State ex rel. McGraw v. Scott Runyan Pontiac-Buick, Inc.

Decision Date19 July 1995
Docket NumberWORLD-WIDE,INC,PONTIAC-BUIC,No. 22728,22728
PartiesSTATE of West Virginia ex rel. Darrell V. McGRAW, Jr., Attorney General, Plaintiff Below, Appellant, v. SCOTT RUNYAN, a West Virginia Corporation; Scott Runyan, Individually and as an Officer of Scott Runyan Pontiac-Buick, Inc.; Cox Pontiac-Buick, Inc., a West Virginia Corporation; A.W. Cox Department Store Co., a West Virginia Corporation; Wilber E. Cox, Individually; Wilber E. Cox II, Individually; Runyan Creditors Trust, Scott Runyan, Trustee; General Motors Acceptance Corporation, a Delaware Corporation; Citizens National Bank of St. Albans, a Federally Chartered Bank; and Other Financial Institutions as Yet Unknown, Defendants Below, Appellees. GENERAL MOTORS ACCEPTANCE CORPORATION, a Delaware Corporation, Defendant and Third-Party Plaintiff Below, Appellee, v.WARRANTY, INC., and Guaranty National Insurance Company, Third-Party Defendants Below, Appellees.
CourtWest Virginia Supreme Court

1. The key to determining if an order is final is not whether the language from Rule 54(b) of the West Virginia Rules of Civil Procedure is included in the order, but is whether the order approximates a final order in its nature and effect. We extend application of this rule to a motion to dismiss under Rule 12(b)(6) of the West Virginia Rules of Civil Procedure.

2. Appellate review of a circuit court's order granting a motion to dismiss a complaint is de novo.

3. " 'The powers and duties of the Attorney General are specified by the constitution and by the rules of law prescribed pursuant thereto.' Syllabus point 1, Manchin v. Browning, 170 W.Va. 779, 296 S.E.2d 909 (1982)." Syllabus Point 2, State ex rel. Fahlgren Martin, Inc. v. McGraw, 190 W.Va. 306, 438 S.E.2d 338 (1993).

4. "When a note is created as a result of a consumer transaction, an assignee of such a note takes the note subject to all claims and defenses, regardless of whether the assignee is a holder in due course. W.Va.Code 46A-2-102 [1990]." Syllabus Point 1, One Valley Bank of Oak Hill, Inc. v. Bolen, 188 W.Va. 687, 425 S.E.2d 829 (1992).

5. The Attorney General clearly has the right to bring a civil action against an assignee to collect a refund of an excess charge imposed upon a consumer regardless of whether the assignee committed any wrongdoing. The issue of wrongdoing only is relevant under W.Va.Code, 46A-7-111(1) (1974), when the assignee may be subjected to a "civil penalty." If the assignee can establish an unintentional violation or a bona fide error on the part of the wrongdoer by a preponderance of the evidence, a penalty may not be imposed under this subsection. W.Va.Code, 46A-7-111(1).

Darrell V. McGraw, Jr., Attorney General, Donald L. Darling, Senior Deputy Attorney General, Jill L. Miles, Senior Assistant Attorney General, Charleston, for appellant.

E.W. Rugeley, Jr., William D. Esbenshade, Jackson & Kelly, Charleston, for appellee General Motors Acceptance Corp.

James T. Cooper, Lovett, Cooper & Glass, Charleston, for appellee World-Wide Warranty, Inc.

Deborah K. Aronoff, North Central W. Va. Legal Aid Society, Morgantown, amicus curiae.

Dennis R. Vaughan, Jr., Vaughan & Withrow, Charleston, for appellee Citizens Nat. Bank of St. Albans (now Bank One, West Virginia, St. Albans).

John R. Hoblitzell, Kay, Casto, Chaney, Love & Wise, Charleston, for appellee Guaranty Nat. Ins. Co.

Steven S. Zaleznick, Deborah M. Zuckerman, American Ass'n of Retired Persons, Washington, DC, amicus curiae.

CLECKLEY, Justice:

The issue now before this Court is whether the plaintiff, Darrell V. McGraw, Jr., Attorney General, 1 is authorized to seek debt cancellations The plaintiff seeks a reversal of the July 25, 1994, order of the Circuit Court of Kanawha County which granted motions to dismiss filed by GMAC and Bank One. 3 The order stated, in relevant part:

                [194 W.Va. 774]  and/or refunds from the defendants, General Motors Acceptance Corporation (GMAC) and Citizens National Bank of St. Albans (now Bank One, West Virginia, St. Albans, N.A.).  The Consumer Protection Division of the Office of the Attorney General of West Virginia filed suit against Scott Runyan Pontiac-Buick, Inc.  (Scott Runyan), et al., 2 on November 9, 1990, alleging Scott Runyan engaged in various unfair and deceptive acts in violation of the West Virginia Consumer Credit and Protection Act (CCPA).  W.Va.Code, 46A-1-101, et seq.   Specifically, the Attorney General claimed Scott Runyan sold extended vehicle warranties to automobile buyers at an average cost of over $600 each and collected the purchase prices from consumers but failed to pay the warranty company for the additional coverages.  The Attorney General argues that because GMAC and Bank One financed the extended warranty purchases, they are lenders subject to the claims and defenses arising from consumer credit transactions pursuant to W.Va.Code, 46A-2-101;  W.Va.Code, 46A-2-102;  and W.Va.Code, 46A-2-103
                

"3. The complaint filed by the Attorney General contains no allegation that the defendants GMAC and/or Bank One have engaged in any unfair or deceptive act(s), or violated any provisions of the [CCPA] and the Attorney General conceded this in his argument/statement to the Court.

