The opinion
STATE OF WEST VIRGINIA
SUPREME COURT OF APPEALS
James E. Phillips, II,
Plaintiff Below, Petitioner FILED
June 18, 2020
EDYTHE NASH GAISER, CLERK
vs.) No. 19-0610 (Kanawha County 17-C-1153) SUPREME COURT OF APPEALS
OF WEST VIRGINIA
West Virginia Department of
Health and Human Resources,
d/b/a Mitchell-Bateman Hospital,
Defendant Below, Respondent
MEMORANDUM DECISION
Petitioner James E. Phillips, II, by counsel Richard W. Walters, appeals the final order of
the Circuit Court of Kanawha County that granted summary judgment on the basis of sovereign
and qualified immunity in favor of respondent in this civil action stemming from a Master
Agreement for services. Respondent the West Virginia Department of Health and Human
Resources, d/b/a Mitchell-Bateman Hospital (“DHHR” or “Bateman Hospital”), by counsel
Kelly C. Morgan and Kristen V. Hammond, filed a response in support of the circuit court’s
order. Petitioner filed a reply.
This Court has considered the parties’ briefs and the record on appeal. The facts and legal
arguments are adequately presented, and the decisional process would not be significantly aided
by oral argument. Upon consideration of the standard of review, the briefs, and the record
presented, the Court finds no substantial question of law and no prejudicial error. For these
reasons, a memorandum decision affirming the order of the circuit court is appropriate under
Rule 21 of the Rules of Appellate Procedure.
Petitioner, a sign language interpreter, entered into a Master Agreement with DHHR, a
State agency, to provide sign language interpreter services to deaf and hearing-impaired patients
at Bateman Hospital, a State psychiatric hospital in Huntington, West Virginia. Per the Master
Agreement, in effect from April 1, 2016, to December 31, 2016, petitioner was to provide
interpreter services “on an as needed basis” and the DHHR had discretionary decision-making
authority as to the need for interpreter services at Bateman Hospital. The Master Agreement
specifically noted that petitioner was a vendor of the DHHR and further provided that petitioner
was “an independent contractor and no principal-agent relationship or employer-employee
relationship” was contemplated by the parties.
1
On August 14, 2017, petitioner filed this civil action against the DHHR stemming from
the Master Agreement. Petitioner maintained that, during the period provided for by the Master
Agreement, he provided only approximately ten hours of service to the DHHR, despite the fact
that the DHHR led petitioner to believe that he would provide services a minimum of forty hours
per week, or an estimated 1550 hours over the life of the Master Agreement. Petitioner alleged
that he forewent other employment opportunities and procured a $1 million dollar insurance
policy as required by the Master Agreement, but the DHHR did not fulfill its responsibilities
under the Master Agreement. Petitioner sought compensatory damages, lost wages, attorney’s
fees, and costs from the DHHR. On January 23, 2018, the DHHR filed a motion to dismiss based
upon the doctrine of qualified immunity. After the circuit court denied the motion, the parties
conducted discovery.
On December 14, 2018, the DHHR filed a motion for summary judgment based upon the
doctrines of sovereign and qualified immunity. On January 3, 2019, petitioner filed a motion to
amend his complaint to include claims of fraudulent and negligent inducement, concealment, and
execution. Although the DHHR objected to this amendment noting the amendment’s futility, the
circuit court granted the motion and petitioner filed his Second Amended Complaint.1
Petitioner’s Second Amended Complaint asserted the following causes of action: breach
of contract and promissory estoppel; fraudulent inducement, fraudulent concealment, and
fraudulent execution; promissory estoppel; and lost wages. In response to petitioner’s Second
Amended Complaint, the DHHR filed a renewed motion for summary judgment on April 10,
2019. The DHHR argued that dismissal of the complaint was appropriate based upon the
doctrines of sovereign and qualified immunity, the gist of the action doctrine, and petitioner’s
inability to recover attorney’s fees and costs. On May 30, 2020, the circuit court entered a final
order dismissing petitioner’s Second Amended Complaint, with prejudice.
