Sizemore v. State Farm General Ins. Co.

Decision Date23 June 1998
Docket NumberNo. 24436.,24436.
Citation202 W.Va. 591,505 S.E.2d 654
CourtWest Virginia Supreme Court
PartiesRandall O. SIZEMORE and Teresa Sizemore, Plaintiffs, v. STATE FARM GENERAL INSURANCE COMPANY, Kenneth M. Johnson and Goldie C. Rhodes, Defendants.

Robert H. Miller, II, Katz, Kantor & Perkins, Bluefield, for Plaintiffs.

James D. McQueen, Jr., Jeffrey C. Dunham, McQueen, Harmon, Potter & Cleek, Charleston, for Defendants.

MAYNARD, Justice:

We are presented in this case with four questions certified by the Circuit Court of Mercer County regarding the proper limitation period in which to bring an action on a multiple line insurance policy. The certified questions and the circuit court's answers are as follows:

1. Is the plaintiffs' claim for first party property coverage for a fire loss barred by the one year limitation of action provision contained in their State Farm mobile home policy where plaintiffs failed to institute an action on the policy within one year after both plaintiffs and their attorneys received written notification of denial of coverage by State Farm General Insurance Company?
Answer of the circuit court: No.
2. Is the plaintiffs' claim for extra-contractual damages under a theory of common law bad faith, arising from the investigation and denial of their fire loss property insurance claim, also barred by the one year limitation of action provision contained in their State Farm mobile home policy where plaintiffs failed to institute an action on the policy within one year after both plaintiffs and their attorneys received written notification of denial of coverage by State Farm General Insurance Company?
Answer of circuit court: No.
3. Alternatively, is the plaintiffs' claim for extra-contractual damages under a theory of common law bad faith, arising from State Farm's investigation and denial of their fire loss property insurance claim, barred by the one year statutory limitation of action provision [Code § 55-2-12(c)], where plaintiffs failed to institute an action on the policy within one year after both plaintiffs and their attorneys received written notification of denial of coverage by State Farm General Insurance Company?
Answer of the circuit court: No.
4. If a two year statute of limitations applies, is dismissal of a civil action appropriate where the plaintiff files a summons and complaint within the two year period, does not serve it, but later abandons the original summons and, 34 days after the two year period expires, causes another summons to issue and to be served for the first time on the defendants, with the complaint?
Answer of the circuit court: No.

These certified questions are the result of the circuit court's denial of the defendants' motion for summary judgment.

West Virginia Code, 58-5-2 (1967), allows for certification of a question arising from a denial of a motion for summary judgment. However, such certification will not be accepted unless there is a sufficiently precise and undisputed factual record on which the legal issues can be determined. Moreover, such legal issues must substantially control the case.

Syllabus Point 5, Bass v. Coltelli, 192 W.Va. 516, 453 S.E.2d 350 (1994).

We find that there is a sufficiently precise and undisputed factual record upon which the legal issues can be determined, and because these legal issues substantially control the case, the questions are properly certified under W.Va.Code § 58-5-2 (1967). Therefore, we have jurisdiction to consider the questions certified by the circuit court.

I. FACTS

The undisputed facts are as follows. On April 24, 1993, a fire destroyed the mobile home of the plaintiffs, Randall and Teresa Sizemore, located in Mercer County, West Virginia. At the time of the fire, the plaintiffs' mobile home was covered by a manufactured home insurance policy issued by defendant State Farm General Insurance Company ("State Farm"). This insurance policy contained multiple line coverages providing casualty insurance combined with fire insurance.1 The policy had been approved by the Commissioner of Insurance of the State of West Virginia as required by W.Va. Code § 33-17-2 (1957).2

By letter dated August 24, 1993, State Farm informed the plaintiffs that their fire loss claim was denied by reason of provisions in the policy relating to intentional acts, concealment or fraud, and the failure to provide certain records and documents.

Thereafter, on April 24, 1995, the plaintiffs filed a complaint in the Circuit Court of Mercer County against State Farm Fire and Casualty Company3, State Farm General Insurance Company, Kenneth M. Johnson, Claims Superintendent of the Special Investigative Unit of State Farm, and Goldie C. Rhodes, a senior investigator. The complaint alleged both breach of contract and bad faith arising from the defendants' denial of coverage of the plaintiffs' fire loss.

