“Generally, whether notice has been given to an automobile insurer within a reasonable period of time is an issue to be resolved by the fact finder.” (citations omitted)
How later courts described this case
- “Generally, whether notice has been given to an automobile insurer within a reasonable period of time is an issue to be resolved by the fact finder.” (citations omitted)
- recognizing that the issue of reasonableness is typically a jury question
- overruled on other grounds by Parsons v. Halliburton Energy Servs., Inc., 237 W. Va. 138, 785 S.E.2d 844 (2016
- “Typically, interlocutory orders are not subject to this Court’s appellate jurisdiction.”
Written by the judges who cited it.
The opinion
IN THE INTERMEDIATE COURT OF APPEALS OF WEST VIRGINIA
FILED
Fall 2025 Term
November 13, 2025
_____________________ released at 3:00 p.m.
ASHLEY N. DEEM, CHIEF DEPUTY CLERK
INTERMEDIATE COURT OF APPEALS
No. 24-ICA-441 OF WEST VIRGINIA
_____________________
G&G BUILDERS, INC.,
Plaintiff/Counterclaim Defendant/Cross-Claimant/Third-Party Plaintiff Below, Petitioner,
v.
CENTRAL MUTUAL INSURANCE COMPANY,
Third-Party Defendant Below, Respondent.
___________________________________________________________
Appeal from the Circuit Court of Cabell County, West Virginia
Honorable Gregory L. Howard, Judge
Civil Action No. CC-06-2014-C-250
AFFIRMED in part, REVERSED in part, and REMANDED with directions
_________________________________________________________
Submitted: October 7, 2025
Filed: November 13, 2025
Brent K. Kesner, Esq. Mychal S. Schulz, Esq.
Ernest G. Hentschel, Esq. Babst, Calland, Clements & Zomnir, PC
Kesner & Kesner, PLLC Charleston, West Virginia
Charleston, West Virginia Counsel for Respondent
Counsel for Petitioner
_________________________________________
AND
_____________________
No. 25-ICA-42
_____________________
G&G BUILDERS, INC.,
Plaintiff/Counterclaim Defendant/Cross-Claimant/Third-Party Plaintiff Below, Petitioner,
v.
BUILDERS PREMIER MUTUAL INSURANCE COMPANY,
Third-Party Defendant Below, Respondent.
___________________________________________________________
Appeal from the Circuit Court of Cabell County, West Virginia
Honorable Gregory L. Howard, Judge
Civil Action No. CC-06-2014-C-250
AFFIRMED in part, REVERSED in part, and REMANDED with directions
__________________________________________________________
Submitted: October 7, 2025
Filed: November 13, 2025
Brent K. Kesner, Esq. W. Gus Saines, Esq.
Ernest G. Hentschel, Esq. R. Gregory McDermott, Esq.
Kesner & Kesner, PLLC McDermott & Bonenberger, PLLC
Charleston, West Virginia Wheeling, West Virginia
Counsel for Petitioner Counsel for Respondent
_______________________________________________________
AND
_____________________
No. 25-ICA-111
_____________________
CENTRAL MUTUAL INSURANCE COMPANY,
Third-Party Defendant Below, Petitioner,
v.
G&G BUILDERS, INC.,
Plaintiff/Counterclaim Defendant/Cross-Claimant/Third-Party Plaintiff Below,
Respondent.
___________________________________________________________
Appeal from the Circuit Court of Cabell County, West Virginia
Honorable Gregory L. Howard, Judge
Civil Action No. CC-06-2014-C-250
REVERSED and REMANDED with directions
__________________________________________________________
Submitted: October 7, 2025
Filed: November 13, 2025
Mychal S. Schulz, Esq. Brent K. Kesner, Esq.
Babst, Calland, Clements & Zomnir, PC Ernest G. Hentschel, Esq.
Charleston, West Virginia Kesner & Kesner, PLLC
Counsel for Petitioner Charleston, West Virginia
Counsel for Respondent
JUDGE GREEAR delivered the Opinion of the Court.
GREEAR, Judge:
Petitioner G&G Builders (“G&G”) appeals the October 3, 2024, and
December 30, 2024, orders of the Circuit Court of Cabell County awarding summary
judgment to Respondent Builders Premier Mutual Insurance Company (“Builders”) and
Respondent Central Mutual Insurance Company (“Central”) as to G&G’s separate claims
against them for breach of contract, common law bad faith, and violations of the West
Virginia Unfair Trade Practices Act (“UTPA”), West Virginia Code §§ 33-11-1 to -10
(2005).1 Separately, Central appeals the circuit court’s May 28, 2024, order granting
G&G’s motion for summary judgment on coverage issues.2
As these appeals relate to the same construction project, arise out of the
same civil action, and involve similar issues, on its own motion, this Court consolidates
the appeals in 24-ICA-441, 25-ICA-42, and 25-ICA-111 for consideration and decision.
Further, we recognize that the appeal filed by Central (25-ICA-111) is the appeal of an
1
In 24-ICA-441, G&G appeals the circuit court’s October 3, 2024, Order Granting
Motion for Summary Judgment of Central Mutual Insurance Company on G&G Builders,
Inc.’s Claims for Breach of Contract, Common Law Bad Faith, and Unfair Trade
Practices. In 25-ICA-42, G&G appeals the circuit court’s December 30, 2024, Order
Granting Motion for Summary Judgment of Builders Premier Mutual Insurance Company
on G&G Builders, Inc.’s Claims for Breach of Contract, Common Law Bad Faith, and
Unfair Trade Practices.
2
In 25-ICA-111, Central appeals the circuit court’s May 28, 2024, Order Granting
G&G Builders, Inc.’s Motion for Summary Judgment and Denying Central Mutual
Insurance Company’s Motion for Summary Judgment on Coverage Issues.
1
interlocutory order, for which this Court lacks jurisdiction. However, given the posture of
these cases, in the interests of expediting a ruling, for judicial efficiency and economy,
and for good cause shown, pursuant to Rule 2 of the West Virginia Rules of Appellate
Procedure, we convert Central’s petition for appeal and the arguments raised therein to
cross-assignments of error in response to G&G’s petition for appeal against Central (24-
ICA-441) and will consider Central’s arguments accordingly.
On appeal, G&G contends that the circuit court erred in finding no valid
claim for breach of contract against Central and Builders and in its application of the
Supreme Court of Appeals of West Virginia’s (“SCAWV”) ruling in Soaring Eagle
Development Co., LLC v. Travelers Indemnity Co. of America, 19-0841, 2020 WL
6131741 (W. Va. Oct. 19, 2020) (memorandum decision). Further, G&G argues that the
circuit court erred in failing to apply the collateral source rule and in its “refusal” to permit
G&G to complete discovery with respect to its breach of contract, common law bad faith,
and UTPA claims.
Based upon our review of the record, applicable law, and the written and
oral arguments of counsel, we affirm, in part; reverse, in part; and vacate, in part, the
circuit court’s rulings.3 Generally, we find the consolidated cases herein wholly
3
We acknowledge and extend our appreciation to the West Virginia Insurance
Federation, which filed a brief as amicus curiae.
2
distinguishable from Soaring Eagle, which was misconstrued by the circuit court to
preclude G&G’s claims for breach of contract, common law bad faith, and violations of
the UTPA. Accordingly, we reverse the circuit court’s rulings in this regard and remand
this matter to circuit court for additional proceedings consistent with this opinion. As to
G&G’s claims that the circuit court erred in finding the collateral source rule inapplicable,
we disagree and find no error. Because we have remanded this matter to circuit court, we
defer to the circuit court’s determination as to the need for additional discovery on the
issues of breach of contract, common law bad faith, and violations of the UTPA.
