STATE EX REL. AFFILIATED CONST. v. Vieweg

• Decision Date: 14 July 1999
• Docket Number: No. 26364.,26364.
• Citation: 520 S.E.2d 854,205 W.Va. 687
• Court: West Virginia Supreme Court
• Parties: STATE of West Virginia ex rel. the AFFILIATED CONSTRUCTION TRADES FOUNDATION, a Division of the West Virginia Building and Construction Trades Council, AFL-CIO, and All Those Similarly Situated, Petitioner, v. William F. VIEWEG, Commissioner, Bureau of Employment Programs, and Compensation Programs Performance Council, Respondents.

520 S.E.2d 854

205 W.Va. 687

STATE of West Virginia ex rel. the AFFILIATED CONSTRUCTION TRADES FOUNDATION, a Division of the West Virginia Building and Construction Trades Council, AFL-CIO, and All Those Similarly Situated, Petitioner, v. William F. VIEWEG, Commissioner, Bureau of Employment Programs, and Compensation Programs Performance Council, Respondents.

No. 26364.

Supreme Court of Appeals of West Virginia.

Submitted June 29, 1999.

Decided July 14, 1999.

Stuart Calwell, Esq., John H. Skaggs, Esq., The Law Offices of Stuart Calwell, PLLC, Charleston, West Virginia, Attorneys for the Petitioner.

Ancil G. Ramey, Esq., Thomas M. Woodward, Esq., L. Eugene Dickinson, Esq., WVBEP, Legal Services Bureau, Charleston, West Virginia, Attorneys for Vieweg.

Franklin D. Cleckley, Esq., Morgantown, West Virginia, Attorney for Compensation Programs Performance Council.

John L. McClaugherty, Esq., A.L. Emch, Esq., Mychal S. Schulz, Esq., Jackson & Kelly, Charleston, West Virginia, Attorneys for WV Chamber of Commerce.

Thomas P. Maroney, Esq., Thomas P. Maroney, L.C., Charleston, West Virginia, Attorney for AFL-CIO WV Labor Federation.

Bradley J. Pyles, Esq., Crandall, Pyles, Haviland & Turner, Logan, West Virginia, Attorney for United Mine Workers of America.

Karen Price, President, West Virginia Manufacturers Association, Charleston, West Virginia.

Amicus Briefs: Barbara H. Allen, Esq., William S. Steele, Esq., Attorney General Darrell V. McGraw, Jr., Anthony Majestro, Esq., William D. Turner, Esq., WV Trial Lawyers Association; John L. McClaugherty, Esq., A.L. Emch, Esq., Mychal S. Schulz, Esq., WV Coal Association & WV Mining & Reclamation Association; David Grubb, Esq., John Barret, Esq., WV Citizen Action Group, Inc.; Henry C. Bowen, Esq., WV Business & Industrial Council.

Amici Brief: John Poffenbarger, Esq., West Virginia Department of Administration; Perry Pauley, Esq., West Virginia Department of Education and the Arts; Susan Settle, Esq., West Virginia Department of Health and Human Resources; Phyllis Carter, Esq., West Virginia Department of Military Affairs and Public Safety; Dale W. Steager, Esq., West Virginia Department of Tax and Revenue; Anthony G. Halkias, Esq., West Virginia Department of Transportation; William E. Adams, Jr., Esq., West Virginia Bureau of Environment.

PER CURIAM:

This case is before the Court upon a petition for writ of prohibition filed by the petitioner, The Affiliated Construction Trades Foundation, a division of the West Virginia Building and Construction Trades Council, AFL-CIO, and all those similarly situated, against the respondents, William F. Vieweg, Commissioner, Bureau of Employment Programs, and the Compensation Programs Performance Council. The petitioner seeks a writ prohibiting Commissioner Vieweg from dismissing civil actions instituted by the Workers' Compensation Division against certain corporate entities under theories of imputed liability for delinquent workers' compensation premiums, penalties and interest; prohibiting the Commissioner from having any further involvement in these actions; and directing the Commissioner and the Compensation Programs Performance Council to promulgate rules and regulations governing the conduct of litigation commenced by the Commissioner. We issued a rule to show cause and now deny the petitioner the relief which it seeks.

I. FACTS

In the original proceeding before us, this Court has the pleadings, affidavits and exhibits of the parties as well as several briefs of amicus curiae.¹ From these we glean the following facts.

