Mills v. Watkins, No. 30694.

CourtSupreme Court of West Virginia
Writing for the CourtMAYNARD, Justice
Citation213 W.Va. 430,582 S.E.2d 877
PartiesCrystal Johnston MILLS and Ronald Nicholas Mills and Ronald Nicholas Mills, as Father and Next of Friend of Alyssa Nicole Mills, an Infant Under the Age of Eighteen, and Jane Doe, and John Doe, Plaintiffs Below, Appellants v. Krista WATKINS and Wanda Watkins and Sarah Long, and Nationwide Mutual Insurance Company, a Foreign Corporation, Defendants Below, Appellees.
Docket NumberNo. 30694.
Decision Date22 May 2003

582 S.E.2d 877
213 W.Va.
430

Crystal Johnston MILLS and Ronald Nicholas Mills and Ronald Nicholas Mills, as Father and Next of Friend of Alyssa Nicole Mills, an Infant Under the Age of Eighteen, and Jane Doe, and John Doe, Plaintiffs Below, Appellants
v.
Krista WATKINS and Wanda Watkins and Sarah Long, and Nationwide Mutual Insurance Company, a Foreign Corporation, Defendants Below, Appellees

No. 30694.

Supreme Court of Appeals of West Virginia.

Submitted January 15, 2003.

Decided May 22, 2003.

Concurring and Dissenting Opinion of Justice McGraw July 2, 2003.

Concurring Opinion of Chief Justice Starcher July 11, 2003.


582 S.E.2d 878
Stephen D. Paesani, Princeton, for Plaintiffs Below, Appellants

582 S.E.2d 879
C. William Davis, Richardson & Davis, PLLC, Bluefield, for S. Long and Nationwide

MAYNARD, Justice:

The appellant, Crystal Johnston Mills, appeals the November 2, 2001 order of the Circuit Court of Mercer County. In its order, the circuit court declined to grant relief from a previous order which granted summary judgment to Nationwide Mutual Insurance Company, agent Sarah Long, Krista Watkins, and Wanda Watkins. Because the appellant, by her legal guardian, settled and released all claims against the insured and the insurance company in compliance with W.Va.Code § 44-10-14 (1929), we find no error.

I.

FACTS

On August 2, 1996, the appellant was one of two passengers who was injured in a single-vehicle accident. At the time of the accident, Krista Watkins was driving a vehicle that was owned by her mother, Wanda Watkins, and insured by Nationwide Mutual Insurance Company (Nationwide). The appellant injured her left shoulder and incurred medical expenses in the amount of $21,335.61. The appellant's mother, Dorcas Knuckles, qualified as legal guardian.1 Pursuant to W.Va.Code § 44-10-14 (1929),2 the court appointed attorney Ward Morgan to serve as guardian ad litem.

Ms. Knuckles entered into settlement negotiations with Wanda Watkins' insurer, Nationwide, through Nationwide's representative, Sarah Long. David Johnston and Dorcas Knuckles, as parents and natural guardians of the appellant, and Dorcas Knuckles, as legal guardian, entered into a release and settlement agreement with Nationwide. The agreement stated that the appellant acknowledged receipt of $10,000 cash along with $18,391.73 for medical expenses and $1,000 under the medical payments coverage of the policy. The agreement also provided that the appellant would receive a lump sum payment in the amount of $20,340 on her eighteenth birthday. In return, the appellant released the insured and the insurer from any further damages. The circuit court approved the settlement agreement by order entered on August 6, 1997.

The appellant subsequently married and had a daughter. On her twentieth birthday, June 5, 2000, the appellant, her husband, Ronald Nicholas Mills, and her husband as next friend and father of her daughter, Alyssa Nicole Mills, and unborn children, Jane Doe and John Doe, filed a complaint against Krista Watkins, Wanda Watkins, Sarah Long, and Nationwide seeking to set aside the settlement agreement and obtain additional insurance resources for medical expenses and loss of consortium and exemplary damages.3 Alternatively, the appellant sought to proceed against the insurer under the West Virginia Unfair Trade Practices

582 S.E.2d 880
Act, W.Va.Code § 33-11-4 (1985) (UTPA).4 The appellant alleged Long and Nationwide misrepresented the amount of coverage that was available to compensate her for her injury. She specifically complained in her amended complaint, filed on July 14, 2000, that Long "intentionally and illegally" failed to tell her that the combined payments to all persons injured in the accident did not exhaust the policy limits. The amended complaint also contained a count for fraud

Long, Nationwide, and the Watkins filed motions to dismiss the complaint attaching thereto copies of the release and settlement agreement and the court's August 6, 1997 order. On December 27, 2000, the circuit court dismissed the complaint, reserving unto the appellant the opportunity to set forth with particularity the circumstances surrounding the claim of fraud.5 The appellant abandoned her claim for fraud by declining to follow the court's suggestion. Instead, she filed a motion asking the court to alter or amend its judgment. She subsequently clarified her motion by requesting that her claims for additional medical expenses and consortium be dismissed; she also requested that she be allowed to refile her UTPA claims. On November 2, 2001, the circuit court denied relief. It is from this order that the appellant appeals.

