Copier Word Processing v. Wesbanco Bank
| Decision Date | 15 November 2006 |
| Docket Number | No. 33046.,33046. |
| Citation | 640 S.E.2d 102 |
| Court | West Virginia Supreme Court |
| Parties | COPIER WORD PROCESSING SUPPLY, INC., Plaintiff, v. WESBANCO BANK, INC., et al., Defendants. |
Dissenting Opinion of Justice Albright December 1, 2006.
1. "The appellate standard of review of questions of law answered and certified by a circuit court is de novo." Syllabus point 1, Gallapoo v. Wal-Mart Stores, Inc., 197 W.Va. 172, 475 S.E.2d 172 (1996).
2. "Where a tort involves a continuing or repeated injury, the cause of action accrues at and the statute of limitations begins to run from the date of the last injury or when the tortious overt acts or omissions cease." Syllabus point 11, Graham v. Beverage, 211 W.Va. 466, 566 S.E.2d 603 (2002).
3. The equitable tolling theory of continuing torts does not apply to the conversion of multiple, separate negotiable instruments.
4. In an action alleging conversion of multiple, separate negotiable instruments, and governed by the three-year limitations period set out in W. Va.Code § 46-3-118(g) (1993) (Repl.Vol.2001), the cause of action accrues and the limitations period begins to run from the date of the negotiation of each separate instrument.
James R. Leach, Victoria J. Sopranik, Jim Leach, L.C., Parkersburg, for the Plaintiff.
Robert W. Full, Goodwin & Goodwin, LLP, Parkersburg, James C. Gardill, J. Christopher Gardill, Phillips, Gardill, Kaiser & Altmeyer, PLLC, Wheeling, for the Defendants.
Sandra M. Murphy, Thomas A. Heywood, Julia A. Chincheck, Bowles Rice McDavid Graff & Love, Charleston, for Amici Curiae West Virginia Ass'n of Community Bankers, Inc., and West Virginia Bankers Ass'n.
This case presents certified questions relating to whether the continuing tort theory may be applied to toll the three-year statute of limitations set out in W. Va.Code § 46-3-118(g) (1993) (Repl.Vol.2001) in connection with a civil action for the conversion of multiple, separate negotiable instruments. We conclude that the continuing tort theory may not be so applied.
The facts pertinent to the resolution of the questions herein certified are undisputed. Copier Word Processing Supply, Inc. (hereinafter referred to as "Copier"), the plaintiff in this action, hired Doris Hendrickson in 1985. Ms. Hendrickson was eventually promoted to the position of office manager in 1994. In May of 2003, Copier discovered that Ms. Hendrickson had been embezzling its funds for a period of several years and discharged her from its employ. Based upon the discovery that has occurred in the proceedings below, Copier now believes that Ms. Hendrickson's embezzlement may have begun as early as 1991.
Ms. Hendrickson carried out her embezzlement of Copier's funds by depositing checks, which were received from Copier's vendors and were made payable to Copier, into personal accounts she held at WesBanco Bank, Inc. (hereinafter referred to as "WesBanco"), the defendant in this action. To embezzle the funds, Ms. Hendrickson would intercept checks that had been mailed to Copier by its vendors. She would then locate the corresponding invoices and "zero out" the invoices with a credit memo. Finally, she would sign the back of the check with an endorsement purported to be "CWS," meaning Copier Word Processing Supply, and "John Alkire: Pres., Doris Hendrickson, Treas.," and deposit the check into one of two personal checking accounts she maintained at WesBanco.1 Often she would receive some cash from the deposit transaction.2 Copier alleges that, over the years, Ms. Hendrickson repeated this process at least 721 times, embezzling approximately $472,000.00, and that no one at WesBanco at any time questioned her authority to deposit the corporate checks into her personal accounts.3
On October 6, 2003, Copier filed a civil action for conversion against Ms. Hendrickson, and for negligence and conversion against WesBanco.4 In November 2003, WesBanco filed its answer along with a cross-claim against Ms. Hendrickson. Ms. Hendrickson failed to file an answer; therefore, default judgment was entered against her on February 4, 2005.
