STATE OF WEST VIRGINIA
 

IN THE SUPREME COURT OF APPEALS
 

FILED BOARD OF TRUSTEES November 21, 2013 

OF THE WEIRTON POLICEMEN’S released at 3:00 p.m. 

RORY L. PERRY II, CLERK PENSION AND RELIEF FUND SUPREME COURT OF APPEALS 

Plaintiff Below, Petitioner OF WEST VIRGINIA 

vs.) No. 12-0959 (Hancock Co. 10-C-123) 

The Jones Financial Companies, LLP;
 

EDJ Holding Company, Inc.;
 

Edward D. Jones & Co., L.P.; and
 

CURT RANDY GROSSMAN,
 

Defendants Below, Respondents
 

MEMORANDUM DECISION 

The Petitioner, the Board of Trustees of the Weirton Policemen’s Pension 

and Relief Fund, appeals from an order entered June 19, 2012, by the Circuit Court of 

Hancock County which granted Respondents, The Jones Financial Companies, LLP, EDJ 

Holding Company, Inc., Edward D. Jones & Co., L.P. and Curt Randy Grossman’s, 

Motion to Compel Arbitration.1 Herein, Petitioner alleges that the circuit court erred by 

ordering that the arbitration agreement was valid and enforceable by misinterpreting the 

impact of the United States Supreme Court decision, Marmet Health Care Ctr v. Brown, 

132 S.Ct. 1201 (2012); by refusing to determine whether the arbitration agreement was 

procedurally and substantively unconscionable pursuant to Brown v. Genesis Healthcare 

Corp., 228 W. Va. 646, 724 S.E.2d 250 (2011) (“Brown I”) and Brown v. Genesis 

Healthcare Corp., 229 W. Va. 382, 729 S.E.2d 217 (2012) (“Brown II”); and by refusing 

to assess the impact of the ambiguity of the arbitration agreement. To the contrary, 

Respondents assert that the circuit court did not refuse to determine whether the 

arbitration agreement was procedurally and substantively unconscionable, but rather 

found that the particular agreement to arbitrate was enforceable; and that the Petitioner 

failed to establish evidence of unconscionability. Based upon the parties’ briefs and oral 

arguments, the portions of the record designated for our consideration, and the pertinent 

authorities, we conclude that the case should be remanded to the circuit court for a 

consideration of whether the arbitration agreement is procedurally and substantively 

unconscionable under Brown I and Brown II. This case satisfies the “limited 

1 Petitioner is represented by Teresa C. Toriseva, Esq. Respondents are represented 

Matthew P. Heiskell, Esq., James A. Walls, Esq., and Loren Schechter, Esq. 

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circumstances” requirement of Rule 21(d) and it is appropriate for the Court to issue a 

memorandum decision rather than an opinion. 

The Weirton Policemen’s Pension and Relief Fund was created pursuant to 

W.Va. Code § 8-22-16, et seq (2009).2 Pursuant to state law, it has a five member board 

of trustees and it may contract with investment advisors. See W.Va. Code §§ 8-22-17, ­

22.3 On April 13, 2006, the trustees opened three different brokerage accounts with 

Edward Jones and a registered financial advisor employed by Edward Jones, Curt Randy 

Grossman.4 

When opening these accounts in March 2006, Trustee (and Weirton Mayor) 

William Miller signed a “Fiduciary/Trust Account Authorization and Acknowledgment 

Form” (“Authorization”) for each account. This single-page form states, inter alia, 

The Edward Jones Account Agreement and Disclosure 

Statement contains, on page 19, paragraph 2, a binding 

arbitration provision which may be enforced by the 

parties. By my/our signature(s) below, I/we have received a 

copy of this document including a schedule of fees and 

Edward Jones Privacy Notice and agree to its terms and 

conditions. 

(Emphasis in original.) Accompanying the Authorizations is a multi-page “Edward Jones 

Account Agreement and Disclosure Statement” which includes the arbitration agreement 

on page 19. The arbitration agreement states: 

This Agreement contains a predispute arbitration clause. By 

signing an arbitration agreement the parties agree as follows: 

2 Specifically, W. Va. Code § 8-22-18a (2009) creates a Pension Oversight Board “to 

assure prudent administration, investment and management of the funds” and to “assure 

the funds’ compliance with applicable laws.” West Virginia Code § 8-22-22 (2009) sets 

forth the duties of the board of trustees generally, including their right to delegate 

investment authority to a professional investment advisor. 

