Christian v. Sizemore

• Decision Date: 14 July 1989
• Docket Number: No. 18682,18682
• Parties: Willetta Dawn CHRISTIAN v. Rodney Lee SIZEMORE and Hester Sizemore.
• Court: West Virginia Supreme Court

Page 810

383 S.E.2d 810

181 W.Va. 628

Willetta Dawn CHRISTIAN v. Rodney Lee SIZEMORE and Hester Sizemore.

No. 18682.

Supreme Court of Appeals of

West Virginia.

July 14, 1989.

Syllabus by the Court

1. "The purpose of the words 'and leave [to amend] shall be freely given when justice so requires' in Rule 15(a) W.Va.R.Civ.P., is to secure an adjudication on the merits of the controversy as would be secured under identical factual situations in the absence of procedural impediments; therefore, motions to amend should always be granted under Rule 15 when: (1) the amendment permits the presentation of the merits of the action; (2) the adverse party is not prejudiced by the sudden assertion of the subject of the amendment; and (3) the adverse party can be given ample opportunity to meet the issue." Syllabus Point 3, Rosier v. Garron, Inc., 156 W.Va. 861, 199 S.E.2d 50 (1973).

2. The purpose of the Uniform Declaratory Judgments Act is set forth in W.Va.Code, 55-13-12: "This article is declared to be remedial; its purpose is to settle and to afford relief from uncertainty and insecurity with respect to rights, status and other legal relations; and is to be liberally construed and administered."

3. An injured plaintiff may bring a declaratory judgment action against the defendant's insurance carrier to determine if there is policy coverage before obtaining a judgment against the defendant in the personal injury action where the defendant's insurer has denied coverage.

4. A declaratory judgment claim with regard to the defendant's insurance coverage may be brought in the original personal injury suit rather than by way of a separate action.

Joseph A. Colosi, Welch, for Christian.

Kermit J. Moore, Bluefield, for Sizemore.

MILLER, Justice:

This appeal involves the question of whether a plaintiff in a personal injury action may amend the complaint to add a count for declaratory judgment against an insurance carrier to determine its liability under the defendant's insurance policy. We conclude that such an amendment is within the contemplation of Rule 15(a) of the West Virginia Rules of Civil Procedure and of the Uniform Declaratory Judgments Act, W.Va.Code, 55-13-1, et seq.

In December, 1986, the plaintiff, Willetta Dawn Christian, brought an action for damages in the Circuit Court of McDowell County against Rodney Lee Sizemore and Hester Sizemore for personal injuries she allegedly received in an automobile accident. The Sizemores' insurance carrier, Federal Kemper Insurance Company (Kemper), subsequently disclaimed liability for coverage on the ground that the Sizemores' insurance policy had lapsed.

In July, 1987, Kemper filed a declaratory judgment action against the Sizemores and the plaintiff in the United States District Court for the Southern District of West Virginia to determine the issue of insurance coverage. Neither of the Sizemores responded to the complaint. The plaintiff moved to dismiss Kemper's action and, in January, 1988, filed a motion in state court to amend her complaint to add a count for declaratory judgment against Kemper on the coverage issue.

A hearing on the plaintiff's motion to amend her complaint was conducted before the circuit court in February, 1988. The plaintiff argued that the coverage issue could be most expeditiously and fairly resolved in state court and agreed to bifurcated trials on the declaratory judgment and tort actions. Nonetheless, the circuit court, by order dated June 13, 1988, denied the plaintiff leave to amend her complaint to incorporate the declaratory judgment count. ¹ This appeal followed.

The principal issue on appeal is whether the trial court erred in refusing to allow the plaintiff to amend her complaint. The issue is controlled by Rule 15(a) of the West Virginia Rules of Civil Procedure, which provides, in part, that "leave shall be freely given when justice so requires." ²

In Syllabus Point 3 of Rosier v. Garron, Inc., 156 W.Va. 861, 199 S.E.2d 50 (1973), we stated:

"The purpose of the words 'and leave [to amend] shall be freely given when justice so requires' in Rule 15(a) W.Va.R.Civ.P., is to secure an adjudication on the merits of the controversy as would be secured under identical factual situations in the absence of procedural impediments; therefore, motions to amend should always be granted under Rule 15 when: (1) the amendment permits the presentation of the merits of the action; (2) the adverse party is not prejudiced by the sudden assertion of the subject of the amendment; and (3) the adverse party can be given ample opportunity to meet the issue."

A motion for leave to amend a complaint is addressed to the sound discretion of the trial court. Nellas v. Loucas, 156 W.Va. 77, 191 S.E.2d 160 (1972); Perdue v. S.J. Groves & Sons Co., 152 W.Va. 222, 161 S.E.2d 250 (1968).

