Appendix — Allstate Insurance v. Karl
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>| Supreme Court, U.S.
FILED
93120 0 JAN 2 6 1998
ee oo ee ee
IN THE
Supreme Court of the Gnited States
OCTOBER TERM, 1993
ALLSTATE INSURANCE COMPANY,
AN ILLINOIS CORPORATION,
Petitioner,
Vv.
Hon. MARK A. KARL, JUDGE OF THE
CIRCUIT COURT FOR MARSHALL CouNTy, WEST VIRGINIA,
Respondent.
Petition For Writ Of Certiorari To The
Supreme Court Of Appeals Of West Virginia
APPENDIX
PauL B. WEISS
Counsel of Record
and
WALTER M. Jones, III
MARTIN & SEIBERT, L.C.
119 South College Street
P.O. Box 1286
Martinsburg, WV 25401
(304) 267-8985
PRESS OF BYRON S. ADAMS, WASHINGTON, D.C. (202) 347-8203
TABLE OF CONTENTS
Tab "A" Opinion & Order, Supreme
Court of Appeals of West
Virginia, State of West Virginia
ex. rel. Allstate Ins. Co. v.
Karl, et al., No. 21818, October
see coh eee ow 6 6 0 8 wee |
Tab "B" Plaintiff's Motion For Single
Answer, Carr v. Brooks, Circuit
Court for Marshall County,
West Virginia, No. 93-C-72-K,
EE 27
Tab "C" Motion to Strike Affirmative
Defenses First Through Seventh
and Fourteenth And Motion for
Sanctions, Carr v. Brooks,
Circuit Court for Marshall
County, West Virginia, No. 93-
C-72-K, March 23, 1993 ........... 30
Tab "D" Motion For Allstate Insurance
Company to Make an Election
Pursuant to W. Va. Code § 33-
6-31(d), Carr v. Brooks,
Circuit Court for Marshall
County, West Virginia, No. 93-
Cec ee ee eee 40
Tab "E" Motion for Protective Order,
Carr v. Brooks, Circuit Court
for Marshall County, West
Virginia, No. 93-C-72-K,
etree toe od bes 4 6 43
Tab "F" Order Granting in Part and
Denying In Part the Foregoing
Motions, Carr vv. Brooks,
Circuit Court for Marshali
County, West Virginia, No. 93-
C-72-K, Jume Ge, Wee «cence ceeeeee 47
Tab "G" Petition for Writ of Prohibition,
Allstate Ins. Co. v. Karl,
Supreme Court of Appeals of
West Virginia, No. 21818, June
29, 19S ow. cect eee ee eee 53
Tab "H" Plaintiff's Memo in Opposition
to Provisional Rule, Allstate Ins.
Co. v. Karl, Supreme Court of
Appeals of West Virginia, No.
21818, September 7, 1993 ....... an oe
Tab "I" Consolidated Opposition of
Allstate Insurance Company to
Plaintiff's Motion for Single
Answer, Motion for Allstate
Insurance Company to Make an
Election Pursuant to W. Va.
Code § 33-6-11, Motion for
Protective Order and Motion to
Stnke Various Affirmative
Defenses and For Sanctions,
Carr v. Brooks, Circuit Court
for Marshall County, West
Virginia, No. 93-C-72-K, April
cM 161
APPENDIX, TAB **A”’
IN THE SUPREME COURT OF APPEALS
OF WEST VIRGINIA
September 1993 Term
» aye r -
Bi sad seed meaty Kore No. 21818
eS Nori ey we em es STATE OF WEST VIRGINIA EX REL.
Bit atte Sate 2 bce Shs cae. ALLSTATE INSURANCE COMPANY,
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Fs ene cD Mal Se, Teas eek HONORABLE MARK A. KARL, JUDGE OF THE
SG Ne CHIL, © Gy Say Ao | i Me: CIRCUIT COURT OF MARSHALL COUNTY;
nor uo rat oe Me en | ja JAMIE LYNN BROOKS; JAMES E. BROOKS;
Peary eae key 3 hee AND NAOMI CARR,
iy sng Bie eS BARRA | a Respondents
e
«¥ Vad - ay
ak sau aie ey. Se
a ae " ™
Ag ae ee 5 of ‘
Sie oe * a
A r, -F Ag? val
as | ak Petition for Writ of Prohibition
“aa 24
got , | Lp WRIT DENIED
Submitted: September 14, 1993
Filed: October 29, 1993
Walter M. Jones, III
Paul B. Weiss
Martin & Seibert
Martinsburg, West Virginia
Attorneys for Relator
Larry W. Blalock Robert P. Fitzsimmons
Lucinda L. Fluharty Fitzsimmons & Associates
Jackson & Kelly Wheeling, West Virginia
New Martinsville, West G. Charles Hughes
Virginia : Moundsville, West
Attorneys for Respondents Virginia
Jamie Lynn Brooks and James Attorneys for Respondent
E. Brooks Naomi Carr
JUSTICE MILLER delivered the opinion of the Court.
Appendix Page 2
SYLLABUS BY THE COURT
l. The prohibition standard set out in
Syllabus Point 1 of Hinkle v. Black, 164 W. Va. 112, 262
S.E.2d 744 (1979), permits an original prohibition proceeding
in this Court to correct substantial legal errors where the facts
are undisputed and resolution of the errors is critical to the
proper disposition of the case, thereby conserving costs to the
parties and economizing judicial resources.
2. “W.Va. Code, 33-6-31(b), as amended,
on uninsured and underinsured motorist coverage,
contemplates recovery, up to coverage limits, from one’s own
insurer, of full compensation for damages not compensated by .
a negligent tortfeasor who at the time of the accident was an
owner or operator of an uninsured or underinsured motor
vehicle. Accordingly, the amount of such tortfeasor’s motor
vehicle liability insurance coverage actually available to the
injured person in question is to be deducted from the total
amount of damages sustained by the injured person, and the
insurer providing underinsured motorist coverage is liable for
the remainder of the damages, but not to exceed the coverage
limits." Syllabus Point 4, State Automobile Mutual Insurance
Co, v. Youler, 183 W. Va. 556, 396 S.E.2d 737 (1990).
3. “W. Va. Code, 33-6-31(d) (1988), outlines certain
rights given to an uninsured/underinsured insurance carrier
where a tortfeasor who is uninsured or underinsured is sued
by a plaintiff. It requires that a copy of the complaint be
served upon
Appendix Page 3
the insurance carrier. It also allows the carrier ’the right to
file pleadings and to take other action allowable by law in the
name of the owner, or operator, or both, of the uninsured or
underinsured vehicle or in its own name.’" Syllabus Point 1,
WwW , W.
Va. , 432 S.E.2d 802 (1993).
4. An underinsured motorist carrier occupies
the position of an excess or additional insurer in regard to the
tortfeasor’s liability carrier, which is deemed to have the
primary coverage. Consequently, the tortfeasor’s liability
carrier, having primary coverage, should ordinarily control the
litigation on behalf of the tortfeasor insured.
m A primary insurance carrier has a duty to
act in good faith with respect to an excess or additional
insurance carrier when defending a claim on behalf of the
primary insurance carrier’s insured.
6. If an underinsured motorist carrier can
demonstrate that the liability insurance carrier of the tortfeasor
is defending the claim in a bad faith manner, the underinsured
motorist carrier may petition the court to allow it to assume
primary control of the defense.
Appendix Page 4
¥ "A consent-to-settle provision of an
automobile insurance policy pertaining to underinsured
motorist coverage whereby an insured voids his
underinsurance coverage by settling a claim with a tortfeasor
without first obtaining the insurer’s written consent when such
claim involves either the insured’s underinsurance coverage or
potentially involves that coverage is a valid and enforceable
means by which an insurer may protect its statutorily-
mandated right to subrogate claims pursuant to West Virginia
Code § 33-6-31(f) (1992)." Syllabus Point 3, Arndt _v.
Burdette, W. Va. , 434 S.E.2d 394 (1993).
8. An underinsured motorist carrier may
assume control of the litigation on behalf of the tortfeasor
where the tortfeasor’s liability carrier has declined to defend.
An underinsured motorist carrier is not foreclosed from filing
an answer on behalf of the tortfeasor when it appears that a
default judgment might be entered against the tortfeasor.
9. A liability carrier and an underinsured motorist
carrier may agree to jointly defend an action by having their
respeciive attorneys participate together in the defense. This
does noi mean that they may file separate pleadings, indulge
in separate discovery, or examine witnesses separately.
10. "’"Subrogation, being a creation of
equity, will not be allowed except where the subrogee has a
clear case of right and
ill
Appendix Page 5
no injustice will be done to another." Syllabus, Buskirk v.
State-Planters’ Bank & Trust Co., 113 W. Va. 764, 169 S.E.
738 (1933).’ Syllabus point 6,
Fuller v. Stonewall Cas, Co.
of W. Va., 172 W. Va. 193, 304 S.E.2d 347 (1983)."
Syllabus Point 2, Kittle v. Icard, 185 W. Va. 126, 405 S.E.2d
456 (1991).
11. The right of subrogation in W. Va. Code,
33-6-31(f) (1988), is not available where the policyholder has
not been fully compensated for the injuries received and still
has the right to recover from other sources. Subrogation is
permitted only to the extent necessary to avoid a double
recovery by such policyholder.
12. An underinsured motorist carrier does not
have a due process right to assume independent control of the
defense of a tortfeasor who is represented by a liability
Carrier.
13. W. Va. Code, 33-6-31(d) (1988), does not
give an underinsured motorist carrier the absolute right to file
pleadings on behalf of a tortfeasor who has liability coverage
and is being defended by a liability insurance carrier.
14. The language of W. Va. Code, 33-6-31(d) (1988),
that allows an uninsured or underinsured motorist carrier to
answer a complaint in its own name is primarily designed to
enable the carrier to raise policy defenses it may have against
the plaintiff under its uninsured or underinsured policy.
iV
Appendix Page 6
Miller, Justice:
We granted this original proceeding in prohibition
in order to resolve certain procedural issues with regard to
uninsured and underinsured motorist coverage. The basic
facts are not in dispute, and the case involves critical legal
questions that will substantially impact the underlying civil
litigation. Thus, the issues fall within the prohibition _
set out in Syllabus Point 1 of Hinkle v. Black, 164 W. Va.
112, 262 S.E.2d 744 (1979),' which permits an original
prohibition proceeding in this Court to correct substantial legal
errors where the facts are undisputed and resolution of the
errors is critical to the proper disposition of the case, thereby
conserving costs to the parties and economizing judicial
resources.
‘Syllabus Point 1 of Hinkle states:
"In determining whether to grant a ry to onsen
ibition when a court is not acting in excess of its jurisdiction,
aaa the adequacy of other available remedies such as appeal
and to the over-all economy of effort and money among litigants, lawyers
and courts; however, this Court will use prohibition in this discretionary
way to correct only substantial, clear-cut, legal errors plainly in
contravention of a clear statutory, constitutional, or common law _—
which may be resolved independently of any disputed facts and 7 2
cases where there is a high probability that the trial will be completely
reversed if the error is not corrected in advance.”
Appendix Page 7
OO
I.
The relator, Allstate Insurance Company
(Allstate), issued an automobile insurance policy with
uninsured and underinsured motorist coverage to David A.
Carr. The policy also covered Naomi J. Carr, who was his
mother, as a member of his household. Ms. Carr was injured
while walking across a public street in Moundsville.2. She was
struck by an automobile operated by Jamie Lynn Brooks and
owned by James E. Brooks, her father. The Brooks policy
provided for liability coverage in the amount of $250,000 with
State Automobile Mutual Insurance Company (State Auto).
The claim could not be settled, and Ms. Carr filed suit
against the Brookses in the Circuit Court of Marshall County
in February of 1993. A copy of the suit papers was also sent
to Allstate pursuant to the provisions of W. Va. Code, 33-6-
31(d) (1988). This section requires an insured who sues for
damages arising from a motor vehicle accident and who
desires to recover under the uninsured or underinsured
provisions of their insurance policy to "cause a copy of the
summons and a copy of the complaint to be served upon the
insurance company . . . in the manner prescribed by law[.]”
"The parties do not dispute that Ms. Carr, as a pedestrian, was
covered as an additional insured as a member of the household under her
son’s automobile liability policy, which contained underinsured motorist
coverage.
"The complete text of W. Va. Code, 33-6-31(d), states:
(continued. . .)
Appendix Page 8
te
After receipt of the complaint, Allstate filed an
answer which raised several defenses on behalf of the
Brookses. It also issued interrogatories against Ms. Carr and
requests for production of documents. — An answer was also
filed by State Auto, the liability carrier for the Brookses.
State Auto also filed interrogatories and requests for
production of documents. A number of the requests by State
Auto overlapped with Allstate’s requests.*
Ms. Carr’s attorneys then moved to restrict the
participation by both Allstate and State Auto on behalf of
(. . . continued)
"Any insured intending to rely on the coverage
required by subsection (b) of this section [providing for
uninsured and underinsured motorist coverage] shall, if any
action be instituted against the owner or operator of an
uninsured or underinsured motor vehicle, cause a copy of the
summons and a copy of the complaint to be served upon the
insurance company issuing the policy, in the manner
prescribed by law, as though such insurance company were a
named party defendant; such company shall thereafter have the
right to file pleadings and to take other action allowable by
law in the name of the owner, or operator, or both, of the
uninsured or underinsured motor vehicle or in its own name.
"Nothing in this subsection shall prevent such owner
or operator from employing counsel of his own choice and
taking any action in his own interest in connection with such
proceeding.”
This provision applies only where the uninsured files suit against the
tortfeasor.
‘State Auto’s discovery requests covered approximately 260 items
Appendix Page 9
the Brookses. The trial court, after hearing arguments and
receiving briefs, by its June 11, 1993 order determined that a
unified defense was warranted and required Allstate and State
Auto to file a single answer on behalf of the Brookses. It
required Allstate, the underinsured motorist carrier, to elect
whether it would intervene in the case in its own right or
merely in the name of the Brookses.
The trial court also ruled that the plaintiff need
not answer Allstate’s discovery requests and that State Auto’s
discovery would control. It also granted Ms. Carr’s motion
to strike certain defenses asserted by Allstate in its answer on
behalf of the Brookses, finding those defenses to be without
merit.° Following the entry of this order, Allstate filed a
petition for a writ of prohibition with this Court claiming
statutory and due process violations.
II.
Before we address the relator’s claims, it is useful
to outline some of the salient features of our uninsured and
underinsured insurance law. Its statutory provisions are
contained in W. Va. Code, 33-6-31. We recognized in State
"The defenses asserted by Allstate included a lack of subject matter
jurisdiction, lack of personal jurisdiction, improper venue, and
insufficiency of service of process. We decline to address the validity of
this ruling in light of our holding that the trial court was correct in ruling
that a single answer on behalf of the Brookses was proper.
4
Appendix Page 10
, 183 W. Va.
Automobile Mutual Insurance Co, v, Youler
556, 396 S.E.2d 737 (1990), that the purpose of our statutory
requirement that insurers offer uninsured and underinsured
protection in motor vehicle liability policies is to protect an
injured insured when the defendant tortfeasor has either no
liability insurance coverage (uninsured) or has inadequate
liability coverage (underinsured). We summarized the
statutory provisions contained in W. Va. Code,
33-6-31(b), in Syllabus Point 4 of Youler:
"W. Va. Code, 33-6-31(b), as amended, on uninsured
and underinsured motorist coverage, contemplates recovery,
up to coverage limits, from one’s own insurer, of full
compensation for damages not compensated by a negligent
tortfeasor who at the time of the accident was an owner or
operator of an uninsured or underinsured motor vehicle.
Accordingly, the amount of such tortfeasor’s motor vehicle
liability insurance coverage actually available to the injured
person in question is to be deducted from the total amount of
damages sustained by the injured person, and the insurer
providing underinsured motorist coverage is liable for the
remainder of the damages, but not to exceed the coverage
limits.”
See also Pristavec v. Westfield Ins. Co., 184 W. Va. 331,
400 S.E.2d 575 (1990).
Recently, in Syllabus Point | of Postlethwait v.
Boston Old Colony Insurance Co., Ss W. Va.____, 432
S.E.2d 802 (1993), we outlined the procedural mechanism
under W. Va. Code, 33-6-31(d), that a plaintiff must follow
to give an uninsured or underinsured carrier notice of the
litigation:
Appendix Page |1
"W. Va. Code, 33-6-31(d) (1988), outlines certain
nghts given to an uninsured/underinsured insurance carner
where a tortfeasor who 1s uninsured or underinsured 1s sued
by a plaintiff. It requires that a copy of the complaint be
served upon the insurance carrer. It also allows the carner
‘the nght to file pleadings and to take other action allowable
by law in the name of the owner, or operator, or both, of the
uninsured or underinsured vehicle or in its own name.’”
What is at issue here is the proper relationship
between the tortfeasor’s liability carner and the plaintiff's own
insurance carrier, who provides the underinsured motorist
coverage, when litigation arises. We are not cited nor have
we found a published opinion that deals with the issues raised
in this case.°
*Allstate submits an unpublished opimon by the Intermediate Court
of Appeals of Tennessee, Fyke v. Clark, 1989 WL 146736 (Tenn. App.).
It would appear in Tennessee that an unpublished opinion “has no
precedential value except to the parties in the case{. |" Patton v. McHone,
822 S.W.2d 608, 615 n.10 (Tenn. App. 1991). If it did have precedential
value in Tennessee, we would have to determine under principles of comity
whether we could give it precedential value. Even if we were to consider
this opinion, it is clear that the issue raised therein was only whether the
trial court erred in precluding the liability insurance carrier and the
undennsured carner from conducting a joint defense when they represented
"that there would be no promotion of any interest, separate or
additional from the named defendant's interest, nor attempt at
any separate or additional cross-examunation of witnesses, but
also it was made clear that the named defendant expressly
consented and agreed that counsel for the underinsured
motonst carner work together with her attorney in presenting
the defense on her behalf and in her name before the jury.”
1989 WL 146736 at 2.
(continued. . .)
Appendix Page 12
| . The parties acknowledge that each carrier has an
interest in the case through its respective exposure to an
adverse award of damages.’ Under our statutory scheme, the
role of an underinsured carrier is analogous to that of a
secondary of excess carrier."
We dealt with a related issue in Allstate Insurance
178 W. Va.
Co. v. State Automobile Mutual Insurance Co.,
704, 364 §.E.2d 30 (1987), where State Auto insured a
vehicle that the owner allowed a friend to operate. In the
course of operating the
*(. . . continued)
For the reasons set out in Part III, infra, we have approved such an
arrangement. See Syllabus Point 9, supra.
"Where the tortfeasor has no liability coverage, the plaintiff's
uninsured motonst carner would be the only insurance carner exposed to
the plaintiff's liability claim. In most instances, the uninsured carrier
would then control the defense. We recognize that W. Va. Code, 33-6-
31(d), contains this proviso: “Nothing in this subsection shall prevent such
= poly ary from employing counsel of his own choice and taking
action in own interest in
Ag connection with such proceeding. ° See
§ 28.14 (1992). Certainly, if the uninsured carrier is acting in bad faith
SES ES, Ce EET ORIN SY SE OO
"The role of an excess carrier is summarized in Section 4682 of 7C
J. Appeiman, Insurance Law and Practice (1979 & Supp. 1992):
| “Excess imsurance is routinely written in the insurance
industry with the expectation that the pnmary insurer will conduct
all of the investigation, negotiation and defense of claims until its
limits are exhausted . . . . Thus, the primary insurer acts as a sort
of deductible and the excess insurer does not expect to be called
upon to assist in these details.”
