IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA

January 2020 Term

No. 18-0605

TD AUTO FINANCE LLC, FOCUS RECEIVABLES MANAGEMENT,

and NORTHSTAR LOCATION SERVICES, LLC,

Defendants Below, Petitioners

v.

FREDDIE REYNOLDS and SHELBY REYNOLDS,

Plaintiffs Below, Respondents

Appeal from the Circuit Court of Mercer County, West Virginia

The Honorable Mark Wills, Judge

Civil Action No. 17-C-372-MW

AFFIRMED

Submitted: January 15, 2020

Filed: April 10, 2020

Daniel J. Konrad, Esq. Raymond S. Franks, II, Esq.

DINSMORE & SHOHL LLP BAILEY & GLASSER, LLP

Huntington, West Virginia Charleston, West Virginia

Attorney for Petitioners Steven J. Broadwater, Jr., Esq.

HAMILTON, BURGESS, YOUNG

 & POLLARD, PLLC

Fayetteville, West Virginia

Attorneys for Respondents

JUSTICE WORKMAN delivered the Opinion of the Court.

JUSTICE HUTCHISON concurs and reserves the right to file a separate opinion.

CHIEF JUSTICE ARMSTEAD and JUSTICE JENKINS dissent and reserve the right to 

file separate opinions. 

FILED

April 10, 2020

released at 3:00 p.m.

EDYTHE NASH GAISER, CLERK

SUPREME COURT OF APPEALS

OF WEST VIRGINIA
i

SYLLABUS BY THE COURT

1. “When an appeal from an order denying a motion to dismiss and to 

compel arbitration is properly before this Court, our review is de novo.” Syl. Pt. 1, W. Va. 

CVS Pharmacy, LLC v. McDowell Pharmacy, Inc., 238 W.Va. 465, 796 S.E.2d 574 (2017). 

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. “‘Separate written instruments will be construed together and 

considered to constitute one transaction where the parties and the subject matter are the 

same, and where there is clearly a relationship between the documents.’ Syllabus point 3, 

McCartney v. Coberly, –––W.Va. ––––, 250 S.E.2d 777 (1978), overruled on other 

grounds by Syllabus point 2, Overfield v. Collins, 199 W.Va. 27, 483 S.E.2d 27 (1996).” 

Syl. Pt. 1, McDaniel v. Kleiss, 202 W. Va. 272, 273-74, 503 S.E.2d 840, 841-42 (1998). 

4. “Ordinarily an assignee acquires no greater right than that possessed 

by his assignor, and he stands in his shoes; and an assignee takes subject to all defenses 

and all equities which could have been set up against an instrument in the hands of an 
ii

assignor at the time of the assignment.” Syl. Pt. 10, Lightner v. Lightner, 146 W.Va. 1024, 

124 S.E.2d 355 (1962). 
1

WORKMAN, Justice:

 This is an appeal from the Circuit Court of Mercer County’s denial of 

petitioners TD Auto Finance LLC (“TD Auto Finance”), Focus Receivables Management, 

LLC, and Northstar Location Services, LLC’s (collectively “petitioners”) motion to 

compel arbitration of respondents Freddie and Shelby Reynolds’ (“respondents”) claims 

against them. The circuit court found that a merger clause in the Retail Sales Installment 

Contract supplanted a prior agreement to arbitrate contained in a credit application 

executed by respondents.

Upon careful review of the briefs, the appendix record, the arguments of the 

parties, and the applicable legal authority, we conclude that the credit application and Retail 

Installment Sales Contract did not constitute contemporaneously-executed documents 

which were part of a singular transaction. As such, the merger clause contained in the 

Retail Installment Sales Contract served to supersede the arbitration agreement contained 

in the previously-executed credit application and contained no requirement to arbitrate. 

Accordingly, we affirm the circuit court’s denial of petitioners’ motion to compel 

arbitration.

