Opinion ID: 1267395
Heading Depth: 1
Heading Rank: 5

Heading: trial on bad faith settlement practices

Text: As previously indicated, an action under Jenkins v. J.C. Penney Casualty Insurance Company, supra , and its progeny, is a type of action which is wholly distinct from an underlying contractual action on an insurer's failure to comply with its insurance contract. Such an action is also wholly distinct from a Hayseeds action. Further, the conditions and predicate for bringing a Jenkins -type case are wholly different from those necessary for bringing an underlying contract action or for bringing a Hayseeds action. Whereas under Hayseeds it is necessary that a policyholder substantially prevail on an underlying contract action before he may recover enhanced damage, under Jenkins there is no requirement that one substantially prevail; it is required that liability and damages be settled previously or in the course of the Jenkins litigation. Jenkins instead predicates entitlement to relief solely upon violation of the West Virginia Unfair Trade Practices Act, W.Va.Code § 33-11-4(9), where such violation arises from a general business practice on the part of the insurer. The fundamental holding of Jenkins recognizes a private, implied cause of action for violations of W.Va.Code § 33-11-4(9) and permits plaintiff to recover attorney fees and, under the appropriate circumstances, punitive damages, if it can be shown that there was more than a single isolated violation of W.Va.Code § 33-11-4(9) and that the violations indicate a general business practice on the part of the insurer. In the body of Jenkins, the Court further indicated: We conceive that proof of several breaches by an insurance company of W.Va.Code, 33-11-4(9), would be sufficient to establish the indication of a general business practice. It is possible that multiple violations of W.Va.Code, 33-11-4(9), occurring in the same claim would be sufficient, since the term frequency in the statute must relate not only to repetition of the same violation but to the occurrence of different violations. Proof of other violations by the same insurance company to establish the frequency issue can be obtained from other claimants and attorneys who have dealt with such company and its claims agents, or from any person who is familiar with the company's general business practice in regard to claim settlement. 167 W.Va. at 610, 280 S.E.2d at 260. Since the predicate for seeking relief under Jenkins and its progeny does not require that an insured substantially prevail on an underlying action, and since Jenkins does allow, under certain conditions, a party to seek reasonable attorney fees and punitive damages, this Court believes that insofar as the trial court's order in the present case precludes the appellant from seeking attorney fees or punitive damages because the appellant failed substantially to prevail below, the trial court's order in the present case was erroneous. Additionally, as previously indicated, on July 31, 1992, the trial court entered an order bifurcating the issues for trial in this case and specifically provided that any questions arising under the Unfair Trade Practices Act would be handled in a separate trial. It appears that at the conclusion of the trial, the trial court not only found that the appellant had not substantially prevailed in his underlying action, but refused to allow the appellant to proceed to trial to seek damages or attorney fees under any cause of action. This Court believes that, in the circumstances of this case, litigation of the Jenkins -type claim is appropriate. The appellant has prevailed in the first phase on his claim that Allstate failed to pay the amount to which the appellant was entitled under the insurance contract. Pursuit of the Jenkins claim, if either of the parties elects to proceed, will afford full opportunity to litigate the substance of the remaining issues that were not adequately addressed during the first phase trial had below, including, if supported by the evidence, the issue of whether the reconditioning deductions used by Allstate are a general business practice, whether, under the applicable Jenkins rule, punitive damages should be awarded, and whether appellant should be awarded attorney fees for vindicating his Jenkins -type claim and, if so, in what amount. The Court notes that the remainder of the errors assigned by the appellant relate to matters which may be raised in the Jenkins phase of the trial and are not prejudicial with respect to the result which we announce today relating to the trial had below, even if they constituted error.