, constituted additional consideration supporting the ADR Agreement. Because petitioner participated in the STIP in 2007, continued to participate until his termination, and received substantial additional compensation as a result of his participation, the court concluded that the consideration provided by EQT was not illusory. Lastly, the circuit court determined that the ADR Agreement was neither procedurally nor substantively unconscionable. Petitioner now appeals to this Court and challenges the circuit court's determination that a valid arbitration agreement existed between the parties.

Discussion

The standard of review is set forth in Syllabus Point 4 of McGraw v. American Tobacco Co., et al., 224 W.Va. 211, 681 S.E.2d 96 (2009), which states as follows:

This Court will preclude enforcement of a circuit court's order compelling arbitration only after a de novo review of the circuit court's legal determinations leads to the inescapable conclusion that the circuit court clearly erred, as a matter of law, in directing that a matter be arbitrated or that the circuit court's order constitutes a clear-cut, legal error plainly in contravention of a clear statutory, constitutional, or common law mandate.

Moreover, whether an arbitration agreement constitutes a valid contract is a matter of state contract law. See State ex rel. Clites v. Clawges, 224 W.Va. 299, 305, 685 S.E.2d 693, 699 (2009); Southland Corp. v. Keating, 465 U.S. 1, 16 (1984). In West Virginia, the fundamental elements of a legal contract are an offer and acceptance supported by consideration. See Syl. Pt.1, First Nat'l Bank of Gallipolis v. Marietta Mfg. Co., 151 W.Va. 636, 153 S.E.2d 172 (1967). This Court has held that

[i]t is elementary that mutuality of assent is an essential element of all contracts. Wheeling Downs Racing Ass'n v. West Virginia Sportservice, Inc., 158 W.Va. 935, 216 S.E.2d 234 (1975). In order for this mutuality to exist, it is necessary that there be a proposal or offer on the part of one party and an acceptance on the part of the other. Both the offer and acceptance may be by word, act or conduct that evince the intention of the parties to contract. That their minds have met may be shown by direct evidence of an actual agreement or by indirect evidence through facts from which an agreement may be implied. See Lacey v. Cardwell, 216 Va. 212, 217 S.E.2d 835 (1975); Charbonnages de France v. Smith, 597 F.2d 406, 415-416 (4th Cir.1979).

Ways v. Imation Enters. Corp., 214 W.Va. 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 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).

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."

With the above case law in mind, including our recent decision in Kirby, we now address petitioner's appeal, in which he raises three assignments of error. First, he argues that the ADR Agreement is unenforceable for lack of adequate consideration. Because he was enrolled in the STIP prior to 2007, petitioner contends that he did not receive any new consideration when he signed the ADR Agreement and gave up his right to pursue his grievances in court. Citing Williston on Contracts § 7:7, *2, petitioner states that "the doctrine that past consideration is no consideration represents the overwhelming weight of authority and has represented the weight of authority since the early common law." However, by focusing so heavily on the STIP, petitioner ignores the fact that the ADR Agreement contains mutual commitments by EQT and petitioner to submit their respective employment disputes to binding arbitration. "A valuable consideration may consist either in some right, interest, profit, or benefit accruing to the one party or some forbearance, detriment, loss or responsibility given, suffered, or undertaken by the other." Syl. Pt. 1, Tabler v. Hoult, 110 W.Va. 542, 158 S.E. 782 (1931). In the present case, the circuit court was correct in finding that the mutual commitments to arbitrate alone constitute...