State of WV ex rel. Gallagher Bassett Services v. The Honorable Carrie Webster, Robin Lusk and Old Dominion Freight Line, Inc. ( 2019 )

IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA
January 2019 Term FILED
_______________
June 12, 2019
released at 3:00 p.m.
No. 19-0043 EDYTHE NASH GAISER, CLERK
SUPREME COURT OF APPEALS
_______________ OF WEST VIRGINIA
STATE OF WEST VIRGINIA EX REL. GALLAGHER BASSETT SERVICES,
INC.,
Petitioner
v.
THE HONORABLE CARRIE WEBSTER, JUDGE OF THE CIRCUIT COURT
OF KANAWHA COUNTY; ROBIN LUSK; AND OLD DOMINION FREIGHT
LINE, INC.,
Respondents
____________________________________________________________
ORIGINAL PROCEEDING IN PROHIBITION
WRIT GRANTED
____________________________________________________________
Submitted: April 23, 2019
Filed: June 12, 2019
Arie M. Spitz, Esq. James D. McQueen, Jr., Esq.
Kevin A. Nelson, Esq. McQueen Davis, PLLC
Dinsmore & Shohl LLP Huntington, West Virginia
Charleston, West Virginia
Christopher J. Heavens, Esq.
Counsel for the Petitioner Heavens Law Firm, PLLC
Charleston, West Virginia
Counsel for the Respondent Robin Lusk
Justin M. Harrison, Esq.
George E. Chamberlain IV, Esq.
Jackson Kelly PLLC
Charleston, West Virginia
Counsel for Respondent Old Dominion
Freight Line, Inc.
JUSTICE ARMSTEAD delivered the Opinion of the Court.
JUSTICE WORKMAN concurs, in part, and dissents, in part, and reserves the
right to file a separate opinion.
SYLLABUS BY THE COURT
1. “A writ of prohibition will not issue to prevent a simple abuse of
discretion by a trial court. It will only issue where the trial court has no jurisdiction or
having such jurisdiction exceeds its legitimate powers. W. Va. Code, 53-1-1.” Syl. Pt. 2,
State ex rel. Peacher v. Sencindiver, 160 W. Va. 314, 233 S.E.2d 425 (1977).
2. W. Va. Code § 23-2C-21(a) [2009] prohibits a cause of action by an
employee against a third-party administrator, or any employee or agent of a third-party
administrator, for workers’ compensation discrimination.
i
Armstead, Justice:
This case is before the Court on a petition for writ of prohibition. Respondent
Robin Lusk worked for Respondent Old Dominion Freight Line, Inc., (“Old Dominion”)
as a long-haul truck driver. Ms. Lusk was injured at Old Dominion’s trucking terminal,
and Old Dominion subsequently terminated her. Old Dominion’s third-party claims
administrator, Petitioner, Gallagher Bassett Services, Inc., (“Gallagher Bassett”) denied
Ms. Lusk’s claim for workers’ compensation benefits on behalf of Old Dominion.
Ms. Lusk sued both Old Dominion and Gallagher Bassett in the Circuit Court
of Kanawha County. Gallagher Bassett moved to dismiss Ms. Lusk’s claims against it, and
Respondent The Honorable Carrie L. Webster, Judge of the Circuit Court of Kanawha
County, denied Gallagher Bassett’s motion. Gallagher Bassett contends that Judge
Webster erred and asks this Court to direct the circuit court to dismiss all of Ms. Lusk’s
claims against Gallagher Bassett.
Based on the record before us, the arguments of the parties, and the
applicable law, we find that the circuit court exceeded its jurisdiction by failing to dismiss
Ms. Lusk’s claims against Gallagher Bassett. Accordingly, we grant the writ of
prohibition, reverse the circuit court’s order denying Gallagher Bassett’s motion to dismiss,
and remand this case to the circuit court for the entry of an order dismissing Ms. Lusk’s
claims against Gallagher Bassett.
1
I. FACTUAL AND PROCEDURAL BACKGROUND
Robin Lusk and her husband, Kevin Lusk, were long-haul truckers for Old
Dominion. Their work took them to California, and on June 16, 2015, they entered Old
Dominion’s Los Angeles terminal to begin their next haul. When they arrived, Old
Dominion’s computer system noted their presence and identified the trailers that they were
to transport. When the Lusks attempted to connect to their trailers, Ms. Lusk received
serious injuries.
