STATE OF WEST VIRGINIA
 

SUPREME COURT OF APPEALS
 

State of West Virginia, ex rel. FILED 

AIG Domestic Claims, Inc., February 21, 2014 

Petitioner released at 3:00 p.m. 

RORY L. PERRY II, CLERK 

SUPREME COURT OF APPEALS 

v.) No. 13-1048 (Ohio County 05-C-550) OF WEST VIRGINIA 

The Honorable Larry V. Starcher,
 

Judge of the Circuit Court of Ohio County,
 

West Virginia, and Candy George, Individually
 

and as Guardian, Mother and Next of Friend of
 

Kyle George, a minor, and Mark George,
 

Respondents
 

MEMORANDUM DECISION 

Petitioner (and defendant in the underlying action) AIG Domestic Claims 

(“AIG”), by counsel Don C.A. Parker and Laura E. Hayes, invokes this Court’s original 

jurisdiction. AIG seeks a writ prohibiting enforcement of an order of the Circuit Court of Ohio 

County that allows the plaintiffs in the underlying action to seek discovery of potentially unfair 

claim settlement practices that occurred after July 8, 2005, the date the Legislature abolished 

third-party actions for unfair claim settlement practices under the West Virginia Unfair Trade 

Practices Act (“UTPA”). AIG also asks this Court for a writ of mandamus compelling the circuit 

court to rule on whether the plaintiffs will be permitted to rely upon evidence of unfair claims 

handling activities by AIG that occurred after July 8, 2005, to establish their assertion that AIG 

violated the UTPA. The plaintiffs in the underlying action (and respondents herein), Candy and 

Mark George, appeared by their counsel Ronald W. Zavolta. 

On June 30, 2005, plaintiffs Candy and Mark George brought an action for 

injuries to their minor child, Kyle, arising from two accidents when he fell on a school 

playground. The plaintiffs brought suit against the county school board, and against AIG for 

third-party unfair claim settlement practices in violation of the UTPA. AIG was the claims 

handler for the county school board’s insurance carrier. 

On July 8, 2005, W.Va. Code § 33-11-4a(a) [2005] took effect and thereafter 

prohibited third-party lawsuits alleging unfair claim settlement practices, lawsuits just like that 

filed by the plaintiffs. The statute says, in pertinent part: 

A third-party claimant may not bring a private cause of 

action or any other action against any person for an unfair claims 

settlement practice. A third-party claimant’s sole remedy against a 

person for an unfair claims settlement practice or the bad faith 

settlement of a claim is the filing of an administrative complaint 

with the Commissioner. . . . A third-party claimant may not include 

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allegations of unfair claims settlement practices in any underlying 

litigation against an insured. 

However, while the Legislature abolished lawsuits alleging third-party unfair 

claim settlement practices, the Legislature simultaneously established an administrative process 

whereby litigants could pursue administrative penalties against insurers for third-party unfair 

claim settlement practices. See W.Va. Code § 33-11-4a(b)-(j). Unfair claim settlement practices 

by insurers are still illegal; it was simply the forum for relief that was changed. 

The plaintiffs settled their lawsuit against the county school board in 2009. 

Thereafter, the plaintiffs sought discovery on their allegations that AIG had engaged in unfair 

claim settlement practices in the resolution of their lawsuit. 

AIG filed a motion for a protective order to limit the scope of discovery that could 

be sought by the plaintiffs. Specifically, AIG asked the circuit court to prohibit discovery of any 

unfair claim settlement practices by AIG that occurred after either the filing of the respondent’s 

complaint or the effective date of W.Va. Code § 33-11-4a. AIG argued that the statute 

essentially prohibits the use at trial of unfair claim settlement practices that occurred after July 8, 

2005, and therefore that conduct is not discoverable. 

In an order dated April 11, 2013, the circuit court refused to issue a protective 

order. The circuit court reasoned that W.Va. Code § 33-11-4a only prohibits the filing of a 

lawsuit after July 8, 2005; it does not prohibit the evidence of unfair claims settlement practices 

that occurred after July 8, 2005, from being used in a pending lawsuit. Thus, the circuit court 

found that “the post July 8, 2005 claims activities of AIG are discoverable in this lawsuit.” 

On October 18, 2013, AIG filed a petition with this Court seeking a writ of 

prohibition to halt enforcement of the circuit court’s order. 

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

12 (1996), we adopted the following guidelines where a writ of prohibition is sought: 

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 

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satisfied, it is clear that the third factor, the existence of clear error 

as a matter of law, should be given substantial weight. 

AIG asks that we prohibit enforcement of the circuit court’s order allowing 

discovery of unfair claim settlement practices after July 8, 2005. AIG contends that the circuit 

court’s order is clearly wrong “as a matter of common sense” because AIG’s violations of the 

UTPA after July 8, 2005 “could not form the basis of a lawsuit when they took place.” AIG 

further contends it should not be subjected to compensatory and punitive damages based upon 

unfair claim settlement practices that occurred after July 8, 2005. Lastly, AIG argues that any of 

AIG’s violations of the UTPA after July 8, 2005 would not be admissible at trial. 

