Noland v. Virginia Ins. Reciprocal
| Decision Date | 24 September 2009 |
| Docket Number | No. 34702.,34702. |
| Citation | 686 S.E.2d 23 |
| Parties | Lloyd Michael NOLAND, R.N., Plaintiff Below, Appellant, v. VIRGINIA INSURANCE RECIPROCAL and The Reciprocal Group, Inc., A Virginia Corporation; Lisa Hyman, individually; Coverage Options Associates a.k.a. Kentucky Hospital Service Company, A Kentucky Limited Liability Company; Kentucky Hospital Association, A Kentucky Corporation; and Richard Stocks, individually, Defendants Below, Appellees. |
| Court | West Virginia Supreme Court |
Syllabus by the Court
1. "Appellate review of a partial summary judgment order is the same as that of a summary judgment order, which is de novo." Syllabus point 1, West Virginia Department of Transportation, Division of Highways v. Robertson, 217 W.Va. 497, 618 S.E.2d 506 (2005).
2. "Appellate review of a circuit court's order granting a motion to dismiss a complaint is de novo." Syllabus point 2, State ex rel. McGraw v. Scott Runyan Pontiac-Buick, Inc., 194 W.Va. 770, 461 S.E.2d 516 (1995).
3. "The interpretation of an insurance contract, including the question of whether the contract is ambiguous, is a legal determination that, like a lower court's grant of summary judgment, shall be reviewed de novo on appeal." Syllabus point 2, Riffe v. Home Finders Associates, Inc., 205 W.Va. 216, 517 S.E.2d 313 (1999).
4. The one year statute of limitations contained in W. Va.Code § 55-2-12(c) (1959) (Repl. Vol. 2008) applies to a common law bad faith claim.
5. In a first-party bad faith claim that is based upon an insurer's refusal to defend, and is brought under W. Va.Code § 33-11-4(9) (2002) (Repl. Vol. 2006) and/or as a common law bad faith claim, the statute of limitations begins to run on the claim when the insured knows or reasonably should have known that the insurer refused to defend him or her in an action.
Perry W. Oxley, Dinsmore & Shohl, LLP, Charleston, WV, and Scott W. Andrews, Offutt Nord, PLLC, Huntington, WV, for the Appellant.
Greg E. Mitchell, Frost Brown Todd, Lexington, KY, for the Appellee, Kentucky Hospital Association.
Lonnie C. Simmons, Joshua I. Barrett, DiTrapano, Barrett & DiPiero, Charleston, WV, for the Appellees, Virginia Insurance Reciprocal and the Reciprocal Group, Inc.; Lisa Hyman; and Coverage Options Associates (Kentucky Hospital Service Company).
Jeffrey M. Wakefield, Jaclyn A. Bryk, Elizabeth L. Taylor, Flaherty, Sensabaugh & Bonasso, Charleston, WV, for the Appellee, Mr. Stocks.
Lloyd Michael Noland, the appellant herein and plaintiff below (hereinafter referred to as "Mr. Noland"), appeals from an order of the Circuit Court of Raleigh County granting partial summary judgment in favor of the appellee herein and defendant below, Virginia Insurance Reciprocal (hereinafter referred to as "VIR"),1 and dismissing the claims Mr. Noland brought against the remaining appellees herein and defendants below, Richard Stocks; Lisa Hyman; Coverage Options Associates; and Kentucky Hospital Association (hereinafter referred to as "Mr. Stocks", "Ms. Hyman", "COA" and "KHA").2 In this appeal, Mr. Noland contends that the trial court committed error in concluding that VIR had no duty to defend him in another action after a certain date and in ruling that the statute of limitations barred his claims against the other four defendants.3 After careful review of the parties' briefs and the record submitted on appeal, and having heard the arguments of the parties, we reverse the circuit court's partial summary judgment in favor of VIR. However, we affirm the dismissal of the claims against Mr. Stocks, Ms. Hyman, COA and KHA.
This case has its origins in a medical malpractice lawsuit that was brought in 1998 by Ireland and Charlene Noel against Beckley Appalachian Regional Hospital (hereinafter referred to as "BARH").4 The Noels filed their action in the Circuit Court of Kanawha County. The Noels' lawsuit was filed against BARH as a result of severe injuries Mr. Noel sustained while being treated by BARH.5 The action against BARH was covered by both primary and umbrella insurance policies issued by VIR. Consequently, VIR provided counsel for BARH.
