Dan Cava, Steven Hall, Sonny Nicholson, & Dan's Car World LLC v. Nat'l Union Fire Ins. Co. of Pittsburgh

232 W.Va. 503

753 S.E.2d 1

Dan CAVA, Steven Hall, Sonny Nicholson, and Dan's Car World LLC, d/b/a Dan Cava's Toyota World, Defendants and Third–Party Plaintiffs Below, Petitioners

v.NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA., Third–Party Defendant and Counter–Plaintiff Below, Respondent.

No. 12–0203.

Supreme Court of Appeals of West Virginia.

Submitted Sept. 4, 2013.

Decided Sept. 12, 2013.

Concurring Opinion of Justice Benjamin

Dec. 30, 2013.

Syllabus by the Court

1. A trial court may, in exercising its discretion whether to allow a party to file a third-party complaint pursuant to Rule 14(a) of the West Virginia Rules of Civil Procedure, consider the following factors: (1) the potential prejudice to the original plaintiff or to the third-party defendant; (2) whether a third-party complaint would delay or unduly complicate the trial; (3) the timeliness of the motion; (4) judicial efficiency; and (5) whether the proposed third-party complaint states a claim upon which relief can be granted.

2. A third-party complaint requesting a declaratory judgment that an insurance policy provides coverage and that an insurance company has a duty to defend, may, in the discretion of the trial court, be allowed.Gregory H. Schillace, Esq., Schillace Law Office, Clarksburg, WV, for Petitioners Dan Cava, Steven Hall and Dan's Car World.

Don C.A. Parker, Esq., Glen A. Murphy, Esq., Charity K. Flynn, Esq., Spilman Thomas & Battle, PLLC Charleston, WV, for Respondent.

KETCHUM Justice:

The petitioners, who are the defendants/third-party plaintiffs below, Dan Cava, Steven Hall, Sonny Nicholson, and Dan's Car World, LLC, d/b/a Dan Cava's Toyota World (“petitioners”), appeal from an order entered January 3, 2012, by the Circuit Court of Marion County. The circuit court granted summary judgment to the respondent, who is the third-party defendant below, National Union Fire Insurance Company of Pittsburgh, PA (“National Union”). The circuit court concluded, inter alia, that the claims contained in the petitioners' third-party complaint were not derivative of the claims asserted in the underlying lawsuit.

After thorough review, we affirm the circuit court's summary judgment order.

I. FACTUAL & PROCEDURAL BACKGROUND

Johnnie Fluker, Jr. filed a lawsuit against the petitioners on April 3, 2009, alleging that he was wrongfully terminated from his employment with the petitioners.¹ The petitioners reported Mr. Fluker's lawsuit to their insurance carrier, National Union, four days later, but National Union did not respond until November 11, 2009, when it sent a denial of coverage letter to the petitioners' lawyer.² Therefore, the petitioners defended the lawsuit without the assistance of their insurance carrier, National Union.

On June 24, 2010, the petitioners filed a motion requesting leave to file a third-party complaint against National Union. The petitioners' proposed third-party complaint against National Union set forth two tort causes of action: (1) common law “bad faith” and (2) violations of the West Virginia Unfair Trade Practices Act (“UTPA”), arising from National Union's denial of coverage. The third-party complaint did not contain a count for declaratory judgment requesting a finding that there was coverage under the National Union policy or even a general request that the court find coverage and order National Union to defend the lawsuit. In November 2010, the circuit court granted the petitioners' motion to file a third-party complaint. The petitioners filed their third-party complaint on December 3, 2010.

National Union filed an answer and counterclaim to the petitioners' third-party complaint on January 19, 2011. Seven months later, National Union filed a motion for summary judgment, arguing that the petitioners' third-party complaint alleging common law bad faith and UTPA violations was tortious in nature and subject to the one-year statute of limitation set forth in W.Va.Code § 55–2–12(c) [1959]. National Union argued that the third-party complaint should be dismissed because it did not derive from Mr. Fluker's underlying wrongful termination claim and it was not filed within one year of the denial of coverage. In support of this argument, National Union cited Syllabus Point 1 of Wilt v. State Auto. Mut. Ins. Co., 203 W.Va. 165, 506 S.E.2d 608 (1998), in which this Court held “[c]laims involving unfair settlement practices that arise under the Unfair Trade Practices Act, West Virginia Code § 33–11–1 to –10 (1996 & Supp.1997) are governed by the one-year statute of limitations set forth in West Virginia Code § 55–2–12(c) (1994).” Similarly, National Union cited Syllabus Point 4 of Noland v. Virginia Ins. Reciprocal, 224 W.Va. 372, 686 S.E.2d 23 (2009), which states “[t]he one year statute of limitations contained in W.Va.Code § 55–2–12(c) (1959) (Repl.Vol.2008) applies to a common law bad faith claim.”

