SER Michael B. Ferrell v. Honorable Warren R. McGraw, Judge and Employers' Innovative Network, LLC, and Jeff Mullins ( 2020 )

IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA
January 2020 Term FILED
_______________ March 10, 2020
released at 3:00 p.m.
EDYTHE NASH GAISER, CLERK
No. 19-0658 SUPREME COURT OF APPEALS
OF WEST VIRGINIA
_______________
STATE OF WEST VIRGINIA EX REL. MICHAEL B. FERRELL, AMERICAN
STAFFING, INC., SHANNON L. WELLS, AND THE CHESTNUT GROUP, INC.,
Petitioners
v.
THE HONORABLE WARREN R. MCGRAW, JUDGE OF THE CIRCUIT COURT OF
WYOMING COUNTY; AND EMPLOYERS’ INNOVATIVE NETWORK, LLC, AND
JEFF MULLINS,
Respondents
____________________________________________________________
ORIGINAL PROCEEDING IN PROHIBITION
WRIT GRANTED
____________________________________________________________
Submitted: January 29, 2020
Filed: March 10, 2020
E. Taylor George, Esq. Nicholas S. Preservati, Esq.
Arden J. Cogar, Jr., Esq. SPILMAN THOMAS & BATTLE, PLLC
MacCorkle Lavender, PLLC Charleston, West Virginia
Charleston, West Virginia Counsel for Respondents Employers’ Innovative
Counsel for Petitioner Shannon Wells Network, LLC and Jeff Mullins
Stuart A. McMillan, Esq.
Gabriele Wohl, Esq.
Bowles Rice LLP
Charleston, West Virginia
Counsel for Petitioners Michael B. Ferrell,
American Staffing, Inc., and The Chestnut
Group, Inc.
JUSTICE WALKER delivered the Opinion of the Court.
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 a trial court has no jurisdiction or having
such jurisdiction exceeds its legitimate powers. W. Va. Code 53-1-1.” Syllabus Point 2,
State ex rel. Peacher v. Sencindiver, 160 W. Va. 314, 233 S.E.2d 425 (1977).
2. “In determining whether to entertain and issue the writ of prohibition
for cases not involving an absence of jurisdiction but only where it is claimed that the lower
tribunal exceeded its legitimate powers, this Court will examine five factors: (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. These factors
are general guidelines that serve as a useful starting point for determining whether a
discretionary writ of prohibition should issue. Although all five factors need not be
satisfied, it is clear that the third factor, the existence of clear error as a matter of law,
should be given substantial weight.” Syllabus Point 4, State ex rel. Hoover v. Berger, 199
W. Va. 12, 483 S.E.2d 12 (1996).
i
3. “The venue of a cause of action in a case involving breach of contract
in West Virginia arises within the county: (1) in which the contract was made, that is, where
the duty came into existence; or (2) in which the breach or violation of the duty occurs; or
(3) in which the manifestation of the breach—substantial damage occurs.” Syllabus Point
3, Wetzel County Sav. & Loan Co. v. Stern Bros., 156 W. Va. 693, 195 S.E.2d 732 (1973).
4. Where a challenge is made to venue under Rule 12(b)(3) of the West
Virginia Rules of Civil Procedure, the burden is on the plaintiff to establish proper venue
for the civil action in the county in which it is pending under the framework of West
Virginia Code § 56-1-1.
ii
WALKER, Justice:
Petitioners seek a writ of prohibition to halt the litigation of Respondents’
breach of contract and related tort claims against them in the Circuit Court of Wyoming
County for lack of venue. Because the entirety of the business relationship between the
parties giving rise to the underlying causes of action took place in Kanawha County and
Respondents have failed to meet their burden to prove any connection between the causes
of action asserted and Wyoming County sufficient to establish venue there, we grant the
writ of prohibition.
I. FACTS AND PROCEDURAL HISTORY
American Staffing, Inc. (American Staffing) and Employers’ Innovative
Network (EIN) are Professional Employment Organizations (PEOs).1 In March 2018,
Petitioners American Staffing and its President Michael B. Ferrell entered into a Purchase
Agreement with Respondents EIN and its President Jeff Mullins for EIN to acquire
American Staffing’s customer list, customer relationships, and goodwill. Respondents
1
PEOs are authorized and governed by West Virginia Code §§ 33-46A-1 to -10.
