State ex rel. Van Nguyen v. Berger

Decision Date11 February 1997
Docket NumberNos. 23614,23655,s. 23614
Citation199 W.Va. 71,483 S.E.2d 71
CourtWest Virginia Supreme Court
PartiesSTATE of West Virginia ex rel. Truong VAN NGUYEN, Petitioner, v. Honorable Irene C. BERGER, Judge of the Circuit Court of Kanawha County, and William C. Forbes, Prosecuting Attorney for Kanawha County, Respondents. STATE of West Virginia, Appellant v. Steve A. RIFE, Appellee.

Richard L. Gottlieb, Lewis, Friedberg, Glasser, Casey & Rollins, Charleston, for Petitioner.

Susan B. Tucker, Assistant Prosecuting Attorney, Charleston, for Respondents.

Alvin E. Gurganus, II, Shott, Gurganus & Williamson, Bluefield, for Petitioner.

RECHT, Judge: 1

We are presented here with two cases consolidated for purposes of appeal, each requiring us to consider whether a corporate officer is criminally responsible, along with the corporation, for the failure to pay workers' compensation premiums and to file workers' compensation reports within the meaning of W. Va.Code 23-1-16(a) (1995). The defendant Truong Van Nguyen petitions this Court for a writ of prohibition to prevent the Circuit Court of Kanawha County, Judge Irene Berger, from enforcing an order refusing to grant the defendant's motion to dismiss an indictment for multiple violations of W. Va.Code 23-1-16 (1995). Conversely, the State appeals the granting of a motion to dismiss the indictment against defendant Steve A. Rife for multiple violations of W. Va.Code 23-1-16 (1995) by the Circuit Court of Kanawha County, Judge Paul Zakaib, Jr.

I. FACTS

The defendants in this case were indicted in separate proceedings in the January 1996 term by the Grand Jury for the Circuit Court of Kanawha County. The grand jury returned multiple count indictments against Van Nguyen, in his capacity as president of McDowell Energy, Inc., and Rife, in his capacity as president of Black Rock Mining, Inc., both for failing to pay premiums into the Workers' Compensation Fund as well as failing to file quarterly reports with the Workers' Compensation Commissioner.

The defendants filed motions to dismiss their indictments on the ground that corporate officers cannot be held criminally liable under W. Va.Code 23-1-16 (1995).

The defendants' motions were considered by different circuit judges, one of whom agreed with the defendant Rife and dismissed his indictment, with prejudice; the other of whom denied Mr. Nguyen's motion.

As a result of the circuit court rulings on the defendants' respective motions, Mr. Nguyen petitions this Court for a writ of prohibition to prevent the circuit court from enforcing its order, and the State appeals the dismissal of the indictment against Mr. Rife. Because both cases turn on the same legal issue, we granted both petitions and consolidated them for purposes of appeal.

II. DISCUSSION

The sole issue raised in both appeals is whether, under the specific provisions of W. Va.Code 23-1-16(a) (1995), a corporate officer can be held criminally responsible for the failure of the corporation to pay workers' compensation premiums as well as the failure to file quarterly reports.

W. Va.Code 23-1-16 (1995) provides, in relevant part:

(a) Any person, firm, partnership, company, corporation or association who, as an employer, is required by the provisions of this chapter to subscribe to the workers' compensation fund, and who knowingly and willfully fails ... to make any payment or file a report as required by the W. Va.Code 23-1-16 (1995).

[199 W.Va. 74] provisions of this chapter within the time periods specified by law, is guilty of a felony, and, upon conviction thereof, shall be fined not less than one thousand dollars and not more than ten thousand dollars.... Provided, That in the case of a person other than a natural person, the amount of the fine shall be not less than ten thousand dollars nor more than twenty-five thousand dollars.

