Dan's Car World, LLC v. Delaney, 20-0489

CourtSupreme Court of West Virginia
Writing for the CourtWALKER, JUSTICE
PartiesDAN'S CAR WORLD, LLC, A WEST VIRGINIA LIMITED LIABILITY COMPANYD/B/A/ DAN CAVA'S TOYOTA WORLD, Defendant Below, Petitioner v. CARESSA DELANEY Plaintiff Below, Respondent
Docket Number20-0489
Decision Date08 April 2022

DAN'S CAR WORLD, LLC, A WEST VIRGINIA LIMITED LIABILITY COMPANYD/B/A/ DAN CAVA'S TOYOTA WORLD, Defendant Below, Petitioner
v.

CARESSA DELANEY Plaintiff Below, Respondent

No. 20-0489

Supreme Court of Appeals of West Virginia

April 8, 2022


Submitted: January 5, 2022

Appeal from the Circuit Court of Monongalia County The Honorable Susan B. Tucker Case No. 18-C-75

Gregory H. Schillace, Esq.

Schillace Law Office

Clarksburg, West Virginia

Petitioner's Counsel

John N. Ellem, Esq.

Ellem Law Office, PLLC

Parkersburg, West Virginia

Jane E. Peak, Esq.

Allan N. Karlin & Associates PLLC

Morgantown, West Virginia

Respondent's Counsel

JUSTICE WALKER delivered the Opinion of the Court. JUSTICE ALAN D. MOATS, sitting by temporary assignment, not participating.

SYLLABUS BY THE COURT

1. "In reviewing challenges to findings and rulings made by a circuit court, we apply a two-pronged deferential standard of review. We review the rulings of the circuit court concerning a new trial and its conclusion as to the existence of reversible error under an abuse of discretion standard, and we review the circuit court's underlying factual findings under a clearly erroneous standard. Questions of law are subject to a de novo review." Syllabus Point 3, State v. Vance, 207 W.Va. 640, 535 S.E.2d 484 (2000).

2. "The appellate standard of review for an order granting or denying a renewed motion for a judgment as a matter of law after trial pursuant to Rule 50(b) of the West Virginia Rules of Civil Procedure [1998] is de novo." Syllabus Point 1, Fredeking v. Tyler, 224 W.Va. 1, 680 S.E.2d 16 (2009).

3. "In formulating the appropriate sanction, a court shall be guided by equitable principles. Initially, the court must identify the alleged wrongful conduct and determine if it warrants a sanction. The court must explain its reasons clearly on the record if it decides a sanction is appropriate. To determine what will constitute an appropriate sanction, the court may consider the seriousness of the conduct, the impact the conduct had in the case and in the administration of justice, any mitigating circumstances, and whether the conduct was an isolated occurrence or was a pattern of wrongdoing throughout the case." Syllabus Point 2, Bartles v. Hinkle, 196 W.Va. 381, 472 S.E.2d 827 (1996).

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4. "The imposition of sanctions by a circuit court under W.Va.R.Civ.P. 37(b) for the failure of a party to obey the court's order to provide or permit discovery is within the sound discretion of the court and will not be disturbed upon appeal unless there has been an abuse of that discretion." Syllabus Point 1, Bell v. Inland Mut. Ins. Co., 175 W.Va. 165, 332 S.E.2d 127 (1985).

5. "Where a party's counsel intentionally or with gross negligence fails to obey an order of a circuit court to provide or permit discovery, the full range of sanctions under W.Va. R. Civ. P. 37(b) is available to the court and the party represented by that counsel must bear the consequences of counsel's actions." Syllabus Point 4, Bell v. Inland Mut. Ins. Co., 175 W.Va. 165, 332 S.E.2d 127 (1985).

6. "There is authority in equity to award to the prevailing litigant his or her reasonable attorney's fees as 'costs,' without express statutory authorization, when the losing party has acted in bad faith, vexatiously, wantonly or for oppressive reasons." Syllabus Point 3, Sally-Mike Prop. v. Yokum, 179 W.Va. 48, 365 S.E.2d 246 (1986).

7. "Where attorney's fees are sought against a third party, the test of what should be considered a reasonable fee is determined not solely by the fee arrangement between the attorney and his client. The reasonableness of attorney's fees is generally based on broader factors such as: (1) the time and labor required; (2) the novelty and

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difficulty of the questions; (3) the skill requisite to perform the legal service properly; (4) the preclusion of other employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the undesirability of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases." Syllabus Point 4, Aetna v. Pitrolo, 176 W.Va. 190, 342 S.E.2d 156 (1986).

