Horkulic v. Galloway

• Decision Date: 19 February 2008
• Docket Number: No. 33352.,No. 33353.,33352.,33353.
• Citation: 665 S.E.2d 284,222 W. Va. 450
• Parties: Jeffrey A. HORKULIC, Rebecca A. Horkulic, His Wife, and Jeffrey Horkulic, as Natural Parent and Legal Guardian of Stephanie Horkulic and Benjamin Horkulic, Minors, Plaintiffs Below, Appellees v. William O. GALLOWAY, Galloway Law Offices, Cambridge Professional Liability Services, and Acordia of West Virginia, Inc., and John Does Unknown, Defendants Below, and TIG Insurance Company, Defendant Below, Appellant. TIG Insurance Company, Petitioner v. The Honorable Arthur M. Recht; William O. Galloway, Galloway Law Offices; Cambridge Professional Liability Services and John Does Unknown; Jeffrey A. Horkulic; Rebecca A. Horkulic, his Wife, and Jeffrey Horkulic, as Natural Parent and Legal Guardian of Stephanie Horkulic and Benjamin Horkulic, Minors, Respondents.
• Court: West Virginia Supreme Court

665 S.E.2d 284

222 W.Va. 450

Jeffrey A. HORKULIC, Rebecca A. Horkulic, His Wife, and Jeffrey Horkulic, as Natural Parent and Legal Guardian of Stephanie Horkulic and Benjamin Horkulic, Minors, Plaintiffs Below, Appellees v. William O. GALLOWAY, Galloway Law Offices, Cambridge Professional Liability Services, and Acordia of West Virginia, Inc., and John Does Unknown, Defendants Below, and TIG Insurance Company, Defendant Below, Appellant.

TIG Insurance Company, Petitioner v. The Honorable Arthur M. Recht; William O. Galloway, Galloway Law Offices; Cambridge Professional Liability Services and John Does Unknown; Jeffrey A. Horkulic; Rebecca A. Horkulic, his Wife, and Jeffrey Horkulic, as Natural Parent and Legal Guardian of Stephanie Horkulic and Benjamin Horkulic, Minors, Respondents.

No. 33352.

No. 33353.

Supreme Court of Appeals of West Virginia.

Submitted January 8, 2008.

Decided February 19, 2008.

Concurring Opinion of Justice Davis February 21, 2008.

Syllabus by the Court

1. "In reviewing challenges to the findings and conclusions of the circuit court, we apply a two-prong deferential standard of review. We review the final order and the ultimate disposition 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." Syl.Pt.2, Walker v. West Virginia Ethics Comm'n, 201 W.Va. 108, 492 S.E.2d 167 (1997).

2. "Prohibition lies only to restrain inferior courts from proceeding in causes over which they have no jurisdiction, or, in which, having jurisdiction, they are exceeding their legitimate powers and may not be used as a substitute for writ of error, appeal or certiorari." Syl. Pt. 1, Crawford v. Taylor, 138 W.Va. 207, 75 S.E.2d 370 (1953).

3. "In determining whether to entertain and issue the writ of prohibition for cases not involving an absence of jurisdiction but only where it is claimed that the lower tribunal exceeded its legitimate powers, this Court will examine five factors: (1) whether the party seeking the writ has no other adequate means, such as direct appeal, to obtain the desired relief; (2) whether the petitioner will be damaged or prejudiced in a way that is not correctable on appeal; (3) whether the lower tribunal's order is clearly erroneous as a matter of law; (4) whether the lower tribunal's order is an oft repeated error or manifests persistent disregard for either procedural or substantive law; and (5) whether the lower tribunal's order raises new and important problems or issues of law of first impression. These factors are general guidelines that serve as a useful starting point for determining whether a discretionary writ of prohibition should issue. Although all five factors need not be satisfied, it is clear that the third factor, the existence of clear error as a matter of law, should be given substantial weight." Syl. Pt. 4, State ex rel Hoover v. Berger, 199 W.Va. 12, 483 S.E.2d 12 (1996).

4. "The law favors and encourages the resolution of controversies by contracts of compromise and settlement rather than by litigation; and it is the policy of the law to uphold and enforce such contracts if they are fairly made and are not in contravention of some law or public policy." Syl. Pt. 1, Sanders v. Roselawn Meml. Gardens, Inc., 152 W.Va. 91, 159 S.E.2d 784 (1968).

5. "Collateral estoppel will bar a claim if four conditions are met: (1) The issue previously decided is identical to the one presented in the action in question; (2) there is a final adjudication on the merits of the prior action; (3) the party against whom the doctrine is invoked was a party or in privity with a party to a prior action; and (4) the party against whom the doctrine is raised had a full and fair opportunity to litigate the issue in the prior action." Syl. Pt. 1, State v. Miller, 194 W.Va. 3, 459 S.E.2d 114 (1995).

