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No. 18-0605 – TD Auto Finance LLC, Focus Receivables Management, 

and Northstar Location Services, LLC, v. Freddie Reynolds

and Shelby Reynolds

Hutchison, J., concurring:

I write separately to emphasize what this case is and what it is not about. I 

also write to point out that the position propounded by petitioner TD Auto Finance would 

create chaos in the law of contracts.

First, and foremost, this case is not about arbitration. Admittedly, the 

contract provision the parties are dickering over concerns arbitration. Additionally, in its 

brief, TD Auto Finance cites a string of federal arbitration cases, insists that this Court’s 

authority is “extremely limited,” and argues that federal law emphatically mandates that 

we send this case to arbitration. This argument ignores, however, the fundamental rule that 

arbitration contracts are subject to interpretation using general principles of state contract 

law, not federal law. See, e.g., Perry v. Thomas, 482 U.S. 483, 492 n.9 (1987) (“[S]tate 

law, whether of legislative or judicial origin, is applicable if that law arose to govern issues 

concerning the validity, revocability, and enforceability of contracts generally.”);

Chesapeake Appalachia, L.L.C. v. Hickman, 236 W. Va. 421, 435, 781 S.E.2d 198, 212 

(2015) (“[A]n agreement to arbitrate is a contract. The rights and liabilities of the parties 

are controlled by the state law of contracts.”). Moreover, the federal law cited by TD Auto 

Finance is largely irrelevant because, at its heart, this case has absolutely nothing to do 

with arbitration.

FILED

April 10, 2020

released at 3:00 p.m.

EDYTHE NASH GAISER, CLERK

SUPREME COURT OF APPEALS

OF WEST VIRGINIA
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This case is a dull, run-of-the-mill, state-law contract interpretation case. 

Every first-year law student knows that a contract is defined as one party’s acceptance of 

another’s offer of specific terms (along with an exchange of consideration). Dan Ryan 

Builders, Inc. v. Nelson, 230 W. Va. 281, 287, 737 S.E.2d 550, 556 (2012)

(“The elements of a contract are an offer and an acceptance supported by consideration.”). 

If any one of the three elements (offer, acceptance, or consideration) is missing, then no 

contract is formed. Logically, an offer – with all of its terms – must precede the opposite 

party’s acceptance of those very same terms. “As a general principle, an offeree cannot 

actually assent to an offer unless the offeree knows of its existence.” Schnabel v. Trilegiant 

Corp., 697 F.3d 110, 121 (2d Cir. 2012). Accordingly (and this shouldn’t have to be said), 

an offeree cannot “know” about an offer and assent to it before it even exists. See Taubman 

Cherry Creek Shopping Ctr., LLC v. Neiman-Marcus Grp., Inc., 251 P.3d 1091, 1095 

(Colo. App. 2010) (“[W]e are aware of no precedent holding that parties can clearly know 

of and assent to contract terms that do not yet exist[.]”).

This case is about a sub-doctrine of contract law, the doctrine of 

“incorporation by reference.” The long-standing rules of contracts recognize that parties 

can make a new contract, and in that new contract refer to other, existing documents or 

contracts. Stated another way, a party can offer to form a contract using terms written in 

other documents; the opposing party may then accept those terms. Those other materials 

must be clearly identified so there is no doubt by both parties as to what they are agreeing 

to. As noted above, an offeree cannot assent to something that does not exist.
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This Court summarized the doctrine of incorporation in this way:

In the law of contracts, parties may incorporate by 

reference separate writings together into one agreement.

However, a general reference in one writing to another 

document is not sufficient to incorporate that other document 

into a final agreement. To uphold the validity of terms in a 

document incorporated by reference, (1) the writing must make 

a clear reference to the other document so that the parties’

assent to the reference is unmistakable; (2) the writing must 

describe the other document in such terms that its identity may 

be ascertained beyond doubt; and (3) it must be certain that the 

parties to the agreement had knowledge of and assented to the 

incorporated document so that the incorporation will not result 

in surprise or hardship.

