STATE EX REL. ALLSTATE v. Madden, No. 31392.

CourtSupreme Court of West Virginia
Writing for the CourtDAVIS, Justice.
Citation215 W.Va. 705,601 S.E.2d 25
PartiesSTATE of West Virginia ex rel. Allstate Insurance Company, Petitioner, v. The Honorable John T. MADDEN, Judge of the Circuit Court of Marshall County, West Virginia, Respondent.
Decision Date18 May 2004
Docket NumberNo. 31392.

601 S.E.2d 25
215 W.Va.
705

STATE of West Virginia ex rel. Allstate Insurance Company, Petitioner,
v.
The Honorable John T. MADDEN, Judge of the Circuit Court of Marshall County, West Virginia, Respondent

No. 31392.

Supreme Court of Appeals of West Virginia.

Submitted: February 24, 2004.

Filed: May 18, 2004.


601 S.E.2d 30
E. Kay Fuller, Esq., Walter M. Jones, III, Esq., Michael M. Stevens, Esq., Martin & Seibert, L.C., Martinsburg, for the Petitioner, Allstate Insurance Company

Christopher J. Regan, Esq., Bordas & Bordas, Wheeling, for the Plaintiff Below, Cindy Jo Falls.

Ned Miltenberg, Esq., Center for Constitutional Litigation, PC, Washington, DC, for Amicus Curiae, American Trial Lawyers Association.

G. David Brumfield, Esq., Brumfield & Watson, Charleston, Eugene R. Anderson, Esq., Anderson Kill & Olick, P.C., New York, NY, Amy Bach, Esq., Law Offices of Amy Bach, Mill Valley, CA, for Amicus Curiae, United Policyholders.

Paul T. Farrell, Jr., Esq., Wilson, Frame, Benninger & Metheney, PLLC, Morgantown, for Amicus Curiae, West Virginia Trial Lawyers Association.

Charles S. Piccirillo, Esq., Kelly R. Charnock, Esq., Shaffer & Shaffer, PLLC, Madison, for Amicus Curiae, State Farm Mutual Automobile Insurance Company.

DAVIS, Justice.

The petitioner herein, Allstate Insurance Company [hereinafter referred to as "Allstate"], requests this Court to issue a writ of prohibition to prevent the respondent herein, the Honorable John T. Madden, Judge of the Circuit Court of Marshall County [hereinafter referred to as "Judge Madden"], from enforcing certain orders requiring Allstate to submit to discovery requests made by the plaintiff below, Cindy Jo Falls [hereinafter referred to as "Ms. Falls"].1 Specifically, Allstate objects to the circuit court's rulings requiring it to produce documents and submit to depositions regarding matters which Allstate claims are protected by the attorney-client privilege and the work product doctrine. In rendering his rulings, below, Judge Madden found that the aforementioned privileges were inapplicable in the context of a first-party bad faith action and, even if the privileges applied, Allstate had not met its burden of proof to establish entitlement to the protections afforded by the privileges.

601 S.E.2d 31
Upon a review of the parties' arguments and the pertinent authorities, we grant as moulded the requested writ of prohibition

I.

FACTUAL AND PROCEDURAL HISTORY

The instant proceeding has its origins in the Circuit Court of Monongalia County, when, in 1990, Ms. Falls filed a civil action seeking to recoup damages she had incurred during a 1989 automobile accident. At that time, Ms. Falls had a policy of motor vehicle insurance with Allstate and, during the course of said litigation, Allstate paid Ms. Falls $100,000, which represented the liability limits of the other driver's insurance policy, and an additional $100,000, an amount equal to the limits of her underinsured motorists coverage under her Allstate policy. When Ms. Falls attempted to stack coverages under her Allstate policy, the parties' failure to resolve the claim resulted in its submission to arbitration. As a result of such arbitration, Allstate paid Ms. Falls an additional $429,143.90, plus pre-judgment interest in the amount of $64,205.12. Following these proceedings, the Circuit Court of Monongalia County dismissed Ms. Falls' case with prejudice by order entered September 24, 1999.

Thereafter, on September 25, 2000, Ms. Falls instituted the bad faith action underlying the instant proceeding. In that suit, Ms. Falls alleged that Allstate, and its casualty claim manager, Larry Poynter, had violated W. Va.Code § 33-11-4(9) (1985) (Repl.Vol.2000)2 of the West Virginia Unfair Trade Practices Act. In the course of such litigation, Ms. Falls sought various documents that had been authored by Allstate's in-house and defense counsel. Allstate objected to the disclosure of these documents claiming that they were protected by the attorney-client privilege and the work product doctrine. By order entered November 14, 2001, Judge Madden determined that the requested documents were not so protected because the attorney-client privilege and the work product doctrine do not protect an insurer's files and personnel in a first-party bad faith action. In the alternative, the court found that Allstate had not provided evidence sufficient to establish the protections' applicability. As a result of this ruling, the circuit court required Allstate to tender the requested documents to Ms. Falls. Allstate sought a writ of prohibition to prevent Judge Madden from enforcing this order, but the writ was refused.

