A Guide to General West Virginia Litigation Principles

1. A Guide to General WestVirginia Litigation Principles Presented by: Kelly C. Morgan David E. Schumacher

2. Basic Elements of WV Tort Law • WV employs a traditional English common-law tort system. • Negligence is the failure to exercise ordinary care. • Ordinary care is that kind and degree of care or caution which an ordinary prudent and careful person would exercise under the same or similar circumstances. • Negligence is doing something a reasonably prudent person would not do in the same or similar circumstances. • Failing or refusing to do something a reasonably prudent persons would have done in the same, or similar circumstance.

3. WV Tort Law, cont. • A negligence claim requires a claimant to prove that a breach of duty occurred which proximately caused injury. • Negligence cannot be presumed; it must be proven by a preponderance of the evidence • Contributory negligence - combined negligence of plaintiff and defendant(s) which proximately caused the accident. • Must be proven by a preponderance of the evidence by party asserting it.

4. WV Tort Law, cont. • Assumption of risk - knowing full well the hazards involved or reasonably expected hazards involved and failing to take precautions to protect oneself. • Proximate cause - the negligent act contributing to the accident. • the cause which in actual sequence, unbroken by any independent cause, produces an event, and without which, the event would not have occurred.

5. Comparative Negligence • West Virginia follows the 50% Rule. • If Plaintiff is 50% or greater at fault, then Plaintiff is barred from any recovery. • If Plaintiff’s negligence is less than 50%, Plaintiff may recover, but, if damages are awarded there is a reduction or offset by the percentage of fault attributed to Plaintiff. • “much better than the lottery” • Bradley v. Appalachian Power Co. 256 S.E.2d 879 (1979).

6. Agency • Employer is liable for all damages proximately caused by negligence of an agent/employee acting within the scope of employment. • Act doesn’t need to be one directed by employer if employer has the “right to determine where and in what manner the work needs to be done.” • Limitations on exposure include necessity of employee acting within the scope of employment and the act as one which is deemed to be natural, direct, or logical result of act “directed” by employer. • Must be negligent act

7. Independent Contractor Defense • Employer not responsible for independent contractor’s acts. • If employer has the right or reserves the right to exercise control over where and in what manner the work will be done, then individual is not independent contractor but employee for whom employer will be responsible. • Oddities with statutes including Medical Professional Liability Act (MPLA) • MPLA’s immunity provisions, limitations on damages, and ostensible agency issues

8. Property Damage Claims • Total loss or destruction of property-normally damages are determined by the fair market value at the time of this loss or destruction.

9. Personal Property • Damaged but not totaled property – general rule is difference between fair market value immediately before the damage and its FMV immediately after. • Note that if the property is not totaled then measure of damages could also include reasonable expenses incurred by owner due to damage. • However, if property can be restored to previous condition then measure of damages is the cost of restoration to its condition prior to the accident – Again, damages would be cost of repair plus expenses directly related to the injury including loss of use during repair.

10. Personal Property, cont. • Note that if cannot be repaired or repair costs exceed market value then owner may obtain lost value plus expenses directly related to the damage including loss of use. • Testimony specific as to the value to a specific plaintiff, or price paid by plaintiff is inadmissible. • There is an odd case or two discussing cost of repairs plus diminished value-specifically car frame damage case – even so the total - cost of repair plus diminished value should not exceed market value.

11. Realty • Similar analysis as to damages • Cost of repair plus expenses directly related to the injury including loss of use. Repair costs not to exceed fair market value – although loss of use, etc. can still be obtained in interim including damages for annoyance and inconvenience during loss of use.

12. Adjusting Property Damage Claims • Cautionary tale • First party claims • Wrongful denial • Unreasonable delay in payment leads to foreseeable consequential damages naturally flowing from delay • “Substantially prevails” • Can recover net economic loss caused by the delay as well as an award for aggravation and inconvenience – substantially prevailing can be low standard favoring the claimant/first-party insured.

13. Adjusting Property Damage Claims, cont. • Indicators – insurance company offers amount materially below the damage estimate provided by the insured and jury verdict is an amount that approximates that previously suggested by the insured. • Be careful when insurer provides reasonable demand in advance of filing lawsuit since any settlement thereafter for “an amount equal to or approximating the amount claimed by insured” after action is filed or jury verdict of similar amount, can be used as evidence by plaintiff to help recover reasonable attorney fees from his insurer which were necessitated for payment. • Reasonable attorney fees are determined by Court not jury.