With regard to Central’s arguments that the circuit court erred in
determining that G&G’s provision of notice to Central regarding the underlying claims
was reasonable, we agree. Specifically, we find error in the circuit court’s determination
of reasonableness of notice, as such a determination was a question of fact for a jury to
decide. Accordingly, we reverse the circuit court’s ruling in this regard, remand the matter
to circuit court, and direct that the issue of reasonableness of notice be presented to a jury
for determination.
I. FACTUAL AND PROCEDURAL BACKGROUND
Each of the underlying cases in these consolidated appeals relate to the
design and construction of a residence, owned by Randie and Deanna Lawson
(“Lawsons”), in Milton, West Virginia. Construction of the residence began in late 2010
(“Lawson project”), with G&G serving as the general contractor. In building the residence,
3
the Lawsons contracted with several subcontractors/material suppliers to complete work
on the project, including Archetype Builders, Inc. (“Archetype”) and Stone by Lynch &
Design, LLC (“SBL”)4. The separate contractual agreements between the Lawsons and
SBL and the Lawsons and Archetype contained a provision titled “G&G Builders, Inc.
Special Conditions[.]” This provision contained indemnification and insurance
requirements as follows:
INDEMNIFICATION: To the full extent permitted by law,
Contractor/Material Supplier[5] agrees to save, indemnify,
and hold harmless the Owner’s Representative and the Owner
and their agents, employees, officers, directors, engineers,
architects, and surveyors from any and all liability, suits,
claims, demands, costs, loss of expense, judgments or
demands for damages, including actual attorney[’]s fees,
whether arising before or after completion of the
Contractor/Material Supplier’s Work caused by, arising out
of, resulting from, or occurring in connection with the
performance of the Work or any activities associated with the
Work by the Contractor/Material Supplier, its Subcontractors,
suppliers or their agents or employees, or from any activity of
the Contractor/Material Suppliers, its Subcontractors,
suppliers or their agents or employees at the Site, whether or
not caused in whole or in part by the active or passive
negligence, fault, or any other grounds of legal liability of a
party indemnified hereunder.
4
There are multiple versions of the corporate name of SBL throughout the
consolidated appeals. For example, SBL is known as Stone by Lynch, LLC in the Central
policy. SBL as referred to in this opinion shall be read to include the multiple versions of
SBL’s corporate name referenced in the records herein.
5
The agreement between SBL and the Lawsons included references to the
following parties: SBL was identified as “Contractor/Material Supplier[;]” the Lawsons
were identified as “Owners[;]” and G&G was identified as “Owner’s Representative[.]”
Similar references were included in the agreement between Archetype and the Lawsons,
except that Archetype was identified as “SubContractor/Material Supplier” and G&G was
identified as “Contractor.”
4
In the case of claims against the Owner’s Representative, the
Owner, or their agents and employees by any employee of the
Contractor/Material Supplier, anyone directly or indirectly
employed by the Contractor/Material Supplier, or anyone for
whose acts it may be liable, the indemnification obligation
under this Attachment A shall not be limited in any way by
any limitation on the amount or type of damages,
compensation or benefits payable by or for the
Contractor/Material Supplier under workers’ compensation
acts, disability benefit acts.
. . .
INSURANCE: Before Contractor/Material Suppliers does
any work at or prepares or delivers material to the site of
construction, the Contractor/Material Supplier agrees to
obtain and continue in force while performing work
hereunder, at its own expense, the insurance coverage set forth
below, with companies authorized to do business in the State
of West Virginia with full policy limits applying, but not less
than, as stated. A certificate of insurance naming Owner’s
Representative, Owner, engineers, architects, and surveyors,
their subsidiaries and affiliates, as well as their up stream
parents, as an additional named insured and evidencing the
following coverage[s], specifically quoting the
indemnification provision set forth in this Agreement, shall be
delivered to Owner’s Representative prior to commencement
of the work. The additional named insured endorsement shall
be endorsed as primary coverage on Contractor/Material
Suppliers’ commercial general liability and excess Insurance
policy. Such certificate shall provide that any change
restricting or reducing coverage or the cancellation of any
policies under which certificates are issued shall not be valid
with respect to Owner’s Representative’s interest therein until
Owner’s Representative has received sixty (60) days6 written
notice of such change or cancellation.
6
In the G&G Builders, Inc. Special Conditions attached to the contract between
Archetype and the Lawsons, this is “thirty (3) days written notice.”
5
SBL began work on the Lawson project on May 5, 2011. From July 8, 2010,
to July 8, 2011, SBL was insured under a commercial general liability policy of insurance
issued by Central and identified as policy number CLP8886235.7 On May 5, 2011, a
certificate of insurance (“COI”) was issued by Central (through its agent Central Carolina
Insurance) to G&G for the Lawson project. The COI contained the following limitations:
THIS CERTIFICATE IS ISSUED AS A MATTER OF
INFORMATION ONLY AND CONFERS NO RIGHTS
UPON THE CERTIFICATE HOLDER. THIS
CERTIFICATE DOES NOT AFFIRMATIVELY OR
NEGATIVELY AMEND, EXTEND OR ALTER THE
COVERAGE AFFORDED BY THE POLICIES BELOW.
THIS CERTIFICATE OF INSURANCE DOES NOT
CONSTITUTE A CONTRACT BETWEEN THE ISSUING
INSURER(S), AUTHORIZED REPRESENTATIVE OR
PRODUCER, AND THE CERTIFICATE HOLDER.
IMPORTANT: If the certificate holder is an ADDITIONAL
INSURED, the policy(ies) must be endorsed. If
SUBROGATION IS WAIVED, subject to the terms and
conditions of the policy, certain policies may require an
endorsement. A statement on this certificate does not confer
rights to the certificate holder in lieu of such endorsement(s).
Like SBL’s insurer, on August 11, 2011, Archetype’s insurer (through its
agent KWT Insurance) provided G&G with a COI containing the same limitations
7
While not relevant to this appeal, SBL became insured under a policy of insurance
issued by Cincinnati Insurance Company when the policy period of the Central policy at
issue expired on July 8, 2011. Cincinnati was named as a third-party defendant by G&G
below, but is not a party to any of the consolidated appeals. In its brief before this Court,
Central alleged that “[t]he overwhelming amount of the work performed” by SBL on the
Lawson project “took place after July 8, 2011, which work accounted for approximately
81% of the [total] amounts charged by SBL for the work performed” on the Lawson
project.
6
appearing in SBL’s COI.8 These COIs qualified G&G as an additional insured and
indemnitee under SBL’s Central policy and Archetype’s Builders policy for claims arising
out of the work performed by SBL and Archetype on the Lawson project.
On March 20, 2014, G&G filed the underlying complaint against the
Lawsons seeking compensation for work G&G completed on the Lawson project.9
Specifically, G&G sought recovery of a mechanic’s lien from the Lawsons in the amount
of $303,686.31, plus pre- and post-judgment interest.10
In response to G&G’s complaint, the Lawsons filed an answer,
counterclaim, and crossclaim.11 In their counterclaim, the Lawsons generally alleged that
8
At all times relevant hereto, Archetype was insured under a policy of insurance
issued by Builders and identified as policy number PCP 00094601.
9
HB Fuller and Newtech were also named Defendants in G&G’s complaint but are
not parties in any of the consolidated appeals.
