UNPUBLISHED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Vacated and remanded by unpublished per curiam opinion.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Unpublished opinions are not binding precedent in this circuit.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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