Wednesday, November 26, 2003

Doctor loses lawsuit against trial lawyers

The Daily Mail reports that Dr. Julie McCammon, a Harrison County doctor who sued trial lawyers for allegedly causing her malpractice insurance rates to increase, has lost her case.

Dr. McCammon failed to demonstrate that the West Virginia Trial Lawyers Association and its former president, Bill Frame, bore legal responsibility for her malpractice rates, McDowell County Circuit Judge Booker Stephens (sitting in for Judge Beddell) ruled after a hearing Tuesday.

It sounds from the article like the suit was dismissed on a motion for summary judgment.

Tuesday, November 25, 2003

Mountaineer Field renamed after $20 million gift

Home of Mountaineer Field renamed after $20 million gift [Dominion Post]

I still do not know the correct pronounciation of the Puskar family name. As a Mountaineer fan, I need to know this. Is it prounced "Push-kar"? "Puss-kar"? "Poos-kar"? The news media has pronounced it all of these ways. I am going to have to figure it out so I can tell people where I am going on game day.

Statutes of limitations are the real nuisance

The West Virginia Supreme Court is continuing its efforts to abate the nusiance of the statute of limitations defense in West Virginia. In Taylor v. Culloden Public Service District, No. 31263 (Nov. 24, 2003), the Court created the following new syllabus points:

3. Recovery in a nuisance action is not limited to damages to plaintiff's property and its rental value, but the owner of a residence or dwelling house occupied by him as a home is entitled to just compensation for annoyance, discomfort, and inconvenience caused by a nuisance, even though he makes no showing of a monetary loss or of bodily injury or illness.

***

5. Where the acts which constitute a nuisance are continuing in the sense that distinct instances of injury result from the nuisance, as opposed to a singular injury, and the acts of nuisance are capable of being abated or discontinued, the temporary nuisance continues until such time as those acts are abated or discontinued.

6. The two year statute of limitations set forth in West Virginia Code § 55-2- 12(a) (1959) (Repl. Vol. 2000) does not begin to run in a nuisance action where the tort at issue is both temporary and continuing until the date of the last injurious act or when the acts constituting the nuisance have been abated or discontinued.

In this case, the plaintiff intervenors (the Balls) sued a regional wastewater treatment plan for fouling a stream that crossed through their property with raw sewage. The contamination was ongoing, but the plaintiffs had discovered it more than two years before they sued the defendants. The circuit court dismissed their suit on summary judgment, holding that the two year statute of limitations barred their claims. On appeal, the Supreme Court reversed, finding that because the contamination was continuing, the statute of limitations had not begun to run.

The Court first found that the injury was temporary, not permanent because it can (and probably will be) abated. The Court then found that the nuisance was a continuing tort because"distinct instances of injury result from the nuisance, as opposed to a singular injury, and the acts of nuisance are capable of being abated or discontinued[.]"

In syllabus point 11 of Graham v. Beverage, et al., No. 30110 (Albright, J.)(June 14, 2002), the Court held that "[w]here a tort involves a continuing or repeated injury, the cause of action accrues at and the statute of limitations begins to run from the date of the last injury or when the tortious overt acts or omissions cease." Syl. Pt. 11, Graham. The Court clarified that this analysis applies to any tort, not just trespass: "There is no language in syllabus point eleven of Graham that limits its application to specific types of torts. As a result, that point of law was clearly intended to apply to torts of all types – not merely to the negligence type of action involved in Graham."

This case continues the trend of finding ways to extend and avoid statutes of limitations, in derogation of prior precedent. See, e.g., Humble Oil v. Lane, 152 W. Va. 578, 583, 165 S.E.2d 379, 383 (1969) ("Statutes of limitations are favored in the law and cannot be avoided unless the party seeking to do so brings himself strictly within some exception. It has been widely held that such exceptions 'are strictly construed and are not enlarged by the courts upon considerations of apparent hardship.'") (citations omitted).

Sunday, November 23, 2003

State ex rel. Human Resources Development and Employment, Inc. v. BRIM: A truly puzzling insurance decision

The opinion in SER Human Resource Development v. Board of Risk, No. 31235, decided November 21, 2003, has to be one of the most puzzling opinions I have seen from our Court.