An ambulance transported Ms. Lusk to a California hospital, where she
remained until June 22, 2015. On the day Ms. Lusk was released, Mr. Lusk spoke to Old
Dominion’s terminal manager by phone. According to Ms. Lusk, the manager said that
the couple had “falsified the log book,” and that both of them were fired.
The Lusks returned to West Virginia, arriving by car on June 26, 2015. Ms.
Lusk immediately checked into a hospital. According to her, this was when she learned
that Old Dominion had terminated her health insurance coverage. That same day, she
asserts that she spoke to a Gallagher Bassett employee named Cathy Reedy. According to
Ms. Lusk, Ms. Reedy took her statement and then promptly informed her that her request
for workers’ compensation benefits was denied.
Ms. Reedy, in her capacity as a Gallagher Bassett claims administrator, also
communicated this decision to Ms. Lusk in a letter dated June 26, 2015. The letter
identifies Old Dominion as the “Client” and appears to have been printed on Gallagher
2
Bassett letterhead. It reports, “Your application for the benefits filed in the above claim is
denied. We have determined that your injury is not work related.”
Ms. Lusk challenged the decision to deny her claim. After an expedited
hearing on October 9, 2015, the Office of Judges agreed with Ms. Lusk, ruled that her
injury was work-related, and determined that her claim was compensable. The Board of
Review affirmed the decision of the Office of Judges in March 2016.1
Ms. Lusk sued Old Dominion in Kanawha County Circuit Court on
November 16, 2015. In her complaint, she accuses Old Dominion of workers’
compensation discrimination, workers’ compensation fraud, and defamation. She
identifies Ms. Reedy by name, describes their June 26, 2015 conversation, and refers to the
June 26, 2015 denial letter. Ms. Lusk alleges, in particular, that Ms. Reedy accused her of
“falsif[ying] log book records[.]” As reported by Ms. Lusk, Ms. Reedy said that “according
to the Log Book, Kevin [Lusk] . . . was supposed to be in the ‘sleeper[,]’ and [Robin Lusk]
was supposed to be ‘off duty’ at the time she was hooking up the trailers, such that neither
was logged in as being ‘on duty’ when [Robin Lusk] was . . . injured.” Ms. Lusk denies
that she falsified any log-book entries but says that “she freely admitted [during her
conversation with Ms. Reedy] that she inadvertently failed to log in as being ‘on duty’ by
forgetting to do so when she began her pre-shift activities.” The complaint also contends
1
Old Dominion appealed the Board of Review’s decision to this Court in
April 2016, but Old Dominion later withdrew the appeal.
3
that Old Dominion’s “workers’ compensation representatives, acting as employees of [Old
Dominion’s] third-party administrator, were the agents and servants of [Old Dominion.]”
Ms. Lusk filed an amended complaint on January 4, 2018. The amended
complaint added Gallagher Bassett as a defendant, accusing Gallagher Bassett of workers’
compensation discrimination and workers’ compensation fraud.2 The amended complaint
alleges that Gallagher Bassett “contract[ed] with . . . Old Dominion . . . to act as a claims
administrator for workers’ compensation claims” and alleges that “[a]t all times material
to this action, . . . Gallagher Bassett’s workers’ compensation representatives, who were
acting as employees of said third-party administrator, were also the agents and servants of
. . . Old Dominion[.]” According to the amended complaint, Gallagher Bassett’s
employees “were either acting within the scope and course of their employment and
agency, such that . . . Old Dominion is liable for any wrongful conduct by them . . . [,] or
[they] were acting on their own in a manner contrary to the workers’ compensation laws
of West Virginia.”
Ms. Lusk appears to have anticipated that the statute of limitations might
become an issue for her claims against Gallagher Bassett, and sought to address the issue
in her motion for leave to file the amended complaint. The motion alleges that the August
2017 deposition revealed to Ms. Lusk “that Old Dominion did not make the decision to
deny compensability . . . and that Gallagher Bassett . . . and its Claims Manager . . . , Cathy
2
The parties appear to agree that Ms. Lusk’s defamation claim does not
extend to Gallagher Bassett.
