Hensley v. West Virginia DHHR, 25020.

• Decision Date: 02 October 1998
• Docket Number: No. 25020.,25020.
• Citation: 508 S.E.2d 616,203 W.Va. 456
• Court: West Virginia Supreme Court
• Parties: Mary HENSLEY and Sue P. Hatcher, Petitioners Below, Appellees, v. WEST VIRGINIA DEPARTMENT OF HEALTH AND HUMAN RESOURCES and West Virginia Department of Administration/Division of Personnel, Respondents Below, Appellants.

508 S.E.2d 616

203 W.Va. 456

Mary HENSLEY and Sue P. Hatcher, Petitioners Below, Appellees, v. WEST VIRGINIA DEPARTMENT OF HEALTH AND HUMAN RESOURCES and West Virginia Department of Administration/Division of Personnel, Respondents Below, Appellants.

No. 25020.

Supreme Court of Appeals of West Virginia.

Submitted September 22, 1998

Decided October 2, 1998.

Darrell V. McGraw, Jr., Attorney General, Meredith A. Harron, Michelle T. Mensore, Assistant Attorneys General, Charleston, West Virginia, Attorneys for the Appellants.

Charles M. Hatcher, Jr., Huntington, West Virginia, Attorney for the Appellees.

DAVIS, Chief Justice:

The West Virginia Department of Health and Human Resources and the West Virginia Department of Administration/Division of Personnel (hereinafter collectively referred to as "the Departments"), respondents below and appellants herein, appeal from an order entered September 16, 1997, by the Circuit Court of Cabell County. In this ruling, the court determined that the petitioners below and appellees herein, Mary Hensley and Sue Hatcher, former employees of the Department of Health and Human Resources, were entitled to compound prejudgment interest at the rate of ten percent on their back pay awards resulting from the pay differential associated with their misclassified positions of employment. The Departments contest this decision and argue that the correct computation of prejudgment interest should be simple prejudgment interest at the rate of six percent for claims accruing prior to July 5, 1981, citing W. Va.Code § 47-6-5(a) (1974) (Repl.Vol.1996), and ten percent for claims accruing after that date, citing W. Va.Code § 56-6-31 (1981) (Repl.Vol.1997). After reviewing the parties' arguments, the record in this case, and the relevant authorities, we agree with the view espoused by the Departments. Accordingly, we affirm in part, and reverse in part, the order of the circuit court. Additionally, we remand this matter to the circuit court for further proceedings consistent with this decision.

I. FACTUAL AND PROCEDURAL HISTORY

This case arises from ongoing litigation, beginning in the mid-1980s, wherein certain employees of the West Virginia Division of Human Services,¹ upon learning that they had been misclassified in their employment positions,² sought back pay as restitution for the alleged violations of the legislative mandate, contained in W. Va.Code § 29-6-10(2) (1995) (Supp.1998),³ requiring the Civil Service Commission to provide "equal pay for equal work." See American Fed'n of State, County & Mun. Employees v. Civil Serv. Comm'n of West Virginia, 174 W.Va. 221, 324 S.E.2d 363 (1984)

(hereinafter AFSCME I); American Fed'n of State, County & Mun. Employees v. CSC of W. Va., 176 W.Va. 73, 341 S.E.2d 693 (1985) (per curiam) (hereinafter AFSCME II); American Fed'n of State, County & Mun. Employees v. Civil Serv. Comm'n of West Virginia, 181 W.Va. 8, 380 S.E.2d 43 (1989) (hereinafter AFSCME IV).⁴ While it is not clear from the record whether the particular former employees participating in this appeal, Mary Hensley and Sue Hatcher, were involved in the earlier litigation, it is not disputed that their claims similarly arose from discrepancies between the duties and salaries associated with the employment position titles in which they were employed and the duties that they actually performed, for which a properly classified employee would have received greater compensation.

With respect to this particular appeal, Hensley and Hatcher believed themselves to have been misclassified in their employment positions with the West Virginia Department of Health and Human Resources (hereinafter DHHR) and filed grievances seeking back pay commensurate with the sums they would have been paid had their positions been properly classified. In September, 1991, Level IV grievance decisions were issued declaring both former employees to have been misclassified and to be entitled to back pay and prejudgment interest "computed at the rate authorized by West Virginia statutory law."⁵ Although the Departments had a statutory right to appeal these adverse decisions,⁶ they did not seek circuit court review of the hearing examiner's rulings.