10
G&G also sought recovery of “other damages[,]” which included “extra and
additional payroll costs, overhead costs, home office administrative costs, loss of profit,
loss of interest on amount due, damage to [G&G]’s business reputation, annoyance and
inconvenience suffered as a result of the acts and omissions and/or unjust enrichment” of
the Lawsons, HB Fuller, and Newtech.
11
After filing its initial complaint, G&G moved the circuit court to compel the
parties to engage in arbitration and, further, moved to dismiss the Lawsons’ counterclaim
against G&G. Said motions were denied by order of the circuit court dated August 20,
2015. G&G then appealed the circuit court’s August 20, 2015, order to the SCAWV. In
2016, the SCAWV issued an opinion in which it affirmed the circuit court’s refusal to
compel arbitration and refusal to dismiss the Lawsons’ counterclaim against G&G. See
G&G Builders, Inc., v. Lawson, 238 W. Va. 280, 794 S.E.2d 1 (2016).
7
G&G failed to provide adequate supervision for the Lawson project and failed to oversee
and require that the project be completed in a good and workmanlike manner. Further, the
Lawsons alleged that G&G failed to provide supervision of employees, contractors, and
subcontractors “to assure that proper materials, equipment and appliances” were used in
the Lawson project. Within the counterclaim, the Lawsons identified deficiencies within
the Lawson project, including
damage to the wood work, stone is cracked and broken,
windows leak, chimney leaks, patio is damaged, electronics in
the house do not function correctly, finish work needs
replaced, the tile is defectively installed and needs replaced
with proper grout which is not defective, and other significant
defects and failure of performance.
G&G contends that the general allegations in the Lawsons’ counterclaim
“did not provide a detailed analysis or description of each claimed defect or indicate when
any allegedly defective work was performed” and, accordingly, the parties were required
to conduct discovery in order to identify the claimed defects and the responsible
subcontractors/suppliers. Throughout the discovery process,12 once specific defects were
identified by the Lawsons, G&G demanded defense and indemnification from the
subcontractor/supplier responsible for that defect and its insurer, based upon the contracts
each subcontractor/supplier executed with the Lawsons. When any subcontractor/supplier
or insurer refused G&G’s demand for defense and indemnification, G&G filed a third-
12
The discovery process did not begin until 2017, following the SCAWV’s
issuance of its opinion in G&G v. Lawson. See fn. 9 supra.
8
party complaint against the subcontractor/supplier and its insurer seeking indemnification
from the subcontractor/supplier and, where applicable, raising claims against the insurer
for breach of contract, common law bad faith, and violations of the unfair trade practices
act.
On March 5, 2020, G&G filed its Third Amended Third-Party Complaint
asserting claims for breach of contract, common law bad faith, and violations of the UTPA
against Central. In this complaint, G&G sought a declaratory judgment that Central was
obligated to provide G&G a defense and indemnification for the claims asserted by the
Lawsons. However, in its Fourth Amended Third-Party Complaint (filed on April 26,
2021), while G&G restated its previously alleged claims for breach of contract, common
law bad faith, and violations of the UTPA against Central, it made no request for a
declaratory judgment against Central. Additionally, in its Fourth Amended Third-Party
Complaint, G&G asserted claims for bad faith, breach of contract, and UTPA violations
against Builders, but made no accompanying request for a declaratory judgment against
Builders.13
Nevertheless, in November of 2021, G&G filed separate motions for
summary judgment on the insurance coverage issues against Builders and Central.
13
Builders allege that before the filing of its Fourth Amended Third-Party
Complaint, G&G “had never even notified Builders of the litigation it initiated . . . in 2014,
or tendered the litigation to Builders requesting defense and coverage.”
9
Builders responded by asserting that summary judgment was premature and that its policy
issued to Archetype did not extend to provide coverage to G&G. Central filed its own
competing motion for summary judgment on coverage issues and responded to G&G’s
motion by denying that its policy provided coverage to G&G for the underlying loss
because G&G failed to comply with the notice requirements set forth in the Central
policy.14
A hearing on these motions for summary judgment was held before the
circuit court on February 11, 2022. At the conclusion of the hearing, the court found in
favor of G&G on all coverage issues; however, it was not until April 29, 2024 (Builders),15
and May 28, 2024 (Central), that the circuit court entered its orders granting G&G’s
motions for summary judgment on the issue of coverage.16
14
We note that Central has conceded (for the purpose of its motion for summary
judgment on coverage below and now in relation to both consolidated appeals in which it
is a party) that SBL obtained insurance coverage under the Central policy that covered the
work it performed at the Lawson residence. Additionally, Central specifically recognized
SBL’s indemnification obligation to G&G (under the contract between SBL and the
Lawsons) and, further, acknowledged that a COI was issued by Central’s agent that
reflected G&G Builders to be an additional insured under the Central policy issued to
SBL. Thus, below, Central did not dispute the existence of coverage to G&G under the
Central Policy issued to SBL, but argued that such coverage was not applicable, as G&G
did not provide timely notice to Central of the claims of the Lawsons.
Builders did not appeal the circuit court’s April 29, 2024, order awarding G&G
15
summary judgment on the coverage issue.
16
On July 15, 2024, Central filed a Petition for Writ of Prohibition before the
SCAWV to prohibit enforcement of the circuit court’s May 28, 2024, order. Central’s
petition was refused by SCAWV order dated January 21, 2025. Central then appealed the
10
Following the circuit court’s award of summary judgment to G&G on
coverage issues, but before entry of the orders awarding G&G this relief, the parties below
engaged in settlement negotiations. On September 30, 2022, the Lawsons entered into a
Settlement Agreement and Mutual Release with Builders, wherein Builders paid the
Lawsons the sum of $40,000 for settlement of all claims against Archetype and G&G
(related to the work completed by Archetype on the Lawson project). That same day, the
Lawsons entered into a Settlement Agreement and Mutual Release with G&G and SBL,
resolving all their claims against SBL and G&G “caused by, arising out of, resulting from,
occurring in connection with, derivative of, and/or related to the work and/or work product
of [SBL] in connection with the construction or repair” of the Lawson residence. As
consideration for the settlement of their claims against SBL and G&G, the Lawsons were
paid $1,425,000 ($1,325,000 paid by Cincinnati; $100,000 paid by Central). As a part of
the settlement agreement, G&G agreed to release $250,000 of its $303,686.31 mechanics
circuit court’s May 28, 2024, order to this Court. Per Central, this Court “refused to
docket” that appeal “based on Central’s representation in the [n]otice of [a]ppeal” that the
May 28, 2024, order “was not a final order and had not been certified by the circuit court
as a final and appealable order.”
Thereafter, Central filed a motion in circuit court for certification of the May 28,
2024, order as a final appealable order under Rule 54(b) of the West Virginia Rules of
Civil Procedure. In that proceeding, G&G filed an objection to Central’s motion for
certification, noting that Central’s initial appeal of the May 29, 2024, order was properly
refused by this Court and further argued that the May 28, 2024, order was “not final in its
nature and effect because it left G&G’s breach of contract, bad faith and UTPA [claims]
against Central.” Despite G&G’s objection, the circuit court certified, by order entered
March 4, 2025, its May 28, 2024, order, under Rule 54(b). Central then refiled its
underlying appeal with this Court and the appeal was accepted.
11
lien against the Lawsons.17 Thus, the claims against the Lawsons, SBL, and Archetype
(including the derivative claims against G&G related to SBL and Archetype’s work on
the Lawson project) were resolved fully by settlement on September 30, 2022.
