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HORIZON VENTURES of WEST VIRGINIA, INC., a WEST VIRGINIA CORPORATION, Plaintiff Below, Petitioner

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HORIZON VENTURES of WEST VIRGINIA, INC., a WEST VIRGINIA CORPORATION, Plaintiff Below, Petitioner IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA January 2021 Term FILED _____________ April 1, 2021 released at 3:00 p.m. No. 19-0171 EDYTHE NASH GAISER, CLERK SUPREME COURT OF APPEALS _____________ OF WEST VIRGINIA HORIZON VENTURES OF WEST VIRGINIA, INC., A WEST VIRGINIA CORPORATION, Plaintiff Below, Petitioner V. AMERICAN BITUMINOUS POWER PARTNERS, L.P., Defendant Below, Respondent ________________________________________________ Appeal from the Circuit Court of Marion County The Honorable Patrick N. Wilson, Judge Civil Action No. 18-C-76 REVERSED AND REMANDED ________________________________________________ Submitted: February 9, 2021 Filed: April 1, 2021 Mark A. Kepple John F. McCuskey Bailey & Wyant, PLLC Roberta F. Green Wheeling, West Virginia Shuman, McCuskey, & Slicer PLLC Attorney for the Petitioner Charleston, West Virginia Attorneys for the Respondent CHIEF JUSTICE JENKINS delivered the Opinion of the Court. JUSTICES HUTCHISON and WOOTON concur and reserve the right to file concurring opinions. SYLLABUS BY THE COURT 1. “A circuit court’s entry of summary judgment is reviewed de novo.” Syllabus point 1, Painter v. Peavy, 192 W. Va. 189, 451 S.E.2d 755 (1994). 2. “‘A motion for summary judgment should be granted only when it is clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not desirable to clarify the application of the law.’ Syllabus Point 3, Aetna Casualty & Surety Co. v. Federal Insurance Co. of New York, 148 W. Va. 160, 133 S.E.2d 770 (1963).” Syllabus point 1, Andrick v. Town of Buckhannon, 187 W. Va. 706, 421 S.E.2d 247 (1992). 3. “Summary judgment is appropriate if, from the totality of the evidence presented, the record could not lead a rational trier of fact to find for the nonmoving party, such as where the nonmoving party has failed to make a sufficient showing on an essential element of the case that it has the burden to prove.” Syllabus point 2, Williams v. Precision Coil, Inc., 194 W. Va. 52, 459 S.E.2d 329 (1995). 4. “If the moving party makes a properly supported motion for summary judgment and can show by affirmative evidence that there is no genuine issue of a material fact, the burden of production shifts to the nonmoving party who must either (1) rehabilitate the evidence attacked by the moving party, (2) produce additional evidence showing the existence of a genuine issue for trial, or (3) submit an affidavit explaining why further i discovery is necessary as provided in Rule 56(f) of the West Virginia Rules of Civil Procedure.” Syllabus point 3, Williams v. Precision Coil, Inc., 194 W. Va. 52, 459 S.E.2d 329 (1995). 5. “‘The doctrine of unconscionability means that, because of an overall and gross imbalance, one-sidedness or lop-sidedness in a contract, a court may be justified in refusing to enforce the contract as written. The concept of unconscionability must be applied in a flexible manner, taking into consideration all of the facts and circumstances of a particular case.’ Syllabus Point 12, Brown v. Genesis Healthcare Corp., 228 W. Va. 646, 724 S.E.2d 250 (2011).” Syllabus point 4, Brown v. Genesis Healthcare Corp., 229 W. Va. 382, 729 S.E.2d 217 (2012). 6. “‘A contract term is unenforceable if it is both procedurally and substantively unconscionable. However, both need not be present to the same degree. Courts should apply a “sliding scale” in making this determination: the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the clause is unenforceable, and vice versa.’ Syllabus Point 20, Brown v. Genesis Healthcare Corp., 228 W. Va. 646, 724 S.E.2d 250 (2011).” Syllabus point 9, Brown v. Genesis Healthcare Corp., 229 W. Va. 382, 729 S.E.2d 217 (2012). ii 7. “‘Procedural unconscionability is concerned with inequities, improprieties, or unfairness in the bargaining process and formation of the contract. Procedural unconscionability involves a variety of inadequacies that results in the lack of a real and voluntary meeting of the minds of the parties, considering all the circumstances surrounding the transaction. These inadequacies include, but are not limited to, the age, literacy, or lack of sophistication of a party; hidden or unduly complex contract terms; the adhesive nature of the contract; and the manner and setting in which the contract was formed, including whether each party had a reasonable opportunity to understand the terms of the contract.’ Syllabus Point 17, Brown v. Genesis Healthcare Corp., 228 W. Va. 646, 724 S.E.2d 250 (2011).” Syllabus point 10, Brown v. Genesis Healthcare Corp., 229 W. Va. 382, 729 S.E.2d 217 (2012). 8. “This State’s public policy favors freedom of contract which is the precept that a contract shall be enforced except when it violates a principle of even greater importance to the general public.” Syllabus point 3, Wellington Power Corp. v. CNA Surety Corp., 217 W. Va. 33, 614 S.E.2d 680 (2005). 