Dunn v. Rockwell

• Decision Date: 24 November 2009
• Docket Number: No. 34716.,34716.
• Court: West Virginia Supreme Court
• Parties: Stanley W. DUNN, Jr., and Katherine B. Dunn, Plaintiffs Below, Appellants, v. Douglas S. ROCKWELL, Carol K. Rockwell, and Martin & Seibert, L.C., Defendants Below, Appellees.

689 S.E.2d 255

Stanley W. DUNN, Jr., and Katherine B. Dunn, Plaintiffs Below, Appellants, v. Douglas S. ROCKWELL, Carol K. Rockwell, and Martin & Seibert, L.C., Defendants Below, Appellees.

No. 34716.

Supreme Court of Appeals of West Virginia.

Submitted October 7, 2009.

Decided November 24, 2009.

[689 S.E.2d 258]

Syllabus by the Court

1. In order to clarify our law regarding the "discovery rule," Cart v. Marcum, 188 W.Va. 241, 423 S.E.2d 644 (1992) and its progeny are hereby overruled.

2. The "discovery rule" is generally applicable to all torts, unless there is a clear statutory prohibition to its application.

3. "In tort actions, unless there is a clear statutory prohibition to its application, under the discovery rule the statute of limitations begins to run when the plaintiff knows, or by the exercise of reasonable diligence, should know (1) that the plaintiff has been injured, (2) the identity of the entity who owed the plaintiff a duty to act with due care, and who may have engaged in conduct that breached that duty, and (3) that the conduct of that entity has a causal relation to the injury." Syllabus Point 4, Gaither v. City Hosp., Inc., 199 W.Va. 706, 487 S.E.2d 901 (1997).

4. Under the discovery rule set forth in Syllabus Point 4 of Gaither v. City Hosp., Inc., 199 W.Va. 706, 487 S.E.2d 901 (1997), whether a plaintiff "knows of" or "discovered" a cause of action is an objective test. The plaintiff is charged with knowledge of the factual, rather than the legal, basis for the action. This objective test focuses upon whether a reasonable prudent person would have known, or by the exercise of reasonable diligence should have known, of the elements of a possible cause of action.

5. A five-step analysis should be applied to determine whether a cause of action is time-barred. First, the court should identify the applicable statute of limitation for each cause of action. Second, the court (or, if questions of material fact exist, the jury) should identify when the requisite elements of the cause of action occurred. Third, the discovery rule should be applied to determine when the statute of limitation began to run by determining when the plaintiff knew, or by the exercise of reasonable diligence should have known, of the elements of a possible cause of action, as set forth in Syllabus Point 4 of Gaither v. City Hosp., Inc., 199 W.Va. 706, 487 S.E.2d 901 (1997). Fourth, if the plaintiff is not entitled to the benefit of the discovery rule, then determine whether the defendant fraudulently concealed facts that prevented the plaintiff from discovering or pursuing the cause of action. Whenever a plaintiff is able to show that the defendant fraudulently concealed facts which prevented the plaintiff from discovering or pursuing the potential cause of action, the statute of limitation is tolled. And fifth, the court or the jury should determine if the statute of limitation period was arrested by some other tolling doctrine. Only the first step is purely a question of law; the resolution of steps two through five will generally involve questions of material fact that will need to be resolved by the trier of fact.

6. "Statutes of limitations are not applicable in equity to subjects of exclusively equitable cognizance." Syllabus Point 3, in part, Felsenheld v. Bloch Bros. Tobacco Co., 119 W.Va. 167, 192 S.E. 545 (1937).

7. "Where a suit based on fraud is not for damages but seeks to rescind a writing or

[689 S.E.2d 259]

impose a trust or other equitable relief, it is not a common law action for fraud but is equitable in nature. Consequently, the doctrine of laches is applicable rather than any specific statute of limitations period." Syllabus Point 3, Laurie v. Thomas, 170 W.Va. 276, 294 S.E.2d 78 (1982).

8. A civil conspiracy is a combination of two or more persons by concerted action to accomplish an unlawful purpose or to accomplish some purpose, not in itself unlawful, by unlawful means. The cause of action is not created by the conspiracy but by the wrongful acts done by the defendants to the injury of the plaintiff.

9. A civil conspiracy is not a per se, stand-alone cause of action; it is instead a legal doctrine under which liability for a tort may be imposed on people who did not actually commit a tort themselves but who shared a common plan for its commission with the actual perpetrator(s).

10. The statute of limitation for a civil conspiracy claim is determined by the nature of the underlying conduct on which the claim for conspiracy is based.

11. "West Virginia adopts the continuous representation doctrine through which the statute of limitations in an attorney malpractice action is tolled until the professional relationship terminates with respect to the matter underlying the malpractice action." Syllabus Point 6, Smith v. Stacy, 198 W.Va. 498, 482 S.E.2d 115 (1996).