Syllabus Point 2, State ex rel. U-Haul Co. of W.Va. v. Zakaib, 232 W. Va. 432, 752 S.E.2d 

586 (2013) (emphasis added).

The key term throughout the U-Haul Court’s discussion of the incorporation 

doctrine is the word “assent.” When a court weighs the validity of a provision incorporated

into a contract by reference, the court’s focus is whether the contracting parties knew of 

and assented to the incorporated provision. A meeting of the minds and mutuality of assent 

are the most basic ingredients of a contract.

Central to the notion of “assent” is that the parties must know, at the moment 

they form their contract, what they are agreeing to: if a term in the new, incorporating

contract is buried in an older, existing document, then the reference in the new contract has 

to be clear “so that the parties’ assent to the reference is unmistakeable.” Id. In most 

instances, to incorporate by reference some collateral document, the new, incorporating 

contract must expressly and sufficiently describe another document that exists. As one 
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court said, “what is being incorporated must actually exist at the time of the incorporation, 

so the parties can know exactly what they are incorporating.” Gilbert St. Developers, LLC 

v. La Quinta Homes, LLC, 174 Cal. App. 4th 1185, 1194 (2009). See also In re Plumel’s 

Estate, 90 P. 192, 193 (Cal. 1907) (“in order to make out a case for the application of the 

doctrine of incorporation by reference, the paper referred to must not only be in existence 

at the time of the execution of the attested or properly executed paper, but that it must be 

referred to in the latter as an existent paper, so as to be capable of identification.”). Where 

the term referred to in a new contract is not in existence at the time the parties form the 

principal contract, the enforceability of the term is in jeopardy.1

1 As a general principle, incorporating nonexistent, future terms into a present 

contract usually imperils the enforceability of those terms:

Where the document referred to is not in existence at the 

time the principal contract is made, the enforceability of the 

incorporated terms may be jeopardized. Where the principal 

agreement contains the essential elements of a valid contract, 

and further binds the parties to terms to be established by one 

party in futuro, the danger exists that the critical elements of

knowledge of, and assent to, the additional terms will be 

missing. If the provisions to be incorporated will only explain 

or particularize the obligations of the parties under the 

principal contract, there is no obstacle to the enforcement of 

those supplemental provisions. But where the added terms, 

established by one of the parties, modify or contradict a 

material term of the original valid contract, the incorporated 

terms must fall.

Hous. Auth. of City of Hartford v. McKenzie, 36 Conn. Supp. 515, 519, 412 A.2d 1143, 

1145-46 (Super. Ct. 1979). Accord Lamb v. Emhart Corp., 47 F.3d 551, 559 (2d Cir. 

1995). See also Taubman Cherry Creek Shopping Ctr., LLC v. Neiman-Marcus Grp., Inc., 

251 P.3d 1091, 1095 (Colo. App. 2010) (finding parties did not agree to incorporate into 

their contract amendments to American Arbitration Association rules made after adoption 
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That brings me to the problem in the instant case: the one of temporality. 

Time goes forward; as much as we would like, we cannot roll back the clock. Likewise, 

incorporation by reference is unidirectional, that is, it “occurs in one direction: it pulls 

material into the incorporating contract.” Care Grp. Heart Hosp., LLC v. Sawyer, 93 

N.E.3d 745, 755 (Ind. 2018). When parties make a new contract, they can agree to 

of the contract. “Indeed, we are aware of no precedent holding that parties can clearly 

know of and assent to contract terms that do not yet exist when, as here, the term is in 

abrogation of statutorily expressed public policy, the parties do not expressly agree to be 

bound by future amendments, neither party has any control over subsequent amendments, 

and there is no ascertainable standard for the promulgation of amendments or new rules.”); 

Gilbert St. Developers, LLC v. La Quinta Homes, LLC, 174 Cal. App. 4th 1185, 1194, 94 

Cal. Rptr. 3d 918, 924 (2009) (Same. “Incorporating the possibility of a future rule by 

reference simply doesn’t even meet the basic requirements for a valid incorporation by 

reference under simple state contract law. . . . A rule that does not exist at the time of 

incorporation by reference fails the elementary test of being known or easily available at 

the time of incorporation.”).