I. FACTS AND PROCEDURAL HISTORY

On November 14, 2014, respondents purchased a new 2014 Chevrolet 

Silverado truck from Crossroads Chevrolet (“Crossroads”). During their interactions with 

Crossroads, respondents executed a credit application permitting Crossroads to effectively 
2

investigate and “shop” their credit around to potential financing companies for the purchase

of a vehicle. Upon negotiating and reaching an agreement as to the purchase of a 2014 

Chevrolet Silverado, respondents subsequently executed a Retail Installment Sales 

Contract (“RISC”) for the purchase of the truck. 

The credit application first executed by respondents states that by executing 

the application, respondents “authorize dealer and any finance company, bank or other 

financial institution to which the Dealer submits my application,” to investigate their credit 

and employment history. The form credit application contains a paragraph that applies to

“applications submitted to TD Auto Financial LLC Only” and provides that “in exchange 

for the time, effort, and expense in reviewing your application and for other valuable 

consideration . . . [respondents] agree to all of the terms of the TD Auto Finance LLC 

Contract of Arbitration contained in [the] application . . . .” The “Contract of Arbitration,”

which comprises page six1 of the credit application, provides:

Any claim or dispute, whether in contract, tort or otherwise 

(including any dispute over the interpretation, scope, or 

validity of this Important Contract of Arbitration or the 

arbitrability of any issue), between our employees, parents, 

subsidiaries, affiliate companies, agents, successors or 

assignees, which arises out of or relates to this application and 

Important Contract of Arbitration, any installment sale contract 

or lease agreement, or any resulting transaction or relationship 

(including any such relationship with third parties who do not 

sign this application and important Contract of Arbitration) 

1There is no page five of the document (skipping from page four to page six); 

however, petitioners’ counsel represented that there was no such page in the document and 

the non-serial page numbering was an error of some sort.
3

shall, at the election of any of us . . . . be resolved by a neutral, 

binding arbitration and not by a court action.

The record contains no information about precisely when, during the course of 

respondents’ interaction with Crossroads, this document was executed. However, in oral 

argument below and before this Court, counsel for petitioners conceded that common sense 

suggests it was executed at some point prior to the RISC, as a necessary precursor to the 

sales transaction.

The RISC was executed by respondents and Crossroads to consummate the 

purchase of the truck. The RISC provides that it is for the purchase of a 2014 Chevrolet 

Silverado in the amount of $37,700.21 and financing in the amount of $46,811.18. The 

final page of the document contains what is commonly known as a “merger” or 

“integration” clause, as follows: “HOW THIS CONTRACT CAN BE CHANGED. This 

contract contains the entire agreement between you and us relating to this contract. Any 

change to this contract must be in writing and we must sign it. No oral changes are 

binding.”

This specific paragraph is signed by both respondents and a representative of 

Crossroads. Importantly, however, the document concludes with a contemporaneous 

assignment of the RISC from Crossroads to petitioner TD Auto Finance. The final 

paragraph states: “Seller assigns its interest in this contract to TD AUTO FINANCE LLC

(Assignee) under the terms of Seller’s agreement(s) with Assignee.” It is signed by the
4

President of Crossroads Chevrolet LLC. Petitioner TD Auto Finance’s name has been 

typed into the form.

Respondents ultimately defaulted on their loan and petitioner TD Auto 

Finance began collection efforts by referral to collection agencies—petitioners Focus 

Receivables Management, LLC and Northstar Location Services, LLC. Respondents

allege that the collection agencies harassed them by phone even after being advised they 

were represented by counsel. As a result, they filed a complaint asserting violations of the 

West Virginia Consumer Credit and Protection Act, among other claims,2 and naming 

petitioners as defendants. Petitioners moved to compel arbitration on the basis of the 

arbitration provision contained in the credit application.

3

The circuit court denied the motion, finding that the credit application and 

attendant arbitration clause constituted “an entirely separate transaction” from the RISC 

inasmuch as “typically” a credit check and application precedes the negotiations regarding 

2 In addition to their claims under the West Virginia Consumer Credit and Protection 

Act, respondents alleged violations of the West Virginia Computer Crimes Act, intentional 

infliction of emotional distress, and invasion of privacy. 