In its final dismissal order, the circuit court found that the State ordinarily enjoys
sovereign immunity, unless there is insurance coverage for the claims presented. The circuit
court determined that all of petitioner’s claims were excluded from insurance coverage pursuant
to the State’s policy. As to petitioner’s breach of contract and promissory estoppel claims, the
circuit court found that the DHHR’s policy included a clear and unambiguous exclusion from
coverage “[t]o any claim(s) based upon or attributable to any allegations or claims that the
‘insured’ breached the terms of any type or any form of contract, either express or implied,
written or oral.” Further, as to petitioner’s fraudulent inducement, fraudulent concealment, and
fraudulent execution claims, the circuit court found that Endorsement #25, Fraud, Dishonesty or
1
Petitioner filed an amended complaint on or about November 20, 2017, shortly after the
institution of this litigation. Although the record is unclear as to the date when the second
amended complaint was filed, the circuit court granted petitioner’s motion to file this amended
complaint on or about February 11, 2019.
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Criminal Act Exclusion, excluded coverage for these claims.2 Per the circuit court, petitioner’s
promissory estoppel claim was precluded by Endorsement #5, which provided that there is no
insurance coverage for actions seeking equitable relief. Finally, as to petitioner’s claim for lost
wages, the circuit court found that the wrongful act coverage provision included an exclusion of
coverage “[t]o any claim(s) made against the ‘insured’ for damages attributable to wages,
salaries and benefits.”
Additionally, the circuit court found that petitioner’s Second Amended Complaint should
be dismissed because his claims against the DHHR were barred by the doctrine of qualified
immunity.3 The circuit court noted that whether claims were barred by the doctrine of qualified
2
Additionally, the circuit court determined that petitioner’s tort claims were simply
breach of contract claims being “masqueraded as tort claims.” Thus, the circuit court found that
petitioner’s fraudulent inducement; fraudulent concealment; fraudulent execution; and negligent
inducement/concealment/execution claims duplicated his breach of contract claim and were
barred based upon the gist of the action doctrine.
3
The circuit court conducted the two-part analysis announced by this Court in syllabus
point 10, West Virginia Regional Jail & Correctional Facility Authority v. A.B., 234 W. Va. 492,
766 S.E.2d 751 (2014), where we held:
To determine whether the State, its agencies, officials and/or employees
are entitled to immunity, a reviewing court must first identify the nature of the
governmental acts or omissions which give rise to the suit for purposes of
determining whether such acts or omissions constitute legislative, judicial,
executive or administrative policy-making acts or involve otherwise discretionary
governmental functions. To the extent that the cause of action arises from judicial,
legislative, executive or administrative policy-making acts or omissions, both the
State and official involved are absolutely immune pursuant to Syl. Pt. 7 of
Parkulo v. W. Va. Bd. of Probation and Parole, 199 W.Va. 161, 483 S.E.2d 507
(1996).
And, further:
To the extent that governmental acts or omissions which give rise to a
cause of action fall within the category of discretionary functions, a reviewing
court must determine whether the plaintiff has demonstrated that such acts or
omissions are in violation of clearly established statutory or constitutional rights
or laws of which a reasonable person would have known or are otherwise
fraudulent, malicious, or oppressive in accordance with State v. Chase Securities,
Inc., 188 W.Va. 356, 424 S.E.2d 591(1992). In the absence of such a showing,
both the State and its officials or employees charged with such acts or omissions
are immune from liability.
(continued . . . )
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immunity depended on whether (1) the DHHR’s actions were discretionary; and if so, (2)
whether those actions violated any statutory or constitutional rights or laws that were clearly
established and of which a reasonable person would have known or whether those actions were
fraudulent, malicious, or oppressive. The circuit court found that the DHHR’s determination as
to the use of petitioner’s independent contractor services “on an as needed basis” was
discretionary. Further, the circuit court found that petitioner had failed to establish any statutory
or constitutional right that the DHHR violated with respect to him, and that he further failed to
offer evidence that the DHHR’s actions were fraudulent, malicious, or oppressive as they related
to him.
