Pritt v. Suzuki Motor Co., Ltd., 24999.

Decision Date15 December 1998
Docket NumberNo. 24999.,24999.
Citation513 S.E.2d 161,204 W.Va. 388
PartiesDr. Donald S. PRITT, Appellant, v. SUZUKI MOTOR CO., LTD., a Foreign Corporation; U.S. Suzuki Motor Corp., a California Corporation; Davis and Owens, Inc., dba Suzuki of Harrisville, a West Virginia Corporation; Specialty Vehicle Institute of America, a California Company, Appellees.
CourtWest Virginia Supreme Court

Rebecca A. Baitty, Esq., Sarasota, Florida, Joseph W. Moch, Esq., Teresa M. Hendricks, Esq., Grand Rapids, Michigan, Richard W. Cardot, Esq., Elkins, West Virginia, for Appellant.

Anita R. Casey, Esq., G.W. Lavender, III, Esq., Karyn M. Schmidt, Esq., Meyer, Darragh, Buckler, Bebenek & Eck, Charleston, West Virginia, Gene C. Schaerr, Esq., John Fee, Sidley & Austin, Washington D.C., for Suzuki.

Ira M. Haught, Esq., Harrisville, West Virginia, for Davis & Owens.

David L. Wyant, Esq., Shuman, Annand & Poe, Wheeling, West Virginia, for Specialty Vehicle Institute.

PER CURIAM:1

This Court accepted Appellant Donald S. Pritt's appeal solely on the issue of whether the Circuit Court of Randolph County erred in its ruling entered on July 21, 1995, through which the lower court awarded attorneys' fees and costs to the defendants in this case, as well as to Appellant's trial counsel. Having thoroughly reviewed this issue, we conclude that the lower court was correct in its ruling and accordingly, we affirm.

I. Factual and Procedural Background

On December 9, 1990, Appellant was allegedly in an all-terrain vehicle ("ATV") accident. Because he was alone at the time, there were no witnesses to the alleged accident. On October 27, 1992, Appellant brought suit against Appellee Suzuki Motor Company,2 as the manufacturer of the ATV. Appellant averred that he suffered severe, permanent physical and mental injuries including a closed head injury and soft tissue injuries, as a result of the accident. Appellant, who was previously a successful podiatrist, now claimed to have an intelligence quotient of around sixty. Appellant alleged that he suffered back and neck injuries which rendered him disabled and forced him to walk in a stooped-over fashion with the assistance of a cane. As a result of these injuries plus continuing extreme pain in both his right leg and hand, Appellant claimed that he was no longer able to work.

When he failed to obtain a continuance of the July 14, 1994, trial date, Appellant voluntarily committed himself to St. Joseph's Hospital in Parkersburg the day before the trial was set to begin. The trial court appointed a guardian ad litem to represent Appellant's interests at trial. Just before trial, Appellees learned that Appellant had failed to disclose that he had been treated for psychological problems for years.3 Based on this information, Appellees moved to strike Appellant's claim for mental damages. Concluding that Appellant had been acting in "bad faith" in making his discovery responses, the circuit court barred him from presenting any expert testimony on psychiatric injury or damages at trial.

The first witness called at trial was Appellant's son, ("Mr.Pritt"). During cross-examination, Mr. Pritt spoke at length about the limitations his father had suffered as a result of the accident. In an effort to impeach Mr. Pritt, Appellees moved to introduce surveillance tapes taken during a six-week period which showed Appellant performing a variety of physical activities.4 The lower court excused the jury and the videotape was viewed by counsel and the court. Based on the highly physical and demanding nature of the activities that the videotape captured Appellant executing, the trial court declared a mistrial.5

In its order declaring a mistrial,6 the lower court found that "plaintiff, Donald S. Pritt, has willfully concealed his condition, and has willfully and intentionally and fraudulently represented to have been injured in various ways that might have entitled him to recover substantial recovery from the defendants and their insurance carriers seeking, obviously, a very substantial recovery possibly into the millions of dollars had this been a legitimate claim." In addition, the trial court observed that Appellant had been motivated by the possibility of recovering insurance proceeds as "he had, prior to the alleged accident, purchased various insurance policies that had disability indemnity provisions in them and that he has, in fact, been receiving substantial money from some of those insurance companies." Both Appellees' counsel and Appellant's trial counsel, Joseph Moch, filed motions for attorneys' fees.7

