Court Opinion

ID: 2679082
Source: CourtListenerOpinion
Date Created: 2014-06-18 20:19:29.628692+00
Date Added: 2024-06-11T13:08:59.772141
License: Public Domain

IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA

                                  January 2014 Term
                                  _______________                        FILED
                                                                     June 18, 2014
                                                                      released at 3:00 p.m.
                                    No. 13-1153                     RORY L. PERRY II, CLERK
                                                                  SUPREME COURT OF APPEALS
                                  _______________                      OF WEST VIRGINIA

                       STATE OF WEST VIRGINIA EX REL.

                        OWNERS INSURANCE COMPANY,

                                  Petitioner

                                           v.

            HONORABLE WARREN R. McGRAW, JUDGE OF THE

   CIRCUIT COURT OF WYOMING COUNTY, WEST VIRGINIA, and MORLAN

                    ENTERPRISES, INC., Respondents

       ____________________________________________________________

                      PETITION FOR WRIT OF PROHIBITION

                              WRIT DENIED
       ____________________________________________________________

                             Submitted: February 19, 2014

                                Filed: June 18, 2014

Barbara J. Keefer, Esq.                               Brent K. Kesner, Esq.
Karen E. Klein, Esq.                                  Ernest G. Hentschel, Esq.
Schuda & Associates, PLLC                             Kesner & Kesner, PLLC
Charleston, West Virginia                             Charleston, West Virginia
Counsel for the Petitioner                            Counsel for the Respondent

The Opinion of the Court was delivered PER CURIAM.

CHIEF JUSTICE DAVIS, JUSTICE LOUGHRY and JUSTICE WORKMAN concur,
and reserve the right to file concurring opinions.

JUSTICE KETCHUM concurs, in part, and dissents, in part, and reserves the right to file
a separate opinion.
                               SYLLABUS BY THE COURT

              1.      “A writ of prohibition will not issue to prevent a simple abuse of

discretion by a trial. Court. It will only issue where the trial court has no jurisdiction or

having such jurisdiction exceeds its legitimate powers. W. Va. Code 53-1-1.” Syl. pt. 2,

State ex rel. Peacher v. Sencindiver, 160 W. Va. 314, 233 S.E.2d 426 (1977).

              2.      “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 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 satisfied, it is clear that the third factor, the existence of clear error as

a matter of law, should be given substantial weight.” Syl. pt. 4, State ex rel. Hoover v.

Berger, 199 W. Va. 12, 483 S.E.2d 12 (1996).

                                                i
Per Curiam:

               Petitioner Owners Insurance Company (“Owners”) invokes the original

jurisdiction of this Court seeking a writ of prohibition to stop the Circuit Court of

Wyoming County from exercising jurisdiction over it, from applying West Virginia

substantive law instead of Ohio law to an insurance coverage issue, from allowing the

respondent, Morlan Enterprises, Inc (“Morlan”) to proceed against it on a first-party bad

faith claim and for violation of the West Virginia Unfair Trade Practice Act (“UTPA”),

W. Va. Code § 33-11-1, et seq., (1974), and from prohibiting the presentation of evidence

of the payment of attorney fees sought by Morlan that were paid by another source.

Upon a thorough review of the briefs, arguments of counsel, the designated record and

applicable precedent, we find that the petitioner has not established the necessary

elements for the granting of a writ, and we therefore deny the requested writ of

prohibition.

                                            I.

                  FACTUAL AND PROCEDURAL BACKGROUND

               This case arises from a September 15, 2005, incident where electrician

Bobby Messer came into contact with an energized electrical transmission line while

working as a lineman for Rectron, Inc., in Mingo County. Mr. Messer alleged that his

supervisors tested the line, confirmed that it was de-energized, grounded it and instructed

him to remove the transformers and switches from the pole. At the time of the accident,

                                            1

Mr. Messer was working on a line between a substation and a cellphone tower. Mr.

Messer’s injuries required the amputation of his left arm and right leg.

              Mr. Messer filed a civil action against his employer and other entities.

Through a series of amended complaints, Mr. Messer added claims against respondent

Morlan who had contracted with Rectron, Inc. for services, and against Paul Kerns, an

electrician who worked as a subcontractor for Morlan. Mr. Kerns, an Ohio resident, was

covered under a commercial general liability policy issued by Owners. This policy was

obtained in Ohio through an Ohio agent. Owners likewise operates in the State of Ohio.