The State Board of Risk and Insurance Management ("BRIM") refused to renew an insurance policy with the relator, Human Resources Development and Employment, Inc., a non-profit corporation that owns, operates, and manages apartment complexes that provide subsidized housing for elderly, disabled, and/or low-income citizens of West Virginia. The reason given for the non-renewal was that the company owned 100% of the shares of a for-profit company that incurred substantial liability the previous year. BRIM insures only non-profit entities, including charitable organizations, political subdivisions, and public service corporations.

The Court properly observed that according to state law, BRIM is not required to provide insurance to any entity. Specifically, W.Va. Code, 29-12-5 [2003], states, in part:

(b) If requested by a political subdivision, a charitable or public service organization, or an emergency medical services agency, the board [BRIM] is authorized to provide property and liability insurance to insure their property, activities and responsibilities. The board is authorized to enter into any necessary contract of insurance to further the intent of this subsection.

Clearly, this provision does not require BRIM to insure any non-profit entity. Nevertheless, the relator brought a writ of mandamus seeking to compel BRIM to renew its insurance policy. The Circuit Court denied the writ, and our Supreme Court of Appeals reversed, ordering that the writ be granted. Its reasoning was as follows:
BRIM has no factual or legal grounds upon which to arbitrarily base the exercise of its statutory discretion so as to refuse to afford to HRDE (and only those non-profit entities or activities associated with HRDE)--the same offer of insurance coverage that (according to the record in this case) BRIM provides to all other such charitable entities.
BRIM was not engaging in unlawful discrimination here. It based its decision on claims history in which the for-profit subsidiary cost the company a substantial sum of money defending a claim that was brought against it. (The for-profit entity should have never been insured in the first place.) That decision would not appear to be capricious or arbitrary, but instead well-reasoned. BRIM feared it might incur future liability from this for-profit entity, which it did not desire to insure, through a veil-piercing theory.

The Court comes dangeroulsy close to creating a new standard allowing BRIM to deny policy renewals only for "good cause." Such a requirement appears nowhere in the statute.

Compounding the problems with this decision is the questionable application of the writ of mandamus. According to the Court's previous decisions, "Mandamus is a proper remedy to compel tribunals and officers exercising discretionary and judicial powers to act, when they refuse so to do, in violation of their duty, but it is never employed to prescribe in what manner they shall act, or to correct errors they have made." Syllabus Point 1, State ex rel. Buxton v. O'Brien, 97 W.Va. 343, 125 S.E. 154 (1924) (emphasis added). In this case, the Court explains that it decided the writ should be granted because BRIM acted capriciously, arbitrarily or under misapprehension of law in its exercise of discretion. I cannot see how this is different from using the writ to compel BRIM to exercise its discretion in a certain manner, or to correct an error it made, both of which are verboten. The end result is that the Court decides who should and should not be insured by BRIM.

This case makes me wonder how our court can get statutory interpretation so right in one case, and so wrong in another on the same day. The good news is the opinion was issued per curiam, which will hopefully limit its use as precedent in future cases.

Insurance claims adjusters may be held liable for violating the Unfair Trade Practices Act

On Friday, the Supreme Court decided several new cases. Probably the most noteworthy decision is Taylor v. Nationwide Mutual Ins., No. 31154, in which the Court held that "A cause of action exists in West Virginia to hold a claims adjuster employed by an insurance company personally liable for violations of the West Virginia Unfair Trade Practices Act, W.Va. Code §§ 33-11-1 to -10."

The state's Unfair Trade Practices Act prohibits any "person" from engaging in an unfair method of competition or an unfair and deceptive act or practice in the business of insurance. Under W.Va. Code § 33-11-2(a) (1974) the definition of the term “person” includes:

any individual, company, insurer, association, organization, society, reciprocal, business trust, corporation, or any other legal entity, including agents and brokers. "Person" also includes hospital service corporations, medical service corporations and dental service corporations as defined in article twenty-four [§§ 33-24-1 et seq.] of this chapter, and health care corporations as defined in article twenty-five [§§ 33-25-1 et seq.] of this chapter.

