State ex rel. Gallagher Bassett Services, Inc. v. Webster
| Decision Date | 12 June 2019 |
| Docket Number | No. 19-0043,19-0043 |
| Citation | 829 S.E.2d 290 |
| Parties | STATE of West Virginia EX REL. GALLAGHER BASSETT SERVICES, INC., Petitioner v. The Honorable Carrie WEBSTER, Judge of the Circuit Court of Kanawha County; Robin Lusk; and Old Dominion Freight Line, Inc., Respondents |
| Court | West Virginia Supreme Court |
Arie M. Spitz, Esq., Kevin A. Nelson, Esq., Dinsmore & Shohl LLP, Charleston, West Virginia, Counsel for the Petitioner
James D. McQueen, Jr., Esq., McQueen Davis, PLLC, Huntington, West Virginia, Christopher J. Heavens, Esq., Heavens Law Firm, PLLC, Charleston, West Virginia, Counsel for the Respondent Robin Lusk
Justin M. Harrison, Esq., George E. Chamberlain IV, Esq., Jackson Kelly PLLC, Charleston, West Virginia, Counsel for Respondent Old Dominion Freight Line, Inc.
This case is before the Court on a petition for writ of prohibition. Respondent Robin Lusk worked for Respondent Old Dominion Freight Line, Inc., ("Old Dominion ") as a long-haul truck driver. Ms. Lusk was injured at Old Dominion’s trucking terminal, and Old Dominion subsequently terminated her. Old Dominion’s third-party claims administrator, Petitioner, Gallagher Bassett Services, Inc., ("Gallagher Bassett ") denied Ms. Lusk’s claim for workers’ compensation benefits on behalf of Old Dominion.
Ms. Lusk sued both Old Dominion and Gallagher Bassett in the Circuit Court of Kanawha County. Gallagher Bassett moved to dismiss Ms. Lusk’s claims against it, and Respondent The Honorable Carrie L. Webster, Judge of the Circuit Court of Kanawha County, denied Gallagher Bassett’s motion. Gallagher Bassett contends that Judge Webster erred and asks this Court to direct the circuit court to dismiss all of Ms. Lusk’s claims against Gallagher Bassett.
Based on the record before us, the arguments of the parties, and the applicable law, we find that the circuit court exceeded its jurisdiction by failing to dismiss Ms. Lusk’s claims against Gallagher Bassett. Accordingly, we grant the writ of prohibition, reverse the circuit court’s order denying Gallagher Bassett’s motion to dismiss, and remand this case to the circuit court for the entry of an order dismissing Ms. Lusk’s claims against Gallagher Bassett.
Robin Lusk and her husband, Kevin Lusk, were long-haul truckers for Old Dominion. Their work took them to California, and on June 16, 2015, they entered Old Dominion’s Los Angeles terminal to begin their next haul. When they arrived, Old Dominion’s computer system noted their presence and identified the trailers that they were to transport. When the Lusks attempted to connect to their trailers, Ms. Lusk received serious injuries.
An ambulance transported Ms. Lusk to a California hospital, where she remained until June 22, 2015. On the day Ms. Lusk was released, Mr. Lusk spoke to Old Dominion’s terminal manager by phone. According to Ms. Lusk, the manager said that the couple had "falsified the log book," and that both of them were fired.
The Lusks returned to West Virginia, arriving by car on June 26, 2015. Ms. Lusk immediately checked into a hospital. According to her, this was when she learned that Old Dominion had terminated her health insurance coverage. That same day, she asserts that she spoke to a Gallagher Bassett employee named Cathy Reedy. According to Ms. Lusk, Ms. Reedy took her statement and then promptly informed her that her request for workers’ compensation benefits was denied.
Ms. Reedy, in her capacity as a Gallagher Bassett claims administrator, also communicated this decision to Ms. Lusk in a letter dated June 26, 2015. The letter identifies Old Dominion as the "Client" and appears to have been printed on Gallagher Bassett letterhead. It reports,
Ms. Lusk challenged the decision to deny her claim. After an expedited hearing on October 9, 2015, the Office of Judges agreed with Ms. Lusk, ruled that her injury was work-related, and determined that her claim was compensable. The Board of Review affirmed the decision of the Office of Judges in March 2016.1
Ms. Lusk sued Old Dominion in Kanawha County Circuit Court on November 16, 2015. In her complaint, she accuses Old Dominion of workers’ compensation discrimination, workers’ compensation fraud, and defamation. She identifies Ms. Reedy by name, describes their June 26, 2015 conversation, and refers to the June 26, 2015 denial letter. Ms. Lusk alleges, in particular, that Ms. Reedy accused her of "falsif[ying] log book records[.]" As reported by Ms. Lusk, Ms. Reedy said that "according to the Log Book, Kevin [Lusk] ... was supposed to be in the ‘sleeper[,]’ and [Robin Lusk] was supposed to be ‘off duty’ at the time she was hooking up the trailers, such that neither was logged in as being ‘on duty’ when [Robin Lusk] was ... injured." Ms. Lusk denies that she falsified any log-book entries but says that "she freely admitted [during her conversation with Ms. Reedy] that she inadvertently failed to log in as being ‘on duty’ by forgetting to do so when she began her pre-shift activities." The complaint also contends that Old Dominion’s "workers’ compensation representatives, acting as employees of [Old Dominion’s] third-party administrator, were the agents and servants of [Old Dominion.]"