The defendants contend that because W. Va.Code 23-1-16(a) (1995) does not specify corporate officers among those who may be responsible for the non-performance of the mandatory requirement of paying workers' compensation premiums and submitting workers' compensation forms, then the statute was not intended to apply to corporate officers. The argument continues that the statute was designed only to apply to sole proprietorships and other enumerated business organizations in their capacity as employers, and not corporate officers, as they are not employers as contemplated within W. Va.Code 23-2-1. 2

W. Va.Code 23-1-16(a) does impose responsibility upon a corporation and does not specifically mention officers of the corporation, however, the common law rule is entrenched in West Virginia to the extent that "[o]fficers, agents, and directors of a corporation may be criminally liable if they cause the corporation to violate the criminal law while conducting corporate business." Syllabus Point 5, State v. Childers, 187 W.Va. 54, 415 S.E.2d 460 (1992). See also Syllabus Point 3, Bowling v. Ansted Chrysler-Plymouth-Dodge, Inc., 188 W.Va. 468, 425 S.E.2d 144 (1992) ("An officer of a corporation ... may be personally liable for the tortious acts of the corporation, including fraud, if the officer participated in, approved of, sanctioned, or ratified such acts.")

The rationale behind imputing criminal liability to corporate officers, in addition to imposing liability upon the corporation, is that "[t]he existence of a corporate entity does not shield from prosecution corporate agents who knowingly and intentionally cause the corporation to commit crimes, in that a corporation obviously acts, and can act, only by and through its member agents and it is their conduct which criminal law must deter and those agents who in facts are culpable." 3 Childers, 187 W.Va. at 59, 415 S.E.2d at 465 (quoting Miller v. State, 732 P.2d 1054, 1059 (Wyo.1987)). See Syllabus Point 3, Mullins v. Venable, 171 W.Va. 92 The common law rule of imputing criminal liability upon corporate officers who are responsible for the criminal violations of the corporation continues as part of the law of this State until and unless the Legislature says otherwise. We have said that "[t]he common law, if not repugnant of the Constitution of this State, continues as the law of this State unless it is altered or changed by the Legislature. Article VIII, Section 21 of the Constitution of West Virginia; Chapter 2, Article 1, Section 1, of the Code of West Virginia." Syllabus Point 3, Seagraves v. Legg, 147 W.Va. 331, 127 S.E.2d 605 (1962).

[199 W.Va. 75] 96, 297 S.E.2d 866, 871 (1982) ("Corporate officers have a duty to see that their corporation obeys the law.").

If the Legislature intends to alter or supersede the common law, it must do so clearly and without equivocation. Our "common law is not to be construed as altered or changed by statute, unless legislative intent to do so be plainly manifested." Syllabus Point 4, Seagraves, 147 W.Va. 331, 127 S.E.2d 605 (quoting Shifflette v. Lilly, 130 W.Va. 297, 43 S.E.2d 289 (1947)). See also United States v. Wise, 370 U.S. 405, 409, 82 S.Ct. 1354, 1357, 8 L.Ed.2d 590 (1962) ("No intent to exculpate a corporate officer who violates the law is to be imputed to Congress without clear compulsion; else the fines established ... to deter crime become mere license fees for illegitimate corporate business operations."). Therefore, if the Legislature intends to change the common law rule so as to exempt corporate officers from criminal liability for criminal offenses committed by the corporation, it must draft the legislation with language that explicitly expresses that intent. 4

Because the common law in this State is clear that a corporate officer can be held criminally liable for criminal violations of the corporation, does W. Va.Code 23-1-16(a) (1995) contain express language which plainly and without equivocation exempts corporate officers from criminal sanctions when the corporations that they control fail to pay workers' compensation premiums or file timely appropriate reports? The answer is no.

We are assisted in framing this answer by our decision in Mullins v. Venable, 171 W.Va. 92, 297 S.E.2d 866 (1982). In Mullins, we held that civil liability may be imposed upon corporate officers, under the Wage Payment and Collection Act, to the employees of the corporation. We noted, in support of our holding, that the Wage Payment and Collection Act, W. Va.Code 21-5-15 (1981), imposed criminal penalties, including imprisonment, for willful violations of the bonding provisions in the Act. 5 Mullins, 171 W.Va. at 95, 297 S.E.2d at 870. We construed W. Va.Code 21-5-15 (1981), which is similar in language to W. Va.Code 23-1-16 (1995), to impose criminal liability upon corporate officers from the language "[a]ny...

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