On October 7, 2022, Central filed its motion for summary judgment as to
G&G’s claims against it for breach of contract, common law bad faith, and UTPA
violations. Oral argument on this motion was held before the circuit court on December
6, 2022; however, the court did not enter its order granting Central’s motion for summary
judgment until October 3, 2024. It was not until September 14, 2024, that Builders filed
its motion for summary judgment as to G&G’s claims against it for breach of contract,
common law bad faith and UTPA violations. A hearing on Builders’ motion was held
before the circuit court on November 18, 2024, and the order granting Builders’ motion
was entered on December 20, 2024. In both the October 3, 2024, and December 30, 2024,
orders, the circuit court included conclusions of law finding the SCAWV’s memorandum
decision in Soaring Eagle dispositive of G&G’s breach of contract, bad faith, and UTPA
claims.
17
The language of the Settlement Agreement and Mutual Release executed by the
Lawsons on September 30, 2022, noted the parties’ agreement that “[i]n exchange for”
payment of $1,425,000 “plus the agreement of G&G to release” $250,000 “of its
contractual claim and interest against the Lawsons, the Lawsons have agreed to resolve
their claims against [SBL] and G&G.”
12
It is from the December 30, 2024, and October 3, 2024, orders awarding
summary judgment to Builders and Central on G&G’s claims for breach of contract,
common law bad faith, and violations of the UTPA that G&G now appeals. On appeal,
Central seeks relief from the circuit court’s May 28, 2024, order.
II. JURISDICTION
It is well established that the West Virginia Intermediate Appellate Court
(“ICA”) is a court of limited appellate jurisdiction. As the SCAWV acknowledged in
James M.B. v. Carolyn M., 193 W. Va. 289, 292, 456 S.E.2d 16, 19 (1995), “[a] court of
limited appellate jurisdiction is obliged to examine its own power to hear a particular
case.” Thus, we begin our review of the consolidated cases by establishing our jurisdiction
to review such cases.
As to the ICA, the SCAWV has consistently acknowledged that the West
Virginia “Legislature set out the ICA’s limited jurisdiction in West Virginia Code § 51-
11-4, which includes a paragraph that deprives the ICA of jurisdiction over eleven matters
. . . includ[ing] interlocutory appeals.” Danny Webb and Danny Webb Construction Co.,
Inc., v. North Hills Group, Inc., 251 W. Va. 402, ___, 914 S.E.2d 275, 282 (2025). The
SCAWV has specifically held, as set forth in syllabus point two of Webb, that “[t]he [ICA]
generally does not have appellate jurisdiction over interlocutory appeals. W. Va. Code §
51-11-4(d)(8).” Id. at ___, 914 S.E.2d at 277 (citing Syl. Pt. 6, Aaron W. v. Evelyn W., 251
W. Va. 1, 909 S.E.2d 36 (2024)).
13
Further, in Webb, the SCAWV discussed that
[a]ppellate courts, in general, do not have jurisdiction to
review interlocutory orders. See Credit Acceptance Corp. v.
Front, 231 W. Va. 518, 522, 745 S.E.2d 556, 560 (2013)
(“Typically, interlocutory orders are not subject to this Court’s
appellate jurisdiction.”) [footnote omitted] This is because
“[t]he usual prerequisite for . . . appellate jurisdiction is a final
judgment[.]” Coleman v. Sopher, 194 W. Va. 90, 94, 459
S.E.2d 367, 371 (1995). A final judgment or order “ends the
litigation on the merits and leaves nothing for the court to do
but execute the judgment.” Durm v. Heck’s, Inc., 184 W. Va.
562, 566, 401 S.E.2d 908, 912 (1991) (quoting Catlin v.
United States, 324 U.S. 229, 233, 65 S. Ct. 631, 633, 89 L. Ed.
911 (1945)). The requirement for a final judgment, known as
the “rule of finality,” serves “to prohibit ‘piecemeal appellate
review of trial court decisions which do not terminate the
litigation[.]’” Coleman, 194 W. Va. at 95 n.3, 459 S.E.2d at
372 n.3 (quoting James M.B. v. Carolyn M., 193 W. Va. 289,
292, 456 S.E.2d 16, 19 (1995)).
Id. at __, 914 S.E.2d at 280-81 (2025). As established by the SCAWV in Syllabus Point 3
of State ex. rel. West Virginia University Hospitals, Inc., et al. v. Hon. Phillip D. Gaujot,
et al., 248 W. Va. 11, 886 S.E.2d 346 (2023)
[u]nder W. Va. Code § 58-5-1 [1998], appeals only may 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 what has been determined.
(citing Syl. Pt. 3 of James M.B.). Here, we find that the circuit court’s October 3, 2024,
and December 30, 2024, orders awarding summary judgment to Central and Builders as
to G&G’s claims for breach of contract, common law bad faith, and violations of the
UTPA are properly within the jurisdiction of the ICA for review, pursuant to West
14
Virginia Code § 51-11-4(b)(1), as these orders are final orders of a circuit court entered
after June 30, 2022.18
However, as to the May 28, 2024, order appealed by Central, we find that
this order is interlocutory, as the order does not resolve the entirety of any claim between
any of the parties below. See Durm, 184 W. Va. at 566, 401 S.E.2d at 912 (1991) (noting
that under Rule 54(b) “an order may be final prior to the ending of the entire litigation on
its merits if the order resolves the litigation as to a claim or party”). Rather, the May 28,
2024, order addresses only one of the several issues between Central and G&G: the
existence of coverage. Given these facts, we would, under different circumstances,
dismiss Central’s appeal of the May 28, 2024, order as being improvidently permitted;
18
We acknowledge, but find no merit in, Central’s argument that the circuit court’s
October 3, 2024, order was not a “final judgment” order, as that order did not contain the
“explicit language of Rule 54(b) [of the West Virginia Rules of Civil Procedure,]”
designating it as a final appealable order. As the SCAWV discussed in Butler v. Price,
212 W. Va. 450, 453, 574 S.E.2d 782, 785 (2002) (per curiam), “the [c]ircuit [c]ourt’s
designation of its order as appealable . . . under Rule 54(b) is not dispositive.” See also
Leadmine Community Church, et al. v. West Virginia Annual Conference of the United
Methodist Church, et al., No. 24-ICA-475, 2025 WL 2240416, at *2 n.2 (W. Va. Ct. App.
August 6, 2025) (memorandum decision) (citing Durm at Syl. Pt 2, in part) (The absence
of an express Rule 54(b) of the West Virginia Rules of Civil Procedure certification “will
not render the order interlocutory and bar appeal provided that this Court can determine
from the order that the trial court’s ruling approximates a final order in its nature and
effect.”). Here, our review of the October 3, 2024, order establishes that said order resolves
all of the issues between Central and G&G below, as summary judgment was awarded to
Central on each of G&G’s remaining claims (breach of contract, common law bad faith,
and UTPA violations). Accordingly, there is no question as to the jurisdiction of this Court
to review G&G’s appeal of the October 3, 2024, order.
15
however, we find, as permissible under Rule 2 of the Rules of Appellate Procedure 19 and
the practice of the SCAWV,20 that judicial efficiency and economy and the need for
substantial justice outweigh Central’s procedural failure to bring its appeal as one
invoking the jurisdiction of the ICA; thus, we convert Central’s petition for appeal of the
May 28, 2024, order from a direct appeal to a cross-assignment of error raised by Central
in response to G&G’s appeal of the circuit court’s October 3, 2024, order.21 In making
19
Rule 2 of the West Virginia Rules of Appellate Procedure provides that
[i]n the interest of expediting a ruling, or for other good cause shown, the
[ICA] or the [SCAWV] may suspend the requirements or provisions of any
of these Rules in a particular case on application of a party or on its own
motion and may order proceedings in accordance with its direction. These
Rules shall be construed to allow the [ICA] or the [SCAWV] to do
substantial justice.