Likewise, parties cannot agree today to make a future contract, unless the 

parties have assented to all the material terms of the future contract.

[U]nless an agreement to make a future contract is definite and 

certain upon all the subjects to be embraced, it is nugatory.

To be enforceable, a contract to enter into a future contract 

must specify all its material and essential terms and leave none 

to be agreed upon as the result of future negotiations. Where a 

final contract fails to express some matter, as, for instance, a 

time of payment, the law may imply the intention of the parties; 

but where a preliminary contract leaves certain terms to be 

agreed upon for the purpose of a final contract, there can be no 

implication of what the parties will agree upon. If any essential 

term is left open to future consideration, there is no binding 

contract, and an agreement to reach an agreement imposes no 

obligation on the parties thereto.

Gulf Coast Hospice LLC v. LHC Grp. Inc., 273 So. 3d 721, 735 (Miss. 2019).
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incorporate into the contract terms from another document that already exists. Parties

cannot agree to the opposite: they generally cannot insist that a term in a present contract 

automatically incorporate itself into a new, future agreement that does not exist. One 

cannot assent to something that does not exist. Incorporation by reference pulls existing 

material into the new, incorporating contract; it does not push material terms into nonexistent, as-yet-unassented-to future contracts.

The petitioners are arguing to subvert this basic rule of contract law and are 

essentially making an argument for “reverse incorporation.” Let me explain, in the context 

of the sparse record from the circuit court.

Freddie and Shelby Reynolds signed a “retail installment sales contract”

(“RISC”) with Crossroads Chevrolet to buy a pickup truck. The RISC contained a zipper 

clause2 which plainly says that the RISC “contains the entire agreement between” 

Crossroads and the Reynoldses. The clause says that the RISC is the complete and final 

agreement, and it says the terms of the RISC supersede any other understandings or oral 

2 A “zipper clause” is defined as a “contractual provision that operates as 

both an integration clause and as a no-oral-modification clause.” Black’s Law Dictionary

1855 (10th Ed. 2009). See Pace v. Honolulu Disposal Serv., Inc., 227 F.3d 1150, 1159 (9th

Cir. 2000) (“Notable in this case is the inclusion of a ‘zipper clause’ . . . so called because 

the combination of the integration and no-oral-modification clauses is intended to foreclose 

claims of any representations outside the written contract aside from those made in another 

written document executed by the parties.”). Synonymously, an “integration clause” is a 

“contractual provision stating that the contract represents the parties’ complete and final 

agreement and supersedes all informal understandings and oral agreements relating to the 

subject matter of the contract.” Black’s Law Dictionary at 929. Other synonyms include 

“merger clause” and an “entire-agreement” or “entire-contract” clause.
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agreements regarding the Reynoldses’ decision to buy a pickup truck from Crossroads. 

There is no agreement to arbitrate anywhere in the RISC. TD Auto Finance is nowhere 

mentioned in the terms of the RISC. Moreover, there is no language suggesting, in any 

way, that the RISC incorporates by reference some pre-existing document.

Put simply and logically, neither the Reynoldses nor Crossroads Chevrolet 

assented to arbitrate disputes regarding the RISC. 

Without any input by, or apparently any knowledge to, the Reynoldses, 

Crossroads Chevrolet assigned the RISC to TD Auto Finance. TD Auto Finance now 

claims that Mr. and Mrs. Reynolds have defaulted on the RISC, have forfeited the pickup 

truck purchased in the RISC, and that the Reynoldses owe additional damages under the 

terms of the RISC. TD Auto Finance has persistently, and possibly in violation of West 

Virginia’s credit protection laws, been pursuing repayment of monies due under the RISC.