3 In a supplemental filing below, petitioners asserted that the issue of arbitrability 

must be determined by the arbitrator, rather than the circuit court, as a result of the 

purported delegation provision in the arbitration agreement. The circuit court did not 

address this issue and petitioners do not raise it in this appeal.

(continued . . .)
5

the sale.4 Accordingly, it found that the credit application and RISC were not part of the 

same transaction and therefore were not required to be construed together. Further, the 

circuit court found that petitioners’ failure to have an arbitration agreement signed at the 

same time as the RISC, included in the RISC, or at a minimum, incorporated by reference

into the RISC, was fatal to its claim for arbitration. Petitioners then filed the instant appeal. 

II. STANDARD OF REVIEW

This Court has held that “[w]hen an appeal from an order denying a motion 

to dismiss and to compel arbitration is properly before this Court, our review is de novo.” 

Syl. Pt. 1, W. Va. CVS Pharmacy, LLC v. McDowell Pharmacy, Inc., 238 W.Va. 465, 796 

S.E.2d 574 (2017). With this standard in mind, we consider the parties’ arguments.

III. DISCUSSION

With respect to a trial court’s consideration of a motion to compel arbitration, 

this Court has held:

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. 

4 The circuit court noted that there was no evidence presented as to specifically when 

the arbitration agreement was signed, but found that “the auto dealer cannot make an offer 

especially as to financing rate terms until after the buyer has a credit check.” As indicated

supra, counsel for petitioners conceded to this order of events.
6

Syl. Pt. 2, State ex rel. TD Ameritrade, Inc. v. Kaufman, 225 W.Va. 250, 692 S.E.2d 293 

(2010). This case therefore requires this Court to determine whether the circuit court erred 

in determining that no valid arbitration agreement existed. To do so, we turn to governing 

West Virginia contract law: “[T]he issue of whether an arbitration agreement is a valid

contract is a matter of state contract law and capable of state judicial review.” State ex rel. 

Clites v. Clawges, 224 W. Va. 299, 305, 685 S.E.2d 693, 699 (2009) (emphasis in original). 

See also Chesapeake Appalachia, L.L.C. v. Hickman, 236 W. Va. 421, 436, 781 S.E.2d 

198, 213 (2015) (observing that whether a valid arbitration agreement exists is determined 

“[u]nder general principles of state contract law”); Syl. Pt. 4, in part, State ex rel. Richmond 

Am. Homes of W. Va., Inc. v. Sanders, 228 W. Va. 125, 717 S.E.2d 909 (2011) (“[T]he trial 

court may rely on general principles of state contract law in determining the enforceability 

of the arbitration clause.”).

The issue before the Court is whether the arbitration provision respondents 

agreed to in the credit application survives the “merger clause” in the RISC, which states

that the RISC constitutes the “entire agreement” between the parties. This Court has 

explained that “[a] ‘merger clause’ is ‘[a] provision in a contract to the effect that the 

written terms may not be varied by prior or oral agreements because all such agreements 

have been merged into the written document.’” Frederick Bus. Properties Co. v. Peoples 

Drug Stores, Inc., 191 W. Va. 235, 240 n.2, 445 S.E.2d 176, 181 n.2 (1994) (quoting 

Black’s Law Dictionary 989 (6th ed. 1990)). Under the credit application, there is a clear 

agreement to arbitrate with TD Auto Finance; however, the RISC contains no such 
7

arbitration agreement nor reference to the prior agreement, and explicitly purports to be the 

“entire agreement” between the parties.

5

Petitioners contend that the arbitration agreement contained in the credit 

application and the RISC, which is silent on dispute resolution, are not in conflict and 

unmistakably demonstrate an agreement to arbitrate any claims involving petitioner TD 

Auto Finance. Citing highly similar extra-jurisdictional caselaw, petitioners contend that 

the arbitration agreement and RISC are “separate and distinct” collateral documents 

executed as part of a singular transaction and therefore must be construed together. 

