UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

UNITED NATIONAL INSURANCE 

COMPANY,

Plaintiff-Appellee,

v.

KEVIN M. LEE,

Defendant-Appellant,  No. 01-2260 and

JEFFREY O. STAMM, d/b/a Silk

Stockings and individually; THE

GENTLEMEN’S CLUB, INCORPORATED,

d/b/a Silk Stockings, a West

Virginia Corporation,

Defendants. 

Appeal from the United States District Court

for the Northern District of West Virginia, at Clarksburg.

Irene M. Keeley, Chief District Judge.

(CA-00-79-1)

Argued: September 25, 2002

Decided: November 26, 2002

Before WIDENER, LUTTIG, and WILLIAMS, Circuit Judges.

Affirmed by unpublished per curiam opinion. 

COUNSEL

ARGUED: Gregory Howard Schillace, SCHILLACE LAW OFFICE,

Clarksburg, West Virginia, for Appellant. Anita Rose Casey, MAC-
CORKLE, LAVENDER & CASEY, P.L.L.C., Charleston, West Virginia, for Appellee. ON BRIEF: Timothy J. Manchin, Vanessa Lynn

Rodriguez, MANCHIN & ALOI, P.L.L.C., Fairmont, West Virginia,

for Appellant. Renatha S. Garner, MACCORKLE, LAVENDER &

CASEY, P.L.L.C., Charleston, West Virginia, for Appellee.

Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c). 

OPINION

PER CURIAM: 

Kevin M. Lee appeals the district court’s entry of summary judgment in favor of United National Insurance Company. Lee argues that

summary judgment was inappropriate because genuine issues of

material fact exist regarding whether an insured’s delay in notifying

United National of Lee’s lawsuit against the insured was reasonable

and whether United National was prejudiced by the delay. Lee also

argues that the insured’s assertion that United National was provided

notice of Lee’s injuries raises a genuine issue of material fact.

Because we agree with the district court’s determination that Lee has

failed to raise a genuine issue of material fact, we affirm. 

I.

On December 4, 1998, Lee was severely injured on the premises

of the Gentleman’s Club, Inc., d/b/a Silk Stockings (the Club). On

December 17, 1998, counsel for Lee attempted to send a certified letter to Jeffrey Stamm, president and chief operating officer of the

Club, to inform the Club that Lee had retained counsel. The letter was

returned on January 9, 1999, marked as "unclaimed." On January 13,

1999, Lee filed a civil action against the Club in the Circuit Court of

Harrison County, West Virginia. Service of process was accepted by

the secretary of state on behalf of the Club on January 19, 1999.1 The

1Under West Virginia law, "[t]he secretary of state . . . [has the]

authority to accept service of notice and process on behalf of every . . .

2 UNITED NATIONAL INSURANCE CO. v. LEE
secretary of state forwarded process to Stamm, the Club’s registered

agent, via certified mail but this letter was also returned as "unclaimed." After the Club failed to answer Lee’s complaint, the state

trial court granted Lee’s motion for a default, held a hearing to determine damages, and on July 27, 1999, entered a default judgment

order, awarding Lee $322,415.76. The default judgment order was

sent to Stamm via regular mail at the address the secretary of state

had on file. On August 3, 1999, Stamm informed United National,

which had issued a commercial lines policy to Stamm d/b/a Silk

Stockings, that he had received the default judgment order and had

contacted his lawyer. On August 12, 1999, Stamm filed a claim report

with United National on behalf of the Club. 

On October 18, 1999, the Club filed a motion to vacate the default

judgment. The state trial court denied the motion, and the Club

appealed. The West Virginia Supreme Court of Appeals affirmed,

rejecting the Club’s defense that because Stamm stated that he had

been unaware of Lee’s suit until he received the default judgment

order, the Club was not "intransigent in failing to timely answer the

complaint." Lee v. Gentleman’s Club, Inc., 542 S.E.2d 78, 82 (W. Va.

2000). Unpersuaded by the Club’s argument, the court agreed that

"the evidence overwhelmingly shows that the Club intentionally

avoided two previous communications concerning [Lee’s accident]."