The circuit court here denied the plaintiff's motion to amend her complaint in reliance on Davis v. Robertson, 175 W.Va. 364, 332 S.E.2d 819 (1985), where we held, in Syllabus Point 1: "An injured plaintiff may not join the defendant's insurance carrier in a suit for damages filed against the defendant arising from a motor vehicle accident, unless the insurance policy or a statute authorizes such direct action." In Davis, we concluded that the defendant's insurance carrier could not be held liable in damages to an injured plaintiff until a judgment had been obtained against the insured. In this connection, we cited Syllabus Point 1 of Broy v. Inland Mut. Ins. Co., 160 W.Va. 138, 233 S.E.2d 131 (1977):

" 'If an insured with coverage under a liability insurance policy does not pay the underlying judgment entered in a personal injury action, the injured plaintiff may institute a direct action against the insurance company to recover the amount of the judgment up to the limits of the policy.' " 175 W.Va. at 366, 332 S.E.2d at 821.

We recognized that such a rule was required to avoid the possibility of prejudice inherent in the unnecessary mention of insurance coverage at trial.

In this case, however, the plaintiff is not seeking to recover damages against the defendants' insurance carrier. Instead, she seeks a declaration that Kemper is required to provide insurance coverage to the defendants in the personal injury suit. This declaration is entirely ancillary to the personal injury suit for damages against the defendants.

The Uniform Declaratory Judgments Act authorizes courts of record to issue declarations of "rights, status and other legal relations whether or not further relief is or could be claimed." (Emphasis added). W.Va.Code, 55-13-1. ³ The purpose of the Act is set forth in W.Va.Code, 55-13-12: "This article is declared to be remedial; its purpose is to settle and to afford relief from uncertainty and insecurity with respect to rights, status and other legal relations; and is to be liberally construed and administered." See United Steelworkers of America v. Tri-State Greyhound Park, 178 W.Va. 729, 364 S.E.2d 257 (1987); Lorenze v. Church, 172 W.Va. 369, 305 S.E.2d 326 (1983); Shobe v. Latimer, 162 W.Va. 779, 253 S.E.2d 54 (1979); Robertson v. Hatcher, 148 W.Va. 239, 135 S.E.2d 675 (1964).

Standing to bring a declaratory judgment action is conferred by W.Va.Code, 55-13-2, on "[a]ny person interested under a deed, will, written contract, or other writings constituting a contract...." ⁴ This Court has recognized that an injured plaintiff who has obtained a judgment against a defendant vehicle owner or operator is entitled to maintain a declaratory judgment action against the defendant's insurance carrier to impose liability under the policy. Helvy v. Inland Mut. Ins. Co., 148 W.Va. 51, 132 S.E.2d 912 (1963).

In reliance on Bias v. Nationwide Mut. Ins. Co., 179 W.Va. 125, 365 S.E.2d 789 (1987), Torbett v. Wheeling Dollar Sav. & Trust Co., 173 W.Va. 210, 314 S.E.2d 166 (1983), and Anderson v. McDonald, 170 W.Va. 56, 289 S.E.2d 729 (1982), the plaintiff contends that we have also recognized the right to bring a declaratory judgment action in conjunction with an action for damages. We note, however, that although Bias is factually similar to this case, we did not have occasion there to discuss the procedural correctness of the joinder of the insurance companies. ⁵ In Torbett, we merely discussed the procedure by which a plaintiff in a declaratory judgment action could obtain further relief in the form of damages under Rule 57, W.Va.R.Civ.P. ⁶

The Anderson case is more relevant. There, the defendant asserted that the plaintiff in an action for personal injuries had executed and then repudiated a written release of her claim. In his counterclaim, the defendant sought specific performance of the release. The plaintiff moved to make the defendant's insurance carrier, which had allegedly negotiated the release, a party to the original suit in order to resolve the question of the validity of the release. We concluded in Syllabus Point 1 of Anderson:

"When a release of liability is obtained by the representative of an insurance company and in a negligence action against the insured, the insured pleads the release as an affirmative defense pursuant to W.Va.R.Civ.P. 8(c), and the plaintiff has moved to join the insurance company as a party to the action, the trial judge may join the insurance company as a party to the action pursuant to W.Va.R.Civ.P. 20."

The Supreme Court of Virginia addressed a related issue in Reisen v. Aetna Life & Casualty Co., 225 Va. 327, 302 S.E.2d 529 (1983), where the defendant's insurance carrier brought a declaratory judgment suit, contending that its policy did not cover the automobile accident in which the plaintiff had been injured. The plaintiff argued that declaratory judgment was premature because there had been no judgment against the insured. In dismissing this argument, the Virginia court quoted extensively from E. Borchard, Declaratory Judgments (2d ed. 1941):

"Some courts have erroneously assumed, 'contrary to...