;
Appendix Page 13
vehicle, the friend injured the plaintiff. The friend also had
insurance through Allstate that provided coverage if its insured
operated another vehicle. We found that both coverages
applied, but concluded that the “bright-line rule of law [is]
that the primary obligation to defend and indemnify follows
the automobile, rather than the driver[{.]" 178 W. Va. at 707,
364 S.E.2d at 33.’
In the underinsured motorist context, our cases
Suggest that the primary duty to defend rests with the
tortfeasor’s liability carrier. Although we have not had
occasion to express this precise point in a Syllabus, it is
implicit in Youler, supra, and the cases that followed it that
this principle was at the heart of the discussion. See generally
Annot., 24 A.L.R.4th 13 (1983). The primary duty of the
tortfeasor’s liability carrier to defend is impliedly recognized
in the last sentence of subsection (b) of W. Va. Code, 33-6-
31, that states: “No sums payable as a result of underinsured
motorists’ coverage shall be reduced by payments made under
the insured’s policy or any other policy." This sentence was
added in 1988 and precludes an underinsured carrier from
setting off payments made by the liability carrier against the
amounts due under the underinsurance coverage.
*The Court's discussion in Allstate, supra, centered on the fact that
both policies contained pro-rata and excess coverage language that could
not be reconciled. We stated in Syllabus Point |: “We adopt the rule that
when a pro-rata clause and an excess clause appear in the automobile
lability policies of both the driver and the owner of an automobile, the
insurer of the owner is primarily liable and must bear the whole loss,
within the limits of the policy.”
Appendix Page 14
ee ne
\
We conclude that the legislature, by precluding a
set-off by the underinsured carrier intended that the liability
carrier’s payment serve as the initial layer of damage
recovery. It follows that the underinsured carrier’s limits are
then additional] coverage. We believe that the language in W.
Va. Code, 33-6-31(b), forbidding a set-off, indicates a
legislative intent to make the liability carrier the primary
coverage carrier, and the underinsured carrier the excess or
additional coverage carrier.
The Louisiana Supreme Court in Bond vy.
Commercial Union Assurance Co., 407 So. 2d 401, 410
(1981), explicitly recognized the relationship between the
underinsured carrier and the liability carrier for the tortfeasor
as an additional or excess insured when it stated:
"Accordingly, the object of the uninsured motorist statute, as
amended, is to promote full recovery for damages by innocent
automobile accident victims by making uninsured motorist
coverage available for their benefit as primary protection when
the tortfeasor is without insurance and as additional or excess
coverage when he is inadequately insured.” (Citations
omutted).
We, therefore, conclude that an underinsured motorist carrier
occupies the position of an excess or additional insurer in
regard to the tortfeasor’s liability carrier, which is deemed to
have the primary coverage. Consequently, the tortfeasor’s
liability carrier, having primary coverage, should ordinarily
control the litigation on behalf of the tortfeasor insured.
9
Appendix Page 15
This does not mean that an excess carrier, such as
an underinsured carrier, is without protection against either
collusion between the plaintiff and the liability carrier or
negligent handling of the defense. It is generally
acknowledged that a primary insurance carrier has a duty to
act in good faith with respect to an excess or additional
insurance carrier when defending a claim on behalf of the
primary insurance carrier’s insured. See, e.g., Valentine v.
Aetna Ins, Co., 564 F.2d 292 (9th Cir. 1977); American
190 F.2d
Fidelity & Cas. Co, v., All Am. Bus Lines, Inc.,
234 (10th Cir.), cert. denied, 342 U.S. 851, 72 S. Ct. 79, 96
L. Ed. 642 (1951); Allstate Ins. Co. v. Reserve Ins, Co., 116
N.H. 806, 373 A.2d 339 (1976) ; Home Ins, Co. v. Royal
Indem. Co., 68 Misc. 2d 737, 327 N.Y.S.2d 745, aff'd, 39
A.D.2d 768, 332 N.Y.S.2d 1003 (1972); Centennial Ins. Co.
v. Liberty Mut. Ins. Co.., 62 Ohio St. 2d 221, 404 N.E.2d
759 (1980). We therefore apply the foregoing principle to
underinsured motorist carriers to the extent that if an
underinsured motorist carrier can demonstrate that the liability
insurance carrier of the tortfeasor is defending the claim in a
bad faith manner, the underinsured motorist carrier may
petition the court to allow it to assume primary control of the
defense.
We recently recognized another protection
afforded to an underinsured carrier in Arndt v. Burdette,
W. Va. , 434 S.E.2d 394 (1993). There, we
stated in Syllabus Poi Point 3 that if the underinsured carrier’s
policy has a “consent-to-settle”
10
Appendix Page 16
provision, the underinsured carrier must consent to the
plaintiff's settlement with the tortfeasor’s liability carrier:
"A consent-to-settle provision of an automobile
insurance policy pertaining to underinsured motorist coverage
whereby an insured voids his underinsurance coverage by
settling a claim with « tortfeasor without first obtaining the
insurer’s written consent when such claim involves either the
insured’s underinsurance coverage or potentially involves that
coverage is a valid and enforceable means by which an insurer
may protect its statutorily-mandated right to subrogate claims
pursuant to West Virginia Code § 33-6-31(f) (1992).*"°
The consent-to-settle language in an underinsured
policy is common, and, as we indicated in the foregoing
Syllabus, it protects the insurer’s statutory subrogation right.
However, it is also designed to foreclose a collusive settlement
between the plaintiff and the tortfeasor’s liability carrier. See
generally 2 Widiss, Uninsured and Underinsured Motorist
Coverage § 17.2 (1992).
In addition to_the foregoing protections afforded
an underinsured carrier, it is clear that such a carrier may
assume control of the litigation on behalf of the tortfeasor
where the tortfeasor’s liability carrier has declined to defend.
Moreover, an underinsured motorist carrier is not foreclosed
from filing an
‘However, as we recognized in note 10 of Amdt v. Burdette,
W. Va. at , 434 S.E.2d at 400: “It is important to note that if an
insurer acts unreasonably in refusing to give written consent to settle, that
insurer may be subjecting itself to a bad faith claim pursuant to this
Court’s holding in Shamblin v. Nationwide Mutual Insurance Co., 183 W.
Va. 585, 396 S.E.2d 766 (1990)."
ll
Appendix Page 17
answer on behalf of the tortfeasor when it appears that a
default judgment might be entered against the tortfeasor."!
Finally, we find that a liability carrier and an
underinsured motorist carrier may agree to jointly defend an
action by having their respective attorneys participate together
in the defense. This does not mean that they may file separate
pleadings, indulge in separate discovery, or examine witnesses
separately.
Ina related matter, we also recognize that W. Va.
Code, 33-6-31(f), gives a right of subrogation as follows:
"An insurer paying a claim under the endorsement or
provisions required by subsection (b) of this section shall be
subrogated to the mght of the insured to whom such claim was
pid against the person causing such injury, death or damage
t» the extent that payment was made."
While this right of subrogation can be waived by the
uninsured or underinsured carrier, we do not believe such
carrier can be forced to waive its subrogation rights by the
threat of a tortfeasor’s liability carrier to withhold settlement
of the claim. The primary liability carrier of the tortfeasor
has a duty to deal in good faith both with its insured and with
the underinsured carrier, and may subject itself to a bad faith
suit by making such a demand and
Prudence would dictate that the underinsured carrier first contact
plaintiff's counsel to determine if an extension of time to answer had been
granted.
12
Appendix Page 18
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refusing to settle if such demand is not met. See Shamblin
yv. Nationwide Mut, Ins. Co., 183 W. Va. 585, 396 S.E.2d
766 (1990).
We have recognized that subrogation is an
equitable doctrine, stating in Syllabus Point 2 of Kittle v.
Icard, 185 W. Va. 126, 405 S.E.2d 456 (1991):
"**"Subrogation, being a creation of equity, will not be
allowed except where the subrogee has a clear case of right
and no injustice will be done to another.” Syllabus, Buskirk v.
State-Planters’ Bank & Trust Co., 113 W. Va. 764, 169 S.E.
738 (1933).” Syllabus point 6, Fuller v. Stonewall Cas. Co. of
W. Va., 172 W. Va. 193, 304 S.E.2d 347 (1983)."
Other jurisdictions have specifically dealt with the right
of subrogation in an uninsured or underinsured motorist
context. In these cases, the right of subrogation existed either
by virtue of ianguage in the insurance policy or by virtue of
a Statute similar to W. Va. Code, 33-6-31(f). The general
rule is summarized in 2 A. Widiss, Uninsured and
Underinsured Motorist Insurance § 19.6 at 124:
“Courts in a substantial number of states have
concluded that the terms of a subrogation or trust provision
are not enforceable when the insured has not been fully
indemnified; consequently, an attempt by an insurance
company to secure proceeds of a recovery from a third party -
- such as the uninsured motorist or a party who is jointly
liable--is appropriately denied when the damages sustained by
an insured have not been completely compensated."
13
Appendix Page 19
See, e.g., White v. Nationwide Mut. Ins. Co,, 361 F.2d 785
(4th Cir. 1966) (Virginia law - statute); Alabama Farm Bureau
Mut. Cas. Ins, Co, v. Humphrey, 54 Ala. App. 343, 308 So.
2d 255 (1975) (policy); Government Employees Ins, Co, v.
Oliver, 192 Cal. App. 3d 12, 237 Cal. Rptr. 174 (1987)
(statute); Central Nat'l Ins. Group v. Hotte, 312 So. 2d 235
(Fla. App. 1975) es Thatcher v, Eichelberger, 102 Ill.
App. 3d 231, 57 Ill. . 816, 429 N.E.2d 1090 (1981)
(statute); edith tench oy bows sige og supra
(statute); Michigan Mut. Ins. Co. v. Shaheen, 101 Mich.
App. 761, 300 N.W.2d 599 (1980) (policy); Milbank Mut.
Ins. Co. v. Kluver, 302 Minn. 310, 225 N.W.2d 230 (1974)
(statute); Dunham v. State Farm Mut. Auto. Ins. Co., 366 So.
2d 668 (Miss. 1979) (statute); McGhee v, Charley’s Other
Brother, 161 N.J. Super. 551, 391 A.2d 1289 (Law Div.
1978), aff'd sub nom. Mozee v. McGhee, 171 N.J. Super.
454, 410 A.2d 46 (1979) (policy); Walls v. City of
Pittsburgh, 292 Pa. Super. 18, 436 A.2d 698 (1981) (statute);
Lombardi v. Merchants Mut. Ins. Co., 429 A.2d 1290 (R.I.
1981) (policy).
The Supreme Court of Minnesota in Milbank
Mutual Insurance Co. v. Kluver, 302 Minn. at 315-16, 225
N.W.2d at 233, after examining its uninsured motorist statute,
came to this conclusion:
"We are persuaded by the rationale of these cases and
by our own analysis of the statute in question that the
uninsured motorist coverage statute should be construed to
mean that an uninsured-motonist liability carrier does not have
the nght to be subrogated to
14
Appendix Page 20
=~
ee ee ee nr ee eo
ee ee
oie r solic r olde 08s En 7" . rr 1). a
We agree with this anaiysis and conclude that the
right of subrogation in W. Va. Code, 33-6-31(f), is not
available where the policyholder has not been fully
compensated for the injuries received and still has the right to
recover from other sources. Subrogation is permitted only to
the extent necessary to avoid a double recovery by such
policyholder.
IV.
Allstate’s next claim is that if it is denied the right
to participate in this litigation, its constitutional due process
rights will be infringed. We are not cited nor have we found
any case where an underinsured or excess carrier has raised
a due process argument based on the premise of its inability
to proceed to fully represent the defendant tortfeasor.
In this type of litigation, the named defendant is
the tortfeasor. It is this party who has due process rights.
The underinsured carrier, if properly brought into a case, has
a duty under its contract and the language of W. Va. Code,
33-6-31(d), to afford coverage to the plaintiff and to pay up to
the policy limits on any judgment obtained against the
defendant not covered by the tortfeasor’s liability carrier. The
fact that the actual defense
15
Appendix Page 21
of the tortfeasor is conducted by his or her liability carrier
does not mean that the underinsured carrier’s rights are
sacrificed. The protections that we have afforded the
underinsured carrier in Part III of this opinion will further
protect that carrier’s rights. Thus, we conclude that an
underinsured motorist carrier does not have a due process
right to assume independent control of the defense of a
tortfeasor who is represented by a liability carrier.
The few cases which can be found relating to an
underinsured motorist carrier’s right to intervene do not allow
intervention as a matter of right nor do they express any due
process considerations. In Husfeldt v. Willmsen, 434 N.W.2d
480 (Minn. App. 1989), the court affirmed the trial court’s
decision denying intervention to the underinsured carrier. The
argument was advanced that the underinsured carrier would be
liable for any verdict in excess of the coverage afforded by the
tortfeasor’s liability carrier. The court rejected this argument,
Stating: "“[I]}t has not made a showing that its rights are not
being adequately represented by the existing parties. It made
a conclusory statement that its rights will be jeopardized, but
gave no specific facts or reasons why." 434 N.W.2d at 482-
83. ,
The Kansas Supreme Court in Haas v. Freeman, 236
Kan. 677, 693 P.2d 1199 (1985), determined that an
underinsured motorist carrier had the option to intervene, but
did not discuss what role
16
Appendix Page 22
ay 2
es
the carrier would play with regard to handling the litigation
with the tortfeasor’s liability carrier. See also Ramsey v.
Chism, 249 Kan. 299, 817 P.2d 198 (1991). The Haas court
relied on Tidmore v. Fullman, 646 P.2d 1278 (Okla. 1982),
which accorded the underinsured carrier the right to intervene,
but did not discuss the underinsured carrier’s role in the case
vis-a-vis the tortfeasor’s liability carrier. We do not find
these cases to be helpful since they do not analyze the issue
before us, i.e., the role to be played by the underinsured
carrier once litigation is commenced.
Nor do we find that the procedural language in
W. Va. Code, 33-6-31(d),"* allowing an uninsured/
underinsured carrier to file pleadings in its own name or on
behalf of the tortfeasor, see Postlethwait v. Boston Old
Colony Ins. Co., supra, enables the carrier to control the
defense on behalf of the tortfeasor or to conduct a separate
defense. It must be remembered that under W. Va. Code, 33-
6-31(d), a plaintiff files suit against a tortfeasor. If the
plaintiff desires to bring his or her uninsured or underinsured
coverage into play, a copy of the complaint must be
"The applicable portion of W. Va Code 33-6-31(d), is: “[S]uch
company shall thereafter have the right to file pleadings and to take other
action allowable by law in the name of the owner, or operator, or both, of
the uninsured or underinsured motor vehicle or in its own name."
17
Appendix Page 23
served on that carrier.'"? However, the uninsured or
underinsured carrier is not a named party in the complaint.
It must be remembered also that W. Va. Code,
33-6-31, now addresses both uninsured and underinsured
motorist coverages. Originally, W. Va. Code, 33-6-31(b) and
-31(d), addressed only uninsured motorist coverage. It was
not until 1982 that underinsured motorist coverage was added
to the purview of W. Va. Code, 33-6-31(b).'* Even though
the right to obtain underinsured motorist coverage was added
to subsection (b), the procedure outlined in W. Va. Code, 33-
6-31(d), still only included uninsured motorists and did not
refer to underinsured motorists. This oversight was not
corrected until 1988 when the term "underinsured" was placed
in W. Va. Code, 33-6-31(d).'
It is apparent from the foregoing legislative
history that the original purpose of W. Va. Code, 33-6-31(d),
was to protect the uninsured motorist carrier where the
tortfeasor had no liability coverage: In this situation, the
uninsured motorist carrier would be the only insurance carrier
liable. In the absence of more specific language, W. Va.
Code, 33-6-31(d), does not give an underinsured motorist
carrier the absolute right to file
"For the complete text of W. Va. Code, 33-6-31(d), see note 3,
supra.
“See 1982 W. Va. Acts ch. 106.
'SSee 1988 W. Va. Acts ch. 75.
18
Appendix Page 24
pleadings on behalf of a tortfeasor who has liability coverage
and is being defended by the liability insurance carrier.
Moreover, the language of W. Va. Code, 33-6-
31(d), that allows an uninsured or underinsured carrier to
answer a complaint in its own name is primarily designed to
enable the carrier to raise policy defenses it may have against
the plaintiff under its uninsured or underinsured policy. We
recognized a similar right on behalf of a plaintiff who sues a
tortfeasor and discovers that the tortfeasor’s carrier has denied
coverage in Christian v. Sizemore, 181 W. Va. 628, 383
~ §.E.2d 810 (1989). There, we held that a declaratory
judgment cause of action could be placed in the complaint for
personal injuries and that such an issue should be resolved
prior to submitting the liability issue to the jury." However,
we do not find that this right of the underinsured carrier to file
an answer in its own name was intended to give the
underinsured carrier the right to separately defend along with
the tortfeasor’s own carrier.'’
‘Syllabus Point 3 of Christian v. Sizemore, supra, states: “An
injured plaintiff may bring a declaratory judgment action against the
defendant's insurance carrier to determine if there is policy coverage for
obtaining a judgment against the defendant in the personal injury action
where the defendant's insurer has denied coverage. ©
"It is difficult to conceive of any other reason why an uninsured or
underinsured carrier would answer for the tortfeasor by filing the answer
in the insurance carrier's own name. If the carrier answered in its own
name, it could well waive its mght not to have insurance mentioned in the
tortfeasor’s liability case. See Davis v. Robertson, 175 W. Va. 364, 332
S.E.2d 819 (1985); Coffindaffer v. Coffindaffer, 161 W. Va. 557, 244
$.E.2d
(continued...)
19
Appendix Page 25
As an ancillary claim, Allstate asserts that the trial
court erred when it required Allstate to elect whether to file
an answer in its own name or to allow the tortfeasor’s liability
carrier to defend. However, we do not agree. The apparent
purpose of that requirement was to determine whether Allstate
intended to assert some policy defense in order to avoid
coverage under its underinsured policy.
Having determined that the Circuit Court of
Marshall County was correct in its ruling, we decline to issue
the writ of prohibition.
Writ denied.
(. . . continued)
338 (1978).
APPENDIX, TAB ‘‘B”’
aes Be a a a OT sali Mo) oR a ene
IN THE CIRCUIT COURT OF
MARSHALL COUNTY, WEST VIRGINIA
NORMA J. CARR,
Plaintiff,
CIVIL ACTION NO. 93-C-72 K
vs.
JAMIE LYNN BROOKS
and JAMES E. BROOKS
ll i i i
Defendants.
Now comes your plaintiff, Norma J. Carr, who hereby
moves for an order requiring the parties responding by and/or
on behalf of the defendants, Jamie Lynn Brooks and James E.