4
Reedy, made the decision based on facts provided by Old Dominion.” The motion explains
that Ms. Lusk had not previously sought amendment of the complaint because prior to the
deposition, Old Dominion had not taken the position that it relied on Gallagher Bassett in
making the decision to deny compensability. Gallagher Bassett moved to dismiss all of
Ms. Lusk’s claims against it pursuant to Rule 12(b)(6) of the West Virginia Rules of Civil
Procedure.3 Gallagher Bassett argued that Ms. Lusk’s claims were barred by the two-year
statute of limitations and that Gallagher Bassett was not a proper defendant because it was
not Ms. Lusk’s employer.4 Ms. Lusk responded that the statute of limitations was tolled
by the discovery rule and did not begin to run until she learned from Old Dominion’s
employee that “Gallagher Bassett apparently had complete independence in administering
and making decisions as to the workers’ compensation claim[.]” She also contended that
“[n]othing in Chapter 23 of the West Virginia Code precludes the application of Persinger
[v. Peabody Coal Co., 196 W. Va. 707, 474 S.E.2d 887 (1996)] to intentional acts, such as
fraud, by a claims administrator[.]” As support for this claim, she quoted W. Va. Code §
23-2C-21 [2009].5
3
Rule 12(b)(6) authorizes a motion to dismiss for “failure to state a claim
upon which relief can be granted[.]” W. Va. R. Civ. P. 12(b)(6) [1998].
4
Gallagher Bassett also argued that Ms. Lusk failed to plead her fraud claim
with sufficient particularity and that Ms. Lusk was attempting to bring what amounts to “a
disguised [insurance] bad faith claim or a privatized § 23-1-1 et seq. administrative claim.”
5
The relevant portions of W. Va. Code § 23-2C-21 are set forth below in the
analysis section of this opinion.
5
The circuit court considered Gallagher Bassett’s motion to dismiss at a
hearing on June 28, 2018. The circuit court denied the motion to dismiss in an order entered
on August 27, 2018.6 In denying the motion, the circuit court summarized the parties’
arguments and suggested that it might later side with Gallagher Bassett on summary
judgment. Indeed, the circuit court noted Gallagher Bassett’s argument that Ms. Lusk’s
oral arguments about the June 26, 2015 letter amounted to “further evidence that Plaintiff
knew or should have known of potential claims against Gallagher Bassett more than two
years before she filed suit” and observed that “Gallagher Bassett’s arguments [that it was
not a proper defendant] are extremely persuasive[.]” However, the circuit court was
6
We note with some concern that neither party included the circuit court’s
August 27, 2018 order in either the appendix or the supplemental appendix filed with this
Court. We added the August 27, 2018 order to the appendix record by order of this Court
entered on April 9, 2019. See W. Va. R. App. P. 6(b) [2010].
Instead of the August 27, 2018 order, Gallagher Bassett filed a transcript of
the circuit court’s June 28, 2018 hearing on Gallagher Bassett’s motion to dismiss and a
January 14, 2019 proposed order denying the motion. However, the proposed order—
unlike the August 27, 2018 order—does not bear Judge Webster’s signature, and we
understand that, as of the morning of oral argument before this Court, the proposed order
had not been entered. “It is a paramount principle of jurisprudence that a court speaks only
through its orders.” Legg v. Felinton, 219 W. Va. 478, 483, 637 S.E.2d 576, 581 (2006).
Accordingly, we decline to consider the January 14, 2019 proposed order, and we decline
to consider the circuit court’s remarks from the bench to the extent, if any, they may be
inconsistent with the reasoning and outcome stated in the August 27, 2018 order. See
Tennant v. Marion Health Care Found., Inc., 194 W. Va. 97, 106 n.5, 459 S.E.2d 374, 383
n.5 (1995) (“[I]t is clear that where a circuit court’s written order conflicts with its oral
statement, the written order controls. Therefore, ‘we are left to decide this case within the
parameters of the circuit court’s order.’” (quoting State v. White, 188 W. Va. 534, 536 n.2,
425 S.E.2d 210, 212 n.2 (1992))).
We also decline to consider the documents that Gallagher Bassett filed on
the day before oral argument under an untimely motion to supplement the appendix record.
W. Va. R. App. P. 38(f) [2018] (“No documents shall be filed less than forty-eight hours
prior to a scheduled argument in a proceeding unless specifically requested by the Court.”).
6
unwilling to grant Gallagher Bassett’s motion based on the early stage in the litigation and
based on a “belie[f] that public policy must require that Gallagher Bassett be answerable
to the jurisdiction of this Court as to Plaintiff’s claims.” The court also noted “that no case
directly addressing this issue [i.e., whether a third-party administrator could be sued for
workers’ compensation discrimination and fraud] has been decided by the Supreme Court
of Appeals.”