Respondents, also citing factually-similar caselaw supportive of its position, maintain that 

the scope and purpose of the credit application was substantially unrelated to the ultimate 

vehicle purchase and therefore is merely a prior agreement which was “merged” into the 

RISC. The RISC, which respondents contend is the governing document, contains no 

requirement to arbitrate. 

Several courts have had opportunity to examine the effect of a merger clause 

on separately executed arbitration agreements in cases with similar facts—vehicle 

purchasers who agree to arbitrate in one document but contemporaneously sign an 

installment sales contract that contains no arbitration provision, but includes a merger 

5 Petitioners contend that the RISC is effectively a “third-party” contract that cannot 

affect its arbitration rights under the credit application inasmuch as Crossroads, and not TD 

Auto Finance, executed the RISC. As more fully discussed infra, this argument is without 

merit.
8

clause stating that it is the “entire agreement.” These courts have universally cited to some 

iteration of the following well-recognized contract principle: “[A]bsent anything to 

indicate a contrary intention, written instruments executed at the same time, by the same 

contracting parties, for the same purpose, and in the course of the same transaction will be 

considered and construed together as one contract or instrument, even though they do not 

by their terms refer to each other.” 11 Williston on Contracts § 30:26 (4th ed.). 

For example, in Johnson ex rel. Johnson v. JF Enterprises, LLC 400 S.W.3d 

763, 768 (Mo. 2013), the Missouri Supreme Court rested its resolution on the “general rule 

that contemporaneously signed documents relating to one subject matter or transaction are 

construed together[.]” The Johnson court found that a separate, stand-alone arbitration 

agreement was enforceable where it was executed as one of a “pile of documents” which 

were executed “within minutes of each other, in a single sitting, as part of a single sales 

transaction.” Id. at 768. Explaining that “[t]o protect the sanctity of the parties’ written 

contract, all the provisions in the writing can and should be harmonized and given effect,” 

it concluded that a valid arbitration agreement was created. Id. at 768. See also Kates v. 

Chad Franklin Nat’l Auto Sales North, LLC, No. 08-0384-CV-W-FJG, 2008 WL 5145942, 

at *4 (W.D. Mo. Dec. 1, 2008) (finding stand-alone arbitration agreement applicable and 

observing “the merger clause does not prohibit the forming of a separate arbitration 

agreement contemporaneously with the other contracts in this matter.”).
9

Similarly, in Najera v. David Stanley Chevrolet, Inc., 406 P.3d 592 (Okla. 

Civ. App. 2017), the court found an arbitration agreement contained in a previously 

executed purchase agreement6 was not rendered a nullity by the merger clause in the RISC. 

The court reasoned that by signing numerous documents contemporaneously, the totality 

of the documents formed the agreement and that to conclude that the RISC was the “only 

and complete agreement of the parties, execution of these other [contemporaneouslyexecuted] documents would be rendered nugatory.” Id. at 597. See also Ramick v. 

Howard-GM II, Inc., 414 P.3d 397, 400 (Okla. Civ. App. 2018) (requiring RISC to be 

construed with purchase agreement requiring arbitration where contracts were “‘relating to 

the same matters’” and “‘parts of substantially one transaction’” (citations omitted)). The 

Najera court relied on the Tenth Circuit’s reasoning in Mooneyham v. BRSI, LLC, 682 Fed. 

Appx. 655, 660 (2017) which found that the merger clause may have precluded 

“incorporation of other agreements into the RISC[] [b]ut the clause doesn’t preclude 

incorporation of other agreements into the transaction as a whole.”

6 Importantly, however, the Purchase Agreement in Najera containing the 

arbitration provision also provided that the agreement “and all written contracts relating to 

the same transaction . . . and made as part of substantially the same transaction . . . shall be 

taken together and read as one document setting forth the terms of the parties agreement.” 

