Slider v. State Farm Mut. Auto. Ins. Co.

• Court: West Virginia Supreme Court
• Writing for the Court: McGRAW, Chief Justice.
• Citation: Slider v. State Farm Mut. Auto. Ins. Co., 210 W.Va. 476, 557 S.E.2d 883 (W. Va. 2001)
• Decision Date: 13 December 2001
• Docket Number: No. 29292.,29292.
• Parties: Diana L. SLIDER and Randy Slider, Plaintiffs Below, Appellants, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Erie Insurance Group, Charles Noffsinger, Individually and as an Employee at State Farm Automobile Insurance Company, Nationwide Mutual Insurance Company, Defendants Below, Appellees.

557 S.E.2d 883

210 W.Va. 476

Diana L. SLIDER and Randy Slider, Plaintiffs Below, Appellants, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Erie Insurance Group, Charles Noffsinger, Individually and as an Employee at State Farm Automobile Insurance Company, Nationwide Mutual Insurance Company, Defendants Below, Appellees.

No. 29292.

Supreme Court of Appeals of West Virginia.

Submitted November 6, 2001.

Decided December 13, 2001.

David A. Jividen, Esq., James B. Stoneking, Esq., Bordas, Bordas & Jividen, Wheeling, for Appellants.

Catherine D. Munster, Esq., Tiffany R. Durst, Esq., McNeer, Highland, McMunn & Varner, Clarksburg, for Appellees State Farm Mutual Automobile Insurance Company and Charles Noffsinger.

James D. Lamp, Esq., Benu Rellan, Esq., Lamp, O'Dell, Bartrum, Levy & Trautwein, Wheeling, for Appellee Erie Insurance Group. McGRAW, Chief Justice.

Diana and Randy Slider, plaintiffs below and appellants herein, appeal the September 8, 2000 order of the Circuit Court of Ohio County granting summary judgment to defendants-appellees State Farm Mutual Automobile Insurance Company ("State Farm"), Charles Noffsinger, and Erie Insurance Property and Casualty Company ("Erie"). The circuit court determined that the bad faith and intentional tort claims asserted by plaintiffs in the instant case, which are predicated upon defendants' alleged misconduct in making settlement under first-party underinsurance coverage, were barred by res judicata or claim preclusion in that during the course of a previous personal injury action plaintiffs had sought consequential damages against such insurers under Marshall v. Saseen, 192 W.Va. 94, 450 S.E.2d 791 (1994), but were denied relief by way of a final judgment. We now reverse, finding that plaintiffs' present claims are not barred under the "same-evidence" test for claim preclusion that applies in this jurisdiction.

I. BACKGROUND

Diana Slider was injured on October 5, 1992 while riding as a passenger in a pickup truck owned and driven by Nancy Jo Haught. The vehicle had come to a stop on Route 18 near Middlebourne, West Virginia, while Mrs. Haught was attempting to make a left-hand turn, and was struck from behind by a loaded log truck driven by Paul Buck. Mrs. Slider was transported by ambulance to Wetzel County Hospital, where she was treated for various injuries including a concussion and scalp lacerations. Following her discharge from the hospital, Mrs. Slider complained of pain in the shoulders, neck and back, as well as persistent headaches and lightheadedness, and after seeking further medical treatment was diagnosed with several maladies including fibromyalgia, myofascial pain syndrome, headache disorder, and temporomandibular joint (TMJ) disfunction.

Howard Buck, the owner of the log truck, was insured by State Farm with a bodily injury liability coverage limit of $50,000. The driver, Paul Buck, had $100,000 in liability coverage from Nationwide Mutual Insurance Company ("Nationwide"). Mrs. Slider also had first-party coverage under the underinsured motorist ("UIM") provisions of both her own policy with State Farm, as well as Mrs. Haught's policy with Erie, each of which provided UIM coverage in the amount of $100,000.

Demands were later made on both State Farm and Nationwide, with State Farm responding on October 25, 1992 by offering the full $50,000 available under Howard Buck's bodily injury liability coverage. Nationwide apparently made no offer, and as a result the Sliders in September 1994 commenced a personal injury action against Howard and Paul Buck in the Circuit Court of Tyler County. The Sliders served a copy of the complaint on both Erie and State Farm pursuant to W. Va.Code § 33-6-31(d) (1998).

Nationwide chose not to offer the full policy limit of Paul Buck's bodily injury liability coverage, but instead tendered an offer of only $70,000. The Sliders refused this offer, and the case went to trial on September 10, 1996. Neither Erie nor State Farm apparently made any offers of settlement either prior to or during trial. The jury subsequently returned a verdict in favor the Sliders in the amount of $336,000. All three insurers paid their share of the verdict shortly after trial, and on November 21, 1996, the circuit court entered a judgment order and an order showing satisfaction of such judgment on the underlying personal injury claims.