14. Damages • Damages should compensate plaintiff for injuries caused by another • Speculation is inappropriate, normally past injuries are compensated based on causation by “reasonable probability” while future injuries are based on reasonable certainty or, to a reasonable degree of medical probability vs. reasonable degree of medical certainty. • Damages and injuries run the gamut – preponderance of the evidence for present and past injuries and to a reasonable degree of medical probability including bodily injuries, with proposed duration (to a reasonable degree of medical certainty with regard to duration) • Past pain and suffering and future pain and suffering.

15. Damages, cont. • Again, for a determination, future requires testimony regarding reasonable degree of certainty and duration whereas past requires reasonable degree of medical probability relationship only. • Past pain and suffering • Future pain and suffering • Inconvenience and suffering as well as the ability to enjoy life in the future • Medical expenses – reasonable and necessary. • Reasonably certain loss of earnings and/or future earning capacity with fringe benefits analysis • Household service losses • Duration of injuries – reasonable certainty with probable life expectancy analysis.

16. Non-economic Damages • Sympathy is inappropriate but finds its way into many damage aspects including; • non-economic damages • Future economic damages • Wrongful death damages • Punitive damages • So the sympathy non-sympathy relationship is cloudy, at the very least. • Non-economic damages or general damages equal compensation for pain, suffering, loss of enjoyment of life and loss of consortium. Solely left to the jury. • Loss of enjoyment of life – jury determines how injured parties have been deprived of his or her customary activities. • Consortium – companionship, comfort, guidance, kindly offices and advice between husband and wife or parent and child. • Non economic losses includes aggravation of pre-existing injury – eggshell plaintiff.

17. Future economic damages • Again, sympathy can be a factor and hidden in the resulting jury verdict. • Plaintiff’s ploy is to hire economists who provides a high and low range for loss of earnings and future fringe benefits which are reduced to present value providing a large spectrum within which a jury may make a finding. • Without rebuttal from the defendant anything within that spectrum is acceptable and will not be overturned. • Difficulty in providing rebuttal without helping to establish a minimum for plaintiff recovery.

18. Punitive Damages • Always be aware of sympathy factor. • Even with various decisions reached by WV Supreme Court, the limitations on punitive damages tend to be a moving target, however: punitive damages must bear “a reasonable relationship” to compensatory damages and/or injuries/harm. • West Virginia requires reasonable constraint on jury discretion for punitive – meaningful and accurate review by trial court and meaningful and accurate appellate review. • Punitive damages include consideration of – reasonable relationship to the harm. • Note whether harm is relatively small or grievous. • Reprehensibility of defendants conduct. • Duration of conduct.

19. Punitive Damages, cont. • Actual knowledge of effect of conduct. • Efforts to cover-up conduct or action or harm. • Similar past conduct. • Efforts to settle claim. • Also note profitability of conduct. If profits proven, damages should exceed the profit earned from the conduct. • Financial position of defendant is relevant if punitive damages awarded.

20. Punitive Damages, cont. • Development of cases indicate that single digit multipliers are a relationship of up to 9 to 1 can be considered reasonable and constitutional. (That is the relationship between punitive and compensatory damages.) • However note that in the TXO case mentioned in the handout for slander and liable against TXO, the Supreme Court, while establishing that 5 to 1 could easily be a reasonable relationship with higher ratios being considered constitutional depending upon the degree of “evil intention” of the defendant allowed a 500 to 1 ratio to stand based on a compensatory damages of $19,000 vs. punitive damages of $10 million.

21. Wrongful Death Damages • Again, sympathy can be a factor. • By statute, damages for wrongful death claim, include: • Sorrow and mental anguish suffered by family and/or other beneficiaries. • Loss of solace, companionship, etc. – consortium by family members and other beneficiaries. • Compensation for reasonable expected loss of income of decedent and services provided by the decedent – usually through economist. • Medical expenses for care and treatment, etc. of decedent. • Funeral expenses. • Note, the only two which provide hard factual content are actual medical expenses and funeral expenses, everything else can be expanded upon by jury determination.

22. Fee Shifting Statutes • It should be noted that there are various statutes – as many as 7 in West Virginia that allow fee shifting. In other words attorneys fees and costs can be shifted though certain statutes including workers’ compensation claims, WV Surface Mining and Reclamation Act, WV Whistleblowers Statute, Request for Freedom of Information, actions under the Human Rights Act of WV and a few others. • Various federal statutes allow the same thing, including civil rights actions, family medical leave, Americans with disability Act, Fair Labor Standards Act, age discrimination and employment, voting rights, etc. • These claims are used because of the significant fees that can be awarded which are left to the Court’s discretion.

