Court Opinion

ID: 4398286
Source: CourtListenerOpinion
Date Created: 2019-05-17 19:51:41.752901+00
Date Added: 2024-06-11T12:19:41.309434
License: Public Domain

IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA

                                January 2019 Term
                                 _______________
                                                                          FILED
                                                                        May 17, 2019
                                                                          released at 3:00 p.m.
                                   No. 17-0972                        EDYTHE NASH GAISER, CLERK
                                 _______________                      SUPREME COURT OF APPEALS
                                                                           OF WEST VIRGINIA

               CERTEGY CHECK SERVICES, INC. and
           COMPLETE PAYMENT RECOVERY SERVICES, INC.,
                    Petitioners Below, Petitioners

                                         v.

                              JANICE FULLER,
                         Respondent Below, Respondent

      ____________________________________________________________

                Appeal from the Circuit Court of Mercer County
                      The Honorable Mark Wills, Judge
                         Civil Action No. 17-C-147-MW

                       VACATED AND REMANDED
      ____________________________________________________________

                              Submitted: March 5, 2019
                                Filed: May 17, 2019

D. Kyle Deak, Esq.                            Steven R. Broadwater, Jr., Esq.
Troutman Sanders LLP                          Ralph C. Young, Esq.
Raleigh, North Carolina                       Christopher B. Frost, Esq.
John C. Lynch, Esq.                           Hamilton, Burgess, Young & Pollard,
Jonathan M. Kenney, Esq.                      PLLC
Troutman Sanders LLP                          Fayetteville, West Virginia
Virginia Beach, Virginia                      Counsel for the Respondent
Counsel for the Petitioners

JUSTICE ARMSTEAD delivered the Opinion of the Court.
                              SYLLABUS BY THE COURT

               1.     “An order denying a motion to compel arbitration is an interlocutory

ruling which is subject to immediate appeal under the collateral order doctrine.” Syl. Pt.

1, Credit Acceptance Corp. v. Front, 231 W. Va. 518, 745 S.E.2d 556 (2013).

               2.     When a circuit court denies a motion to compel arbitration, the circuit

court’s order must contain the requisite findings of fact and conclusions of law that form

the basis of its decision.

                                              i
Armstead, Justice:

              This is an interlocutory appeal of a circuit court’s order denying a motion to

compel arbitration. Based on the record before us, the arguments of the parties, and the

applicable law, we find that the circuit court’s order does not contain sufficient findings of

fact and conclusions of law for this Court to conduct a proper review. Therefore, we vacate

the circuit court’s order denying the motion to compel and remand this matter to the circuit

court for further proceedings, including the determination of whether any arbitration

agreement exists between the parties and, if an agreement exists, whether that agreement

is unconscionable.

                I. FACTUAL AND PROCEDURAL BACKGROUND

              Plaintiff, Janice Fuller, was in Las Vegas, Nevada, in January or February

2016. According to Ms. Fuller, she stayed at a hotel and paid for her stay with two

“convenience checks” drawn on her credit card account. She says that her credit card

company “processed the checks” and added them to her bill. She claims that she paid her

bill in full when she returned home.

              Defendant Complete Payment Recovery Systems, Inc. (“Complete

Payment”), is a debt collector and a subsidiary of Defendant Certegy Check Services, Inc.

(“Certegy”). Certegy is a risk management company. Together, they work with a third

(and apparently unrelated) company called Global Payments Gaming Services, Inc., that

operates a “VIP Preferred Program” for “gaming establishments” and their customers.

According to Certegy and Complete Payment, Ms. Fuller signed up for the program and

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used it to conduct “two check transactions” in January and February 2016, which they say

were “returned as unpaid.”

                Sometime afterward, Complete Payment attempted to collect this alleged

debt from Ms. Fuller. Ms. Fuller claims she protested the debt and demanded to be left

alone, but Certegy and Complete Payment persisted in their collection efforts.

                Ms. Fuller sued them in the Circuit Court of Mercer County. She claims that

the defendants invaded her privacy and violated the West Virginia Consumer Credit and

Protection Act, W.Va. Code §§ 46A-1-101 to -8-102 (2018). Certegy and Complete

Payment answered the Complaint and later moved to compel arbitration.