3 The trustees have included former mayors of Weirton and full-time police officers. 

4 Respondent Edward D. Jones & Co. L.P. (“Edward Jones”) is a registered broker-dealer. 

It is a Missouri partnership and is authorized to do business in the State of West Virginia. 

The Jones Financial companies LLP is the parent company of Edward Jones and is a 

Missouri partnership. EDJ Holding Company is affiliated with Edward Jones and The 

Jones Financial Companies LLLP, and is a Missouri corporation. Curt Randy Grossman 

was formerly employed by Edward Jones in Pittsburgh, Pennsylvania. 

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1.	 All parties to this Agreement are giving up the right to sue 

each other in court, including the right to a trial by jury, 

except as provided by the rules of the arbitration forum in 

which a claim is filed. 

2.	 Arbitration awards are generally final and binding; a party’s 

ability to have a court reverse or modify an arbitration award 

is very limited. 

3.	 The ability of the parties to obtain documents, witness 

statements and other discovery is generally more limited in 

arbitration that in court proceedings. 

4.	 The arbitrators do not have to explain the reason(s) for their 

award. 

5.	 The panel of arbitrators will typically include a minority of 

arbitrators who were or are affiliated with the securities 

industry. 

6.	 The rules of some arbitration forums may impose time limits 

for bringing a claim in arbitration. In some cases, a claim that 

it ineligible in arbitration may be brought in court. 

7.	 The rules of the arbitration forum in which the claim is filed, 

and any amendments thereto, shall be incorporated into this 

Agreement. 

I agree that this Agreement shall be governed by the laws of 

the State of Missouri without giving effect to the choice of 

law or conflict of laws provisions thereof. Any controversy 

arising out of or relating to any of my accounts or transactions 

with you, your officers, directors, agents and/or employees 

for me, to this Agreement, or to the breach thereof, or relating 

to transactions or accounts maintained by me with any of 

your predecessor or successor firms by merger, acquisition or 

other business combinations from the inception of such 

accounts shall be settled by arbitration in accordance with the 

rules then in effect of the Board of Directors of the New York 

Stock Exchange, Inc., or the National Association of 

Securities Dealers, Inc. as I may elect. 

No person shall bring a putative or certified class action to 

arbitration, nor seek to enforce any pre-dispute arbitration 

agreement against any person who has initiated in court a 

putative class action, or who is a member of a putative class 

who has not opted out of the class with respect to any claims 

encompassed by the putative class action until: (i) the class 

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certification is denied; or (ii) the class is decertified; or (iii) 

the customer is excluded from the class by the court. Such 

forbearance to enforce an agreement to arbitrate shall not 

constitute a waiver of any rights under this Agreement except 

to the extent stated herein. 

The Edward Jones Authorizations were renewed annually. On August 20, 

2007; February 3, 2009; September 28, 2009; and October 2, 8, 16, 2009, each of the 

trustees signed new Authorizations for each of the three brokerage accounts, again 

incorporating the arbitration agreement. More than ten separate authorizations were 

executed. 

The trustees maintained these investment accounts with Edward Jones until 

2010. On July 30, 2010, the trustees filed suit against Edward Jones alleging that it had 

made improper investments in violation of W.Va. Code § 8-22-22 and asserting claims 

for negligence per se, breach of fiduciary duty, and breach of the implied covenant of 

good faith and fair dealing. On October 13, 2010, Edward Jones filed a motion to compel 

arbitration and to stay the litigation. After a significant time had passed, the trustees 

noticed the arbitration issue for a hearing on February 15, 2012. No discovery had 

occurred. On May 2, 2012, the trustees filed a written objection to the motion to compel 

arguing that the arbitration provision was unconscionable. The trustees argued that 

Brown I was controlling and that the arbitration provision was both procedurally and 

substantively unconscionable, that it was ambiguous, and that it should be stricken. The 

next day, May 3, the trustees supplemented their brief by bringing to the circuit court’s 

attention the United States Supreme Court’s recent ruling in Marmet Health Care Ctr v. 