Gallagher Bassett filed this petition for writ of prohibition on January 18,
2019, challenging the denial of its motion to dismiss.
II. STANDARD OF REVIEW
We have held that “[a] writ of prohibition will not issue to prevent a simple
abuse of discretion by a trial court. It will only issue where the trial court has no jurisdiction
or having such jurisdiction exceeds its legitimate powers. W. Va. Code, 53-1-1.” Syl. Pt.
2, State ex rel. Peacher v. Sencindiver, 160 W. Va. 314, 233 S.E.2d 425 (1977). When a
petitioner claims that a circuit court has exceeded its powers, we apply the following test:
(1) whether the party seeking the writ has no other adequate
means, such as direct appeal, to obtain the desired relief; (2)
whether the petitioner will be damaged or prejudiced in a way
that is not correctable on appeal; (3) whether the lower
tribunal’s order is clearly erroneous as a matter of law; (4)
whether the lower tribunal’s order is an oft repeated error or
manifests persistent disregard for either procedural or
substantive law; and (5) whether the lower tribunal’s order
raises new and important problems or issues of law of first
impression.
Syl. Pt. 4, in part, State ex rel. Hoover v. Berger, 199 W. Va. 12, 483 S.E.2d 12 (1996).
We have described these factors as “general guidelines” and “a useful starting point[.]” Id.7
“Although all five factors need not be satisfied, . . . the third factor, the existence of clear
error as a matter of law, should be given substantial weight.” Id. With these considerations
in mind, we turn to Gallagher Bassett’s petition.
III. ANALYSIS
Gallagher Bassett argues that Ms. Lusk’s workers’ compensation
discrimination claim is barred by W. Va. Code § 23-2C-21(a) [2009] and that both her
workers’ compensation discrimination claim and her workers’ compensation fraud claim
are barred by the two-year statute of limitations. Gallagher Bassett contends that a writ of
prohibition should issue because it has no other timely means of correcting the circuit
court’s clearly erroneous decision, and observes that the application of W. Va. Code § 23-
2C-21(a) to third-party administrators is a matter of first impression for this Court. We
agree that this is a matter of first impression and that W. Va. Code § 23-2C-21(a) imposes
clear limits on a claimant’s right to maintain certain causes of action against a third-party
administrator. We proceed to consider those limits now in light of Ms. Lusk’s claims
against Gallagher Bassett.7
7
We note that “Old Dominion takes no position with respect to this Petition,
nor does it otherwise express an opinion in support of or against the arguments outlined
therein.”
8
A. Statutory Immunity
We begin our analysis of W. Va. Code § 23-2C-21(a) with a review of our
rules of statutory construction. This Court has held that in deciding the meaning of a
statutory provision, “[w]e look first to [a] statute’s language. If the text, given its plain
meaning, answers the interpretive question, the language must prevail and further inquiry
is foreclosed.” Appalachian Power Co. v. State Tax Dep’t of W. Va., 195 W. Va. 573, 587,
466 S.E.2d 424, 438 (1995). We have also cautioned that “[a] statute is open to
construction only where the language used requires interpretation because of ambiguity
which renders it susceptible of two or more constructions or of such doubtful or obscure
meaning that reasonable minds might be uncertain or disagree as to its meaning.” Sizemore
v. State Farm Gen. Ins. Co., 202 W. Va. 591, 596, 505 S.E.2d 654, 659 (1998) (cleaned
up). “That the parties disagree as to the meaning or the applicability of [a] provision does
not of itself render [the] provision ambiguous or of doubtful, uncertain or obscure
meaning.” In re Resseger’s Estate, 152 W. Va. 216, 220, 161 S.E.2d 257, 260 (1968).
With these rules of statutory construction in mind, we turn to W. Va. Code §
23-2C-21. Section 21 provides that “[n]o civil action may be brought or maintained by an
employee against a . . . third-party administrator, or any employee or agent of a . . . third-
party administrator, who violates any provision of this chapter or chapter thirty-three of
this code.” W. Va. Code § 23-2C-21(a) (emphasis added). Section 21 goes on to set forth
9
in clear, unambiguous language that “administrative fines or remedies[8] . . . are the
exclusive civil remedies for any violation of this chapter committed by a . . . third-party
administrator or any agent or employee of a . . . third-party administrator.” W. Va. Code
§ 23-2C-21(b) (emphasis added).
