GOLDEN EAGLE RESOURCES, II, L.L.C., Defendant Below, Petitioner
WILLOW RUN ENERGY, L.L.C., Plaintiff Below, Respondent
Submitted: October 15, 2019
from the Circuit Court of Pleasants County The Honorable
Timothy Sweeney, Judge Civil Action No. 16-C-14
Manmeet Waila, pro hac vice Siltstone Capital, LLC Houston,
Texas Christopher Brumley, Esq. Richard R. Marsh, Esq.
Flaherty Sensabaugh Bonasso PLLC Charleston, West Virginia
Counsel for the Petitioner
Paul Marteney, Esq. Parkersburg, West Virginia Counsel for
"An order denying a motion to compel arbitration is an
interlocutory ruling which is subject to immediate appeal
under the collateral order doctrine." Syllabus Point 1,
Credit Acceptance Corp. v. Front, 231 W.Va. 518, 745
S.E.2d 556 (2013).
"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." Syllabus Point
1, W.Va. CVS Pharmacy, LLC v. McDowell Pharmacy,
Inc., 238 W.Va. 465, 796 S.E.2d 574 (2017).
Under the West Virginia Revised Uniform Arbitration Act, West
Virginia Code § 55-10-8(a) (2015), a written agreement
to submit to arbitration any controversy between the parties
to the agreement is valid, enforceable, and irrevocable,
unless the agreement is found to be invalid, unenforceable,
or revocable upon a ground that exists at law or in equity
for the revocation of any contract.
a trial court is required to rule upon a motion to compel or
stay arbitration, the West Virginia Revised Uniform
Arbitration Act, West Virginia Code § 55-10-8(b) (2015),
limits the authority of the trial court to determining
whether a litigant has established: (1) the existence of a
valid, enforceable agreement to arbitrate between the
parties; and (2) that the parties' controversy falls
within the substantive scope of that agreement to arbitrate.
Parties may agree to submit to arbitration questions
concerning clouds on the title to any estate, right, or
interest in real property, despite West Virginia Code §
51-2-2(d) (2017) vesting circuit courts with jurisdiction to
resolve those same questions.
West Virginia Revised Uniform Arbitration Act, West Virginia
Code § 55-10-8(a) (2015), requires that if a lawsuit
presents multiple claims, some subject to an arbitration
agreement and some not, the former claims must be sent to
arbitration - even if this will lead to piecemeal litigation.
A trial court may not issue a blanket refusal to compel
arbitration of some of a party's claims, merely because
the party has other claims that are not subject to the
arbitration agreement, or because other parties in the
lawsuit are not subject to the arbitration agreement.
appeal from the Circuit Court of Pleasants County, we address
a simple question: may individuals agree to arbitrate a
dispute regarding a cloud on the title to real estate? We
hold that they may.
discuss below, the circuit court decided otherwise and
refused to enforce an arbitration agreement. We reverse the
circuit court's decision and remand the case with
directions that the circuit court enforce the agreement to
arbitrate the parties' real estate dispute.
Factual and Procedural Background
case involves the conveyance of an interest in real estate,
specifically, ownership interests in minerals. Plaintiff
Willow Run Energy, L.L.C. ("Willow Run"), owned 1,
856.281 acres of mineral interests. In early 2015, defendant
Golden Eagle Resources, II, L.L.C. ("Golden
Eagle"), sought to buy a share of those mineral
March 17, 2015, Willow Run and Golden Eagle entered into an
eleven-page contract whereby Willow Run would convey 944.131
acres of mineral interests to Golden Eagle in exchange for
$3.9 million. Additionally, the parties' March 2015
contract contained an arbitration clause that required the
parties to refer any dispute about the parties'
performance of the contract to an arbitrator.
the parties signed the March 2015 contract, the parties agree
that a dispute arose concerning defects in the title to the
Run and Golden Eagle subsequently entered into a new,
two-page agreement, the agreement that is the subject of this
case. On July 24, 2015, the parties signed a "Letter
Agreement Bill of Sale," wherein Willow Run agreed to
convey to Golden Eagle 220.5 net acres of mineral rights. The
parties stated that their new agreement was "subject to
the terms and conditions" of their earlier, March 2015
contract. The parties concede that the July 2015 agreement
incorporates the arbitration clause agreed to by the parties
in the March 2015 contract.