It is from the circuit court’s final order that petitioner appeals. On appeal, petitioner
asserts three assignments of error based upon his breach of contract and promissory estoppel
claims. First, petitioner contends that the circuit court erred when it determined that his claims
for breach of contract and promissory estoppel were excluded from coverage by the State’s
insurance policy and thus barred by sovereign immunity. Second, petitioner maintains that the
circuit court erred when it determined that his claims of breach of contract and promissory
estoppel were barred by qualified immunity. Finally, petitioner asserts that the circuit court erred
when it determined that his claim for promissory estoppel was per se non-actionable against the
State and was otherwise barred by the equitable relief exclusion to the State’s insurance policy.
On appeal, this Court accords a plenary review to the circuit court’s order granting
summary judgment: “[a] circuit court’s entry of summary judgment is reviewed de novo.” Syl.
Pt. 1, Painter v. Peavy, 192 W. Va. 189, 451 S.E.2d 755 (1994). In conducting our de novo
review, we apply the same standard for granting summary judgment that is applied by the circuit
court. Under that standard,
“‘[a] motion for summary judgment should be granted only when it is
clear that there is no genuine issue of fact to be tried and inquiry concerning the
facts is not desirable to clarify the application of the law.’ Syllabus Point 3, Aetna
Casualty & Surety Company v. Federal Insurance Co. of New York, 148 W.Va.
160, 133 S.E.2d 770 (1963).” Syllabus Point 1, Andrick v. Town of Buckhannon,
187 W.Va. 706, 421 S.E.2d 247 (1992).
Painter, 192 W. Va. at 190, 451 S.E.2d at 756, syl. pt. 2. In other words,
[s]ummary 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.
Painter at 190, 451 S.E.2d at 756, syl. pt. 4. Additionally, we note that “[t]he circuit court’s
A.B. at 497, 766 S.E.2d at 756, syl. pt. 11.
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function at the summary judgment stage is not to weigh the evidence and determine the truth of
the matter, but it is to determine whether there is a genuine issue for trial.” Id. at 190, 451 S.E.2d
at 756, syl. pt. 3. Finally, we note that “the party opposing summary judgment must satisfy the
burden of proof by offering more than a mere ‘scintilla of evidence’ and must produce evidence
sufficient for a reasonable jury to find in a nonmoving party’s favor. Anderson [v. Liberty Lobby,
Inc.], 477 U.S. [242,] 252, 106 S.Ct. [2505,] at 2512, 91 L.Ed.2d [202] at 214 [1986].” Williams
v. Precision Coil, Inc., 194 W. Va. 52, 60, 459 S.E.2d 329, 337 (1995).
Reviewing the record, we conclude that the circuit court appropriately found that
petitioner’s complaint failed to present a genuine issue for trial. We have long held that the State
and its agencies are entitled to the benefit of sovereign immunity pursuant to Article VI, § 35 of
the Constitution, which provides that “[t]he State of West Virginia shall never be made
defendant in any court of law or equity[.]” Consistent with the circuit court’s final order, this
Court has held that this constitutional immunity “can not be waived by the Legislature or any
other instrumentality of the State.” Skaff v. Pridemore, 200 W. Va. 700, 705, 490 S.E.2d 787,
792 (1997). However, “[s]uits which seek no recovery from state funds, but rather allege that
recovery is sought under and up to the limits of the State’s liability insurance coverage, fall
outside the traditional constitutional bar to suits against the State.” Syl. Pt. 2, Pittsburgh Elevator
Co. v. W. Va. Bd. of Regents, 172 W. Va. 743, 310 S.E.2d 675 (1983).