Brown, 132 S.Ct. 1201 (“Marmet”), which partially reversed this Court’s decision in 

Brown I and remanded the case for further proceedings to determine the application of 

West Virginia law in light of the partial reversal of its per se rule against arbitration 

agreements in nursing home contracts. Although Petitioner filed the supplemental brief 

pointing out its omission of the Marmet case, it argued that the case left the arguments 

that it was advancing unaffected. 

At the May 4, 2012, hearing, the circuit court expressed a strong dislike for 

arbitration agreements, but felt that it had no choice but to compel arbitration in this 

matter in light of the United States Supreme Court’s decision in Marmet. Counsel for the 

trustees sought to argue that the contract was procedurally and substantively 

unconscionable, but the circuit court found that it was not and would not entertain oral 

argument on that issue. Judge Recht made the following statements: 

THE COURT: I have read all of the papers, and most 

important, of course, I have read the United States Supreme 

Court’s opinion in Marmet Health Care Center, Inc. versus 

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Brown. That is dispositive of this case. Period. There’s no 

getting around it. 

. . . 

THE COURT: “There are times, probably, if, in fact, there is 

an attack on the contract itself, for example, going back to 

your law school days, if there was no meeting of the minds, 

go back to those --- you remember in Williston you had all of 

the ingredients of a contract, you could attack it on that basis, 

and then I think the Arbitration Clause would fail with it, or if 

you had testimony – and I don’t see anything here – where 

there may have been a question asked at the time that this 

contract was entered into, “Is there an Arbitration Clause in 

the contract?” And they say, “no,” then, of course, you have 

fraud. There is no allegation of that point. That would 

change things, but I see nothing in this case that has that. 

THE COURT: So I am following the United States Supreme 

Court opinion. . . . 

. . . 

I have no choice here, so the Motion is granted. 

Believing that Marmet was dispositive of the issue and that no further 

analysis was needed, the circuit court expressed frustration with Petitioner’s counsel for 

not originally citing to the United States Supreme Court case that partially overruled 

Brown I. The circuit court refused to entertain Petitioner’s argument that notwithstanding 

Marmet, the court still has a duty to analyze procedural and substantive 

unconscionability. The following discussion between Judge Recht and Petitioner’s 

counsel took place: 

THE COURT: As a matter of fact, you didn’t even know 

about the Supreme Court’s opinion, and that bothered me. 

That bothered me a great deal. When I read the first Brief, 

and you’re relying on upon the West Virginia Supreme Court 

case, that wasn’t right, just wasn’t right. And you found out 

about it, and I got another paper this morning. It’s there. 

That is it. It speaks for itself and there is nothing more to say. 

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MS. TORISEVA: I understand, Your Honor. If I may just 

have 30 seconds. I do believe this Court has authority to 

examine our contractual arguments, not a categorical rule 

against arbitration, but our contractual arguments about this 

arbitration provision. In fact, not only do you have the right to 

do so, I think you have the duty to do so ---­

THE COURT: Why? 

MS. TORISEVA: ---- because we’ve objected. That’s the 

law. 

THE COURT: What are you going to put on? What facts are 

you going to put on regarding this contract? 

MS. TORISEVA: That it’s both procedurally and 

substantively unconscionable -­

THE COURT: It is not. It is not. 

MS. TORISEVA: I understand, Your Honor. 

THE COURT: And you are -- again, it is the way that you 

continually try to get around these things. I don’t blame you. 

I’m not critical of those efforts, but it just can’t be done. It 

cannot be done. Not in this case. And unless -- I mean, they 

put these in every contract there is. 

The contract in the nursing home case, I mean, there is just a 

pure negligent -- I mean, next time you go anywhere, you go 

into a hospital, you’re going to have an Arbitration Clause. 

You buy a product, you sign an Arbitration Clause. It’s going 

to get rid of the entire jury system. 

Talk about tort reform, there is not going to be any torts at all 

that are heard by a jury, and that’s how bad it is. I agree with 

you. 

And with those findings, how I disagree with the concept, I 

cannot and I will not, go against the United States Supreme 

Court’s opinion in Brown. So prepare the Order. 

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Following that hearing, by order entered June 19, 2012, the circuit court 

granted the motion to compel arbitration. In its findings of fact and conclusions of law, 

the order the court found, inter alia, that a valid arbitration agreement exists, the trustees’ 

claims fall entirely within the scope of the arbitration agreement, and the arbitration 

agreement is not procedurally or substantively unconscionable. However, the order 

contained no reasoning or analysis supporting its finding regarding unconscionability. 