Id. at 595 (emphasis in original). See also Bank Julius Baer & Co., Ltd. v. Waxfield Ltd., 

424 F.3d 278 (2d Cir. 2005) abrogated on other grounds by Granite Rock Co. v. Int’l Bhd. 

of Teamsters, 561 U.S. 287 (2010) (finding merger clause “at odds” with Purchase 

Agreement incorporation clause providing that rights and remedies in Agreement, 

including arbitration, are “cumulative and not exclusive of any rights or remedies provided 

under any other agreement”).
10

Courts in other states have used similar reasoning to conclude that a merger 

clause does not necessarily foreclose the enforceability of agreements reached in collateral 

documents, where they are contemporaneously executed as part of a single transaction. See 

Ritter v. Grady Automotive Group, Inc., 973 So.2d 1058, 1062 (Ala. 2007) (finding standalone arbitration agreement valid and holding merger clause “does not bar evidence of 

contemporaneous collateral agreements between the parties”); Lowe v. Nissan of Brandon, 

Inc., 235 So.3d 1021 (Fla. Dist. Ct. App. 2018) (upholding arbitration agreement in 

Purchase Agreement where executed with other purchase documentation 

contemporaneously); Wells Fargo Auto Finance, Inc. v. Wright, 698 S.E.2d 17, 19 (Ga. Ct. 

App. 2010) (finding stand-alone arbitration agreement valid where “retail sales contract, 

installment contract, and the [Arbitration] Agreement were executed simultaneously”); 

Bartkus v. Thomas Motors of Joliet, Inc., No. 09-C-3005, 2009 WL 2766719 (N.D. Ill. 

Aug. 27, 2009) (suggesting that contemporaneous execution of RISC and purchase order 

requiring arbitration supersedes merger clause).7

Other courts, however, have interpreted merger clauses more strictly, 

refusing to allow predecessor or contemporaneous documents, which purport to add to or 

7 The Fourth Circuit has reached the same conclusion under similar facts, which has 

been followed as precedent by the Maryland Court of Appeals. See Rota-McLarty v. 

Santander Consumer USA, Inc., 700 F.3d 690, 700 (4th Cir. 2012) (“[T]he Buyer’s Order 

and RISC were made a part of a single transaction, and should be interpreted together[.]”); 

see also Ford v. Antwerpen Motorcars Ltd., 117 A.3d 21 (Md. 2015) (citing Rota-McLarty

in support of rejection of merger clause in RISC as supplanting separate agreement to 

arbitrate in Buyer’s Order). 
11

alter the “final agreement,” to require arbitration or other matters. In Duval Motors Co. v. 

Rogers, 73 So.3d 261 (Fla. Dist. Ct. App. 2011), the purchaser signed a Retail Buyer’s 

Order containing an arbitration agreement, as well as a RISC containing the identical 

merger language as in the case at bar. The Duval court explained that the purpose of a 

merger clause is “‘to affirm the parties’ intent to have the parol evidence rule applied to 

their contracts.’” Id. at 265 (citations omitted). And as such, the parol evidence rule 

“precludes consideration of . . . evidence ‘to contradict, vary, defeat, or modify a complete 

and unambiguous written instrument, or to change, add to, or subtract from it, or affect its 

construction.’” Id. (citations omitted). The court therefore found that the integration or 

merger clause precluded applicability of the arbitration provision in the other document. 

See also Weiszhaar v. Hampton Automotive Group, Inc., No. 5:12-cv-46/RS-GRJ, 2012 

WL 2034783 (N.D. Fla. June 6, 2012) (same). 

Likewise, the Florida appeals court in HHH Motors, LLP v. Holt, 152 So.3d 

745, 748 (Fla. Dist. Ct. App. 2014) found that a purchase agreement containing an 

arbitration provision did not survive the merger clause in the RISC, stating succinctly: “If 

[the dealer] intended for credit buyers to be subject to the arbitration clause, then it could 

have said so in the RISC, but did not.” Accord Harbor Village Home Center, Inc. v. 