After the disclosure of these documents, Ms. Falls sought to depose the attorney authors of said documents, to which Allstate objected based upon the fact that those counsel had not participated in Ms. Falls' claim for underinsured motorist benefits. Allstate then moved for a protective order to preclude the depositions of these individuals, which motion was denied by order entered April 15, 2003. In so ruling, the circuit court determined that the communications would not be privileged insofar as they concerned matters of fact rather than opinion.

Following these adverse rulings of the circuit court, Allstate petitioned this Court for a writ of prohibition to prevent Judge Madden from enforcing his orders requiring Allstate to tender the allegedly privileged documents and permitting Ms. Falls to depose the authors thereof. By order entered June 17, 2003, we directed the circuit court to "conduct[] such proceedings and analysis as set forth in this Court's opinion in State ex rel. Medical Assurance of West Virginia, Inc. v. Recht, 213 W.Va. 457, 583 S.E.2d 80 (2003)." Upon the conclusion of these proceedings, Judge Madden, by order entered September 8, 2003, concluded that "Allstate is not able to demonstrate to this Court that the elements establishing the attorney-client privilege or work product exception have been established." Having not been mooted by Judge Madden's final consideration of the matter, we proceed to consider Allstate's request for prohibitory relief.

601 S.E.2d 32
II.

STANDARD FOR ISSUANCE OF WRIT

The question presented by this petition is whether Allstate is entitled to the writ of prohibition it requests. When determining whether a writ of prohibition should issue, we consider the following factors:

In determining whether to entertain and issue the writ of prohibition for cases not involving an absence of jurisdiction but only where it is claimed that the lower tribunal exceeded its legitimate powers, this Court will examine five factors: (1) whether the party seeking the writ has no other adequate means, such as direct appeal, to obtain the desired relief; (2) whether the petitioner will be damaged or prejudiced in a way that is not correctable on appeal; (3) whether the lower tribunal's order is clearly erroneous as a matter of law; (4) whether the lower tribunal's order is an oft repeated error or manifests persistent disregard for either procedural or substantive law; and (5) whether the lower tribunal's order raises new and important problems or issues of law of first impression. These factors are general guidelines that serve as a useful starting point for determining whether a discretionary writ of prohibition should issue. Although all five factors need not be satisfied, it is clear that the third factor, the existence of clear error as a matter of law, should be given substantial weight.

Syl. pt. 4, State ex rel. Hoover v. Berger, 199 W.Va. 12, 483 S.E.2d 12 (1996). Accord Syl. pt. 1, Hinkle v. Black, 164 W.Va. 112, 262 S.E.2d 744 (1979).

Of particular relevance to cases concerning discovery matters, such as the case presently before us, we additionally have held that

"`[a] writ of prohibition is available to correct a clear legal error resulting from a trial court's substantial abuse of its discretion in regard to discovery orders.' Syllabus Point 1, State Farm Mutual Automobile Insurance Co. v. Stephens, 188 W.Va. 622, 425 S.E.2d 577 (1992)." Syllabus Point 3, State ex rel. McCormick v. Zakaib, 189 W.Va. 258, 430 S.E.2d 316 (1993).

Syl. pt. 2, State ex rel. United States Fid. & Guar. Co. v. Canady, 194 W.Va. 431, 460 S.E.2d 677 (1995). Thus, where, as here, the party seeking the issuance of a prohibitory writ complains that the circuit court's ruling will require the disclosure of allegedly privileged materials, it is proper for this Court to entertain the petition. "When a discovery order involves the probable invasion of confidential materials that are exempted from discovery under Rule 26(b)(1) and (3) of the West Virginia Rules of Civil Procedure, the exercise of this Court's original jurisdiction is appropriate." Syl. pt. 3, U.S.F. & G., 194 W.Va. 431, 460 S.E.2d 677. Mindful of these standards, we proceed to consider the parties' arguments.

III.

