State ex rel. Medical Assurance v. Recht

• Citation: 213 W.Va. 457,583 S.E.2d 80
• Decision Date: 30 April 2003
• Docket Number: No. 30840.,30840.
• Court: Supreme Court of West Virginia
• Parties: STATE of West Virginia ex rel. MEDICAL ASSURANCE OF WEST VIRGINIA, INC., Petitioner, v. The Honorable Arthur M. RECHT, Judge of the Circuit Court of Ohio County; The Estate of Marjorie I. Verba, by Sally Jo Nolan, Executrix, Respondents.

583 S.E.2d 80

213 W.Va. 457

STATE of West Virginia ex rel. MEDICAL ASSURANCE OF WEST VIRGINIA, INC., Petitioner, v. The Honorable Arthur M. RECHT, Judge of the Circuit Court of Ohio County; The Estate of Marjorie I. Verba, by Sally Jo Nolan, Executrix, Respondents.

No. 30840.

Supreme Court of Appeals of West Virginia.

Submitted January 14, 2003.

Decided April 30, 2003.

Concurring Opinion of Justice Davis May 30, 2003.

Concurring Opinion of Justice Albright June 17, 2003.

Dissenting Opinion of Justice McGraw July 2, 2003.

Concurring Opinion of Chief Justice Starcher July 11, 2003.

Jeffrey M. Wakefield, Esq., Michelle Marinacci, Esq., Flaherty, Sensabaugh & Bonasso, Charleston, for Medical Assurance of West Virginia, Inc. Robert P. Fitzsimmons, Esq., Russell J. Guthrie, Esq., Fitzsimmons Law Offices, Wheeling, David N. Dittmar, Esq., Zagula & Dittmar, Weirton, for Estate of Marjorie I. Verba.

Heather Heiskell Jones, Esq., Mary Molly August, Esq., for Amicus Curiae West Virginia Insurance Federation.

Dale A. Buck, Esq., E. Kay Fuller, Esq., for Amici Curiae Nationwide Mutual Insurance Company, Progressive Paloverde Insurance Company, and American Insurance Association. MAYNARD, Justice.

In this original proceeding for a writ of prohibition, this Court is asked to prevent the enforcement of the September 19, 2002, order of the Circuit Court of Ohio County which directed the relator and defendant below, Medical Assurance of West Virginia, Inc., to produce its complete investigative and claim files in connection with the underlying medical malpractice claim of respondent and plaintiff below, the Estate of Marjorie I. Verba. The relator alleges that these files contain information protected by the attorney-client privilege, work product doctrine, and quasi attorney-client privilege. For the reasons set forth below, we grant the writ of prohibition.¹

I. FACTS

Dr. David A. Ghaphery performed anti-reflux surgery on Marjorie Verba on February 21, 1996. Within several hours of Ms. Verba's release from the hospital four days later, she died. An autopsy indicated that a surgical nick resulted in a laceration to her stomach which caused Ms. Verba to contract peritonitis and to die as a result.

Ms. Verba's estate, respondent herein and plaintiff below ("Respondent"), brought a medical malpractice action against Dr. Ghaphery. A jury awarded $300,000 for physical pain, mental pain, and loss of enjoyment of life; $21,000 for medical and funeral bills; and $2,500,000 to the beneficiaries of Ms. Verba's estate under the wrongful death statute.² The trial court reduced the award to conform to the medical malpractice cap on noncompensatory damages found in W.Va. Code § 55-7B-8 (1986).³ Respondent appealed the reduction and challenged the constitutionality of the one million-dollar cap. In Verba v. Ghaphery, 210 W.Va. 30, 552 S.E.2d 406 (2001), this Court upheld the cap's constitutionality.