Id.

On May 4, 2000, United National filed a declaratory judgment

action against the Club, Stamm individually, and Stamm d/b/a Silk

Stockings in the United States District Court for the Northern District

of West Virginia, asserting that the defendants are not entitled to covcorporation and upon whom service of notice and process may be made

in this state for and upon every . . . corporation." W. Va. Code § 31-1-15

(Michie 2001). "Immediately after being served with or accepting any

such process or notice . . . the secretary of state shall file in his office

a copy of such process or notice . . . and transmit one copy of such process or notice by registered or certified mail, return receipt requested, to

the person whom notice and process shall be sent [or, if not available,]

to the principal office of the corporation at the addressed last furnished."

Id.

UNITED NATIONAL INSURANCE CO. v. LEE 3
erage under the United National policy because no notice of the

December 4, 1998 accident or of Lee’s claim was given prior to

August 3, 1999, after the entry of the default judgment order. On February 5, 2001, United National amended its complaint to join Lee as

a defendant. On July 20, 2001, United National filed a motion for

summary judgment. On September 12, 2001, the district court granted

United National’s motion for summary judgment. Lee then filed this

appeal. We possess jurisdiction pursuant to 28 U.S.C.A. § 1291 (West

1993). 

We review the grant of summary judgment de novo, viewing the

disputed facts in the light most favorable to Lee, the non-moving

party. See Morrell v. Nationwide Mut. Fire Ins. Co., 188 F.3d 218,

222 (4th Cir. 1999). Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file,

together with the affidavits, if any, show that there is no genuine issue

as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c).

II.

Failure to satisfy the notice requirement of an insurance policy bars

a claim against the insurer for coverage. Colonial Ins. Co. v. Barrett,

542 S.E.2d 869, 874 (W. Va. 2000) ("The satisfaction of the notice

provision in an insurance policy is a condition precedent to coverage

for the policyholder."). The insurance policy issued by United

National required the insured to notify United National "as soon as

practicable" of any claim or "suit" that is brought against the insured.2

(J.A. at 88.) "The phrase ‘as soon as practicable’ means a reasonable

amount of time." Ragland v. Nationwide Mut. Ins. Co., 120 S.E.2d

482, 490 (W. Va. 1961). When determining whether a delay in notifying an insurance company will bar a claim, West Virginia law

requires a court to address the following considerations: 

The length of the delay in notifying the insurer must be considered along with the reasonableness of the delay. If the

2The policy also required notice of an occurrence that could result in

a claim and immediate submission of all legal documents in connection

with any claim. See infra notes 5-6. 

4 UNITED NATIONAL INSURANCE CO. v. LEE
delay appears reasonable in light of the insured’s explanation, the burden shifts to the insurance company to show

that the delay in notification prejudiced their investigation

and defense of the claim. If the insurer can produce evidence of prejudice, then the insured will be held to the letter

of the policy and the insured barred from making a claim

against the insurance company. If, however, the insurer cannot point to any prejudice caused by the delay in notification, then the claim is not barred by the insured’s failure to

notify. 

Dairyland Ins. Co. v. Voshel, 428 S.E.2d 542, 546 (W. Va. 1993). 

It is undisputed that United National was not notified of Lee’s lawsuit until after the default judgment had been entered, over six months

after the lawsuit had been filed and served on the secretary of state.

Lee argues that whether this half-year delay was reasonable constitutes a genuine issue of material fact. A finder of fact could conclude

that the delay was reasonable, Lee contends, based on Stamm’s assertion that he was unaware that a suit had been filed until he received

the default judgment order. The judgment of the West Virginia

Supreme Court of Appeals, however, is dispositive on this issue, see

Lee, 542 S.E.2d at 82-83 (rejecting the Club’s contention that it was

not intransigent in failing to timely answer Lee’s complaint because

Stamm was unaware of the lawsuit prior to receiving the default judgment), and Lee, a party in that case, is precluded from relitigating the

findings of that court, see Conley v. Spillers, 301 S.E.2d 216, 220 (W.