Having not received their awards of back pay and prejudgment interest, Hensley and Hatcher filed a petition for writ of mandamus in the Cabell County Circuit Court on July 8, 1992, seeking such remuneration. In their petition, they alleged that the Departments had paid other misclassified employees compound prejudgment interest at the annual rate of ten percent, and requested the court to compel the Departments to also pay them compound prejudgment interest, as opposed to simple prejudgment interest. The former employees argued that if the Departments did not pay them compound prejudgment interest, such a failure to do so would constitute an additional violation of the "equal pay for equal work" doctrine. The Departments answered and denied that Hensley and Hatcher were entitled to compound prejudgment interest. Although the Departments admitted having resolved the claims of a few⁷ of the other misclassified employees by paying them ten percent compound prejudgment interest, they indicated that such payments had been isolated and in error and that these miscalculations had not been perpetuated.

On August 10, 1993, the circuit court entered an agreed order wherein the Departments consented to

pay unto the Petitioners [Hensley and Hatcher] the amount of back pay, together with interest the Respondents [Departments] believe the Petitioners are owing through August 31, 1993, which payment does not prohibit or prejudice the Petitioners from raising all issues hereto deemed in controversy, including, but not limited to the calculation of back pay and interest thereon[.]

The parties indicate that, following the entry of this order, an informal, unrecorded hearing took place, on September 8, 1993, during which the circuit court allegedly ordered the Departments to pay Hensley and Hatcher compound prejudgment interest at the rate of ten percent on their awards of back pay. As is evidenced by the transcript of a subsequent hearing, the circuit court, on September 8, 1993, apparently also directed the attorney representing the former employees to facilitate the drafting and entry of the order memorializing this ruling. No further action was taken in this case until the parties appeared at a status conference on June 17, 1997.

Following this status hearing, the circuit court entered, on September 16, 1997, the order which is the subject of this appeal. Acknowledging that the Departments had paid Hensley and Hatcher the amounts of back pay occasioned by their misclassifications, the court proceeded to determine the rate and type of prejudgment interest the Departments would be required to pay on these back pay awards. The court ordered

[t]hat the calculation of the interest on the Petitioners' [Hensley's and Hatcher's] back pay award is to be at the rate of 10 percent compounded interest upon the grounds that pre-judgment interest, according to West Virginia Code 56-3-31 and the decisions of the West Virginia Supreme Court interpreting that Statute, is not a cost but a form of compensatory damages intended to make an injured party whole as far as loss of use of funds is concerned. As such, back pay is special damages, which was the loss of use of income for several years by the Petitioners and calculating their back pay award with simple interest does not make them whole. BUCKHANNON-UPSHUR CTY. AIRPORT [AUTH.] V. R & R COAL [CONTRACTING, INC., 186 W.Va. 583,] 413 S.E.2d 404 (W.V.1991).

From this order, the Departments appeal to this Court. We therefore commence to evaluate the legal sufficiency of the parties' arguments.

II. DISCUSSION

The primary issues controverted in this appeal concern the rate and type of prejudgment interest awarded to Hensley and Hatcher on their awards of back pay. Neither party disputes the propriety of an award of prejudgment interest under the facts and circumstances underlying this appeal. However, both the Departments and their former employees dispute the type of prejudgment interest that is appropriate in this case and the percentage rate at which such prejudgment interest should be calculated. Following a discussion of the applicable standard of review, we will address the Departments' assignments of error.

A. Standard of Review

Procedurally, this case is before us on appeal from the circuit court's rulings which effectively granted Hensley and Hatcher relief through the extraordinary writ of mandamus by facilitating the Departments' payment, and the former employees' receipt, of the back pay amounts awarded by the Level IV hearing examiner. "`"The standard of appellate review of a circuit court's order granting relief through the extraordinary writ of mandamus is de novo." Syllabus Point 1, Staten v. Dean, 195 W.Va. 57, 464 S.E.2d 576 (1995).' Syllabus point 1, O'Daniels v. City of Charleston, 200 W.Va. 711, 490 S.E.2d 800 (1997)." Syl. pt. 1, Ewing v. Board of Educ. of Summers County, 202 W.Va. 228, 503 S.E.2d 541 (1998). Thus, when reviewing a circuit court's decision to grant such relief, we look to the circumstances surrounding the writ of mandamus to determine if the facts before the court supported the award. In determining the propriety of mandamus relief, we ordinarily have held that

"`[a] writ of mandamus will not issue unless three elements coexist—(1) a clear legal right in the petitioner to the relief sought; (2) a legal duty on the part of respondent to do the thing which the petitioner seeks to compel; and (3) the absence of another adequate remedy.' Syllabus Point 1, State ex rel. Billy Ray C. v. Skaff, 190 W.Va. 504, 438 S.E.2d 847 (1993); Syllabus Point 2, State ex rel. Kucera v. City of Wheeling, 153 W.Va. 538, 170 S.E.2d 367 (1969)." Syllabus point 2, Staten v. Dean, 195 W.Va. 57, 464 S.E.2d 576 (1995).

Syl. pt. 2...