The lower court's Judgment Order8 sets forth various findings including the fact that Appellant, as demonstrated by the videotapes, was a "very active individual performing a variety of physical tasks that also require mental alertness." In this order, the trial court expressly found that Appellant was perpetrating a fraud on the court, the parties, their counsel, and his own counsel. On October 11, 1994, Appellant's newly-retained post-trial counsel filed a motion to set aside the court's judgment order. The circuit court held a hearing on Appellant's posttrial motion on November 17, 1994, and granted a continuance to permit the newlyretained counsel an opportunity to familiarize himself with the case. The lower court also heard evidence on various motions for attorneys' fees. The trial court considered Appellant's post-trial motion to set aside judgment on December 21, 1994, and again granted a continuance. At this same proceeding, the circuit court heard argument from both sides regarding the authenticity of the videotapes. On May 15, 1995, the trial court heard argument on Appellant's motion for a new trial and denied the same in an order dated July 21, 1995. In that same order, the lower court awarded attorneys' fees to both Suzuki and Appellant's trial counsel.9

On August 2, 1995, Appellant filed additional post-trial motions seeking a stay, to set aside judgment, and new trial. He then filed a petition for review with this Court on November 25, 1995. Shortly after granting review solely on the award of attorneys' fees on October 19, 1996, this Court vacated its grant of review on the grounds that Appellant's post-trial motions had not yet been ruled upon by the lower court. By order entered February 2, 1997, the circuit court ruled that Appellant's post-trial motions had not been timely filed and were in fact "phantom" in nature because they presented no new issues. Appellant filed a second petition for appeal with this Court on June 18, 1997, which this Court granted for the sole purpose of reviewing the award of attorneys' fees.

II. Standard of Review

With regard to a review of the appropriateness of sanctions ordered by a trial court, the standard, as we recognized in Bartles v. Hinkle, 196 W.Va. 381, 472 S.E.2d 827 (1996), is abuse of discretion: "The question is not whether we would have imposed a more lenient penalty had we been the trial court, but whether the trial court abused its discretion in imposing the sanction." Id. at 389-90, 472 S.E.2d at 835-36. On the issue of whether the trial court properly directed Appellant to pay attorneys' fees to his own trial counsel, our review is de novo, as that issue involves a question of law. See Syl. Pt. 1, Chrystal R.M. v. Charlie A.L., 194 W.Va. 138, 459 S.E.2d 415 (1995).

III. Discussion

Arguing that the lower court's dismissal of his lawsuit was an appropriately severe sanction, Appellant challenges the award of attorneys' fees to both Suzuki and Mr. Moch. We recently stated in syllabus point two of Bartles:

In formulating the appropriate sanction, a court shall be guided by equitable principles. Initially, the court must identify the alleged wrongful conduct and determine if it warrants a sanction. The court must explain its reasons clearly on the record if it decides a sanction is appropriate. To determine what will constitute an appropriate sanction, the court may consider the seriousness of the conduct, the impact the conduct had in the case and in the administration of justice, any mitigating circumstances, and whether the conduct was an isolated occurrence or was a pattern of wrongdoing throughout the case.

196 W.Va. at 384, 472 S.E.2d at 830. In this case, the wrongful conduct at issue was the fraud which Appellant perpetrated on the court in filing a baseless lawsuit and on his own counsel in securing representation for apparently nonexistent injuries.

This Court has long-recognized the inherent authority of trial courts to award attorney's fees as a sanction for fraud. In Bowling v. Ansted Chrysler-Plymouth-Dodge, Inc., 188 W.Va. 468, 425 S.E.2d 144 (1992), we discussed the issue of attorney's fees in the context of an action for fraud: "`A well-established exception to the general rule prohibiting the award of attorney fees in the absence of statutory authorization, allows the assessment of fees against a losing party who has acted in bad faith, vexatiously, wantonly, or for oppressive reasons.'" Id. at 474, 425 S.E.2d at 150 (quoting Nelson v. West Virginia Public Employees Ins. Bd., 171 W.Va. 445, 451, 300 S.E.2d 86, 92 (1982)). Based on our determination that "fraud falls within the `bad faith' exception to the American rule[,]" we concluded in Bowling that findings of fraud demonstrated by clear and convincing evidence permit attorney's fees to be awarded against a defendant. 188 W.Va. at 475,425 S.E.2d at 151; accord Yost v. Fuscaldo, 185 W.Va. 493, 499-500, 408 S.E.2d 72, 78-79 (1991)

(reversing trial court's decision not to award attorney's fees against defendants who had fraudulently induced plaintiff to sign release settling his personal injury claim). The trial court's award of attorneys' fees in this case was based both on violations of specific rules of civil procedure, as well the court's inherent sanctioning power.10

In its order awarding attorneys' fees, the trial...

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