Ms. Lusk has sued Gallagher Bassett for workers’ compensation
discrimination. This is a statutory cause of action under Chapter 23 of the West Virginia
Code, and she alleges that Gallagher Bassett9 violated W. Va. Code § 23-5A-1 [1978]
(barring discrimination “because of [an] . . . employee’s receipt of or attempt to receive
benefits under this chapter”); W. Va. Code § 23-5A-2 [1982] (barring cancelation of health
insurance while an employee “is claiming or is receiving benefits under this chapter for a
temporary disability”); and W. Va. Code § 23-5A-3 [1990] (barring termination of “an
injured employee while the injured employee is off work due to a compensable injury . . .
and is receiving or is eligible to receive temporary total disability benefits”).10
8
The statute specifies that the “administrative fines or remedies” to which it
refers are those “provided in this chapter or chapter thirty-three of this code or rules
promulgated by the Workers’ Compensation Commission or the Insurance
Commissioner[.]” W. Va. Code § 23-2C-21(b).
9
The amended complaint actually identifies Old Dominion as the perpetrator
of these (alleged) statutory violations; Gallagher Bassett’s liability, according to the
amended complaint, stems from its status as Old Dominion’s (alleged) co-conspirator.
10
We note that the amended complaint vaguely refers to “statutory and
common law violations . . . pertaining to the rights of injured workers” and cites to a
number of our decisions in footnotes. It also alleges that Gallagher Bassett’s “statutory
violations” were “contrary to the public policies of the State of West Virginia regarding
the treatment of workers injured on the job.” This language does not obscure or alter the
10
Pursuant to our rule of statutory construction set forth above, we hold that
the “plain meaning” of W. Va. Code § 23-2C-21(a) prohibits a cause of action by an
employee against a third-party administrator, or any employee or agent of a third-party
administrator, for workers’ compensation discrimination. Because Ms. Lusk accuses
Gallagher Bassett, in its capacity as Old Dominion’s third-party administrator, of workers’
compensation discrimination, we find that this claim against Gallagher Bassett must be
dismissed and that the circuit court’s refusal to do so was clear error.11
Our law is clear that responsibility for compensability determinations lies
with a self-insured employer. “In any claim for benefits under this chapter, the . . . self-
fact that Ms. Lusk is asserting a statutory cause of action under Chapter 23, which is our
workers’ compensation statute. W. Va. Code §§ 23-1-1 to -6-3 [2019].
11
Our holding suggests a further question as to whether W. Va. Code § 23-
2C-21(a) also bars Ms. Lusk from asserting a cause of action against Gallagher Bassett for
workers’ compensation fraud. In Persinger, we recognized a cause of action for
“knowingly and intentionally fraudulently misrepresenting facts . . . in opposition to [an]
employee’s [workers’ compensation] claim . . . with the intention of depriving the
employee of benefits rightfully due him.” Syl. Pt. 1, in part, Persinger, 196 W. Va. 707,
474 S.E.2d 887. Conduct that would provide a cause of action under Persinger would also
seem “unreasonable” for purposes of W. Va. Code § 23-2C-21(c), which might plausibly
implicate Section 21’s ban on civil actions against third-party administrators for
“violat[ing] any provision of this chapter[.]” W. Va. Code § 23-2C-21(a) (emphasis
added).
However, Gallagher Bassett has not asked us to apply Section-21 immunity
to Ms. Lusk’s Persinger claim. Indeed, during oral argument, Gallagher Bassett’s counsel
expressly disavowed any intent to raise this question, explaining that he did not think our
law was sufficiently settled to warrant a finding that the circuit court had committed clear
error as to such claim. For this reason, and because we find the workers’ compensation
fraud claim is barred by the applicable statute of limitations as outlined below, we do not
address whether W. Va. Code § 23-2C-21(a) is a bar to Ms. Lusk’s fraudulent
misrepresentation claim. Accordingly, we decline to determine, in this action, whether W.
Va. Code § 23-2C-21(a) applies to claims of workers’ compensation fraud and reserve such
question for later determination.
11
insured employer . . . shall determine whether the claimant has sustained a compensable
injury . . . and enter an order giving all parties immediate notice of the decision.” W. Va.