23. Governmental Tort Claims & Insurance Reform Act • Regulates actions against political subdivisions charged with the performance of a government function • Enacted “to limit liability of political subdivisions and provide immunity to political subdivisions in certain instances and to regulate the costs and coverage of insurance available to political subdivisions for such liability.”

24. Tort Immunities Act, cont. • The Legislature found that the political subdivisions of this state were unable to procure adequate liability insurance coverage at a reasonable cost due to: “The high cost in defending such claims, the risk of liability beyond the affordable coverage, and the inability of political subdivisions to raise sufficient revenues for the procurement of such coverage without reducing the quantity and quality of traditional governmental services.”

25. Tort Immunities Act, cont. • Employee - an officer, agent, employee, or servant (regardless of full-time or compensated or not) who is authorized to act and is acting within the scope of his or her employment for a political subdivision. • Includes any elected or appointed official of a political subdivision. • Does not include independent contractors. • Municipality - any incorporated city, town or village and all institutions, agencies or instrumentalities of a municipality.

26. Tort Immunities Act, cont. • Political subdivision includes any of the following: • county commission; • municipality; • county board of education; • separate corporation or instrumentality established by one or more counties or municipalities; • any instrumentality supported in most part by municipalities; • any public body charged by law with the performance of a government function and whose jurisdiction is coextensive with one or more counties, cities or towns; • a combined city-county health department; • public service districts; • volunteer fire departments; • emergency service organizations

27. Tort Immunities Act, cont. • Hospitals of a political subdivision and their employees are expressly excluded • Not the State of the agencies • Scope of employment - employee acting in good faith within the duties of his or her employment or tasks lawfully assigned by a competent authority • does not include corruption or fraud.

28. Tort Immunities Act, cont. • State - the state of West Virginia, including • the Legislature • the supreme court of appeals • the offices of all elected state officers, • all departments, boards, offices, commissions, agencies, colleges, and universities, institutions

29. Tort Immunities Act, cont. Immunities • A political subdivision cannot be held liable for damages in any civil action for injury, death, or loss to person or property allegedly caused by an act or omission of the public entity or an employee of the public entity • Generally speaking, a public entity can be held liable for injury, death, or loss to person or property caused by a negligent act or omission of an employee who is acting within the scope of his or her authority. • Actions for prospective or extraordinary relief (mandamus, injunction, prohibition, etc.) are not restricted.

30. Tort Immunities Act, cont. • A political subdivision enjoys absolute immunity, irrespective of negligence, for losses resulting from: • Legislative or quasi-legislative functions; • Judicial, quasi-judicial or prosecutorial functions; • Execution or enforcement of the lawful orders of any court; • Adoption or failure to adopt an ordinance, policy, statute, rule, regulation or other law; • Civil disobedience or the method of providing police, law enforcement or fire protection; • Snow or ice conditions or temporary or natural conditions on any public way or other public place, unless the condition is affirmatively caused by the negligent act of a political subdivision; • Natural conditions of unimproved property;

31. Tort Immunities Act, cont. • Assessment or collection of taxes; • Licensing powers; • Inspection powers relating to real or personal property; • Any claim covered by any worker's compensation law; • Misrepresentation, if unintentional; • Court-ordered work release, treatment or rehabilitation program; • Operation or maintenance of any prison, jail or correctional facility, or injuries resulting from the parole or escape of a prisoner; • Claim or action based on the theory of manufacturer's products liability or breach of warranty or merchantability or fitness for a specific purpose; • The operation of dumps, sanitary landfills; or • Issuance or refusal to issue revenue bonds

32. Tort Immunities Act, cont. • An employee of a political subdivision is immune from liability unlessone of the following applies: • If the employee’s acts or omissions were manifestly outside the scope of employmentor official responsibilities; • If the employee’s acts or omissions were performed with malicious purpose, in bad faith, or in a wanton and reckless manner; or • If liability is imposed upon the employee by a provision of the West Virginia Code. • Immunity of an employee does not affect or limit the liability of the political subdivision for an act of the employee.

33. Tort Immunities Act, cont. • The Tort Immunities Act contains a strict prohibition against awards of punitive or exemplary damages. • Damages for economic losses are not capped. • Non-economic damages are capped at $500,000. • Procedure • Actions against a public entity is located or where the cause of action arose.

34. Tort Immunities Act, cont. Special Duty Doctrine • The duty imposed upon a governmental entity is one owed to the general public, and unless the injured party can demonstrate that some special relationship existed between the injured person and the allegedly negligent entity, the claim is barred.Jeffrey v. West Virginia Dep’t of Pub. Safety, Div. of Cor., 198 W.Va. 609, 614, 482 S.E.2d 226, 231 (1996). • The public duty doctrine is a principle independent of the doctrine of governmental immunity, although in practice it achieves must the same result. Benson v. Kutsch, 181 W.Va. 1, 2, 380 S.E.2d 36, 37 (1989).

