Court Opinion

ID: 4454303
Source: CourtListenerOpinion
Date Created: 2019-11-08 13:15:49.776993+00
Date Added: 2024-06-11T14:53:29.099482
License: Public Domain

STATE OF WEST VIRGINIA
                          SUPREME COURT OF APPEALS

Joann Dickens,                                                                  FILED
Defendant Below, Petitioner                                                 November 8, 2019
                                                                             EDYTHE NASH GAISER, CLERK
                                                                             SUPREME COURT OF APPEALS
vs.) No. 18-0568 (Raleigh County 17-C-351-K)                                     OF WEST VIRGINIA

Rebecca Chapel Church,
Rebecca Chapel United,
Steven Smith, Ronald Sanbower,
Lonnie Burnside, James Farley,
Gary Daniels,
Plaintiffs Below, Respondents

                              MEMORANDUM DECISION

       Petitioner Joann Dickens, by counsel Brandon L. Gray, Matthew A. Bradford, and Kyle
G. Lusk, appeals the Circuit Court of Raleigh County’s June 1, 2018, order granting respondents’
motion for summary judgment. Respondents Rebecca Chapel Church, Rebecca Chapel United,
Steven Smith, Ronald Sanbower, Lonnie Burnside, James Farley, and Gary Daniels, by counsel
William R. Wooten, filed a response in support of the circuit court’s order and a supplemental
appendix. On appeal, petitioner argues that the circuit court erred in finding that respondents did
not act in bad faith and denying petitioner’s motion to conduct discovery prior to granting
summary judgment.

        This Court has considered the parties’ briefs and the record on appeal. The facts and legal
arguments are adequately presented, and the decisional process would not be significantly aided
by oral argument. Upon consideration of the standard of review, the briefs, and the record
presented, the Court finds no substantial question of law and no prejudicial error. For these
reasons, a memorandum decision affirming the circuit court’s order is appropriate under Rule 21
of the Rules of Appellate Procedure.

        In June of 2017, respondents filed a civil complaint alleging that petitioner fraudulently
embezzled approximately $27,483.94 while she was the treasurer of the Rebecca Chapel Church.
Respondents alleged that petitioner was appointed treasurer in May of 2012 and resigned in
February of 2013 after confessing to using church funds for personal use. Respondents asserted
several causes of action: fraud, conversion, and embezzlement; and a breach of fiduciary duty.
Respondents requested compensatory damages, punitive damages, pre- and post-judgment
interest, and attorney’s fees. In August of 2017, petitioner filed a motion to dismiss all asserted

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claims based on the statute of limitations. Petitioner correctly identified respondents’ causes of
action as torts, which were subject to a two-year statute of limitations pursuant to West Virginia
Code § 55-2-12.1

        Respondents moved to amend the complaint and filed an amended complaint in
September of 2017 that asserted two additional causes of action, a breach of contract claim and
default on payment of note. In support of the breach of contract claim, respondents alleged that,
following the discovery of the missing funds, petitioner “confessed that she had misused funds
and pledged to repay the entire amount.” Thereafter, respondents entered into a contract with
petitioner to repay $20,000, “and in consideration therefore the Church agreed to forgive . . .
$7,483.94 of the money stolen by [petitioner], and instead accept[ed] . . . to be repaid in forty
(40) consecutive monthly payments beginning on the 1st day of June, 2013.” Respondents
alleged that petitioner delivered a promissory note for $20,000 on May 13, 2013, which required
one $500 payment per month for forty months and terminated in September of 2016. Finally,
respondents alleged that petitioner had no intention of repaying the note and fraudulently
induced respondents to accept the same to their detriment. Respondents asserted that due to
petitioner’s breach of contract, she was contractually obligated to repay the original $27,483.94.
In support of the default in payment of note claim, respondents alleged that petitioner paid only
$1,946.00 toward the promissory note and had made no payments since September of 2014.
Respondents requested payment of the remaining $18,054.00 balance of the note.

        The circuit court held a hearing on petitioner’s motion to dismiss and respondents’
motion to amend the complaint in September of 2017. Respondents argued that petitioner would
have ample time to respond to the amended complaint and, therefore, would not be prejudiced by
the amendment. Petitioner objected to the motion and argued that respondents acted in bad faith
by strategically choosing to exclude the additional causes of action in the original complaint in
an attempt to obtain punitive damages. Ultimately, the circuit court granted the motion to amend
and in doing so considered that Rule 15 of the West Virginia Rules of Civil Procedure is “an
extremely liberal rule;” that this matter was filed relatively recently; petitioner would have ample
opportunity to respond to the amended complaint; respondents had not acted in bad faith; and
respondents had “not acted out of a dilatory motive.” The circuit court also heard petitioner’s
motion to dismiss the first two causes of action in the complaint, but held that motion in
abeyance.

