Samuel J. and Brenda F. Swiger v. United Valley Insurance Co. ( 2016 )

STATE OF WEST VIRGINIA
SUPREME COURT OF APPEALS
Samuel J. Swiger and Brenda F. Swiger,
individually, and as next friend of FILED
Joseph S. Swiger, an infant, all June 17, 2016
individually, and as representatives RORY L. PERRY II, CLERK
of the class of other similarly situated SUPREME COURT OF APPEALS
OF WEST VIRGINIA
individuals,
Plaintiffs Below, Petitioners,
vs) No. 15-0596 (Harrison County 05-C-91-3)
United Valley Insurance Company,
a foreign corporation doing business in
West Virginia, UGI Corporation, a foreign
corporation doing business in West Virginia,
Lon R. Greenberg, Euguene Van Name Bissell,
R. Paul Grady, Crawford & Company, a
corporation doing business in West Virginia, a/k/a
Crawford & Company Insurance Adjusters, Inc.,
Mark P. Griffith, Daniel W. Hoover, individuals,
Associated Electric & Gas Insurance Services, Ltd.
(AEGIS), National Union Fire Insurance Company
of Pittsburgh, Energy Insurance Mutual, Ltd.,
Starr Excess Liability Insurance Company, Ltd.,
and American International Group, Inc.,
Defendants Below, Respondents
MEMORANDUM DECISION
Petitioners and plaintiffs below, Samuel J. Swiger and Brenda F. Swiger, individually,
and as next friend of Joseph S. Swiger, an infant, individually, and as representatives of the class
of other similarly situated individuals, by counsel David J. Romano, appeal the May 18, 2015,
order of the Circuit Court of Harrison County that denied their motion to add additional parties
as named class representatives and motion to amend or modify the circuit court’s previous order
denying petitioners’ motion to certify a class. Respondents and defendants below, United Valley
Insurance Company, UGI Corporation, Lon R. Greenberg, Euguene Van Name Bissell, R. Paul
Grady, by counsel James A. Varner, Sr., James N. Riley, and Debra Tedeschi Varner; Crawford
& Company, a/k/a Crawford & Company Insurance Adjusters, Inc., Mark P. Griffith, Daniel W.
Hoover, by counsel Richard J. Bolen, and Melissa Dodd Veltri; Associated Electric & Gas
Insurance Services, Ltd. (AEGIS), Energy Insurance Mutual, Ltd., by counsel Jonathan L.
Anderson; National Union Fire Insurance Company of Pittsburgh, Starr Excess Liability
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Insurance Company, Ltd., and American International Group, Inc., by counsel John H. Tinney,
Jr. and John K. Cecil, filed a response. Petitioners submitted a reply.
This Court has considered the parties’ briefs and the record on appeal. The facts and legal
arguments are adequately presented, and the decisional process would not be significantly aided
by oral argument. Upon consideration of the standard of review, the briefs, and the record
presented, the Court finds no substantial question of law and no prejudicial error. For these
reasons, a memorandum decision affirming the circuit court’s order is appropriate under Rule 21
of the Rules of Appellate Procedure.
Monongalia County Action
On October 20, 1996, an explosion and resulting fire occurred at the home of Petitioners
Samuel and Brenda Swiger (“the Swigers”), causing property damage and personal injuries to
Petitioner Samuel Swiger and the Swigers’ infant son. The Swigers filed a complaint against
AmeriGas Propane (“AmeriGas”), a subsidiary of Respondent UGI Corporation (“UGI”), in the
Circuit Court of Monongalia County, alleging that AmeriGas had improperly installed an
underground liquid propane gas line at too shallow a depth on the Swigers’ property. The
propane line was breached, causing gas to leak into the home, and ignite.
The Swigers’s complaint also included class action allegations. The purported class
consisted of others in West Virginia who had underground propane gas lines installed by
AmeriGas and for whom the Swigers’ sought reinstallment or replacement of the propane lines
to an appropriate depth, in accordance with national fire code regulations. Other than the
Swigers, none of the members of the purported class had suffered any personal injury or property
damage. By order entered October 21, 1999, the circuit court granted class certification.
Thereafter, in 2001, the Swigers settled their individual claims for $210,000, and the
settlement was approved by the circuit court in 2003. As part of the dismissal of the individual
claims, it was agreed that the Swigers could remain as the named class representatives with
respect to any class claims that they may be deemed to possess, but that any award the Swigers
may receive for any class claim would be limited to nominal damages of no more than $100.