Copier filed a motion for summary judgment against WesBanco in November 2004 asserting, in relevant part, that the acts of conversion at issue in this case amounted to a continuing tort such that the statute of limitations would not begin to run until the date of the last act of conversion. WesBanco subsequently filed a motion for judgment on the pleadings claiming that the three-year statute of limitations applicable to actions for conversion of negotiable instruments pursuant to W. Va.Code § 46-3-118(g) served to bar Copier's claims with respect to any negotiable instruments negotiated more than three years prior to the filing of the original complaint in this matter. On February 4, 2005, a hearing was held on all motions. Following the hearing, by order entered on February 28, 2005, the circuit court denied Copier's motion for summary judgment and granted WesBanco's motion for judgment on the pleadings. Accordingly, the circuit court awarded partial judgment in favor of WesBanco and dismissed with prejudice Copier's cause of action with respect to any of the negotiable instruments alleged to have been negotiated more than three years prior to the filing of Copier's original complaint on October 6, 2003.
Subsequently, on May 9, 2005, Copier filed a motion requesting that the circuit court certify to this Court questions clarifying whether the continuing tort theory applies to the limitations period provided in W. Va Code § 46-3-118(g). The circuit court granted Copier's motion and certified the following two questions to this Court:
In a case governed by the three year limitations period provided for in West Virginia Code 46-3-118(g):
(a) Does the continuing tort theory apply to the alleged conversion of multiple, separate negotiable instruments made payable to the plaintiff's business by an employee of plaintiff to her personal checking account at defendant bank over a period of several years, such that the cause of action accrues at, and the statute of limitations does not begin to run until, the date of the alleged conversion of the last negotiable instrument, permitting damage claims for instruments allegedly converted more than three years prior to the filing of the complaint, or
(b) Does the cause of action accrue and the limitations period run from the date of the negotiation of each separate instrument permitting damage claims only for such instruments allegedly converted within such three year period prior to the filing of the complaint?
The circuit court answered question (a) in the negative and answered question (b) in the affirmative. This Court accepted the certified questions for review by order entered March 2, 2006. Having considered the parties' appellate briefs, including the brief of amici curiae,5 the pertinent authorities, and the oral arguments presented, we now answer the certified questions in the same manner they were answered by the circuit court.6
"The appellate standard of review of questions of law answered and certified by a circuit court is de novo." Syl. pt. 1, Gallapoo v. Wal-Mart Stores, Inc., 197 W.Va. 172, 475 S.E.2d 172 (1996).
The issue at the heart of the questions certified in this case seeks to determine what portion of Copier's claims survive the applicable statute of limitations. The causes of action asserted by Copier are governed by the three year statute of limitations set out in W. Va.Code § 46-3-118(g), which states
Unless governed by other law regarding claims for indemnity or contribution, an action (I) for conversion of an instrument, for money had and received, or like action based on conversion, (ii) for breach of warranty or (iii) to enforce an obligation, duty, or right arising under this article and not governed by this section must be commenced within three years after the cause of action accrues.
Because many of the transactions between WesBanco and Ms. Hendrickson involving the fraudulently endorsed checks occurred more than three years before Copier filed its complaint in this case, Copier sought to extend the operation of the statute of limitations by asserting that WesBanco's conduct amounted to a continuing tort. We find three separate grounds for reaching our conclusion that the circuit court correctly rejected the continuing tort theory when answering the questions herein certified. First, the act of converting multiple, separate negotiable instruments does not fall within the meaning of a continuing tort as that theory has been previously applied in West Virginia; second, the statutory provision setting out the applicable statute of limitations clearly expresses a legislative intent that each act of conversion be treated separately for limitations purposes; and finally, application of a continuing tort theory would be contrary to the policy and purposes underlying the Uniform Commercial Code ().
We begin our analysis of this case by examining the continuing tort theory to ascertain whether it is amenable to application in the context of the conversion of a negotiable instrument. This Court formally adopted the continuing tort theory in Syllabus point 11 of Graham v. Beverage, which states:
Where a tort involves a continuing or repeated injury, the cause of action accrues at and the statute of limitations begins to run from the date of the last injury or when the tortious overt acts or omissions cease.
211 W.Va. 466, 566 S.E.2d 603 (2002). Thus, Graham instructs that in order to toll the statute of limitations under a continuing tort theory, there must be a "continuing or repeated injury." Id. To determine whether the conversion of...
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