Justice Workman delivered the Opinion of the Court.
Workman, Justice :
The Appellant, Halliburton Energy Services, Inc. (Halliburton), appeals from an Order of the Circuit Court of Tyler County, West Virginia, entered October 29, 2008, dismissing its cross-claims for contractual indemnification and contribution against the Appellee Texas Keystone, Inc. (Texas Keystone), because Halliburton's indemnification claim was subject to arbitration. The circuit court subsequently entered a February 6, 2009, Supplemental Order holding: 1) that the original dismissal Order was intended to encompass Halliburton's cross-claim for both indemnification and contribution; 2) that Halliburton's implied indemnification and contribution claims against the Appellee Falcon Drilling Co., LLC (Falcon Drilling), were still pending; (See footnote 1) and 3) that its original dismissal Order was subject to appeal pursuant to the provisions of West Virginia Rule of Civil Procedure 54(b). On appeal, Halliburton argues the circuit court erred: 1) by misapplying the relevant legal standard for a Motion to Dismiss; 2) by dismissing its cross-claim for contractual indemnification against Texas Keystone when settled contract law requires that Halliburton is entitled to indemnification without arbitrating the issue: 3) by expanding the scope of the arbitration clause; 4) by ruling that Texas Keystone did not waive its right to assert the affirmative defense of arbitration when it failed to include the affirmative defense in its Motion to Dismiss Halliburton's cross-claim; and 5) by dismissing Halliburton's claim for contribution. Based upon a review of the record, the respective parties' briefs and arguments, as well as all other matters submitted before the Court, we reverse the decision of the circuit court and remand the case for further proceedings consistent with this decision.
C. RELEASE AND INDEMNITY Customer [(Texas Keystone)] agrees to RELEASE Halliburton Group from any and all liability for any and all damages whatsoever to property of any kind owned by, in the possession of, or leased by Customer and those persons and entities Customer has the ability to bind by contract or which are co-interest owners or joint venturers with Customer. Customer also agrees to DEFEND, INDEMNIFY AND HOLD Halliburton Group HARMLESS from and against any and all liability, claims, costs, expenses, attorney fees and damages whatsoever for personal injury, illness, death, property damages and loss resulting from: loss of well control, services to control a wild well, whether underground or above the surface, reservoir or underground damage, including loss of oil, gas, other mineral substances or water, surface damage arising from underground damage, damage to or loss of the well bore; subsurface trespass or any action in the nature thereof; fire; explosion; subsurface pressure; radioactivity; and pollution and contamination and its cleanup and control.
The work order further provided:
CUSTOMER'S RELEASE, DEFENSE, INDEMNITY AND HOLD HARMLESS obligations will apply even if the liability and claims are caused by the sole, concurrent, active or passive negligence, fault, or strict liability of one or more members of the Halliburton Group, the unseaworthiness of any vessel or any defect in the data, products, supplies, materials or equipment furnished by any member or members of the Halliburton Group whether in the design, manufacture, maintenance or marketing thereof or from a failure to warn of such defect. Halliburton Group is defined as Halliburton Energy Services, Inc., its parent, subsidiary and affiliated companies, insurers and subcontractors and all its/their officers, directors, employees, consultants and agents. . . .
The work order also contained the following provision regarding arbitration:
G. DISPUTE RESOLUTION - Customer and Halliburton agree that any dispute that may arise out of the performance of this Contract shall be resolved by binding arbitration by a panel of three arbitrators under the rules of the American Arbitration Association. The arbitration will take place in Houston, TX.
Rather than filing an Answer to the cross-claim asserted against it, Texas
Keystone filed a Motion to Dismiss Cross-Claim of Halliburton Energy Services, Inc. Texas
Keystone's position was that there was no enforceable work order or contract against it,
because an employee or agent of Texas Keystone did not sign the work order. Further, the issue of whether the indemnification provision was enforceable should be resolved by arbitration as set forth in the contract.
