Vincenzo v. AIG Insurance Services, Inc. , 288 F. App'x 875 ( 2008 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 07-2078
FRANK W. VINCENZO; SANDRA K. VINCENZO,
Plaintiffs - Appellees,
v.
AIG INSURANCE SERVICES, INCORPORATED,
Defendant - Appellant.
Appeal from the United States District Court for the Northern
District of West Virginia, at Clarksburg. Irene M. Keeley, Chief
District Judge. (1:07-cv-00026-IMK)
Argued: May 15, 2008 Decided: July 17, 2008
Before TRAXLER and KING, Circuit Judges, and Jackson L. KISER,
Senior United States District Judge for the Western District of
Virginia, sitting by designation.
Affirmed by unpublished per curiam opinion.
ARGUED: Clifford Forrest Kinney, Jr., SPILMAN, THOMAS & BATTLE,
PLLC, Charleston, West Virginia, for Appellant. Theodore L.
Tsoras, JACOB M. ROBINSON LAW OFFICES, Wheeling, West Virginia, for
Appellees. ON BRIEF: Paula L. Durst, SPILMAN, THOMAS & BATTLE,
PLLC, Charleston, West Virginia, for Appellant. Jacob M. Robinson,
JACOB M. ROBINSON LAW OFFICES, Wheeling, West Virginia, for
Appellees.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Defendant AIG Insurance Services, Incorporated, pursues this
interlocutory appeal from the district court’s denial of AIG’s
motion to dismiss the state law third-party bad faith claim brought
against it by plaintiffs Frank and Sandra Vincenzo. See Vincenzo
v. AIG Ins. Servs., Inc., No. 1:07-cv-00026 (N.D. W. Va. Sept. 21,
2007) (the “Order”).1 As explained below, we conclude that the
Order correctly resolved the issue of whether West Virginia’s
savings statute, see W. Va. Code § 55-2-18 (the “Savings Statute”),
preserved the Vincenzos’ claim, which had been timely filed prior
to abolition of private third-party bad faith claims in West
Virginia. Thus, we are content to affirm the Order — ruling that
the Vincenzos’ bad faith claim was not barred when it was refiled
after being dismissed without prejudice — on the basis of the
district court’s reasoning.
I.
A.
In 2000, the Vincenzos filed suit in the Circuit Court of
Monongalia County, West Virginia, against multiple defendants,
seeking recovery for physical injuries sustained on the job by
1
The Order is found at J.A. 140-53. (Citations to “J.A. __”
refer to the contents of the Joint Appendix filed by the parties in
this appeal.)
2
Frank Vincenzo. On July 7, 2005, while their suit was pending, the
Vincenzos filed a separate action in the state circuit court
against AIG (the “First Complaint”), alleging a third-party bad
faith claim, then authorized under state law. See Jenkins v. J.C.
Penney Cas. Ins. Co., 280 S.E.2d 252, 254 (W. Va. 1981) (concluding
that West Virginia Code section 33-11-4(9) gave rise to cause of
action by third-party claimants against insurance companies for
having engaged in unfair claims settlement practices). In April
2005, however, the West Virginia legislature had enacted West
Virginia Code section 33-11-4a, which abrogated the rule
promulgated in Jenkins, and provided instead for such a claim to be
handled administratively:
A third-party claimant may not bring a private cause of
action or any other action against any person for an
unfair claims settlement practice. A third-party
claimant’s sole remedy against a person for an unfair
claims settlement practice or the bad faith settlement of
a claim is the filing of an administrative complaint with
the Commissioner.
W. Va. Code § 33-11-4a(a) (the “Abrogation Statute”) (emphasis
added). The Abrogation Statute became effective on July 8, 2005,
one day after the Vincenzos filed their First Complaint. The
Vincenzos failed to perfect service of the First Complaint on AIG
within 120 days, as required by Rule 4 of the West Virginia Rules
of Civil Procedure. As a result, on January 24, 2006, the state
circuit court dismissed the First Complaint without prejudice.
3
One year later, on January 24, 2007, the Vincenzos refiled
their third-party bad faith claim against AIG in the state circuit
court (the “Second Complaint”), relying on the Savings Statute.
The Savings Statute provides, in pertinent part, that
[f]or a period of one year from the date of an order
dismissing an action or reversing a judgment, a party may
refile the action if the initial pleading was timely
filed and . . . the action was involuntarily dismissed
for any reason not based upon the merits of the action.