Thomas, 882 So.2d 811, 816 (Ala. 2003) (finding that retail installment contract was “fully 

integrated agreement of the parties” and rejecting arbitration agreement which contained 

no purchase terms nor merger clause of its own); Ex parte Palm Harbor Homes, Inc., 798 

So.2d 656, 661 (Ala. 2001) (finding that drafters of installment contract “could easily have 
12

included in the merger clause a specific reference to . . . free-standing instruments, thus 

identifying the instrument as a part of the integrated agreement” but failure to do so 

precluded consideration of arbitration provisions contained in free-standing documents); 

Salvagne v. Fairfield Ford, Inc., 794 F. Supp.2d 826, 832 (S.D. Ohio 2010) (finding RISC 

to be “standing alone, a fully integrated contract that by its terms was binding” and rejecting 

argument that terms contained in delivery agreement may alter RISC); Gonzalez v. 

Consumer Portfolio Servs., Inc., No. CL04-00092, 2004 WL 2334765 (Cir. Ct. of Va., 

Rockingham Co. Sept. 2, 2004) (refusing to enforce arbitration due to merger clause in 

RISC and construing contract against drafter).

Like the courts above, this Court has also recognized, generally, that 

contemporaneous documents which comprise a single transaction may be construed 

together: 

“Separate written instruments will be construed 

together and considered to constitute one transaction where the 

parties and the subject matter are the same, and where there is 

clearly a relationship between the documents.” Syllabus point 

3, McCartney v. Coberly, –––W.Va. ––––, 250 S.E.2d 777 

(1978), overruled on other grounds by Syllabus point 2, 

Overfield v. Collins, 199 W.Va. 27, 483 S.E.2d 27 (1996).

Syl. Pt. 1, McDaniel v. Kleiss, 202 W. Va. 272, 503 S.E.2d 840 (1998). Elaborating on 

this general rule, the McDaniel Court explained that “we have found a single contract to 

exist where the two agreements were signed contemporaneously or where the earlier 

contract was specifically referenced in the later contract.” Id. at 279, 503 S.E.2d at 847. 
13

We have not, however, had occasion to address the effect of a merger clause on this general 

principle.

While the cases argued by the parties represent divergent approaches to the 

effect of a merger clause on contemporaneously-executed documents and are tantalizingly 

similar in their facts, we find that this case does not require the Court to cast its lot with 

one approach or the other. Rather, our general rule on the construction of competing 

contractual agreements along with the particular facts of this case are sufficient to resolve 

the issue at hand. As noted above, our rule provides that contemporaneously executed 

agreements between the same parties and relating to the same subject matter may be 

construed together as part of one contract or transaction. Commensurately, the 

distinguishing factors in the cases cited by petitioners reveal that the competing documents 

were 1) signed contemporaneously as part and parcel of a larger purchase transaction; and 

2) were either purchase-type agreements which, like the RISC, purport to govern the 

purchase or stand-alone arbitration agreements executed during consummation of the 

transaction. 

In this case, however, it is undisputed that the credit application 1) was signed 

before and not contemporaneously with the RISC in consummation of the purchase; and 

2) was not, by its subject matter, part or parcel of the purchasing documents or transaction. 

The credit application is merely an authorization to investigate respondents’ credit score 

and employment information and present that information to various finance companies to 
14

determine which company may wish to extend financing to them. The credit application 

is not part of the purchase transaction documentation and governs an entirely different 

subject matter—the credit investigation and approval process. There is nothing about a 

simple credit application which ostensibly purports to govern any of the terms of the 

ultimate vehicle purchase or financing. See Lowe, 235 So.3d at 1027 (“‘The test for 

determining arbitrability of a particular claim under a broad arbitration provision is whether 

a “significant relationship” exists between the claim and the agreement containing the 

arbitration clause, regardless of the legal label attached to the dispute.’” (quoting Murphy 

v. Courtesy Ford, LLC, 944 So.2d 1131, 1133 (Fla. Dist. Ct. App. 2006)); cf. Ashland Oil, 

Inc. v. Donahue, 159 W. Va. 463, 469, 223 S.E.2d 433, 437 (1976) (finding lease 

agreement and dealer contract sufficiently related where both “deal with the operation of a 

gasoline station at identified premises[;] provide for the same initial term and automatic 

extensions from year to year; [] provide for the sale and delivery of gasoline; [] provide for 

the conduct of the business on the part of Donahue with skill and diligence”).