. bast Brooks, not be permitted to file an additional answer. As
| grounds for this motion, your plaintiff states and alleges as
? follows:
(1) This action involves personal injuries received by
+ 4 Norma J. Carr when she was struck by an automobile driven
| | by Jamie Lynn Brooks on October 17, 1991. Allstate
: Insurance Company was served with a copy of the Complaint
pursuant to the underinsurance statute in West Virginia,
namely, W. Va. Code § 33-6-31.
, | | | ) (2) On March 10, 1993, Walter M. Jones III. counsel
for Allstate Insurance Company, filed an Answer to the
Ppt 4 Complaint.
Appendix Page 27
(3) On March 19, 1993, Jamie Lynn Brooks and James
E. Brooks appeared by their counsel, Don M. Kresen, of the
law firm of Jackson & Kelly, and a stipulated order was
entered permitting Jamie Lynn Brooks and James E. Brooks
an additional thirty (30) days to answer or otherwise respond
to the Complaint.
(4) On the basis that a Complaint has now been filed
on behalf of the interests of the defendants, Jamie Lynn
Brooks and James E. Brooks, it would be improper for an
additional answer to be filed on their behalf alleging different
responses, answers and/or defenses.
Wherefore, your plaintiff prays that an order be
entered prohibiting any further answers to be filed on behalf
of the defendants, Jamie Lynn Brooks and James E. Brooks,
other than that which has been previously filed.
NOTICE OF HEARING
You will please take notice that a hearing will be held
on the foregoing MOTION FOR SINGLE ANSWER before
the Honorable Mark A. Karl, Judge of the Circuit Court of
Marshall County, West Virginia, in his chambers located in
the Marshall County Courthouse, Moundsville, West Virginia,
on Friday, the 7th day
-2.
Appendix Page 28
of May, 1993,at 11:30 o’clock a.m., or as soon thereafter as
the matter may be heard.
NORMA J. CARR
by:_/s/ Robert P. Fitzsimmons
Robert P. Fitzsimmons
Fitzsimmons & Parson, L.C.
2003 Warwood Avenue
Wheeling, West Virginia 26003
(304) 277-1400
G. Charles Hughes
G. Charles Hughes, L.C.
Post Office Box 871
Moundsville, West Virginia 26041
(304) 845-2300
APPENDIX, TAB ‘*‘*C”’
-v,
“A
IN THE CIRCUIT COURT OF
MARSHALL COUNTY, WEST VIRGINIA
NORMA J. CARR,
Plaintiff,
vs. CIVIL ACTION NO. 93-C-72 K
JAMIE LYNN BROOKS and
JAMES E. BROOKS,
ee eee eee ee ee
Defendants.
MOTION TO STRIKE AFFIRMATIVE
DEFENSES FIRST THROUGH SEVENTH AND
FOURTEENTH AND MOTION FOR SANCTIONS
Now comes your plaintiff, Norma J. Carr, who hereby
moves for an order striking the affirmative defenses listed as
First through Seventh and Fourteenth on the basis that said
defenses are clearly without merit and constitute frivolous
pleadings and a violation of Rule 11 of the West Virginia
Rules of Civil Procedure.
Plaintiff will address each of the frivolous affirmative
defenses raised by counsel for Allstate Insurance Company
separately.
First Affirmative Defense
Counsel for Allstate Insurance Company alleges in the
First Defense that:
"Plaintiff's Complaint fails to state a cause of
action against the defendants, Jamie Lynn
Brooks and James E. Brooks, upon which relief
can be granted."
The Complaint in this action alleges that the cause of
action is one of negligence. (See Paragraph 4 of plaintiff's
Complaint.) Rule 9(b) of the West Virginia Rules of Civil
Procedure states that:
"NEGLIGENCE MAY ALSO BE AVERRED
GENERALLY."
[Emphasis added. ]
The law in West Virginia is clear that cases in West
Virginia should be decided upon their merits, and if the
complaint states a claim upon which relief can be granted
under any legal theory, a motion to dismiss or a defense for
failure to state a claim upon which relief can be granted is
unjustified and must be denied. John W. Lodge Distributing
Company v. Texaco, Inc., 245 S.E.2d 157 (W. Va., 1978).
It has further been held that any language in a complaint
which will apprise the opposing party of the cause of action is
sufficient. Warner v. Kittle, 280 S.E. 2d 276 (W. Va.,
1981).
Paragraph 3 of the Complaint joins Defendant James
E. Brooks under the theory of family-purpose doctrine which
is clearly a recognizable cause of action in West Virginia.
(See Paragraph 3 of Plaintiff's Complaint.)
Counsel for Allstate Insurance Company has failed to
set
2
Appendix Page 31
forth any grounds for the First Affirmative Defense which
based upon the Complaint itself is Clearly without any merit,
and this is particularly so in actions of negligence which can
be averred generally.
Second Affirmative Defense
Counsel for Allstate Insurance Company alleges:
“Plaintiff's Complaint fails to state a cause of
action against Allstate Insurance Company upon
which relief can be granted."
Allstate Insurance Company is not a named defendant
or party in this lawsuit and was served pursuant to W. Va.
Code §33-6-31. The affirmative defense raised by counsel for
Allstate Insurance Company does not in any way address any
of the averments set forth in the Complaint and is frivolous.
Third Affirmative Defense
Counsel for Allstate Insurance Company alleges in his
Third Defense that:
". . . the affirmative defense of lack of
junsdiction over the subject matter."
Article 8, Section 6, of the Constitution of West
Virginia provides in pertinent part that:
2
Appendix Page 32
“Circuit court shall have original and general
junsdiction of all civil cases at law where the
value or amount in controversy, exclusive of
interest and costs, exceeds one hundred dollars
unless such value or amount is increased by the
legislature; . . .*
Chapter 51, Article 2, Section 2, of the West Virginia
Code provides that in circuit courts jurisdiction is over all
matters at law where the amount in controversy, exclusive of
interest, exceeds three hundred dollars.
The Complaint alleges negligence which is a matter at
law, and the ad damnum clause states, “the minimum
jurisdictional amount for filing this action is met."
Clearly, this affirmative defense is totally without
merit.
Fourth Affirmative Defense
Counsel for Allstate Insurance Company alleges in his
Fourth Defense:
. . . the affirmative defense of lack of
junsdiction over the person of the Defendants,
Jamie Lynn Brooks and James E. Brooks.”
Paragraph 1 of the Complaint alleges that the
defendants, Jamie Lynn Brooks and James E. Brooks, are
residents of Marshall County, West Virginia. Service upon
the defendants was also had in Marshall County, West
Virginia, by serving them with a copy
+4-
Appendix Page 33
of the Summons and Complaint at their residence and by
depositing a copy of the Summons and Complaint with a
member of their household on February 23, 1993, as is
evidenced by Exhibit | attached hereto.
This affirmative defense is totally without merit.
Fifth Affirmative Defense
Counsel for Allstate Insurance Company alleges in the
Fifth Defense:
". . . the affirmative defense of improper
venue.”
Paragraph | of the Complaint alleges that the
defendants are residents of Marshall County. Paragraph 2 of
the Complaint alleges that the plaintiff is a resident of
Marshall County. Paragraph 4 of the Complaint alleges that
the cause of action occurred in Marshall County.
Chapter 56, Article 1, Section 1, of the West Virginia
Code states in pertinent part as follows:
"(a) Any civil action or other proceeding,
except where it is otherwise specifically
provised, may hereafter be brought in the
circuit court of any county:
“(1) WHEREIN ANY OF THE
DEFENDANTS MAY RESIDE OR THE
CAUSE OF ACTION AROSE, . . .”
Allstate Insurance Company’s Fifth Affirmative
Defense is
totally without merit.
Sixth Affirmative Defense
Counsel for Allstate Insurance Company asserts in his
Sixth Defense and Seventh Defense "insufficiency of process”
and “insufficiency of service of process.”
Rule 4(d)(1) provides that process may be had:
". . . by delivering a copy of the summons and
of the complaint at his dwelling house or usual
place of abode to a member of his family above
the age of sixteen years. . .”
Exhibit | attached hereto evidences that the Summons
and Complaint in this matter were served upon both
defendants by serving Jamie Lynn Brooks’ mother and James
E. Brooks’ wife through the Marshall County Sheriff's
Department.
These two affirmative defenses are without ny merit
whatsoever.
Fourteenth Affirmative Defense
Counsel for Allstate Insurance Company asserts in his
Fourteenth Defense:
". . . all policy defenses applicable to the
underinsured motorist claim. . .”
The Complaint is a complaint sounding in tort, and no
4-
averments have been made concerning underinsurance
coverage or any other type of contractual insurance coverage.
This defense has absolutely no relevance to the pending action
and is without merit.
SUMMARY
Rule 11 provides that every pleading must be signed by
at least one attorney of record. The rule further states in
pertinent part that:
"The signature of an attorney or party
CONSTITUTES A CERTIFICATE by him that he
has read the pleading, motion or other paper;
that to the best of his knowledge, information,
and belief FORMED AFTER REASONABLE
LITIGATION." [Emphasis added. |
If counsel for Allstate Insurance Company would have
checked the courthouse records, he would have determined
that process was proper and that service of process of proper.
Allstate Insurance Company’s counsel could have easily
determined that jurisdiction over the subject matter and
persons were proper by reviewing the Complaint, and in
particular the ad damnum clause, and by checking the
courthouse records to determine service had been obtained
upon the defendants. Venue
Appendix Page 36
could have easily been determined to have been proper by
merely looking at the Complaint.
It is clear that counsel for Allstate Insurance Company
has taken a cavalier attitude or is intentionally attempting to
interpose delay or harass plaintiff or cause additional expenses
in this litigation by filing clearly frivolous and unwarranted
affirmative defenses.
Plaintiff's counsel is very interested in hearing the
"reasonable inquiries” made by counsel for Allstate Insurance
Company, together with his statement that such affirmative
defenses were “well grounded in fact" in a hearing on this
motion.
Plaintiff's counsel requests that the defenses labeled as
First through Seventh and Fourteenth be stricken. Counsel
further requests that the Court enter an order finding that
Allstate Insurance Company's counsel has violated Rule 11 of
the West Virginia Rules of Civil Procedure and enter
sanctions, including reasonable attorney fees incurred in the
prosecution of this motion.
NOTICE OF HEARING
You will please take notice that hearing will be held on
the foregoing MOTION TO STRIKE AFFIRMATIVE DEFENSES
FIRST THROUGH SEVENTH AND FOURTEENTH AND MOTION
FOR SANCTIONS before
Appendix Page 37
the Honorable Mark A. Karl, Judge of the Circuit Court of
Marshall County, West Virginia, in his chambers located in
the Marshall County Courthouse, Moundsville, West Virginia,
on Friday, the 7th day of May, 1993, at 11:30 o’clock a.m.,
or as soon thereafter as the matter may be heard.
NORMA J. CARR
By: _/s/ Robert P. Fitzsimmons _
Of Counsel
Robert P. Fitzsimmons
Fitzsimmons & Parsons, L.C.
2003 Warwood Avenue
Wheeling, West Virginia 26003
(304) 277-1400
G. Charles Hughes
G. Charles Hughes, L.C.
Post Office Box 871
Moundsville, West Virginia 2604]
(304) 845-2300
Appendix Page 38
—L a ee —_ -
CERTIFICATE OF SERVICE
Service of the foregoing MOTION TO STRIKE
AFFIRMATIVE DEFENSES FIRST THROUGH SEVENTH AND
FOURTEENTH AND MOTION FOR SANCTIONS and NOTICE OF
HEARING was made upon the parties to this action by mailing
a true copy thereof by United States mail, postage prepaid, to
, their respective attorneys on the 23 day of March, 1993, as
follows:
JAMIE LYNN BROOKS and
JAMES E. BROOKS
c/o Donaid M. Kresen, Esq.
Jackson & Kelly
Post Office Drawer 68
New Martinsville, West Virginia 26155
ALLSTATE INSURANCE COMPANY
c/o Walter M. Jones, III, Esq.
Martin & Seibert, L.C.
Post Office Box 1286
Martinsburg, West Virginia 25401
/s/ Robert P. Fitzsimmons _
Of Counsel for Plaintiff
-10-
Appendix Page 39
APPENDIX, TAB ‘‘D’’
el cel le ls ek a Le ake
IN THE CIRCUIT COURT OF
MARSHALL COUNTY, WEST VIRGINIA
NORMA J. CARR,
Plaintiff,
CIVIL ACTION NO. 93-C-72 K
Vs.
JAMIE LYNN BROOKS
and JAMES E. BROOKS
ll i i i i
Defendants.
MOTION FOR ALLSTATE INSURANCE
COMPANY TO MAKE ELECTION
PURSUANT TO W. Va. CODE 33-6-31(d)
Now comes your plaintiff, Norma J. Carr, who hereby
moves that Allstate Insurance Company be required to make
an election to appear on behalf of the defendants or in its own
name. As grounds for this motion, your plaintiff states and
alleges as follows:
(1) This is a negligence action alleging that the
defendants were negligent and caused injury to the plaintiff,
Norma J. Carr, when the automobile driven by Defendant
Jamie Lynn Brooks struck Norma J. Carr, who was then a
pedestrian.
(2) Allstate Insurance Company was served pursuant to
the underinsurance motorists statute, W. Va. Code § 33-6-31.
Appendix Page 40
(3) It is unclear from reading the Answer filed by
Allstate Insurance Company whether it is appearing in its own
name or in the name of the defendants.
(4) If Allstate Insurance Company is appearing in its
own name, then plaintiff is of the opinion that such election
once made and which cannot be changed would entitle Allstate
Insurance Company to conduct discovery and to be required
to participate in discovery provided that once said election has
been made and the rights attendant therewith have been
exercised that such election cannot be changed.
Wherefore, your plaintiff prays that this Court order
that Allstate Insurance Company now make its election
pursuant to W. Va. Code § 33-6-31(d).
NOTICE OF HEARING
You will please take notice that a hearing will be held
on the foregoing MOTION FOR ALLSTATE INSURANCE
COMPANY TO MAKE ELECTION PURSUANT TO W.
Va. CODE § 33-6-31(d) before the honorable Mark A. Karl,
Judge of the Circuit Court of Marshall County, West Virginia,
in his chambers located in the Marshall County Courthouse,
Moundsville, West Virginia, on Friday, the 7th day of May,
1993,at 11:30 o’clock a.m., or as soon thereafter as the
matter may be heard.
a.
Appendix Page 41
NORMA J. CARR
By:
Of Counsel
Robert P. Fitzsimmons
Fitzsimmons & Parsons, L.C.
2003 Warwood Avenue
Wheeling, West Virginia 26003
(304) 277-1400
G. Charles Hughes
G. Charles Hughes, L.C.
Post Office Box 871
Moundsville, West Virginia 26041
(304) 845-2300
Appendix Page 42
APPENDIX, TAB “E”
aan ea ie
oe he
a)
a &
ee 4
IN THE CIRCUIT COURT OF
MARSHALL COUNTY, WEST VIRGINIA
NORMA J. CARR,
Plaintiff,
CIVIL ACTION NO. 93-C-72 K
vs.
JAMIE LYNN BROOKS
and JA) [ES E. BROOKS
Defendants.
MOTION FOR PROTECTIVE ORDER
Now comes your plaintiff, Norma J. Carr, who hereby
moves for a protective order pursuant to Rule 26(c) of the
West Virginia Rules of Civil Procedure. As grounds for this
motion, your plaintiff states and alleges as follows:
i i i ee
(1) This is an action for personal injuries resulting
from the alleged negligence of Defendant Jamie Lynn Brooks
when her automobile struck the plaintiff, Norma J. Carr, who
was a pedestrian, on October 17, 1991. (See Paragraph 4 of
plaintiff's Complaint.)
(2) Defendant James E. Brooks is a party to the lawsuit
on the basis of the family-purpose doctrine. (See Paragraph
3 of plaintiff's Complaint.)
Appendix Page 43
(3) Allstate Insurance Company was served in this case
pursuant to W. Va. Code § 33-6-31 and is not a named party
nor is any cause of action stated against Allstate Insurance
Company.
(4) Attorney Donald M. Kresen, of the law firm of
Jackson & Kelly, has entered an appearance on behalf of the
defendants, Jamie Lynn Brooks and James E. Brooks, and
obtained an order granting him an extension to file an answer
or otherwise respond to the Complaint by April 14, 1993.
(5) Allstate Insurance Company states in its Answer
(first paragraph) that it is appearing "on behalf of the interest
of the defendants, Jamie Lynn Brooks and James E. Brooks."
The Answer is then signed on behalf of the insurance
company.
(6) Allstate Insurance Company served "First
Interrogatories" and “First Request for Production of
Documents" on March 10, 1993.
(7) Allstate Insurance Company’s Answer to the
Complaint and interrogatories make it unclear whether Allstate
Insurance Company is electing to appear on behalf of the
insurance company or on behalf of the named defendants.
(8) Allstate Insurance Company is attempting to
conduct discovery which most assuredly will duplicate the
discovery
4.
Appendix Page 44
conducted on behalf of defendants’ counsel in this proceeding,
and, furthermore, Allstate Insurance Company will not be able
to reciprocate by providing any meaningful type of discovery,
such as answering the outstanding Interrogatories and Request
for Production of Documents served upon the defendants with
the Complaint.
(9) W. Va. Code § 33-6-31(d) permits an insurance
company who has underinsurance to be served as if it were a
named party defendant and permits the company to file
pleadings and take other action allowable by law in the name
of the owner or operator or both or in its own name. In this
case, the Answer of Allstate Insurance Company and
discovery materials are not clear as to the Capacity in which
Allstate Insurance Company is attempting to appear.
(10) By permitting Allstate Insurance Company to
conduct discovery in this case merely serves to duplicate the
entire discovery process and to cause an unneeded burden
upon the plaintiffs.
(11) If Allstate Insurance Company is appearing on
behalf of the interests of the defendants, plaintiff requests that
this Court order that their discovery be conducted by one
Party so as not to duplicate the discovery.
&
Appendix Page 45
Wherefore, plaintiff prays that a protective order for
good cause shown be granted ordering that counsel for the
defendants unify their discovery and be permitted to conduct
discovery through single counsel.
NOTICE OF HEARING
You will please take notice that a hearing will be held
on the foregoing MOTION FOR PROTECTIVE ORDER
before the Honorable Mark A. Karl, Judge of the Circuit
Court of Marshall County, West Virginia, in his chambers
located in the Marshall County Courthouse, Moundsville,
West Virginia, on Friday, the 7th day of May, 1993, at
11:30 o'clock a.m., or as soon thereafter as the matter may
be heard.
NORMA J. CARR
By:/s/ Robert P. Fitzsimmons
Of Counsel
Robert P. Fitzsimmons
Fitzsimmons & Parsons, L.C.
2003 Warwood Avenue
West Virginia 26003
(304) 277-1400
G. Charles Hughes
G. Charles Hughes, L.C.
Post Office Box 871
Moundsville, West Virginia 26041
(304) 845-2300
-4-
Appendix Page 46
o Rian ed
APPENDIX, TAB ‘‘F”’
BRR es De cet 5 a ee
IN THE CIRCUIT COURT OF MARSHALL
COUNTY, WEST VIRGINIA
NORMA J. CARR,
Plaintiff,
v. CIVIL ACTION NO. 93-C-72 K
JAMIE LYNN BROOKS and
JAMES E. BROOKS
Defendants.
