Schoolhouse Ltd. v. Creekside Owners Ass'n, 13-0812
| Decision Date | 08 May 2014 |
| Docket Number | No. 13-0812,13-0812 |
| Court | West Virginia Supreme Court |
| Parties | SCHOOLHOUSE LIMITED LIABILITY COMPANY, a West Virginia limited liability company, Defendant, Petitioner v. Creekside Owners Association, a West Virginia not-for-profit homeowners association, individually and on behalf of two (2) or more unit owners, Plaintiff, Respondent and WIL-KEN, INC., a West Virginia Corporation; BUILDERS GROUP, INC., a West Virginia corporation; BG Millwork, Inc., a West Virginia Corporation; SMITH BACKHOE AND DOZER SERVICE, LLC, a West Virginia limited liability corporation; R.E.H., INC., a West Virginia corporation; DAVIS ELECTRICAL SERVICE, INC., a West Virginia corporation; COOPER ASPHALT, INC., a West Virginia corporation; RELIABLE ROOFING COMPANY, a West Virginia corporation; D'JERICHO, LLC, a West Virginia limited liability company; OLD SPRUCE REALTY AT SNOWSHOE, LLC, a/k/a Remax Old Spruce Properties, a West Virginia limited liability company, Defendants, Respondents |
(Pocahontas County 12-C-33(R))
The petitioner (defendant below), Schoolhouse Limited Liability Company ("Schoolhouse"), appeals from the August 13, 2013, revised order of the Circuit Court of Pocahontas County approving a mediation settlement reached between the respondent (plaintiff below), Creekside Owners Association ("Creekside"), and the remainingrespondents (defendants below).1 The circuit court found that the settlement had been made in good faith and dismissed all claims against the settling defendants, including the cross-claim of the non-settling Schoolhouse for implied indemnification against the settling defendants. On appeal, Schoolhouse does not assert that the settlement was not made in good faith, but it does challenge the circuit court's dismissal of its implied indemnity cross-claim.
Upon our review of the parties' arguments, the pertinent authorities, and because we find no prejudicial error upon consideration of the applicable standard of review and the appendix record presented, this matter is proper for disposition pursuant to Rule 21 of the West Virginia Rules of Appellate Procedure.
On August 28, 2012, Creekside filed an Amended Complaint against Schoolhouse, the developer and declarant2 of Creekside Villas, a condominium complex made up of common elements, limited common elements, and condominium units located at Snowshoe Mountain, Pocahontas County, West Virginia. Also named as defendants were Wil-Ken, Inc. ("Wil-Ken"), the general contractor for the project, D'Jericho, LLC ("D'Jericho"), the architect for the project, and Old Spruce Realty at Snowshoe, LLC, a/k/a ReMax Old Spruce Properties ("Old Spruce Realty"), the realtor that marketed the project to prospective buyers, as well as the various subcontractors and/or suppliers on the project: Elkins Builders Supply Company, LLC ("Elkins Builders"), Builders Group, Inc. ("Builders Group"), BG Millwork, Inc. ("BG Millwork"), Minighini Construction, LLC ("Minighini Construction"), Smith Backhoe and Dozer Service, LLC ("Smith Backhoe"), R.E.H., Inc. ("R.E.H."), Davis Electrical Service, Inc. ("Davis Electric"), Cooper Asphalt, Inc. ("Cooper Asphalt"), and Southern States Elkins Cooperative, Inc. ("Southern States"). Creekside alleged various claims, including negligence, conspiracy, and breach of warranty in the design, construction, marketing, and sale of the common elements, limited common elements, and/or condominium units by one or more of the defendants to Creekside and tovarious condominium owners who comprise Creekside. Schoolhouse answered and asserted a cross-claim for implied indemnity and contribution against its co-defendants.3
On December 5, 2012, Creekside filed a Second Amended Complaint, which added subcontractors Reliable Roofing Company, Randy King d/b/a/ Mountain Artisan Masonry, and Bruce K. Howell d/b/a BK Construction as defendants in the litigation.
In May 2013, the parties engaged in a multi-day mediation, which resulted in a settlement agreement being reached between plaintiff Creekside and defendants Wil-Ken, D'Jericho, Old Spruce Realty, Builders Group, BG Millwork, Smith Backhoe, R.E.H., Davis Electrical, Cooper Asphalt, and Reliable Roofing (the "settling defendants"). Under the pertinent terms of the settlement, the settling defendants agreed to pay Creekside the sum of $600,000 and, in return, Creekside agreed to dismiss its claims against the settling defendants with prejudice. The settling defendants also agreed to a dismissal with prejudice of the cross-claims asserted amongst themselves. Although Schoolhouse, Southern States, and Mountain Artisan Masonry participated in the mediation, they did not reach a settlement with Creekside.4
On May 22, 2013, counsel for Schoolhouse advised all counsel that its cross-claim for implied indemnity against the settling defendants was not extinguished by the settlement. Thereafter, on June 17, 2013, the settling defendants and plaintiff Creekside filed a Joint Motion to Approve Settlement and Dismiss Claims ("joint motion") seeking the circuit court's approval of the mediated settlement and a dismissal of all claims asserted against them, including Schoolhouse's implied indemnity cross-claim; they argued that absent the dismissal of all claims, the settlement would not go forward. Schoolhouse opposed the motion arguing that its cross-claim survived the settlement because the countsin the Amended Complaint asserted against it were all derivative of the claims asserted against the settling defendants.5
On August 20, 2013, the circuit court entered Plaintiff's Stipulation of Dismissal of All Claims of Vicarious Liability for Work Performed by or Products Supplied by the Settling Defendants and Order Approving Said Dismissal ("Stipulation/Order").7 This Stipulation/Order, which effectively closed the door on any possibility that allegations of vicarious liability remained against Schoolhouse, provides that "Plaintiff hereby stipulates to the dismissal, with prejudice, [of] any and all claims for vicarious liability for work performed by or products supplied by the Settling Defendants that it made or could have made against any remaining party Defendant." The Stipulation/Order concludes that "all claims for vicarious liability for work performed by or products supplied by the Settling Defendants that have been or could have been made by the Plaintiff against any Defendant in this case are hereby DISMISSED WITH PREJUDICE." This appeal followed.
Schoolhouse appeals the circuit court's order dismissing its cross-claim for implied indemnity against the settling defendants. "Appellate 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). In light of our de novo standard of review, we also consider the standard that was applied by the circuit court:
"The 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 support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957).
Syl. Pt. 3, Chapman v. Kane Transfer Co., 160 W.Va. 530, 236 S.E.2d 207 (1977). Under these applicable standards, we proceed to address the parties' arguments.8
Schoolhouse argues that the allegations in its cross-claim were sufficient to meet the dismissal standard under Rule 12(b)(6) of the West Virginia Rules of Civil Procedure because it denied any wrongdoing and asserted that any damages suffered by Creekside were the result of the wrongful conduct of others. According to Schoolhouse, all claims asserted against it in the Amended Complaint are derivative9 of the claims asserted against the settling defendants; thus, its cross-claims for implied indemnity should survive the settlement. In other words, Schoolhouse contends that the negligent acts of the settling defendants are the factual predicate for all claims asserted by Creekside.
Conversely, the respondents argue that allowing Schoolhouse to maintain its cross-claim for implied indemnity would serve no purpose other than to prejudice the settling defendants who have bought their peace in this litigation.10 The respondents assert thatSchoolhouse's potential liability is not predicated upon product liability or strict liability, but on its own misrepresentations, fraud, and breach of its separate duty of care as the developer/declarant of the Creekside Villas condominium complex. Because Creekside has dismissed with...
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