       Following that hearing, respondents served petitioner with written interrogatories and
requested that petitioner provide:

       (a) The total amount of payments you have made on your note dated May 13,
       2013 payable to the order of REBECCA CHAPPEL [sic] UNITED METHODIST

       1
         West Virginia Code § 55-2-12 provides, in relevant part: “Every personal action for
which no limitation is otherwise prescribed shall be brought: (a) Within two years next after the
right to bring the same shall have accrued, if it be for damage to property . . . .”

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       CHURCH. (b) The dates and amounts of each payment. (c) To whom each
       payment was made. (d) Any form of documentary evidence of such payments,
       including but not limited to receipts or cancelled checks.

Under oath, petitioner responded that the total amount paid to respondents was $1,946.00.
Petitioner included a list of individual payment amounts and copies of receipts of payments in
her answer. Respondents moved for summary judgment on the default on payment of note claim.
Petitioner objected and filed a motion to dismiss respondents’ breach of contract claim.

        In March of 2018, the circuit court held a hearing on the pending motions. Respondents
argued that petitioner admitted to paying only $1,946.00 toward the promissory note and that
summary judgment for the remaining amount, with pre- and post-judgment interest applied, was
appropriate. Petitioner objected and argued “there was a strong possibility that if we are allowed
to engage in discovery, that there’s a chance that [respondents] received more funds than is
actually contained in the pleadings thus far.” Petitioner believed that she made cash payments to
respondents, but did not receive a receipt for those payments. Respondents replied that the
accountings of both parties matched and showed that petitioner paid only $1,946.00 total.
Ultimately, the circuit court ordered respondents to search for “anything else, any other ledger
book, any other document that would reflect payments that [petitioner] made” and held
respondents’ motion for summary judgment in abeyance until that time.

        The circuit court entered a final order for summary judgment in respondents’ favor on
June 1, 2018. In the order, the circuit court noted that respondents filed a letter detailing a
“diligent search of the records” completed by two of the respondents and “each of their searches
has disclosed no record of any payments other than the $1,946.00 which [respondents] contend
that [petitioner] made, and which [petitioner] in her [a]nswers to [i]nterrogatories likewise
contends that she made.” Accordingly, the circuit court granted summary judgment and awarded
respondents judgment against petitioner for the sum of $18,054.00 with pre- and post-judgment
interest. Petitioner now appeals this order.

        We review petitioner’s appeal of the circuit court’s summary judgment order de novo.
See syl. pt. 1, Painter v. Peavy, 192 W. Va. 189, 451 S.E.2d 755 (1994) (“A circuit court’s entry
of summary judgment is reviewed de novo.”). Additionally,

               “[i]n reviewing challenges to the findings and conclusions of the circuit
       court, we apply a two-prong deferential standard of review. We review the final
       order and the ultimate disposition under an abuse of discretion standard, and we
       review the circuit court’s underlying factual findings under a clearly erroneous
       standard. Questions of law are subject to de novo review.” Syllabus point 2,
       Walker v. West Virginia Ethics Commission, 201 W.Va. 108, 492 S.E.2d 167
       (1997).

Syl. Pt. 5, Peters v. Rivers Edge Min., Inc., 224 W. Va. 160, 680 S.E.2d 791 (2009).

       On appeal, petitioner argues that the circuit court clearly erred in finding that respondents
did not act in bad faith when amending the original complaint. In support, petitioner cites Rule

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15(a) of the Federal Rules of Civil Procedure and federal cases interpreting this federal rule.2 In
doing so, petitioner imposes a requirement that a plaintiff moving to amend a complaint must do
so in the absence of bad faith. However, petitioner does not identify a case where this Court has
applied such a requirement. Rule 15 of the West Virginia Rules of Civil Procedure permits the
amendment of a pleading by a matter of course prior to the service of a responsive pleading or
“only by leave of court . . . and leave shall be freely given when justice so requires.” This Court
has further clarified that

               “‘[t]he purpose of the words “and leave [to amend] shall be freely given
       when justice so requires” in Rule 15(a) W. Va. R. Civ. P., is to secure an
       adjudication on the merits of the controversy as would be secured under identical
       factual situations in the absence of procedural impediments; therefore, motions to
       amend should always be granted under Rule 15 when: (1) the amendment permits
       the presentation of the merits of the action; (2) the adverse party is not prejudiced
       by the sudden assertion of the subject of the amendment; and (3) the adverse party
       can be given ample opportunity to meet the issue.’ Syllabus Point 3, Rosier v.
       Garron, Inc., 156 W.Va. 861, 199 S.E.2d 50 (1973).” Syllabus point 2, State ex
       rel. Vedder v. Zakaib, 217 W.Va. 528, 618 S.E.2d 537 (2005).