July 2015 agreement contains a statement that "[t]here
is a cloud on [the] title" of Willow Run's mineral
estate and goes on to specify a payment formula to account
for that title defect. The contract provides that Golden
Eagle would eventually pay a total price of $537, 597.38 for
the 220.5 net acres of mineral interests. However, because of
the title defect, the parties agreed that Golden Eagle
"shall hold a reserve of $221, 363.62
('Reserve') . . . until the cloud on title . . . has
been cured, at which point, [Golden Eagle] will release the
Reserve to [Willow Run] less any costs required to cure said
cloud on title."
Run delivered a deed for the subject mineral interests, and
Golden Eagle promptly recorded the deed with the county
clerk. The record suggests that discussions continued between
Willow Run and Golden Eagle, but that the parties reached an
impasse regarding whether the cloud on the title to the
mineral interests had been cured. Golden Eagle insisted that
Willow Run was responsible for removing the cloud and had
failed to do so. Golden Eagle therefore refused to pay the
remaining $221, 363.62 due under the July 2015 agreement.
April 8, 2016, Willow Run filed a complaint against Golden
Eagle in the Circuit Court of Pleasants County. Willow Run
asserted three causes of action. First, it alleged that
Golden Eagle had breached the July 2015 agreement. Second, it
asserted that Golden Eagle was unjustly enriched because it
accepted the deed to the mineral interests, but failed to pay
the "agreed-upon price for the subject property."
Third, Willow Run asked the circuit court for a declaratory
judgment to determine whether a cloud still exists on the
title to the mineral interests at issue.
Golden Eagle promptly responded by filing a motion to dismiss
the complaint and to compel the parties to arbitrate. Golden
Eagle argued to the circuit court that the parties'
contracts contained an unambiguous arbitration provision that
specifically covers disputes regarding Golden Eagle's
performance under the July 2015 agreement. It therefore asked
the circuit court to dismiss Willow Run's complaint, and
to enter an order compelling Willow Run to arbitrate
according to the process spelled out in the parties'
January 2018, twenty-one months after filing suit, plaintiff
Willow Run moved to amend its complaint. Willow Run sought
permission to add several new defendants to the case,
defendants that might have been operating an oil and gas well
on Willow Run's property interests since the 1980s and
might have created a cloud on Willow Run's title. None of
these new defendants was a signatory to any contract between
Golden Eagle and Willow Run. Willow Run's proposed
amended complaint sought a declaratory judgment clarifying
that none of the new defendants had an ownership right to the
disputed mineral interests purchased by Golden
Eagle again promptly responded to Willow Run's motion.
Golden Eagle asked the circuit court to deny the motion to
amend the complaint. More importantly, Golden Eagle again
asked the circuit court to refer its dispute with Willow Run
order dated March 28, 2018, the circuit court granted Willow
Run's motion to amend its complaint to add the new
defendants and claims.
the circuit court refused Golden Eagle's motion to refer
Willow Run's claims against Golden Eagle to arbitration.
The circuit court found that "the arbitration clause
contained in the . . . [parties'] Agreement is
valid[.]" Nevertheless, the circuit court found the
claims against Golden Eagle fell outside the scope of the
arbitration clause for two reasons. First, West Virginia Code
§ 51-2-2(d) (2017) grants circuit courts jurisdiction
"to remove any cloud on the title to real property, or
any part of a cloud, or any estate, right or interest in the
real property[.]" Because of this statute, the circuit
court concluded that "[a]s a matter of public policy,
property rights are not subject to arbitration" and that
"the actual dispute relates back to an issue over which
no arbitrator would have jurisdiction[.]" Second, the
circuit court found that the new defendants added by Willow
Run's amended complaint were necessary parties to the
full resolution of the dispute. However, those new defendants
were not a party to the ...