                Certegy and Complete Payment supported their motion to compel arbitration

with affidavits and exhibits. The exhibits include two “VIP Preferred™ Check Cashing

Enrollment Forms” (the “Enrollment Forms”). The Enrollment Forms appear to be

identical, apart from signatures and other handwritten notations. Both Enrollment Forms

contain an arbitration clause that says that “any dispute . . . shall be finally resolved by

arbitration[.]”1 What purports to be Ms. Fuller’s signature appears on the second page of

       1
           The entire arbitration clause states as follows:
                Any dispute arising out of or relating to the TOS [i.e., the
                “Terms of Service” stated in the Enrollment Form] or the
                Services, regarding Global Payments or its Service Providers
                or any affiliate thereof, shall be finally resolved by arbitration
                administered by the American Arbitration Association under
                its Commercial Arbitration Rules, and judgment upon the
                award rendered by the arbitrator may be entered in any court
                having jurisdiction. The arbitration will be conducted in the

                                                2
each enrollment form. An affidavit produced by Certegy and Complete Payment avers that

the attachments are bona fide copies and that Ms. Fuller signed the original Enrollment

Forms. According to the affidavit, the Enrollment Form “is presented to the customer as a

paper document, rather than in an electronic format.” “[T]he customer must review and

physically fill out and sign the document.” The affidavit asserts that “receiving and

signing” an Enrollment Form (which contains the arbitration clause) is an essential

condition of participation in the VIP Preferred Program.

              Ms. Fuller opposed the motion to compel arbitration and filed her own

affidavit. In her affidavit—and apparently in reference to the Enrollment Forms—she

states that she “was never presented with the documents[.]” She also appears to allege that

              English language in accordance with the United States
              Arbitration Act. There shall be one arbitrator, named in
              accordance with such rules. The arbitrator shall decide the
              dispute in accordance with the substantive law of the state of
              Florida. The award of the arbitrator shall be accompanied by
              a statement of the reasons upon which the award is based. Any
              arbitration arising out of the TOS or the Services shall proceed
              solely on an individual basis without the right for any claims
              to be arbitrated on a class action basis or on bases involving
              claims brought in a purported representative capacity on behalf
              of others. Claims may not be joined or consolidated unless
              agreed to in writing by all parties. No award or decision will
              have any preclusive effect as to issues or claims in any dispute
              with anyone who is not a named party to the arbitration.

       According to the Enrollment Forms, “[a]ll references to ‘Service Providers’ in these
TOS shall refer to Service Providers retained by Global [Payments] in its sole discretion to
perform some or all of the Services and may include, but not be limited to, Certegy Check
Services, Inc.”

                                             3
her signatures on the forms were applied electronically. She states, “[w]hen I cashed my

checks, I was told to electronically sign a card reader terminal. . . . My signature was

electronically placed upon the documents.”2 She goes on to claim that the signing process

was “rushed” and unfair. She asserts that she will “have to abandon [her] claim” if the

court enforces the terms of the alleged arbitration agreement.

              The circuit court held a brief hearing on the motion to compel arbitration.

The court heard arguments from counsel, but no witnesses testified.

              The circuit court entered an order on October 5, 2017, denying the motion to

compel arbitration. The circuit court’s order is unclear and contradictory in its rulings. On

the one hand, the order declares that “[t]here was no evidence presented that shows the

Plaintiff agreed to the terms of this contract.” On the other hand, the order reports that “the

contract has many sophisticated terms” and identifies several terms contained in the

Enrollment Forms, leading to the court’s apparent finding that the contract was

unconscionable. In sum, the circuit court’s order appears to have determined (despite the

parties’ offers of conflicting evidence) that no arbitration agreement was formed and to

have determined, simultaneously, that the arbitration agreement was unconscionable and

should not be enforced.

              Certegy and Complete Payment filed a timely appeal from the circuit court’s

October 5, 2017 order.

       2
         It would seem that, if she only signed electronically, she signed electronically at
least five separate times. No signatures appear to match.
                                             4
                              II. STANDARD OF REVIEW

               Certegy and Complete Payment appeal an interlocutory order denying their

motion to compel arbitration. “Typically, interlocutory orders are not subject to this

Court’s appellate jurisdiction.” Credit Acceptance Corp. v. Front, 231 W. Va. 518, 522,

745 S.E.2d 556, 560 (2013). Yet this matter is properly before us. “An order denying a

motion to compel arbitration is an interlocutory ruling which is subject to immediate appeal

under the collateral order doctrine.” Syl. Pt. 1, Credit Acceptance, 231 W. Va. 518, 745
S.E.2d 556.