Code § 23-4-1c(a) [2009] (emphasis added); see also W. Va. Code R. § 85-18-11.1 [2008]
(“All self-insured employers shall administer their own claims consistent with the
provisions of chapter twenty-three of the West Virginia Code and the rules promulgated
thereunder.” (emphasis added)). Third-party administrators, as the name implies, are third-
party entities “hired by self-insured employers to help administer workers’ compensation
claims[.]” W. Va. Code R. § 85-18-1.1 [2008]; see also, Wetzel v. Emp’rs Serv. Corp. of
W. Va., 221 W. Va. 610, 615, 656 S.E.2d 55, 60 (2007). “Self-insured employers may hire
third[-]party administrators to administer claims[,]” and such third-party administrators
“shall comply with relevant provisions of chapter[] twenty-three . . . of the West Virginia
Code and the rules promulgated thereunder.” W. Va. Code R. § 85-18-17 [2008] (emphasis
added). However, the ultimate responsibility for compensability decisions lies with the
self-insured employer.
Notably, in her response to the petition for writ of prohibition, Ms. Lusk
appears to concede that her workers’ compensation discrimination claim is barred by W.
Va. Code § 23-2C-21. She writes, “[t]he statute relied upon by Gallagher Bassett, W.[]Va.
[Code] §[]23-2C-21(a), . . . expressly states in clear fashion that an employee can not [sic]
bring or maintain an action against a . . . third-[party ]administrator . . . under chapter 23 .
. . of the West Virginia Code.” She contends, however, that Section 21 is unconstitutional
because Chapter 23 punishes fraud on the part of claimants while at the same time
12
“protecting those who administer the workers’ compensation laws . . . from exposure for
acting in a discriminatory manner[.]” Ms. Lusk further asserts, “[T]here is neither a
standard applicable to insurers, third-party administrators, or their employees to guide their
conduct or to prohibit either fraudulent or bad faith conduct.” She claims that “[t]here is
no rational basis for” this disparate treatment, and she alleges that it
violates the . . . equal protection, special legislation, . . .
substantive due process, certain remedy, or right to jury trial
provisions of the West Virginia Constitution. W.Va. Const.
art. III, §10; W.Va. Const. art. VI, §39; W.Va. Const. art. III
§10; W.Va. Const. art. III §17; and W.Va. Const. art. III [§]13.
We have held that “[e]very presumption is to be made in favor of the
constitutionality of a statute, and it can never be declared unconstitutional except when it
is clearly and plainly so. A reasonable doubt as to its unconstitutionality must be resolved
in favor of the validity of the law.” State ex rel. Greenbrier Cty. Airport Auth. v. Hanna,
151 W. Va. 479, 491, 153 S.E.2d 284, 290–91 (1967) (cleaned up). Ms. Lusk has failed to
meet this heavy burden. Indeed, she has offered us only a “skeletal ‘argument,’ really
nothing more than an assertion[.]” State v. Sites, ___ W. Va. ___, ___, 825 S.E.2d 758,
777 (2019) (cleaned up). We find no basis for Ms. Lusk’s challenge to the statute on a
constitutional basis.
We now consider whether Ms. Lusk’s remaining cause of action for workers’
compensation fraud is barred by the statute of limitations.
13
B. Statute of Limitations
We have held that “[a] five-step analysis should be applied to determine
whether a cause of action is time-barred”:
First, the court should identify the applicable statute of
limitation for each cause of action. Second, the court (or, if
questions of material fact exist, the jury) should identify when
the requisite elements of the cause of action occurred. Third,
the discovery rule should be applied to determine when the
statute of limitation began to run by determining when the
plaintiff knew, or by the exercise of reasonable diligence
should have known, of the elements of a possible cause of
action, as set forth in Syllabus Point 4 of Gaither v. City Hosp.,
Inc., 199 W.Va. 706, 487 S.E.2d 901 (1997). Fourth, if the
plaintiff is not entitled to the benefit of the discovery rule, then
determine whether the defendant fraudulently concealed facts
that prevented the plaintiff from discovering or pursuing the
cause of action. . . . And fifth, the court or the jury should
determine if the statute of limitation period was arrested by
some other tolling doctrine.
Syl. Pt. 5, in part, Dunn v. Rockwell, 225 W. Va. 43, 689 S.E.2d 255 (2009) (emphasis
added).
The parties agree that a two-year statute of limitations12 applies to this claim.