Justice Maynard, writing from the majority, found this decision to be a no-brainer. The legislature clearly intended for individuals to be liable under the act by defining "person" as it did. But liable to whom?

Although the legislature may have intended for individuals to be held liable under the UTPA, it never, in the opinion of many, intended to create a direct private cause of action for third-party bad faith. The purpose of the UTPA "is to regulate trade practices in the business of insurance . . . by defining, or providing for the determination of, all such practices in this State which constitute unfair methods of competition or unfair or deceptive acts or practices and by prohibiting the trade practices so defined or determined." W.Va. Code § 33-11-1 (1974). As the argument goes, the State Insurance Commissioner was to enforce the act administratively, not private persons.

As the majority notes in footnote 10 of the decision,
Unlike West Virginia, the majority of states do not recognize a right to bring a private cause of action under their unfair claim settlement practices statutes. According to Stephen S. Ashley, in Bad Faith Actions: Liability and Damages § 9:03, pp. 9-9 - 10 (1997), “[t]hough a few states have agreed with the conclusion that the unfair claims settlement practices statutes support private claims, most have rejected private causes of action.” (Footnote omitted). Information promulgated by the National Association of Insurance Commissioners indicates that twelve states permit first-party private causes of action under either their Unfair Trade Practices or Unfair Claims Settlement Practices statutes. It appears that seven of these states do so because of the express provisions of their statutes, while five of the states do so by judicial interpretation. See NAIC's Compendium of State Laws on Insurance Topics, “Private Rights of Action For Unfair Claims Settlement Practices” (2002).
As much as I dislike the outcome of the case, I must say the decision is correct. It serves to re-emphasize the need to repeal, by legislation (not judicial fiat), the private third-party "bad faith" cause of action created in Jenkins v. J.C. Penney Cas. Ins. Co., 167 W.Va. 597, 280 S.E.2d 252 (1981), overruled on other grounds by State ex rel. State Farm Fire & Cas. Co. v. Madden, 192 W.Va. 155, 451 S.E.2d 721 (1994).

I am certain the next target will be private law firms who work for the insurance companies and engage in "bad faith" settlement tactics. However, the liability of these folks will not be as clear. The attorneys (who are not employees of insurance companies) are not persons "engaging... in the business of insurance" as contemplated by the Act. But just in case, the legislature ought to do something to reverse Jenkins before the question is posed to the Supreme Court of Appeals. As the next post indicates, the Court's does not always reliably interpret statutes as they are written.

Saturday, November 22, 2003

A poor opinion summary is like no summary at all

I subscribe to Findlaw.com's daily opinion summaries e-mail service. The service is timely and very helpful for keeping up to date with published decisions from the federal circuit courts of appeals. Best of all, it's free. (Subscribe here).

The summaries are very short (usually one or two sentences), but most of the time, they provide the reader with a general idea of what the decision is about. Each opinion is placed in a category too, which in itself is very helpful for busy practitioners. Being a lawyer on the civil side, I tend to ignore most of the opinions in the criminal category, but I pay particular attention to the labor & employment, tort, and constitutional law categories. If I see a new opinion in one of my areas of interest, I read it regardless of the content of the summary.

On Wednesday, I received the following case summary:

CONSTITUTIONAL LAW

ODOM v. S. CAROLINA DEP'T OF CORR., No. 02-7086 (4th Cir. November
19, 2003)
The District Court's summary judgment ruling on behalf of the
defendants is vacated and remanded where there was sufficient
evidence, on behalf of the plaintiff, to make out a claim against
the defendants.

To read the full text of this opinion, go to:

[PDF File]
http://caselaw.lp.findlaw.com/data2/circs/4th/027086p.pdf

Although this opinion summary is technically correct, it is completely worthless. It does not even attempt to frame the constitutional issue involved that justifies its placement in the "Constitutional Law" category. Reading it, one would never know the case involves a claim by a prison inmate that his Eighth Amendment rights were violated when correctional officers failed to take adequate measures to protect him from an assualt by other inmates. The trial court found the officers entitled to qualified immunity and dismissed the claims against them on summary judgment. On appeal, the Fourth Circuit reversed, finding genuine triable issues of fact with regard to the application of qualified immunity. Judge Luttig dissented, contending his colleagues (Judges Williams and Traxler) took substantial liberty with the facts to find in the plaintiff's favor.