Shortly following the entry of the circuit court’s order, this Court issued a 

ruling upon remand from the United States Supreme Court decision in Marmet. Upon 

remand, in Brown II, this Court overruled syllabus point 21 of Brown I, which contained 

the per se rule invalidating arbitration agreements in nursing home contracts. Syl. Pt. 3, 

Brown II, 229 W. Va. 382, 729 S.E.2d 217. However, we explained that arbitration 

provisions can, in fact, still be voided if they are procedurally or substantively 

unconscionable under West Virginia law, as set forth in Brown I. Brown II, 229 W. Va. at 

391, 729 S.E.2d at 226. Herein, Petitioner alleges that this matter should be reversed and 

remanded to allow the circuit court the benefit of the reasoning in Brown II. We agree. 

At the time the circuit court entered its order compelling arbitration in this 

case, it did not have the benefit of this Court’s opinion in Brown II, wherein we stated, 

In accordance with the Supreme Court’s mandate, we 

overrule Syllabus Point 21 of Brown I. We otherwise find that 

the Supreme Court’s decision does not counsel us to alter our 

original analysis of West Virginia’s common law of contracts. 

The doctrine of unconscionability that we explicated in 

Brown I is a general, state, common-law, contract-law 

principle that is not specific to arbitration, and does not 

implicate the FAA. 

229 W. Va. at 388, 729 S.E.2d. at 222-223. In so holding, we reaffirmed syllabus point 6 

of Brown I, which states: 

Under the Federal Arbitration Act, 9 U.S.C. §2, a written 

provision to settle by arbitration a controversy arising out of a 

contract that evidences a transaction affecting interstate 

commerce is valid, irrevocable, and enforceable, unless the 

provision is found to be invalid, revocable or unenforceable 

upon a ground that exists at law or in equity for the 

revocation of any contract. 

Syl. Pt. 1, Brown II. 

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We previously explained in syllabus point 12 of Brown I that “[t]he 

doctrine of unconscionability means that, because of an overall and gross imbalance, onesidedness 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.” 

228 W. Va. 646, 724 S.E.2d 250. We also stated that “[u]nder West Virginia law, we 

analyze unconscionability in terms of two component parts: procedural unconscionability 

and substantive unconscionability.” Id. at 681, 724 S.E.2d at 285. “Procedural and 

substantive unconscionability often occur together, and the line between the two concepts 

is often blurred. For instance, overwhelming bargaining strength against an 

inexperienced party (procedural unconscionability) may result in an adhesive form 

contract with terms that are commercially unreasonable (substantive unconscionability).” 

Id. at 684, 724 S.E.2d at 288. In syllabus point 20 of Brown I, we held, 

[a] contract term is unenforceable if it is both procedurally 

and substantively unconscionable. However, both need not be 

present to the same degree. Courts should apply a ‘sliding 

scale’ in making this determination: the more substantively 

oppressive the contract term, the less evidence of procedural 

unconscionability is required to come to the conclusion that 

the clause is unenforceable, and vice versa. 

228 W. Va. 646, 724 S.E.2d 250. 

In Brown II, we also reaffirmed the following guidelines for determining 

procedural unconscionability that were set forth in Syllabus Point 17 of Brown I: 

Procedural unconscionability is concerned with inequities, 

improprieties, or unfairness in the bargaining process and 

formation of the contract. Procedural unconscionability 

involves a variety of inadequacies that results in the lack of a 

real and voluntary meeting of the minds of the parties, 

considering all the circumstances surrounding the transaction. 

These inadequacies include, but are not limited to, the age, 

literacy, or lack of sophistication of a party; hidden or unduly 

complex contract terms; the adhesive nature of the contract; 

and the manner and setting in which the contract was formed, 

including whether each party had a reasonable opportunity to 

understand the terms of the contract. 