In 1996 and 1998, the Workers' Compensation Division ["the Division"] instituted civil actions against several coal companies asserting theories of imputed liability for workers' compensation premiums that had not been paid by entities with whom those companies had contracted.² Because of concerns about the progress of these civil actions, the Commissioner recently sought advice from the Compensation Programs Performance Council ("the council") concerning the continued prosecution of these actions.³

On March 12, 1999, the council adopted Resolution 30 recommending that the Commissioner "take such action as is deemed necessary to terminate, withdraw or otherwise dismiss any party or entity named as a defendant whose liability, if any, for payment of premium is not direct under the workers compensation laws ... and whose own account with the Division is deemed to be in good standing."⁴ The council emphasized that the division "should continue to pursue collection from those parties or entities, including responsible officers, whose accounts remain in default and which parties, entities or officers have direct responsibility for and means of payment of premium, interest and/or penalty under the workers compensation statutes ... and applicable case law."⁵ The council's recommendation was unanimous. The council listed several reasons in support of the recommendation. These included:

WHEREAS, the Division has in fact initiated civil actions against certain parties, founded upon certain complex theories of law which are without precedence in the field of workers compensation law in West Virginia, and perhaps in other states, claiming liability of such parties for the defaulted premium obligations of other employers and further claiming such parties to be related or affiliated in some manner to the defaulting employers; and

WHEREAS, it appears that the amount of defaulted premium due and owing approximates $95 million and the interest and penalties thereon also approximate $95 million and further accumulating at the rate of $3 million per month; and

WHEREAS, outside litigation expenses to date have totaled $3 million; and

WHEREAS, the Division may expect to incur ongoing outside litigation expenses of $30,000 per month in addition to the ongoing but undetermined administrative and managerial time and other resources committed in support of the litigation; and

WHEREAS, the representation agreement with outside counsel imposes on the Division certain contractual obligations for purchase of a data system at fair market value which may total $700,000; and

WHEREAS, the representation agreement provides for the outside counsel to be compensated on a contingent fee basis in accord with Ch. 21A-2-6(17)(B), which basis has been an obstacle to settlement of certain of the pending actions; and

WHEREAS, due to the nature of the complex theories of law upon which the claims against parties deemed only to be liable on a vicarious basis are founded,⁶ any estimate of recovery would be wholly speculative; however, it is anticipated with a high degree of certainty that a favorable trial decision to any of the parties will likely result in appeal by the party adversely affected; and

WHEREAS, claims may still be pursued against those defaulting employers and their responsible officers deemed directly liable for payment of premium, penalty and interest under traditional collection theories recognized under the workers compensation law; and

WHEREAS, current underground coal employers participating in the workers compensation system are paying through the premium rating mechanism all claims arising from the defaulted employers with direct liability for premium, while all employers in good standing in the workers compensation system are bearing the expenses associated with the litigation; and

WHEREAS, over a long period of time preceding the filing of this litigation, the Division failed to adequately enforce premium payments from those directly responsible therefor under the workers compensation law and due to enhanced data systems, increased staffing, and strengthened statutes, it is unlikely that the environment which permitted such failures would be replicated; and

WHEREAS, it being the conclusion of the Council that further expenditure of Division funds in support of litigation founded upon the complex theories is not justified by the expectation of recovery or the need for precedent to discourage other parties from utilizing subcontractors as a means for workers compensation tax avoidance[.] (Footnote added).

On May 20, 1999, the Commissioner publicly announced his decision to dismiss cases filed against those parties which were claimed to be liable for payment of premium taxes due and owing from their contractors and to continue to pursue recovery against workers' compensation subscribers and their responsible officers under traditional legal theories.⁷ Thereafter, the petitioner filed the writ of prohibition which is the subject of this case.

II. DISCUSSION

The petitioners herein seek a writ of prohibition. According to W.Va.Code § 53-1-1 (1923), "[t]he writ of prohibition shall lie as a matter of right in all cases of usurpation and abuse of power, when the inferior court has not jurisdiction of the subject matter in controversy, or, having such jurisdiction, exceeds its legitimate powers." This Court has said that " ` "[a] writ of prohibition will not issue to prevent a simple abuse of discretion by a trial court. It will only issue where the trial court has no jurisdiction or having such jurisdiction exceeds its legitimate powers. W.Va.Code, 53-1-1." Syl. pt. 2, State ex rel. Peacher v. Sencindiver, 160 W.Va. 314, 233 S.E.2d 425 (1977).' Syllabus point 3, State ex rel. McDowell County Sheriff's Dept. v. Stephens, 192 W.Va. 341, 452 S.E.2d 432 (1994)." Syllabus Point 1, State ex rel. Charleston Area Medical Center, Inc. v. Kaufman, 197 W.Va. 282, 475 S.E.2d 374 (1996). See also Syllabus Point 1, Crawford v. Taylor, 138 W.Va. 207, 75 S.E.2d 370 (1953). We have stated that "[p]rohibition lies only in case of the unlawful exercise of judicial functions. Acts of a mere ministerial, administrative, or executive character do not fall within its province." Syllabus Point 4, Fleming v. Kanawha County Com'rs, 31 W.Va. 608, 8 S.E. 267 (1888). See also Syllabus Point 2, State ex rel. City of Huntington v. Lombardo, ...