Home Inspections of VA & WV, LLC v. Hardin

Home Inspections of VA and WV, LLC v. Hardin

No. 19-0905

STATE OF WEST VIRGINIA SUPREME COURT OF APPEALS

November 19, 2020

Workman, Justice, dissenting:

This Court's arbitration jurisprudence has dutifully followed the federal model in recent years,¹ a model that mandates such a strong preference for arbitration and allows for such a limited scope of judicial review² that, although I have acceded to the mandate of controlling federal law as required by my judicial oath, I have long been concerned that "an average citizen's right to a jury trial in a civil matter is vanishing before our very eyes." Employee Resource Group, LLC v. Harless, No. 16-0493, 2017 WL 1371287, at *8 (W. Va. April 13, 2017) (memorandum opinion) (Workman, J., concurring). In the instant case, however, the majority's opinion takes a giant step too far. I cannot agree that the single word arbitration, even capitalized and in bold font as it is, is sufficient to turn the following twenty-seven words into an enforceable arbitration clause: "ARBITRATION: Any dispute concerning the interpretation of this agreement or arisingfrom this inspection and report, except for inspection fee payment, shall be resolved informally between the parties."

It is a fundamental principle in West Virginia law that "[a] meeting of the minds of the parties is a sine qua non of all contracts." Syl. Pt. 8, Chesapeake Appalachia, L.L.C. v. Hickman, 236 W. Va. 421, 781 S.E.2d 198 (2015) (citing Syl. Pt. 1, Martin v. Ewing, 112 W.Va. 332, 164 S.E. 859 (1932)). In this case, the notion that there was a meeting of the minds about arbitration is laughable. The parties' agreement, if any, is that "[a]ny dispute . . . shall be resolved informally between the parties[,]" a phrase which could not possibly be more vague. There is no explanation as to how this informal resolution is to be carried out, or what happens if the parties are unable to resolve the dispute between themselves. Left totally unanswered are the following questions, among others: Where are the parties to meet? What are the rules? What law governs? Who pays the costs? Who is the decider in case of an impasse, and who picks him or her? Is his or her decision binding? If not, what's the next step: mediation? litigation? pistols at dawn? Finally, and most critically, who gets to answer these questions?

Compare the so-called arbitration clause upheld by the majority in the instant case to that upheld against a vagueness charge in Blevins v. Flagstar Bank, F.S.B., No. 3:12-CV-134, 2013 WL 3365252 (N.D.W. Va. July 3, 2013). At the outset, the court notedthat "[t]he title "ARBITRATION" was offset from the surrounding text." Id. at *10. Significantly, however, that point of similarity with the instant case was the only point of similarity between the two; the district court went on to examine the arbitration clause itself, not just its one-word heading.

The arbitration provision in the contract also explained the process to the parties. First, the provision explained that any claims arising from the contract or by virtue of alleged representations "shall be settled and finally determined by arbitration and not in a court of law." Second, the provision stated that before "commencing arbitration, the dispute shall first be mediated." This highlighted that there was a difference between mediation and arbitration. Last, the provision states that the parties "specifically acknowledge that they are and shall be bound by arbitration and are barred from initiating any proceeding or action whatsoever in connection with this Agreement." This emphasizes that arbitration is a binding process, and that parties are prohibited from initiating other proceedings or actions. Therefore, the arbitration provision in the contract provides some explanation of the process.

Id. at *11; see also Lugenbuhl v. City of Gallup, 302 P.3d 751 (N.M. 2013) (rejecting vagueness claim where arbitration clause specified who selects the mediator, who bears the costs, and that the outcome is final and binding on both parties). Here, in contrast, what explanation of anything did the respondent have?

The majority's analysis of this issue consists of nothing more than a logical fallacy known as ignorantio elenchi, or irrelevant conclusion. First, the majority cites section five of the Federal Arbitration Act, 9 U.S.C. §§ 1 to 16 (2002), for the proposition that arbitration provisions are not required to contain a method for selection of an arbitrator.Then, the majority cites West Virginia Code § 55-10-13 (2016) for the same proposition, emphasizing the words "[i]f the parties have not agreed on a method" as if those words somehow seal the deal for the sweeping conclusion that follows: "[t]he circuit court was clearly wrong to base its conclusion on the failure of the disputed provision to include specific terms, including how arbitrators will be selected." The logical fallacy is readily apparent: the fact that an arbitration clause does not have to contain a methodology for selection of an arbitrator does not prove that the arbitration clause does not have to contain any terms at all. In this regard, the few cases cited by the majority all involve arbitration agreements which, although "not set[ting] forth all the procedural details . . . do clearly evince the parties' intent to submit future disputes to arbitration." Robertson v. Mount Royal Towers, 134 So.3d 862, 868 (Ala. 2013).

Here, in contrast, nothing evinces the respondent's intent to submit any disputes to arbitration. The fact that the so-called arbitration provision in this case contains no terms whatsoever is not the only problem with said provision; the twenty-seven words that are contained therein are ambiguous. Courts are in general agreement that to be enforceable, an arbitration clause must have "sufficient certainty of terms so that the obligations involved can be determined." Estate of Decamacho ex rel. Guthrie v. LaSolana Care and Rehab, Inc., 316 P.3d 607, 610 (Ariz. 2014). In similar vein, this Court has held that "[i]n construing the terms of a contract, we are guided by the common-sense canons of contract interpretation. One such canon teaches that contracts containing unambiguouslanguage must be construed according to their plain and natural meaning." Fraternal Order of Police, Lodge No. 69 v. City of Fairmont, 196 W. Va. 97, 101, 468 S.E.2d 712, 716 (1996) (citing Payne v. Weston, 195 W. Va. 502, 507, 466 S.E.2d 161, 166 (1985)). We went on in Fraternal Order of Police to note that,

[c]ontract language usually is considered ambiguous where an agreement's terms are inconsistent on their face or where the phraseology can support reasonable

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