I know I should not look a gift horse in the mouth. The opinion summaries are great and helpful most of the time. But this opinion summary was so poor, I had to mention it.

By the way, the development of the doctrine of qualified immunity in the Fourth Circuit continues to be extremely interesting. (See previous posts here, here, and here.) It all started with the Robles decision in August, 2002. Judge Luttig seems to be at the center of the controversy. He is quick to criticize the other judges for what he sees as inconsistencies. Still good fodder for a law review article for anyone interested.

Thursday, November 20, 2003

New Employment Law Article

A new article of mine has been published over at LawMemo.com entitled Mixed-motive cases after Desert Palace, Inc. v. Costa. In the article, I suggest that in order to avoid juror confusion and prejudice to defendants, courts should bifurcate mixed-motive trials into liability and damages phases.

Friday, November 14, 2003

Governor Wise issues list of "bad words" for video lottery retailers

The Charleston Gazette has this article noting that Governor Wise has issued a list of banned words and symbols for lottery retailers who desire to advertise. "Wise on Thursday instructed the state Lottery Commission to send out letters listing the prohibited words and symbols to the 1,300-plus bars, clubs and fraternal groups that operate the video lottery machines."

Among the banned words are "chance,” “dollar” [or the dollar sign], “dough,” “game,” “hit,” “insurance,” “jacks” [although “Jack’s” is acceptable if it is the licensee’s actual name], “kitty,” “luck, lucki or lucky,” “money,” “progressive,” “roll,” “token,” “wild,” or “winning.” Retailers are also prohibited from using 1-800-GAMBLER, the state problem gambler hotline number, to advertise.

I'm sure we'll be seeing some litigation on this issue in 2004. There are a lot of very expensive-looking neon signs in my area that will be banned after December 31.

Thursday, November 13, 2003

Justices limit inmate Freedom of Information requests

Prison inmates cannot file FOIA requests to gather information for lawsuits alleging their constitutional rights have been violated, the state Supreme Court ruled in State ex rel. Wyant v. Brotherton, No. 30907 (Nov. 10, 2003). Wyant and Valentine filed separate FOIA request to prepare for habeas corpus petitions challenging their convictions. The circuit courts blocked the FOIA requests of both men, and the Supreme Court affirmed, holding that "[a]n inmate may not use the Freedom of Information Act, W. Va. Code § 29B-1-1 et seq., to obtain court records for the purpose of filing a petition for writ of habeas corpus. Instead, an inmate is bound to follow the procedures set out in the Rules Governing Post-Conviction Habeas Corpus Proceedings in West Virginia for filing a petition for writ of habeas corpus and to obtain documentation in support thereof." Those rules are posted here in this PDF file. The Dominion Post has this AP article about the case.

Wednesday, November 12, 2003

W.Va. Supreme Court clarifies definition of "gross misconduct"

In Dailey v. Bd. of Review, et al. No. 30730 (Nov. 10, 2003), the state Supreme Court helped to clarify the definition of "gross misconduct" under the unemployment compensation laws. Pursuant to West Virginia Code § 21A-6-3, workers are disqualified from obtaining unemployment benefits for six weeks if the termination of their employment was due to "misconduct" (i.e. "simple misconduct") and are disqualified indefinitely if the termination was due to "gross misconduct." The statute does not define misconduct, and the delineation between gross and simple, as it developed through case law, has been less than clear. The Court held in Syllabus Point 4:
For purposes of determining the level of disqualification for unemployment compensation benefits under West Virginia Code § 21A-6-3, an act of misconduct shall be considered gross misconduct where the underlying misconduct consists of (1) willful destruction of the employer's property; (2) assault upon the employer or another employee in certain circumstances; (3) certain instances of use of alcohol or controlled substances as delineated in West Virginia Code § 21A-6-3; (4) arson, theft, larceny, fraud, or embezzlement in connection with employment; or (5) any other gross misconduct which shall include but not be limited to instances where the employee has received prior written notice that his continued acts of misconduct may result in termination of employment. To the extent that UB Services, Inc. v. Gatson, 207 W. Va. 365, 532 S.E.2d 365 (2000), implemented a definition for gross misconduct inconsistent with the foregoing, it is expressly overruled.
Basically, the Court has found that gross misconduct falls into one of three categories: (1) those specifically enumerated acts which shall be considered gross misconduct; (2) items which may be interpreted to be “other gross misconduct;” and (3) acts of misconduct for which the employee has received prior written warning that continued violation will result in employment termination. "Except where an employee has received a prior written warning, the phrase, 'other gross misconduct,' in West Virginia Code § 21A-6-3 evidences the legislature's intent to provide some element of discretion in the Board and reviewing courts, based upon the peculiar facts of each case."

