Savarese v. Allstate Ins. Co.

• Decision Date: 26 September 2008
• Docket Number: No. 33443.,33443.
• Citation: 672 S.E.2d 255
• Court: West Virginia Supreme Court
• Parties: Frank A. SAVARESE, Plaintiff Below, Appellant, v. ALLSTATE INSURANCE COMPANY, Kim Jozsa Lashwanda Carter, and Kira Hill, Defendants Below, Appellees.

672 S.E.2d 255

Frank A. SAVARESE, Plaintiff Below, Appellant, v. ALLSTATE INSURANCE COMPANY, Kim Jozsa Lashwanda Carter, and Kira Hill, Defendants Below, Appellees.

No. 33443.

Supreme Court of Appeals of West Virginia.

Submitted: January 23, 2008.

Decided: September 26, 2008.

Dissenting Opinion of Justice Starcher December 30, 2008.

Syllabus by the Court

1. "Under the Privileges and Immunities Clause of the United States Constitution, Art. IV, Sec. 2, the provisions of W. Va.Code, 56-1-1(c) [2003] do not apply to actions filed against West Virginia citizens and residents." Syllabus point 2, Morris v. Crown Equipment Corporation, 219 W.Va. 347, 633 S.E.2d 292 (2006).

2. Pursuant to West Virginia Code § 56-1-1(c) (2003), a nonresident plaintiff must establish that all or a substantial part of the acts giving rise to his or her claims occurred in West Virginia in order to establish that venue is appropriate in this state where no claims are asserted against a West Virginia resident. In an action arising from the failure to pay a nonresident plaintiff's medical payment claims arising under a contract of insurance entered into and governed by the law of another state, the nonresident plaintiff's retention of a West Virginia attorney and communications to that attorney in West Virginia that the medical payment claims have been denied are insufficient, standing alone, to satisfy the requirements of West Virginia Code § 56-1-1(c)(2003).

David A. Jividen, Chad C. Groome, Jividen Law Offices, PLLC, Wheeling, for Appellant.

Brent K. Kesner, Ellen R. Archibald, Tanya M. Kesner, Kesner, Kesner & Bramble, PLLC, Charleston, for Appellees.

BENJAMIN, Justice.

In the instant matter, Appellant Frank A. Savarese (hereinafter "Mr. Savarese") seeks reversal of the Circuit Court of Ohio County's October 11, 2006, Memorandum Opinion and Order dismissing, without prejudice, this first party bad faith action, pursuant to West Virginia Code § 56-1-1(c)(2003), for lack of subject matter jurisdiction. After thorough consideration of the arguments of the parties, the record below and all pertinent legal authorities, we affirm the circuit court's dismissal order.

I. FACTUAL AND PROCEDURAL HISTORY

Mr. Savarese, a resident of Yorkville, Jefferson County, Ohio, was injured in a March 14, 2003, automobile accident occurring in Yorkville, Belmont County, Ohio.¹ Mr. Savarese thereafter retained an attorney located in Wheeling, Ohio County, West Virginia, to pursue any claims arising from this automobile accident.² This attorney promptly filed suit in the Court of Common Pleas for Jefferson County, Ohio, against the other driver who was resident of Belmont County, Ohio.

At the time of the accident, Mr. Savarese was insured by the Appellee Allstate Insurance Company (hereinafter "Allstate") under a policy of insurance providing for Twenty-five Thousand Dollars ($25,000) in medical payments coverage. As a result of injuries sustained in this accident, Mr. Savarese sought treatment from medical providers in both Ohio and West Virginia. His claims for medical payments under his Allstate policy were handled by Allstate representative Kim Jozsa (hereinafter "Ms. Jozsa") in Allstate's Hudson, Ohio, office, Allstate representative Lashwanda Carter (hereinafter "Ms. Carter") in Allstate's Birmingham, Alabama, office,³ and Allstate representative Kira Hill (hereinafter "Ms. Hill") in Allstate's Birmingham, Alabama, office. During the course of handling Mr. Savarese's medical payment claims, requests for information and notification of benefit payments were directed to Mr. Savarese's counsel in Wheeling, West Virginia.

