Court Opinion

ID: 816274
Source: CourtListenerOpinion
Date Created: 2013-01-29 20:00:11.922193+00
Date Added: 2024-06-11T12:38:53.126277
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                            No. 11-1215

DAN RYAN BUILDERS, INCORPORATED,

                Petitioner - Appellant,

           v.

NORMAN C. NELSON; ANGELIA NELSON,

                Respondents - Appellees.

Appeal from the United States District Court for the Northern
District of West Virginia, at Martinsburg. John Preston Bailey,
Chief District Judge. (3:10-cv-00076-JPB-JES)

Argued:   March 20, 2012                   Decided:   January 29, 2013

Before KEENAN and FLOYD, Circuit Judges, and Norman K. MOON,
Senior United States District Judge for the Western District of
Virginia, sitting by designation.

Vacated and remanded by unpublished per curiam opinion.

ARGUED: Susan Renee Snowden, MARTIN & SEIBERT, LC, Martinsburg,
West Virginia, for Appellant.      Lawrence M. Schultz, BURKE,
SCHULTZ, HARMAN & JENKINSON, Martinsburg, West Virginia, for
Appellees.   ON BRIEF: Paul B. Weiss, MARTIN & SEIBERT, LC,
Martinsburg, West Virginia, for Appellant.

Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

      The   procedural       and    factual    background      of    this   case   is

discussed in our prior published order, in which, pursuant to

the Uniform Certification of Questions of Law Act, W. Va. Code

§§ 51-1A-1 through 51-1A-13, this Court certified to the Supreme

Court of Appeals of West Virginia the following question:

      Does West Virginia law require that an arbitration
      provision, which appears as a single clause in a
      multi-clause contract, itself be supported by mutual
      consideration when the contract as a whole is
      supported by adequate consideration?

Dan Ryan Builders, Inc. v. Nelson, 682 F.3d 327, 327 (4th Cir.

2012).      The    West     Virginia      court    accepted    our    request      and

answered this question.            Dan Ryan Builders, Inc. v. Nelson, No.

12-0592, 2012 WL 5834590 (W. Va. Nov. 15, 2012).

      The West Virginia court recognized that litigants, such as

the plaintiffs in this case, often challenge the enforceability

of   arbitration     clauses       that   do   not    impose   equal    duties      to

arbitrate on both contracting parties.                   As the West Virginia

court    noted,      those        litigants       frequently      challenge     such

arbitration       clauses    on    the    ground     that   the     clauses   “lack

consideration” or “lack mutuality of obligation.”                      Id. at *6.

      In accord with the majority of courts that have addressed

the issue, the West Virginia court held that “West Virginia’s

law of contract formation only requires that a contract as a

whole be supported by adequate consideration.”                      Id. at *2, 6.

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Therefore,            “a    single      clause      within         a    multi-clause       contract,”

here,          the    arbitration            clause,      “does          not     require      separate

consideration.”                   Id.   at    *2.        In    view       of    the    West   Virginia

court’s holding, the district court’s contrary conclusion cannot

stand.

          In its answer to our certified question, the West Virginia

court further explained, however, that mutuality of obligation

or    a    lack       thereof        properly       may       be       considered      when   a   court

assesses whether a contract or term therein is unconscionable

under West Virginia law.                        Id. at *7.              The West Virginia court

was       careful          to     emphasize      that         any       such     review    concerning

unconscionability requires an inquiry that is case-specific, and

cannot be conducted in a manner targeting arbitration provisions

for disfavored treatment.                       Id. at *9.              Nevertheless, under West

Virginia’s unconscionability doctrine, a court “may decline to

enforce a contract clause-such as an arbitration provision-if

the obligations or rights created by the clause unfairly lack

mutuality.”            Id.

          In    the        present      case,    the      parties         disputed        whether    the

arbitration clause in this case was unconscionable under West

Virginia law.                The district court did not rule on that issue.

Because         the        issue     of      unconscionability              is    a    fact-specific

determination,               we    conclude      that         this      issue     is   appropriately

decided          in        the     first      instance             by     the     district        court.

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Accordingly, we vacate the judgment of the district court, and

remand for further proceedings consistent with this opinion and

the opinion of the West Virginia court.

                                           VACATED AND REMANDED

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