DISCUSSION

The sole issue presented in this case for resolution by the Court is whether, or to what degree are, documents protected from disclosure and individuals insulated from providing testimony when a party in a first-party bad faith action asserts that the documents and/or individuals are protected from discovery by the attorney-client privilege and/or the work product doctrine. In short, the circuit court found the attorney-client privilege and the work product doctrine to be inapplicable to first-party bad faith cases and, even if they did apply, Allstate had failed to establish the requisite elements for either protection. Before this Court, Allstate argues that the circuit court erred by finding the privileges to be inapplicable. Ms. Falls contends that the circuit court correctly ruled and that if the privileges are found to apply, the crime-fraud exception operates to compel disclosure of the requested communications. Prior to addressing the specific queries presented in this case, however, we find it...

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22 practice notes
  • Horkulic v. Galloway, No. 33352.
    • United States
    • Supreme Court of West Virginia
    • February 19, 2008
    ...nature of attorney-client privilege conflicts within the bad faith context in State of West Virginia ex rel. Allstate Ins. Co. v. Madden, 215 W.Va. 705, 601 S.E.2d 25 (2004). In that case, this Court recognized that even "[i]f the materials sought to be protected from disclosure do not sati......
  • Loudin v. Nat'l Liab. & Fire Ins. Co., No. 35763.
    • United States
    • Supreme Court of West Virginia
    • October 24, 2011
    ...Ins. Reciprocal, 224 W.Va. 372, 384 n. 34, 686 S.E.2d 23, 35 n. 34 (2009); State of West Virginia ex rel. Allstate Ins. Co. v. Madden, 215 W.Va. 705, 714 n. 4, 601 S.E.2d 25, 34 n. 4 (2004); State ex rel. Brison v. Kaufman, 213 W.Va. 624, 630, 584 S.E.2d 480, 486 (2003); State ex rel. Med. ......
  • Barefield v. DPIC Companies, Inc., No. 31226.
    • United States
    • Supreme Court of West Virginia
    • June 25, 2004
    ...Fire and Marine Insurance Co., 215 W.Va. 250, 599 S.E.2d 673 (2004), and Madden v. Allstate Insurance Company, No. 31392, ___ W.Va. ___, 601 S.E.2d 25 (June 10, In his separate opinion, concurring in part and dissenting in part to the decision in this case and the decision in Rose v. St. Pa......
  • Newman v. State, No. 31
    • United States
    • Court of Appeals of Maryland
    • December 13, 2004
    ...In re International Systems & Controls Corporation Securities Litigation, 693 F.2d 1235, 1242 (5th Cir.1982) (same); State v. Madden, 215 W.Va. 705, 601 S.E.2d 25, 37 (2004) ("The crime-fraud exception comes into play when a prospective client seeks the assistance of an attorney in order to......
  • Request a trial to view additional results
23 cases
  • Horkulic v. Galloway, No. 33352.
    • United States
    • Supreme Court of West Virginia
    • February 19, 2008
    ...nature of attorney-client privilege conflicts within the bad faith context in State of West Virginia ex rel. Allstate Ins. Co. v. Madden, 215 W.Va. 705, 601 S.E.2d 25 (2004). In that case, this Court recognized that even "[i]f the materials sought to be protected from disclosure do not sati......
  • Loudin v. Nat'l Liab. & Fire Ins. Co., No. 35763.
    • United States
    • Supreme Court of West Virginia
    • October 24, 2011
    ...Ins. Reciprocal, 224 W.Va. 372, 384 n. 34, 686 S.E.2d 23, 35 n. 34 (2009); State of West Virginia ex rel. Allstate Ins. Co. v. Madden, 215 W.Va. 705, 714 n. 4, 601 S.E.2d 25, 34 n. 4 (2004); State ex rel. Brison v. Kaufman, 213 W.Va. 624, 630, 584 S.E.2d 480, 486 (2003); State ex rel. Med. ......
  • Barefield v. DPIC Companies, Inc., No. 31226.
    • United States
    • Supreme Court of West Virginia
    • June 25, 2004
    ...Fire and Marine Insurance Co., 215 W.Va. 250, 599 S.E.2d 673 (2004), and Madden v. Allstate Insurance Company, No. 31392, ___ W.Va. ___, 601 S.E.2d 25 (June 10, In his separate opinion, concurring in part and dissenting in part to the decision in this case and the decision in Rose v. St. Pa......
  • Newman v. State, No. 31
    • United States
    • Court of Appeals of Maryland
    • December 13, 2004
    ...In re International Systems & Controls Corporation Securities Litigation, 693 F.2d 1235, 1242 (5th Cir.1982) (same); State v. Madden, 215 W.Va. 705, 601 S.E.2d 25, 37 (2004) ("The crime-fraud exception comes into play when a prospective client seeks the assistance of an attorney in order to......
  • Request a trial to view additional results

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