Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Golden Eagle Resources, II, L.L.C. v. Willow Run Energy, L.L.C.

Supreme Court of Appeals of West Virginia

November 19, 2019

GOLDEN EAGLE RESOURCES, II, L.L.C., Defendant Below, Petitioner
v.
WILLOW RUN ENERGY, L.L.C., Plaintiff Below, Respondent

          Submitted: October 15, 2019

          Appeal 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

          M. Paul Marteney, Esq. Parkersburg, West Virginia Counsel for the Respondent

         SYLLABUS

         1. "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).

         2. "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).

         3. 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.

         4. When 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.

          5. 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.

         6. The 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.

          HUTCHISON, JUSTICE:

         In this 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.

         As we 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.

         I. Factual and Procedural Background

         This 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 interests.

         On 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.[1] 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.[2]

         After the parties signed the March 2015 contract, the parties agree that a dispute arose concerning defects in the title to the mineral interests.

         Willow 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.

         The 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."

         Willow 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.

         On 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.

         Defendant 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' contracts.

         In 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.[3]

         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 to arbitration.

         In an order dated March 28, 2018, the circuit court granted Willow Run's motion to amend its complaint to add the new defendants and claims.

         However, 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 ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.