Ms. Lusk filed an amended complaint on January 4, 2018. The amended complaint added Gallagher Bassett as a defendant, accusing Gallagher Bassett of workers’ compensation discrimination and workers’ compensation fraud.2 The amended complaint alleges that Gallagher Bassett "contract[ed] with ... Old Dominion ... to act as a claims administrator for workers’ compensation claims" and alleges that "[a]t all times material to this action, ... Gallagher Bassett’s workers’ compensation representatives, who were acting as employees of said third-party administrator, were also the agents and servants of ... Old Dominion[.]" According to the amended complaint, Gallagher Bassett’s employees "were either acting within the scope and course of their employment and agency, such that ... Old Dominion is liable for any wrongful conduct by them ... [,] or [they] were acting on their own in a manner contrary to the workers’ compensation laws of West Virginia."
Ms. Lusk appears to have anticipated that the statute of limitations might become an issue for her claims against Gallagher Bassett, and sought to address the issue in her motion for leave to file the amended complaint. The motion alleges that the August 2017 deposition revealed to Ms. Lusk "that Old Dominion did not make the decision to deny compensability ... and that Gallagher Bassett ... and its Claims Manager ..., Cathy Reedy, made the decision based on facts provided by Old Dominion." The motion explains that Ms. Lusk had not previously sought amendment of the complaint because prior to the deposition, Old Dominion had not taken the position that it relied on Gallagher Bassett in making the decision to deny compensability. Gallagher Bassett moved to dismiss all of Ms. Lusk’s claims against it pursuant to Rule 12(b)(6) of the West Virginia Rules of Civil Procedure .3 Gallagher Bassett argued that Ms. Lusk’s claims were barred by the two-year statute of limitations and that Gallagher Bassett was not a proper defendant because it was not Ms. Lusk’s employer.4 Ms. Lusk responded that the statute of limitations was tolled by the discovery rule and did not begin to run until she learned from Old Dominion’s employee that "Gallagher Bassett apparently had complete independence in administering and making decisions as to the workers’ compensation claim[.]" She also contended that "[n]othing in Chapter 23 of the West Virginia Code precludes the application of Persinger [v. Peabody Coal Co. , 196 W. Va. 707, 474 S.E.2d 887 (1996) ] to intentional acts, such as fraud, by a claims administrator[.]" As support for this claim, she quoted W. Va. Code § 23-2C-21 [2009].5
The circuit court considered Gallagher Bassett’s motion to dismiss at a hearing on June 28, 2018. The circuit court denied the motion to dismiss in an order entered on August 27, 2018.6 In denying the motion, the circuit court summarized the parties’ arguments and suggested that it might later side with Gallagher Bassett on summary judgment. Indeed, the circuit court noted Gallagher Bassett’s argument that Ms. Lusk’s oral arguments about the June 26, 2015 letter amounted to "further evidence that Plaintiff knew or should have known of potential claims against Gallagher Bassett more than two years before she filed suit" and observed that "Gallagher Bassett’s arguments [that it was not a proper defendant] are extremely persuasive[.]" However, the circuit court was unwilling to grant Gallagher Bassett’s motion based on the early stage in the litigation and based on a "belie[f] that public policy must require that Gallagher Bassett be answerable to the jurisdiction of this Court as to Plaintiff’s claims." The court also noted "that no case directly addressing this issue [i.e., whether a third-party administrator could be sued for workers’ compensation discrimination and fraud] has been decided by the Supreme Court of Appeals."
Gallagher Bassett filed this petition for writ of prohibition on January 18, 2019, challenging the denial of its motion to dismiss.
We have held that ." Syl. Pt. 2, State ex rel. Peacher v. Sencindiver , 160 W. Va. 314, 233 S.E.2d 425 (1977). When a petitioner claims that a circuit court has exceeded its powers, we apply the following test:
(1) whether the party seeking the writ has no other adequate means, such as direct appeal, to obtain the desired...
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