FAMILY DOLLAR STORES OF WEST VIRGINIA, INC., Defendant Below, Petitioner,
RACHEL TOLLIVER, Plaintiff Below, Respondent.
County No. 16-C-12
an appeal by the Petitioner, Family Dollar Stores of West
Virginia, Inc., through counsel, Richard M. Wallace and J.
Todd Bergstrom, from an order of the Circuit Court of Wyoming
County that denied its motion to compel arbitration. The
Respondent, Rachel Tolliver, by counsel, David G. Thompson,
filed a response brief in support of the circuit court's
decision. The Petitioner filed a reply brief.
Court has considered the parties' briefs, the appendix
submitted, and the parties' oral arguments. Upon
consideration of the standard of review, the Court finds that
the circuit court erred in denying the Petitioner's
motion to compel arbitration. Accordingly, we reverse and
remand this case for entry of an order granting the
Petitioner's motion to compel arbitration. Insofar as
this case does not present a new or significant issue of law,
and for the reasons set forth herein, we find this case
satisfies the "limited circumstances" requirements
of Rule 21(d) of the West Virginia Rules of Appellate
Procedure and is proper for disposition as a memorandum
Respondent was hired by the Petitioner as a store manager on
or about December 9, 2014. It appears that the hiring process was
done exclusively over the internet. Part of the terms of
Respondent's employment included an agreement to
arbitrate disputes between the parties. The Respondent
apparently worked at Petitioner's stores in Oceana and
Pineville, West Virginia. On January 25, 2015, the store in
which the Respondent was working, in Oceana, was robbed by an
armed assailant. During the robbery the Respondent was forced
into a closet by the assailant. As a result of the robbery
the Respondent filed a claim for workers' compensation
benefits, due to apparent mental health issues that were
accompanied by physical symptoms. The Respondent's claim
was ruled compensable and she received workers'
compensation benefits. On March 22, 2015, the Petitioner
terminated the Respondent's employment.
to her termination, the Respondent filed a civil action
against the Petitioner on February 5, 2016. In the complaint,
the Respondent alleged that she was unlawfully terminated
because she filed a claim for worker's
compensation. The Petitioner filed a motion to dismiss
and to compel arbitration. In that motion, the Petitioner noted
that the arbitration agreement contained a "delegation
provision, " which required all disputes involving the
application of the arbitration agreement be resolved by an
arbitrator. The Respondent did not file a response to the
motion. A hearing was held on the motion on December 7, 2016.
During the hearing, the Petitioner again raised the issue of
the delegation provision. The circuit court entered an order on
January 10, 2017, denying the Petitioner's motion to
dismiss and compel arbitration. This appeal followed.
held that "[a]n 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). Further, "[w]hen an
appeal from an order denying a motion to dismiss and to
compel arbitration is properly before this Court, our review
is de novo." Syl. pt. 1, West Virginia CVS
Pharmacy, LLC v. McDowell Pharmacy, Inc., 238 W.Va. 465,
796 S.E.2d 574 (2017).
circuit court's order denied the Petitioner's motion
after determining that the arbitration agreement was a
contract of adhesion, it excluded coverage for a workers'
compensation retaliation claim, and on the grounds that the
cause of action set out under W.Va. Code § 23-5A-3
(1990) (Repl. Vol. 2017) "supercedes the private
arbitration agreement in this [case]." The Petitioner
argues that, as a result of the delegation provision
contained in the arbitration agreement, the circuit court
could not address defenses to the arbitration agreement
without first addressing the validity of the delegation
provision. Further, the Petitioner contends that under this
Court's decision in Schumacher Homes of Circleville,
Inc. v. Spencer, 237 W.Va. 379, 787 S.E.2d 650 (2016),
the case must be reversed because the circuit court's
order failed to address the delegation provision and as a
result of the Respondent's failure to specifically
address the delegation provision before the circuit court and
in his brief in this appeal. We agree.
defendant in Schumacher built a home for the
plaintiffs. The plaintiffs thereafter filed a civil action in
circuit court alleging defects in the construction of the
home. The defendant filed a motion to dismiss on the grounds
that an arbitration agreement existed between the parties,
and that a delegation provision in the agreement required all
issues involving the interpretation of the agreement be
resolved by an arbitrator. The plaintiffs failed to address
the delegation provision at the trial court level.
Ultimately, the trial court, without any discussion of the
delegation provision, found the arbitration agreement was
unconscionable. The defendant appealed and argued that the
delegation provision prohibited the trial court from
interpreting the application of the arbitration agreement.
The plaintiffs did not address the issue of the delegation
provision on appeal. This Court affirmed the trial court
decision after concluding that the delegation provision did
not reflect a clear and unmistakable intent by the parties to
have an arbitrator determine the validity, revocability, or
enforceability of the arbitration provision. Our decision was
vacated by the United States Supreme Court and the case was
remanded for us to reconsider the matter based upon the
decision in DIRECTV, Inc. v. Imburgia, U.S., 136
S.Ct. 463, 193 L.Ed.2d 365 (2015). On remand, this Court
reversed the trial court decision because the plaintiffs
failed to challenge, and the trial court failed to consider,
the enforceability of the delegation provision. The opinion
set out the following general definition of a delegation
A "delegation provision" is a clause, within an
agreement to arbitrate, which clearly and unmistakably
provides that the parties to the agreement give to the
arbitrator the power to decide the validity, revocability or
enforceability of the arbitration agreement under general
state contract law.
Syl. pt. 4, Schumacher.
Schumacher opinion next set out the following
principle of law regarding the application of a delegation
Under the Federal Arbitration Act, 9 U.S.C. § 2, and the
doctrine of severability, where a delegation provision in a
written arbitration agreement gives to an arbitrator the
authority to determine whether the arbitration agreement is
valid, irrevocable or enforceable under general principles of
state contract law, a trial court is precluded from deciding
a party's challenge to the arbitration agreement. When an
arbitration agreement contains a delegation provision, the
trial court must first consider a challenge, under general
principles of state law applicable to all contracts, that is
directed at the validity, revocability or enforceability of
the delegation provision itself.
Syl. pt. 5, Id. We applied the latter principle of
law to the facts of the case as follows:
Before both the circuit court and this Court, the plaintiffs
failed to sever the delegation language and dispute its
validity. Unless the plaintiffs challenged the delegation
language specifically, we must treat it as valid under the
FAA and must enforce it, leaving any challenge to the
validity of the arbitration agreement as a whole for the
arbitrator. The plaintiffs' arguments addressed the
validity of the arbitration agreement as a whole, but failed
to even mention the delegation language in their arguments to
the circuit court and this Court. On these procedural facts,
we find that the delegation language within the parties'
arbitration agreement is ...