State ex rel. Nat'l Union Fire Ins. Co. of Pittsburgh, PA v. Hummel, No. 19-0978

CourtSupreme Court of West Virginia
Writing for the CourtArmstead, Chief Justice
Citation850 S.E.2d 680,243 W.Va. 681
Parties STATE of West Virginia, EX REL. NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA.; Allianz Global Risks US Insurance Company; Ace American Insurance Company; Zurich American Insurance Company; Great Lakes Insurance SE; XL Insurance America, Inc.; General Security Indemnity Company of Arizona; Aspen Insurance UK Limited; Navigators Management Company, Inc.; Ironshore Specialty Insurance Company ; Validus Specialty Underwriting Services, Inc. ; and HDI-Gerling America Insurance Company, Petitioners v. The Honorable David W. HUMMEL, Jr., Judge of the Second Judicial Circuit, and Axiall Corporation, and Westlake Chemical Corporation, Respondents
Docket NumberNo. 19-0978
Decision Date19 October 2020

243 W.Va. 681
850 S.E.2d 680

STATE of West Virginia, EX REL. NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA.; Allianz Global Risks US Insurance Company; Ace American Insurance Company; Zurich American Insurance Company; Great Lakes Insurance SE; XL Insurance America, Inc.; General Security Indemnity Company of Arizona; Aspen Insurance UK Limited; Navigators Management Company, Inc.; Ironshore Specialty Insurance Company ; Validus Specialty Underwriting Services, Inc. ; and HDI-Gerling America Insurance Company, Petitioners
v.
The Honorable David W. HUMMEL, Jr., Judge of the Second Judicial Circuit, and Axiall Corporation, and Westlake Chemical Corporation, Respondents

No. 19-0978

Supreme Court of Appeals of West Virginia.

Submitted: September 23, 2020
Filed: October 19, 2020


Debra Tedeschi Varner, Esq., James A. Varner, Sr., Esq., Varner & Van Volkenburg PLLC, Clarksburg, West Virginia, Myles A. Parker, pro hac vice, Alexandra F. Markov, pro hac vice, Carroll, Warren & Parker, Jackson, Mississippi, Counsel for Petitioners.

Jeffrey V. Kessler, Esq., Berry, Kessler, Crutchfield, Taylor & Gordon, Moundsville, West Virginia, Travis L. Brannon, Esq., Thomas C. Ryan, Esq., John M. Sylvester, pro hac vice, Paul C. Fuener, pro hac vice, David R. Osipovich, pro hac vice, Sarah M. Czypinski, pro hac vice, K&L Gates LLP, Pittsburgh, Pennsylvania, Counsel for Respondents.

Armstead, Chief Justice:

850 S.E.2d 682

In this petition for writ of prohibition, both parties agree that this Court should grant the requested relief to the extent that it prohibits the circuit court from enforcing its sua sponte order dismissing Count III of Axiall Corporation ("Axiall") and Westlake Chemical Corporation's ("Westlake") (collectively, "Respondents") complaint and finding that West Virginia law applied to all of Respondents’ bad faith claims. Petitioners argue, and Respondents disagree, that this Court should extend the writ to order that Georgia law – and only Georgia law – applies to all claims raised in the underlying complaint.

For the reasons set forth below, we agree that the circuit court exceeded its legitimate authority by sua sponte dismissing Count III of the complaint and finding that West Virginia law applied to all bad faith claims, as that issue had not been briefed, argued, or developed by the parties. However, we decline to extend the writ to find that Georgia law applies to the entire dispute, as a writ of prohibition is not the proper avenue for such relief.

I. FACTUAL AND PROCEDURAL BACKGROUND

On August 27, 2016, a chlorine tank train car ruptured at the Natrium Plant located in Proctor, West Virginia. This rupture caused damage to the Natrium Plant, which is owned and operated by Westlake. Axiall is a wholly-owned indirect subsidiary of Westlake.

Axiall sought coverage under its insurance policies for damages caused by the leak. Among them, Petitioners issued thirteen separate policies in which each Petitioner subscribed to certain "quota-shares" of the insurance for the Natrium Plant. These policies, subject to their conditions, endorsements, and exclusions, provided coverage for all risks of direct physical loss or damage to the insured property.