We reject AIG’s contentions. The UTPA, W.Va. Code § 33-11-4 [2002], was last 

amended in 2002 and prohibits a long list of activities by insurance companies. The UTPA 

declares violations of this list to be “unfair methods of competition and unfair or deceptive acts 

or practices in the business of insurance.” These activities are prohibited, regardless of whether 

the insurance company is dealing with a first-party insured or a third-party to an insurance 

policy. 

More importantly, nothing in W.Va. Code § 33-11-4a (that was adopted in 2005) 

altered the list of prohibited activities contained in W.Va. Code § 33-11-4. All that the 2005 

statute changed was to proscribe third-party plaintiffs from filing lawsuits based on insurance 

company claim settlement misconduct. Third-party plaintiffs must now file an administrative 

complaint with the insurance commissioner. First-party plaintiffs, however, may continue to 

bring lawsuits for violations of the UTPA. 

Furthermore, the UTPA delineates certain activities as “unfair claims settlement 

practices.” W.Va. Code § 33-11-4(9) prohibits various unfair claim settlement activities, but 

only so long as they are committed “with such frequency as to indicate a general business 

practice[.]” Hence, a first- or third-party plaintiff cannot simply complain that an insurance 

company violated W.Va. Code § 33-11-4(9) on one occasion; instead, they must establish “that 

the practice or practices are sufficiently pervasive or sufficiently sanctioned by the insurance 

company that the conduct can be considered a ‘general business practice’ and can be 

distinguished by fair minds from an isolated event.” Syllabus Point 4, Doddrill v. Nationwide 

Mut. Ins. Co., 201 W.Va. 1, 491 S.E.2d 1 (1996). See also, Syllabus Point 3, Jenkins v. J.C. 

Penney Cas. Ins. Co., 167 W.Va. 597, 280 S.E.2d 252 (1981) (“More than a single isolated 

violation of W.Va. Code, 33–11–4(9), must be shown in order to meet the statutory requirement 

of an indication of ‘a general business practice,’ which requirement must be shown in order to 

maintain the statutory implied cause of action.”). 

In the instant case, the plaintiffs brought suit on June 30, 2005, before the 

effective date of W.Va. Code § 33-11-4a. To establish their claim that AIG committed unfair 

claims settlement practices in the resolution of their lawsuit in violation of the UTPA, W.Va. 

Code § 33-11-4(9) requires more than simply showing one isolated violation. The UTPA 

requires the plaintiffs to show that AIG engaged in unfair claim settlement practices with such 

frequency as to establish that the conduct was a pervasive “general business practice.” To 

establish a “general business practice,” the plaintiffs should be permitted discovery of AIG’s 

claims settlement practices, whether or not those actions pre- or post-dated when W.Va. Code § 

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33-11-4a went into operation. Our rules indisputably permit “discovery regarding any matter, 

not privileged, which is relevant to the subject matter involved in the pending action[.]” 

W.Va.R.Civ.Pro. 26(b)(1). 

The plaintiffs timely filed their UTPA lawsuit when the law still permitted the 

filing of such suits. There is nothing in W.Va. Code § 33-11-4a to suggest the Legislature 

intended to retroactively preempt existing suits. And the circuit court’s order permits discovery 

of AIG’s claim settlement practices that post-date the adoption of the statute, and that will assist 

the plaintiffs in proving their allegation that AIG had a general business practice of violating the 

UTPA. On this record, we can find no error by the circuit court. 

In its petition to this Court, AIG also seeks a writ of mandamus. AIG asks that 

we compel the circuit court to rule forthwith on the admissibility at trial of any post-July 8, 2005, 

unfair claim settlement practices by AIG. We stated the standard for a writ of mandamus in 

Syllabus Point 2 of State ex rel. Kucera v. City of Wheeling, 153 W.Va. 538, 170 S.E.2d 367 

(1969): 

A writ of mandamus will not issue unless three elements 

coexist -- (1) a clear legal right in the petitioner to the relief 

sought; (2) a legal duty on the part of respondent to do the thing 

which the petitioner seeks to compel; and (3) the absence of 

another adequate remedy. 

AIG is asking this Court to force the circuit court to rule on the admissibility of 

evidence before the parties have even conducted discovery. It is well established that the West 

Virginia Rules of Evidence and Rules of Civil Procedure allocate significant discretion to a trial 

court in making evidentiary and procedural rulings. See, e.g., Syllabus Point 1, McDougal v. 

McCammon, 193 W.Va. 229, 455 S.E.2d 788 (1995); Syllabus Point 4, State v. Rodoussakis, 204 

W. Va. 58, 511 S.E.2d 469 (1998); Syllabus Point 2, State v. Peyatt, 173 W.Va. 317, 315 S.E.2d 

574 (1983); Syllabus Point 10, State v. Huffman, 141 W.Va. 55, 87 S.E.2d 541 (1955). 

Since the admissibility or exclusion of evidence is a question within the circuit 

court’s discretion, AIG cannot establish a “clear legal right” to the relief sought and is therefore 

not entitled to mandamus relief. 

We therefore deny the requested writ of prohibition and the requested writ of 

mandamus. 

Writs denied. 

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ISSUED: February 21, 2014 

CONCURRED IN BY: 

Chief Justice Robin Jean Davis 

Justice Margaret L. Workman 

Justice Menis E. Ketchum 

Justice Allen H. Loughry II 

DISSENTING: 

Justice Brent D. Benjamin 

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