A settlement agreement was reached in or around December of 2010, defining the
settlement class, in essence, as those who had an AmeriGas propane system on their property in
West Virginia. The settlement class did not include anyone who had suffered damages as a result
of any fire, explosion, or other similar catastrophe, nor did it include any property damage or
personal injury claims from an explosion or fire cause by AmeriGas propane systems.
Furthermore, the settlement agreement did not release AmeriGas from liability for personal
injury or property damage claims that might be asserted by any member of the settlement class
due to any explosion, fire, or other calamity involving a member’s propane system.
By order entered August 12, 2011, the circuit court gave final certification and approval
of the settlement class, which was thereafter administered pursuant to their classification in six
categories.
Harrison County Action
2
On October 23, 2002, and February 16, 2005, the Swigers filed complaints on their own
behalf and in the instant action, respectively, in the Circuit Court of Harrison County. The cases
were consolidated by order entered April 27, 2006. The Swigers’s primary claim is that the
insurance company respondents violated the West Virginia Unfair Trade practices Act (“UTPA”)
by failing to investigate or properly adjust the Monongalia County class members’ claims. The
Swigers further asserted claims of negligence, civil conspiracy, violation of the Unauthorized
Insurers Act, and intentional conduct for the alleged failure of AmeriGas to disclose insurance
information to the class members in the Monongalia County action.
On July 25, 2013, the Swigers filed a motion to certify the present case as a class action
pursuant to Rule 23 of the West Virginia Rules of Civil Procedure.1 A hearing on the motion was
conducted on February 21, 2014. By order entered January 26, 2015, the circuit court denied the
motion to certify the class, finding that the Swigers failed to satisfy the “typicality” and
“adequacy of representation” requirements of Rule 23(a). The circuit court further found that the
Swigers failed to satisfy the predominance criteria set forth in Rule 23(b)(3). The circuit court
ordered that the remainder of the Swigers’s individual claims of bad faith and violations under
the UTPA would be allowed to proceed.
1
Rule 23 of the West Virginia Rules of Civil Procedure states, in relevant part, as follows:
(a) Prerequisites to a Class Action. One or more members of a class may sue or
be sued as representative parties on behalf of all only if (1) the class is so
numerous that joinder of all members is impracticable, (2) there are questions
of law or fact common to the class, (3) the claims or defenses of the
representative parties are typical of the claims or defenses of the class, and (4)
the representative parties will fairly and adequately protect the interests of the
class.
(b) Class Actions Maintainable. An action may be maintained as a class action if
the prerequisites of subdivision (a) are satisfied, and in addition:
....
(3) The court finds that the questions of law or fact common to the members of
the class predominate over any questions affecting only individual members, and
that a class action is superior to other available methods for the fair and efficient
adjudication of the controversy. The matters pertinent to the findings include: (A)
the interest of members of the class in individually controlling the prosecution or
defense of separate actions; (B) the extent and nature of any litigation concerning
the controversy already commenced by or against members of the class; (C) the
desirability or undesirability of concentrating the litigation of the claims in the
particular forum; (D) the difficulties likely to be encountered in the management
of a class action.
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Thereafter, the Swigers filed a motion to alter or amend the January 26, 2015, order,
which motion the circuit court denied by order entered February 25, 2015. Meanwhile, on
February 20, 2015, the Swigers filed a motion to add additional parties, namely Frank J.
Yablonsky and Andrew J. Sorine, as named class representatives and to amend or modify the
January 26, 2015, order denying class certification. By order entered May 18, 2015, the circuit
court denied the Swigers’s motions. This appeal followed.
The Swigers’s first assignment of error is that the circuit court erred in denying class
certification in this case. The Swigers argue that they met the essential criteria of Rule 23,
including that their claims were typical of the class, as required by Rule 23(a)(3); that they can
adequately represent the interests of the putative class, as required by Rule 23(a)(4); and that
common questions of law or fact predominated over issues affecting only the putative class, as
required by Rule 23(b)(3). The Swigers further argue that, in denying class certification, the
circuit court improperly decided the merits of the case.