As such, we proceed to the second step and consider “when the requisite elements of the
cause of action occurred.” Id.In Persinger we held that
West Virginia Code § 23-2-6 (1994) does not preclude an
employee from maintaining a separate and distinct cause of
12
See W. Va. Code § 55-2-12 [1959].
14
action against an employer[13] for damages as a result of the
employer knowingly and intentionally fraudulently
misrepresenting facts to the Workers’ Compensation Fund that
are not only in opposition to the employee’s claim, but are
made with the intention of depriving the employee of benefits
rightfully due him.
Syl. Pt. 1, Persinger, 196 W. Va. 707, 474 S.E.2d 887. It is clear that the crux of Ms.
Lusk’s fraudulent misrepresentation claim against Gallagher Bassett is her assertion that
Gallagher Bassett, either acting on its own or as an agent of Old Dominion, fraudulently
misrepresented that she intentionally falsified her log entries. Therefore, we will turn our
attention to the question of when such a cause of action, if supported by the facts, actually
arose.
To state a cause of action for workers’ compensation fraud, a claimant must
allege that the defendant conveyed false information to some other person or body with
authority to rule on the claim. See Cobb v. E.I. duPont deNemours & Co., 209 W. Va. 463,
467, 549 S.E.2d 657, 661 (1999). According to our workers’ compensation statute, the
relevant person or body to hear her challenge—and, thus, the relevant person or body to
receive actionable misrepresentations under Persinger—was the Office of Judges. See,
e.g., W. Va. Code §§ 23-4-1c(a)(3) [2009], 23-5-1(b)(1) [2009], and 23-5-9 [2007]. We
13
Persinger refers multiple times to an action “against an employer[.]” See,
e.g., Syl. Pts. 1 and 4, Persinger, 196 W. Va. 707, 474 S.E.2d 887. Because we hold that
Ms. Lusk’s Persinger claim is barred by the statute of limitations, we need not consider
whether Persinger’s references to “an employer” provide a further basis for dismissing this
claim against Gallagher Bassett.
15
note that the Office of Judges conducted an expedited evidentiary hearing on Ms. Lusk’s
claim on October 9, 2015, and entered a decision in her favor approximately four weeks
later. From the decision, it is clear that the administrative law judge considered and
rejected Old Dominion’s14 claim that Ms. Lusk “was not [acting] in the course of her
employment because she ha[d] failed to enter she was on duty[.]” Therefore, any alleged
misrepresentation that would form the basis of her misrepresentation claim would have
occurred, at the latest, on the day of the October 9, 2015 evidentiary hearing.
Proceeding to the third factor set forth in Dunn, we must now review when
Ms. Lusk knew, or by the exercise of reasonable diligence should have known, of the
elements of a possible cause of action for fraudulent misrepresentation. As set forth above,
Ms. Lusk would have known, or by reasonable diligence should have known, of the alleged
fraudulent misrepresentation at the latest by the date of the October 9, 2015 evidentiary
hearing. In fact, Ms. Lusk would have been put on notice of the alleged misrepresentation
and the fact that it was a basis for the proposed denial of her workers’ compensation
coverage as early as June 26, 2015. This was the date of the letter from Gallagher Bassett
denying her workers’ compensation coverage based, at least in part, on the allegation that
she had falsified her log records—an allegation that was communicated to her in the June
22, 2015 phone call terminating her employment. Clearly, she possessed the facts relevant
14
Old Dominion, as the employer, was the responding party before the Office
of Judges.
16
to assert her fraudulent misrepresentation claim against Gallagher Bassett no later than
October 9, 2015.
This brings us to the question of whether we should apply the discovery rule
to toll the statute of limitations as outlined in the fourth step of our analysis under Dunn
and whether Gallagher Bassett in some way concealed facts that would warrant the tolling
of the statute of limitations. We have held that “[t]he ‘discovery rule’ is generally
applicable to all torts, unless there is a clear statutory prohibition to its application.” Syl.
Pt. 2, Dunn, 225 W. Va. 43, 689 S.E.2d 255. The more important question is whether the
discovery rule can save Ms. Lusk’s Persinger claim. We find that it cannot.
“[U]nder the discovery rule the statute of limitations begins to run when the
plaintiff knows, or by the exercise of reasonable diligence, should know (1)
that the plaintiff has been injured, (2) the identity of the entity who owed the
plaintiff a duty to act with due care, and who may have engaged in conduct
that breached that duty, and (3) that the conduct of that entity has a causal
relation to the injury.” Syllabus Point 4, Gaither v. City Hosp., Inc., 199
W.Va. 706, 487 S.E.2d 901 (1997).