Mr. Messer and his wife ultimately settled his claims with the various corporate entities,

with the exception of Hampden Coal Company, LLC.1

              The commercial general liability policy issued by Owners was obtained by

Mr. Kerns through Gladstone Insurance Agency as part of his work for Morlan. On

March 2, 2005, Mr. Kerns’ insurance agent faxed to Morlan at its headquarters in

Parkersburg a “Certificate of Insurance Coverage” dated March 2005. This certificate of

       1
         The underlying case in which Mr. Messer sued Hampden Coal Company, LLC,
and other entities was appealed to this Court on a juror disqualification issue. The
pertinent facts regarding the workplace accident giving rise to the present case are
derived from that opinion. The claims against Hampden Coal Company, LLC, were
tried, and the jury returned a verdict in favor of company. Mr. Messer appealed that
verdict to this Court. The verdict was affirmed by this Court in Messer v. Hampden Coal
Company, LLC, 229 W. Va. 97, 727 S.E.2d 443 (2012).

                                             2

insurance identified a policy of insurance in effect from October 9, 2004, through

October 9, 2005. Owners was listed as the insurer providing this coverage, and Morlan

was named along with Mr. Kerns on the certificate as an additional insured.

              After Mr. Messer’s lawsuit was filed against Morlan and the other

defendants, Morlan’s insurer, Westfield Insurance Company (“Westfield”), put Owners

on notice of a potential claim against the commercial general liability policy on which

Morlan was listed as an additional insured. Owners took no action to defend Morlan until

after Morlan filed a third-party complaint against Mr. Kerns, wherein Morlan asserted

that any liability it had to Mr. Messer was the result of work performed by Mr. Kerns in

April and May of 2005. Owners then engaged counsel to defend Mr. Kerns for the third-

party claim. Mr. Messer eventually also asserted a direct claim against Kerns and Owners

provided a defense to that claim. In April of 2009, Owners settled Mr. Messer’s claim

against Morlan and Kerns and obtained a full and final release of liability. The settlement

of Mr. Messer’s claim did not, however, resolve the coverage dispute between Morlan

and Owners.

              While these coverage claims were pending in West Virginia, Owners twice

filed declaratory actions in Ohio courts, seeking a declaratory judgment of its duties to

Morlan. The first of these actions was filed in the Court of Common Pleas in Guernsey

                                            3

County.    That case was dismissed; the Ohio judge ruling that the matters at issue

belonged in the courts of West Virginia.2

              The second action was filed in the Court of Common Pleas in Allen

County, Ohio, seeking a declaratory judgment of Owners’ duties toward Morlan. On

November 5, 2009, this case was also dismissed; the court finding that “Ohio has no

overriding interest in deciding this case. It does not involve a localized controversy. It is

a broad action for contribution based on a settlement paid in West Virginia based on

claims originating in West Virginia and involves policies issued and witnesses residing in

West Virginia.” The Allen County court specifically noted that “many of the same issues

could be covered” in the litigation pending in West Virginia.

              Owners appealed the Allen County decision to the Ohio Court of Appeals.

The Ohio Court of Appeals affirmed the Allen County ruling by an opinion entered April

5, 2010, stating that West Virginia had far superior contacts with the case than Ohio did,

because the coverage issues arose from an incident in West Virginia, West Virginia was

the state where all of the transactions of direct relevance to Owners’ complaint took place

       2
           In its order entered June 15, 2009, the Ohio court stated that the “Plaintiff may
pursue adjudication of this matter in the Circuit Court of Wyoming County, West
Virginia, in Civil Action No. 08-C-182.”

                                             4

and West Virginia was the site where Owners negotiated the settlement with Mr. Messer

and his wife for which it now sought indemnification.

              After its Ohio appeals were exhausted, Owners filed an action in the Circuit

Court of Wyoming County separate from the one filed by Mr. Messer seeking to recover

the amounts it paid to settle the Messer claims against Morlan from Morlan’s

commercial, Westfield. This civil action was consolidated with the original civil action

filed by Mr. Messer in 2006 for the purposes of discovery.

              On May 24, 2011, Owners filed a motion to apply Ohio law to this dispute.

That motion was later amended to include a motion for summary judgment on that issue.

Morlan disputed Owners’ motion, arguing that West Virginia law applied to this dispute

because the certificate of insurance issued by Owners to Morlan was issued to Morlan’s

West Virginia address and that the incident giving rise to this dispute happened in West

Virginia, making West Virginia law the governing law.