In the Dailey case, the employee was fired for lying to his employer about having a valid driver's license. The lower court found gross misconduct, but the high court reversed, holding that "we do not conclude that the Appellant's act of concealing his license suspension clearly falls within the legislature's enumeration of acts constituting gross misconduct."

This case should not have been reversed. This man was committing a fraud on his employer by lying about having a valid driver's license. The elements of fraud are (1) an act of the defendant, (2) that was material and false; that plaintiff relied on it and was justified under the circumstances in relying upon it; and (3) that he was damaged because he relied on it. Syl. Pt. 1, Lengyel v. Lint, 167 W. Va. 272, 280 S.E.2d 66 (1981). This man lied about having a valid license, the employer relied on his representation, and it paid him wages and salary for what it believed was a qualified worker. That would seem to fit within the definition of fraud.

But even if it isn't fraud, isn't this a serious enough offense to discharge someone without progressive discipline? This guy's duties included transporting gasoline and passengers! Would the Court have preferred that the employer use progressive discipline with this guy? Give him a written warning, then a suspension, then termination? What if in the meantime he ran someone down and injured or killed them? This dishonest individual should not have been permitted to draw unemployment compensation. He lied, was caught lying, and now is being rewarded for it by the State with free money. The rule of liberality was never intended to produce such perverse results.

The newly-clarified definitions of "gross misconduct" and "simple misconduct" emphasize the need for progressive discipline and documentation of workplace misconduct. The newly-clarified definition of simple misconduct certainly sounds like it includes what many would regard gross misconduct: "simple misconduct is conduct evincing such willful and wanton disregard of an employer's interests as is found in deliberate violations or disregard of standards of behavior which the employer has the right to expect of his employee, or in carelessness or negligence of such degree or recurrence as to manifest equal culpability, wrongful intent or evil design, or to show an intentional and substantial disregard of the employer's interests or of the employee's duties and obligations to his employer." Syl. Pt. 7, Dailey. Thus, even flagrant, intentional, willful and wanton disregard of workplace rules will fall into the "simple misconduct" category unless written warnings are issued and the employee is given a chance to improve.

Prosecutors challenge new workers' comp law

First, West Virginia's new workers' compensation law was challenged by a claimant, now it is be challenged by county prosecutors. The Charleston Daily Mail reports that "[t]he state Prosecuting Attorneys Association has filed a lawsuit to overturn a provision in a new law that gives Workers' Compensation Commission lawyers statewide prosecutorial powers."

The target of this suit is a provision that gives the workers' comp division's lawyers authority to prosecute fraud cases. The prosecutors argue that only elected county prosecutors have that power and that "vesting that authority with non-elected lawyers violates the state constitution."

The provision is part of an effort to decrease the division's long-term deficit, now nearing $4 billion.

Thursday, November 06, 2003

West Virginia: "Judicial Hellhole"

The Daily Mail reports the results of a study by the American Tort Reform Association declaring the whole state, especially Kanwha County and the Northern Panhandle, a "judicial hellhole."

According to ATRA's website, "'[j]udicial hellholes' are cities, counties, or judicial districts that attract lawsuits from around the nation or the region because they are correctly perceived as very plaintiff-friendly jurisdictions."

West Virginia is the only state to have its entire court system held up as a bad example. The other "hellholes" were individual circuits or jurisdictions.

