State v. McGraw

• Decision Date: 18 June 2014
• Docket Number: No. 13–1153.,13–1153.
• Citation: 233 W.Va. 776,760 S.E.2d 590
• Court: West Virginia Supreme Court
• Parties: STATE of West Virginia ex rel. OWNERS INSURANCE COMPANY, Petitioner v. Honorable Warren R. McGRAW, Judge of the Circuit Court of Wyoming County, West Virginia, and Morlan Enterprises, Inc., Respondents.

233 W.Va. 776

760 S.E.2d 590

STATE of West Virginia ex rel. OWNERS INSURANCE COMPANY, Petitioner

v.Honorable Warren R. McGRAW, Judge of the Circuit Court of Wyoming County, West Virginia, and Morlan Enterprises, Inc., Respondents.

No. 13–1153.

Supreme Court of Appeals of West Virginia.

Submitted Feb. 19, 2014.

Decided June 18, 2014.

Syllabus by the Court

1. “A writ of prohibition will not issue to prevent a simple abuse of discretion by a trial. Court. It will only issue where the trial court has no jurisdiction or having such jurisdiction exceeds its legitimate powers. W. Va.Code 53–1–1.” Syl. pt. 2, State ex rel. Peacher v. Sencindiver, 160 W.Va. 314, 233 S.E.2d 425 (1977).

2. “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 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.” Syl. pt. 4, State ex rel. Hoover v. Berger, 199 W.Va. 12, 483 S.E.2d 12 (1996).

Barbara J. Keefer, Esq., Karen E. Klein, Esq., Schuda & Associates, PLLC, Charleston, WV, for the Petitioner.

Brent K. Kesner, Esq., Ernest G. Hentschel, Esq., Kesner & Kesner, PLLC, Charleston, WV, for the Respondent.

PER CURIAM:

Petitioner Owners Insurance Company (“Owners”) invokes the original jurisdiction of this Court seeking a writ of prohibition to stop the Circuit Court of Wyoming County from exercising jurisdiction over it, from applying West Virginia substantive law instead of Ohio law to an insurance coverage issue, from allowing the respondent, Morlan Enterprises, Inc (“Morlan”) to proceed against it on a first-party bad faith claim and for violation of the West Virginia Unfair Trade Practice Act (“UTPA”), W. Va.Code § 33–11–1, et seq., (1974), and from prohibiting the presentation of evidence of the payment of attorney fees sought by Morlan that were paid by another source. Upon a thorough review of the briefs, arguments of counsel, the designated record and applicable precedent, we find that the petitioner has not established the necessary elements for the granting of a writ, and we therefore deny the requested writ of prohibition.

I.FACTUAL AND PROCEDURAL BACKGROUND

This case arises from a September 15, 2005, incident where electrician Bobby Messer came into contact with an energized electrical transmission line while working as a lineman for Rectron, Inc., in Mingo County. Mr. Messer alleged that his supervisors tested the line, confirmed that it was de-energized, grounded it and instructed him to remove the transformers and switches from the pole. At the time of the accident, Mr. Messer was working on a line between a substation and a cellphone tower. Mr. Messer's injuries required the amputation of his left arm and right leg.

Mr. Messer filed a civil action against his employer and other entities. Through a series of amended complaints, Mr. Messer added claims against respondent Morlan who had contracted with Rectron, Inc. for services, and against Paul Kerns, an electrician who worked as a subcontractor for Morlan. Mr. Kerns, an Ohio resident, was covered under a commercial general liability policy issued by Owners. This policy was obtained in Ohio through an Ohio agent. Owners likewise operates in the State of Ohio. Mr. Messer and his wife ultimately settled his claims with the various corporate entities, with the exception of Hampden Coal Company, LLC.¹

The commercial general liability policy issued by Owners was obtained by Mr. Kerns through Gladstone Insurance Agency as part of his work for Morlan. On March 2, 2005, Mr. Kerns' insurance agent faxed to Morlan at its headquarters in Parkersburg a “Certificate of Insurance Coverage” dated March 2005. This certificate of insurance identified a policy of insurance in effect from October 9, 2004, through October 9, 2005. Owners was listed as the insurer providing this coverage, and Morlan was named along with Mr. Kerns on the certificate as an additional insured.

