Citibank, N.A. v. Perry, 797 S.E.2d 803

Citibank issued Mr. Perry a MasterCard governed by a Card Agreement that included an arbitration clause allowing either party to move to compel arbitration at any time before trial or final judgment and containing a "no waiver" clause.
Citibank filed a debt-collection suit in Boone County Circuit Court on September 20, 2010; Perry filed a pro se letter-answer conceding the debt on October 1, 2010.
Citibank moved for judgment on the pleadings in April 2011; the motion was never decided and the case remained largely inactive for ~3.5 years.
After Perry obtained counsel, the parties submitted an agreed scheduling order; Perry filed a putative class counterclaim (WVCCPA and related claims) on May 1, 2015 (more than four years after the original suit).
Citibank moved to compel arbitration and stay the action less than two months after Perry’s counterclaim; the circuit court denied the motion, finding Citibank had waived arbitration by litigating and delaying nearly five years.
The Supreme Court of Appeals reversed, concluding Citibank did not intentionally relinquish the arbitration right and remanded with instructions to compel arbitration and stay the case.

Issue	Citibank's Argument	Perry's Argument	Held
Whether Citibank waived its contractual right to arbitrate	Contract permits either party to seek arbitration anytime before trial or final judgment; the no-waiver clause preserves the right; federal policy favors arbitration	Citibank’s initiation of suit, litigation activity, agreed scheduling order, discovery conduct, and long delay caused waiver and prejudice	No waiver: Citibank did not intentionally relinquish the right; motion to compel arbitration must be granted
Whether prejudice is required to find waiver	Courts often require actual prejudice before inferring waiver; Citibank acted promptly after counterclaim	Perry contends he was prejudiced by delay and exchanged discovery responses	Court applied WV law: prejudice not required, but here Perry failed to prove waiver and alleged prejudice was insufficient
Whether the circuit court properly applied West Virginia law versus contract choice-of-law	Citibank argued choice-of-law clause required South Dakota/federal law; consistency between laws made issue harmless	Perry relied on WV waiver precedent	Issue not preserved below; WV and SD law were treated as consistent; no reversible error
Effect of a contractual "no waiver" clause on waiver analysis	Such clauses do not preclude waiver inquiry; ordinary waiver principles still apply	Perry argued actions overcame the clause	Court held no-waiver clause does not automatically bar finding of waiver but here there was no intent to relinquish right

Credit Acceptance Corp. v. Front, 231 W.Va. 518, 745 S.E.2d 556 (W.Va. 2013) (interlocutory denial of motion to compel arbitration reviewable de novo)
Parsons v. Halliburton Energy Servs., Inc., 237 W.Va. 138, 785 S.E.2d 844 (W.Va. 2016) (waiver requires intentional relinquishment; prejudice not required)
Johnson Assocs. Corp. v. HL Operating Corp., 680 F.3d 713 (6th Cir. 2012) (a contractual no-waiver clause does not foreclose a waiver finding under ordinary principles)
American Recovery Corp. v. Computerized Thermal Imaging, Inc., 96 F.3d 88 (4th Cir. 1996) (courts will not lightly infer waiver given strong federal policy favoring arbitration)
S & R Co. of Kingston v. Latona Trucking, Inc., 159 F.3d 80 (2d Cir. 1998) (permitting courts to find waiver despite no-waiver clauses to avoid tactical delay)
Ara v. Erie Ins. Co., 182 W.Va. 266, 387 S.E.2d 320 (W.Va. 1989) (waiver requires evidence of intentional relinquishment of a known right)