Conversely, Halliburton's contention was that the work order was enforceable and that the arbitration clause in the work order limits the issues to be arbitrated to those that arose out of the performance of the contract. Halliburton, therefore, argued that indemnification for damages from a wrongful death suit does not constitute an event that arose out of the performance of the contract.
In resolving Texas Keystone's Motion to Dismiss, the circuit court couched the issue before it as whether the construction and application of the work order should be decided by arbitration, rather than by the circuit court. In answering this question, the circuit court opined as follows:
[T]he Court feels the work order is valid. However, perhaps more discovery would be needed on this issue for the Court to decide that issue upon summary judgment. It may be the case that even after discovery is concluded, certain issues of fact remain for jury determination before the court could find as a matter of law that the work order constituted a binding agreement between Texas and Halliburton.
The circuit court further found
This Court has earlier herein opined that from the brief amount of discussion submitted by the parties surrounding the execution of the work order that both parties were bound. It doesn't appear to the Court that Falcon Drilling is a necessary party to an arbitration proceeding. The agent of Falcon Drilling who signed the work order is involved or will be involved in the arbitration, but only as a witness who may be called, or whose affidavit presented in an arbitration proceeding.
The circuit court then granted Texas Keystone's motion, dismissing Halliburton's cross- claim upon the basis that the indemnification claim was subject to arbitration.
II. Standard of Review
The Court reviews a circuit court's order granting a motion to dismiss a complaint under a de novo standard. Syl. Pt. 2, State ex rel. McGraw v. Scott Runyan Pontiac-Buick, Inc., 194 W. Va. 770, 461 S.E.2d 516 (1995); Richardson v. Kennedy, 197 W. Va. 326, 331, 475 S.E.2d 418, 423 (1996). Having established the applicable standard of review, the Court proceeds to consider the parties' arguments.
It is presumed that an arbitration provision in a written contract was bargained for and that arbitration was intended to be the exclusive means of resolving disputes arising under the contract; however, where a party alleges that the arbitration provision was unconscionable or was thrust upon him because he was unwary and taken advantage of, or that the contract was one of adhesion, (See footnote 3) the question of whether an arbitration provision was bargained for and valid is a matter of law for the court to determine by reference to the entire contract, the nature of the contracting parties, and the nature of the undertakings covered by the contract. Syllabus Point 3, Board of Education of the County of Berkeley v. W. Harley Miller, Inc., 160 W. Va. 473, 236 S.E.2d 439 (1977).
224 W. Va. at ___, 685 S.E.2d at 695, Syl. Pt. 3 (footnote added).
In the instant matter, given the equivocal determination by the circuit court on the issue of whether the work order was a valid, binding contract between Halliburton and Texas Keystone, the circuit court erroneously dismissed the action by determining that the contract was binding.
[a] contract providing a procedure for arbitration of disputes, and providing that: (1) all claims, disputes or other matters in question arising out of, or relating to the contract shall be decided by arbitration, unless the parties mutually agree otherwise; (2) the arbitration agreement shall be specifically enforceable under the prevailing arbitration law; (3) the arbitration award shall be final; and (4) the judgment may be entered upon the award in accordance with applicable law in any court having jurisdiction thereof-, creates a condition precedent to any right of action arising under the contract.
Id., Syl. Pt. 2.
This Court has never precisely addressed the issue of whether the arbitrator or the circuit court resolves the issue of whether a particular claim is arbitrable outside the context of the Federal Arbitration Act, 9 U.S.C. §§ 1-307 (2006). In this case, the circuit court ultimately found that the claim of indemnification was subject to arbitration; but, this determination was devoid of any discussion of the circuit court's resolution of this particular issue.