Small-to-medium-sized businesses often outsource human resource functions to PEOs to
lessen the costs of maintaining a human resource function. A person employed by a
business who has contracted with a PEO becomes a co-employee of the PEO, allowing the
PEO to become the “employer of record” for issuance of W-2s and other taxes purposes.
The PEO further manages employee benefits, payroll, and any other services the client-
employer has contracted with the PEO to provide. Allocation of client-employer and PEO
responsibilities and the associated administrative fees paid by the client-employer for
services are dictated by the individual agreement.
1
allege that at least eight of the customer relationships purchased were companies owned in
part by Petitioner Shannon L. Wells, and that as a material inducement to enter into the
Purchase Agreement, Mr. Ferrell guaranteed EIN and Jeff Mullins that those companies
would remain with EIN for at least two years. Respondents further allege that Mr. Ferrell
pressured EIN and Mr. Mullins to advance the remaining balance of the purchase price,
and EIN paid the advance on November 30, 2018.
On December 3, 2018, Mr. Wells terminated the relationship between his
companies and EIN, and Respondents allege that numerous entities listed in the Purchase
Agreement as clients of American Staffing were, in actuality, clients of Petitioner The
Chestnut Group, another PEO. Respondents contend that The Chestnut Group and Mr.
Wells began soliciting EIN’s newly-purchased clients by falsely advising them that EIN
was engaged in improper business practices, including the failure to pay the taxes it
withheld from its clients’ employees. Finally, Respondents allege that when Mr. Mullins
attempted to resolve this matter with Mr. Ferrell, Mr. Ferrell threatened him and told third-
parties that he had “hired someone from Chicago to kill” Mr. Mullins.
As a result of this business transaction, Respondents EIN and Mr. Mullins
filed a complaint in the Circuit Court of Wyoming County alleging six causes of action
against Petitioners American Staffing, Mr. Ferrell, The Chestnut Group, and Mr. Wells:
fraud in the inducement; breach of contract; slander; fraud in the performance; outrage;
and civil conspiracy. In their complaint, Respondents state that venue is proper in
2
Wyoming County because the parties conducted business in Wyoming County. Petitioners
moved to dismiss for lack of venue, contending that (1) West Virginia Code § 56-1-1 does
not support Wyoming County as an appropriate venue for this action when all Defendants,
save one,2 reside or have a principal place of business in Kanawha County; (2) the parties
executing the Purchase Agreement reside or have a principal place of business in Kanawha
County; (3) the Purchase Agreement was executed in Kanawha County; and (4) the
operative business relationship between the entities took place entirely within Kanawha
County. The circuit court denied the motion to dismiss for lack of venue because 82
employees to whom EIN would have provided PEO services were residents of Wyoming
County. Petitioners then filed this petition for a writ of prohibition.
II. STANDARD OF REVIEW
Petitioners invoke this Court’s original jurisdiction in prohibition. We have
noted that this extraordinary remedy is to be deployed only in particular and extraordinary
circumstances.3 In other words, “a writ of prohibition will not issue to prevent a simple
abuse of discretion by a trial court. It will only issue where a trial court has no jurisdiction
or having such jurisdiction exceeds its legitimate powers. W. Va. Code 53-1-1.”4 Our
2
Mr. Wells is a resident of the Commonwealth of Kentucky.
3
See, e.g., State ex. rel. Denise L.B. v. Burnside, 209 W. Va. 313, 317, 547 S.E.2d
251, 255 (2001) (quoting State ex rel. Allen v. Bedell, 193 W. Va. 32, 37, 454 S.E.2d 77,
82 (1994) (Cleckley, J., concurring)).
4
Syl. Pt. 2, State ex rel. Peacher v. Sencindiver, 160 W. Va. 314, 233 S.E.2d 425(1977).