In this regard, the McDaniel case is instructive. In McDaniel, the Court 

examined an insurance policy and subsequent release to determine whether their terms 

were conflicting and which document governed the parties’ responsibilities as pertained to 

preserving the insurance company’s subrogation rights. The Court determined that the 

policy and release, while plainly related to each other, were “two separate and distinct 

contracts” by virtue of the “difference in the subject matter addressed in each document[.]” 

Id. at 278-79, 503 S.E.2d at 846-47. Acknowledging the relationship between the two 
15

documents, the Court stated that “absent the existence of the automobile insurance policy, 

there would have been no reason for Aetna to negotiate the release.” Id. at 279, 503 S.E.2d 

at 847. However, it found that “this fact alone [is] insufficient upon which to find that the 

two documents are so closely related that they become a single contract.” Id. While the 

insurance contract may have given rise to the coverage for the loss described in the release, 

the release itself purported to govern the terms of a “particular known loss.” Id. 

Similarly, here, while the credit application may have been a common 

precursor to a vehicle purchase governed by a RISC, the completely different subject 

matter of the two documents and lack of contemporaneous execution—which also 

demonstrates their distinct purposes—are insufficient to view them as part of a single 

transaction. Therefore, the RISC and its merger clause—stating that it represents the 

“entire agreement” between the parties as pertains to the purchase of the vehicle—must 

govern. The RISC’s failure to include an arbitration provision or incorporate by reference 

any prior arbitration agreement, therefore, is fatal to petitioners’ demand for arbitration.

Petitioners, however, maintain that the arbitration agreement language in the 

credit application specifically extended the requirement to arbitrate to any subsequentlyexecuted RISC and therefore serves to effectively “reach out” and incorporate itself into 

the RISC. As indicated, the arbitration provision in the credit application states that it 

applies to “any installment sale contract or lease agreement, or any resulting transaction or 

relationship . . . .” This language, however, is fully at odds with the purpose of the merger 
16 

clause contained in the RISC: to merge any preexisting agreements into one, final 

agreement governed exclusively by the terms contained within the four corners of the 

RISC. To make the preexisting arbitration agreement applicable to the RISC, the opposite 

must have occurred: the final, “entire” agreement—the RISC—should have incorporated 

the prior arbitration agreement by reference. Cf. Art’s Flower Shop v. Chesapeake & 

Potomac Tel. Co., 186 W.Va. 613, 615, 413 S.E.2d 670, 672 (1991) (finding prior contract 

incorporated by reference where subsequent contract specifically stated “‘all other terms 

and conditions to remain as previously signed’”). Other courts have similarly 

rejected this attempted “reverse incorporation.” See Salvagne, 794 F. Supp.2d at 833 

(“[T]he RISC must clearly reach out and incorporate the [prior] Spot Delivery Agreement, 

not the other way around.”); Duval Motors, 73 So.3d at 269 ([T]he important inquiry is 

whether the [final] RISC incorporates the [prior Buyer’s Order], not whether the [Buyer’s 

Order] incorporates the RISC.”).