Before certifying a class under Rule 23 of the West Virginia Rules of Civil
Procedure [1998], a circuit court must determine that the party seeking class
certification has satisfied all four prerequisites contained in Rule 23(a)—
numerosity, commonality, typicality, and adequacy of representation—and has
satisfied one of the three subdivisions of Rule 23(b). As long as these
prerequisites to class certification are met, a case should be allowed to proceed on
behalf of the class proposed by the party.
Syl. Pt. 8, In re W.Va. Rezulin Litig., 214 W.Va. 52, 585 S.E.2d 52 (2003).
Our review of the circuit court’s order denying the Swigers’s motion for class
certification is guided by the following: “This Court will review a circuit court’s order granting
or denying a motion for class certification pursuant to Rule 23 of the West Virginia Rules of Civil
Procedure [1998] under an abuse of discretion standard.” Rezulin Litig., 214 W.Va. at 56, 585
S.E.2d at 56, syl. pt. 1. Furthermore,
“[t]he party who seeks to establish the propriety of a class action has the
burden of proving that the prerequisites of Rule 23 of the West Virginia Rules of
Civil Procedure have been satisfied.” Syllabus Point 6, Jefferson County Board of
Education v. Jefferson County Education Association, 183 W.Va. 15, 393 S.E.2d
653 (1990).
Rezulin Litig., 214 W.Va. at 56, 585 S.E.2d at 56, syl. pt. 4.
With these principles in mind, we first address the Swigers’s challenge to the circuit
court’s conclusion that their claims were not typical of the putative class. The Swigers argue that
whether their claims are typical of the class is governed by our holding in syllabus point twelve
of Rezulin Litigation, in which we stated, in relevant part, that
[t]he “typicality” requirement of Rule 23(a)(3) of the West Virginia Rules of Civil
Procedure [1998] requires that the “claims or defenses of the representative
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parties [be] typical of the claims or defenses of the class.” A representative party’s
claim or defense is typical if it arises from the same event or practice or course of
conduct that gives rise to the claims of other class members, and if his or her
claims are based on the same legal theory.
214 W.Va. at 57, 585 S.E.2d at 57.
In determining that the Swigers’s claims did not satisfy the typicality requirement of Rule
23, the circuit court found that their individual claims were the only claims based upon an
accident, fire, and explosion that resulted in property damage and personal injuries, and that their
primary theory of liability was that respondents failed to fairly and promptly evaluate their
individual claims in this regard. In contrast, the circuit court found that the other class members’
primary theory of liability was that respondents failed to investigate potential claims. The circuit
court also found that the Swigers’s initial claim did not exceed the first layer of available
insurance coverage based upon their pre-suit demand and that, given this fact, there was a
question as to whether respondents were required to disclose that there was excess coverage or
whether the respondent insurance companies had a duty to defend. On the other hand, the class
claims could have triggered multiple layers of insurance coverage, which could have imposed
additional duties on respondents.
On appeal, the Swigers point out that the circuit court found that “[t]he conduct alleged
against the Defendants, regarding claim handling procedures during the Monongalia County
action, is from a common nucleus of operative fact.” The Swigers argue that the evidence
necessary to prove the alleged wrongful conduct, and respondents’ legal and factual defenses to
such conduct, will be the same for the Swigers and the putative class. The Swigers further argue
that the fact that they alone suffered a fire loss to their home and personal injuries does not alter
their claims against respondents for UTPA bad faith insurance conduct, civil conspiracy, and the
other alleged misconduct in this case. As the Swigers argue, “differences in the situation of each
plaintiff or each class member do not necessarily defeat typicality[,]”and although the harm
suffered “may differ in degree . . . so long as the harm suffered is of the same type,” class
certification should not be defeated. Perrine v. DuPont, 225 W.Va. 482, 524, 694 S.E.2d 815,
857 (2010). Likewise, the Swigers argue, class certification should not be denied based upon
“[t]he fact that a defense may be asserted against the named representatives, as well as some
other class members, but not the class as a whole[.] . . .” Id. Accord Rezulin Litigation, 214
W.Va. at 68, 585 S.E.2d at 68. Finally, the Swigers argue that the circuit court improperly
considered and decided the merits of the case in arriving at its conclusion that the Swigers’s
claims were not typical of the class. The Swigers argue that the “threshold requirement[] of . . .
typicality [is] not high[,]” Brown v. Nucor Corp., 576 F.3d 149, 153 (4th Cir. 2009), and that the
Swigers satisfied it in this case.