One plaintiff's lawyer who had one of his cases held up as an example of judicial unfairness considered the criticism an honor, according to the Daily Mail article.

The entire report can be viewed at ATRA's web site. (PDF 1,623 KB)

Wednesday, November 05, 2003

Local store can continue importing Canadian drugs

The Charleston Gazette reports that Kanawha County Circuit Judge Duke Bloom has refused to shut down a Fairmont business that imports discounted prescription drugs from Canada for local residents. The State Board of Pharmacy had sued to shut down the business, arguing that the practice was illegal and also dangerous.

Since this case began, cities like Boston and New York, and states such as Illinois, Vermont and Minnesota, have been considering implementing programs in which employees and retirees would be allowed to buy their prescription drugs from Canadian pharmacies. The Gazette article notes that the FDA does not intend to sue them.

Sunday, November 02, 2003

Are all private e-mails on a government's e-mail system "public documents"?

The Supreme Court of Florida says no. In State v. City of Clearwater, Nos. SC02-1694 & SC02-1753 (Sept. 11, 2003) (PDF), the court held that "'personal' e-mails are not 'made or received pursuant to law or ordinance or in connection with the transaction of official business' and, therefore, do not fall within the state's definition of public records by virtue of their placement on a government-owned computer system."

In City of Clearwater, a Times Publishing Company reporter requested that the City of Clearwater provide copies of all e-mails either sent from or received by two city employees over the City's computer network for a period of more than one year. Pursuant to the City's procedures, the employees reviewed their e-mails and sorted them into two categories, personal and public. No one else reviewed the e-mails deemed by the employees to be personal. The City copied the public e-mails and provided them to Times Publishing. Times Publishing requested the e-mails deemed "personal" but were denied access. It filed an action in the circuit court to obtain the undisclosed e-mails, asserting that it was entitled to all the e-mails generated by and stored on the City's computers. The circuit court denied the request, finding that the private e-mails were not public documents. The Times appealed and eventually the question was certified to the Supreme Court of Florida.

The Supreme Court held that personal e-mails by state employees on state computers are not public records and so are not subject to disclosure. Records subject to public disclosure are limited to those made or received pursuant to court rule, law or ordinance, or in connection with the transaction of "official business." The nature of the record, not its physical location, is the critical factor. The city's policy that its computers were city property and that users had no expectation of privacy did not expand the definition of public records subject to disclosure to include personal e-mails on the computers.

I think this is a sound decision. If a private letter is brought into a public office by a public official, it does not become a "public document" just because it physically rests on public property. The same is true with private e-mails residing on public servers.

A few months ago, Governor Wise gave up over 500 e-mails to the press which contained correspondence with his mistress. I don't remeber there being any objection to the disclosure of these e-mails due to their private nature. But under West Virginia's Freedom of Information Act, W.Va. Code 29B-1-1 through 29B-1-7, "public records" are defined as "any writing containing information relating to the conduct of the public's business, prepared, owned and retained by a public body." Thus, if the e-mails did not contain "information relating to the conduct of the public's business," there would be no duty to disclose them. (The exemptions of W.Va. Code 29B-1-4 are not even reached because 29B-1-3 only permits inspection or copying of "public record[s]." W.Va. Code 29B-1-3(1).

The Supreme Court of Florida found that personal e-mails are not connected to "official business" (a term used by Florida statutes arguably equivalent to "information relating to the conduct of the public's business" under W.Va. law) merely because they were sent over a public computer system. Although I have never seen any of the e-mails Wise gave up to the press in their entirety, based on the exercerpts that were published, I somehow doubt they involved any information that related to the public's business. (For instance, one e-mail discussed Wise's affinity for deer jerky, Diet Pepsi and NASCAR) This Clearwater case would certainly seem to support the withholding of such e-mails in the future.

Of course, Wise's strategy during the whole affair "scandal" was to come clean and not add fuel to the fire by trying to protect documents such as this. However, I am certain this issue of e-mails will arise again under state law, and when it does, I would hope our own Supreme Court would decide the issues in the same manner as the Supreme Court of Florida.