6. "A fundamental due process point relating to the utilization of collateral estoppel is that any person against whom collateral estoppel is asserted must have had a prior opportunity to have litigated his claim." Syl. Pt. 8, Conley v. Spillers, 171 W.Va. 584, 301 S.E.2d 216 (1983).

7. A consent or confessed judgment against an insured party is not binding on that party's insurer in subsequent litigation against the insurer where the insurer was not a party to the proceeding in which the consent or confessed judgment was entered, unless the insurer expressly agreed to be bound by the judgment. Therefore, an attack on the consent or confessed judgment in the subsequent litigation by an insurer who did not expressly agree to such judgment is a permissible direct, not collateral, attack on the consent or confessed judgment.

8. "Where the interests of an insured and his or her insurance company are in conflict with regard to a claim for underinsured motorist coverage and the insurance company is represented by counsel, the bringing of a related first-party bad faith action by the insured does not automatically result in a waiver of the insurance company's attorney-client privilege concerning the underinsurance claim." Syl. Pt. 7, State ex rel. Brison v. Kaufman, 213 W.Va. 624, 584 S.E.2d 480 (2003).

9. "As a general rule each litigant bears his or her own attorney's fees absent a contrary rule of court or express statutory or contractual authority for reimbursement." Syl. Pt. 2, Sally-Mike Properties v. Yokum, 179 W.Va. 48, 365 S.E.2d 246 (1986).

10. "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." Syl. Pt. 3, Sally-Mike Properties v. Yokum, 179 W.Va. 48, 365 S.E.2d 246 (1986).

11. "Whenever a policyholder substantially prevails in a property damage suit against its insurer, the insurer is liable for: (1) the insured's reasonable attorneys' fees in vindicating its claim; (2) the insured's damages for net economic loss caused by the delay in settlement[;] and [(3)] damages for aggravation and inconvenience." Syl. Pt. 1, Hayseeds, Inc. v. State Farm Fire & Cas., 177 W.Va. 323, 352 S.E.2d 73 (1986).

12. "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 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." Syl. Pt. 4, Aetna Cas. & Sur. Co. v. Pitrolo, 176 W.Va. 190, 342 S.E.2d 156 (1986).

Thomas V. Flaherty, Tammy R. Harvey, Jaclyn A. Bryk, Flaherty, Sensabaugh & Bonasso, PLLC, Charleston, for the Appellant.

Joseph W. Selep, Zimmer Kunz, PLLC, Pittsburgh, PA, for the Appellees, William O. Galloway and Galloway Law Offices.

Robert P. Fitzsimmons, Robert J. Fitzsimmons, Fitzsimmons Law Offices, Wheeling, and Dean G. Makricostas, David N. Dittmar, Daniel P. Taylor, Dittmar Taylor & Makricosts, PLLC, Weirton, for Appellees, Jeffrey A. Horkulic; Rebecca A. Horkulic, his wife, and Jeffrey Horkulic, as Parent and Natural Guardian of Stephanie Horkulic and Benjamin Horkulic, Minors.

ALBRIGHT, Justice:

This matter is before this Court upon an appeal by TIG Insurance Company (hereinafter "Appellant" or "TIG") from an August 25, 2006, order of the Circuit Court of Hancock County granting a Motion to Compel Enforcement of Compromise Settlement Agreement filed by the Appellees, Jeffrey Horkulic, Rebecca Horkulic, and Jeffrey Horkulic as natural parent and legal guardian of Stephanie Horkulic and Benjamin Horkulic (hereinafter "Appellees" or "Horkulics"). TIG also requests a writ of prohibition from an order of the lower court assessing an award of attorney fees against TIG.

On appeal of the order compelling enforcement of a settlement agreement, TIG maintains that the lower court's failure to permit TIG to participate in the May 30, 2006, plenary hearing on the motion to compel constitutes a violation of TIG's due process rights and should prevent TIG from being bound by the ultimate holdings of the lower court to the extent that such holdings may ultimately affect TIG's rights in the pending bad faith claim against TIG. The petition for a writ of prohibition, filed by TIG, seeks to prevent the lower court from enforcing an order requiring TIG to pay attorney fees associated with the litigation of the Appellees' motion to compel.

Upon thorough review of the arguments of counsel, briefs, record, and applicable precedent, this Court consolidates the appeal and the request for a writ of prohibition and affirms the determination of the lower court that the parties entered into a valid and enforceable settlement agreement. We also grant the requested writ of prohibition, as moulded, on the issue of attorney fees, and remand this matter for relitigation of the issue of the Horkulics' entitlement to attorney fees.

I. Factual and Procedural History

This matter was initially presented as a legal malpractice action filed by the Appellees against their former attorney, Mr. William O. Galloway and Galloway Law Offices. The original complaint alleged that Mr. Galloway committed legal malpractice by failing to observe a statute of limitations applicable to the Appellees' automobile accident...