20
See Gaujot, 248 W. Va. at 17-18, 886 S.E.2d at 352-53 (converting an appeal of
interlocutory order to a petition for writ of prohibition).
21
While we acknowledge that the May 28, 2024, order is not a final order, we find
that the consideration of the propriety of that order is essential for completion of a proper
consideration of G&G’s appeal of the circuit court’s October 3, 2024, and December 30,
2024, orders. We also recognize that, given the procedural history in this matter, the
typical concerns with an appeal of an interlocutory order are not present. Were we
considering a simple direct appeal of the May 28, 2024, coverage order, we would be
compelled to dismiss because the order did not resolve any substantive claims or end the
litigation as to any party. However, in this case, Central appealed the May 28, 2024, order
through the circuit court’s March 4, 2025, Rule 54(b) certificate order. Since the circuit
court entered this certification after its October 3, 2024, order granting summary judgment
to Central, the issues that the May 28, 2024, order left unresolved between G&G and
Central-the merits of G&G’s claims against Central-had been resolved by the October 3,
2024, order at the time of Central’s appeal. As the May 28, 2024, order resolved an issue-
insurance coverage-necessary to the resolution of G&G’s substantive claims, the merits
of that order are within the scope of the appeal of the October 3, 2024, summary judgment
order. Therefore, in consolidating these appeals and construing 25-ICA-111 as a cross-
assignment of error in 24-ICA-441, the court has done no more than allow additional
16
this conversion we note the long and complex history of the ongoing litigation, the need
for resolution of the outstanding appeal, and the multiple unsuccessful good faith attempts
by counsel for Central to seek appellate review of the May 28, 2024, order (including
filing a Writ of Prohibition before the SCAWV; attempting to file a previous appeal with
the ICA; and moving for the circuit court to certify the May 28, 2024, order as a final
appealable order under Rule 54(b) of the West Virginia Rules of Civil Procedure), and
find that such facts establish “good cause” under Rule 2 of the West Virginia Rules of
Appellate Procedure to permit the conversion. Having established this Court’s jurisdiction
to hear the underlying claims, we now turn to an examination of the standard of review.
III. STANDARD OF REVIEW
Generally, we note that
[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 a de novo
review.
Syl. Pt. 2, Walker v. W. Va. Ethics Comm’n, 201 W. Va. 108, 492 S.E.2d 167 (1997).
Likewise, we apply a de novo standard of review to the circuit court’s entry of summary
judgment. Syl. Pt. 1, Moorhead v. W. Va. Army Nat’l Guard, 251 W. Va. 600, 915 S.E.2d
378 (2025). Summary judgment is appropriate when “there is no genuine issue as to any
briefing on an issue properly within the scope of the appeal, which it could have ordered
on its own motion.
17
material fact and the movant is entitled to judgment as a matter of law.” W. Va. R. Civ. P.
56(a), in part; see also Syl. Pt. 4, Painter v. Peavy, 192 W. Va. 189, 451 S.E.2d 755 (1994)
(“Summary judgment 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.”).
As to declaratory judgment actions, the SCAWV reviews a circuit court’s
entry of a declaratory judgment de novo, because the principal purpose of a declaratory
judgment action is to resolve legal questions. Syl. Pt. 3, Cox v. Amick, 195 W. Va. 608,
466 S.E.2d 459 (1995).22 In these consolidated appeals, like the SCAWV in Marlin v.
Wetzel County Bd. of Education, 212 W. Va. 215, 220-221, 569 S.E.2d 462, 467-468
(2002),
we are asked to review the circuit court’s interpretation of an
insurance contract. In Syllabus Point 2 of Riffe v. Home
Finders Associates, Inc., 205 W. Va. 216, 517 S.E.2d 313
(1999), we stated that “[t]he interpretation of an insurance
contract, including the question of whether the contract is
ambiguous, is a legal determination that, like a lower’s court’s
grant of summary judgment, shall be reviewed de novo on
appeal.” “Determination of the proper coverage of an
22
We acknowledge, as noted supra, that while G&G sought a declaratory judgment
ruling from the circuit court as to Central’s obligations to G&G under the Central policy
issued to SBL in its Third Amended Third-Party Complaint, G&G did not renew its
request for this declaratory judgment in its Fourth Amended Third-Party Complaint.
However, we recognize that the circuit court’s May 28, 2024, order addresses the duties
and responsibilities of Central to G&G under the Central policy issued to SBL, similar to
a declaratory judgment.
18
insurance contract when the facts are not in dispute is a
question of law.” Syllabus Point 1, Tennant v. Smallwood, 211
W. Va. 703, 568 S.E.2d 10 (2002). See also, Murray v. State
Farm Fire & Cas. Co., 203 W. Va. 477, 482, 509 S.E.2d 1, 6
(1998).
With these standards in mind, we begin our review of the consolidated appeals by
examining the circuit court’s May 28, 2024, order, the first chronologically of the three
orders on appeal.
IV. DISCUSSION
A. The May 28, 2024, order
As to the May 28, 2024, order, Central raises four assignments of error,
which we will address in turn. In its first and second assignments of error, Central suggests
that the circuit court erred when it concluded that Central was “estopped” from denying
coverage or a duty to defend to G&G based on coverage limitations that were not included
in the Central COI issued to G&G, namely the requirement of an insured to provide notice
of a claim “as soon as practicable.” Specifically, Central contends that, in reaching its
conclusions as to the applicability of equitable estoppel, the circuit court misconstrued the
SCAWV’s rulings in Marlin v. Wetzel County Bd. of Education, 212 W. Va. 215, 569
S.E.2d 462 (2002), and Nat’l Mut. Ins. Co., v. McMahon & Sons, Inc., 177 W. Va. 734,
356 S.E.2d 488 (1987) (overruled on other grounds by Parsons v. Halliburton Energy
Servs., Inc., 237 W. Va. 138, 785 S.E.2d 844 (2016).
As the SCAWV held in Syllabus Point 9 of Marlin,
19
[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.
Below, the circuit court found that Central did not set forth or disclose in the COI issued
to G&G all of the “limitations” of coverage within the Central policy, particularly
excluding the duty of G&G to provide notice of any claims under the policy “as soon as
practicable.” Given such an occurrence, the court concluded that, per Marlin and
McMahon,23 Central was estopped from raising G&G’s failure to provide reasonable
notice of the Lawsons’ underlying claims as a coverage defense. We disagree.24
23
In McMahon, at Syllabus Point 10, the SCAWV held that “[a]n insurer wishing
to avoid liability on a policy . . . must make exclusionary clauses conspicuous, plain, and
clear, placing them in such a fashion as to make obvious their relationship to other policy
terms, and must bring such provisions to the attention of the insured.”
24
For purposes of clarification, we find no error in the circuit court’s application
of the law of the State of West Virginia (as opposed to North Carolina), as West Virginia
had a more significant relationship to the transaction at issue. We agree with the circuit
court’s determination that, by virtue of the issuance of a COI to G&G, Central undertook
to insure a West Virginia company; that the alleged construction defects occurred
exclusively in West Virginia; and that the underlying action was filed in West Virginia.