Va. 1983) ("Collateral estoppel is designed to foreclose relitigation of

issues in a second suit which have actually been litigated in the earlier

suit even though there may be a difference in the cause of action

between the parties of the first and second suit.").3 Specifically, the

West Virginia Supreme Court of Appeals, in determining that the

3While the other defendants did not appeal the district court’s entry of

summary judgment, we note that each of them was also precluded from

relitigating the findings of the West Virginia Supreme Court of Appeals

because each was either a party or in privity with a party. See Conley v.

Spillers, 301 S.E.2d 216, 220 (W. Va. 1983) (noting that both named parties and those who are in privity with them are barred from relitigating

issues decided in an earlier suit). 

UNITED NATIONAL INSURANCE CO. v. LEE 5
Club was intransigent in failing to answer Lee’s complaint, found that

Stamm intentionally avoided two certified letters regarding Lee’s

injury. Lee, 542 S.E.2d at 80, 82. Both of these letters, the December

1998 letter from Lee’s attorney notifying the Club that Lee had

retained counsel and the January 1999 letter from the secretary of

state forwarding a copy of the service of process, would have alerted

Stamm that Lee was taking legal action to recover for the injuries he

sustained on the Club’s premises. Therefore, because Stamm intentionally avoided the two letters, his claim of being unaware of the

lawsuit cannot reasonably account for his delay in notifying United

National. As Lee offers no alternative explanation, Stamm’s sixmonth delay in notifying United National of the lawsuit was unreasonable as a matter of law.4

See Buckeye Union Casualty Co. v. Perry,

406 F.2d 1270, 1272 (4th Cir. 1969) ("[T]he insurer is entitled to

summary judgment because of the unexplained delay of 70 days in

notifying it after process was served."); Ragland, 120 S.E.2d at 490-

91 ("[M]ore than five months is not, under normal circumstances, a

reasonable time."). 

Lee also argues that Stamm’s assertion that he telephoned United

National on December 5, 1998 and informed them of Lee’s accident

raises a genuine issue of material fact. We agree with the district

court, however, that Stamm’s unexplained delay of six months in

notifying United National of Lee’s lawsuit is dispositive in this case.

Providing notice of Lee’s accident, while required under the policy,5

would not entitle Stamm to breach the other requirements under the

4Lee’s failure to state a reasonable explanation for the six-month delay

precludes his argument that United National was not prejudiced. Cf.

Dairyland Ins. Co. v. Voshel, 428 S.E.2d 542, 546 (W. Va. 1993) ("If the

delay appears reasonable in light of the insured’s explanation, the burden

shifts to the insurance company to show that the delay in notification

prejudiced their investigation and defense of the claim."). Of course, the

default judgment for $322,415.76 entered against the Club, combined

with the failed effort to have it vacated, demonstrates that United National’s defense of the claim likely was prejudiced by the delay in receiving

notice of Lee’s lawsuit. 

5The policy required that the insured "must see to it that [United

National] [is] notified as soon as practicable of an ‘occurrence’ or an

offense which may result in a claim." (J.A. at 87.) 

6 UNITED NATIONAL INSURANCE CO. v. LEE
policy by intentionally avoiding notices regarding the lawsuit.6

 The

alleged factual dispute regarding whether Stamm notified United

National of Lee’s injuries does not, therefore, save Lee from summary

judgment. See Plett v. United States, 185 F.3d 216, 223 (4th Cir.

1999) ("Summary judgment does not become disfavored simply

because . . . there are some disputed facts. The essential question presented on a motion for summary judgment remains whether, in the

absence of a genuine dispute over material facts, the moving party is

entitled to judgment as a matter of law." (citation and internal quotation marks omitted)). Accordingly, the order of the district court

granting summary judgment is

AFFIRMED.

6The policy not only required Stamm to notify United National of

Lee’s lawsuit as soon as practicable, but also required him to

"[i]mmediately send [United National] copies of any demands, notices,

summonses or legal papers received in connection with the claim." (J.A.

at 88.) 

UNITED NATIONAL INSURANCE CO. v. LEE 7