In March 2006, Mr. Savarese filed suit in the Circuit Court of Ohio County, West Virginia, against Allstate, an Illinois corporation with a principal place of business in Illinois, Ms. Jozsa, Ms. Carter and Ms. Hill alleging that they failed to exercise good faith in handling his first-party medical payment claims, that they breached his insurance contract by failing to pay such claims, that their failure to pay his medical payment claims caused him severe emotional distress and that Allstate failed to properly train its employees. In his complaint, Mr. Savarese sought both compensatory and punitive damages. The defendants promptly removed the action to federal court, however the case was remanded to the Circuit Court of Ohio County on the basis that the defendants did not demonstrate that the jurisdictional amount in controversy requirement had been satisfied. Upon remand, Allstate filed a motion to dismiss asserting that the circuit court lacked both subject matter jurisdiction and venue over Mr. Savarese's action because it involves no West Virginia parties and is governed by Ohio law. The individual defendants, appearing specially to challenge jurisdiction and venue, also filed a motion to dismiss. In addition to the issues raised by Allstate, the individual defendants argued insufficiency of service of process and lack of personal jurisdiction as to the claims asserted against them.

In his response to the motions to dismiss, Mr. Savarese admitted that Ohio law governed his claims but asserted that the Circuit Court of Ohio County, West Virginia, had jurisdiction to hear this matter because Allstate had directed communications regarding his medical benefit payments to his Wheeling, West Virginia, attorney and that some of his medical providers were located in Ohio County, West Virginia. To support this position, he attached numerous letters directed to his counsel involving his medical payment claims. Of the fifty-three (53) letters attached, thirty-three (33) involved the denial of payment, in whole or in part, to an Ohio chiropractor,⁴ David A. Smith, D.C.⁵ Seven (7) letters indicated payment in full had been remitted to medical providers.⁶ Eight (8) letters were requests for medical records, medical records release authorizations, and/or further information such as diagnostic codes and tax identification numbers so that payments could be processed.⁷ Two (2) letters evidence direct reimbursements to Mr. Savarese. An April 13, 2005, letter indicated that $18,522.57 had been paid in medical expenses to date. The remaining two (2) letters, both dated March 30, 2005, notified Mr. Savarese's counsel that partial payment had been made to David Liebeskind, M.D., a West Virginia provider. The Explanation of Benefits referenced as attached to these two letters which would explain the decision were not included in the record created in the circuit court and there is no way for this Court to determine whether the April 13, 2005, letters were duplicates, whether they involved one or more charges, the reason Dr. Liebeskind was not fully reimbursed, or if he eventually received full payment.

Applying West Virginia Code § 56-1-1(c)(2003), the circuit court dismissed the underlying civil action. This statute provided,⁸ in pertinent part, that "a nonresident of the state may not bring an action in a court of this state unless all or a substantial part of the acts or omissions giving rise to the claim asserted occurred in this state." In its October 11, 2006, order, the circuit court noted that no party was a resident of West Virginia and that "[a]ll parties have agreed that Ohio law should apply to the claims." Acknowledging Mr. Savarese's argument that "the acts or omissions giving rise to jurisdiction in West Virginia are several calls and letters from the Defendants directed to [his] attorney located in Ohio County, West Virginia[,]" the circuit court framed the question before it as "whether these communications constitute `a substantial part of the acts or omissions giving rise to the claim asserted.'" Answering this question in the negative, the circuit court explained its decision stating that it did:

not agree that the communications sent to the Plaintiff's attorney are a substantial part of the acts giving rise to the claims. The claim was adjusted in offices located in Hudson, Ohio, and Birmingham, Alabama. Any decisions involving whether to pay or to deny benefits under the policy were made at these locations. The decisions were then simply communicated to the Plaintiff's attorney, but they were already finalized before they were communicated.

A mere communication to an attorney that a decision has been made, without more, cannot confer subject matter jurisdiction. To find differently would put the Defendants in a situation where they would either have to 1) submit to jurisdiction anywhere a claimant hires an attorney simply because they have a duty to communicate with the attorney, or 2) refuse to send correspondence to a claimant's attorney in order to preserve their jurisdictional defenses, but possibly give rise to additional bad faith claims for failure to communicate. The Court believes that more than Plaintiff's counsel's physical location is contemplated by W. Va. Code § 56-1-1(c) in order for subject matter jurisdiction to exist over claims filed in this state by nonresidents.

(footnote omitted). Accordingly, the circuit court dismissed the action, without prejudice, for lack of subject matter jurisdiction.⁹ It is from this order that the instant appeal was taken. As explained in further detail below, we agree that the mere presence of Mr. Savarese's counsel in West Virginia, including communications directed to him, is insufficient to permit the instant action to proceed in the courts of our state. Accordingly, we affirm the circuit court's dismissal order.

II. STANDARD OF REVIEW

As noted above, the circuit court dismissed Mr. Savarese's for lack of subject matter jurisdiction based upon motions to dismiss filed by the various Appellees. Although it characterized its ruling as one based upon a lack of subject matter jurisdiction, the circuit court's ruling is clearly based upon application of the then-existing venue statute, W. Va.Code § 56-1-1(c). In general, this Court will apply a de novo standard of review...