II.

STANDARD OF REVIEW

The standard of review applicable to an appeal from a motion to alter or amend a judgment, made pursuant to W. Va. R. Civ. P. 59(e), is the same standard that would apply to the underlying judgment upon which the motion is based and from which the appeal to this Court is filed.

Syllabus Point 1, Wickland v. American Travellers Life Ins., 204 W.Va. 430, 513 S.E.2d 657 (1998). In the present case, the circuit court dismissed the appellant's complaint "under Rule 12(b)(6) of the West Virginia Rules of Civil Procedure [] for failure to state a claim upon which relief can be granted and/or the defense of settlement and release."

In dismissing the action, the circuit court relied on evidence outside the pleadings. Attached as exhibits to the motions to dismiss were the release and settlement agreement, the settlement order, the petition for settlement, and the order appointing a guardian ad litem. In its December 27, 2000 order, the court specifically stated that it had studied the motions to dismiss, "the memoranda of law and exhibits submitted by the parties, and other relevant legal authorities." Under these circumstances, Rule 12(b)(6) grants circuit courts the authority to treat motions to dismiss as motions for summary judgment. The rule states in pertinent part:

If, on a motion asserting the defense numbered (6) to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.

Moreover, this Court previously held:

Only matters contained in the pleading can be considered on a motion to dismiss under Rule 12(b) R.C.P., and if matters outside the pleading are presented to the court and are not excluded by it, the motion should be treated as one for summary judgment and disposed of under Rule 56

582 S.E.2d 881
R.C.P. if there is no genuine issue as to any material fact in connection therewith.

Syllabus Point 4, in part, United States Fidelity and Guaranty Co. v. Eades, 150 W.Va. 238, 144 S.E.2d 703 (1965). Because the circuit court considered matters outside the pleadings, we find that the court's order must be treated as one granting summary judgment. It is well-settled that "[a] circuit court's entry of summary judgment is reviewed de novo." Syllabus Point 1, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994).

III.

DISCUSSION

On appeal, the appellant contends the circuit court erred by denying her motion for relief from judgment. She supports her claim by stating that Nationwide made material representations which she later learned were misrepresentations. In the interim, her legal guardian relied upon the representations to settle her claim. As an injured third party, she believes the misrepresentations may form the basis to bring a UTPA action against the insurer and the tortfeasor who were both released in the settlement agreement. In her brief filed on appeal, the appellant makes clear that she challenges only the circuit court's dismissal of Counts VI and VII of her amended complaint. These counts read as follows:

COUNT VI

By their actions as hereinabove stated, the Defendants Nationwide and Long breached their duties under the West Virginia Unfair Trade Practices Act to not misrepresent policy coverages and provide truthful representations concerning insurance benefits, as stated in W.Va.Code § 33-11-4(1)(a).

* * *

COUNT VII

By their actions as hereinabove stated, the Defendants Long and Nationwide breached their duties as provided in W.Va. Code § 33-11-4(9)(a), (e), (f), (g), (j), (m) and (n) with such frequency as to indicate a general business practice.

The appellant's principal argument on appeal is that the circuit court erred by holding that the case of Poling v. Motorists Mut. Ins. Co., 192 W.Va. 46, 450 S.E.2d 635 (1994), precludes her UTPA cause of action. She argues that Poling is a case of inclusion under which she should be allowed to bring her complaint because she was not aware of the insurer's conduct at the time she released Nationwide in the settlement agreement. She acknowledges that Poling involved an insurance company that was not released in the settlement agreement and that this Court added that the insurer must be aware of the possibility of a bad faith action at the time the settlement is reached before a UTPA cause of action may be maintained. She, nonetheless, argues that Poling should not be read in a manner which precludes her from asserting a UTPA cause of action.

The appellant also avers that the facts of her case are similar to the facts contained in Elmore v. State Farm Mut. Auto. Ins. Co., 202 W.Va. 430, 504 S.E.2d 893 (1998). She reasons that "this Court would not have reached the issues it ultimately ruled upon in Elmore" if Poling precluded such actions. However, the claim in Elmore could not proceed because it was time barred. Nationwide argues that if the appellant had accepted the circuit court's offer to plead fraud with specificity, then she could have, with sufficient proof, rescinded the settlement...

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