Following the favorable jury verdict and prior to the appeal, Respondent was granted leave to amend its complaint to allege that the relator herein and defendant below, Medical Assurance of West Virginia, Inc., Dr. Ghaphery's medical liability insurer, committed unfair claim settlement practices in violation of W.Va.Code § 33-11-4(9).⁴ Specifically, Respondent alleged that the relator did not perform an adequate investigation; liability was reasonably clear throughout the underlying malpractice claim; and the relator rejected Respondent's offer of settlement of one million dollars plus medical expenses, and made no offer in return. The unfair claim settlement practices or "bad faith" action⁵ was stayed and bifurcated pending resolution of the appeal after which the stay was lifted and discovery commenced.⁶

Pursuant to discovery in the bad faith action, Respondent requested, among other things:

(2) The complete investigative files and claims files (including their original folders and binders and all documents therein) of Medical Assurance in connection with the underlying claim of plaintiff arising from the malpractice claims, including, but not limited to, claims files maintained by adjusters, claims files maintained by claims examiners, claims files maintained by district or regional offices and claims files maintained by the home office of Medical Assurance. These files are to be produced in their entirety, in their original state, complete with original file jacket and any notes or attachments thereto.

(4) All memoranda, diary entries, notes or other writings, recordings and/or other data entries which in any way document and/or record discussions between any representative of Medical Assurance and any other person relating to the claims made on behalf of plaintiff arising out of the underlying claim.

(11) Any and all statements of witnesses, potential witnesses or interested parties relating in any way to the subject matter of plaintiff's Amended Complaint.

(17) All e-mail documents and computer documents, whether reduced to hard copies or not, which in any way relate to the handling of the underlying claim.

The relator responded that a general request for materials and files as that contained in Request number 2 is improper under this Court's opinion in State ex rel. Allstate Ins. Co. v. Gaughan, 203 W.Va. 358, 508 S.E.2d 75 (1998). The relator also asserted various privileges including the attorney-client privilege of the insured, opinion and fact work product, and the quasi attorney-client privilege of the relator. Documents in the files, created up through the resolution of post-verdict motions in the medical malpractice action, which the relator considered non-privileged were produced. Documents considered privileged were not produced but were identified by the relator in a 52-page "Privilege Log."

Respondent subsequently moved to compel production of all the documents requested. Following a hearing, the Circuit Court of Ohio County, by order dated September 19, 2002, granted Respondent's motion and directed the relator to fully respond to the requests for production of documents and deliver the documents to Respondent's counsel on or before September 30, 2002. The circuit court further ruled that,

Defendant Medical Assurance shall not be permitted to withhold the production of any documents requested by said requests for production of documents based upon any claim of privilege with the exception that defendant may object to producing any document which was exclusively between Steptoe & Johnson and Defendant David Ghaphery, M.D., and was not received by and/or reviewed by Defendant Medical Assurance, and all documents falling within this objection shall be produced to this Court in camera for inspection and all such documents shall be identified by its identifying information, together with the specific reason for objecting to production.

Shortly thereafter, the relator presented to this Court its petition praying for a writ of prohibition to be directed against the Circuit Court of Ohio County and the Estate of Marjorie I. Verba. This Court issued a rule to show cause, and we now grant the writ.

II. STANDARD OF REVIEW

The general standard for issuance of the writ of prohibition is set forth in W.Va.Code § 53-1-1 (1923) which states that "[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 held that "[p]rohibition lies only to restrain inferior courts from proceeding in causes over which they have no jurisdiction, or, in which, having jurisdiction, they are exceeding their legitimate powers and may not be used as a substitute for [a petition for appeal] or certiorari." Syllabus Point 1, Crawford v. Taylor, 138 W.Va. 207, 75 S.E.2d 370 (1953). The relator herein does not claim that the circuit court has no jurisdiction but rather that it has exceeded its legitimate powers.

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.

Syllabus Point 4, State ex rel. Hoover v. Berger, 199 W.Va. 12, 483 S.E.2d 12 (1996).

"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 v. Stephens, 188 W.Va. 622, 425 S.E.2d 577 (1992). Also, "[w]hen 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." Syllabus Point 3, State ex rel. USF & G v. Canady, 194 W.Va. 431, 460 S.E.2d 677 (1995). Further, "[u]nless obviously correct or unreviewably discretionary, rulings requiring attorneys to turn over documents that are presumably prepared for their...