               In these matters, we apply a de novo standard of review. See, e.g., Syl. Pt. 1,

W. Virginia CVS Pharmacy, LLC v. McDowell Pharmacy, Inc., 238 W. Va. 465, 796 S.E.2d
574 (2017) (“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.”); and Salem Int’l Univ.,

LLC v. Bates, 238 W. Va. 229, 233, 793 S.E.2d 879, 883 (2016) (applying a de novo

standard of review to a “motion to stay proceedings pending mandatory alternative dispute

resolution [i.e., binding arbitration]”).

                                       III. ANALYSIS

               Certegy and Complete Payment moved to compel arbitration under the

Federal Arbitration Act, 9 U.S.C. § 1 et seq. (2002) (“FAA”). Under the FAA, arbitration

agreements are “valid, irrevocable, and enforceable, save upon such grounds as exist at law

or in equity for the revocation of any contract.” 9 U.S.C. § 2 (1947). Accordingly, when

a party moves to compel arbitration, “the authority of the trial court is limited to

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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 (in part), State ex rel. TD

Ameritrade, Inc. v. Kaufman, 225 W. Va. 250, 692 S.E.2d 293 (2010).

              The parties confine their dispute to the first issue: “whether a valid arbitration

agreement exists between the parties[.]” Id. This question is one of state law. Brown ex

rel. Brown v. Genesis Healthcare Corp., 228 W. Va. 646, 673, 724 S.E.2d 250, 277 (2011),

overruled on other grounds by Marmet Health Care Ctr., Inc. v. Brown, 565 U.S. 530, 132
S. Ct. 1201, 182 L. Ed. 2d 42 (2012) (“Brown I”) (“State law governs the determination of

whether a party agreed to arbitrate a particular dispute.”); see also State ex rel. Clites v.

Clawges, 224 W. Va. 299, 305, 685 S.E.2d 693, 699 (2009) (“[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.” (emphasis in original)). “Nothing in the Federal Arbitration Act, 9

U.S.C. § 2, overrides normal rules of contract interpretation. Generally applicable contract

defenses—such as laches, estoppel, waiver, fraud, duress, or unconscionability—may be

applied to invalidate an arbitration agreement.” Syl. Pt. 9, Brown I, 228 W. Va. 646, 724
S.E.2d 250.

              The threshold issue—“whether a valid arbitration agreement exists”—is

really two intertwined issues. First, is there an agreement? Second, if there is an

agreement, is it valid (i.e., in the sense of being enforceable)?

                                              6
              “Arbitration is a matter of contract, and a party cannot be required to arbitrate

a dispute that it has not agreed to arbitrate.” State ex rel. U-Haul Co. of W. Virginia v.

Zakaib, 232 W. Va. 432, 439, 752 S.E.2d 586, 593 (2013). To determine whether an

arbitration agreement exists, we look to basic contract law. “The fundamentals of a legal

contract are competent parties, legal subject matter, valuable consideration and mutual

assent. There can be no contract if there is one of these essential elements upon which the

minds of the parties are not in agreement.” Syl. Pt. 5, Virginian Exp. Coal Co. v. Rowland

Land Co., 100 W. Va. 559, 131 S.E. 253 (1926); see also Atl. Credit & Fin. Special Fin.

Unit, LLC v. Stacy, No. 17-0615, 2018 WL 5310172, at *5 (W. Va. Oct. 26, 2018)

(memorandum decision) (quoting Virginian Export and stating that these fundamentals are

“well-established”).

              According to Ms. Fuller, the circuit court determined that there was no

arbitration agreement. She directs our attention to the circuit court’s statement that “[t]here

was no evidence presented that shows the Plaintiff agreed to the terms of this contract.”

She points to the circuit court’s express finding and conclusion “that there was no

agreement by the Plaintiff to arbitrate.”3

       3
        Ms. Fuller moved this Court to “dismiss this appeal for lack of controversy” based
on the same theory. She supported her motion with an additional quote from the order:
“‘This [contract] is certainly not a “bargained for exchange.”’” (The order actually says,
“This certainly is not . . . .”) We are uncertain that, with or without the insertion, this
sentence from the order actually supports her position. In context, the circuit court seems
to be addressing (alleged) procedural unconscionability. In any event, we denied the
motion to dismiss the appeal.
                                              7
              Certegy and Complete Payment reject this reading of the order. They refer

us to the order’s “structure and language” and, in particular, to the circuit court’s discussion

of unconscionability. To accept Ms. Fuller’s position, they say, would require this Court

to find that the circuit court order is composed of dicta. As they construe the circuit court’s

order, the circuit court “found [that] there was no enforceable arbitration agreement based

on its belief that the Arbitration Provision was unconscionable, not on any lack of

formation.”