Despite having built their entire substantive case on the RISC, TD Auto 

Finance focuses this appeal on a wholly separate, preexisting document: the credit 

application. The credit application in this case is a form prepared by “RouteOne” (and we 

know this because at the top of each page, in bold text, is the heading “RouteOne®.”). 

RouteOne bills itself as a company that “provides automobile financing system solutions, 

which include credit applications . . . to provide a single portal to accommodate the entire 
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credit application process for [automobile] dealers and finance sources.”3

 An auto dealer 

like Crossroads Chevrolet can use a RouteOne credit application, and the RouteOne 

computer system, to access “a network of 1,500+ finance sources” to help customers 

finance their vehicle purchases.4

At some point – we don’t know when because there is no record – Mr. and 

Mrs. Reynolds signed a credit application permitting Crossroads Chevrolet to do a credit 

check through RouteOne. The first six substantive paragraphs of the application are written 

in terms of the Reynoldses “authorizing” a credit check. The first six paragraphs identify 

two parties: “I” and “You.” “I” is obviously Mr. and Mrs. Reynolds, as in “I authorize.” 

3 “RouteOne Overview,” https://www.routeone.com/about-us/media-room

(last accessed March 26, 2020). RouteOne represents that it was “created in 2002 by Ally 

Financial, Ford Motor Credit, TD Auto Finance, and Toyota Financial Services to offer 

automotive dealerships an alternative to existing systems.” Id.

4 “Credit Application System,” https://www.routeone.com/dealers/creditapplication (last accessed March 26, 2020). At another point on its internet web site, 

RouteOne claims to have an even larger number of finance sources, saying: “The RouteOne 

system streamlines the credit application process with a single point of entry, providing 

you [auto dealers] access to a network of 1,700+ finance sources, and 200+ Dealership 

Service Providers.” https://www.routeone.com/dealers/products-and-services (last 

accessed March 26, 2020). We note, however, that elsewhere on its site RouteOne 

identifies only 89 “eContracting Finance Sources.” “RouteOne Finance Sources,” 

https://www.routeone.com/financesources (last accessed March 26, 2020). Whatever the 

number, RouteOne represents that its credit application system was designed by dealers for 

dealers, and that “[w]ith RouteOne’s credit application platform, [auto dealers will] get 

access to a large network of finance sources to give you and your customers a wide range 

of vehicle financing options.” https://www.routeone.com/dealers/credit-application.
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The term “You” is defined in the application as the “dealer and any finance company, bank 

or other financial institution to which the Dealer submits my application[.]”

Any reasonable, prudent reading of the first six paragraphs would have lead 

the Reynoldses to think they were allowing Crossroads Chevrolet and whatever “finance 

company, bank or other financial institution” to which Crossroads Chevrolet submitted the 

application to search their credit.

TD Auto Finance bases its whole theory on the seventh paragraph, buried at 

the bottom of page 3, which explicitly says it “applies to applications submitted to TD 

AUTO Finance LLC Only[.]” Remember, RouteOne’s webpage says it has credit 

arrangements with over a thousand finance companies, banks, and institutions. There is 

nothing in the record saying Mr. or Mrs. Reynolds knew that Crossroads Chevrolet was 

submitting their credit application to TD Auto Finance, so it takes a leap of legal faith to 

say the Reynoldses “assented” to anything in the seventh paragraph.

Still, that seventh paragraph says that if Crossroads Chevrolet submits the 

application to TD Auto Finance, then an arbitration agreement exists between “YOU AND 

TD AUTO FINANCE LLC.” The arbitration language does not apply to any other 

financier, only TD Auto Finance. However, it bears noting that, in this paragraph, the 

drafter of the RouteOne credit application has changed the meaning of “You.” In the prior 

six paragraphs, “You” meant the dealership and the “finance company, bank or other 
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financial institution.” In paragraph seven, “you” suddenly has to be interpreted as Mr. and 

Mrs. Reynolds.