W. Va. Code § 55-2-18(a). In the Second Complaint, the Vincenzos
alleged that, although the Abrogation Statute had abolished private
third-party bad faith claims on July 8, 2005 (a day after they
filed their First Complaint), the Savings Statute preserved their
claim against AIG because the Statute allowed them to refile the
claim within a year from the date of its dismissal due to a failure
to perfect service — a dismissal that was “not based upon the
merits of the action.”
B.
On February 26, 2007, AIG removed the Vincenzo’s action to the
Northern District of West Virginia, on the basis of diversity
jurisdiction under 28 U.S.C. § 1332. Shortly thereafter, on March
5, 2007, AIG moved in the district court to dismiss the Second
Complaint, pursuant to Rule 12(b)(6), contending that the
Abrogation Statute barred the third-party bad faith claim asserted
therein, and that the Savings Statute failed to preserve the claim
because it only applied when a statute of limitations issue was
4
implicated.2 On April 24, 2007, the court heard argument on AIG’s
Rule 12(b)(6) motion, and thereafter assessed supplemental briefs
addressing AIG’s contention that the Savings Statute is not
applicable in these circumstances, and only applies to claims that
are time-barred by a statute of limitations. AIG filed its
supplemental brief on May 4, 2007, requesting that, if the court
denied its Rule 12(b)(6) motion, the court certify an interlocutory
appeal to this Court under the provisions of 28 U.S.C. § 1292(b).3
2
As the district court aptly recognized in its Order, claims
involving unfair settlement practices that arise under the West
Virginia Unfair Trade Practices Act, see W. Va. Code §§ 33-11-1 to
-10, have a one-year statute of limitations, see Syl. Pt. 1, Wilt
v. State Auto. Mut. Ins. Co., 506 S.E.2d 608, 608 (W. Va. 1998),
which begins to run only after the expiration of the appeal period
for the underlying personal injury claim, see Klettner v. State
Farm Mut. Auto. Ins. Co., 519 S.E.2d 870, 876 (W. Va. 1999). The
parties settled their underlying personal injury claim on March 28,
2006, and a final order was entered on May 1, 2006. Thus, as the
district court concluded, the statute of limitations was not
implicated when the Vincenzos filed their Second Complaint on
January 24, 2007. See Order 3.
3
Pursuant to 28 U.S.C. § 1292(b), an interlocutory appeal may
be pursued in the following circumstances:
When a district judge, in making in a civil action an
order not otherwise appealable . . . , shall be of the
opinion that such order involves a controlling question
of law as to which there is substantial ground for
difference of opinion and that an immediate appeal from
the order may materially advance the ultimate termination
of the litigation, he shall so state in writing such
order. The Court of Appeals which would have
jurisdiction of an appeal of such action may thereupon,
in its discretion, permit an appeal to be taken from such
order.
28 U.S.C. § 1292(b).
5
On September 21, 2007, the district court issued its Order
denying AIG’s Rule 12(b)(6) motion to dismiss, ruling that the
Vincenzos’ third-party bad faith claim against AIG, as alleged in
the Second Complaint, is viable under state law. The Order also
stayed the proceedings in the district court to permit AIG to
pursue an interlocutory appeal under § 1292(b), which the court
certified. AIG filed a petition for interlocutory appeal on
October 5, 2007, and, on October 31, 2007, we granted the petition.
II.
We review de novo the district court’s conclusion that the
Savings Statute preserves the third-party bad faith claim alleged
against AIG in the Second Complaint. See Holly v. Scott, 434 F.3d
287, 288-89 (4th Cir. 2006) (“We review de novo a district court’s
denial of a motion to dismiss under Rule 12(b)(6).”). In arriving
at this conclusion, the district court explained in its Order that
the plain language of the Savings Statute requires that “(1) the
initial complaint be timely filed, (2) the cause of action be
involuntarily dismissed for any reason not based on the merits, and
(3) the complaint be refiled within one year of the involuntary
dismissal.” Order 4. It is undisputed that the Vincenzos had
timely filed their First Complaint, and that it was dismissed
without prejudice. See W. Va. Code § 55-2-18(b) (“[A] dismissal
not based upon the merits of the action includes . . . [a]
6
dismissal for failure to have process timely served.”). The court
also concluded that the Vincenzos had satisfied the third
requirement of the Savings Statute, in that they filed their Second
Complaint, on January 24, 2007, within one year of the state
court’s involuntary dismissal of their First Complaint, on January
24, 2006.