9. “‘The judicial power to declare a contract void as contravening sound public policy “is a very delicate and undefined power,” and should be exercised only in cases free from doubt. Richmond v. [Dubuque and Sioux City] Railroad Co., 26 Iowa[] 191.’ Syllabus Point 1, Barnes v. Koontz, 112 W. Va. 48, 163 S.E. 719 (1932).” Syllabus iii point 4, Wellington Power Corp. v. CNA Surety Corp., 217 W. Va. 33, 614 S.E.2d 680 (2005). iv Jenkins, Chief Justice: On June 25, 1987, Petitioner Horizon Ventures of West Virginia (“Horizon”) and Respondent American Bituminous Power Partners (“AMBIT”) entered into a Contract and Agreement (“consulting agreement”) whereby Horizon was to “provide expertise and consulting services” to AMBIT in exchange for the annual sum of $50,000.00 “as long as [the AMBIT Grant Town Power Plant] continues to produce power.” The parties operated under this agreement from 1987 until 2018 when AMBIT refused to continue to pay Horizon. Upon this refusal to pay, Horizon instituted a breach of contract action against AMBIT. After a limited amount of discovery, in its order dated January 30, 2019, the circuit court granted AMBIT’s motion for summary judgment finding that the consulting agreement was substantively unconscionable and violative of public policy. On appeal, Horizon asserts that the circuit court erred by finding the consulting agreement to be unconscionable. AMBIT contends to the contrary that the circuit court correctly resolved the matter by finding the consulting agreement substantively unconscionable and granting it summary judgment. Upon careful consideration of the briefs and arguments of counsel, the record accompanying the appeal, the pertinent facts, and the relevant law, we find that the circuit court erred in finding the consulting agreement unconscionable without finding both procedural and substantive unconscionability. Accordingly, we reverse the summary judgment order and remand the case for further proceedings consistent with this opinion. 1 I. FACTUAL AND PROCEDURAL HISTORY The parties entered into a consulting agreement on June 25, 1987.1 The relevant portions of the consulting agreement are as follows. AMBIT was “engaged in a venture of establishing one or more electric power plants in the State of West Virginia[.]” The parties “negotiated an agreement wherein [Horizon] will provide expertise and consulting services within its field to [AMBIT] in its projects in West Virginia[.]” In particular, it was agreed that Horizon [w]ill perform from time to time upon the reasonable request of [AMBIT], such public and governmental relations and liaison functions as are necessary or incident to aiding and assisting [AMBIT] in locating, permitting, licensing, developing, maintaining[,] and operating power plants in the State of West Virginia and will further aid in such other ventures as locating coal “gob” and all like coal resources when the same may be needed by [AMBIT]. In exchange for these services, AMBIT agreed to pay an initial sum of $50,000.00 once AMBIT had completed the construction of its initial power plant, the Grant Town Power Plant in Grant Town, West Virginia. AMBIT agreed to pay the same $50,000.00 sum each succeeding year “as long as said power plant continue[d] to produce power.” The 1 Aside from this consulting agreement, in the 1980s Horizon and AMBIT entered into a separate landlord-tenant lease agreement wherein AMBIT operates the Grant Town Power Plant on a parcel of property owned by Horizon. See Am. Bituminous Power Partners, L.P. v. Horizon Ventures of W. Va., Inc., No. 14-0446, 2015 WL 2261649, at *1- 2 (W. Va. May 13, 2015) (memorandum decision). The lease agreement has been amended and restated on numerous occasions. Id. at *2. The terms of this agreement have no relevance to the matter presently before us. 2 consulting agreement “set[] forth the entire understanding and agreement between the parties. It may not be amended, terminated[,] or otherwise changed except by a writing signed by both parties.” Lastly, the consulting agreement was “binding on the parties [], their successors[,] and assigns.”2 The president of AMBIT, Richard J. Halloran (“Mr. Halloran”), signed the consulting agreement on behalf of AMBIT, and Horizon’s then- president, Andrew Noshagya, Jr. (“Mr. Noshagya”), signed it on behalf of Horizon.3 For approximately the next thirty years, the parties operated pursuant to the consulting agreement. However, by 2017, AMBIT asserts that the parties’ relationship had deteriorated and Horizon had filed various lawsuits against AMBIT.4 On December 26, 2017, Horizon sent AMBIT its annual invoice for the $50,000.00, pursuant to the consulting agreement, requesting that the money be paid no later than January 15, 2018.5 By letter dated January 27, 2018, AMBIT’s executive director responded to Horizon noting 2 The appendix record before us includes an unexecuted amendment to the consulting agreement.
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