ORDER
The 11th day of June, 1993, came the plaintiff, Norma
J. Carr, by G. Charles Hughes, of G. Charles Hughes, L.C..,
of her counsel, and as well came the defendants, Jamie Lynn
Brooks and James E. Brooks, by V. Tad Greene, of Jackson
& Kelly, their counsel, and by Walter M. Jones, III, of
Martin & Seibert, L.C. (counsel for Allstate Insurance
Company, the “notice-defendant" and the plaintiff's
underinsurance carrier), pursuant to the "Plaintiff's Combined
Motions" and the defendants’ bifurcation motion, to-wit:
Appendix Page 47
(1) the plaintiff's MOTION FOR A SINGLE
ANSWER;
(2) the plaintiff's MOTION FOR ALLSTATE
INSURANCE COMPANY TO MAKE’ ELECTION
PURSUANT TO W.VA. CODE 33-6-31(d);
(3) the plaintiff's MOTION FOR PROTECTIVE
ORDER;
(4) the plaintiff's MOTION TO STRIKE
AFFIRMATIVE DEFENSES FIRST THROUGH SEVENTH
AND FOURTEENTH AND MOTION FOR SANCTIONS;
(5) the defendants’ MOTION TO BIFURCATE
ISSUES OF LIABILITY AND DAMAGES;
Appendix Page 48
previously filed, served, argued, briefed and submitted for
— following the consolidated hearing thereon of 7 May
‘Whereupon, for the reasons spread upon the record,
the rulings of the Court upon the foregoing motions - in the
same order of arrangement - were as follows:
(1) = granted (a unified defense on the merits
being contemplated);
(2) granted; said election to be made by
Allstate Insurance Company on or before 11 July
1993;
(3) granted; said discovery not to be
duplicative;
(4) granted, in part; the "Third Affirmative
Defense" (re lack of subject matter jurisdiction), the
Appendix Page 49
"Fourth Affirmative Defense” (re lack of personal
jurisdiction), the “Fifth Affirmative Defense” (re
improper venue), and the "Sixth Affirmative Defense”
(re insufficiency of process and service of process),
being without merit and somewhat frivolous, are
hereby stricken; the plaintiff's motion for sanctions
being hereby denied;
(5) denied;
and it is so ADJUDGED and ORDERED.
Whereupon, in response to the representation of
counsel for Allstate Insurance Company that issues similar to
those addressed by motions (1), (2), (3) and (4), supra, and
the rulings thereon, were currently pending before the
Supreme Court of Appeals of West Virginia - upon a
provisional writ issued in the case of State Auto
Appendix Page 50
Mutual Insurance Company v. Steptoe, Judge, et al - the
Court indicated that in the event the Supreme Court resolved
one or more of said issues in a manner contrary to the
foregoing rulings, the same could be rescheduled for hearing,
and it is so ADJUDGED and ORDERED.
. Whereupon, this came on for the status conference
previously noticed, the results of which are set forth in a
separate order.
To all of which action of the Court, the plaintiff,
defendants and Allstate Insurance Company - as their interests
may be adversely affected - object and except.
Dated the 28th day of June, 1993.
—/s/ Mark A. Karl _
Judge
Appendix Page 51
APPROVED FOR ENTRY:
/ h h
For the Plaintiff
/s/_ Donald M. Kresen
For the Defendants
/s/_ Walter M. Jones, III
For Allstate Insurance Company
Appendix Page 52
APPENDIX, TAB ‘‘G”’
Oe ns “hea
oo
be aa,
No.
833.0 —ooooeoOOO
IN THE SUPREME COURT
OF APPEALS OF WEST VIRGINIA
At Charleston
8S 970——ooo oO
ALLSTATE INSURANCE COMPANY,
A Corporation,
Petitioner,
Vv.
MARK A. KARL, Judge, Circuit Court
of Marshall County, West Virginia,
Respondent.
From Proceedings In The Circuit Court Of
Marshall County, West Virginia
Civil Action No. 93-C-72-K
PETITION FOR Writ OF PROHIBITION
MARTIN & SEIBERT, L.C.
/s/ Walter M. Jones, III
Walter M. Jones, III
Paul B. Weiss
Post Office Box 1286
119 South College Street
Martinsburg, WV 25401
(304) 267-8985
Counsel For Petitioner
SS ?73>——=@PokoO Oo
Appendix Page 53
Statement Of Facts And Proceedings Below
Assignments Of Error
Points & Authorities
I.
Il.
Ill.
IV.
TABLE OF CONTENTS
es a eee ee
PROHIBITION IS AN APPROPRIATE
REMEDY IN THIS INSTANCE .....
THE PETITIONER’S RIGHTS TO
PROCEDURAL DUE PROCESS WILL
BE VIOLATED IF COMPELLED TO
PROCEED WITH THE PENDING
ACTION AS POSTURED IN LIGHT
OF THE RESPONDENT’S ORDER
FORCING THE PETITIONER TO
MAKE AN IRREVOCABLE
ELECTION AS TO WHETHER IT
APPEARS IN THE PENDING
ACTION IN ITS OWN NAME OR IN
THE NAME OF THE
DEEEEUEED ces cvesecesecse
THE PETITIONER’S RIGHTS TO
PROCEDURAL DUE PROCESS WILL
BE VIOLATED IF IT IS
COMPELLED TO PROCEED WITH
THE PENDING ACTION AS
POSTURED IN LIGHT OF THE
RESPONDENT’S ORDER
Appendix Page 54
= i a i a
> 2s & @ @ 62 6.6 6 8 2 2 ee 2 2 9 ee 2 <
.
;
|
VI.
PERMITTING THE PETITIONER
DISCOVERY PURSUANT TO THE
RULES OF CIVIL PROCEDURE
ONLY IF IT ELECTS TO APPEAR IN
THE PENDING ACTION IN ITS
OWN NAME OR, IF NOT
APPEARING IN ITS OWN NAME,
CONDUCTS DISCOVERY ONLY IN
CONJUNCTION WITH THE
OS eee
THE PETITIONER’S RIGHTS TO
PROCEDURAL DUE PROCESS WILL
BE FURTHER VIOLATED IF
COMPELLED TO PROCEED WITH
THE PENDING ACTION AS
POSTURED IN LIGHT OF THE
RESPONDENT’S ORDER
SUBJECTING THE PETITIONER TO
A “UNIFIED DEFENSE ON THE
MERITS" OF THE PENDING
ACTION IN CONJUNCTION WITH
THE DEFENDANTS ............
THE PETITIONER’S RIGHTS TO
PROCEDURAL DUE PROCESS WILL
ALSO BE VIOLATED IF
COMPELLED TO PROCEED WITH
THE PENDING ACTION AS
POSTURED IN LIGHT OF THE
RESPONDENT’S ORDER STRIKING
AFFIRMATIVE DEFENSES
RESERVED BY THE PETITIONER ..
Appendix Page 55
21
VII.
Conclusion
Certificate of Servic .. 1. cc eet cece eee 27
THE PETITIONER’S RIGHT TO
PROCEDURAL DUE PROCESS WILL :
BE VIOLATED IF COMPELLED TO ;
PROCEED WITH THE PENDING
ACTION AS POSTURED IN LIGHT
OF THE CUMULATIVE EFFECTS
OF ALL OR SOME COMBINATION
OF THE FOREGOING ORDERS .... 23
25
So en ed
|
|
Appendix Page 56
TABLE OF AUTHORITIES
CASES
Alsbach v. Bader, 616 S.W.2d 147 (Mo. App. 1981) .. 6
American R. Express Co. v. Kentucky,
a 10
American Sur. Co. v. Baldwin,
Ss ED cg ccc cc ics ecccesen 20, 23
Blonder-Tongue Laboratories, Inc. v.
University of Illinois Foundation,
Ge I POE ow cc cece ccc ete sceeeces 6
Briggs v. American Family Mut. Ins. Co..,
co aw fe 7
Davis v. Robertson, 175 W. Va. 364,
332 $.B.26 $19 (1966) ........00. 13, 15, 18, 24
Felhaber v. Felhaber, 681 F.2d 1015
(Sth Cir. 1982), cert. denied,
lee ewecees 24
Fyke v. Clark, No. 89-98-II
(Tenn. Ct. App. Dec. 6, 1989)
See ae ES ww ccc ccc ccc seees 15
Handley v. Cook, 162 W. Va. 629,
rt bcecececces 9
Hannah v. Larche, 363 U.S. 420 (1960) .......... 24
Appendix Page 57
Hinkle v. Black, 164 W. Va. 112,
262 S.E.2d 744 (1979) .... cece cere cv evees ll
In re Ralph Marcantoni & Sons, Inc.,
62 B.R. 245 (D. Md. 1986) .......2eeeeeees 11
Lindsey v. Normet, 405 U.S. 56 (1972) ........ 20, 23
Lyons v. Steele, 113 W. Va. 652,
10 $.B. 461 (1933) .. ee cesscetn ue ll
Martino v. American Airlines, Inc.,
404 F. Supp. 1202 (S.D.N.Y. 1975),
aff'd, 573 F.2d 1292 (2d Cir. 1977),
cert. denied, 439 U.S. 869 (1978) ..........45. ll
Nevels v. Hanlon, 656 F.2d 372 (8th Cir. 1972) ..... 10
Osaka Shosen Kaisha Line v. United States,
300 U.S. 96 (19ST) wwe ee ee i4
Perkins v. Doe, 177 W. Va. 84,
350 §.E.2d 711 (1906)... cee v ese seseenwee 9
Appendix Page 58
ee)
ee
Plumley v. Allstate Ins. Co..,
772 F. Supp. 922 (S.D.W.V. 1991) ... 13, 15, 18, 24
Powell v. Alabama, 287 U.S. 45 (1932) .......... 10
Scarnati v. Washington, 599 F. Supp. 1554 (M.D. Pa.),
aff'd, 772 F.2d 896 (3d Cir. 1985), cert. denied,
EEE EEE 10
Stypmann vy. City & County of San Francisco,
a 24
Terzian v. California Cas. Indem. Exch..,
42 Cal. App.3d 942, 117 Cal. Rptr. 284 (1974) ..... 7
Travelers Ins. Co. v. Lobello, 212 Va. 534,
Te ee woe pc te 16
United States v. American Trucking Ass'ns.,
EES 14
United States v. Kirby Lumber Co. ,
EE Ee 14
Vernon Fire & Cas. Ins. Co. v. Matney,
170 Ind. App. 45, 351 N.E.2d 60 (1976) ....... 6, 7
Waters \ United States Fidelity & Guar. Co..,
328 Md. 700, 616 A.2d 884 (1992) ........... 7
Webster v. Harris, 727 S.W.2d 248
PEC EE Den ccecsccesceccec 15
Zurenda v. Holloman, 616 F. Supp. 212
~~ E eS cc ccescesccccccecs 16
Appendix Page 59
STATUTES & RULES
Ga. Cope Ant. 6 53-F-11 0 ww cece ccc eee 8
KAN. STAT. ANN. § 40-284(e) ... 2... 22 ee ee eee 8
Miss. CODE ANN. § $3 11-105 .........-55445- 8
N.C. GEN STAT. § 20-279.21(b)(3) ........ aeeen 8
S.C. Comps Ant. 6 SE-7T7-1SD www eee cee 8
TENN. CODE ANN. § 56-7-1206 ...........4.. 8, 15
Va. CODE ANN. § 38.2-2206 ..... 2... 2. ee eee 8, 16
iv
Appendix Page 60
eg
W. VA. CODE
ANN. § 33-6-31(d) ...... 8, 9, 12-15, 17, 19, 21, 25
Fed. R. Civ. P. 24 .. ey scarves 7
Th «hs 6 enewe 688 0 0h eo hhsewaenen 8
R.C.P., Rule | . 17
PGE cc ccecueecuweeteisiwee 22
PEE 6 6 Fé be eeeavecteuniciseu 7
EE nb oso ben beeee niscceees 16, 17
Dies ccc cheonsveckacessueaeuun 17
ee ee Se eee eee se 17
ih +70 soa + ib Oe oaks eo Wade awe 17
Paks ehéis ee Ce bes.ceducekaewe 17
NG Sit & to acs rs en ace ce ek ie ae 17
RO PPE Pee Te TT eee ee 17
Ps + ib dese eed eeeee es caneune 17
Ds 4 des ene ae eee boeues eeexks 17
Dis +<eaned¢eee bob hk ounbdddeaur 17
Pes o+aeeenbed nedess axes 17
Appendix Page 61
\
R.C.P., Rule ST ow ccc cc cer ese esesesscess
W.V.R.E., Rule 411
Appendix Page 62
ee ee dette 4 om et es Ee ee
) ~wwtew
TREATISES & OTHER AUTHORITIES
16A AM. JUR.2D, Constitutional Law,
poy of 5 6
73 AM. JUR.2D, Statutes,
§ 196 (1974 & Supp. 1993) 2... ccc ccc cece 14
17 MICHIE’S JURISPRUDENCE, Statutes
Se ¢ occ ea weehseu bes 14
vi
Appendix Page 63
STATEMENT OF FACTS
AND PROCEEDINGS BELOW
This matter arises from the case of Norma J. Carr v.
Jamie Lynn Brooks and James G. Brooks, Civil Action No.
93-C-72-K, now pending in the Circuit Court of Marshall
County, West Virginia and hereinafter referred to as the
“pending action." The pending action arises from an
automobile collision in which it is alleged that the Defendants,
Jamie Lynn and James G. Brooks, negligently caused injury
to the Plaintiff Norma J. Carr. The Petitioner is the
automobile insurer of the Plaintiff and provides uninsured and
underinsured motorist coverage to the Plaintiff. On the
premise that the Plaintiff's damages incurred in the subject
collision exceed or might exceed the automobile liability
insurance coverage available to the Defendants, thereby
invoking her underinsured motorist coverage, the Petitioner
was duly served with notice of the pending action pursuant to
West Virginia Code § 33-6-31(d).
Upon receipt of the Summons and Complaint, the
Petitioner filed an Answer to the Plaintiff's Complaint on its
own behalf and on behalf of the interests of the Defendants,
Jamie Lynn and James G. Brooks. The Defendants thereafter
appeared by counsel and filed an Answer on their own behalf.
In addition, the Petitioner propounded upon the Plaintiff
interrogatories and requests for production of documents
pursuant to Rules 33 and 34, of the West Virginia Rules of
Civil Procedure. The Defendants had not undertaken such
discovery at the time of the hearing upon the Motions which
give rise to the Order from which this Petition arises.
On March 23, 1993, the Plaintiff filed four motions,
the granting of which by the Respondent is the grievance
advanced in the present Petition. Plaintiffs first motion was
Appendix Page 64
to limit the alleged tortfeasor Defendants and the Petitioner to
a single answer to the Plaintiff's Complaint. Appendix, Tab
1. As framed, the Plaintiff sought to prevent the alleged
tortfeasor
Appendix Page 65
Defendants from filing their Answer subsequent to the filing
of the Petitioner’s Answer. The Petitioner’s Answer was filed
on its own behalf and on behalf of the interests of the
Defendants.
Plaintiff, in her second motion, sought to compel the
Petitioner to make an irrevocable election as to "whether it is
appearing in its own name or in the name of the defendants"
in the pending action. Appendix, Tab 2. The Plaintiff further
asserted that the Petitioner would be entitled to conduct
discovery only if it elected to appear in its own name in the
pending action. /d. It is further the Plaintiff's position that
such an action would subject the Petitioner to discovery. /d.
As a companion to this, the Plaintiff filed a motion for a
protective order, R.C.P., Rule 26, whereby she sought to
avoid responding to the discovery requests propounded by the
Petitioner. Appendix, Tab 3. Her rationale is that, if the
Petitioner were appearing on behalf of the interests of the
alleged tortfeasor Defendants, discovery could only be
conducted by either the Petitioner or the alleged tortfeasor
Defendants (but not both) so as not to duplicate discovery. /d.
In her fourth motion, the Plaintiff sought to strike eight
affirmative defenses asserted in the Petitioner’s Answer in its
own behalf and on behalf of the interests of the alleged
tortfeasor Defendants and to subject the Petitioner to sanctions
pursuant to R.C.P., Rule 11 for raising the aforesaid
defenses.' The affirmative defenses which were reserved in
the Answer were: failure to state a claim against Petitioner
upon which relief may be granted and failure to state a claim
against Defendants upon which relief may be granted, lack of
Appendix Page 66
subject matter jurisdiction, lack of personal jurisdiction,
improper venue, insufficiency of process, insufficiency of
service of
‘This motion is not appended to this Petition due to its length and
the page limitation imposed by the Rules of Appellate Procedure. Like the
Plaintiff's other motions, the argument supporting the motion to strike
contains no factual support upon which the court could make any findings
relative to the basis of the asserted and reserved defenses.
Appendix Page 67
_) eee.
process, and all “policy defenses” arising under the contract
of insurance between the Petitioner and the Plaintiff.
All of the aforesaid motions were opposed in a
consolidated Opposition filed by the Petitioner. The alleged
tortfeasor Defendants did not file any memorandum. Hearings
were held on May 7, 1993 and June 11, 1993, before the
Respondent. In the interim, the Petitioner filed a
supplemental brief in opposition to the consolidated motions
advanced by the Plaintiff. By Order entered by the
Respondent on June 28, 1993, the Plaintiff's first three
motions were granted and her fourth motion granted in part
and denied in part. Appendix, Tab 4. It is the Petitioner’s
position that the granting of the aforesaid motions was
erroneous and that proceeding with the pending action as it is
postured by the granting of the aforesaid motions would
constitute a grievous denial of the Petitioner's due process
rights pursuant to the fifth and fourteenth amendments to the
United States Constitution and Article III, § 10 of the West
Virginia Constitution. Accordingly, the Petitioner respectfully
prays that the Respondent be prohibited from denying the
Petitioner's due process rights by proceeding with the pending
action as postured by the Respondent’s erroneous granting of
~ “the Plaintiffs motions, and that the ruling of the Circuit Court
of Marshall County be reversed.
Appendix Page 68
Assignments Of Error
The Petitioner’s rights to procedural due process will
be violated if compelled to proceed with the pending
action as postured in light of the Respondent’s Order
forcing the Petitioner to make an irrevocable election
as to whether it appears in the pending action in its
own name or in the name of the Defendants.
The Petitioner’s rights to procedural due process will
be violated if compelled tq proceed with the pending
action as postured in light of the Respondent’s Order
permitting the Petitioner discovery pursuant to the
Rules of Civil Procedure only if it elects to appear in
the pending action in its own name or, if not appearing
in its own name, conducts discovery only in
conjunction with the Defendants.
The Petitioner’s rights to procedural due process will
be further violated if compelled to proceed with the
pending action as postured in light of the Respondent’s
Order subjecting the Petitioner to a “unified defense on
the merits” of the pending action in conjunction with
the Defendants.
The Petitioner’s rights to procedural due process will
also be violated if compelled to proceed with the
pending action as postured in light of the Respondent’s
Order striking affirmative defenses reserved by the
Petitioner.
