McDowell County Bd. of Educ. v. Stephens

• Decision Date: 20 July 1994
• Docket Number: No. 22050,22050
• Citation: 191 W.Va. 711,447 S.E.2d 912
• Court: West Virginia Supreme Court
• Parties: , 93 Ed. Law Rep. 1042 The McDOWELL COUNTY BOARD OF EDUCATION Petitioner, v. Honorable Booker T. STEPHENS, Judge of the Circuit Court of McDowell County, Melanie Campbell Church and Wendy Emazetta Burks, Respondents.

Page 912

447 S.E.2d 912

191 W.Va. 711, 93 Ed. Law Rep. 1042

The McDOWELL COUNTY BOARD OF EDUCATION Petitioner, v. Honorable Booker T. STEPHENS, Judge of the Circuit Court of McDowell County, Melanie Campbell Church and Wendy Emazetta Burks, Respondents.

No. 22050.

Supreme Court of Appeals of West Virginia.

Submitted Feb. 8, 1994.

Decided July 20, 1994.

Syllabus by the Court

1. "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 Memorial Gardens, Inc., 152 W.Va. 91, 159 S.E.2d 784 (1968).

2. "A party in a civil action who has made a good faith settlement with the plaintiff prior to a judicial determination of liability is relieved from any liability for contribution." Syl. Pt. 6, Board of Educ. v. Zando, Martin & Milstead, Inc., 182 W.Va. 597, 390 S.E.2d 796 (1990).

3. "Defendants in a civil action against whom a verdict is rendered are entitled to have the verdict reduced by the amount of any good faith settlements previously made with the plaintiff by other jointly liable parties." Syl. Pt. 7, in part, Board of Educ. v. Zando, Martin & Milstead, Inc., 182 W.Va. 597, 390 S.E.2d 796 (1990).

4. "A settlement entered into between a nonparty and a claimant prior to the instigation of a lawsuit should discharge the nonparty from further obligation to either the claimant or the nonparty's joint tortfeasor, as long as the settlement was entered into in good faith and the amount of the settlement is disclosed to the trial court for verdict reduction." Syl. Pt. 3, Cline v. White, 183 W.Va. 43, 393 S.E.2d 923 (1990).

5. "When a settlement is entered into between a non-party and a claimant prior to the institution of the suit, a defendant in the suit cannot implead the non-party in a subsequently filed civil action, so long as the settlement was entered into in good faith and the amount of the settlement was disclosed to the trial court for verdict reduction." Syl. Pt. 2, Cook v. Stansell, 186 W.Va. 189, 411 S.E.2d 844 (1991).

6. "If a plaintiff enters into a settlement with a non-party against whom it has not directly asserted a cause of action, and the settlement occurs before a judicial determination of liability, the settlement relieves the non-party of all further obligations to the plaintiff and all liability for contribution to the non-party's joint tortfeasor, if the settlement was made in good faith and the amount of the settlement is disclosed to the trial court for the purpose of reducing the verdict." Syl. Pt. 4, Smith v. Monongahela Power Co., 189 W.Va. 237, 429 S.E.2d 643 (1993).

7. A good faith settlement of a contribution claim entered into between one joint tortfeasor and another, while resolving the legal obligations between the joint tortfeasors, does not bar the plaintiff from subsequently asserting a direct action against the settling joint tortfeasor unless the settling joint tortfeasor obtains a release from the plaintiff at the time of the settlement. Further, the amount of the settlement between the joint tortfeasors must be disclosed to the trial court for the purpose of reducing any verdict which may result from the subsequent action.

8. " 'The purpose of the words "and leave [to amend] shall be freely given when justice so requires" in Rule 15(a) W.Va.R.Civ.P., is to secure an adjudication on the merits of the controversy as would be secured under identical factual situations in the absence of procedural impediments; therefore, motions to amend should always be granted under Rule 15 when: (1) the amendment permits the presentation of the merits of the action; (2) the adverse party is not prejudiced by the sudden assertion of the subject of the amendment; and (3) the adverse party can be given ample opportunity to meet the issue.' Syl. pt. 3, Rosier v. Garron, Inc., 156 W.Va. 861, 199 S.E.2d 50 (1973)." Syl. Pt. 6, Berry v. Nationwide Mut. Fire Ins. Co., 181 W.Va. 168, 381 S.E.2d 367 (1989).

9. " 'The writ of prohibition lies as a matter of right when the inferior court does not have jurisdiction of the subject matter in controversy, or having such jurisdiction, exceeds its legitimate powers.' Pt. 6, syllabus, W.Va. Sec. School Activities Comm. v. Wagner, Judge, 143 W.Va. 508[,] [1958]." Syl. Pt. 3, State ex rel. West Virginia Secondary Sch. Activities Comm'n v. Oakley, 152 W.Va. 533, 164 S.E.2d 775 (1968).

