Martino v. Barnett, 31270.

• Decision Date: 15 March 2004
• Docket Number: No. 31270.,31270.
• Citation: 595 S.E.2d 65,215 W.Va. 123
• Parties: Frank S. MARTINO, Plaintiff Below, v. Betty J. BARNETT; Sean M. Swiger; Jerry Boyce and Colleen Boyce, Husband and Wife; Horace Mann Insurance Company, a Foreign Insurance Company; Edgar Bruce Garner, an Individual; Nationwide Mutual Insurance Company, a Foreign Insurance Company; and Rodney Stewart, an Individual, Defendants Below.
• Court: West Virginia Supreme Court

595 S.E.2d 65

215 W.Va. 123

Frank S. MARTINO, Plaintiff Below, v. Betty J. BARNETT; Sean M. Swiger; Jerry Boyce and Colleen Boyce, Husband and Wife; Horace Mann Insurance Company, a Foreign Insurance Company; Edgar Bruce Garner, an Individual; Nationwide Mutual Insurance Company, a Foreign Insurance Company; and Rodney Stewart, an Individual, Defendants Below.

No. 31270.

Supreme Court of Appeals of West Virginia.

Submitted: October 7, 2003.

Decided March 15, 2004.

David J. Romano, Michael J. Romano, Romano Law Offices, Clarksburg, for Frank S. Martino.

E. Kay Fuller, Walter M. Jones, III, Martin & Seibert, L.C., Martinsburg, for the defendant, Nationwide Mutual Insurance Company.

Sandra M. Murphy, Amy J. Tawney, Bowles Rice McDavid Graff & Love, P.L.L.C., Charleston, for Amici Curiae, West Virginia Bankers Association and American Bankers Association.

ALBRIGHT, Justice:

This matter involves three certified questions from the Circuit Court of Harrison County regarding whether applicable state and federal privacy laws allow dissemination of confidential customer information by an insurance company to an unaffiliated third party during the adjustment or litigation of an insurance claim.¹ After completing our examination of the record, briefs² and arguments presented in light of the applicable law, we conclude that nonpublic personal information may be subject to release pursuant to judicial process.

I. Factual and Procedural History

The certified questions arise from a civil action in which Frank Martino, plaintiff below, alleges he was injured in an automobile accident on November 18, 1999, due to the negligence of, among others, Betty Jean Barnett, one of the defendants below. Ms. Barnett is insured by Nationwide Mutual Insurance Company (hereinafter referred to as "Nationwide"). Before filing the civil complaint, Mr. Martino asked Nationwide to supply Ms. Barnett's home address so that he could attempt service of the summons and complaint. Nationwide refused to disclose the home address of Ms. Barnett, claiming that to do so would violate the privacy provisions of the Gramm-Leach-Bliley-Act (hereinafter referred to as "GLBA" or "Act")³ and the West Virginia Insurance Commission's Privacy Rule (hereinafter referred to as "Privacy Rule").⁴ Nationwide based its refusal to supply Ms. Barnett's address on the belief that, under these federal and state authorities, insurance companies are considered financial institutions which are prohibited from disclosing "nonpublic personal information" of its customers.

Upon filing suit in the circuit court, Mr. Martino continued his efforts to acquire Ms. Barnett's home address from Nationwide. Mr. Martino notified Nationwide of his intent to depose a Nationwide representative in order to obtain certain factual information about Ms. Barnett, including her address, so that service of process could proceed. Nationwide responded by filing a motion for a protective order to enjoin the deposition. The motion was the subject of a hearing held by the lower court on February 13, 2002, at which both parties agreed the issues the GLBA and Privacy Rule raised regarding disclosure of customer information were proper to certify to this Court. At a subsequent hearing on August 26, 2002, the actual questions were formulated, and by order dated December 6, 2002, the lower court certified those questions to this Court pursuant to West Virginia Code § 58-5-2 (1998) (Supp.2003). Upon finding the issues so certified contained questions of law necessary to the decision in the pending case, were sufficiently precise and were based on an undisputed factual record,⁵ we agreed to accept the certified questions by order entered on April 10, 2003.

II. Standard of Review

This Court's review of the certified questions presented is plenary as "`[t]he 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)." Syl. Pt. 2, Keplinger v. Virginia Elec. and Power Co., 208 W.Va. 11, 537 S.E.2d 632 (2000).

III. Certified Questions

The December 6, 2002, order of the circuit court sets forth the following legal questions and corresponding responses of the lower court:

1. Does the West Virginia Privacy Rule and the GLBA restrict the dissemination by an insurance company of "nonpublic personal information" regarding an insured or any other person to a claimant or a claimant's legal representative necessary for the proper adjustment of a claim?