"4. ... [N]or is there any allegation or proof offered respecting the actions or activities of these defendants in regard to the collection of charges in excess of those permitted by Code § 46A-7-1 [sic 101] et seq. There is no allegation or proof offered that such defendants have willfully violated the subject chapter and the [CCPA]. The actions and activities engaged in by these defendants are within their normal scope of business and there is no showing, contention, or proof offered that such act(s) somehow violated the [CCPA].

* * * * * *

"6. ... [I]t is only the borrower, buyer or lessee who may assert such claim as a defense or setoff as against a holder in due course, assignee or lender. The [CCPA] does not authorize the Attorney General to assert those claims on behalf of individual consumers, borrowers or lessees, nor does his office have the statutory standing or authority to assert such claims. In addition, these sections only permit the buyer or lessee to assert such claims as a defense or seek the cancellation of that part of the indebtedness incurred by such alleged fraudulent conduct." (Emphasis in original).

The plaintiff claims he has statutory authority to file suit on behalf of and secure restitution for affected consumers from those who violate the CCPA. W.Va.Code, 46A-7-108 (1974), states: "The attorney general may bring a civil action to restrain a person from violating this chapter and for other appropriate relief." According to the Attorney General, restitution for the consumer falls within the category of "other appropriate relief."

The Attorney General also contends that W.Va.Code, 46A-7-111 (1974), 4 permits him to file suit against creditors for collecting excess charges and to seek refunds for consumers for the amount of the excess charges. The Attorney General asserts that GMAC and Bank One collected money for services the consumers never received and, therefore, they collected fees in excess of those permitted by the CCPA. The Attorney General further argues that "[b]ecause W.Va.Code § 46A-7-111 makes it a per se violation of the [CCPA] for a creditor to collect 'charges in excess of those permitted by this chapter[,]' the complaint undeniably asserts a specific violation of the [CCPA] by GMAC and [Bank One] and should not have been dismissed[.]"

I.

DISCUSSION
A. Jurisdiction

Our jurisdiction normally does not encompass appeals from the denial or granting of a motion to dismiss where there are remaining issues to be litigated. However, the granting of the defendants' dispositive pretrial motions to dismiss the claim as against them could have the effect of gutting the lawsuit for all practical purposes. We believe the spirit of Rule 54(b) 5 of the West Virginia Rules of Civil Procedure has been met, and we treat this important appeal as if it falls into this narrow exception to the finality principle and, therefore, is immediately appealable. In the context of a summary judgment, we stated first in Syllabus Point 2 of Durm v. Heck's, Inc., 184 W.Va. 562, 401 S.E.2d 908 (1991), and again in Syllabus Point 1 of Sisson v. Seneca Mental Health/Mental Retardation Council, Inc., 185 W.Va. 33, 404 S.E.2d 425 (1991), that the key to determining if an order is final is not whether Rule 54(b) language is included in the order, but is whether the order "approximates a final order in its nature and effect." We now extend application of the rule announced in Durm and Sisson to a motion to dismiss under Rule 12(b)(6). 6

B. Standard of Review

This case was dismissed by the circuit court because, in its view, the plaintiff failed to state a claim upon which relief could be granted. The procedural posture is central to the adjudication of the present appeal. Accordingly, we find it necessary to set forth at the beginning of our analysis, a discussion of the settled principles of law that must guide our inquiry when a case is presented in this procedural context.

Appellate review of a circuit court's order granting a motion to dismiss a complaint is de novo. Revene v. Charles County Comm'rs, 882 F.2d 870, 872 (4th Cir.1989).

                [194 W.Va. 776] Complaints are to be read liberally as required by the notice pleading theory underlying the West Virginia Rules of Civil Procedure.  Mandolidis v. Elkins Indus., Inc., 161 W.Va. 695, 246 S.E.2d 907 (1978);  John W. Lodge Distrib.  Co., Inc. v. Texaco, Inc., 161 W.Va. 603, 245 S.E.2d 157 (1978).  See also Conley v. Gibson, 355 U.S. 41, 47-48, 78 S.Ct. 99, 102-03, 2 L.Ed.2d 80, 85-86 (1957).  The circuit court, viewing all the facts in a light most favorable to the nonmoving party, may grant the
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