35. Tort Immunities Act, cont. • The public duty doctrine is not an immunity; but rests on the principle that recovery may be had for negligence only if a duty has been breached which was owed to the particular person seeking recovery.Parkulo w. West Virginia Bd. of Probation & Parole, 199 W.Va. 161, 172, 483 S.E.2d 507, 518 (1996). • Under the public duty doctrine, the governmental entity’s liability for nondiscriminatory governmental functions may not be predicated upon the breach of a general duty owed to the public as a whole; instead, only the breach of a duty owed to the particular person injured is actionable.” Wolfe v. City of Wheeling, 182 W.Va. 252, 256, 387 S.E.2d 307, 310 (1989). • The linchpin of the “public duty doctrine” is that some governmental acts create duties to the public as a whole and not to the particular private person or private citizen who may be harmed by such acts. Parkulo, 199 W.Va. at 172, 482 S.E.2d at 518.

36. Tort Immunities Act, cont. • A special relationship only exists when there exists: (1) An assumption by state governmental entity of an affirmative duty to act on behalf of the party who was injured; (2) knowledge on the part of the state governmental entity’s agents that inaction could lead to harm; (3) some form of direct contact between the state governmental entity’s agents and the injured party; and (4) that party’s justifiable reliance on the state governmental entity’s affirmative undertaking. Syllabus Point 10, Parkulo, 199 W. Va. At 164, 483 S.E.2d at 510.

37. Tort Immunities Act, cont. • The determination of a “special duty” is generally a question of fact for the trier of fact. Syllabus Point 11, Parkulo. Insurance • When a public entity or its employee is insured under a liability insurance policy, the terms of the policy govern rights and obligations of the public entity and the insurer with respect to the investigation, settlement, payment, and defense of suits against the public entity, or its employees covered by the policy. W. Va. Code § 29-12A-5. • Many policies incorporate by reference the language of any applicable West Virginia statutes and expressly mandate that statutory language supersedes policy language where conflicts between the two are present.Parkulo v. West Virginia Bd. of Probation and Parole, 199 W.Va. 161, 483 S.E.2d 507 (1996).

38. Tort Immunities Act, cont. • This, of course, requires diligence on the part of the underwriter to know and understand the statutory and regulatory provisions of West Virginia law. W. Va. Code § 33-11-1, et seq • A public entity has a right of indemnity against an insurer up to the limits of the policy. • A public entity and its employees cannot be held liable for any costs, judgments or settlements paid through an applicable policy of insurance. WV Code § 29-12A-9.

39. Tort Immunities Act, cont. Judgments • Any judgment entered against a political subdivision for a loss caused by an act or omission of the political subdivision or its employee cannot be satisfied by execution, judicial sale, garnishment, or attachment of the political subdivision’s real or personal property, money, accounts or investments. W. Va. Code § 29-12A-10(a). • Judgments can only be paid from funds allocated by the political subdivision allocated for that purpose. W. Va. Code § 29-12A-10(b). • If insufficient funds have been allocated, the taxing authority of the political subdivision will place the item on the next annual fiscal year budget. Id.

40. Tort Immunities Act, cont. Defense of Employees • A political subdivision must provide for the defense of an employee in any state or federal court in any civil action or proceeding to recover damages for injury, death, or loss to persons or property caused by an act or omission of the employee if the act or omission is alleged to have occurred while the employee was acting in good faith and not manifestly outside the scope of his employment or official responsibilities. W. Va. Code § 29-12A-11. • Funds expended by a public entity in defending its employees can be apportioned from funds appropriated for such a purpose or pursuant to a contractual agreement between the public entity and its insurer.

41. Tort Immunities Act, cont. • When it was plead that an officer or employee of a public entity has acted maliciously, criminally or in bad faith, a compelling argument can be presented that neither the political subdivision, nor its insurer, has a duty to defend the employee. • If a political subdivision refuses to provide a defense to an employee, an employee may file an action for declaratory relief to determine the veracity of such refusal. W. Va. Code § 29-12A-11(c). • In West Virginia the duty to defend is broader than the duty to indemnify. Bower v. Hi-Lad. Inc., 216 W.Va. 634, 651 609 S.E.2d 895, 912 (2004). • If one allegation of the complaint would be covered then required to defend the insured on all claims although the company may ultimately not owe any duty to indemnify.

