The Fourth Circuit recently vacated and remanded an order denying a motion to stay proceedings pending arbitration after concluding that the district court erroneously failed to consider evidence beyond the pleadings because the motion to stay was part of a motion to dismiss.

Brenda C. Noe sued City National Bank of West Virginia on behalf of a putative class of similarly situated plaintiffs claiming that the bank’s fee practices violated contractual provisions and the West Virginia Consumer Credit and Protection Act, among other things.

The bank filed a motion to dismiss and, in the alternative, moved to stay the action pending referral to arbitration. The district court found it possible that a subsequent agreement altered Noe’s original agreement with the bank such that an agreement to arbitrate was eliminated. The district court then “refused to consider the bank’s evidence calling that elimination into question because the court believed the question was unfit for resolution on a motion to dismiss.”

The bank appealed and the Fourth Circuit vacated and remanded. After determining that it had jurisdiction over the appeal (the circuit court concluded that the bank’s alternative request to stay the case pending arbitration “equated to a motion seeking enforcement of a purported arbitration agreement,” the denial of which conferred appellate jurisdiction), the court concluded “that the district court should have treated the bank’s motion as a motion to stay the litigation and compel arbitration” and that, had the district court done so, it could have considered the bank’s evidence and held a hearing to consider any unresolved questions of fact regarding arbitration.

The Fourth Circuit therefore vacated the district court’s decision denying the bank’s alternative motion to stay and remanded for a determination as to whether the case should be referred to arbitration and, if necessary, a hearing to resolve any related questions of material fact.

Brenda C. Noe v. City National Bank of West Virginia, No. 20-1230 (4h Cir. Sept. 17, 2020)