Opinion ID: 1376182
Heading Depth: 1
Heading Rank: 2

Heading: Delaware CWC Liquidation Corp. v. Martin

Text: In July 1995, Carlton Thornton and Michael Jordan instituted a civil action against their employer, Cleveland Wrecking Co., under W.Va.Code § 23-4-2, West Virginia's deliberate intention statute. Both men were laid off from their employment shortly thereafter, and, as a result, they amended their original complaints to include claims for wrongful discharge, under W.Va.Code § 23-5A-1 ([d]iscriminatory practices prohibited). Meanwhile, Cleveland Wrecking Co. was loaned several million dollars as part of an effort to ease some of its financial problems. For reasons unexplained, as part of the secured transaction, the lending institution failed to perfects its security interest in Cleveland Wrecking Co.'s personal property assets in West Virginia. Cleveland Wrecking Co. eventually defaulted on the bank loan. A California corporation, CWC Acquisition Corp., (CWC Acquisition) was formed for the purpose of buying Cleveland Wrecking Co.'s debt and security interests from the bank. CWC Acquisition foreclosed on the name Cleveland Wrecking Co. and ultimately, began operating as Cleveland Wrecking Co. The original Cleveland Wrecking Co., meanwhile, became known as Delaware CWC Liquidation Corp. In July 1995, attorney Robert Martin was hired to defend the interests of the new Cleveland Wrecking Co. in the deliberate intention and wrongful discharge litigation involving the company and Messieurs Thornton and Jordan. Ultimately, a jury awarded the pair compensatory and punitive damages totaling approximately $149,500.00. It is Defendant Martin's alleged post-trial negligence which is the subject of the legal malpractice claim later assigned to Thornton and Jordan and which is at issue in the instant certified question from the Circuit Court of Putnam County. A judgment order in the underlying litigation was entered on April 28, 1998. On May 8, 1998, Defendant Martin, on behalf of his client, the new Cleveland Wrecking Co., served Defendant's Motion for Judgment Notwithstanding the Verdict or, in the Alternative, Motion for a New Trial. Defendant Martin did not file these post-trial motions with the Circuit Court of Putnam County until May 14, 1998. Defendant Martin was apparently unaware that, effective April 6, 1998, the West Virginia Rules of Civil Procedure were amended to require that the foregoing post-trial motions be filed, and not just served, no later than 10 days after entry of judgment[.] W.Va. R. Civ. P. 50(b). See W.Va. R. Civ. P. 59(b) Thus, under W.Va. R. Civ. P. 50(b) and 59(b), Defendant Martin's requests for post-trial relief were not timely filed. Due to Defendant Martin's failure to timely file post-trial motions, Messrs. Thornton and Jordan, by counsel, obtained a writ of execution, pursuant to which they began levying on and taking possession of motor vehicles and demolition equipment owned by the original Cleveland Wrecking Co. Apparently, the new Cleveland Wrecking Co. had not yet perfected its security interest in these items. Ultimately, representatives from the new Cleveland Wrecking Co. negotiated a settlement with Thornton and Jordan, which included not only a release of the levy on the company's vehicles and equipment, but also an assignment to Thornton and Jordan of the company's purported legal malpractice claims against Defendant Martin for damages caused by his failure to timely file post-trial motions. As a result of this assignment, Thornton and Jordan filed a Complaint against Defendant Martin. Defendant Martin moved to dismiss the complaint, or alternatively, for summary judgment. Thornton and Jordan filed a cross motion for summary judgment on the issue of Defendant Martin's liability. The circuit court denied the parties' respective motions. Thereafter, Defendant Martin filed a second motion for summary judgment on the ground that the assignment of the new Cleveland Wrecking Co.'s purported legal malpractice claim against Defendant Martin is not permitted as a matter of law. In an Order entered November 26, 2001, the Circuit Court of Putnam County denied Defendant Martin's motion for summary judgment and ordered that the disputed legal issues related to the assignment of legal malpractice claims be certified to this Court. By Order entered April 16, 2002, the following question was certified to this Court, pursuant to W.Va.Code § 58-5-2 and W.Va. R.App. P. 13: Is the assignment of a legal malpractice claim contrary to the public policy of the State of West Virginia and therefore void as a matter of law? Answer of the Circuit Court of Putnam County: No.