National Union argued that the statute of limitations on the petitioners' common law bad faith and UTPA claims began to run on November 11, 2009, the date it sent the denial of coverage letter to the petitioners' lawyer. Because the petitioners filed their third-party complaint on December 3, 2010, more than one year after receiving the denial of coverage letter, National Union asserted that the complaint was untimely filed.

By contrast, the petitioners stated that their third-party complaint was connected to Mr. Fluker's wrongful termination claim and was timely filed pursuant to W.Va.Code § 55–2–21 [1981], which states, in relevant part,

After a civil action is commenced, the running of any statute of limitation shall be tolled for, and only for, the pendency of that civil action as to any claim which has been or may be asserted therein by.... third-party complaint[.]

Because the circuit court granted their motion to file a third-party complaint and because the petitioners subsequently filed the complaint during the pendency of the underlying wrongful termination action, the petitioners argued that the statute of limitation was tolled based on the plain language contained in W.Va.Code § 55–2–21. In support of their position, the petitioners cited J.A. Street & Associates, Inc. v. Thundering Herd Development, LLC, 228 W.Va. 695, 724 S.E.2d 299 (2011), in which this Court considered whether an engineering firm's cross-claims filed against a contractor were time-barred pursuant to W.Va.Code § 55–2–21. The Court held in Syllabus Point 8 of J.A. Street that “[p]ursuant to W.Va.Code § 55–2–21 (1981) (Repl.Vol.2008), during the pendency of a civil action, the statute of limitation shall be tolled as to any cross-claim that has been or may be asserted therein.” The Petitioners' argued that the circuit court should apply Syllabus Point 8 of J.A. Street to its third-party complaint and conclude that it was timely filed based on the non-discretionary, mandatory language contained in W.Va.Code § 55–2–21.

The circuit court rejected the petitioners' argument and granted National Union's motion for summary judgment. The circuit court made the following findings in its summary judgment order:

17. The Court finds and concludes as a matter of law that the Third–Party Complaint is an independent action because the Third–Party Complaint against National Union is not derivative of the claims asserted in Plaintiff Johnnie Fluker, Jr.'s original Complaint.

18. The Court finds and concludes as a matter of law that West Virginia Code § 55–2–21 does not apply to toll the statute of limitations applicable to Third–Party Plaintiffs' bad faith claims against National Union.

19. The Court finds and concludes as a matter of law that the statute of limitations on the bad faith claims expired on November 11, 2010 and that those claims are therefore barred.

The circuit court reversed its previous ruling and held that the third-party complaint was not proper because it was not derivative of the original wrongful termination claim. The circuit court concluded that there was no logical relationship between the wrongful termination claim and the third-party complaint filed by the petitioners that only alleged the torts of common law bad faith and UTPA violations arising from National Union's denial of coverage. After entry of the circuit court's summary judgment order, the petitioners filed the present appeal.

II. STANDARD OF REVIEW

This Court has long held that “[a] circuit court's entry of summary judgment is reviewed de novo.” Syllabus Point 1, Painter v. Peavy, 192 W.Va. 189, 451 S.E.2d 755 (1994). In conducting our de novo review, we apply the same standard for granting summary judgment that is applied by the circuit court: “A motion for summary judgment should be granted only where it is clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not desirable to clarify the application of the law.” Syllabus Point 3, Aetna Cas. & Sur. Co. v. Fed. Ins. Co. of New York, 148 W.Va. 160, 133 S.E.2d 770 (1963). Moreover, “[s]ummary judgement is appropriate where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, such as where the nonmoving party has failed to make a sufficient showing on an essential element of the case that it has the burden to prove.” Syllabus Point 4, Painter, supra.

Guided by the foregoing, we proceed to consider the arguments of the parties.

III. ANALYSIS

On appeal, the petitioners argue that the circuit court erred in its ruling that W.Va.Code § 55–2–21 does not apply to toll the statute of limitations. Conversely, National Union argues that the bad faith and UTPA claims contained in the third-party complaint are not derivative of the wrongful termination claim and that the circuit court correctly held that these are independent tort causes of action subject to the one-year statute of limitation contained in W.Va.Code § 55–2–12(c).

Our review of this matter starts with Rule 14(a) of the West Virginia Rules of Civil Procedure.³Rule...