Citing West Virginia Code § 29-12-1, the circuit court found that “[t]he Legislature
created the State Board of Risk and Insurance Management (hereinafter ‘BRIM’) to purchase
and oversee the State’s liability insurance.” Further, referencing precedent from this Court, the
circuit court addressed the latitude vested in BRIM by the Legislature to fix both the scope of
coverage and contractual exceptions to that coverage.4 Specifically, the circuit court’s order
provided:
“The Legislature has also vested in [BRIM] considerable latitude to fix the scope
of coverage and contractual exceptions to that coverage by regulation or by
negotiation of the terms of particular applicable insurance policies.” Syl. Pt. 4, in
part, Parkulo v. West Virginia Bd. of Prob. and Parole, 199 W. Va. 161, 483
S.E.2d 507 (1996). West Virginia Code § 29-12-5 specifically provides that
BRIM has “without limitation and in its discretion as it deems necessary for the
benefit of the insurance program, general supervision and control over the
insurance of state property, activities and responsibilities. . .” Thus BRIM “is not
4
On appeal, petitioner argues that BRIM violated its legislative mandate and exceeded its
authority in procuring the breach of contract exclusion, thus rendering the exclusion void. Based
upon the record, it does not appear that petitioner argued to the circuit court that the breach of
contract exclusion in the DHHR’s policy was against public policy or that BRIM exceeded its
authority. Instead, petitioner argued that the breach of contract exclusion was invalid because
BRIM violated its mandate when it procured the breach of contract exclusion. Although we need
not consider this argument which was not raised below, we note that petitioner’s argument is
contrary to the express discretion afforded to BRIM by the Legislature.
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required to provide insurance for every state property, activity or responsibility”
and nothing bars the State or its agencies from relying on its constitutional
immunity “against claims or suits arising from or out of any state property,
activity or responsibility not covered by a policy or policies of insurance.” W.Va.
Code § 29-12-5.
The Supreme Court of Appeals of West Virginia has made it clear that
“[l]anguage in an insurance policy should be given its plain, ordinary meaning.”
Syl. Pt. 5, Bland v. State, 230 W. Va. 263, 737 S.E.2d 291 (2012)(quoting Syl. Pt.
1, Soliva v. Shand, Morahan & Co., Inc., 176 W. Va. 430, 345 S.E.2d 33 (1986),
overruled on other grounds by National Mut. Ins. Co. v. McMahon & Sons, 177
W. Va. 734, 356 S.E.2d 488 (1987)). Moreover, “[w]here the provisions of an
insurance policy contract are clear and unambiguous they are not subject to
judicial construction or interpretation, but full effect will be given to the plain
meaning intended.” Id. at Syl. Pt. 6 (quoting Syl. Pt., Keffer v. Prudential Ins. Co.,
153 W. Va. 813, 172 S.E.2d 714 (1970)).
Plaintiff’s Second Amended Complaint asserts claims of (1) breach of contract
and (2) promissory estoppel which are based upon and attributable to DHHR’s
alleged breach of the terms of the Agreement. DHHR’s insurance policy in effect
at the time of the alleged breach of the Agreement and alleged detrimental
reliance provided liability insurance for any “Wrongful Act” of the “insured”.
“Wrongful Act” is defined under the applicable insurance policy as “any actual or
alleged act, breach of duty, neglect, error, misstatement, misleading statement or
omission by the ‘insured(s)’ in the scope of duties for the ‘Named Insured.’” In
this case, the Named Insured is DHHR. However, the applicable insurance policy
includes a clear an[d] unambiguous exclusion of coverage “[t]o any claim(s)
based upon or attributable to any allegations or claims that the “insured” breached
the terms of any type or any form of contract, either express or implied, written or
oral.” WHEREFORE, for good cause shown, it is hereby ORDERED,
ADJUDGED, and DECREED that Plaintiff’s claims of (1) breach of contract and
(2) promissory estoppel are hereby DISMISSED, because DHHR is entitled to the
benefit of sovereign immunity since there is no insurance coverage on these
claims.