After the lawsuit against BARH was filed, BARH filed a third-party complaint against its employee, Mr. Noland, on May 24, 2000.6 The third-party complaint alleged that, as a result of Mr. Noland's negligent treatment of Mr. Noel, Mr. Noland was liable to BARH for a percentage of any fault that was attributed to BARH in the action brought by the Noels.7 Although Mr. Noland was an insured under the policy VIR had issued to BARH, VIR wrote a letter to Mr. Noland on October 23, 2000, denying coverage, and further denying a duty to defend him in the third-party action.8
Subsequent to BARH's third-party complaint being filed, the Noels were granted leave to file an amended complaint to assert a bad faith claim against BARH's insurer, VIR.9 On August 1, 2000, the Noels agreed to settle their claims against BARH and VIR for $2.5 million.10
On July 25, 2001, Mr. Noland filed an action against VIR in the Raleigh County Circuit Court.11 Mr. Noland's complaint set out five counts against VIR that are summarized as follows: (1) VIR had a duty to defend and indemnify Mr. Noland under its primary policy from May 24, 2000, through August 1, 2000; (2) VIR had a duty to defend and indemnify Mr. Noland under its primary policy after August 1, 2000; (3) VIR had a duty to defend and indemnify Mr. Noland under its umbrella policy after August 1, 2000; (4) VIR breached its common law duty of good faith and fair dealing in refusing to defend and indemnify Mr. Noland under the primary and umbrella policies; and (5) VIR violated the West Virginia Unfair Trade Practices Act in refusing to defend and indemnify Mr. Noland under both the primary and umbrella policies.12
On August 9, 2001, BARH was permitted to amend its third-party Kanawha County Circuit Court complaint to allow its insurer, VIR, to enter the case as the real party in interest. In the amended third-party complaint, VIR sought declaratory judgment relief to determine whether it owed Mr. Noland a duty to defend against BARH's third-party complaint; VIR also set out a bad faith claim against Mr. Noland's personal liability insurer, ACE American.
On February 8, 2002, the Kanawha County Circuit Court consolidated VIR's declaratory judgment claim against Mr. Noland with Mr. Noland's claims against VIR and transferred the consolidated matters to the Raleigh County Circuit Court.13 Subsequent to the consolidation, VIR and Mr. Noland filed motions for summary judgment on the duty to defend issue. On July 25, 2003, the circuit court entered a partial summary judgment order finding that VIR owed Mr. Noland a duty to defend against BARH's third-party complaint during the period from May 24, 2000, the date the third-party complaint was filed, until August 1, 2000, the date the Noels agreed to settle their claims against BARH and VIR. The circuit court's order also found that VIR had no duty to defend Mr. Noland after August 1, 2000. Mr. Noland thereafter filed a motion for reconsideration of the adverse partial summary judgment ruling.14
While the motion for reconsideration was pending, the circuit court entered an order on August 25, 2005, granting Mr. Noland leave to amend his complaint to assert statutory and common law bad faith claims against Mr. Stocks, Ms. Hyman, COA and KHA.15 The four defendants filed motions to dismiss. On December 8, 2006, the circuit court entered an order granting Mr. Stocks' motion to dismiss. On December 20, 2006, the circuit court entered an order granting Ms. Hyman's motion to dismiss. On March 12, 2007, the circuit court entered an order granting the motion to dismiss filed by COA and KHA.
Pursuant to motions filed by Mr. Noland asking the circuit court to render its previous orders final and appealable under Rule 54(b) of the West Virginia Rules of Civil Procedure, the circuit court entered an order on March 28, 2008, that certified as final and appealable its partial summary judgment order in favor of VIR as well as its orders dismissing the claims against Ms. Hyman, COA and KHA. On August 21, 2008, the circuit court issued an order certifying as final and appealable its order dismissing the claims against Mr. Stocks.16 It is from these rulings that Mr. Noland appeals to this Court.
In this proceeding, the circuit court entered an order granting partial summary judgment in favor of VIR, and entered orders dismissing the claims against Mr. Stocks, Ms. Hyman, COA and KHA pursuant to Rule 12(b)(6) of the West Virginia Rules of Civil Procedure. With respect to the partial summary judgment order, this Court has made clear that "[a]ppellate review of a partial summary judgment order is the same as that of a summary judgment order, which is de novo." Syl. pt. 1, West Virginia Dep't of Transp., Div. of Highways v. Robertson, 217 W.Va. 497, 618 S.E.2d 506 (2005). We have indicated that "[a] motion for summary judgment should be granted only when it is clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not desirable to clarify the application of the law." Syl. pt. 3, Aetna Cas. & Sur. Co. v. Federal Ins. Co. of New York, 148 W.Va. 160, 133 S.E.2d 770 (1963).
Our standard of review of the Rule 12(b)(6) dismissal orders provides that the "[a]ppellate review of a circuit court's order granting a motion to dismiss a complaint is de novo." Syl. pt. 2, State ex rel. McGraw v. Scott Runyan Pontiac-Buick, Inc., 194 W.Va. 770, 461 S.E.2d 516 (1995). We also have held, in Syllabus point 3 of Chapman v. Kane Transfer Co., 160 W.Va. 530, 236 S.E.2d 207 (1977), that "[t]he trial court, in appraising the sufficiency of a complaint on a Rule 12(b)(6) motion, should not dismiss the complaint unless it appears beyond doubt that the plaintiff can prove no set of facts in ...
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