The Sliders had previously filed a motion for summary judgment against Erie and State Farm on November 13, 1996, seeking recovery of attorneys' fees, costs and expenses, together with annoyance and inconvenience damages, on the basis that they had "substantially prevailed" under Marshall v. Saseen, 192 W.Va. 94, 450 S.E.2d 791 (1994). Erie and State Farm filed a joint cross-motion for summary judgment regarding the plaintiffs' Marshall claims on January 9, 1997. Following a hearing on these motions held on November 12, 1997,¹ the Circuit Court of Tyler County on January 9, 1998 denied the Sliders' motion for summary judgment and entered judgment in favor of Erie and State Farm. The circuit court's two-page order merely stated that, "Upon a review of the pleadings filed herein and argument of counsel, the Court finds that the Defendants, Erie Insurance Company and State Farm Mutual Automobile Insurance Company, are entitled to a summary judgment as a matter of law," and otherwise contained no supporting analysis. The Sliders' subsequent appeal to this Court was denied on July 1, 1998.

Undeterred, the Sliders on September 11, 1998 commenced the present action in the Circuit Court of Ohio County against all three insurers, as well as an employee of State Farm, Charles Noffsinger, asserting claims of (1) breach of the implied covenant of good faith and fair dealing (as to Erie and State Farm only)²; (2) unfair claim settlement practices under the West Virginia Unfair Claims Settlement Practices Act, W. Va. Code § 33-11-4(9) (1985); and (3) intentional infliction of emotional distress. The complaint further alleged that all four defendants were subject to a joint enterprise theory of liability, and sought both compensatory and punitive damages.

Erie, State Farm, and Noffsinger subsequently move for judgment on the pleadings and/or summary judgment asserting, inter alia, that the Sliders' claims as to them were barred under the principle of res judicata or claim preclusion based upon the previous failure of plaintiffs' Marshall claims in the underlying personal injury litigation. The Circuit Court of Ohio County subsequently granted summary judgment in favor of the moving defendants on such ground by an order entered on September 8, 2000, and the present appeal followed.

II. STANDARD OF REVIEW

"A circuit court's entry of summary judgment is reviewed de novo." Syl. pt. 1, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994). As we have long stressed, "[a] motion for summary judgment should be granted only when it is clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not desirable to clarify the application of the law." Syl. pt. 3, Aetna Cas. & Sur. Co. v. Federal Ins. Co. of New York, 148 W.Va. 160, 133 S.E.2d 770 (1963); see also Painter, 192 W.Va. at 192, 451 S.E.2d at 758.

III. DISCUSSION

As this Court previously explained, res judicata or claim preclusion "generally applies when there is a final judgment on the merits which precludes the parties or their privies from relitigating the issues that were decided or the issues that could have been decided in the earlier action." State v. Miller, 194 W.Va. 3, 9, 459 S.E.2d 114, 120 (1995) (citing Allen v. McCurry, 449 U.S. 90, 94, 101 S.Ct. 411, 414, 66 L.Ed.2d 308, 313 (1980); In re Estate of McIntosh, 144 W.Va. 583, 109 S.E.2d 153 (1959)).

The fundamental rationale for this doctrine is to permit repose on the part of defendants who have been subject to suit. See Sattler v. Bailey, 184 W.Va. 212, 217, 400 S.E.2d 220, 225 (1990) (observing that doctrine permits litigants to avoid "the expense and vexation attending relitigation of causes of action which have been fully and fairly decided"); State ex rel. Connellsville By-Product Coal Co. v. Continental Coal Co., 117 W.Va. 447, 449, 186 S.E. 119, 120 (1936) (doctrine intended to prevent a person from being "twice vexed for one and the same cause"), overruling on other grounds recognized, State ex rel. Morris v. Taylor, 130 W.Va. 573, 44 S.E.2d 632 (1947). We have further observed that claim preclusion serves to "`conserve[] judicial resources, and fosters reliance on judicial action by minimizing the possibility of inconsistent decisions.'" Conley v. Spillers, 171 W.Va. 584, 588, 301 S.E.2d 216, 220 (1983) (quoting Montana v. United States, 440 U.S. 147, 153-54, 99 S.Ct. 970, 973-74, 59 L.Ed.2d 210, 217 (1979)).

The basic requirements for invoking res judicata or claim preclusion were recently summarized in Blake v. Charleston Area Med. Ctr., Inc., 201 W.Va. 469, 498 S.E.2d 41 (1997):

Before the prosecution of a lawsuit may be barred on the basis of res judicata, three elements must be satisfied. First, there must have been a final adjudication on the merits in the prior action by a court having jurisdiction of the proceedings. Second, the two actions must involve either the same parties or persons in privity with those same parties. Third, the cause of action identified for resolution in the subsequent proceeding either must be identical to the cause of action determined in the prior action or must be such that it could have been resolved, had it been presented, in the prior action.

Syl. pt. 4, id. The third prong of this test is most often the focal point, since "the central inquiry on a plea of res judicata is whether the cause of action in the second suit is the same as in the first suit." Conley, 171 W.Va. at 588, 301 S.E.2d at 220. This case is no different.

The threat of claim preclusion requires that litigants present in a single action ...