This Court has recently held in syllabus point two of State ex rel. TD Ameritrade, Inc., v. Kaufman, Slip. Op. No. 35125, 2010 WL 761229 ___ W. Va. ___, ___ S.E.2d ___ (W. Va. filed March 5, 2010), that under the Federal Arbitration Act, 9 U.S.C. §§ 1-307 (2006),
[w]hen a trial court is required to rule upon a motion to compel arbitration pursuant to the Federal Arbitration Act, 9 U.S.C. §§ 1-307 (2006), the authority of the trial court is limited to determining the threshold issues of (1) whether a valid arbitration agreement exists between the parties; and (2) whether the claims averred by the plaintiff fall within the substantive scope of that arbitration agreement.
___ W. Va. at ___, ___S.E.2d at ___, Syl. Pt. 2 (emphasis added). This holding is in accord with well-established federal law principles. See AT&T Techs., Inc. v. Commc'ns Workers of Am., 475 U.S. 643 (1986); A. T. Massey Coal Co., Inc. v. Int'l Union, United Mine Workers of Am.,799 F.2d 142, 146 (4th Cir. 1986), cert. denied, 481 U. S. 1033 (1987).
In an effort to bring uniformity to our arbitration law, the Court extends the application of the concepts set forth in our recent holding in Ameritrade to apply to all actions involving arbitration agreements. See Ameritrade, ___ W. Va. at ___, ___S.E.2d at ___, Syl. Pt. 2. To this end, the Court holds that when a circuit court is presented with the issue of whether an arbitration agreement is applicable, the court must determine the threshold issues of (1) whether a valid arbitration agreement exists between the parties; and (2) whether the claims averred fall within the substantive scope of that arbitration agreement.
In the instant case, given the circuit court's failure to definitively resolve the initial issue of whether a valid contract exists between Halliburton and Texas Keystone, the issue of the arbitrability of the indemnification claim is called into question. Thus, on remand, the circuit court must not only resolve the issue of whether the a valid contract exists between the parties, but also assuming, arguendo, that a valid contract is found to exist, the circuit must also determine the issue of whether Halliburton's claim for indemnification is subject to the arbitration provision of the contract.
It is an established principle that [i]n West Virginia one joint tort-feasor is entitled to contribution from another joint tort-feasor[.] Syllabus Point 3, Haynes v. City of Nitro, 161 W. Va. 230, 240 S.E.2d 544 (1977). See also, Syllabus Point 3, Sitzes v. Anchor Motor Freight, Inc., 169 W. Va. 698, 289 S.E.2d 679 (1982) (As between joint tortfeasors, a right of comparative contribution exists inter se based upon their relative degrees of primary fault or negligence.).
It is just as established, however, that a right to contribution can only be invoked by one of the joint tortfeasors in the litigation. 169 W. Va. at 713, 289 S.E.2d at 688 (emphasis added). When a tortfeasor elect[s] to remain in the case he . . . will be liable for contribution in favor of the other joint tortfeasor[.] Reager v. Anderson, 179 W. Va. 691, 704, 371 S.E.2d 619, 632 (1988). If a tortfeasor is not a part of the litigation-whether because of a settlement or because the tortfeasor was not sued-our law is clear that no contribution may be had from that tortfeasor. See Syllabus Point 6, Charleston Area Medical Center v. Parke-Davis, 217 W. Va. 15, 614 S.E.2d 15 (2005) ([A] tortfeasor who negotiates and consummates a settlement with an injured party on behalf of itself before any lawsuit is filed cannot subsequently bring an action seeking contribution from a tortfeasor who was not apprised of and not a party to the settlement negotiations and agreement.); Lombard Canada, Ltd. v. Johnson, 217 W. Va. 437, 618 S.E.2d 446 (2005) (same); Board of Educ. v. Zando, Martin & Milstead, Inc., 182 W. Va. at 603-04, 390 S.E.2d at 802-03 (The fundamental purpose of inchoate contribution is to enable all parties who have contributed to the plaintiff's injuries to be brought into one suit. Not only is judicial economy served, but such a procedure also furthers one of the primary goals of any system of justice-to avoid piecemeal litigation which cultivates a multiplicity of suits and often results in disparate and unjust verdicts.).