              On June 11, 2013, the Circuit Court of Wyoming County denied Owners’

Motion to apply Ohio law. Furthermore, in a November 4, 2013, order the court granted

Morlan’s motion to prohibit any evidence or testimony about the payment of legal fees by

Westfield on behalf of attorneys representing Morlan in this action. The circuit court also

granted Morlan’s motion for summary judgment on the coverage issue, stating that

                                            5

Owners’ commercial general liability policy provided primary coverage for Mr. Messer’s

claims against Morlan. The order did not address Morlan’s claims against Owners for

bad faith, breach of contract and violations of the UTPA.

              Owners invokes the original jurisdiction of this Court, seeking a writ of

prohibition to stop the current proceedings filed by Morlan in the Circuit Court of

Wyoming County.

                                             II.

                               STANDARD OF REVIEW

              This Court has explained the standard of review applicable to a writ of

prohibition, stating that “[a] writ of prohibition will not issue to prevent a simple abuse of

discretion by a trial court. It will only issue where the trial court has no jurisdiction or

having such jurisdiction exceeds its legitimate powers. W. Va. Code 53-1-1.” Syl. pt. 2,

State ex rel. Peacher v. Sencindiver, 160 W. Va. 314, 233 S.E.2d 426 (1977). In Syllabus

pt. 4 of State ex rel. Hoover v. Berger, 199 W. Va. 12, 483 S.E.2d 12 (1996), this Court

said:

                     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)

                                              6
             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 satisfied, it is clear that
             the third factor, the existence of clear error as a matter of law,
             should be given substantial weight.

                                            III.

                                     DISCUSSION

             In this proceeding the petitioner seeks to prevent enforcement of the circuit

court’s order regarding its jurisdiction over Owners, the use of West Virginia substantive

law over Ohio substantive law, allowing the first-party bad faith action instituted by

Morlan to proceed against Owners and prohibiting Owners from introducing evidence of

the payment of Morlan’s attorney fees by another source.

             The petitioner asserts there are four reasons why this Court should stop the

proceedings pending in the Circuit Court of Wyoming County from going forward.

Owners first asserts that the circuit court erred in ruling that West Virginia has

jurisdiction over it since it is an Ohio-based insurer who issued a policy to an Ohio

insured through an Ohio agent for a business located in Ohio that was not licensed to do

business in West Virginia. Second, Owners asserts that West Virginia law should not

                                             7

apply to a question of coverage of an Ohio insurance policy issued to an Ohio insured by

an Ohio insurer via an Ohio agent. Third, Owners contends that the named insured set

forth on the certificate of insurance was never an actual additional insured for which

coverage was available. Fourth, Owners argues that the collateral source rule applies to

the attorney fees paid by Morlan’s own insurer in a coverage dispute regarding the

priority of coverages between Westfield and Owners. Morlan counters that the lower

court’s rulings are correct and interlocutory and that Owners is not entitled to the relief of

this Court in the form of a writ of prohibition.

              We have held that an extraordinary writ, such as the one sought by Owners,

is not to be used as a substitute for an appeal.3 “Prohibition lies only to restrain inferior

courts from proceeding in causes over which they have no jurisdiction, or, in which,

having jurisdiction, they are exceeding their legitimate powers and may not be used as a

substitute for writ of error, appeal or certiorari.” Syl. pt. 1, Crawford v. Taylor, 138 W.

Va. 207, 75 S.E.2d 370 (1953). In addition, “[t]his Court is ‘restrictive in its use of

prohibition as a remedy.’ State ex rel. West Virginia Fire Cas. Co. v. Karl, 199 W.Va.

678, 683, 487 S.E.2d 336, 341 (1997).” State ex rel. Allstate Ins. Co. v. Gaughan, 220

       3
         “Under W. Va. Code 58-5-1 (1925) appeals may only be taken from final
decisions of a circuit court. A case is final only when it terminates the litigation between
the parties on the merits of the case and leaves nothing to be done but to enforce by
execution of what has been determined.” Syl. pt. 3, James M.B. v. Carolyn M., 193
W.Va. 289, 456 S.E.2d 16 (1995).

                                              8

W. Va. 113, 118, 640 S.E.2d 176, 182 (2006). In syllabus point 4 of State ex rel. Hoover

v. Berger, this Court said:

                      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 satisfied, it is clear that
              the third factor, the existence of clear error as a matter of law,
              should be given substantial weight.