Appendix Page 69
The Petitioner’s right to procedural due process will be
violated if compelled to proceed with the pending
action as postured in light of the cumulative effects of
all or some combination of the foregoing Orders.
Appendix Page 70
She teat: AREY th. Ties 8 mee
POINTS & AUTHORITIES
I. PREFACE.
Since the inception of underinsured motorist ("UIM")
coverage in the 1960’s, courts have struggled with a number
of nettlesome problems presented by the relationships and
conflicts inherent in the posture of a UIM case. One of the
first considerations was to avoid the multiplicity of lawsuits
which ordinarily would occur if the Plaintiff first must obtain
a judgment against the tortfeasor and then, upon exhaustion of
the tortfeasor’s liability insurance, look to his UIM insurer
which, then, might contest the original tortfeasor’s liability to
the Plaintiff and/or the extent of the Plaintiff's damages.
Absent a means by which the UIM insurer might be bound by
the judgment in the underlying tort claim, the Plaintiff might
be required to relitigate his entire case in seeking
compensation from his UIM carrier.
It is, of course, axiomatic of procedural due process
that a judgment cannot bind one who had no notice of or
opportunity to defend the action from which the judgment
derives. Blonder-Tongue Laboratories, Inc. v. University of
Illinois Foundation, 402 U.S. 313 (1971); 16A AM. JUR.2D,
Constitutional Law, § 843 (1979 & Supp. 1993). Thus, the
typical procedural mechanism established to render the
judgment in the underlying tort action conclusive upon the
UIM carrier holds that the carrier is estopped from attacking
it if it had notice of the underlying tort action and opportunity
to vindicate its interests therein. The courts, in those
jurisdictions where this type of procedural mechanism was
judicially established, recognized that such tripartite litigation
contains inherent conflicts of interest between the insurer and
the insured, see, e.g., Vernon Fire & Cas. Ins. Co. v.
Matney, 170 Ind. App. 45, 351 N.E.2d 60 (1976), and
Appendix Page 71
between the UIM carrier and the alleged tortfeasor defendant,
see, e.g., Alsbach v. Bader, 616
Appendix Page 72
= el See ee
S.W.2d 147 (Mo. App. 1981),’ but generally held that, as a
matter of public policy, avoidance of a multiplicity of suits is
to be desired over the avoidance of these conflicts. Vernon
Fire & Cas. Co., 170 Ind. App. 45, 351 N.E.2d 60. The
courts also recognized that the UIM carrier’s interests are
often unprotected or less-than-fully protected in this arena
where the underlying tort action is sometimes collusive in
nature and otherwise less-than-vigorously contested.’ See,
e.g., Waters v. United States Fidelity & Guar. Co. , 328 Md.
700, 616 A.2d 884 (1992) (intervention is a means of
protecting against collusion or inappropriate settlements
between insureds and tortfeasors); Briggs v. American Family
Mut. Ins. Co. , 833 P.2d 859 (Colo. 1992) (collusion).
The mechanism employed by the majority of the states
is to permit the UIM carrier, upon receiving notice of the suit,
to intervene in the underlying action pursuant to the governing
rules of civil procedure, many of which are similar in
application to Fed. R. Civ. P. 24 and R.C.P., Rule 24, and
to hold that its failure to intervene effectuates a waiver of its
right to do so, thus making the judgment binding as to the
UIM carrier. See, e.g., Vernon Fire & Cas. Co., 170 Ind.
App. 45, 351 N.E.2d 60; Terzian v. California Cas. Indem.
Exch., 42 Cal. App.3d 942,
?While the UIM carrier and the alleged tortfeasor might have a
community of interest in defeating the plaintiff/insured’s claim altogether,
the UIM carrier is also adverse to the alleged tortfeasor defendant. It is,
economically, a matter of no interest to the UIM carrier whether the
plaintiff/insured’s claim is defeated altogether or whether the
plaintiff/insured prevails within the limits of the alleged tortfeasor’s
liability insurance. In either event, the UIM carrier does not have to pay.
Likewise, if the UIM carrier does have to pay, it will typically be
subrogated to the plaintiff/insured’s nght to proceed against the alleged
tortfeasor to recover any UIM payments it has made, thereby compounding
the adversity between the UIM carrier and the alleged tortfeasor defendant.
Appendix Page 73
As argued in this Petitioner's Supplemental Bnef in Opposition
to the Plaintiff's Consolidated Motions, UIM litigation is often between
fends, relatives or acquaintances and involves a tortfeasor defendant
whose interests may be aligned with those of the plaintiff to a greater or
lesser degree. In other instances, it may involve an absent defendant or a
nominal defendant who has previously settled with the plaintiff, leaving the
UIM carrier as the “true defendant.” Thus, even where collusion per se
might be absent, there are numerous instances in which the alignment of
the parties’ interests is less than truly adversarial. Even where true
adversity exists, numerous due process questions would be raised by
binding the UIM carrier's defense to that of the alleged tortfeasor where
the UIM carner might have serious disagreement with the defense strategy
to be employed or the vigor or competency with which it is pursued.
Appendix Page 74
a eee ee ee ee ae
117 Cal. Rptr. 284 (1974). By marked contrast, the West
Virginia mechanism, wherein the right of the UIM carrier to
intervene is statutorily enacted, is one that is employed in a
substantial minority of jurisdictions centered principally in this
region of the country. W. VA. CODE ANN. § 33-6-31(d); Ga.
CODE ANN. § 33-7-11; Miss. CODE ANN. § 83-11-105; N.C.
GEN STAT. § 20-279.21(b)(3); S.C. CODE ANN. § 38-77-150;
TENN. CODE ANN. § 56-7-1206; VA. CODE ANN. § 38.2-
2206. See also KAN. STAT. ANN. § 40-284(e) (UM carrier
may write coverage exclusion where suit filed against
uninsured motorist without notice to carrier); MD. RULE BW4
(service upon Maryland Automobile Insurance Fund).
Thus, authority from jurisdictions which have judicially
recognized a UIM carrier’s right to intervene in the underlying
tort action or where that right is governed by rules of civil
procedure rather than statute, while generally educational, is
irrelevant to the issue now before this Court. This is
particularly true of those numerous cases which construe the
nuances of the rules of civil procedure governing the UIM
carrier’s right to intervene.* Of the statutory enactments
governing the UIM carrier’s right to intervene, the operative
language of TENN. CODE ANN. § 56-17-1206 and VA. CopDE
ANN. § 38.2-2206 F. is almost-verbatim that of W.Va. Code
§ 33-6-31(d). Accordingly, cases construing these statutory
enactments are particularly instructive as to the questions
presented herein. By contrast, GA. CODE ANN. § 33-7-11,
Miss. CODE ANN. § 83-11-105, N.C. GEN. STAT. § 20-
279.21 and S.C. CODE ANN. § 38-77-150 differ substantially
from W. VA. CODE ANN. § 33-6-31(d) and cases construing
them would be less germane to the questions presented here.
“Where intervention is governed by a variant, ¢.g., of Federal
Rule of Civil Procedure 24, as is the situation in numerous of the reported
cases, considerations come into play which are not factors pursuant to §
33-6-31(d), notably whether the UIM carrier can demonstrate that, in the
Appendix Page 75
absence of intervention, its interests are not adequately protected. This is
a criterion under Rule 24 and its progeny, but not under § 33-6-31.
Appendix Page 76
a
Against this backdrop, it is the Petitioner’s position
that W. VA. CODE ANN. § 33-6-31(d) is intended as an
embodiment of the requirements of procedural due process.
Perkins v. Doe, 177 W. Va. 84, 350 S.E.2d 711 (1986). If
judgment rendered in an underlying tort action is to be binding
upon it, a UIM carrier must be given notice and opportunity
to protect its interests. Here, there is no question that the
Petitioner was given notice and some opportunity to participate
in the underlying tort action. However, the question presented
is whether the Respondent has so restricted participation by
the Petitioner so as to deprive it of any meaningful opportunity
to protect its interests, thus denying it procedural due process.
It is the Petitioner’s position that the Order of the Respondent
is directly contrary to W. VA. CODE ANN. § 33-6-31(d) and,
therefore, constitutes a denial of rights guaranteed by the
United States and West Virginia Constitutions. In petitioning
this Court to construe W. VA. CODE ANN. § 33-6-31(d), the
Petitioner concomitantly petitions this Court to address the
constitutional question of what constitutes meaningful
opportunity to be heard in this context.
Il. PROHIBITION IS AN APPROPRIATE REMEDY
IN THIS INSTANCE,
Prohibition lies as a matter of nght where a lower
court, having proper jurisdiction over a matter, exceeds its
legitimate powers, W. VA CODE ANN. § 53-1-1, but cannot
serve as a substitute for a writ of error or appeal. Handley v.
Cook, 162 W. Va. 629, 252 S.E.2d 147 (1979). While, at
first glance, it might appear that this Petitioner’s attack on the
Respondent’s rulings upon the subject motions constitutes such
an attempt at an interlocutory appeal, it must be borne in mind
Appendix Page 77
that those rulings merely serve as a predicate for compelling
this Petitioner to proceed with the pending action in a posture
which this Petitioner contends is in violation of its
9
Appendix Page 78
es — Ta A ies
due process rights. The injury sought to be avoided is the
expense of litigating a matter which, because of those rulings,
would almost certainly result in appeal, reversal and retrial,
to the economic detriment of all involved and at great waste
of judicial resources. While it is necessary for this Court to
consider the propriety of the challenged rulings in the
disposition of this matter, the present Petition is not directed
solely or even primarily to the error of those rulings, but to
the position in which this Petitioner is cast as a result thereof.
Unlike most cases involving true appeals, where the
assignments of error occur at trial or in the later stages of
litigation when the litigants have already been put to the full
expense of litigating the matter, here the injury to be avoided
is largely prospective insofar as the present matter is yet in the
early stages of litigation. In this situation, Prohibition is an
especially appropriate remedy for avoiding the costs to all of
seeing to its conclusion a matter which is fatally flawed at the
outset. A fortiori, the law offers no remedy whereby this
Petitioner might recoup the costs of proceeding with the
pending action in its flawed state and the injury which it
would suffer is, thereby, irreparable.
Added to this absence of an available remedy at law is
the nature and gravity of the grievance raised herein. It is
commonly held that, for fourteenth amendment purposes,
garden-variety errors of procedure or evidentiary rulings
during the course of a trial do not typically rise to the level of
a violation of procedural due process. See., e.g., American
R. Express Co. v. Kentucky, 273 U.S. 269 (1927). By
contrast, denial of a litigant’s participation in a hearing which
purports to be conclusive as to its rights is a fundamental due
process violation. Powell v. Alabama, 287 U.S. 45 (1932).
Appendix Page 79
Jt cannot result in “harmless error” which might later be
overlooked, Nevels v. Hanlon, 656 F.2d 372 (8th Cir. 1972);
Scarnati v. Washington, 599 F.
10
Appendix Page 80
Supp. 1554 (M.D. Pa.), aff'd, 772 F.2d 896 (3d Cir. 1985),
cert. denied, 474 U.S. 1056 (1986); Martino v. American
Airlines, Inc., 404 F. Supp. 1202 (S.D.N.Y. 1975), aff'd, 573
F.2d 1292 (2d Cir. 1977), cert. denied, 439 U.S. 869 (1978);
In re Ralph Marcantoni & Sons, Inc., 62 B.R. 245 (D. Md.
1986), and any such denial of due process could not help but
result in reversal upon appeal. See also Hinkle v. Black, 164
W. Va. 112, 262 S.E.2d 744 (1979) (prohibition is proper
remedy in cases where there is a high probability of reversal
if error is not corrected in advance).
Finally, Prohibition is governed by equitable
principles, Lyons v. Steele, 113 W. Va. 652, 169 S.E. 481
(1933), requiring generally that the litigant seeking the writ
have no adequate remedy at law. As heretofore argued, this
Petitioner has no redress at law for the injury to be incurred
in allowing the pending action to proceed in its flawed state.
Accordingly, Prohibition is a proper and appropriate remedy
in this matter to prevent prospective injury of great magnitude
which is irrevocable in nature and for which the law offers no
redress.
fli. THE PETITIONER’S RIGHTS TO PROCEDURAL
DUE PROCESS WILL BE VIOLATED IF
COMPELLED TO PROCEED WITH THE
PENDING ACTION AS POSTURED IN LIGHT
OF THE RESPONDENT’S ORDER FORCING
THE PETITIONER TO MAKE AN
IRREVOCABLE ELECTION AS TO WHETHER
IT APPEARS IN THE PENDING ACTION IN ITS
OWN NAME OR IN THE NAME OF THE
DEFENDANTS.
The Order issued by the Respondent granting the
Plaintiff's motion to require the Petitioner to make an
Appendix Page 81
irrevocable election as to whether it appears in the pending
action in its own name or in the name of the alleged tortfeasor
Defendants contains no findings of fact or conclusions of law,
but perfunctorily grants the Plaintiff's motion. Appendix,
Tabs 2, 4. As such, it must be presumed that it was the
Respondent's intention to grant the subject motion in
Appendix Page 82
its entirety, as it was posed by the Plaintiff. Incorporated in
this motion are two concepts which are subsidiary to the
premise that the Petitioner must make such an election at all:
(1) that any such election would be irrevocable, and (2) that
the Petitioner’s right to conduct discovery in the pending
action is contingent upon the Petitioner electing to proceed in
its own name. See also Appendix, Tab 3 (Petitioner entitled
to conduct only “unified discovery” in conjunction with
alleged tortfeasor Defendants unless appearing in its own
name);’ Appendix, Tab 4 (granting the same). Each of these
premises is directly contrary to the black-letter law of W. VA.
CODE ANN. § 33-6-31(d) and is repugnant to the constitutional
principles of due process and fundamental fairness.
W. VA. CODE ANN. § 33-6-31(d) provides that
Any insured intending to rely on the coverage required
by subsection (b) of this section shall, if any action be
instituted against the owner or operator of an uninsured
motor vehicle, cause a copy of the summons and a copy
of the complaint to be served upon the insurance
company issuing the policy, in the manner prescribed by
law, as though such insurance company were named a
.party defendant; such company shall thereafter have the
night to file pleadings and to take other action allowable
by law in the name of the owner, or operator, or both,
of the uninsured or underinsured motor vehicle or in its
own name.
Nothing in this subsection shall prevent such owner or
operator from employing counsel of his own choice and
taking any action in his own interest in connection with
such proceeding.
Nothing in this section, nor in any case construing it,
States or suggests that the UIM carrier must make an election
of any sort; that any such election is irrevocable once made;
Appendix Page 83
or that a UIM carrier’s rights to conduct discovery are in any
way contingent upon making such
‘And thereby making the jury cognizant of the presence of
insurance funds from which the Plaintiff may be compensated in
contravention of W.V.R.E., Rule 411.
Appendix Page 84
an election. It is apparently the position of the Plaintiff and
Respondent that the language of the first paragraph of W. VA.
CODE ANN. § 33-6-31(d) permitting the UIM carrier "to file
pleadings and to take other action allowable by law in the
name of [alleged tortfeasor] or in its own name” requires such
an election by negative inference. However, W. VA. CODE
ANN. § 33-6-31(d) requires no such election. Rather, that
meaningful opportunity to participate in an action which will
affect its interests as required by procedural due process
includes the opportunity to participate to the full extent
contemplated by the Rules of Civil Procedure, and that
meaningful opportunity includes participation characterized by
all of the same rights and privileges afforded other litigants.
It is incumbent upon the Respondent to clearly establish the
legal basis for any limitation or qualification imposed upon the
Petitioner’s participation in the underlying action which would
grant the Petitioner fewer rights than other litigants. No such
basis, however, has been advanced.
It is clear that the UIM carrier’s obligations will be
conclusively determined in the underlying tort action provided
it has been given notice thereof and an opportunity to
participate. The Respondent has conditioned this Petitioner’s
right to participate in the underlying action by requiring the
Petitioner to elect between its right to be immune from a
direct action by the Plaintiff, Davis v. Robertson, 175 W. Va.
364, 332 S.E.2d 819 (1986) and Plumley v. Allstate Ins. Co.,.
772 F. Supp. 922 (S.D.W.V. 1991), and its right to conduct
the full measure of discovery to which it would otherwise be
entitled pursuant to the Rules of Civil Procedure. Stated in
the converse, the Petitioner is penalized for its failure to waive
Appendix Page 85
its rights under Davis and Plumley by the imposition of
restrictions upon its right to conduct discovery which have the
The Plaintiff advanced no legal argument whatsoever in support
of her position that an election is required, Appendix, Tab 1, but, instead,
took it as a given factor.
13
Appendix Page 86
effect of denying the Petitioner the right to participate to the
full extent otherwise allowed by the Rules of Civil Procedure
and to a lesser extent than the right to participate enjoyed by
the other litigants.
In the first instance, nothing in W. VA. CODE ANN. §
33-6-31(d) requires that the UIM carrier “appear” in any
capacity whatsoever. The statute references filing pleadings
and taking other action allowable by law -- not "appearance."
From this it is eminently clear that the legislature, did not
contemplate that the UIM carrier must or might participate in
the underlying tort claim. This is amplified by the language
chosen by the legislature relating to service of the summons
and complaint upon the UIM carrier “as though such
insurance company were a named party defendant." W. VA.
CODE ANN. § 33-6-31(d) (emphasis added). Thus, any
requirement that the UIM carrier must appear as a party or on
behalf of any party in the underlying tort action is facially
erroneous.
Notwithstanding such clear indication that the UIM
carrier is not a contemplated actual or representative party to
the underlying tort claim, the legislature, unequivocally and
without qualification of any sort, granted UIM carriers the
right to "file pleadings and to take other action allowable by
law” in its own name or that of the alleged tortfeasor. Just as
it is conclusively presumed that the plain language of the
Statute expresses the intent of the legislature enacting it,
United States v. American Trucking Ass'ns., 310 U.S. 534
(1940); Osaka Shosen Kaisha Line v. United States, 300 U.S.
98 (1937); United States v. Kirby Lumber Co., 284 U.S. |
(1931). See also 17 MICHIE’S JURISPRUDENCE, Statutes § 34
(1979 & Supp. 1992), cases cited at n.13; 73 AM. JUR.2D,
Statutes, § 194 (1974 & Supp. 1993), it must be inferred that
Appendix Page 87
the absence of any language qualifying or conditioning this
right indicates that it was not the
14
Appendix Page 88
intention of the legislature that any qualifications or conditions
be imposed. Yet, the Respondent, upon no supporting legal
argument, precedent or legal authority, seeks to place a price
upon these rights -- that the Petitioner give up its immunity
from direct action as preserved in Davis v. Robertson, 175 W.
Va. 364, 332 S.E.2d 819 (1986) and Plumiey v. Allstate Ins.
Co., 772 F. Supp. 922 (S.D.W.V. 1991). The cost to the
Petitioner of preserving this right is that it be permitted to
participate only in “unified discovery,” -- either relying upon
or working in conjunction with a tortfeasor defendant whose
interests are directly adverse, at least in part, to it. It is clear
that, within the context of the UIM action, the carrier stands
on lesser footing and has fewer rights before the court than the
other litigants.