3
review as to whether the circuit court has exceeded its legitimate powers is guided by the
now-familiar and time-tested Hoover framework, providing five factors for this Court’s
consideration in issuing of a writ of prohibition to correct the alleged overstep:
In determining whether to entertain and issue the writ of
prohibition for cases not involving an absence of jurisdiction
but only where it is claimed that the lower tribunal exceeded
its legitimate powers, this Court will examine five factors: (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. These factors are general guidelines that serve as
a useful starting point for determining whether a discretionary
writ of prohibition should issue. Although all five factors need
not be satisfied, it is clear that the third factor, the existence of
clear error as a matter of law, should be given substantial
weight.[5]
Further, we have previously explained that issues of venue are appropriately addressed in
prohibition.6
5
Syl. Pt. 4, State ex rel. Hoover v. Berger, 199 W. Va. 12, 483 S.E.2d 12 (1996).
6
See State ex rel. Thornhill Group, Inc. v. King, 233 W. Va. 564, 567, 759 S.E.2d
795, 798 (2014) (“That the issue of venue may be properly addressed through a writ of
prohibition is well-settled.”).
4
With this direction, we consider the parties’ arguments and the circuit court’s
rationale for denying Petitioner’s motion to dismiss for lack of venue.
III. DISCUSSION
West Virginia Code § 56-1-1 dictates the appropriate venue for a civil action
and provides, in relevant part:
(a) Any civil action or other proceeding, except where
it is otherwise specially provided, may hereafter be brought in
the circuit court of any county:
(1) Wherein any of the defendants may reside or
the cause of action arose . . . ;
(2) If a corporation or other corporate entity is a
defendant, wherein its principal office is or wherein its
mayor, president or other chief officer resides; or if its
principal office be not in this state, and its mayor,
president or other chief officer do not reside therein,
wherein it does business; or if it is a corporation or other
corporate entity organized under the laws of this state
which has its principal office located outside of this
state and which has no office or place of business within
the state, the circuit court of the county in which the
plaintiff resides or the circuit court of the county in
which the seat of state government is located . . . .
Respondents raise two points to support venue in Wyoming County under this statute.
First, Respondents alleged in their complaint that the parties “conducted business” in
Wyoming County. Second, Respondents contend their contract-based causes of action
arose in Wyoming County and that the slander cause of action arose in Wyoming County.
5
We dispose at the outset of Respondents’ contention that venue was
appropriate in Wyoming County because the parties conducted business there. Subsection
(a)(2) of this provision clearly provides that the “conducting business” clause is only
invoked against corporate entities without a principal office in West Virginia and a chief
officer who does not reside in West Virginia. The parties agree that the individually-named
defendants reside in Kanawha County, with the exception of Mr. Wells who resides in
Kentucky, and that the corporate entities are organized under the laws of West Virginia
and have principal offices in Kanawha County.
Respondents apparently came to the conclusion that such an assertion was
insufficient to establish venue in Wyoming County because they asserted a different basis
for venue below in their response to Petitioners’ motion to dismiss. That response invoked
subsection (a)(1), arguing that the cause of action as to the contract-based claims and the
slander claim arose in Wyoming County.7 Notably, in response to Petitioners’ motion to
dismiss, Respondents did not attempt to assert a basis for venue in Wyoming County for
their civil conspiracy and outrage claims. We examine each of these causes of action in
turn.
7
We note that subsection (a)(1) also provides for venue in any county in which any
defendant resides. Neither of the individual defendants below reside in Wyoming County.
And, Respondents do not assert that the residence of either Mr. Wells or Mr. Ferrell is their
basis for venue in Wyoming County.