8

Finally, we dispense with petitioners’ contention that, since Crossroads was 

the original signatory to the RISC, petitioners’ rights under the credit application arbitration 

8 Further, the unlimited scope of such an attempted “reverse incorporation” leads to 

an absurd, theoretical possibility: that respondents would be obligated to arbitrate any 

claim arising out of any subsequent transaction or relationship regardless of how attenuated 

in time or subject matter. This untenable reading, coupled with tedious and frequently 

indecipherable competing documents foisted upon vehicle purchasers make Justice 

McDonald’s sardonic comment particularly apt: “[A] lay person interested in buying a [] 

car would be well advised to bring along a lawyer, a magnifying glass, and perhaps an 

English major, to decipher [sales contracts].” Antwerpen Motorcars, 117 A.3d at 29 

(McDonald, J., concurring). 
17

agreement cannot be affected by the terms of what is essentially a third-party contract 

between respondents and Crossroads. As assignee of the RISC, petitioner TD Auto 

Finance stands in the shoes of Crossroads. Therefore, for purposes of examining the 

formation, validity, and enforceability of the RISC and defenses thereto, the fact that 

petitioner TD Auto Finance is not an original signatory, but rather an assignee, is of no 

consequence. As is universally-recognized:

[A]n assignee acquires no greater right than that 

possessed by his assignor, and he stands in his shoes; and an 

assignee takes subject to all defenses and all equities which 

could have been set up against an instrument in the hands of an 

assignor at the time of the assignment.

Syl. Pt. 10, Lightner v. Lightner, 146 W.Va. 1024, 124 S.E.2d 355 (1962). Therefore,

“‘[t]he assignee is subject to any defenses that would have been 

good against the [assignor]; the assignee cannot recover more 

than the assignor could recover; and the assignee never stands 

in a better position than the assignor.’” “[A]n assignee gains 

nothing more, and acquires no greater interest than had his 

assignor.” In other words, “the common law puts the assignee 

in the assignor’s shoes, whatever the shoe size.” 

***

Corbin on Contracts states, “[t]he essential purpose of the 

principle is to protect the obligor, the party who must perform 

the correlative duty of the assigned right,” so that the risk to 

the obligor is not materially enlarged over the risk created by 

its agreement with the assignor. In other words, the purpose 

behind the rule is that an assignee has rights and liabilities 

identical to those of its assignor. 
18

Sunridge Dev. Corp. v. RB & G Eng’g, Inc., 230 P.3d 1000, 1003-04 (Utah 2010) (citations 

omitted) (emphasis added). 9 Therefore, to the extent that Crossroads could not have 

compelled respondents to arbitrate their claims due to the absence of such an agreement in 

the RISC, neither can petitioners. Accordingly, we conclude that the arbitration provisions 

in the credit application did not survive the merger clause of the RISC, thereby nullifying 

respondents’ obligation to arbitrate their claims against petitioners.

IV. CONCLUSION

For the reasons set forth hereinabove, we affirm the June 8, 2018, order of 

the Circuit Court of Mercer County, West Virginia, denying petitioners’ motion to compel 

arbitration.

Affirmed.

9 In a similar vein, while not argued by respondents, we further find that petitioners 

are likely estopped from disavowing the merger clause contained in the RISC. When 

respondents defaulted on their vehicle loan, petitioners sought to collect the debt 

presumably pursuant to the terms of the RISC, as its assignee. Petitioners cannot avail 

themselves of the terms of the RISC for purposes of collection, but disavow the 

applicability of certain other of its terms: “[A] party may be estopped from asserting 

[defenses which] preclude[] enforcement of the contract’s [provisions] when he has 

consistently maintained that other provisions of the same contract should be enforced to 

benefit him.” Int’l Paper Co. v. Schwabedissen Maschinen & Anlagen GMBH, 206 F.3d 

411, 418 (4th Cir. 2000). See Invista S.A.R.L. v. Rhodia, S.A., 625 F.3d 75, 85 (3d Cir. 

2010) (noting estoppel prevents party “from ‘cherry-picking’ the provisions of a contract 

that it will benefit from and ignoring other provisions that don't benefit it or that it would

prefer not to be governed by”); see also, e.g. Lowe, 235 So.3d at 1027 (observing that “the 

essential terms of the contract for the [] claim Ms. Lowe raises” were contained in 

arbitration-requiring Purchase Agreement).