Moreover, we concur with the circuit court’s acknowledgement that under West Virginia
law, “damages [bodily injury or property damage] resulting from defective workmanship”
constitute an “occurrence” for coverage under a contractor’s commercial general liability
policy. See Syllabus Point 6, Cherrington v. Erie Insurance Property and Casualty Co.,
231 W. Va. 470, 745 S.E.2d 508 (2013).
20
Based upon our review of the record and applicable law, we find that the
circuit court’s equitable estoppel ruling misstates and misconstrues the SCAWV’s
holdings in Marlin and McMahon. Further, we find that it unnecessarily expands the
holdings of those cases and the resultant duties of insurers (and their agents) doing
business in West Virginia. As the SCAWV held in Syllabus Point 5 of Potesta v. U.S.F.
& G., 202 W. Va. 308, 504 S.E.2d 135 (1998), “[g]enerally, the principles of waiver and
estoppel are inoperable to extend insurance coverage beyond the terms of an insurance
contract.”25 However, the Potesta Court recognized that
[e]xceptions to the general rule that the doctrine of estoppel
may not be used to extend insurance coverage beyond the
terms of an insurance contract, include, but are not necessarily
limited to, instances where an insured has been prejudiced
because: (1) an insurer’s, or its agent’s, misrepresentation
made at the policy’s inception resulted in the insured being
prohibited from procuring the coverage s/he desired; (2) an
insurer has represented the insured without a reservation of
rights; and (3) the insurer has acted in bad faith.
Marlin, 212 W. Va. at 225, 569 S.E.2d at 472 (quoting Potesta at Syllabus Point 7). Below,
the circuit court applied the SCAWV’s ruling in Marlin, without the predicate finding of
a misrepresentation that was relied upon by an insured.26 Instead, the court simply stated
25
The Marlin Court noted that “[t]he rationale for this rule is that an insurance
company should not be made to pay for a loss for which it has not charged a premium.
See ‘Doctrine of Estoppel or Waiver as Available to Bring Within Coverage of Insurance
Policy Risks Not Covered by its Terms or Expressly Excluded Therefrom,’ 1 A.L.R.3d
1139, 1144 (1965).”
26
Below the circuit court did not address scenarios (2) and (3) in Syl. Pt. 8 of
Marlin or any other exception to the general rule that estoppel may not be used to extend
insurance coverage beyond the terms of an insurance contract. Thus, on appeal, we limit
21
that Marlin “addressed similar behavior[,]” thus likening Central’s alleged failure to
specifically denote notice requirements on the face of the COI, to the intentional act of
misrepresentation perpetrated by the insurance agent in Marlin. We find such a
comparison unavailing.
Moreover, in awarding summary judgment to G&G on the coverage issue
involving Central, the circuit court expanded the duties of insurers by finding that, per
McMahon, a West Virginia insurer “must bring all exclusions and limitations on which it
seeks to rely to the attention of the insured.” However, the actual finding of McMahon
addresses exclusions only and not “limitations[,]” a term that was undefined by the circuit
court. Here, Central has not denied coverage to G&G under any “exclusions” within the
Central policy. In fact, as noted by Central, none of the exclusions within the Central
policy “are even relevant to the coverage issues in this case and none were” referenced by
the circuit court in its May 28, 2024, order. Accordingly, we find the circuit court’s
reliance upon McMahon misplaced, as the court misstated and misinterpreted the findings
of that case.
Wherefore, based on the foregoing, we find that the circuit court erred in
awarding summary judgment to G&G on the theory of equitable estoppel. However, such
error is not dispositive of the coverage issue before us, as we must now address the circuit
our review to only the first scenario identified in Syl. Pt. 8 of Marlin, which requires the
misrepresentation of the insurer or its agent.
22
court’s determination as to reasonableness of the notice of the Lawsons’ claims that G&G
provided to Central, which are addressed in Central’s third argument on appeal.
In this argument, Central contends that the circuit court erred in concluding
that G&G’s provision of notice to Central of the Lawsons’ claims against G&G and SBL
was reasonable. In Colonial Ins. Co. v. Barrett, 208 W. Va. 706, 711, 542 S.E.2d 869, 874
(2000), the SCAWV generally recognized that that “[t]he satisfaction of the notice
provision in an insurance policy is a condition precedent to coverage for the policyholder.”
Here, Central contends that it first became aware of the potential claims against SBL
related to the Lawson project when it received a letter from G&G’s counsel (dated June
21, 2019), demanding defense and indemnification of G&G for such claims. Central, after
investigating, wrote to G&G’s counsel, by letter dated August 21, 2019, and denied
coverage. On appeal, Central suggests that the G&G knew of the potential “alleged issues”
with SBL’s work on the Lawson project as early as May of 2012, but did not place Central
on notice of such claims until 2019, a period of more than seven years, a delay that was
indisputably unreasonable.27
27
At the very least, Central argues that G&G knew of the Lawsons’ claims related
to work completed by SBL on the Lawson project when the Lawsons’ counterclaim was
served in June of 2014. Further, Central contends that G&G “possessed all the information
necessary to put Central on notice” of these claims by virtue of Central’s COI, dated May
4, 2011.
23
Conversely, G&G argues its notice to Central of the underlying claims was
reasonable. G&G is critical of the fact that Central does not acknowledge that there was a
need for discovery in the underlying case, with regard to the identification of defects in
the Lawson project and the subcontractor/supplier responsible for said defect, which did
not begin until 2017 (given the SCAWV’s consideration of G&G’s appeal in G&G v.
Lawson). Further, G&G argues that the complexity of the case, which involved at least
nine subcontractors and their insurers (often multiple insurers), increased the time
necessary to gather information regarding the Lawsons’ underlying claims. Given such
facts, G&G claims that its notice was reasonable.
As to a determination of reasonableness, the SCAWV in Travelers Indem.
Co. v. U.S. Silica Co., 237 W. Va. 540, 546, 788 S.E.2d 286, 292 (2015), stated that
[i]n cases which involve liability claims against an insurer,
several factors must be considered . . . [to] determine if the
delay in notifying the insurance company will bar the claim
against the insurer. The length of the delay in notifying the
insurer must be considered along with the reasonableness of
the delay. If the delay appears reasonable in light of the
insured’s explanation, the burden shifts to the insurance
company to show that the delay in notification prejudiced their
investigation and defense of the claim. If the insurer can
produce evidence of prejudice, then the insured will be held
to the letter of the policy and the insured barred from making
a claim against the insurance company. If, however, the
insurer cannot point to any prejudice caused by the delay in
notification, then the claim is not barred by the insured’s
failure to notify.
Below, the circuit court made the determination that the notice of the Lawsons’ claims
G&G provided to Central was reasonable. While Central and G&G take no issue with the
24
circuit court being the arbiter of the reasonableness of notice, we find error in such action.
The SCAWV has long held that “[t]he question of whether an insurance company was
notified within a reasonable time period is, generally, a question for the finder of fact.”
Colonial, 208 W. Va. at 712, 542 S.E.2d at 875 (citing Dairyland Ins. Co., v. Voshel, 189
W. Va. 121, 124, 428 S.E.2d 542, 545 (1993)); see also Travelers Indem. Co. v. U.S.
Silica, 237 W. Va. 540, 547, 788 S.E.2d 286, 293 (2015) (recognizing that the issue of
reasonableness is typically a jury question); State Auto. Mut. Ins. Co. v. Youler, 183 W.