There is nothing in the statute which suggests that it is
intended that the UIM carrier suffer such an impairment to its
due process right to defend its own interests. To the contrary,
both the plain language of W. VA. CODE ANN. § 33-6-31(d)
and those cases which construe it, notably Davis and Plumiey,
indicate the opposite -- that it is intended that the UIM carrier
have the right to participate in the underlying tort action to the
Same extent as the actual parties thereto. Moreover, any
arrangement which imposes such unequal treatment is facially
suspect.
In Fyke v. Clark, No. 89-98-II (Tenn. Ct. App. Dec.
6, 1989) (1989 WL 146736)(1989),’ the court rejected the
identical argument presented here in holding that the identical
Tennessee statute, TENN. CODE ANN. § 56-7-1206, does not
require the UIM carrier to make such an election. In accord
with Davis and Plumley, the court in Webster v. Harris, 727
S.W.2d 248 (Tenn. App. 1987), opined that TENN. CODE
Appendix Page 89
ANN. § 56-7-1206 was enacted in part to preserve to the UIM
carrier the same right of anonymity enjoyed by liability
insurance
"Included herewith for the convenience of the Court at Appendix,
Tab 5.
15
Appendix Page 90
carriers, the purpose of which would be defeated if the UIM
carrier were to be named as a party. Interpreting the identical
Virginia statute, VA. CODE ANN. § 38.2-2206, it has been
held that the UIM carrier is not a party to the action, Zurenda
v. Holloman, 616 F. Supp. 212 (E.D. Va. 1986), and that
injection of insurance into the case is prejudicial error.
Travelers Ins. Co. v. Lobello, 212 Va. 534, 186 S.E.2d 80
(1972).
Accordingly, the Plaintiff's position, as adopted by the
Respondent, that the Petitioner must make an election as to
whether to appear in its own name or in the name of the
alleged tortfeasor Defendant, is erroneous and _ the
consequences attached by the Respondent to the making or
failure to make such an election render it an egregious
violation of the due process clauses of the United States and
West Virginia Constitutions.
IV. THEPETITIONER’S RIGHTS TO PROCEDURAL
DUE PROCESS WILL BE VIOLATED IF IT IS
COMPELLED TO PROCEED WITH THE
PENDING ACTION AS POSTURED IN LIGHT
OF THE RESPONDENT’S ORDER PERMITTING
THE PETITIONER DISCOVERY PURSUANT TO
THE RULES OF CIVIL PROCEDURE ONLY IF
IT ELECTS TO APPEAR IN THE PENDING
ACTION IN ITS OWN NAME OR, IF NOT
APPEARING IN ITS OWN NAME, CONDUCTS
DISCOVERY ONLY IN CONJUNCTION WITH
THE DEFENDANTS.
In his Order granting the Plaintiff's motion for
protective order pursuant to R.C.P., Rule 26, the Respondent
made no findings of fact or conclusions of law, but
perfunctorily granted it without discussion. Appendix, Tabs
Appendix Page 91
3, 4. As such, it must be supposed that the Respondent
adopted the rationale as set forth in the Plaintiff's motion.
That “rationale,” is presumably based in the argument that (1)
"Allstate Insurance Company is attempting to conduct
discovery which most assuredly will duplicate" discovery
which would, in the future, be filed by the alleged tortfeasor
Defendants; (2) the Petitioner, having no direct knowledge of
the collision giving rise
16
Appendix Page 92
to the pending action, would be unable to reciprocate by
providing the Plaintiff with any “meaningful type of
discovery;" and (3) if the Petitioner appears in the pending
action on behalf of the tortfeasor Defendants, unified
discovery must be conducted by either the Petitioner or the
tortfeasor Defends, but not both. Appendix, Tab 3 at 1-2.*
Based upon this rationale, the Respondent has issued an Order
which severely restricts this Petitioner’s right to participate in
the pending action -- a proceeding which purports to
foreclose, in whole or in part, its rights -- in violation of W.
VA. CODE ANN. § 33-6-31(d) and denies this Petitioner
meaningful opportunity to be heard, in violation of the due
process clauses of the United States and West Virginia
Constitutions.
With regard to the first prong of her rationale, the
Plaintiff clairvoyantly argues that the discovery filed by this
Petitioner would "most assuredly" duplicate discovery requests
to be filed in the future by the alleged tortfeasor Defendants.
The Plaintiff (and Respondent) offer no rationale whatsoever -
- legal or otherwise -- as to why it is the present discovery
requests which must yield to those which might or might not
be propounded by another party in the future.
Secondly, the Plaintiff (and Respondent) seek to
rationalize denying this Petitioner full opportunity, to discover
all facts and evidence upon which the Plaintiff bases her
claims because the propounding party cannot reciprocate with
"meaningful discovery" -- This premise is directly contrary to
R.C.P., Rules 1, 26, 27, 28, 29 30, 31, 32, 33, 34, 35, 36
and 37, as well as W. VA. CODE ANN. 33-6-31(d), not a
single one of which expressly or impliedly imposes any such
condition or any remotely similar condition upon a litigant’s
Appendix Page 93
right to participate in full discovery. Simply put, discovery is
not a bargained exchange wherein one’s entitlement is roughly
*By negative inference, if the Petitioner appears in its own name,
it is entitled in its own right to the full measure of discovery contemplated
by the Rules of Civil Procedure. See Appendix, Tab 2; supra, argument
at III.
17
Appendix Page 94
equivalent to what one may offer in return and the Plaintiff
(and Respondent) are simply wrong in believing that the
quantity and quality of any discoverable information which the
Petitioner may possess is in any way relevant to the question
of whether it is entitled to participate in discovery. Such an
irrelevant consideration may not serve as a basis for the
issuance of a protective order. This logic has the effect of
denying this Petitioner procedural due process by relegating it
to the position of a “second class litigant" which may be
denied discovery or whose participation in discovery may be
limited or qualified by the court.
The third leg of Plaintiff's (and Respondent’s)
"rationale" advocates a forthright denial of those due process
rights. Here, the Plaintiff (and Respondent) insist that, if this
Petitioner does not to waive its right to be free of a direct
action against it by the Plaintiff, as per Davis v. Robertson,
175 W. Va. 364, 332 S.E.2d 819 (1986) and Plumley v.
Allstate Ins. Co., 772 F. Supp. 922 (S.D.W.V. 1991), it
must, if it is to have discovery at all, form an alliance with
parties whose interests are adverse to it because only the
tortfeasor defendant or the UIM carrier, but not both, may
conduct discovery.
Nowhere is the fallacy of the Plaintiff's position more
clearly illustrated than in applying it to discovery between the
Petitioner and the alleged tortfeasor Defendants. As
previously noted, while both the UIM carrier and the alleged
tortfeasor defendant share an interest in defeating the
plaintiff's claim altogether, the outer limit of the UIM
Carrier’s interest is in preventing the Plaintiff from obtaining
a judgment in excess of the alleged tortfeasor defendant’s
liability coverage. It is a matter of no interest to the UIM
carrier if the alleged tortfeasor defendant is found liable to the
plaintiff within the limits of his liability coverage and, in
Appendix Page 95
pl elas
certain situations, it might be to the UIM carrier’s advantage
to assist the plaintiff in obtaining such a
Appendix Page 96
judgment in order to protect itself or minimize its liability.
Similarly, the alleged tortfeasor’s motivation to defend is
limited by the extent of his liability coverage in most
instances. In all instances, the question of the defendant’s
assets are of concern to the UIM carrier, as is the protection
of its right of subrogation.
Thus, the Plaintiff (and Respondent) bluntly deny this
Petitioner’s right to independent discovery -- ostensibly
because responding to discovery propounded by both the
alleged tortfeasor Defendants and the UIM carrier would be
burdensome to the Plaintiff. Neither the Plaintiff nor the
Respondent point out how this might be more burdensome
than would be the necessity of responding to discovery
propounded by different alleged tortfeasors where a plaintiff
elects to sue multiple tortfeasors who are not in privity of
interest or where third-party defendants are impleaded.
Neither the Plaintiff nor the Respondent suggest that multiple
defendants are to be subjected to “unified discovery."
Moreover, neither the Plaintiff nor the Respondent
distinguishes or can distinguish the present action, where the
Plaintiff seeks to establish the liability for damages of both
this Petitioner a he tortfeasor, from a "multiple tortfeasor”
action wherein a plaintiff seeks to establish the liability of
multiple tortfeasors for damages. Particularly noteworthy is
the absence of any real “burden” upon the Plaintiff since no
discovery had been filed by the alleged tortfeasor Defendants
at the time of the granting of the protective order.
Both W. VA. CODE ANN. § 33-6-31(d) and the
numerous Rules of Civil Procedure which address discovery
contemplate that litigants shall be on equal footing with regard
to discovery and that there be no “privileged” or
Appendix Page 97
“underprivileged” classes of litigants. This attempt by the
Plaintiff and the Respondent to create such a distinction and
relegate this Petitioner to the
19
Appendix Page 98
underprivileged class is an egregious violation of procedural
due process, as would be any attempt to "tie one hand behind
a litigant’s back" by granting an advantage or imposing a
disadvantage to one litigant which is not enjoyed by all
litigants.
¥. THE PETITIONER’S RIGHTS TO PROCEDURAL
DUE PROCESS WILL BE FURTHER VIOLATED
IF COMPELLED TO PROCEED WITH THE
PENDING ACTION AS POSTURED IN LIGHT
OF THE RESPONDENT’S ORDER SUBJECTING
THE PETITIONER TO A "UNIFIED DEFENSE
ON THE MERITS" OF THE PENDING ACTION
IN CONJUNCTION WITH THE DEFENDANTS.
The Plaintiff (and Respondent) further seek to penalize
this Petitioner by impairing its right to participate in the action
at all. Solely because this Petitioner is a UIM carrier against
whom a direct action may not be maintained, the Plaintiff and
Respondent seek to require it, to present a "unified defense on
the merits” to the Plaintiff's claim on the "rationale" that it
would be unfair to subject a plaintiff, who has elected to sue
multiple defendants for significant sums of money, to
inconsistent responses, answers or defenses which such
diverse defendants might assert. Appendix, Tabs 1, 4.
Meaningful opportunity to defend, as required by due
process, encompasses nothing less than the opportunity to
present every available defense. Lindsey v. Normet, 405 U.S.
56 (1972); American Sur. Co. v. Baldwin, 287 U.S. 156
(1932). To hoid that diverse litigants must present a “unified
defense on the merits” is precisely to deny each of them those
defenses in which the other does not concur. At minimum, it
reduces the ability of both to defend to a "least common
Appendix Page 99
denominator" and at worst, such as where there are
crossclaims between them, paralyzes the duty of either to
defend at all. In either event, it denies both of them the full
measure of due process.
20
Appendix Page 100
In order to comprehend just how egregious a violation
of due process occurs here, it is necessary only to consider
that numerous UIM actions involve, if not collusive claims,
situations in which the defendant is a friend, relative or
associate of the plaintiff and not in the least adverse to the
plaintiff being awarded a substantial judgment -- particularly
where the alleged tortfeasor defendant is otherwise “judgment
proof." To hold that the UIM carrier may not independently
assert any defense which is available to it, but may only assert
those defenses with which the tortfeasor defendant, in
sympathy with the plaintiff, agrees would be to limit it to-only
those defenses of which the plaintiff directly or indirectly
approves.
Here again, the Plaintiff and the Respondent fail to
offer any rationale or authority for the disparate treatment
imposed upon this Petitioner, as a UIM carrier, from the
treatment that would be afforded a litigant who was alleged to
be a joint tortfeasor.
VI. THE PETITIONER’S RIGHTS TO PROCEDURAL
DUE PROCESS WILL ALSO BE VIOLATED IF
COMPELLED TO PROCEED WITH THE
PENDING ACTION AS POSTURED IN LIGHT
OF THE RESPONDENT’S ORDER STRIKING
AFFIRMATIVE DEFENSES RESERVED BY THE
PETITIONER.
In his Order, the Respondent struck this Petitioner’s
affirmative defenses, which it sought to reserve to the extent
of the interests of the tortfeasor Defendants, of lack of subject
matter jurisdiction, lack of personal jurisdiction, improper
venue, insufficiency of process and insufficiency of service of
process on the basis that they were “somewhat frivolous."
Appendix Page 101
Appendix, Tab 4 at 4. It is interesting that the affirmative
defenses were stricken in the absence of any supporting
evidence or findings of fact -- all being upon the motion of the
Plaintiff. Neither the alleged tortfeasor Defendants nor the
Petitioner moved to dismiss the Plaintiff's claim. This again
contravenes W. VA. CODE ANN. § 33-6-31(d) and effectuates
a waiver of the carrier's
21
Appendix Page 102
right to assert those defenses on behalf of the alleged
tortfeasor in violation of the UIM carrier’s due process rights.
If the UIM carrier fails to assert such defenses, they
are waived. R.C.P., Rule 12(h)(1). If the UIM carrier, as
did this Petitioner, asserts such defenses for the purpose of
reserving them subject to the later development of information
which would establish or refute their applicability,’ it risks
their being dismissed by the court as "frivolous" based upon
the UIM carrier’s inability to substantiate them at that point in
time. Most often, the UIM carrier not only often lacks
sufficient information at the time of answering to make a
determination whether any of the Rule 12(h) defenses might
be available, but lacks the means of developing such
information except through the discovery process. To prohibit
the UIM carrier from asserting all potential defenses places
the carrier in a “Catch-22” situation in that it may waive a
viable defense, thereby impeding its interest and subjecting it
to sanctions or it may assert a defense which may later be
proved, but stricken -- again subjecting it to sanctions.
The UIM carrier, not being a natural person,
necessarily must be represented by counsel who is constrained
by the tenets of professional ethics. Where the alleged
tortfeasor is represented by counsel, these tenets prevent the
UIM carrier, by its counsel, from contacting the alleged
tortfeasor to ascertain the facts which would substantiate or
refute the applicability of the Rule 12(h) defenses. In a “John
Doe” suit, there is no alleged tortfeasor available from whom
the facts supporting or refuting the applicability of these
Appendix Page 103
defenses might be ascertained at that time. Thus, it is only
where the UIM carrier has fully developed prior to suit
independent
*Commonly the UIM carrier has no direct knowledge of the
alleged tortfeasor's residence, which is relevant to the question of venue,
the manner in which the alleged tortfeasor was served with process, the
sufficiency vel non of the process with which the alleged tortfeasor was
served or the alleged tortfeasor’s contacts with the forum as they relate to
personal jurisdiction.
22
Appendix Page 104
knowledge of the facts or where the alleged tortfeasor, either
proceeding pro se or represented by counsel, elects to
cooperate with the UIM carrier that the necessary factual
information may be determined prior to discovery. In that
majority of cases which do not fall into either of these
categories, denial of the opportunity for the UIM carrier to
reserve the Rule 12(h) defenses until sufficient facts can be
developed amounts to a forced waiver of these defenses which
might otherwise be available to the UIM carrier if given the
opportunity to develop the supporting information.
As previously noted, procedural due process requires
that the litigant be given the opportunity to present every
available defense. Lindsey v. Normet, 405 U.S. 56 (1972);
American Sur. Co. v. Baldwin, 287 U.S. 156 (1932). In the
normal lawsuit between parties who have knowledge of the
events upon which it is based, the standard apparently applied
by the Respondent for dismissal of the Rule 12(h) defenses has
efficacy. However, in the hybrid form of litigation presented
by the combined tort/UIM suit, it amounts in most instances
to a denial of the UIM carrier’s due process right to assert
these defenses based solely upon its status and the limitations
attendant upon that status. This is especially so where there
is an absentee ("John Doe”) tortfeasor defendant, where the
underlying claim might be collusive or where the tortfeasor
defendant’s interests are aligned with those of the plaintiff. In
any of these events, there is no other litigant who would have
the motivation to vigorously assert available affirmative
defenses, including the Rule 12(h) defenses. The end result
is that the UIM carrier, as here, has been denied the
opportunity te assert available defenses in violation of its due
process rights.
23
Appendix Page 105
Vil. THE PETITIONER’S RIGHT TO PROCEDURAL
DUE PROCESS WILL BE VIOLATED IF
COMPELLED TO PROCEED WITH THE
PENDING ACTION AS POSTURED IN LIGHT
OF THE CUMULATIVE EFFECTS OF ALL OR
SOME COMBINATION OF THE FOREGOING
ORDERS.
To the extent that each or any of the foregoing aspects
of the Respondent’s Order do not rise to the level of a due
process violation in and of themselves, the combined effect of
them does. Here, the Petitioner is compelled in light of these
Orders not only to proceed with the pending action without the
ability to assert affirmative defenses which may be annlicable,
but to either waive its substantive nights under Davis v.
Robertson, 175 W. Va. 364, 332 S.E.2d 819 (1986) and
Plumley v. Allstate Ins. Co., 772 F. Supp. 922 (S.D.W.V.
1991), or be relegated to the status of a “second class
litigant,” not entitled to the full benefit of discovery and not
permitted independently to assert defenses without the
concurrence of the alleged tortfeasor defendants. The
fundamental unfairness of the impediments to protecting its
own interests with which this Petitioner has been burdened by
the Respondent shocks the conscience and is an absolute denial
of this Petitioner’s procedural due process to a meaningful
opportunity -- to protect its interests. Hannah v. Larche, 363
U.S. 420 (1960) (due process embodies rules of fair play);
Stypmann v. City & County of San Francisco, 557 F.2d 1338
(9th Cir. 1977) (fundamental requirement of due process is
opportunity to be heard in a meaningful manner); Felhaber v.
Felhaber, 681 F.2d 1015 (Sth Cir. 1982), cert. denied, 464
U.S. 818 (1983) (serious departure from established modes of
procedure can render judgment void for violation of due
process). Simply put, this Petitioner cannot, consistent with
any known concept of fairness, equality of treatment or
Appendix Page 106
impartiality, be compelled to proceed with the pending action
as it is postured in view of the Respondent’s Order qualifying
and imposing conditions upon the Petitioner’s right to
participate therein. This Order and the position in which it
casts the
24
Appendix Page 107
Petitioner are a blatant and abhorrent affront to the bedrock
principles upon which the Constitutions of the United States
and of this state are founded and the pending action cannot be
permitted by this Honorable Court to go forward in light of
such violations.
CONCLUSION
For the reasons stated herein, the Petitioner
respectfully prays that this Honorable Court issue a Writ of
Prohibition forbidding the Respondent from going forward
with the case of Carr v. Brooks, Civil Action No. 93-C-72-K,
now pending in the Circuit Court for Marshall County, West
Virginia, in any posture other than one which grants to this
Petitioner the full measure of rights enjoyed by any other
litigant under the Rules of Civil Procedure and that the
Respondent be prohibited from enforcing, in whole or in part,
his Order of June 28, 1993 granting the Plaintiff's Motion for
Single Answer, the Plaintiff's Motion for Protective Order,
the Plaintiff's Motion for Allstate Insurance Company to Make
an Election Pursuant to W. VA. CODE ANN. § 33-6-31(d) and
the Plaintiff's Motion to Strike Certain Affirmative Defenses,
each of which limit, qualify and condition the Petitioner’s
rights to participate in the pending action in violation of the
due process clauses of the fifth amendment to the United
States Constitution, the fourteenth amendment to the United
States Constitution and Article II, § 10 of the West Virginia
Constitution.