In the instant case, Farmers Mutual is no longer a tortfeasor that remains in the litigation. Accordingly, we believe that the circuit court's conclusion-that the claims of contribution between Farmers Mutual and Mr. Fike were extinguished by the good faith settlement with the plaintiff-was correct.
224 W. Va. at ___, 687 S.E.2d at 578.
Similarly, in the instant case, because of Halliburton's settlement with the Plaintiffs, it is no longer a tortfeasor that remains in the litigation. Thus, the claims for contribution between Halliburton, Texas Keystone and Falcon Drilling were extinguished when Halliburton entered its settlement with the Plaintiffs.
C. Whether Halliburton's claim for implied indemnification against Falcon Drilling still exists.
Finally, Falcon Drilling argues that Halliburton can no longer recover implied indemnity against it because Halliburton voluntarily settled with the Plaintiffs and cannot otherwise demonstrate that Halliburton is without fault. Halliburton responds by arguing that Falcon Drilling's argument is premature because Falcon Drilling is not a party to this appeal.
As a preliminary matter, when the Court allowed Falcon Drilling to file a brief and participate in oral argument, this Court determined that Halliburton's appeal necessarily impacts both Texas Keystone and Falcon Drilling. See Levine v. Headlee, 148 W. Va. 323, 334, 134 S.E.2d 892, 898 (1964)(quoting Syl. Pt. 1, Buskirk v. Musick, 100 W. Va. 247, 130 S. E. 435 (1925)(Where one party only appeals, but his rights and the rights of others are not only involved in the same question, but are equally affected by the decree or judgment, the appeal of the one will call for an adjudication also of the rights of those not appealing.). Thus, the Court will address the issue presented by Falcon Drilling.
As the Court held in syllabus point two of Harvest Capital v. West Virginia Department of Energy, 211 W. Va. 34, 560 S.E.2d 509 (2002):
The general principle of implied indemnity arises from equitable considerations. At the heart of the doctrine is the premise that the person seeking to assert implied indemnity-the indemnitee-has been required to pay damages caused by a third party-the indemnitor. In the typical case, the indemnitee is made liable to the injured party because of some positive duty created by statute or common law, but the actual cause of the injury was the act of the indemnitor. Syl. Pt. 2, Hill v. Joseph T. Ryerson & Son, Inc., 165 W. Va. 22, 268 S.E.2d 296 (1980).
Harvest Capital, 211 W. Va. at 36, 560 S.E.2d at 511, Syl. Pt. 2. Further,
[t]he requisite elements of an implied indemnity claim in West Virginia are a showing that: (1) an injury was sustained by a third party; (2) for which a putative indemnitee has become subject to liability because of a positive duty created by statute or common law, but whose independent actions did not contribute to the injury; and (3) for which a putative indemnitor should bear fault for causing because of the relationship the indemnitor and indemnitee share.
Id., 560 S.E.2d at 511, Syl. Pt. 4.
Additionally, in Hager v. Marshall, 202 W. Va. 577, 505 S.E.2d 640 (1998), this Court held in syllabus point seven that [i]n non-product liability multi-party civil actions, a good faith settlement between a plaintiff and a defendant will extinguish the right of a non-settling defendant to seek implied indemnity unless such non-settling defendant is without fault. Id. at 580-81, 505 S.E.2d at 643-44. In light of the fact that all the Defendants have entered into good faith settlements with the Plaintiffs and the Plaintiffs' claims against the Defendants have been dismissed, there is no judgment against any of the Defendants requiring any Defendant to pay damages to the Plaintiff. Further, no non-settling Defendant remains in the litigation. Consequently, there is no basis for any implied indemnification claim by Halliburton. Accordingly, Halliburton's claim for implied indemnification against Falcon Drilling has been extinguished.