Syl. Pt. 5, Lloyd’s, Inc. v. Lloyd, 225 W. Va. 377, 693 S.E.2d 451 (2010). “A trial court is vested
with a sound discretion in granting or refusing leave to amend pleadings in civil actions.” Id. at
379, 693 S.E.2d at 453, syl. pt. 2, in part. Because West Virginia case law does not require a
determination of whether a party acted in bad faith, the circuit court’s finding is inconsequential.
Petitioner is entitled to no relief.

        Further, the circuit court did not err in permitting respondents to amend their complaint.
As the circuit court noted in its reasoning, Rule 15 is an extremely liberal rule. See syl. pt. 6,
Cotton States Mut. Ins. Co. v. Bebbie, 147 W. Va. 786, 131 S.E.2d 745 (1963) (“Liberality with
regard to amended and supplemental pleadings is allowed under the Rules of Civil Procedure.”).
In this case, where the amendment was filed relatively soon after the initial pleading and where
petitioner was given ample opportunity to respond to the issue and not prejudiced by the sudden
assertion, the circuit court correctly permitted amendment of this initial complaint.

           Petitioner also argues that the circuit court erred in granting respondents’ motion for
summary judgment without first allowing her an opportunity to conduct discovery. Petitioner
asserts that Rule 26(b)(1) of the West Virginia Rules of Civil Procedure provides that “parties
may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter
. . . if the information sought appears reasonably calculated to lead to the discovery of admissible
evidence.” However, petitioner does not address Rule 56 of the West Virginia Rules of Civil
Procedure, which provides procedural requirements related to summary judgment. Rule 56(c)

       2
        Notably, this Court has stated that “[a] federal case interpreting a federal counterpart to a
West Virginia rule of procedure may be persuasive, but it is not binding or controlling.” Syl. Pt.
3, Brooks v. Isinghood, 213 W. Va. 675, 584 S.E.2d 531 (2003).

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declares “[t]he judgment sought shall be rendered forthwith 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.” (Emphasis added). Parties opposing the motion may utilize Rule
56(f), which provides “a procedural ‘escape hatch’ . . . for a party who genuinely requires
additional time to marshal material facts to contest a summary judgment motion.” Powderidge
Unit Owners Assoc. v. Highland Properties, Ltd., 196 W. Va. 692, 701, 474 S.E.2d 872, 881
(1996). Petitioner’s argument fails when considering that “the party making an informal Rule
56(f) motion must . . . demonstrate that the material facts will, if obtained, suffice to engender an
issue both genuine and material.” See syllabus, Elliot v. Schoolcraft, 213 W. Va. 69, 576 S.E.2d
796 (2002) (applying the four-requirement test provided in Powderidge to a party’s informal
Rule 56(f) motion). In this case, respondents alleged petitioner paid only a certain amount toward
the balance of her promissory note. In the following interrogatories posed by respondents,
petitioner agreed under oath3 that she paid $1,946.00 and provided records to establish the
payments. Petitioner’s later assertions that she made unrecorded cash payments were not
supported by any evidence. The circuit court ordered that respondents conduct a review of their
records for cash payments as a courtesy to petitioner, but it was clear at the March of 2018
hearing that no genuine issue as to any material fact existed. The parties agreed as to the amounts
paid and owed. Accordingly, petitioner is entitled to no relief.

       For the foregoing reasons, we affirm.

                                                                                          Affirmed.

ISSUED: November 8, 2019

CONCURRED IN BY:

Chief Justice Elizabeth D. Walker
Justice Margaret L. Workman
Justice Tim Armstead
Justice Evan H. Jenkins
Justice John A. Hutchison

       3
         Consistent with Rule 33(b)(1) of the West Virginia Rules of Civil Procedure “[e]ach
interrogatory shall be answered separately and fully in writing under oath.” (emphasis added).
Petitioner does not argue that her answers were untruthful.

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