Opinion ID: 4528740
Heading Depth: 2
Heading Rank: 2

Heading: The Appeal by the Defendants

Text: The defendants also appeal the circuit court’s September 15, 2018, order, and assert the existence of two errors in surplus language contained in the order. First, the defendants contend that the circuit court interpreted the record and made two different findings on the merits of plaintiff’s claims, and thereby invaded the province of the arbitrator. The circuit court found that “on the date of Mr. Bayles’ passing the sole beneficiary of the Portfolios Account was his wife, Plaintiff Debra K. Bayles.” The circuit court also found that “the ‘beneficiary confirmation letter’ dated September 24, 2012, DID NOTHING to modify or otherwise affect the designation of Plaintiff Debra K. Bayles as the sole beneficiary of the Portfolio Account or the assets therein.” The defendants ask this Court to reverse these findings by the circuit court and to order that the plaintiff’s claims be arbitrated pursuant to the terms of the arbitration agreements. Federal court cases make clear that the Federal Arbitration Act prohibits trial courts from delving into the merits of a dispute when examining the question of whether arbitration is required. As we said in TD Ameritrade: The law is well-settled “that, in deciding whether the parties have agreed to submit a particular grievance to arbitration, a court is not to rule on the potential merits of the underlying claims.” AT & T Technologies, Inc. v. Communications Workers, 475 U.S. 643, 649, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986). Discussing the general rule that courts are to decide the threshold issue of arbitrability (i.e. whether there is an enforceable agreement to arbitrate), the United States Supreme Court recognized the limited nature of that initial determination: “‘The courts, therefore, have no business weighing the merits of the grievance, considering whether 25 there is equity in a particular claim, or determining whether there is particular language in the written instrument which will support the claim.’” 475 U.S. at 650, 106 S.Ct. 1415 (quoting United Steelworkers v. American Mfg. Co., 363 U.S. 564, 568, 80 S.Ct. 1343, 4 L.Ed.2d 1403 (1960)). 225 W. Va. at 253-54, 692 S.E.2d at 296-97. In the instant case, once the defendants demanded arbitration pursuant to the agreements, the circuit court’s authority was limited to determining whether a valid, enforceable arbitration agreement existed between the parties, and whether the parties’ dispute was within the substantive scope of the agreement. The circuit court was proscribed from ruling on the potential merits of the plaintiff’s underlying claims. Accordingly, when the circuit court ruled that the plaintiff was the sole beneficiary of the portfolios account and made rulings regarding the impact of the September 2012 beneficiary letter sent to Mr. Bayles, the circuit court exceeded its authority. To the extent the circuit court’s order ruled on the factual merits of the plaintiff’s claims, the order must be reversed. The defendants also challenge a surplus statement by the circuit court in its order. The circuit court declared in its dismissal order: “What, if any, causes of action Plaintiff Debra K. Bayles[] has or may assert against Defendants relative to fraud or concealment following the passing of William N. Bayles are not the subject of this dismissal.” The defendants assert the plaintiff never alleged that the defendants committed fraud after the death of the decedent. We agree. 26 We have examined the plaintiff’s amended complaint and can find no allegation of fraud or concealment by the defendants that occurred after the March 26, 2013, death of Mr. Bayles. In doing so, we have construed the amended complaint in the light most favorable to the plaintiff and taken its allegations as true. See John W. Lodge Distrib. Co. v. Texaco, Inc., 161 W. Va. 603, 605, 245 S.E.2d 157, 158 (1978) (“For purposes of the motion to dismiss, the complaint is construed in the light most favorable to plaintiff, and its allegations are to be taken as true.”). Moreover, the allegations of fraud, concealment or misrepresentation in the complaint are intrinsically connected to the contracts signed by Mr. Bayles and are, therefore, subject to arbitration. Accordingly, to the extent the circuit court’s order professes to permit the plaintiff to pursue a cause of action that the plaintiff never alleged, the order was in error and the language has no effect.