Syl. Pt. 3, in part, Dunn, 225 W. Va. 43, 689 S.E.2d 255. As discussed above, as early as
June 26, 2015, Ms. Lusk understood both the fact that her claim for workers’ compensation
benefits had been denied and the reason for that denial.15 She also knew that Gallagher
Bassett was intimately involved with the decision to deny her claim. Indeed, a Gallagher
Bassett representative signed the June 26, 2015 letter that denied her claim and triggered
15
This assumes, for sake of argument, that the denial of Ms. Lusk’s claim qualifies
as an injury under Persinger. As we have explained above, Persinger only punishes
misrepresentations made to another person or body with authority to rule on this claim. In
this case, that person or body was the Office of Judges, and we note that Ms. Lusk prevailed
before the Office of Judges.
17
her right to file an objection with the Office of Judges. That objection was heard in an
evidentiary hearing on October 9, 2015. Thus, there are no circumstances which warrant
applying the discovery rule to toll the statute of limitations.
We further find that Gallagher Bassett took no steps to conceal evidence that
would justify tolling of the statute of limitations. Syl. Pt. 5, in part, Dunn, 225 W. Va. 43,
689 S.E.2d 255. Ms. Lusk contends that Gallagher Bassett and Old Dominion delayed the
discovery efforts that ultimately led her to conclude that Old Dominion blamed Gallagher
Bassett for the decision to deny workers’ compensation benefits. However, even if this
were true, any such delay did not conceal from Ms. Lusk the relevant facts that were
necessary for her to file her fraudulent misrepresentation claim against Gallagher Bassett.
As Ms. Lusk concedes in her response to the petition for a writ of prohibition,
“[i]t was apparent to [Ms. Lusk] that Old Dominion’s personnel had to supply Ms. Reedy
with the facts essential to her decision[.]” Furthermore, Ms. Lusk concedes that “she could
have surmised that Gallagher Bassett was the Claim Administrator who made the initial
decision to deny compensability.” We fail to see how anything revealed in the August
2017 deposition, or the e-mails produced at that deposition, materially altered Ms. Lusk’s
theory of her Persinger claim against Gallagher Bassett. Ms. Lusk offers us no further
reason to believe that Gallagher Bassett concealed relevant information, and we find no
such concealment that would toll the statute of limitations.
Finally, Ms. Lusk has shown no other justification, as outlined in Dunn, for
the statute of limitations to be “arrested by some other tolling doctrine.” Syl. Pt. 5, in part,
18
Dunn, 225 W. Va. 43, 689 S.E.2d 255.16 Accordingly, applying the standard set forth by
this Court in Dunn, we conclude that Ms. Lusk’s claim of fraudulent misrepresentation is
barred by the two-year statute of limitations.
IV. CONCLUSION
For the foregoing reasons, we conclude that the circuit court exceeded its
legitimate powers when it refused to dismiss Ms. Lusk’s claims against Gallagher Bassett.
We, therefore, grant the writ of prohibition and reverse the August 27, 2018 ruling of the
Circuit Court of Kanawha County. We further remand this matter to the circuit court and
order it to enter an order dismissing Ms. Lusk’s claims against Gallagher Bassett for
workers’ compensation discrimination and workers’ compensation fraud.
Writ granted.
16
Ms. Lusk also asserts, in her response to the petition for writ of prohibition,
that the appropriate accrual date for the two-year statute of limitations to begin to run
against Gallagher Bassett was the date upon which the appeal of the workers’ compensation
determination to this court was filed (i.e., Old Dominion’s appeal from the Board of
Review’s decision affirming the Office of Judges determination of workers’ compensation
coverage). She contends that it was “legally necessary” for her to prevail administratively
before considering the assertion of a claim against Gallagher Bassett for workers’
compensation fraud (emphasis added). Nonetheless, she proceeded to sue Old Dominion
in November 2015. Ms. Lusk’s attorney conceded as much during oral argument and
retreated to the position that waiting until the administrative process had run its course was
really an option not a necessity. Ms. Lusk has provided no legal authority that supports
her position that such delay was required or that it in any way tolled the statute of
limitations. See Sites, ___ W. Va. at ___, 825 S.E.2d at 777 (“We decline to address this
inadequately briefed issue on the merits.”). We, therefore, find this argument unpersuasive.
19