Certegy Check Services v. Janice Fuller , 241 W. Va. 701 ( 2019 )

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.
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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
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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
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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.”
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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.
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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)?
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“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
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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.
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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
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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
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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
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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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