Praetorian Ins. Co. v. Chau

• Decision Date: 17 November 2022
• Docket Number: 21-0243,21-0682
• Parties: PRAETORIAN INSURANCE COMPANY, Putative Intervenor Below, Petitioner, v. VIRGINIA CHAU, ADMINISTRATRIX OF THE ESTATE OF ANH KIM HO, Plaintiff Below, Respondent AND AIR CARGO CARRIERS, LLC Defendant Below, Respondent. AND PRAETORIAN INSURANCE COMPANY, Plaintiff Below, Petitioner, v. AIR CARGO CARRIERS, LLC, AND VIRGINIA CHAU, ADMINISTRATRIX OF THE ESTATE OF ANH KIM HO, Defendants Below, Respondents.
• Court: West Virginia Supreme Court

PRAETORIAN INSURANCE COMPANY, Putative Intervenor Below, Petitioner, v. VIRGINIA CHAU, ADMINISTRATRIX OF THE ESTATE OF ANH KIM HO, Plaintiff Below, Respondent AND AIR CARGO CARRIERS, LLC Defendant Below, Respondent. AND PRAETORIAN INSURANCE COMPANY, Plaintiff Below, Petitioner, v. AIR CARGO CARRIERS, LLC, AND VIRGINIA CHAU, ADMINISTRATRIX OF THE ESTATE OF ANH KIM HO, Defendants Below, Respondents.

Nos. 21-0243, 21-0682

Supreme Court of Appeals of West Virginia

November 17, 2022

Submitted: October 5, 2022.

Appeal from the Circuit Court of Kanawha County Civil Action No 19-C-450, The Honorable Louis H. Bloom, Judge.

AFFIRMED

Appeal from the Circuit Court of Kanawha County Civil Action No 20-C-800, The Honorable Kenneth D. Ballard, Judge.

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED

Don C.A. Parker, Esq. Spilman Thomas & Battle, PLLC Charleston, West Virginia Attorney for the Petitioner.

Jeffrey M. Wakefield, Esq. Morgan E. Villers, Esq. Flaherty Sensabaugh Bonasso PLLC Charleston, West Virginia Attorneys for Amicus Curiae, West Virginia Insurance Federation.

Steven K. Wellman Sarah A. Walling Jenkins Fenstermaker, PLLC Huntington, West Virginia Attorneys for Amicus Curiae, West Virginia Chamber of Commerce.

William M. Tiano, Esq. Cheryl A. Fisher, Esq. Tiano O'Dell PLLC Charleston, West Virginia Attorney for the Respondent, Virginia Chau, Administratrix of the Estate of Anh Kim Ho.

Spencer D. Elliott, Esq. James C. Stebbins, Esq. Ramonda C. Marling, Esq. Lewis Glasser PLLC Charleston, West Virginia Attorneys for the Respondent, Air Cargo Carriers, LLC.

SYLLABUS

1. "'West Virginia Rule of Civil Procedure 24(a)(2) allows intervention of right in an action if an applicant meets four conditions: (1) the application must be timely; (2) the applicant must claim an interest relating to the property or transaction [that] is the subject of the action; (3) disposition of the action may, as a practical matter, impair or impede the applicant's ability to protect that interest; and (4) the applicant must show that the interest will not be adequately represented by existing parties.' Syl. Pt. 2, State ex rel. Ball v. Cummings, 208 W.Va. 393, 540 S.E.2d 917 (1999)." Syllabus point 4, SWN Production Co., LLC v. Conley, 243 W.Va. 696, 850 S.E.2d 695 (2020).

2. "'To justify intervention of right under West Virginia Rule of Civil Procedure 24(a)(2), the interest claimed by the proposed intervenor must be direct and substantial. A direct interest is one of such immediate character that the intervenor will either gain or lose by the direct legal operation and effect of the judgment to be rendered between the original parties. A substantial interest is one that is capable of definition, protectable under some law, and specific to the intervenor. In determining the adequacy of the interest in a motion to intervene of right, courts should also give due regard to the efficient conduct of the litigation.' Syl. Pt. 4, State ex rel. Ball v. Cummings, 208 W.Va. 393, 540 S.E.2d 917 (1999)."

Syllabus point 5, SWN Production Co. v. Conley, 243 W.Va. 696, 850 S.E.2d 695 (2020).

3. "To establish jus tertii standing to vindicate the . . . rights of a third party, a litigant must (1) have suffered an injury in fact; (2) have a close relation to the third party; and (3) demonstrate some hindrance to the third party's ability to protect his or her own interests." Syllabus point 5, in part, Kanawha County Public Library Board v. Board of Education of County of Kanawha, 231 W.Va. 386, 745 S.E.2d 424 (2013).

4. "This Court may, on appeal, affirm the judgment of the lower court when it appears that such judgment is correct on any legal ground disclosed by the record, regardless of the ground, reason or theory assigned by the lower court as the basis for its judgment." Syllabus point 3, Barnett v. Wolfolk, 149 W.Va. 246, 140 S.E.2d 466 (1965).