Answer of the circuit court: No.

2. Does the West Virginia Privacy Rule and the GLBA restrict the dissemination by an insurance company of "nonpublic personal information" regarding an insured or any other person through the discovery process to a claimant/plaintiff once civil litigation is instituted against an insured?

Answer of the circuit court: No.

3. To what degree do the West Virginia Privacy Rule and GLBA provisions restricting dissemination by an insurance company of "nonpublic personal information" regarding an insured or any other person control an insurance company's duties under the West Virginia Unfair Trade Practices Act, W.Va.Code § 33-11-1 et seq.?

Answer of the circuit court: In accordance with the Court's answers to questions [I] and [II], the Court concludes that the West Virginia Privacy Rule and the GLBA provisions restricting dissemination by an insurance company of "nonpublic personal information" regarding an insured or any other person do not control, to any degree, an insurance company's duties under the West Virginia Unfair Trade Practices Act.

In developing its response to the first two questions, the lower court noted in its order that the GLBA expressly allows disclosure of personal information to "`comply with Federal, State, or local laws, rules and other applicable legal requirements....' 15 U.S.C. § 6802(e)(8)." The court then reasoned that the West Virginia Rules of Civil Procedure are the type of state rules contemplated by the GLBA and the comparable provisions of the Privacy Rule. Thus, the lower court concluded, information discoverable under the Rules of Civil Procedure is excepted from the GLBA and the Privacy Rule. Moreover, the court below observed a limited purpose or intent for the privacy provisions finding that "the legislative history of the GLBA indicates that the Act was passed in order to prohibit the sharing of nonpublic personal information between financial institutions and non-affiliated third parties for marketing purposes" (footnote omitted).

We believe that merging the first two questions will allow a more complete examination of the law with regard to the issues raised. As we have previously said,

[w]hen a certified question is not framed so that this Court is able to fully address the law which is involved in the question, then this Court retains the power to reformulate questions certified to it under both the Uniform Certification of Questions of Law Act found in W.Va.Code, 51-1A-1, et seq. and W.Va.Code, 58-5-2 [1967], the statute relating to certified questions from a circuit court of this State to this Court.

Syl. Pt. 3, Kincaid v. Mangum, 189 W.Va. 404, 432 S.E.2d 74 (1993). Accordingly, we exercise our discretion by combining the first two questions presented by the court below into the following single question:

Do the exceptions to the privacy provisions of the GLBA and the West Virginia Privacy Rule allow, attendant to judicial involvement, dissemination by an insurance company to a claimant or a claimant's representative of nonpublic personal information obtained from an insured? Subject to the limitations set forth in the discussion of this question, we answer the question in the affirmative.

IV. Discussion

A. Applicable Statutes and Regulations

Turning to the pertinent legal authorities, we first note that the GLBA was signed into law in November of 1999 with the overall purpose of enhancing "`competition in the financial services industry by providing a prudential framework for the affiliation of banks, securities, firms, insurance companies, and other financial providers....' H.R. Conf. Rep. No. 106-434, at 245 [sic] (1999), reprinted in 1999 U.S.C.C.A.N. 245, 245." Landry v. Union Planters Corp., 2003 WL 21355462, *3 (E.D.La. June 6, 2003). The privacy provisions at issue in this case are contained in Title V of the Act,⁶ in which Congress expressed the following privacy obligation policy:

(a) .... It is the policy of the Congress that each financial institution has an affirmative and continuing obligation to respect the privacy of its customers and to protect the security and confidentiality of those customers' nonpublic personal information.

(b) FINANCIAL INSTITUTION SAFEGUARDS.—In furtherance of the policy in subsection (a), each agency or authority described in section 505(a) [15 U.S.C. § 6805(a)] shall establish appropriate standards for the financial institutions subject to their jurisdiction relating to administrative, technical and physical safeguards

(1) to insure the security and confidentiality of customer records and information;

(2) to protect against any anticipated threats or hazards to the security or integrity of such records; and

(3) to protect against unauthorized access to or use of such records or information which could result in substantial harm or inconvenience to any customer.

Pub. L. No. 106-102, § 501, 113 Stat. 1338. In furtherance of this purpose, the GLBA sets forth a procedure whereby financial institutions falling within the purview of the Act may not disclose nonpublic personal information without first notifying its clients of the financial institution's disclosure policies and affording them the opportunity to bar any disclosure of such information by "opting out." See 15 U.S.C. § 6802(a) and (b). However, the GLBA provides exceptions to its notification and opt-out procedures, including when it is...