After Mr. Messer's lawsuit was filed against Morlan and the other defendants, Morlan's insurer, Westfield Insurance Company (“Westfield”), put Owners on notice of a potential claim against the commercial general liability policy on which Morlan was listed as an additional insured. Owners took no action to defend Morlan until after Morlan filed a third-party complaint against Mr. Kerns, wherein Morlan asserted that any liability it had to Mr. Messer was the result of work performed by Mr. Kerns in April and May of 2005. Owners then engaged counsel to defend Mr. Kerns for the third-party claim. Mr. Messer eventually also asserted a direct claim against Kerns and Owners provided a defense to that claim. In April of 2009, Owners settled Mr. Messer's claim against Morlan and Kerns and obtained a full and final release of liability. The settlement of Mr. Messer's claim did not, however, resolve the coverage dispute between Morlan and Owners.

While these coverage claims were pending in West Virginia, Owners twice filed declaratory actions in Ohio courts, seeking a declaratory judgment of its duties to Morlan. The first of these actions was filed in the Court of Common Pleas in Guernsey County. That case was dismissed; the Ohio judge ruling that the matters at issue belonged in the courts of West Virginia.²

The second action was filed in the Court of Common Pleas in Allen County, Ohio, seeking a declaratory judgment of Owners' duties toward Morlan. On November 5, 2009, this case was also dismissed; the court finding that “Ohio has no overriding interest in deciding this case. It does not involve a localized controversy. It is a broad action for contribution based on a settlement paid in West Virginia based on claims originating in West Virginia and involves policies issued and witnesses residing in West Virginia.” The Allen County court specifically noted that “many of the same issues could be covered” in the litigation pending in West Virginia.

Owners appealed the Allen County decision to the Ohio Court of Appeals. The Ohio Court of Appeals affirmed the Allen County ruling by an opinion entered April 5, 2010, stating that West Virginia had far superior contacts with the case than Ohio did, because the coverage issues arose from an incident in West Virginia, West Virginia was the state where all of the transactions of direct relevance to Owners' complaint took place and West Virginia was the site where Owners negotiated the settlement with Mr. Messer and his wife for which it now sought indemnification.

After its Ohio appeals were exhausted, Owners filed an action in the Circuit Court of Wyoming County separate from the one filed by Mr. Messer seeking to recover the amounts it paid to settle the Messer claims against Morlan from Morlan's commercial, Westfield. This civil action was consolidated with the original civil action filed by Mr. Messer in 2006 for the purposes of discovery.

On May 24, 2011, Owners filed a motion to apply Ohio law to this dispute. That motion was later amended to include a motion for summary judgment on that issue. Morlan disputed Owners' motion, arguing that West Virginia law applied to this dispute because the certificate of insurance issued by Owners to Morlan was issued to Morlan's West Virginia address and that the incident giving rise to this dispute happened in West Virginia, making West Virginia law the governing law.

On June 11, 2013, the Circuit Court of Wyoming County denied Owners' Motion to apply Ohio law. Furthermore, in a November 4, 2013, order the court granted Morlan's motion to prohibit any evidence or testimony about the payment of legal fees by Westfield on behalf of attorneys representing Morlan in this action. The circuit court also granted Morlan's motion for summary judgment on the coverage issue, stating that Owners' commercial general liability policy provided primary coverage for Mr. Messer's claims against Morlan. The order did not address Morlan's claims against Owners for bad faith, breach of contract and violations of the UTPA.

Owners invokes the original jurisdiction of this Court, seeking a writ of prohibition to stop the current proceedings filed by Morlan in the Circuit Court of Wyoming County.

II.STANDARD OF REVIEW

This Court has explained the standard of review applicable to a writ of prohibition, stating that “[a] writ of prohibition will not issue to prevent a simple abuse of discretion by a trial court. It will only issue where the trial court has no jurisdiction or having such jurisdiction exceeds its legitimate powers. W. Va.Code 53–1–1.” Syl. pt. 2, State ex rel. Peacher v. Sencindiver, 160 W.Va. 314, 233 S.E.2d 425 (1977). In Syllabus pt. 4 of State ex rel. Hoover v. Berger, 199 W.Va. 12, 483 S.E.2d 12 (1996), this Court said:

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...