12. The doctrine of respondeat superior imposes liability on an employer for the tortious acts of its employees, not because the employer is at fault, but merely as a matter of public policy. Because the employer may only be held liable to the extent that the employee can be held liable, and only for acts committed by the employee in the course of his or her employment, the applicable statute of limitation is determined by the tortious act of the employee.

James A. Varner, Sr., Esq., Debra Tedeschi Herron, Esq., McNeer, Highland, McMunn and Varner, L.C., Clarksburg, WV and William Francis Xavier Becker, Esq., Rockville, MD, for Appellants.

Christopher K. Robertson, Esq., Wendy Glover Adkins, Esq., Jackson Kelly PLLC, Martinsburg, WV, Attorneys for Appellee, Martin & Seibert.

Robert D. Aitcheson, Esq., Charles Town, WV, Attorney for Appellee, Carol Rockwell.

Kathy M. Santa Barbara, Esq., Santa Barbara Law Office Martinsburg, WV and Gregory H. Schillace, Esq., Schillace Law Office, Clarksburg, WV, Attorneys for Appellee, Douglas Rockwell.

KETCHUM, Justice:

In this appeal from the Circuit Court of Jefferson County we are asked to review two orders granting summary judgment to two defendants below: the law firm of Martin & Seibert, and Carol Rockwell. In both orders, the circuit court concluded that the statutes of limitation for the various causes of action alleged against both of the defendants had expired, and ruled that all of the causes of action against the two defendants were time-barred.

As set forth below, we affirm the circuit court's summary judgment order dismissing the causes of action against Martin & Seibert. However, we conclude that questions of material fact exist for the finder of fact to resolve regarding whether the statutes of limitation on five of the causes of action alleged against Carol Rockwell had expired, and conclude that there is no statute of limitation applicable to two equitable causes of action alleged against Ms. Rockwell. We therefore reverse the circuit court's summary judgment order as to her.

I. Facts and Background

This case concerns an undeveloped 6.87 acre tract of land on the shore of the Shenandoah River in Jefferson County. The appellants and plaintiffs-below, Stanley and Katherine Dunn, had a written option to purchase approximately 460 acres of farmland which encompassed the 6.87 acre tract. However, the Dunns claim that the lawyer who drafted the written option — appellee and defendant-below Douglas S. Rockwell ("Lawyer Rockwell") — improperly purchased the 6.87 acre tract and concealed the extent of the purchase from the Dunns. The question we are asked to resolve is whether all or part of the Dunns' lawsuit — against Lawyer Rockwell's wife, appellee and defendant-below Carol Rockwell, and against Lawyer Rockwell's former law firm, appellee and defendant-below Martin & Seibert — regarding the 6.87 acre tract is barred by any statutes of limitation.

In 2001, Hugh N. Hoover and his sister, Dianna Hoover Gray, owned approximately 460 acres of contiguous farmland in Jefferson County which bordered the Shenandoah River. In December 2001, Carol Rockwell, received title from Mr. Hoover and Ms. Gray to a three-acre parcel of that farmland along the Shenandoah River.

In 2002, the Dunns began negotiating with Hugh Hoover to purchase the remaining Hoover/Gray farmland. Mr. Dunn could not yet afford to purchase the farmland, and so he hired his friend, Lawyer Rockwell, to draft an agreement giving the Dunns the exclusive option to purchase the farmland. At that time — and until March 2004 — Lawyer Rockwell was employed at the law firm of Martin & Seibert in Charles Town, West Virginia. Lawyer Rockwell drafted the option agreement and gave it to Mr. Dunn.

On June 27, 2002, Stanley Dunn and Hugh Hoover executed the option, which permitted the Dunns to buy "460 acres more or less by survey" of the Hoover/Gray farmland for $6,000.00 per acre. The property subject to the option surrounded the three-acre parcel bought by the Rockwells in 2001. The 2002 option agreement was set to expire 12 months from the date it was executed.

In November or December 2002, Lawyer Rockwell and his wife sought to buy additional land surrounding their three-acre parcel. Knowing that the land was subject to Mr. Dunn's June 27, 2002 option — the three-acre parcel was bordered on one side by the river and the other three sides by the Hoover/Gray farmland — Lawyer Rockwell orally asked Mr. Dunn if he could buy some of the optioned acreage from Mr. Hoover and Ms. Gray in order to "square up" or "round off" his three-acre parcel. Mr. Dunn agreed, and later told Hugh Hoover that this was acceptable.

In December 2002, a surveyor prepared a map of the acreage that Lawyer Rockwell and his wife sought to purchase out of the optioned property. The map designated a 6.87 acre tract that squarely surrounded the Rockwells' three-acre residential lot, but which also extended north in a panhandle or dogleg along the Shenandoah riverbank approximately 115 feet wide and 589 feet long. The Rockwells paid with two checks —...