6
A. Contract-based Claims
Three counts in Respondents’ complaint – fraud in the inducement, breach
of contract, and fraud in the performance – relate to contract negotiations, terms of the
contract itself, and, of course, the performance of that contract. We have held that
[t]he venue of a cause of action in a case involving breach of
contract in West Virginia arises within the county: (1) in which
the contract was made, that is, where the duty came into
existence; or (2) in which the breach or violation of the duty
occurs; or (3) in which the manifestation of the breach—
substantial damage occurs.[8]
The parties agree that this is the appropriate standard by which to judge venue as to the
contractual-based causes of action. The parties further agree that the Purchase Agreement
was made in Kanawha County and breached in Kanawha County. The crux of
Respondents’ case for venue in Wyoming County is that the manifestation of the breach-
substantial damage occurred in Wyoming County. At Respondents urging, the circuit court
reached the conclusion that venue was proper under the third prong of Wetzel by finding
that as a result of American Staffing’s alleged breach, EIN lost 82 employees who were
residents of Wyoming County and also lost the administrative fees generated by those
employees in Wyoming County. In other words, EIN collects a fee equal to 2-2.5% of the
gross pay of each employee the client-employer has contracted with EIN to manage. Since
8
Syl. Pt. 3, Wetzel County Sav. & Loan Co. v. Stern Bros., 156 W. Va. 693, 195
S.E.2d 732 (1973).
7
82 employees collected their paychecks in Wyoming County, the circuit court reasoned
that Respondents’ damages were felt in Wyoming County.
Petitioners rely on State ex rel. Galloway Group v. McGraw,9 in contending
that this connection is far too tenuous to establish venue in Wyoming County. In Galloway,
a law office (Fredeking & Fredeking) and law partnership (Galloway Group) entered into
a fee-sharing agreement.10 When Galloway Group allegedly failed to pay monies due to
Fredeking & Fredeking under the fee-sharing agreement, the latter filed suit in Wyoming
County, contending that the parties generated fees from litigation involving the UMWA
Health & Retirement Plan, and many UMWA members reside in Wyoming County. 11
Galloway Group challenged the propriety of venue in Wyoming County.12 The circuit
court found that venue was proper, in part, because those UMWA members residing in
Wyoming County generated the fees and debts that were the subject of the underlying
dispute – in other words, those fees were the manifestation of the breach.13 We rejected
that argument, somewhat summarily concluding that the circuit court’s reasoning was
9
227 W. Va. 435, 711 S.E.2d 257 (2011).
10
Id. at 436, 711 S.E.2d at 258.
11
Id.12
Id.13
Id. at 437, 711 S.E.2d at 259.
8
“invalid” and that “our law does not support the conclusion that this fact would establish
venue in Wyoming County[.]”14
Petitioners’ takeaway from Galloway is a rule that venue may not be
established by “where some non-party to the action might be found.” Conversely,
Respondents make a nuanced argument that Galloway is distinguishable because in this
case the employees in Wyoming County and the fees generated from them were the benefit
of entering into the contract – they purchased the source of the fees from American
Staffing. That relationship is, to Respondents, materially different than simply stating that
the source of lost fees happen to reside in Wyoming County.
While we do not read Galloway as stating any bright-line rule with respect
to non-parties, we also find that these Wyoming County residents are as tangential to this
underlying contractual dispute as the ones we addressed and found insufficient to establish
venue in Galloway. Respondents represented to the circuit court that “[t]here were 850
employees that came over from our purchase contract. Three hundred and fifty of those
employees were in West Virginia, of those 350 employees in West Virginia 82 were from
Wyoming County; only 13 were in Kanawha County.” As conceded by counsel at oral
argument, EIN operates much the same as any other PEO – the customers it purchased
14
Id. at 437-38, 711 S.E.2d at 259-60. This Court also took issue with a factual
discrepancy that appeared to indicate that Galloway Group was not even party to an
agreement with a provision regarding UMWA litigation. Id. at 437, 711 S.E.2d at 259.
9
from American Staffing are client-employers, not employees. While the employees of
those client-employers, by agreement, become co-employees of EIN for tax purposes, EIN
had no agreement whatsoever with any employees in any county – it did not purchase their
willingness to stay on with the prospective client-employer; and it did not purchase an
absolute number of employees to maintain for those client-employers.