Va. 556, 561, 396 S.E.2d 737, 742 (1990) (“Generally, whether notice has been given to
an automobile insurer within a reasonable period of time is an issue to be resolved by the
fact finder.” (citations omitted)).
While we acknowledge that the Travelers Court reasoned that, under the
facts and circumstances present in that particular case (undisputed egregious facts and the
sophisticated nature of the parties), that reasonableness of notice was an appropriate
consideration to be made by the court as matter of law, we are mindful of the SCAWV’s
indication in Travelers that it did “not intend to change the customary determination of
reasonableness by the fact finder.” Id. at 547, 788 S.E.2d at 293. Further, we are mindful
of the SCAWV’s long held tenet that “[i]t is the peculiar and exclusive province of the
jury to weigh the evidence and resolve questions of fact . . . when facts, though undisputed,
are such that reasonable men may draw different conclusions from them.” Syl. Pt. 4, Webb,
251 W. Va. at ___, 914 S.E.2d at 277 (citing Syl. Pt. 2, Koontz v. Long, 181 W. Va. 800,
384 S.E.2d 837 (1989) (per curiam).
25
Here, while Central and G&G both suggest that there are no facts in dispute
as to the question of reasonableness, we note that even with an agreement as to the facts
in dispute there are drastically different conclusions that can be drawn from such facts, as
exhibited by the parties’ differing positions as to reasonableness. Thus, we find that under
the facts and circumstances present in the underlying case, and given the SCAWV’s
holding in Webb, the circuit court erred in making the determination as to the
reasonableness of notice below, as such a determination was the province of a jury and
not the court. Accordingly, we vacate the circuit court’s determination of reasonableness
set forth in its May 28, 2024, order and remand this matter to circuit court, and direct that
the question of reasonableness of notice be presented to a jury for determination.28
In its last assignment of error, Central argues that the circuit court erred in
finding that Central was not prejudiced by the unreasonable notice of the Lawsons’ claims
provided by G&G. As we have vacated the circuit court’s determination of reasonableness
of notice, the issue of prejudice associated with such a determination is now moot and
thus not properly before this Court for consideration. Accordingly, we decline to address
Central’s fourth assignment of error and direct that the circuit court address the question
of prejudice in the future proceedings directed in this case, if applicable.
28
We make no specific findings as to the reasonableness of the notice G&G
provided to Central below, and this decision should not be read to such end.
26
B. The October 3, 2024, and December 30, 2024, orders
On appeal, G&G raises five assignments of error in its separate appeals
against Central and Builders, appealing the circuit Court’s October 3, 2024 (Central), and
December 30, 2024 (Builders), orders. The assignments of error raised by G&G against
Central are identical to the assignments of error G&G raised against Builders. As such,
we will address the assignments of error related to Central and Builders together, for the
purposes of brevity and efficiency.29
In its first two assignments of error, which are interrelated and will be
addressed together, G&G argues that the circuit court erred in finding that G&G had no
valid claim for breach of contract against Central and Builders. Specifically, G&G argues
that the circuit court erred in making its finding of no breach of contract given its
misplaced reliance upon the SCAWV’s memorandum decision in Soaring Eagle.
In Soaring Eagle, the SCAWV affirmed an award of summary judgment to
an excess insurer as to an insured’s claims against it for breach of contract and unfair
29
We find that our opinion regarding the propriety of the circuit court’s award of
summary judgment to Central as to G&G’s claims for breach of contract, common law
bad faith, and violations of the UTPA is not an advisory opinion. Specifically, if the circuit
court’s order of October 3, 2024, is affirmed in future proceedings any remand for the
purpose of evaluating coverage would be moot. Additionally, it is important to note that
G&G’s claims for breach of contract, common law bad faith, and violations of the UTPA
against Central are identical to the claims G&G alleged against Builders, except that there
are no coverage issues with regard to Builders (as Builders has not appealed the circuit
court’s order finding coverage for G&G under the Builders’ policy).
27
claims practices. In making this ruling, the Court found that an insured could not maintain
claims against its insurer for common law or statutory bad faith, or breach of contract,
where the insured has been provided a defense at no cost to the insured and a settlement
was reached at no cost to the insured. Here, Builders and Central contend, and the circuit
court agreed, that G&G was always defended in the underlying action at no cost to G&G
and G&G was fully indemnified for all claims at no cost to G&G and, accordingly, G&G’s
claims for breach of contract, common law bad faith, and UTPA violations against Central
and Builders were not sustainable under Soaring Eagle. We disagree.
Below, the circuit court’s reliance upon Soaring Eagle was based upon the
false premise that the facts therein were similar to the facts in the instant case.30 Our review
of the record establishes that the facts in the underlying case are distinguishable from
Soaring Eagle in a number of critical ways. In Soaring Eagle, a developer entered into a
contract that required the general contractor on the project to defend and indemnify the
developer, but also mandated that the general contractor require any subcontractor to
defend the developer as well. Each of the insurers for the subcontractors complied with
that requirement and defended the developer on a primary basis throughout that litigation.
Accordingly, the SCAWV found that the “developer had no valid claim for attorney’s fees
30
On appeal both Builders and Central contend that G&G was in virtually identical
circumstances as the developer in Soaring Eagle and the insurers were in virtually the
same position as the insurers in Soaring Eagle; thus, this Court should “abide” by the
Soaring Eagle decision and affirm the circuit court’s ruling.
28
against the general contractor’s insurer, which had excess coverage to that coverage
provided by the carriers for the subcontractor.” Thus, there was no breach, since the
insurer at issue in Soaring Eagle had no primary duty to defend the developer. However,
in the underlying case, we are not dealing with excess carriers but carriers (Central and
Builders) who had a primary duty to defend G&G.31
Soaring Eagle is also distinguishable because all of the subcontractors in
that case complied with the contractual defense and indemnification requirement on a
primary basis, such that the SCAWV found that the developer had no valid claim for
attorney’s fees against the general contractor’s insurer – who provided excess coverage.
Both Central and Builders argue that like the developer in Soaring Eagle, G&G was
“defended by the insurers for the subcontractors as contemplated by the subcontracts.”
However, both Central and Builders fail to acknowledge that unlike Travelers (the insurer
in Soaring Eagle), they too were “insurers for the subcontractor” who were to provide
insurance “as contemplated in the subcontracts.” Moreover, G&G, unlike the developer
in Soaring Eagle (who did not contribute anything as consideration for the settlement of
the claims against it) contributed directly to the settlement of the Lawsons’ claims against
G&G and SBL, as G&G released $250,000 of its mechanic’s lien against the Lawsons,
31
G&G cites to the agreement between SBL and the Lawsons and Archetype and
the Lawsons which required the subcontractors to name G&G as an additional insured “as
primary coverage on [the subcontractor’s] commercial general liability and excess
insurance policies.” All claims at issue herein, were brought under the subcontractor’s
commercial general liability policies, where G&G was to be a primary insured.
29
which we find is a clear “cost” of that settlement.32 Additionally, we note that both
Builders and Central did not provide a defense and indemnification to G&G in the
underlying action, until G&G obtained a ruling by the circuit court confirming the
existence of coverage for G&G under the Builders and Central policies. Thus, G&G was
required to institute a legal action against Builders and Central to obtain the relief to which
G&G was entitled, as evidenced by the Builders and Central COIs issued to G&G.33
32
We acknowledge, but find no merit in, Central’s arguments supporting the circuit
court’s findings regarding the release of part of G&G’s mechanic’s lien. In its October 3,
2024, order the circuit court determined that since such lien was not part of the
indemnification owed under the Central policy (and was not a “claim” asserted by anyone
against G&G) it was thus irrelevant to the issues here and “could not be considered as part
of the evaluation of whether G&G has been fully indemnified for the claims asserted
against it by the Lawsons.” We disagree. If we were to adopt Central’s arguments and the
circuit court’s finding in this regard, we would have to necessarily conclude that G&G’s
release of part of its mechanic’s lien against the Lawsons was just merely a gift to the
Lawsons, and was not made in consideration of settlement of the underlying claims. We
find such arguments and findings disingenuous, without factual support, and void of logic.