42. Tort Immunities Act, cont. Indemnification of Employees • The Tort Immunities Act provides that an employee is to be indemnifiedfor the amount of any judgment rendered against the employee in a state or federal court that is for damages for injury, death, or loss to persons or property caused by an act or omission of the employee, if the employee was acting in good faith and within the scope of his employment or official responsibilities.

43. Tort Immunities Act, cont. • The duty to indemnify arises once a determination has been made; however, an insurer has a greater obligation to defend than indemnify. • A public entity has the right to seek recoupment for fees, costs, and payments made on behalf of an employee if it is shown that the conduct of the employee which gave rise to the claim or action as outside the scope of his employment or if the employee fails to cooperate in good faith in the defense of the claim or action.

44. Tort Immunities Act, cont. • There may be instances in which the position of the public entity and an employee are adverse and additional counsel will need to be retained for each. Procedure • From a procedural standpoint, actions against a public entity are located or where the cause of action arose. • When a suit is instituted under the authority of the Tort Immunities Act, the public entity must be named as a defendant.

45. Tort Immunities Act, cont. • An employee acting within the scope of his employment cannot be named as a defendant. • Does circumstantial evidence exist that the plaintiff believes the employee was acting outside the scope of employment. • As matter of practice, however, the term “scope of employment” should be broadly construed. • If an employee is named without specific allegations that their actions were manifestly outside the scope of their employment or performed with malicious purpose, in bad faith, or in a wanton and reckless manner, that the employee is immune and must be dismissed.

46. Qualified Immunity • The common law immunity of the State in suits brought under the authority of W. Va. Code § 29-12-5 with respect to judicial, legislative, and executive (or administrative) policy-making acts and omissions is absolute and extends to officials when performing those functions. Syl. Pt. 7, Parkulo, 199 W.Va. at 161, 483 S.E.2d at 507. • A public executive official who is acting within the scope of this authority and is not covered by the provisions of the Tort Immunities Act,is entitled to qualified immunity from personal liability for official acts if the involved conduct did not violate clearly established laws of which a reasonable official would have known. • There is no immunity for an executive official whose acts are fraudulent, malicious, or otherwise oppressive. Syl. Pt 8, Parkulo. • Although qualified immunity available to a state official is generally also available to the State, the existence of the State’s immunity of the State must be determined on a case-by-case basis.

47. Qualified Immunity, cont. • The common law doctrine of qualified immunity is designed to protect public officials from the threat of litigation resulting from difficult decisions which must be made in the course of their employment. Clark v. Dunn, 195 W.Va. 272, 465 S.E.2d 374 (1995). • The Supreme Court of Appeals concluded that the doctrine of qualified immunity bars a claim of mere negligence againstthe Department of Natural Resources, a state agencynot within the purview of the West Virginia Government of Tort Claims and Insurance Reform Act, and against Officer Dunn, an officer of that department acting within the scope of his employment, with respect to the discretionary judgments, decisions, and actions of its public officers. Id. at 380.

48. Qualified Immunity, cont. • To overcome this immunity, a plaintiff must establish that the agency employee or official knowingly violated a clearly established law, or acted maliciously, fraudulently, or oppressively. Parkulo v. West Virginia Board of Probation and Parole, 199 W.Va. 161, 483 S.E.2d 507 (1996); Clark, 465 S.E.2d 394 (citing State v. Chase Securities, Inc., 188 W.Va. 356, 424 S.E.2d 591 (1991)).

49. Qualified Immunity, cont. • The State, its agencies, officials and employees are immune for acts or omissions arising out of the exercise of discretion in carrying out their duties, so long as they are not violating any known law or acting with malice or bad faith. Syl. pt. 8, Parkulo. • The simple use of the words “willful, deliberate, or intentional” is insufficient to overcome the Defendant’s entitlement to qualified immunity. See Pinder v. Johnson, 54 F.3d 1169, 1173 (4th Cir. 1996)(stating that for a right to be clearly established, it must be established in a particularized and relevant sense, not merely as an overarching entitlement to due process.").

50. Qualified Immunity, cont. • State v. Chase Securities, Inc., 188 W.Va. 356, 424 S.E.2d 591 (1992) - scrutinized the common law doctrine of qualified immunity. • “The provision of immunity rests on the view that the threat of liability will make federal officials timid in carrying out their official duties, and that effective government will be promoted if officials are freed the costs of vexations and often frivolous damages suits.” • Employed the standard developed by the United States Supreme Court in Harlow v. Fitzgerald, 457 U.S. 800, 812 (1982), holding that “government officials performing discretionary functions generally are shielded from civil damages insofar as their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known.” • Defined “reasonable person” as a “a reasonable public official occupying the same position as the defendant public official.”