David E. Schumacher, Jay W. Craig, Shuman, Annand & Poe, Charleston, for petitioner.

Joseph A. Colosi, Welch, for respondent Melanie Campbell Church.

Kermit J. Moore, Brewster, Morhous & Cameron, Bluefield, for respondent Wendy Emazetta Burks.

WORKMAN, Justice:

This case is before the Court upon petition for writ of prohibition brought by the Petitioner, the McDowell County Board of Education, against the Respondents, the Honorable Booker T. Stephens, Judge of the Circuit Court of McDowell County, West Virginia, Melanie Campbell Church, the Plaintiff below (also referred to as the Plaintiff), and Wendy Emazetta Burks, the Defendant and Third-Party Plaintiff in the original action brought by the Plaintiff. A recitation of the facts is necessary in order to frame the issues surrounding the petition for writ of prohibition. On September 9, 1989, the Plaintiff was involved in a motor vehicle accident when a school bus owned by the Petitioner and operated by the Petitioner's agent, pulled out in front of a vehicle operated by Ms. Burks. Ms. Burks, attempting to avoid the school bus, ran head-on into the vehicle in which the Plaintiff was a passenger, causing the Plaintiff injury. The Plaintiff below was fifteen years old at the time of the accident. She instituted suit against Ms. Burks within two years from the date of the accident. Subsequently, Ms. Burks filed a third-party complaint for contribution against the Petitioner.

Prior to trial, the Petitioner sought to negotiate a settlement with the Plaintiff for the sum of $5,000, even though the Plaintiff had not asserted a direct action against the Petitioner. The Plaintiff declined to accept the $5,000 settlement offer.

The Petitioner settled with Ms. Burks for $5,000 and obtained a release from her, prior to trial. ¹ The December 10, 1992, court order upholding this settlement provides:

Whereupon, the Court is of the opinion to and does hereby find that the settlement between the Third-Party Plaintiff, Wendy Emazetta Burks and the Third-Party Defendant, McDowell County Board of Education is a good faith settlement, and that the Third-Party Plaintiff's claim against the Third-Party Defendant McDowell County Board of Education is hereby dismissed with prejudice to the Third-Party Plaintiff and any further cross-claims, counter-claims, or direct actions or claims against the Third-Party Plaintiff, ² being untimely, are hereby barred. ³

The Plaintiff objected to the Petitioner being dismissed from the case and did not release the Petitioner from liability in any manner.

The case proceeded to trial on December 14, 1992. After the Plaintiff's case-in-chief, a settlement in the amount of $45,000 was reached between the Plaintiff and Ms. Burks. Included in the $45,000 settlement was the $5,000 previously paid by the Petitioner to Ms. Burks. As consideration for the settlement, the Plaintiff agreed to execute a release as to the personal assets of Ms. Burks and her insurer. The Petitioner was not in any way released under the settlement reached between the Plaintiff and Ms. Burks. The court stated in its January 14, 1993, order upholding the settlement and declaring a mistrial that: "It is understood by the Court that Plaintiff has expressly reserved the right to proceed in this action to collect from Allstate Insurance Company [the Plaintiff's underinsurance carrier] or other proper defendant any funds due under the applicable underinsured motorist policy or other policies." (emphasis added). The court also stated in the order that "[t]his case is to proceed for the purpose of Plaintiff asserting a claim against Allstate Insurance Company or other defendant with a new trial date to be set by the Court." (emphasis added).

By order dated January 25, 1993, the circuit court allowed the Plaintiff to file an amended complaint wherein the Plaintiff alleged a direct action against the Petitioner. The Petitioner filed two different motions to dismiss the complaint pursuant to West Virginia Rule of Civil Procedure 12(b)(6). The circuit court denied both motions by orders dated May 4, 1993, and November 23, 1993, respectively.

The petition for writ of prohibition is based upon a January 25, 1993, order of the circuit court which allowed the Plaintiff to file an amended complaint asserting a direct civil action against the Petitioner, and a November 23, 1993, order denying the Petitioner's motion to dismiss the Petitioner as a Defendant in the direct civil action brought by the Plaintiff. The Petitioner argues that: 1) the circuit court exceeded its legitimate powers by refusing to dismiss the Petitioner as a party defendant, by refusing to recognize the Petitioner's prior good faith settlement with the joint tortfeasor and by refusing to recognize the circuit court's prior dismissal of the Petitioner from the original action as a bar to the Plaintiff's direct action against the Petitioner; and 2) the circuit court exceeded its legitimate powers by allowing the Plaintiff to file an amended complaint against the Petitioner. Based upon a review of the record, the parties' briefs and arguments, and all other matters submitted before this Court, we find that grounds do not exist for the issuance of a writ of prohibition in this case.

I.

The Court has never had the opportunity to discuss the crux of this case which focuses upon the following issue: Whether a good faith...