Walker v. Option One Mortg. Corp.
| Decision Date | 07 June 2007 |
| Docket Number | No. 33225.,33225. |
| Citation | 649 S.E.2d 233 |
| Court | West Virginia Supreme Court |
| Parties | Helen P. WALKER, Plaintiff Below, Appellee, v. OPTION ONE MORTGAGE CORPORATION, A Corporation, and H & R Block Mortgage Corp., A Corporation, Defendants Below, Appellants. |
Syllabus by the Court
1. "`" ." .' Syllabus Point 1, Jones v. Sanger, 217 W.Va. 564, 618 S.E.2d 573 (2005).
2. " Syllabus Point 2, State ex rel. Leung v. Sanders, 213 W.Va. 569, 584 S.E.2d 203 (2003).
3. "The purpose of the words `and leave [to amend] shall be freely given when justice so requires' in Rule 15(a) W.Va. R. Civ. P., is to secure an adjudication on the merits of the controversy as would be secured under identical factual situations in the absence of procedural impediments; therefore, motions to amend should always be granted under Rule 15 when: (1) the amendment permits the presentation of the merits of the action; (2) the adverse party is not prejudiced by the sudden assertion of the subject of the amendment; and (3) the adverse party can be given ample opportunity to meet the issue." Syllabus Point 2, State ex rel. Vedder v. Zakaib, 217 W.Va. 528, 618 S.E.2d 537 (2005).
4. Syllabus Point 3, State ex rel. Vedder v. Zakaib, 217 W.Va. 528, 618 S.E.2d 537 (2005).
Kenneth E. Tawney, Amber L. Hoback, Kevin T. Wills, Jackson & Kelly PLLC, Charleston, for the Appellants.
Bren J. Pomponio, Daniel F. Hedges, Mountain State Justice, Inc., Charleston, for the Appellee.
The appellants herein and defendants below, Option One Mortgage Corporation [hereinafter, "Option One"] and H & R Block Mortgage Corporation [hereinafter, "H & R Block"],1 appeal from an order entered July 7, 2005, by the Circuit Court of Kanawha County. By that order, the circuit court denied the appellants' motion to file a counterclaim and a third-party complaint. On appeal to this Court, the appellants argue that the circuit court abused its discretion by denying their motion. Upon a review of the parties' arguments, the record designated for appellate consideration, and the pertinent authorities, we agree and reverse the decision of the circuit court.
On April 29, 2002, the plaintiff below and appellee herein, Helen F. Walker [hereinafter, "Ms. Walker"], was approved for a mortgage loan with H & R Block to enable her to purchase a house. At the time of her application, Ms. Walker represented that she had $18,000 to use as a down payment for the purchase. H & R Block contends that the fact that Ms. Walker intended to make a down payment in this amount substantially contributed to its decision to approve her application for a $46,963.382 mortgage loan. Following this transaction, H & R Block assigned Ms. Walker's loan to its affiliated assignee, Option One.
Thereafter, Ms. Walker defaulted on her loan, and the appellants sent her a reinstatement quote requesting payment of $6,530 in order to avoid foreclose on her home. On August 7, 2003, Ms. Walker filed a lawsuit against the appellants in the Circuit Court of Kanawha County alleging predatory lending practices and seeking cancellation of the loan, among other relief. By answer filed December 15, 2003, the appellants denied all of the charges against them and asked the circuit court to dismiss the case with prejudice. They did not assert any counterclaims in that pleading. Pursuant to the April 27, 2004, original scheduling order, May 15, 2004, was set as the deadline date to file third-party complaints, while counterclaims were not mentioned in that order. In addition, November 1, 2004, was set as the discovery cut-off date, while January 24, 2005, was set as the original trial date.
On October 29, 2004, the appellants took the depositions of Ms. Walker and her daughter, Paula Walker Paul [hereinafter, "Ms. Paul"]. During this testimony, counsel for the appellants began to question the source of Ms. Walker's $18,000 down payment for her home. Upon further investigation and the receipt of subpoenaed bank records on December 8, 2004, counsel began to suspect that such monies had been illicitly obtained by Ms. Paul from her former employer.3 Counsel for the appellants alerted both Ms. Paul's former employer and counsel for Ms. Walker of their suspicions. On January 26, 2005, counsel for the appellants informed counsel for Ms. Walker that this information may lead them to file a counterclaim and a third-party complaint. Ms. Paul's former employer undertook its own investigation and, on March 21, 2005, turned the matter over to law enforcement authorities.
On April 4, 2005, the appellants filed their "Motion to File Counterclaim and Third-Party Complaint" that is the subject of this appeal.4 On July 7, 2005, the circuit court denied the appellants' motion concluding "that the deadline for filing third party complaints passed nearly fourteen months ago on May 15, 2004 and [Appellants] have failed to provide good cause why the deadline should be extended." From this ruling, the appellants now appeal to this Court.5
We have been called upon to determine whether the circuit court erred by not permitting the appellants to file a third-party complaint. In Syllabus Point 1 of Jones v. Sanger, 217 W.Va. 564, 618 S.E.2d 573 (2005), this Court held that:
"` .' ." [Syllabus Point 1,] Boggs v. Camden-Clark Memorial Hosp. Corp., 216 W.Va. 656, 609 S.E.2d 917 (2004).
Moreover, in Syllabus Point 2 of State ex rel. Leung v. Sanders, 213 W.Va. 569, 584 S.E.2d 203 (2003), we explained that:
Syl. pt. 5, in part, Shamblin v. Nationwide Mutual Insurance Co., 183 W.Va. 585, 396 S.E.2d 766 (1990).
With these standards in mind, we now consider the parties' arguments.
On appeal to this Court, the appellants raise a single assignment of error challenging the circuit court's denial of its motion to file a counterclaim and a third-party complaint. Because these two proposed filings constitute two distinct pleadings against two separate parties, we will consider separately the propriety of the circuit court's rulings denying the appellants' motion to file a counterclaim and the appellants' motion to file a third-party complaint.
The appellants first complain that the circuit court erred by denying their motion to file a compulsory counterclaim against Ms. Walker to allege fraud in her acquisition of the underlying mortgage. In support of their position, the appellants rely upon Rule 13 of the West Virginia Rules of Civil Procedure which provides, in relevant part:
(a) Compulsory counterclaims.—A pleading shall state as a counterclaim any claim which at the time of serving the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject matter of the opposing party's claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction. But the pleader need not state the claim if (1) at the time the action was commenced the claim was the subject of another pending action, or (2) the opposing party brought suit upon the claim by attachment or other process by which the court did not acquire jurisdiction to render a personal judgment on that claim, and the pleader is not stating any counterclaim under this Rule 13.
....
(f) Omitted counter claim.—When a pleader fails to set up a...
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