              Applying this standard of review, we find that Owners is not entitled to its

requested writ of prohibition. Under the first prong of syllabus point 4 of Hoover, the

Court must examine whether the party seeking the writ has any other adequate means,

including a direct appeal, to obtain the desired relief. We find that inasmuch as the order

of the circuit court is not a final order, Owners would have an opportunity to appeal the

decision of the lower court upon entry of a final order.

              Applying the second Hoover factor regarding whether Owners will be

prejudiced in a way that is not correctable upon appeal, we see no indication that any

                                              9

error in the lower court’s interlocutory rulings would not be reparable if this matter were

directly appealed to this Court. Under prong two of Hoover, Owners is not prejudiced by

waiting to appeal a final order.

              The third and most significant factor is whether the circuit court’s order is

clearly erroneous as a matter of law. We have defined “clearly erroneous” as follows:

                      A finding is “clearly erroneous” when, although there
              is evidence to support the finding, the reviewing court on the
              entire evidence is left with the definite and firm conviction
              that a mistake has been committed. However, a reviewing
              court may not overturn a finding simply because it would
              have decided the case differently, and it must affirm a finding
              if the circuit court’s account of the evidence is plausible in
              light of the record viewed in its entirely.

Syl. pt. 1, in part, In the interest of Tiffany Marie S. 196 W. Va. 223, 470 S.E.2d 177

(1996).   Owners makes a number of arguments regarding the propriety of the lower

court’s rulings, including that the circuit court’s decision was clearly wrong because

West Virginia has no jurisdiction over an Ohio insurer, who issued a policy to cover an

Ohio resident at the request and behest of an Ohio insurance agent. Owners further

argues that Morlan is not a first-party claimant who is entitled to pursue a bad

faith/UTPA agreement against Owners. Morlan counters all of these arguments, relying

upon the issuance of the certificate of insurance naming it an additional named insured to

                                            10

ti at its West Virginia address.4 The issuance of the certificate of insurance naming a

West Virginia company as an additional insured is also support for Morlan’s argument

that West Virginia law, not Ohio law, should apply to this case. Finally, Morlan contends

that the certificate of insurance establishes the basis of it bad faith/UTPA claim against

Owners.

              The circuit court’s rulings were not clearly erroneous within our definition

of the phrase. While there were arguments that supported both Owners’ motion and

Morlan’s response, the circuit court’s resolution of these issues does not leave this Court

with a definite and firm conviction that the lower court made a mistake, such that this

matter cannot proceed to a resolution before the circuit court and then be part of an

              4
                  Both Owners and Morlan argues that our holding in Marlin v. Wetzel
County Board of Education, 212 W. Va. 215, 569 S.E.2d 462 (2002), is applicable to the
case at bar. We held in Syllabus point 9 of Marlin that
                      [a] certificate of insurance is evidence of insurance
              coverage, and is not a separate and distinct contract for
              insurance. However, because a certificate of insurance is an
              insurance company’s written representation that a
              policyholder has certain insurance coverage in effect at the
              time the certificate is issued, the insurance company may be
              estopped from later denying the existence of that coverage
              when the policyholder or the recipient of a certificate has
              reasonably relied to their detriment upon a misrepresentation
              in the certificate.

                                            11

appeal by one of the parties. These issues may be further developed in the circuit court

and subsequently appealed.

              Applying the fourth Hoover factor, i.e., whether the circuit court’s order is

an often-repeated error or that it manifests persistent disregard for established procedure

or substantive law, we find that the circuit court’s order does not display this type of

persistent error or blatant disregard for our jurisprudence and procedure. Furthermore,

the circuit court’s order does not raise new or important problems or issues of law of first

impression. Owners argues that this case presents an opportunity to clarify our holding in

Marlin and to provide guidance to circuit courts on the issue and legal effect of

certificates of insurance. We decline to address those questions in this proceeding prior

to an appeal of the final order of the circuit court.

              Reviewing the entirety of the record before us, we find that it is premature

to issue the requested writ of prohibition based upon the interlocutory order herein. The

matters raised by Owners in this petition should be resolved in the lower court. An

appeal may then be taken from any final order.

                                              12

                                          IV.

                                     CONCLUSION

              For the foregoing reasons, we find and conclude that the petitioner is not

entitled to a writ of prohibition.

                                                                           Writ denied.

                                           13