Syl. Pt. 10, Brown II. Reiterating the law set forth in Brown I regarding 

unconscionability, we emphasized in Brown II that procedural unconscionability often 

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begins with a contract of adhesion. Id. at 393, 729 S.E.2d at 228. We restated syllabus 

point 18 of Brown I, which states, 

[a] contract of adhesion is one drafted and imposed by a party 

of superior strength that leaves the subscribing party little or 

no opportunity to alter the substantive terms, and only the 

opportunity to adhere to the contract or reject it. A contract of 

adhesion should receive greater scrutiny than a contract with 

bargained-for terms to determine if it imposes terms that are 

oppressive, unconscionable or beyond the reasonable 

expectations of an ordinary person. 

Syl. Pt. 11, Brown II. We also reemphasized our prior statement in State ex rel. Dunlap 

v. Berger, 211 W.Va. 549, 567 S.E.2d 265 (2002), that “[f]inding that there is an 

adhesion contract is the beginning point for analysis, not the end of it; what courts aim at 

doing is distinguishing good adhesion contracts which should be enforced from bad 

adhesion contracts which should not.” Id. at 557, 567 S.E.2d at 273. 

As for the factors to consider in assessing substantive unconscionabilty, we 

set forth in syllabus point 19 of Brown I, that 

[s]ubstantive unconscionability involves unfairness in the 

contract itself and whether a contract term is one-sided and 

will have an overly harsh effect on the disadvantaged party. 

The factors to be weighed in assessing substantive 

unconscionability vary with the content of the agreement. 

Generally, courts should consider the commercial 

reasonableness of the contract terms, the purpose and effect 

of the terms, the allocation of the risks between the parties, 

and public policy concerns. 

Syl. Pt. 19, Brown I. We recognized in Brown II that 

[s]ubstantive unconscionability may manifest itself in the 

form of “an agreement requiring arbitration only for the 

claims of the weaker party but a choice of forums for the 

claims of the stronger party.” (footnote omitted). “Some 

courts suggest that mutuality of obligation is the locus around 

which substantive unconscionability analysis revolves.” 

(footnote omitted). “Agreements to arbitrate must contain at 

least ‘a modicum of bilaterality’ to avoid unconscionability.” 

(footnote omitted). 

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229 W. Va. at 393, 729 S.E.2d at 228. In State ex rel. Richmond American Homes v. 

Sanders, 228 W. Va. 125, 129, 717 S.E.2d 909, 913 (2011), we stated that when “an 

agreement to arbitrate imposes high costs that might deter a litigant from pursuing a 

claim, a trial court may consider those costs in assessing whether the agreement is 

substantively unconscionable.” Id. at 137, 717 S.E.2d at 921. We also held in State ex 

rel. Dunlap v. Berger, 211 W.Va. 549, 567 S.E.2d 265 that, 

[p]rovisions in a contract of adhesion that if applied would 

impose unreasonably burdensome costs upon or would have a 

substantial deterrent effect upon a person seeking to enforce 

and vindicate rights and protections or to obtain statutory or 

common-law relief and remedies that are afforded by or arise 

under state law that exists for the benefit and protection of the 

public, are unconscionable; unless the court determines that 

exceptional circumstances exist that make the provisions 

conscionable. In any challenge to such a provision, the 

responsibility of showing the costs likely to be imposed by 

the application of such a provision is upon the party 

challenging the provision; the issue of whether the costs 

would impose an unconscionably impermissible burden or 

deterrent is for the court. 

Id., syl. pt. 4. “No single, precise definition of substantive unconscionability can be 

articulated” because “the factors to be considered vary with the content of the agreement 

at issue.” Brown I, 228 W.Va. at 683-84, 724 S.E.2d at 287-88. “Accordingly, courts 

should assess whether a contract provision is substantively unconscionable on a case-bycase basis.” Id. 

Based on the foregoing, we find that this case should be reversed and 

remanded to allow the parties an opportunity to present evidence of, and the circuit court 

to thoroughly consider, the factors set forth in Brown I and reaffirmed in Brown II 

regarding procedural and substantive unconscionability. On remand, the circuit court is 

ordered to enter an order setting forth the requisite findings of fact and conclusions of law 

supporting its ruling. 

Accordingly, the case is reversed and remanded for further proceedings 

consistent with this opinion. 

Reversed and Remanded. 

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ISSUED: November 21, 2013 

CONCURRED IN BY: 

Chief Justice Brent D. Benjamin 

Justice Robin Jean Davis 

Justice Margaret L. Workman 

Justice Menis E. Ketchum 

Justice Allen H. Loughry, II 

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