AIG argued that, although the plain terms of the Savings
Statute had been satisfied, the Statute nevertheless did not apply
to the bad faith claim alleged against it in the Second Complaint.
Relying primarily on Browning v. Browning, 100 S.E. 860 (W. Va.
1919), AIG contended that the Savings Statute’s sole purpose was to
extend the statute of limitations on a timely filed claim that was
dismissed through no fault of the plaintiff. Because the statute
of limitations had not expired with respect to the bad faith claim
in the Second Complaint, the Savings Statute was, according to AIG,
inapplicable. In Browning, the defendant had attempted to utilize
the one-year limitations period from an earlier version of the
Savings Statute to bar a claim that had no statute of limitations.
The Supreme Court of Appeals of West Virginia thus concluded that
the claim was not barred, explaining that
[t]he [Savings Statute] . . . applies only to those
causes of action which, under the general statute of
limitation applicable thereto, would otherwise be barred
before the new action is commenced, and lengthens rather
than shortens the period of limitation prescribed by the
general statute. If there is no such bar, or if there is
one whose limitation has not yet run against the cause of
action, the [Savings Statute] has no application.
7
Syl. Pt. 1, 100 S.E. at 860. Premised on the Browning decision,
AIG asserted that, because the Vincenzo’s bad faith claim was not
time-barred, the Savings Statute did not apply. The district court
rejected AIG’s contention, however, concluding that its
interpretation of Browning was overly broad. The court reasoned
that “[w]hen read in light of its specific facts, Browning actually
stands for the proposition that the savings statute cannot be
utilized to create a statute of limitations for a cause of action.”
Order 10-11.
As the district court properly recognized, the Savings Statute
has historically been broadly interpreted. In Tompkins v. Pacific
Mutual Life Insurance Co., the Supreme Court of Appeals of West
Virginia explained the Savings Statute as “a highly remedial
statute [that] ought to be liberally construed for the
accomplishment of the purpose for which it was designed, namely, to
save one, who has brought his suit within the time limited by law,
from loss of his right of action by reason of accident or
inadvertence.” 44 S.E. 439, 441 (W. Va. 1903). In Crawford v.
Hatcher, the district court in southern West Virginia adopted the
broad reading articulated in Tompkins, concluding that “[i]t can
hardly be questioned that the law favors resolution of disputes on
their merits. Competing principles, such as prompt resolution of
disputes and judicial economy, must give way except in compelling
cases. . . . [T]he savings statute is to be liberally construed in
8
order to effect its intended purpose.” 804 F. Supp. 834, 836-37
(S.D. W. Va. 1992).
In this appeal, AIG seeks to distinguish the Tompkins and
Crawford authorities on the ground that both involved a statute of
limitations issue. But, as the district court observed here,
neither case expressly limited the reach of the savings
statute to claims that are time-barred by a statute of
limitations. Rather, they recognized that the primary
purpose of the savings statute is to permit claims to be
resolved on their merits. Both thus liberally construed
the savings statute to achieve this purpose.
Order 9. Relying on Tompkins and Crawford, the district court thus
denied AIG’s Rule 12(b)(6) motion to dismiss, concluding that,
because the Savings Statute must be broadly construed, it applied
to the bad faith claim alleged against AIG in the Second Complaint,
and authorized the Vincenzos to pursue their claim despite the
enactment of the Abrogation Statute.
III.
After thorough de novo consideration of this appeal, we are
constrained to agree with the district court’s well-reasoned
Order.4 We are accordingly content to affirm on the basis thereof.
4
On May 6, 2008, prior to oral argument of this appeal, we
asked counsel to be prepared to address whether it might be
appropriate to certify the question on appeal to the Supreme Court
of Appeals of West Virginia. See W. Va. Code § 51-1A-3 (“The
supreme court of appeals of West Virginia may answer a question of
law certified to it by any court of the United States . . . if the
answer may be determinative of an issue in a pending case in the
certifying court and if there is no controlling appellate decision,
9
See Vincenzo v. AIG Ins. Servs., Inc., No. 1:07-cv-00026 (N.D. W.
Va. Sept. 21, 2007).
AFFIRMED
constitutional provision or statute of this state.”). Both parties
expressed their opposition to any such certification, and we have
determined that, in the circumstances, a certification is not
warranted.
10