ALLSTATE INSURANCE COMPANY
BY COUNSEL
25
Appendix Page i08
MARTIN & SEIBERT, L.C.
By: _/s/ Walter M. Jones, III
Walter M. Jones, III
Paul B. Weiss
119 South College Street
P.O. Box 1286 :
Martinsburg, WV 25401
(304) 267-8985
26
Appendix Page 109
CERTIFICATE OF SERVICE
I, Walter M. Jones, III, Counsel for the Defendant,
Allstate Insurance Company, hereby certify that I served a
true copy of the foregoing Petition for Writ of Prohibition
upon the following individuals by placing the same in the U.S.
Mail, First Class, postage prepaid, on this the 29th day of
June, 1993:
Hon. Mark A. Karl, Judge
Circuit Court of Marshall County
icial Circuit
Marshall County Courthouse
Moundsville, WV 26041
G. Charles Hughes
G. Charles Hughes, L.C.
P. O. Box 871
Moundsville, WV 2604]!
Robert P. Fitzsimmons
Fitzsimmons & Parsons, L.C.
2003 Warwood Avenue
Wheeling, WV 26003
Donald M. Kresen
Jackson & Kelly
P. O. Drawer 68
New Martinsville, WV 26155
/s/ Wlater M. Jones. III
Walter M. Jones, III
27
Appendix Page 110
APPENDIX, TAB ‘‘H”’
a
STATE OF WEST VIRGINIA EX REL
ALLSTATE INSURANCE COMPANY
oe
Ss
met.
.
rat
a
INDEX
PAGE
I. STATEMENT OF THE CASE ........0:: 2
(A) The Factual Backdrop ............... 2
(B) The Procedural History ............. 6
Il. . ( ree eee ee ot 14
I EO ee 19
ep ee 6 i oo a sk eo ae 19
(B) The Statute Giveth And Taketh Away ..... . 27
i “P J. 4 4° 30
(D) Views From Other Venues ........... 37
i: SE 6 oN bo a6 oSGs ohe eeu 41
Appendix Page 112
21818
IN THE SUPREME COURT OF APPEALS
OF WEST VIRGINIA
STATE OF WEST VIRGINIA EX REL
ALLSTATE INSURANCE COMPANY, a
corporation,
Petitioner,
Vv.
HONORABLE MARK A. KARL, Judge of
the Circuit Court of Marshall County;
JAMIE LYNN BROOKS and
JAMES E. BROOKS,
Respondents.
22 ——— EEE
PLAINTIFF'S MEMO IN
OPPOSITION TO
PROVISIONAL RULE
G. Charles Hughes
G. Charles Hughes, L.C.
Seventh at Court Avenue
Moundsville, WV 26041
Robert P. Fitzsimmons, Esq.
Fitzsimmons & Associates
2003 Warwood Avenue
Wheeling, WV 26003
Counsel for the Plaintiff
l
STATEMENT OF THE CASE
(A) The Factual Backdrop
In the afternoon hours of 17 October 1991, the
plaintiff, Norma J. Carr, a 56-year old widow (hereafter "Ms.
Carr") - while walking home and crossing Jefferson Avenue
at its intersection with Fifth Street in the heart of Moundsville
- was struck by a car owned by the defendant, James E.
Brooks, and operated by his 18-year old daughter, the
defendant, Jamie Lynn Brooks (hereafter "Miss Brooks”).
According to her signed statement within the WV Uniform
Accident Report - produced by the defendants in response to
the first set of Ms. Carr’s document requests - Miss Brooks
told the investigating officer that she did not see Ms. Carr "
. until she was on my car.”
Appendix Page 114
Catapulted from the hood of that car onto the
pavement, Ms. Carr suffered serious and disabling injuries
including, inter alia, brain damage and reflex sympathetic
dystrophy resulting from the trauma-induced disturbance of the
autonomic nervous system of the left upper limb. ' Following
her hospitalization, she spent months in out-patient physical
therapy at the same facility. Despite these therapeutic
oblations, however, future surgery (followed by an additional
year of intensive therapy) will be required if significant
function is to be restored to her arm and hand. To date, Ms.
Carr’s medical expenses approximate $25,000.00. She
remains under the care of a plastic surgeon and psychiatrist,
as well as her family doctor.
‘Specifically, Ms. Carr’s injuries included: a cerebral concussion; a
contusion of the left panetal lobe of the brain (demonstrable on CT Scan);
a fractured rib; a Volkmann's ischemic contracture; multiple and extensive
abrasions and contusions of the face, head, chest, abdomen and
extremities; lacerations of the mght lower and upper eyelids, the forehead,
left cheek and in the area of the left eyelid or eyebrow; contusions to the
orbatal areas; a subgaleal hematoma in the right frontotemporal area; soft
tissue damage or ligamentous strain or sprain of the neck, shoulder and
back; injuries to the left arm and wrist (with resultant reflex sympathetic
dystrophy); and a psychological disorder that interdicts the ability to cross
public streets unattended.
Appendix Page 115
In late 1992, after marshalling the medical records and
bills, together with detailed reports from her three primary
physicians - and after voluntarily submitting Ms. Carr to a
day-long examination at WVU by a neuropsychiatrist selected
by State Automobile Mutual Insurance Company (hereafter
"State Auto"), the liability insurance carrier for Miss Brooks -
counsel for Ms. Carr tendered a settlement demand for the
single limit of liability coverage ($250,000.00) provided by
the Brooks’ policy. No settlement offer was ever made in
response thereto. Unrequited, Ms. Carr filed suit against
Miss Brooks and her father in the Circuit Court of Marshall
County on 13 February 1993.
Instructed by State Automobile Insurance Co. Vv.
Youler, 183 W.Va 556, 563, n. 7, 396 §.E.2d 737, 744 n.
7(1990), if not Ara v. Erie Insurance Co., 182 W.Va. 266,
268, n. 5, 387 S.E.2d 320, 322, n. 5 (1989) - that adherence
to the notice provisions of W. Va. Code, 33-6-31(d) [1988], is
a sine qua non condition precedent to an injured party’s
reliance upon underinsured motorist coverage,’ see also Lusk
v. Doe, 175 W.Va. 775, 778, 338 S.E.2d 375, 378 (1985) -
a copy of the summons and complaint also was caused to be
served upon Allstate Insurance Company (hereafter
"Allstate"),’ a possible source of underinsurance coverage
*In Syllabus Point | of Postlethwait v. Boston Old Colony, __ W.Va.
S.E.2d (slip op. 21347, June 28, 1993) - decided after
the case at hand was filed - this Court held that Code, 33-6-31(d), requires
service of a copy of the complaint upon the underinsurance carrier in the
manner prescribed by law.
The defendants and Allstate also were served with the discovery that
was filed concurrently with Ms. Carr’s complaint, viz., two sets of
interrogatories, one set of requests, and one set of requests to admit.
Appendix Page 116
(hereafter "UIM" coverage) for Ms. Carr.‘ Unfortunately,
having absorbed the admonition, and having complied with the
statutory notice, Ms. Carr cannot now help but wonder at the
mischief thus inspired.
(B) The Procedural History
Housed in eight separately numbered paragraphs spread
over four pages, the allegations of Ms. Carr’s complaint sound
in conventional negligence (see Exhibit "1" hereto). Among
other things, Ms. Carr averred:
"(1) Defendants, Jamie Lynn Brooks and
James E. Brooks, at all times material herein
were residents of 102A Sandy Avenue,
Moundsville, Marshall County, West Virginia.
(2) Plaintiff, Norma J. Carr, was at all
times material herein a resident of Marshall
County, West Virginia.
(3) At all times material herein, Defendant
James E. Brooks was the owner of a 1987
Mercury Topaz automobile which he kept,
maintained and used for the business and
pleasure of his family members, including
Jamie Lynn Brooks, who was a family member
of Defendant James E. Brooks.”
‘Although Ms. Carr did not own a motor vehicle at the time of the
collision, her adult son did. A resident of Ms. Carr’s household at the
time, the son maintained a liability policy through Allstate that provides
$25,000.00 in UIM coverage.
Appendix Page 117
These averments were admitted in the answer filed in due
course by counsel selected by the defendants’ liability insurer,
State Auto. In addition, that answer contained the usual
assortment of denials and affirmative defenses, not least
companies contributory negligence and comparative
assumption of the risk.
Unfortunately, these familiar rites of passage ended
with the refractory answer - seen all too frequently these days
in cases involving underinsurance carriers° - that was filed by
*A host of reasons, few scientific or laudatory, can be found to explain
the increased incidence of cases involving underinsurance carriers, as well
as the type of answer and other efforts made here by Allstate. To begin
with, the medical expenses associated with the treatment of the victims of
automobile accidents are of a piece with the constantly escalating cost of
this Nation’s health care. In addition, the frequency, if not the severity,
of automobile accidents continues to rise, albeit at a much less alarming
rate than the attendant medical costs. It follows, of course, that the limits
of many liability policies, thought to be more than sufficient as recently as
a few years ago, increasingly have been shown to be inadequate.
Secondly, the discovery of a tortfeasor’s status as an
“underinsured” motorist can be a difficult undertaking for plaintiffs’
lawyers. For example, this determination often depends upon the nature
and extent ot the plaintiff's injuries, including the economic consequences,
none of which may have crystallized prior to suit. In addition, the limits
of a tortfeasor’s liability coverage are seldom known, much less disclosed,
Appendix Page 118
Allstate in response to Ms. Carr’s complaint. Casting
convention to the winds, Allstate’s answer (see Exhibit "2"
hereto) - consisting of 14 affirmative defenses - as at once in
conflict with the defendants’ answer and the narrow mission
of Code, 33-6-31(d).
Purporting to speak ". . . on behalf of the interests of
the Defendants, Jamie Lynn Brooks and James E. Brooks," as
well as Allstate, that answer averred, for example, a lack of
knowledge and information sufficient to form a belief as to the
truth or accuracy of all the allegations of Ms. Carr’s
complaint including, not incidentally, those quoted previously
prior to suit and formal discovery. Similarly, if several tortfeasors may be
legally responsible for a plaintiff's injuries, that may affect such a
determination. Questions of negligence and comparative negligence also
may affect this calculus. For these reasons, and more, plaintiffs’ lawyers -
ever aware of the consequences of a failure to consider UIM coverage(s) -
perforce routinely provide the statutory notice to the UIM carrier(s).
Quite properly, insurance defense firms - equally aware of the
consequences of a substantial judgment, as well (if not least) the prosaic
concerns which drive such practices - stand ready to file pleadings and take
other allowable actions as may be directed to assuage the concerns of the
UIM carrier.
Appendix Page 119
with respect to the residency of the defendants and the
ownership of the defendants’ vehicle (see Allstate’s "EIGHTH
DEFENSE").
This “know nothing" response notwithstanding,
Allstate’s answer also asserted i) lack of jurisdiction over the
iii matter ("THIRD DEFENSE"), ii) lack of jurisdiction
over the person of the defendants ("FOURTH DEFENSE"),
iii) improper venue ("FIFTH DEFENSE"), iv) insufficiency
of process ("SIXTH DEFENSE"), and v) insufficiency of
service of process ("SEVENTH DEFENSE").° Nor did this
professed lack of knowledge or information deter Allstate
from pleading the substantive defenses of comparative
negligence, assumption of the risk, sudden emergency, the
failure to mitigate damages, and lack of causation. Moreover,
*Allstate’s answer asserting these dilatory defenses was served on 10
March 1993. This occurred despite the return of service - made by the
official process server for Marshall County - showing that the defendants
were personally served on 23 February 1993 (see Exhibit "3" hereto).
Appendix Page 120
without so much as a genuflection to the reasoning that led to
Ara v. Erie Insurance Co., supra, or the admonition contained
in Lusk v. Doe, supra,’ Allstate sought to repudiate Ms.
Carr’s coverage by claiming all policy defenses applicable to
the underinsured motorist claim of its insured including,
specifically, “untimely notice with prejudice{.]"
("FOURTEENTH DEFENSE").
Contending it was immune from Ms. Carr’s discovery,
Allstate failed to make any responses thereto. At the same
time, however, it spared no fealty of effort in generating its
own. Concurrent with the filing of its answer, Allstate served
a “FIRST’ set of interrogatories (approximately 120 in
"At note 4 in Lusk v. Doe, supra, the Court observed that an uninsured
motorist carner’s attempt to bar a tort action by its insured against “John
Doe” defendant via the assertion of contract defenses including,
specifically, a failure to comply with the notice provisions of the statute,
1) transgresses the protection against possible prejudice (from the mention
of imsurance) recognized in Davis v. Robertson, 175 W.Va 364, 332
S.E.2d 819 (1985), and ii) places the case under the “substantial interest”
principles recognized in Anderson v. McDonald, 170 W.Va. 56, 289
S.E.2d 729 (1982).
Appendix Page 121
number, including subparts), together with a "FIRST" set of
document requests (approximately 26 in number, including
subparts). This discovery sought many of the same medical
records, bills and reports which were included as part of
Exhibits "I" through "27" (consisting of 63 pages) to the
requests to admit that also were served upon the defendants
and Allstate with Ms. Carr’s complaint."
Not to be outdone - nor apparently content to rest upon
Allstate’s discovery - counsel selected by State Auto for the
defendants followed in lemming-like fashion with a "FIRST"
set of interrogatories (approximately 230 in number, including
subparts) and a "FIRST" set of document requests
(approximately 30 in number). Not surprisingly, these
discovery efforts not only asked for many of the same medical
records, bills and reports which were included as part of the
"Most, if not all, of these same medical records, bills and reports also
had been in the possession of State Auto since late 1992 when it received
the settlement demand it importuned.
Appendix Page 122
foregoing requests to admit, but these efforts also subsumed
most, if not all, of the same interrogatories and document
requests that had been served upon Ms. Carr weeks earlier by
Allstate.
Faced with two patently inconsistent answers on behalf of
the defendants, as well as voluminous and duplicative
discovery - not to mention the Prospect of litigating this
conventional negligence action against two adversaries (one
contending for a status of anonymity) - Ms. Carr turned to the
trial court for relief. On 11 June 1993, in response to the
several motions filed prior thereto by Ms. Carr, the trial
court:
(1) granted Ms. Carr’s motion to
require a single answer on behalf of the
defendants - the trial court finding that a
"unified" defense was contemplated;
Appendix Page 123
(2) granted Ms. Carr’s motion to require
Allstate to elect whether it would intervene in
the name of the defendants, or in its own name
- the trial court allowing Allstate to do one or
the other, but not both;
(3) granted Ms. Carr’s motion for a
protective crder against Allstate, thereby
relieving her of answering its discovery - the
trial court finding that discovery shall not be
duplicative;
(4) granted, in part, Ms. Carr’s motion to
strike certain of Allstate’s defenses, viz., lack
of subject matter jurisdiction, lack of personal
jurisdiction, improper venue, and insufficiency
of process and service of process - the trial
court finding that such defenses were without
Appendix Page 124
merit and somewhat frivolous;
(5) denied Ms. Carr’s motion for sanctions;
(6) denied the defendants’ motion to
j
bifurcate the issues of liability and damages;
and
(7) reserved Allstate’s right to revisit
rulings (1) through (4) in the event contrary
views were expressed in the decision to be
issued upon the provisional rule granted by this
Court in State ex rel. State Auto Mutual
Insurance Company v. Steptoe.
(See Exhibit "4" hereto).
Appendix Page 125
THE ISSUE
The issue bequeathed to this Court for resolution is
whether the right of intervention’ accorded underinsurance
"According to the leading commentators, the rights afforded
uninsurance/underinsurance carriers by statutes comparable to Code, 33-6-
31(d) - viz., to file pleadings and take other allowable action in the name
of the owner, or operator, of the uninsured/underinsured vehicle, or both,
or in its own name - are collectively known as “the night of intervention,”
or “the mght to intervene.” See e.g. 2 A. Widiss, Uninsured and
Underinsured Motorist Insurance 28.14 (2d ed. 1987, Cum.Supp. 1992);
8C J. Appleman, /nsurance Law and Practice 5089.55 (3d ed. 1980).
Language simular, if not identical, to that contained in subsection (d) can
be found in the statutes of most of the states that have developed UIM
coverage. That said, this “right of intervention” is not to be confused with
the procedure for intervention prescribed by Rule 24, W. Va.R. Civ. P.
Interestingly enough, even where the applicant/movant seeks to become a
party pursuant to subdivision (b) of Rule 24, intervention may be denied
if the interest of the intervener is adequately represented by the original
parties, or if the relief sought by the intervener might delay a decision on
the ments. M. Lugar & L Silverstein, West Virginia Rules 205-206
(1960). In other contexts, moreover, this Court has held that even after
intervention has been granted pursuant to statutory nght, the nghts of an
intervener are not absolute. See Halstead v. Dials, 182 W.Va. 695, 391
Appendix Page 126
carriers under Code, 33-6-31(d), is and should be limited in
instances where, as here:
(1) the suit is not a direct (aka first-
party/contract) action;
(2) the underinsurance carrier is not
a party, much less a named defendant;
(3) __ the tortfeasor is not only insured
for liability purposes, but also actively
represented by counsel selected by that primary
insurer;
(4) the question of the tortfeasor’s
S.E.2d 385 (1990). Curiously too, it does not appear that the last sentence
of subdivision (c) of this rule - requiring that the procedure for intervention
set forth in the rule be followed when a statute of this State gives a right
to intervene - has ever been construed since the adoption of the Rules of
Civil Procedure.
Appendix Page 127
liability is not only unresolved, but also
vigorously contested;
(5) the question of the tortfeasor’s
"status" - viz., whether the tortfeasor is
"underinsured" - is not conceded by the
underinsurance carrier and, therefore,
unresolved:
(6) the underinsurance carrier has
affirmatively contested coverage (thereby
impliedly refusing to be bound by any
judgment which may be entered); and
(7) the underinsurance carrier has
not demonstrated that its interests are or will be
prejudiced or inadequately protected by the
named parties.
Appendix Page 128
The issue is one of first impression. Appearing at first
blush to be finite, it is not. Ancillary concerns abound.
Additionally, insofar as our research discloses, the question
has not bee reached in most of the 40 or so states that have
developed some form of UIM coverage. Moreover, the
leading “ommentators have not addressed the issue outside the
uninsured motorist context. Unfortunately, as noted anon, the
many decisions which have construed the Statutory right of
intervention in the uninsured motorist context are of little
assistance in this type of underinsurance case.
There inheres in the ambition regime envisioned by
Allstate the potential for the same conflicts that have
shadowed the entirety of these procedures in the uninsured
motorist setting.” If nothing else, the experience of these
“These are not idle musings. For example, after analyzing the
construction given to a similar statutory procedure for pursuing uninsured
motorist claims in Georgia, even Professor Appleman was moved to
remark ". . . what a 24 karat mess of garbage results in these
situations|.]," noting further that Georgia was required to overrule several
earlier decisions in clarifying the situation. 8C J. Appleman, supra.