Further, the circuit court did not err in determining that petitioner’s claims were barred by
the doctrine of qualified immunity. In a recent decision we noted:
Several principles of law guide our resolution of the qualified immunity issue in
this case. To begin, as a general matter “[q]ualified immunity is an immunity
afforded to government agencies, officials, and/or employees for discretionary
activities performed in an official capacity.” Maston v. Wagner, 236 W.Va. 488,
499, 781 S.E.2d 936, 947 (2015). We have held that
In the absence of an insurance contract waiving the defense, the doctrine
of qualified or official immunity bars a claim of mere negligence against a
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State agency not within the purview of the West Virginia Governmental
Tort Claims and Insurance Reform Act, W. Va. Code § 29–12A–1, et seq.,
and against an officer of that department acting within the scope of his or
her employment, with respect to the discretionary judgments, decisions,
and actions of the officer.
Syl. pt. 6, Clark v. Dunn, 195 W. Va. 272, 465 S.E.2d 374 (1995). This Court has
also stated that
[t]o determine whether the State, its agencies, officials, and/or employees
are entitled to immunity, a reviewing court must first identify the nature of
the governmental acts or omissions which give rise to the suit for purposes
of determining whether such acts or omissions constitute legislative,
judicial, executive or administrative policy-making acts or involve
otherwise discretionary governmental functions.
Syl. pt. 10, in part, W. Virginia Reg’l Jail & Corr. Facility Auth. v. A.B., 234 W.
Va. 492, 766 S.E.2d 751 (2014). Additionally, we have indicated that,
To the extent that governmental acts or omissions which give rise to a
cause of action fall within the category of discretionary functions, a
reviewing court must determine whether the plaintiff has demonstrated
that such acts or omissions are in violation of clearly established statutory
or constitutional rights or laws of which a reasonable person would have
known or are otherwise fraudulent, malicious, or oppressive in accordance
with State v. Chase Securities, Inc., 188 W. Va. 356, 424 S.E.2d 591
(1992). In absence of such a showing, both the State and its officials or
employees charged with such acts or omissions are immune from liability.
Syl. pt. 11, W. Virginia Reg’l Jail, 234 W. Va. 492, 766 S.E.2d 751.
Goodwin v. Bd. of Educ. of Fayette Cty., 242 W. Va. 322, , 835 S.E.2d 566, 573-74 (2019).
The circuit court applied established jurisprudence from this Court in finding that the
DHHR was entitled to qualified immunity. To that end, the circuit court found that neither party
disputed that the DHHR had discretion as to when to utilize petitioner’s services, where the
Master Agreement specifically referenced that petitioner could be used “on an as needed basis.”
Further, the circuit court found that petitioner had failed to establish any statutory or
constitutional right that the DHHR violated with respect to him and that he further failed to offer
evidence that the DHHR’s actions were fraudulent, malicious, or oppressive as they related to
him.
Finally, the circuit court appropriately ruled that petitioner cannot maintain a claim of
promissory estoppel against the DHHR. As it relates to petitioner’s claims of promissory
estoppel, the circuit court relied upon jurisprudence from this Court where we announced that
“promissory estoppel per se cannot be urged against the State when functioning in its
governmental capacity.” Pryor v. Gainor, 177 W. Va. 218, 224 n.7, 351 S.E.2d 404, 410 n.7
7
(1986). Moreover, the circuit court ruled that Endorsement #5 of the DHHR’s policy
unambiguously provides that there is no coverage for individuals, like petitioner, who seek
equitable relief under the policy.
Applying a de novo review to the facts, we conclude that the circuit court did not err in
dismissing petitioner’s complaint. For the foregoing reasons, we affirm.
Affirmed.
ISSUED: June 18, 2020
CONCURRED IN BY:
Chief Justice Tim Armstead
Justice Margaret L. Workman
Justice Elizabeth D. Walker
Justice Evan H. Jenkins
Justice John A. Hutchison
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