On November 13, 1995, the defendants filed a motion to dismiss which was converted to a motion for summary judgment under West Virginia Rule of Civil Procedure 56 by reason of the defendants' reliance on factual materials not contained within the pleadings. In this motion, the defendants asserted that the plaintiffs' breach of contract claim was barred by the one year limitation of action provision contained in the insurance policy, and the bad faith claim was barred by the one year statute of limitations for tort actions set forth in W.Va.Code § 55-2-12(c)4. The circuit court, thereafter, denied the defendants' motion for summary judgment and submitted the issues raised therein to this Court as certified questions by joint application and concurrence of the parties.

II. STANDARD OF REVIEW

"The appellate standard of review of questions of law answered and certified by a circuit court is de novo." Syllabus Point 1, Gallapoo v. Wal-Mart Stores, Inc., 197 W.Va. 172, 475 S.E.2d 172 (1996).

III. DISCUSSION
A.

The first question we are asked by the circuit court to decide is whether,

the plaintiffs' claim for first party property coverage for a fire loss [is] barred by the one year limitation of action provision contained in their State Farm mobile home policy where plaintiffs failed to institute an action on the policy within one year after both plaintiffs and their attorneys received written notification of denial of coverage by State Farm General Insurance Company[.]

The multiple line insurance policy at issue provides that "[n]o action shall be brought unless there has been compliance with the policy provisions. The action must be started within one year after the date of loss or damage." It is undisputed that the plaintiffs failed to bring the underlying action within this required time period. In the single syllabus point of Meadows v. Employers' Fire Ins. Co., 171 W.Va. 337, 298 S.E.2d 874 (1982), this Court held that "[u]nder the provisions of the standard fire policy adopted under W.Va.Code, 33-17-2 (1957), the twelve-month time period for bringing suit commences to run when the insurance company notifies the insured in writing that it declines to pay the loss." The plaintiffs were notified of State Farm's denial of their claim on August 24, 1993 and did not bring an action based on this denial until April 24, 1995.

The answer to the first certified question hinges on the validity of the one year limitation of action provision in the multiple line policy. This can only be determined by looking to the meaning of W.Va.Code § 33-17-2 (1957) and W.Va.Code § 33-6-14 (1957). According to W.Va.Code § 33-17-2,

[n]o policy of fire insurance covering property located in West Virginia shall be made, issued or delivered unless it conforms as to all provisions and the sequence thereof with the basic policy commonly known as the New York standard fire policy, edition of one thousand nine hundred forty-three, which is designated as the West Virginia standard fire policy; except that with regard to multiple line coverages providing casualty insurance combined with fire insurance this section shall not apply if the policy contains, with respect to the fire portion thereof, language at least as favorable to the insured as the applicable portions of the standard fire policy and such multiple line policy has been approved by the commissioner. As of the effective date of this chapter [January 1, 1958], the commissioner shall file in his office, and thereafter maintain on file in his office, a true copy of such West Virginia standard fire policy, designated as such and bearing the commissioner's authenticating certificate and signature and the date of filing. Provisions to be contained on the first page of the policy may be rewritten, and rearranged to facilitate policy issuance and to include matter which may otherwise properly be added by endorsement. The standard fire insurance policy shall not be required for casualty insurance, marine insurance nor insurance on growing crops.

W.Va.Code § 33-6-14 states:

No policy delivered or issued for delivery in West Virginia and covering a subject of insurance resident, located, or to be performed in West Virginia, shall contain any condition, stipulation or agreement requiring such policy to be construed according to the laws of any other state or country, except as necessary to meet the requirements of the motor vehicle financial responsibility laws or compulsory disability benefit laws of such other state or country, or preventing the bringing of an action against any such insurer for more than six months after the cause of action accrues, or limiting the time within which an action may be brought to a period of less than two years from the time the cause of action accrues in connection with all insurances other than marine insurances; in marine policies such time shall not be limited to less than one year from the date of occurrence of the event resulting in the loss. Any such condition, stipulation or agreement shall be void, but such voidance shall
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