The Court finds no error. It is undisputed that the Swigers were the only members of the
putative class who suffered property damage or personal injury as a result of the installation of
the propane gas lines at issue. Their individual claims against AmeriGas in Monongalia County
were expressly excluded from the class claims in that action, separately settled, and dismissed.
Under the Monongalia County settlement, the Swigers’s remaining class claims—if they were
deemed to possess any such claims—were limited to the recovery of nominal damages not to
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exceed $100. As respondents suggest, given this limitation, what “class claims” the Swigers
would have been deemed to possess following the settlement of their individual claims is not at
all clear. On the other hand, no member of the settlement class in the Monongalia County action
asserted a claim based upon personal injury or property damage nor has any class member made
a claim to the respondent insurers on his or her own behalf. Indeed, the settlement in that action
expressly excluded any claims for personal injury or property damage “caused now or in the
future” by the class members’ propane system(s). Furthermore, the Swigers’s bad faith claim in
the instant case alleged that respondents violated the UTPA by failing to fairly and promptly
evaluate and settle their reasonably clear property damage and personal injury claims (including
offering a “low ball” settlement), while it is alleged that respondents failed to investigate the
purported class members’ potential claims based upon the possibility that their gas lines were
improperly installed and the possible danger of an explosion or other consequence as a result.
Based upon the foregoing, we find no abuse of discretion by the circuit court in its conclusion
that the Swigers’s claims were not typical of the claims of the putative class. Given our
conclusion that the typicality requirement of Rule 23 was not satisfied in this case, and that, as a
consequence, the Swigers did not satisfy all of the Rule 23 requirements necessary for class
certification, see Rezulin Litig., 214 W.Va. at 56, 585 S.E.2d at 56, syl. pt. 8, we need not address
their argument that the circuit court erred in finding that the Swigers did not adequately represent
the interests of the putative class or that the predominance requirement was not satisfied.
Given this Court’s conclusion that class certification was properly denied, the Swigers
next argue that the circuit court abused its discretion in denying their motion to add Frank J.
Yablonsky and Andrew J. Sorine as class representatives. Both Yablonsky and Sorine had
AmeriGas propane systems installed on their properties and were members of the Monongalia
County class and the putative class herein. The Swigers argued below that adding them as class
representatives “should satisfy [the circuit court’s] concern regarding the typicality requirement”
of Rule 23. However, the circuit court concluded that the Swigers “had ample opportunity to
name new and additional class representatives at various times throughout the course of this
litigation[;]” that, “for a significant length of time,” the Swigers knew “of the issues presented by
the Swigers remaining as the class representatives[;]” that Yablonsky and Sorine could have
been added as named class representatives when this action was instituted in 2005; that the
Swigers’s motion to add Yablonsky and Sorine as class representatives was untimely made; that
the delay in seeking to add additional named class representatives was not justified and
respondents will be prejudiced by the same; and that “[t]the [c]omplaint filed in this case
addressed personal injury and property damage claims, which are claims solely belonging to the
Swigers and not other purported class members. For the same reasons the Court held the
Swigers’s claims were not typical of the putative class claims, it would not be appropriate to now
join non-typical class claims to the Swigers’s individual claims in this action.”
On appeal, the Swigers argue that the motion to add Yablonsky and Sorine as class
representatives before the circuit court was timely made because it was filed within the time
frames set forth in the February 10, 2015, pretrial scheduling order and within thirty days after
the motion for class certification was denied. The Swigers further argue that adding Yablonsky
and Sorine as class representatives would have satisfied the typicality requirement of Rule 23
because, like the other putative class members, they did not suffer any property damage or
personal injury from their propane systems. It is the Swigers’s contention that the only real issue
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is whether there would be prejudicial delay in adding Yablonsky and Sorine as class
representatives in this case. The Swigers argue that no significant prejudice to respondents would
occur given that the trial in this matter was not set to begin until September 2016, giving all
parties ample time to prepare. The Swigers argue that, to the contrary, it would be the putative
class that would suffer if the motion to add Yablonsky and Sorine as named class representatives
is affirmed because it would deny them the opportunity to have their case heard on the merits.