OPINION

BUNN, JUSTICE:

In these consolidated appeals, Praetorian Insurance Company ("Praetorian") seeks review of three orders issued by two separate judges presiding over two separate but related cases in the Circuit Court of Kanawha County.^[1] First, Praetorian appeals an order denying its motion to intervene in a wrongful death action filed against its insured, Air Cargo Carriers, LLC ("Air Cargo"). Praetorian sought to intervene as a matter of right under Rule 24(a)(2) of the West Virginia Rules of Civil Procedure solely to assert Air Cargo's entitlement to workers' compensation immunity as to a negligence claim brought by the plaintiff below, Virginia Chau, as administratrix of the estate of Anh Kim Ho. Second, Praetorian appeals from two orders entered in its companion declaratory judgment action. One order denied Praetorian's motion for summary judgment as to its sought-after declaration in Count I of its complaint that Air Cargo had no coverage for a deliberate intent claim asserted by Ms. Chau due to a policy exclusion for conduct engaged in by deliberate intention as defined by West Virginia Code § 23-4-2(d)(2). The other order granted motions filed by Ms. Chau and Air Cargo seeking dismissal of Count II of Praetorian's declaratory judgment complaint, which sought the same relief Praetorian pursued in its motion to intervene in Ms. Chau's wrongful death action, i.e., a declaration of Air Cargo's entitlement to workers' compensation immunity as to the negligence claim asserted by Ms. Chau in the companion wrongful death action. For the reasons stated below, we affirm the circuit court's order denying Praetorian's motion to intervene in Ms. Chau's wrongful death action for lack of standing to assert Air Cargo's right to workers' compensation immunity. In addition, we reverse the circuit court's order denying Praetorian's motion for summary judgment as to Count I of its declaratory judgment complaint because we find the deliberate intent policy exclusion applies, and Air Cargo has no coverage. Therefore, we remand on this issue for entry of an order granting summary judgment to Praetorian. Finally, we affirm the circuit court's order dismissing Count II of Praetorian's declaratory judgement complaint, again concluding that Praetorian lacks standing to assert Air Cargo's entitlement to workers' compensation immunity.

I. FACTUAL AND PROCEDURAL HISTORY

The litigation underlying these consolidated appeals arose from an aircraft crash on May 5, 2017, that resulted in the death of Anh Kim Ho. Ms. Ho, an employee of respondent Air Cargo, served as first officer on the flight. In May 2019, respondent Ms. Chau, as administratrix of Ms. Ho's estate, filed a wrongful death action in the Circuit Court of Kanawha County,^[2] naming Air Cargo as one of the defendants.^[3] Ms. Chau asserted a deliberate intent claim against Air Cargo under West Virginia Code § 23-4-2(d)(2)(B), and, in the alternative, a negligence claim.^[4]

Air Cargo is insured under a "Workers Compensation and Employers Liability Insurance Policy" issued by Praetorian. Praetorian agreed to defend Air Cargo in the wrongful death action under a reservation of rights and assigned the defense to Edgar Poe of the law firm Pullin, Fowler, Flanagan, Brown & Poe.^[5]

In September 2020, Praetorian filed a declaratory judgment action in the Circuit Court of Kanawha County purportedly seeking to determine its rights and obligations under the policy issued to Air Cargo.^[6] Specifically, Count I of Praetorian's complaint sought a declaration that the policy excludes coverage for the deliberate intent claim asserted in the wrongful death action. However, Count II of Praetorian's complaint sought a declaration that Air Cargo is entitled to the workers' compensation immunity protections of West Virginia Code § 23-2-6 and, therefore, could not be held liable for negligence in connection with Ms. Ho's death. In November 2020, Ms. Chau and Air Cargo each filed a motion to dismiss Count II of Praetorian's declaratory judgment complaint. Both claimed the circuit court had no subject-matter jurisdiction over Count II, as it sought resolution on the merits of the negligence claim asserted in Ms. Chau's separate wrongful death action, and both claimed that Praetorian lacked standing to litigate the merits of Ms. Chau's negligence claim.

Also in November 2020, Praetorian filed a motion to transfer the declaratory judgment action to Judge Bloom, who is presiding over the wrongful death action. All parties to both the wrongful death and declaratory judgment actions consented to the motion. In December 2020, while the motion to transfer was pending, Praetorian filed, in the wrongful death action, a motion to consolidate the declaratory judgment and wrongful death actions. Praetorian sought consolidation so that Judge Bloom could address a legal issue common to both actions: "whether Air Cargo is entitled to the workers' compensation immunity granted by [West Virginia] Code § 23-2-6." Ms. Chau opposed the motion to consolidate and argued that Praetorian sought to "participate directly in litigating the merits of the Estate's negligence claim[.]" By order entered on January 13, 2021, Judge Bloom denied both the agreed motion to transfer and the motion to consolidate. No relief from this order was sought by Praetorian, and no issues related to these rulings are raised in these consolidated appeals.

Meanwhile although Ms. Chau's and Air Cargo's motions to dismiss Count II of the declaratory judgment action remained pending, on December 30, 2020, Praetorian filed a motion for summary judgment in the declaratory judgment action. On February 10, 2021, Praetorian filed a motion in the wrongful death action to intervene as of right under Rule 24(a)(2) of the West Virginia Rules of Civil Procedure. By order entered on February 25, 2021, Judge Bloom denied...