Instead, we find, as is factually supported by the record, that G&G’s release of a
part of its mechanic’s lien against the Lawsons was part of the settlement reached of the
claims of the Lawsons against G&G and SBL. The language of the Settlement Agreement
and Mutual Release itself establishes that the release of part of the mechanic’s lien was
“consideration” and made “in exchange” for a release of the Lawsons’ claims against
G&G and SBL. See fn. 15 supra. Moreover, the SCAWV has recognized that “[a]
compromise of a controversy is a valuable consideration to sustain a contract.” Syl. Pt. 3,
Sanders v. Roselawn, 152 W. Va. 91, 159 S.E.2d 784 (1968). Thus, we reverse the circuit
court’s ruling in this regard and find that G&G’s release of part of its mechanic’s lien
should be considered as part of the evaluation of whether G&G has been fully indemnified
for the claims asserted against it.
33
Under Syl. Pt. 1, Hayseeds, Inc. v. State Farm Fire & Cas., 177 W. Va. 323, 352
S.E.2d 73 (1986), an insured who “substantially prevails” may recover reasonable attorney
fees for vindicating his or her claims, along with damages for aggravation and
inconvenience, and “net economic loss caused by the delay in settlement.” Hayseeds does
not authorize recovery of attorney fees incurred for pursuing a bad faith claim against the
30
Accordingly, given the substantial factual distinctions between Soaring
Eagle and the underlying case, we find that the circuit court’s reliance upon Soaring Eagle
was misplaced. Moreover, we find error with the circuit court’s failure to consider G&G’s
contribution to settlement of the Lawsons’ claims against G&G and the fact that G&G
was forced to initiate litigation against Builders and Central to obtain a defense and
indemnification. Therefore, we vacate the circuit court’s award of summary judgment to
Builders and Central and direct that the circuit court re-examine this matter without
reference to Soaring Eagle and with particular consideration of the specific facts of the
underlying case.
In its third assignment of error, G&G argues that the circuit court erred in
finding the collateral source rule did not apply to the payment made by other
subcontractors’ carriers toward the defense of G&G. In other words, G&G argued that the
collateral source rule applied such that Central and Builders cannot be credited with the
defense costs and indemnity paid by other insurance carriers. Below, the circuit court
concluded, in both the October 3, 2024, and December 30, 2024, orders that the collateral
source rule “does not operate here.” Specifically, the court noted that the SCAWV “has
not applied the collateral source rule to a case such as this where the insured received a
defense and indemnity at no cost to it.”
insurer. While the Soaring Eagle Court did not permit the recovery of Hayseeds damages,
the facts of the underlying case are distinctly different than the facts of Soaring Eagle,
such that the circuit court below must consider any Hayseeds damages which G&G can
establish.
31
On appeal, G&G, citing the SCAWV’s opinion in Aetna Casualty & Surety
Co. v. Pitrolo, 176 W. Va. 190, 342 S.E.2d 156 (1986), argues that it is entitled to recover
its pro-rata share of payments made by other carriers for the defense of G&G under the
collateral source rule. In Ilosky v. Michelin Tire Corp., 172 W. Va. 435, 446, 307 S.E.2d
603, 615 (1983), the SCAWV explained that
[s]imply put, the collateral source rule excludes payments from
other sources to plaintiffs from being used to reduce damage
awards imposed upon culpable defendants. The rule is
premised on the theory that it is better for injured plaintiffs to
receive the benefit of collateral sources in addition to actual
damages than for defendants to be able to limit their liability
for damages merely by the fortuitous presence of these sources.
The Ilosky court further noted
The purpose of the collateral source doctrine is to prevent
reduction in the damage liability of defendants simply because
the victim had the good fortune to be insured or have other
means of compensation.
Id. at 447, 307 S.E.2d at 615.
G&G argues under the collateral source rule it should be able to recover its
pro-rata share of attorney’s fees from Builders and Central. Builders and Central should
not be able to “take advantage” and get a “free pass” simply by having the luck that
someone else complied with a duty all the insurers had. We disagree and find no error in
the circuit court’s decision as to the inapplicability of the collateral source rule. Here, as
G&G was fully defended below at no cost to it (without consideration of the contribution
G&G made to any settlement and any funds it may have expended to “substantially
prevail” in its coverage claims against Builders and Central), it has no claim for recovery
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of attorney’s fees related directly to its defense, which it did not incur. Instead, any claims
for recovery of G&G attorney’s fees paid by some subcontractor’s insurers and not others,
is a claim belonging to the subcontractor’s insurers who funded the defense, not G&G,
who expended no such funds.
Additionally, any claims by G&G for attorney’s fees it has incurred in the
defense of the underlying action are contractual in nature. The collateral source rule is
generally not applicable in breach of contract cases. See Owners Ins. Co v. McGraw, 233
W. Va. 776, 785-786, 760 S.E.2d 590, 599-600 (2014) (per curiam) (Davis, C.J.,
concurring). Accordingly, we find no error in the circuit court’s determination as to the
inapplicability of the collateral source rule.
In its last two assignments of error, G&G is critical of the circuit court’s
refusal to permit additional discovery, despite the affidavit of G&G’s counsel noting the
need for additional discovery, and argues that summary judgment was improper given that
genuine questions of fact remain, which should be determined by a jury. Given our rulings
above reversing, in part, and vacating, in part, the circuit court’s October 3, 2024, and
December 30, 2024, orders, we find these assignments of error to be moot and they will
not be addressed by this Court. Rather, we defer to the circuit court’s determinations as to
the need for additional discovery and the existence of genuine issues of material fact in
that court’s consideration of Builders’ and Central’s motions for summary judgment on
remand.
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V. CONCLUSION
Based on the foregoing, we make the following findings with regard to the
orders of the Circuit Court of Cabell County at issue in these consolidated appeals:
1. With regard to the circuit court’s May 28, 2024, order, we reverse the circuit
court’s ruling as to the application of equitable estoppel; we vacate the circuit
court’s determination of reasonableness of notice and prejudice; and we remand
that matter to circuit court and direct that the determination of reasonableness
of notice be presented to a jury for consideration.
2. As to the October 3, 2024, order, we reverse, in part, the circuit court’s award
of summary judgment to Builders and remand the case to circuit court for
further proceedings consistent with this opinion, which is to include the court’s
consideration of G&G’s alleged Hayseeds damages. We affirm, in part, the
circuit court’s determination that the collateral source rule was inapplicable.
3. As to the December 30, 2024, order, we reverse, in part, the circuit court’s
award of summary judgment to Central, as well as the circuit court’s
determination as to the consideration of G&G’s release of part of its mechanic’s
lien in consideration of settlement, and remand the case to circuit court for
further proceedings consistent with this opinion, which is to include the court’s
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consideration of G&G’s alleged Hayseeds damages. We affirm, in part, the
circuit court’s determination that the collateral source rule was inapplicable.
Affirmed, in part, Reversed, in part, and Remanded with directions.
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