Based upon our review of the record, we find no error. This Court has stated that “[l]ack
of diligence is justification for a denial of leave to amend where the delay is unreasonable, and
places the burden on the moving party to demonstrate some valid reason for his or her neglect
and delay.” Syl. Pt. 3, in part, State ex rel. Vedder v. Zakaib, 217 W.Va. 528, 618 S.E.2d 537(2005). The record in this case reveals that, in 2005, and again during the course of litigating
their motion for class certification, counsel for the Swigers was aware that the Swigers’s status as
the named class representatives was problematic. Nonetheless, the Swigers made a strategic
decision to test their viability as class representatives and, when they were unsuccessful (i.e.,
after the motion for class certification was denied), filed a motion to add Yablonsky and
Sorine—that is, more than ten years after this case was commenced and the propriety of the
Swigers’s representative status was first raised. The Swigers’s argument that their motion to add
Yablonsky and Sorine was timely made under the February 10, 2015, pretrial scheduling order
ignores the fact that the order was entered after the motion for class certification was denied.
Thus, the time frames set forth in that order applied solely to the Swigers’s individual claims,
which were all that remained. Simply put, the Swigers’s clear purpose in seeking to add
Yablonsky and Sorine as class representatives is to re-litigate the issue of class certification, at
additional time and expense to respondents. Indeed, adding additional named class
representatives would require respondents to conduct additional discovery, including deposing
Yablonsky and Sorine to determine if they are suitable class representatives, and re-litigate the
issue of class certification.
This Court reviews the circuit court’s ruling for an abuse of discretion. See Syl. Pt. 2,
Baldau v. Jonkers, 229 W.Va. 1, 725 S.E.2d 170 (2011) (holding that “‘[a] motion to amend a
pleading is addressed to the sound discretion of the trial court and such discretion will not be
disturbed on appeal unless there is a showing of abuse of discretion.’ Syllabus Point 1, Nellas v.
Loucas, 156 W.Va. 77, 191 S.E.2d 160 (1972).”). We find no abuse of the circuit court’s
discretion in its conclusion that the Swigers failed to articulate a compelling reason for the
inordinate and unreasonable delay in seeking to add additional named class representatives and
that respondents would be unfairly prejudiced by permitting the same.2
2
To the extent the Swigers argue on appeal that the joinder of Yablonsky and Sorine was
mandatory, under Rule 19 of the West Virginia Rules of Civil Procedure, or permissive, under
Rule 20, we decline to address these arguments. Our review of the record reveals that, in the
Swigers’s February 20, 2015, motion to add additional parties as named class representatives,
they argued that the addition of Yablonsky and Sorine would cure the typicality defect, “would
be fair and just because to do otherwise may result in denial of class certification,” and that, to
deny the Swigers’s motion “would likely preclude all of the remaining putative Class Members
from obtaining any relief as well as foreclosing their alleged claims forever.” Unlike their brief
on appeal, the Swigers’s motion before the circuit court failed to mention or otherwise argue the
(continued . . .)
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For the foregoing reasons, we affirm.
Affirmed.
ISSUED: June 17, 2016
CONCURRED IN BY:
Chief Justice Menis E. Ketchum
Justice Robin Jean Davis
Justice Allen H. Loughry II
DISSENTING:
Justice Brent D. Benjamin
Justice Margaret L. Workman
applicability of either Rule 19 or 20. As we have repeatedly held, “‘[t]his Court will not pass on
a nonjurisdictional question which has not been decided by the trial court in the first instance.’
Syllabus Point 2, Sands v. Security Trust Co., 143 W.Va. 522, 102 S.E.2d 733 (1958).” Syllabus
point 2, Duquesne Light Co. v. State Tax Department, 174 W.Va. 506, 327 S.E.2d 683 (1984).
Syl. Pt. 5, State ex rel. State Farm Mut. Auto. Ins. Co. v. Bedell, 228 W.Va. 252, 719 S.E.2d 722(2011). See also State ex rel. Cooper v. Caperton, 196 W.Va. 208, 216, 470 S.E.2d 162, 170
(1996) (stating that “[t]o preserve an issue for appellate review, a party must articulate it with
such sufficient distinctiveness to alert a circuit court to the nature of the claimed defect.”). For
this reason, we decline to address the Swigers’s argument that Yablonsky and Sorine should
have been added as named class representatives under the joinder rules set forth in Rule 19 or 20.
8