On April 9, 2019, over two-and-a-half years after the claim was first made, Petitioners denied coverage pointing to exclusions in the policies for faulty workmanship, corrosion, and contamination. That same day, Petitioners filed a declaratory judgment action in the State of Delaware to determine their rights and responsibilities under the policies.1 The next day, April 10, 2019, Respondents filed the underlying complaint asserting five separate counts: (1) declaratory judgment; (2) breach of contract; (3) bad faith under Georgia law; (4) bad faith under West Virginia law; and (5) statutory bad faith under the West Virginia Unfair Trade Practices Act.

Petitioners subsequently filed a motion titled "Defendants’ Motion to Dismiss or Stay In Favor of First-Filed Foreign Action." In that motion, Petitioners sought to either dismiss or stay the West Virginia proceeding

850 S.E.2d 683

because (1) the Delaware action was filed earlier; (2) West Virginia was not a convenient forum; and (3) West Virginia was not the proper venue for this action. The circuit court held a hearing on the motion to dismiss on September 5, 2019, and denied the motion. However, the circuit court, sua sponte , without anyone moving, briefing, or seeking such relief, dismissed2 Count III – Bad Faith – Violation of Georgia Code § 33-4-6, finding:

It is further ORDERED that Count III of Plaintiffs’ Complaint, titled "Bad Faith – Violation of Georgia Code § 33-4-6," is hereby DISMISSED . The Court FINDS that while Georgia law governs the coverage issues pled in Count II, Plaintiffs’ bad-faith claims against Defendants are governed by West Virginia law, and therefore Count III of Plaintiff's Complaint pled under Georgia law cannot be maintained simultaneously with Counts IV and V pled under West Virginia law. The Court acknowledges that this issue has not been briefed or argued before the Court.

On October 25, 2018, Petitioners filed the instant petition, and by order of this Court entered on January 30, 2020, a rule to show cause issued.

II. STANDARD OF REVIEW

In Syllabus Point Four of State ex rel. Hoover v. Berger, 199 W. Va. 12, 483 S.E.2d 12 (1996), this Court...

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2 practice notes
  • Scherich v. Wheeling Creek Watershed Prot. & Flood Prevention Comm'n, No. 19-1065
    • United States
    • Supreme Court of West Virginia
    • March 15, 2021
    ...162 W. Va. 238, 248 S.E.2d 849 (1978), quoted in Syllabus Point 2, State ex rel. Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. v. Hummel , 243 W.Va. 681, 850 S.E.2d 680 (2020). Nonetheless, a circuit court may sua sponte grant summary judgment so long as notice and an opportunity to be heard......
  • Emil N. v. Healy B.-N., No. 20-0396
    • United States
    • Supreme Court of West Virginia
    • May 20, 2021
    ...party moved for dismissal, which we found to be in clear error in State ex rel. National Fire Insurance Co. of Pittsburgh, Pa. v. Hummel, 243 W. Va. 681, 850 S.E.2d 680 (2020). Respondent further claims that the loss of future value allocation was made without supporting evidence, and she a......
2 cases
  • Scherich v. Wheeling Creek Watershed Prot. & Flood Prevention Comm'n, No. 19-1065
    • United States
    • Supreme Court of West Virginia
    • March 15, 2021
    ...162 W. Va. 238, 248 S.E.2d 849 (1978), quoted in Syllabus Point 2, State ex rel. Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. v. Hummel , 243 W.Va. 681, 850 S.E.2d 680 (2020). Nonetheless, a circuit court may sua sponte grant summary judgment so long as notice and an opportunity to be heard......
  • Emil N. v. Healy B.-N., No. 20-0396
    • United States
    • Supreme Court of West Virginia
    • May 20, 2021
    ...party moved for dismissal, which we found to be in clear error in State ex rel. National Fire Insurance Co. of Pittsburgh, Pa. v. Hummel, 243 W. Va. 681, 850 S.E.2d 680 (2020). Respondent further claims that the loss of future value allocation was made without supporting evidence, and she a......

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