Basic rules of English and clarity of meaning aside, and despite the fact that

the credit application is missing an entire page, counsel for Mr. and Mrs. Reynolds 

concedes that an arbitration agreement exists between the Reynoldses and TD Auto 

Finance, at least regarding the credit application.5

The problem in this case is that TD Auto Finance wants to contort the 

arbitration clause to apply beyond the credit application – namely, it wants the Court to 

incorporate the clause into the agreement reached later (the RISC). To support this stretch, 

TD Auto Finance makes its plea for the Court to create a “reverse incorporation” rule. 

Buried on page six of the credit application is language claiming to extend the credit 

application’s arbitration agreement to “any installment sale contract . . . or any resulting 

transaction or relationship[.]” In other words, TD Auto Finance claims that when the 

Reynoldses signed the credit application, they were assenting to incorporate some of the 

terms of the application into a future contract that may, or may not, ever exist. As the 

5 I have read the arbitration language relied upon by TD Auto Finance and 

find it to be somewhat garbled, at least when read by someone who isn’t a lawyer. As it is 

written, the language requires the arbitration of “any claim or dispute . . . between our

employees, parents, subsidiaries, affiliate companies, agents, successors or assignees[.]” 

Non-lawyers would read that language as requiring arbitration of any dispute between TD 

Auto Finance and its own employees, parents, subsidiaries, etc. It is only when you realize 

that the document elsewhere defines “our” as including “the Applicant, Co-Applicant, . . . 

and Dealer, and TD Auto Finance” that lawyers can find the meaning relied upon by TD 

Auto Finance.
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majority opinion makes clear, that argument rubs completely against the grain of contract 

law.

Incorporation by reference is a one-way street, where a new contract pulls in 

existing documents that are unmistakably identified in the new contract so that the 

knowledge and assent of the parties to the incorporation of the documents is clear. Parties 

cannot draft a contract that injects terms into future, non-existent contracts. TD Auto 

Finance’s reverse-incorporation argument is especially offensive when you consider that 

the future contract at issue here has completely different parties. Remember, TD Auto 

Finance was not a party to the RISC; it only became a “party” when Crossroads Chevrolet 

assigned the RISC, sometime after Mr. and Mrs. Reynolds had assented to the terms of the 

RISC. In other words, TD Auto Financing is arguing that a few paragraphs of the 

application signed by the Reynoldses should be incorporated into the Reynoldses’ contract 

with Crossroads Chevrolet.

If arbitration of the RISC was a provision that was material and important to 

TD Auto Finance, then it should have refused to accept Crossroad Chevrolet’s assignment 

of the RISC that did not contain an arbitration provision. Alternatively, it could have 

insisted that Crossroads Chevrolet place an arbitration provision into its RISC form before 

Crossroads Chevrolet offered it to Mr. and Mrs. Reynolds. TD Auto Finance did none of 

these things.
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The arguments proffered by TD Auto Finance would, if adopted by this 

Court, have brought havoc to the law of contracts. In the business context, it is routine for 

companies to sign a series of contracts over many months or years. Under TD Auto 

Finance’s theory, one party could slip a term into an early contract that “self-incorporates” 

years later into a subsequent contract. Worse, those terms could be in conflict. I could 

foresee an early contract requiring arbitration of “this and any other” dispute, and a later 

contract giving the parties the right to seek a courtroom resolution of disputes. Which 

provision controls? As I said, TD Auto Finance’s position is contrary to the law of 

contracts and a recipe for chaos.

When Crossroads Chevrolet offered a pickup truck for sale according to the 

terms in the RISC, Crossroads Chevrolet’s offer did not contain an arbitration provision. 

When Mr. and Mrs. Reynolds accepted the offer, they did not assent to arbitrate any 

disputes with Crossroads Chevrolet. Accordingly, under basic, run-of-the-mill rules of 

contract interpretation, the Reynoldses are not bound to arbitrate their dispute with TD 

Auto Finance regarding the RISC.

I otherwise respectfully concur with the majority’s opinion.