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WALKER, JUSTICE

After Respondent Caressa Delaney had trouble with the car she bought from Petitioner Dan's Car World (DCW), she sued DCW. During discovery, DCW's conduct included withholding requested documents, even after the circuit court ordered production of the documents and imposed monetary sanctions. When the requested documents finally appeared as an exhibit to DCW's motion for summary judgment, the circuit court denied the motion and sanctioned DCW a second time by striking its defenses. On appeal, DCW challenges not only the sanction, which resulted in a directed verdict at trial, but also the damages awarded by the jury and the circuit court's award of prejudgment interest and attorney fees.

We find that the circuit court acted within its discretion by issuing the sanction, approving the jury's verdict, and ordering DCW to pay attorney fees and costs. But we agree that the circuit court erred by applying prejudgment interest to the entire verdict, so we reverse that portion of the circuit court's order. On remand, we direct the circuit court to assess DCW with Ms. Delaney's attorney fees and costs in defending this appeal.

I. FACTUAL AND PROCEDURAL BACKGROUND

Ms. Delaney purchased a used 2012 Chevy Equinox from DCW in February 2017. She experienced numerous issues with the vehicle soon after. So, on February 20, 2018,

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Ms. Delaney sued DCW alleging breach of express warranty, breach of implied warranty, misrepresentation, breach of the Magnuson-Moss Warranty Act[1], violation of the West Virginia Consumer Credit Protection Act (WVCCPA)[2], revocation of acceptance, breach of the duty of good faith, and unconscionability. About a month after filing suit, Ms. Delaney served DCW with interrogatories and a request for production of documents. Importantly, Ms. Delaney's request for production sought, among other things, the following:

a complete copy of [DCW's] dealer file for [Ms Delaney's] vehicle, including but not limited to purchase agreements, finance agreements, advertisements, window stickers, disclosures, work orders, trade-in documents cancelled checks and credit information.

DCW never responded to the interrogatories or the request for production.

After Ms. Delaney unsuccessfully attempted to induce a response from DCW, she filed a motion to compel the discovery. DCW partially answered the interrogatories shortly before a hearing on Ms. Delaney's motion. Somewhat appeased, Ms. Delaney agreed to forgo the hearing in exchange for DCW's promise to fully answer

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the interrogatories and respond to the outstanding request for production. The circuit court entered an order reflecting the parties' agreement on September 12, 2018.

Despite the circuit court's order, DCW never supplemented its answers to the interrogatories or responded to the request for production. Consequently, Ms. Delaney filed a second motion to compel. DCW neither responded to the motion to compel nor appeared for the hearing on it. When DCW's counsel failed to appear, the circuit court telephoned his office and allowed him to participate by phone. DCW's counsel admitted that he violated the circuit court's prior order by not supplementing DCW's answers to the interrogatories or responding to the request for production. So, by order dated February 12, 2019, the circuit court required that DCW's counsel pay Ms. Delaney's counsel $1, 200 in attorney fees as a sanction.[3] The circuit court further warned that "[a]dditional discovery failures and/or similar conduct by defendant [DCW] or its counsel in the future may justify harsher sanctions by this [c]ourt, including those listed in Rule 37(b)."

After the sanction, DCW supplemented its answers to the interrogatories and responded to the request for production. Notably, DCW represented that it "previously produced" all documents related to the vehicle. Ms. Delaney found this and other responses inadequate and asked DCW to clarify its responses three times between March

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and May of 2019. She also sought DCW's cooperation to schedule the deposition of its managing member and controller. Again, DCW never responded to any of Ms. Delaney's communications. So, Ms. Delaney subpoenaed DCW's managing member and controller and "all service files, dealership files and any other records that maybe [sic] in [the controller's] possession for [Ms. Delaney's car]." DCW objected to the document subpoena and the deposition dates and venue. Ms. Delaney agreed to reschedule the subpoenaed depositions, but DCW never responded to her attempts to do so. So, Ms. Delaney subpoenaed the witnesses and documents again. When Ms. Delaney finally deposed the controller, DCW again objected to the document subpoena claiming "[w]e believe we've produced all copies of all of the documents with respect to the vehicle, which is the subject of this incident, and has previously been provided to [Ms. Delaney's counsel]." But during the controller's deposition, she testified that DCW possessed a dealer file for Ms. Delaney's car which contained subpoenaed documents and that DCW's counsel instructed her not to bring it.[4]

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On October 25, 2019, Ms. Delaney filed a motion to strike DCW's defenses as a sanction for its continued discovery misconduct. A week before that motion's scheduled hearing, DCW filed a motion for summary judgment and attached as an exhibit unproduced documents that the circuit court's discovery order required it to produce. At the hearing, Ms....

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