Appendix Page 129
cases teaches that such problems should be minimized, not
Georgia now holds that its statute allowing an uninsured motorist carrier
to enter defenses in the name of the defendant does not give the insurer the
rght to control the litigation where, as here, contrary issues and intentions
have been legally expressed through the pleadings filed by the defendant.
Londeau v. Davis, 136 Ga. App. 25, 220 S.E.2d 43 (1975).
Similarly, as Professor Widiss has observed, see 2 A. Widiss,
supra, 28.2, 28.3, the intervening insurer defends the uninsured motorist
by dttempting to prove either that the uninsured motorist was not negligent
or that its insured (to whom it owes a duty of good faith and fair dealing)
was negligent, or both. Troublesome enough, this situation often is
exacerbated by the uninsured motorist’s filing of a counterclaim. In this
latter context, the insurer has both the contractual right ang duty to defend
the insured (usually even where such counterclaim is fais, fraudulent or
groundless). In discharging that duty, the insurer defends the insured by
attempting to prove either that the uninsured motorist was negligent or that
its insured (to whom it still owes a duty of good faith and fair dealing) was
not negligent, or both. Obviously, the most advantageous result for the
insurer is where both parties are found to be equally at fault.
Nevertheless, as any schoolboy (legal) knows, these positions, and the
interests of the insurer, are not only diametrically opposed, but also awash
with conflicts. It is for these reasons, and more, that a number of courts,
inter alia, have disqualified counsel in such situations, see e.g. O'Bryan
v. Leibson, 446 S.W.2d 643 (Ky.App. 1969), confined the role of counsel
for an intervening insurer, see e.g. Curren v. Verinis, 29 Conn.Supp. 79,
271 A.2d 703 (Conn.Super.Ct. 1970), otherwise restricted the right of
intervention, see e.g. Riley v. State Farm Mutual Automobile Ins. Co., 420
F.2d 1372 (6th Cir. 1990), or flat-out held that the uninsurance carrier
cannot intervene or defend in such litigation, see e.g. Criterion Ins. Co. v.
Brown, 469 S.W.2d 484 (Tex. 1971), citing Allstate Ins. Co. v. Hunt, 450
S.W.2d 668, aff'd, 469 S.W.2d 151 (Tex. App. 1970), the better-reasoned
opinion of the intermediate appellate court. See also The Committee on
Ethics and Professional Responsibility, (1) Informal Opinion 977,
Uninsured Motorist -Conflicting Interest of Insurance Company Attorney
(April 21, 1987), and (2) Informal Opinion 1065, Representation of
Uninsured Motorist by Lawyer Retained by Insurer of Other Motorist
Involved in Accident (July 21, 1969).
Appendix Page 130
encouraged. Assuredly, any procedure which extends a full
panoply of discovery and other rights to nonparties (e.g., the
right to present and cross-examine witnesses) will not serve in
the interests of judicial economy or justice. This is especially
true in cases, ever more common today, involving two or
more underinsurance carriers. In the issue-specific context of
this type of underinsurance case, moreover, such difficulties
are not only unnecessary, but clearly avoidable. Hence, it is
respectfully urged that any decision to judicially modify our
Statute - at least in the type of underinsurance case presented
here - be tempered with caution, circumspection and restraint.
Appendix Page 131
ARGUMENT
(A) The Familiar Rules
No analysis of the matters at issue should proceed without
reprising those rules that currently serve to regulate
underinsurance cases of the type posited here.’
Initially, it should be remembered that the preeminent
public policy of our underinsured motorist statute is to provide
full, ungrudging compensation to an injured insured for those
damages that are not compensated by a negligent tortfeasor,
at least to the extent of the UIM limits. Syl. pt. 5 (in part),
'\'To avoid needless repetition, any reference to “underinsurance cases"
in this argument shall mean tort cases similar to the matter at hand, except
where otherwise expressly indicated. Specifically, any such reference shall
not mean the type of direct (aka first-party/contract) action recognized by
Postlethwait v. Boston Old Colony, supra, and refined in Plumley v. May,
W.Va.
S.E.2d (slip op. 21614, July 22, 1993).
Appendix Page 132
Pristavec v. Westfield Ins. Co., 184 W.Va. 331, 400 S.E.2d
575 (1990); see also State Automobile Insurance Co. v.
Youler, supra. Nor can it be gainsaid that the development of
UIM coverage represents a legisiative recognition that the
mandatory liability limits established by the mandatory
financial responsibility laws, including the protection afforded
by uninsured motorist coverage, were inadequate to
compensate the innocent victims of the carnage on our
highways. 2 A. Widiss, supra, 31.1; see also INSURANCE
INFORMATION INSTITUTE, INSURANCE FACTS, 1987-88
PROPERTY/CASUALTY FACT BOoK 75 (1987). Furthermore,
by holding that such coverage is activated when the amount of
the tortfeasor’s liability insurance available to the injured
insured is less than the total amount of damages sustained by
that person - regardless of any comparison between the limits
of the available liability insurance and the UIM limits - this
Court adopted what has been described as the “broad or
excess coverage” view or definition of underinsured motorist
Appendix Page 133
coverage.'? See generally Comment, Underinsured Motorist
Coverage in lowa, 71 Iowa L. REV. 1569, 1575-76 (1986);
see also 3 A. Widiss., supra, 35.2, 35.3.
It is equally important to recall that, as this Court
‘Conversely, by upholding the validity of “consent-to-settle clauses as
a valid and enforceable means by which an underinsurer may protect
against the loss of its statutonly-mandated subrogation nghts (as well as the
risk of collusion), Arndt v. Burdette, W.Va. . S.E.2d
(slip op. 21457, July 22, 1993), it cannot be said that this Court has
been insensitive to the concerns of underinsurance carriers. So too, Deel
v. Sweeney, supra, in authorizing insurers to incorporate such optional
terms, conditions and exclusions into the underinsurance provisions of an
automobile policy as may be consistent with both the intent of the statute
and the premium charged including, for example: (1) an exclusion which
prohibits the stacking of underinsurance coverage when more than one
vehicle is insured under a single policy at rates reflecting a multi-car
discount, Arbogast v. Nationwide Mutual Insurance Co., W.Va.
, 427 S.E.2d 461 (1993), see also Russeg v. State Auto. Mut. Ins.
Co., 188 W.Va. 81, 422 S.E.2d 803 (1992); (2) a “family use exclusion"
which exempts from the definition of an underinsured vehicle “any
automobile owned by or furnished for the regular use of the insured or a
relative," Thomas v. Nationwide Mutual Insurance Co., W.Va.
. 425 S.E.2d 595 (1992), see also Alexander v. State Automobile
Mutual Insurance Co., 187 W.Va. 72, 415 S.E.2d 618 (1992); and (3)
provisions creating two distinct classes of covered individuals, the second
thereof i) tying a permissive user's right to UIM benefits to the occupancy
of a covered vehicle, and ii) limiting the recovery of such benefits to only
those prescribed by the policy on the occupied vehicle involved in the
accident (thereby precluding the “stacking” of the named insured’s UIM
coverage on another vehicle), Starr v. State Farm Fire and Cas. Co.,
W.Va. , 423 S.E.2d 922 (1992).
Appendix Page 134
emphasized in Deel v. Sweeney, 181 W.Va. 490, 383 S.E.2d
92 (1984), there are discrete and purposeful differences
between uninsured and underinsured motorist coverages,"
the selfsame statutory language prescribing the procedural
rights of uninsurance and UIM carriers
notwithstanding.'* For instance, in the underinsurance case
the tortfeasor is always insured against liability. For instance,
in the
underinsurance case the tortfeasor is always defended by
"These significant differences demonstrate why the many reported
decisions construing
this statutory nght of intervention in the uninsured motorist context are of
little value here.
“Although no criticism is here intended, it seems clear that, by simply
amending the extant statutory language to integrate UIM carriers, little
analysis was given as to whether the significant differences in these
coverages called for a refinement of the procedural requirements imposed
by subsection (d). As Deel makes plain, however, the Legislature does not
view uninsured and underinsured motorist coverage in the same light. For
example, not only was subsection (b) of the statute amended in 1982 to
require an insurer to provide optional underinsured motorist coverage, but
that amendment also was made by separate provision. Contrary to the
statutes in a number of states (and the insurance policies issued pursuant
thereto), therefore, underinsurance motorist coverage is not “included”
within uninsured motorist coverage. Rather, it is a separate entity or
separate program. One does not include the other, the language of
subsection (d) notwithstanding.
Appendix Page 135
counsel, indeed counsel hand-picked by the tortfeasor’s
liability insurer. For
instance, in the underinsurance case the question of whether
the tortfeasor is “underinsured” - viz., the "fact" or "status"
of being
underinsured - is always unresolved. For instance, in the
underinsurance case the interests of the tortfeasor and the
tortfeasor’s liability insurer are always congruent.’ For
instance, in the underinsurance case Shamblin v. Nationwide
Mutual Insurance Co., 183 W.Va. 585, 396 S.E.2d 766
(1990), aka Shamblin II, is always sufficient incentive to keep
‘In the underinsurance case: (a) the tortfeasor owes the tortfeasor’s
liability insurer a contractual duty of cooperation and full disclosure; (b)
the tortfeasor’s liability insurer owes the tortfeasor the contractual duty of
a defense and coverage; (c) the tortfeasor’s liability insurer owes the
tortfeasor a duty of good faith and fair dealing; and (by extension) (d) the
tortfeasor and tortfeasor's liability insurer each agree that neither will do
anything to deprive the other of the benefits of the insurance contract. See
eg. Shamblin v. Nationwide Mutual Insurance Co., supra; Berry v.
Nationwide Mutual Fire Insurance Co., 181 W.Va. 168, 381 S.E.2d 367
(1989); Aetna Casualty and Surety Co. v. Pitrolo, 176 W.Va. 190, 342
S.E.2d 156 (1986); see generally Smith v. Buege, 182 W.Va. 204, 387
S.E.2d 109 (1989); Robinson v. Fidelity & Deposit Co., 181 W.Va. 463,
383 S.E.2d 95 (1989).
Appendix Page 136
a verdict within the limits of the tortfeasor’s policy. In sum,
the policy considerations that militate in favor of a more
ambitious role for the insurer upon intervention in uninsured
motorist cases - not to mention the direct action suits
authorized by Postlethwait v. Boston Old Colony, supra, and
refined in Plumley v. May, supra - do not obtain here.
Even more fundamentally, it should be remembered
here that the underinsurance carrier, Allstate, is a stranger to
the defendants. No privity exists between them. Allstate has
no contract with Miss Brooks, or her father, and neither of
them owes Allstate any duty of cooperation or disclosure.
Nor do the defendants enjoy any advantage from Allstate’s
UIM coverage. To the contrary, as Arndt v. Burdette, supra,
demonstrates, Miss Brooks, if no her father, is amenable to
Allstate’s statutorily-mandated subrogation rights. '°
“The preservation of these subrogation rights in Arndt v. Burdette,
supra, further reinforces the need to limit the underinsurance carrier to a
Passive role in an underinsurance case. One need not be an ethicist to
Appendix Page 137
To reiterate, this is not a Postlethwait-directed suit.
Allstate is not a party-defendant, indeed cannot be made a
party-defendant. In this underinsurance case, Allstate has
neither the contractual right nor duty to defend Miss Brooks
and her father. Conversely, neither Miss Brooks nor her
father - contractants of State Auto - can grant, cede or barter
the defense to Allstate. Not unlike those cases wherein a
tortfeasor’s primary and excess coverages are both implicated,
it is the primary carrier that has the right and duty to control
the tortfeasor’s defense.'’ The excess carrier follows the
fortunes of the primary and may not interfere therein, any
have concerns about any procedure that would authorize Allstate, for
example, 1) to actively defend Miss Brooks against a claim of negligence
by its insured but, if unsuccessful, ii) to file a subrogation claim against
Miss Brooks grounded upon the same claim of negligence.
‘These concepts are not foreign to this Court. In Allstate Ins. Co. v.
State Auto Mut. Ins. Co., 178 W.Va. 704, 364 S.E.2d 30 (1987), a suit
arising out of an automobile collision wherein the automobile liability
policies of both the driver and the owner of the offending automobile each
contained a pro-rata clause and an excess clause, the Court held the insurer
of the owner was primarily liable - “that the simple, bright-line rule of law
is that the primary obligation to defend and indemnify {follows the
automobile, rather than the driver" - and therefore, that the owner’s insurer
must bear the whole loss (including the defense costs), up to the limits of
the policy.
Appendix Page 138
provisions in its policy with the tortfeasor to the contrary
notwithstanding. On the other hand, the excess carrier has the
right to expect, and enforce, the duty of good faith and fair
dealing owed it by the primary carrier, especially in instances
where the primary carrier unreasonably rejects a settlement
offer within its policy limits. See e.g. Centennial Ins. Co. vy.
Liberty Mut. Ins. Co., 62 Ohio St.2d 221, 404 N.E.2d 759
(1980) (the great weight of authority is now that the insurer’s
duty is to act in good faith with respect to excess carriers)."*
"The soundness of this rule was confirmed in Continental Cas. Co. vy.
United States Fidelity & Guar. Co., 516 F.Supp. 384 (N.D. Cal. 1981),
where the claims manager, upon learning of excess coverage, ceased
attempts to settle on the mistaken belief that the primary insurer owed no
duty of good faith to the excess carrier.
In the underinsurance case, to be sure, the lack of privity between
the plaintiff-insured and the tortfeasor’s liability insurer prescinds the
creation of a duty of good faith running from the tortfeasor’s carrier to the
underinsurance carner. Nevertheless, in instances where the tortfeasor’s
liability insurer unreasonably rejects a settlement offer within its limits,
nothing would appear to prevent this Court from vesting the
underinsurance carrier with a right of “equitable subrogation,” see Vencill
v. Continental Casualty Co. , 434 F.Supp. 1371, 1376 (S.D. W.Va. 1977),
sealant the tortfeasor’s liability carrier in the event of a judgment in excess
oO
latter's limits. In short, upon payment of the excess portion of the
judgment in such instances, the underinsurance carrier succeeds to the bad
faith claim that was established for its insured against the tortfeasor’s
liability insurer by Shamblin v. Nationwide Mutual Insurance Co., supra.
Appendix Page 139
Interestingly enough, Allstate admits it is not a party,
and that the provisions of Code, 33-6-31(d), do not make it a
party. Additionally, Allstate concedes it has no interest in
protecting Miss Brooks and her father against liability - that
it’s only interest is in keeping the verdict sufficiently low to
avoid the invasion of the UIM coverage. Indeed, so far as
Miss Brooks and her father are concerned, Allstate is a
nonparty volunteer, if not an interloper, solely concerned with
its own interests.
Indeed, fidelity to Shamblin II, if not Arndt v. Burdette, supra, would
appear to intuit such a result. Moreover, a number of courts have upheld
judgments in favor of excess carners against primary carriers by holding
that if the insured (or someone suing in the place of the insured, e.g., the
excess carner) proves that the primary insurer breached its duty to settle
within its policy limuts, the law presumes that the third party (plaintiff)
would have agreed to settle the case within the policy limits. See e.g.
Pacific Employers Insurance Co., 796 F.Supp. 1428 (D. Kan. 1992);
Covill v. Phillips, 452 F.Supp. 224 (D. Kan. 1978); Coleman v. Holecek,
542 F.2d 532 (10th Cir. 1976); Young v. American Casualty Co. of
Reading, Pa. , 416 F.2d 906 (2d Cir. 1969), cert. dismissed, 396 U.S. 997
(1970).
But control over the litigation by the underinsurance carner should
not be so easily won. The “consent-to-settle” clause serves as a shield, not
a sword. The underinsurance carrier must not be permitted to
unreasonably withhold its consent to settle; nor “force” a trial between the
plaintiff and the defendant; nor force the average tortfeasor into personal
bankruptcy to evade subrogation.
Appendix Page 140
a i
On the other hand, Allstate is no Stranger to Ms. Carr.
Setting aside momentarily any issue of coverage, Ms. Carr is
an Allstate insured. Having paid the premiums (via her son),
Ms. Carr may reasonably expect the benefits of the policy.
Allstate owes Ms. Carr a duty of good faith and fair dealing.
At minimum, this duty requires Allstate to accord the interests
and rights of Ms. Carr at least as great a respect as its own.
Shamblin v. Nationwide Mutual Insurance Co., supra.
(B) The Statute Giveth And Taketh Away
To be sure, as Allstate insists and Postlethwait
confirms, Code, 33-6-31(d), provides the underinsurance
carrier with several solicitudes. As said previously, ante at
note 9, the carrier is permitted to file pleadings and take other
allowable action in the name of the owner and/or operator of
the underinsured vehicle ". . . or _in its own name." (Accent
added). Nevertheless, if the operative word "or" is used in its
Appendix Page 141
normal disjunctive sense, it seems clear that, contrary to the
position taken by Allstate, the underinsurance carrier may do
one or the other, but not both.
In all fairness and events, however, it must be admitted
that statutory construction "is a holistic exercise," United
States Assn. of Texas v. Timbers of Inwood Forest Associates,
Lid., 484 U.S. 365, 371, 108 S.Ct. 626, 632, 98 L.Ed.2d
371, 377 (1988), and, at a minimum, must account for a
Statute’s full text and language, its object and policy. Hence,
while contending for an interpretation that would establish
rights well outside a literal reading of the statute, it is
interesting to note that Allstate studiedly ignores the final
paragraph of Code, 33-6-31(d). It provides:
"Nothing in this subsection shall prevent such
owner or operator from employing counsel of his own
choice and taking any action in his own interest in
connection with such proceeding.”
Appendix Page 142
(Accent added).
There can be little question that constitutional
considerations - always in the wings if not on Stage when
notice and other procedural rights are competing for attention
- intuited this provision. See eg. Perkins v. Doe, 177 W.Va.
84, 350 S.E.2d 711 (1986); Lusk v. Doe, supra. In this
instance, the due process rights of the tortfeasor, if not his or
her liability insurer, are the cynosure of this final paragraph.
When these same rights are summoned to the protection of the
tortfeasor, however, the antecedent procedural provisions of
subsection (d) appear considerably attenuated.
The statutory notice, for example, is simply that, a
notice. It is intended to be served (by such procedural means)
as if the underinsurer were a party, rather than through the
mail with no clear proof that it was sent or received.
Appendix Page 143
\
Similarly, the other procedural protections accorded Allstate
are not the equivalent of the rights reserved for party-litigants
in a tort case. If it were otherwise, the final paragraph of
subsection (d) would be emptied of meaning. In short, any
such interpretation would operate in derogation of the
tortfeasor’s rights - constitutional, contractual, statutory or
otherwise (acting by and through the tortfeasor’s liability
insurer) - by preventing the tortfeasor from “employing
counsel . . . of his own choice and taking any action in his
own interest in connection with such proceeding.” (Accent
added).
(C) The Fear Of Collusion
Allstate’s professed concern for collusion suffers from
several flaws, both factual and conceptual.
First of all, despite Allstate’s insinuations about the
Appendix Page 144
possibility of collusion, or less than arm’s length relationship,
between its insured (Ms. Carr) and the defendants, there is not
a shred of evidence to support such a relationship. To the
contrary, the affirmative defenses and the discovery efforts
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