              It is unclear what legal theory or facts the circuit court relied upon when

considering the motion to compel. “A circuit court speaks through its written orders,

which, as a rule, must contain the requisite findings of fact and conclusions of law to permit

meaningful appellate review.” State v. Allman, 234 W. Va. 435, 438, 765 S.E.2d 591, 594

(2014) (cleaned up). We have held that “a circuit court’s order dismissing a case ‘must set

out factual findings sufficient to permit meaningful appellate review. Findings of fact, by

necessity, include those facts which the circuit court finds relevant, determinative of the

issues and undisputed.’” Brown I, 228 W. Va. at 689, 724 S.E.2d at 293 (quoting Syl. Pt.

3 (in part), Fayette County National Bank v. Lilly, 199 W.Va. 349, 484 S.E.2d 232 (1997)).

              We have also held that, “[a] circuit court’s order denying summary judgment

on qualified immunity grounds on the basis of disputed issues of material fact must contain

sufficient detail to permit meaningful appellate review” and that the order must not only

“identify those material facts which are disputed by competent evidence” but also “provide

a description of the competing evidence or inferences therefrom giving rise to the dispute

                                               8
which preclude summary disposition.” Syl. Pt. 4, W. Virginia Dep’t of Health & Human

Res. v. Payne, 231 W. Va. 563, 746 S.E.2d 554 (2013).

              We believe that a similar rule should apply when a circuit court denies a

party’s motion to compel arbitration. We hold that when a circuit court denies a motion to

compel arbitration, the circuit court’s order must contain the requisite findings of fact and

conclusions of law that form the basis of its decision.

              In the case at bar, the parties presented competing versions of the facts by

way of affidavits, but the circuit court never clearly identified which of these facts it relied

upon and never resolved the disputes between the parties. We believe that, in order to

facilitate review, the circuit court necessarily had to resolve the disputed facts relevant to

resolution of the motion at hand. See Syl. Pt. 4, Payne, 231 W. Va. 563, 746 S.E.2d 554.

              We also note that the circuit court’s order never expressly says that the

alleged arbitration agreement is unconscionable, whether procedurally or substantively.

The circuit court provides an extensive summary of the law of unconscionability, and it

follows this summary with a series of statements about matters that might have a bearing

on whether the arbitration agreement is unconscionable. However, it does not apply the

law to the facts to reach a sound conclusion regarding unconscionability.

              The circuit court must apply the law to the facts to reach conclusions of law

that explain the court’s decision. It is not enough to provide an accurate summary of the

law. The court must identify the particular doctrines of the law that guide its thinking; then

it must connect these doctrines to the particular facts that warrant its decision. “Without

                                               9
factual or legal findings, this Court is greatly at sea without a chart or compass in making

a determination as to whether the circuit court’s decision was right or wrong.” Brown I,
228 W. Va. at 689, 724 S.E.2d at 293.

              We have said that “[t]he interpretation of a court’s order is a question of law,

which we review de novo” and that “we apply the same rules of construction [to an order]

as we use to construe other written instruments.” Syl. Pt. 6 (in part), State ex rel. State

Farm Mut. Auto. Ins. Co. v. Bedell, 228 W. Va. 252, 719 S.E.2d 722 (2011). We have

professed a duty to construe ambiguous orders before we apply them. Syl. Pt. 7, Bedell,

228 W. Va. 252, 719 S.E.2d 722. We think it is one thing for us to say what a particular

term means in the context of a reasonably clear order (see Bedell, 228 W. Va. at 268, 719

S.E.2d at 738 (construing “medical information”)) and something else for us to guess at a

circuit court’s reasoning or even its decision. That is not fair to the circuit court, which

may have had compelling reasons for its decision. It is certainly not fair to the parties.

Because the circuit court failed to provide sufficient findings of fact and conclusions of

law to support its holding, we must remand this case for the circuit court to make such

findings and conclusions.

                                    IV. CONCLUSION

              The circuit court has provided a detailed statement of the law relating to the

formation of a contract to compel arbitration and the circumstances in which such a contract

may be procedurally and substantively unconscionable. However, the court’s order does

not contain sufficient findings of fact and application of the law to those facts to allow this

                                              10
Court to conduct a reasonable review of the circuit court’s decision. Based on the

foregoing, the decision of the Circuit Court of Mercer County denying the motion to

compel arbitration is vacated, and we remand this matter to the circuit court for further

proceedings.

                                                             Vacated and remanded.

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