These Wyoming County employees have no relation to the underlying
contract except insofar as their gross pay is used to calculate the fee owed by the client-
employer to the applicable PEO,15 and the contract at issue changed that PEO. The
employees themselves are only affected by which PEO completes the human resources
services for their client-employer insomuch as it changes the name on their paycheck and
with whom they interact for human resource needs. Their job function does not change;
their employment status is not jeopardized or in any way altered by their employer’s
decision to contract with a PEO.16 Likewise, the fact that the fee collected from those
client-employers is calculated based on the gross pay of the employees the client-
employers ask EIN to manage has no effect on whether those client-employers continued
to do business with EIN. To simplify the point, EIN contracted with American Staffing to
15
While we note that Respondents take great care to characterize the administrative
fee as being “generated” by the employees, by definition an “administrative fee” is the
amount charged to a client-employer. See W. Va. Code § 33-46A-2(a).
16
Rather, West Virginia Code § 33-46A-6(b)(2) specifically provides, in part, that
“[e]ach professional employment agreement shall provide that the client-employer shall
retain the right to hire, discipline, and terminate a covered employee.”
10
purchase their customers. Their customers are client-employers – not the employees of
client-employers.
Respondents do not allege that any client-employers they lost as a result of
the alleged breach of contract had a principal place of business in Wyoming County.
Respondents make reference, by way of example to the circuit court, of a company called
High-Voltage, which had a coal site in Wyoming County. According to the circuit court’s
order, eighteen employees of High-Voltage residing in Wyoming County became co-
employees of EIN under the Purchase Agreement. Respondents did not allege that High-
Voltage or any Wyoming County client-employer was one of Mr. Wells’s companies that
Mr. Ferrell or American Staffing had guaranteed would stay on with EIN for two years
following the Purchase Agreement. They did not allege that High-Voltage or any
Wyoming County client-employer was one such client-employer listed in the Purchase
Agreement that was, in actuality, a client of The Chestnut Group rather than American
Staffing. Finally, Respondents did not allege that High-Voltage or any Wyoming County
client-employer had any obligation whatsoever under the Purchase Agreement such that its
defection from EIN could be said to stem from the breach of contract.
The record reveals that the Defendants reside in17 or have principal places of
business in Kanawha County. Both PEOs are based in Kanawha County. They conducted
17
But see supra n. 2.
11
contract negotiations in Kanawha County and executed the Purchase Agreement in
Kanawha County. The business relationship of the parties exists wholly within Kanawha
County. The Purchase Agreement was allegedly breached in Kanawha County. The
damages flowing from that alleged breach are made evident through the loss of EIN’s
client-employers. The loss of the fees calculated based on employees of those client-
employers are so peripheral and incidental a damage that the residency of those employees
is too far removed from the contractual relationship at issue here to establish venue. It is
plain on these facts that venue for the contract-based claims properly lies in Kanawha
County, not Wyoming County.
B. Civil Conspiracy and Outrage
With respect to Respondents’ remaining claims, we impress upon
Respondents that West Virginia Code § 56-1-1 sets parameters on a plaintiff’s choice of
forum and dictates where a civil action may be properly brought.18 To the extent it is
necessary to explicitly so state, we hold that where a challenge is made to venue under Rule
12(b)(3) of the West Virginia Rules of Civil Procedure, the burden is on the plaintiff to
establish proper venue for the civil action in the county in which it is pending under the
framework of West Virginia Code § 56-1-1.19 Respondents cannot establish venue in
18
See generally W. Va. Code § 56-1-1(a).
19
See syl. pt. 1, Wetzel County Sav. & Loan Co., 156 W. Va. 693, 195 S.E.2d 732(“Where properly questioned by a motion to dismiss under Rule 12(b)(3), W. Va. R. C. P.,
venue must be legally demonstrated independent of In personam jurisdiction of the
defendant.”) (emphasis added). See also C.H. James & Co., Inc. v. Federal Food
12
Wyoming County for their civil conspiracy and outrage claims simply by saying that
Petitioners have not shown why it should not be.
Respondents contend that the civil conspiracy and outrage claims have no
connection to Wyoming County, and the circuit court did not rely on either the civil
conspiracy or outrage claims to support its finding that venue was appropriate in Wyoming
County. The parties alleged to have conspired do not reside or have a principal place of
business in Wyoming County and the tort was not alleged to have occurred in Wyoming
County. The parties alleged to have committed or been the subject of the tort of outrage
do not reside or have a principal place of business in Wyoming County and the tort of
outrage was not alleged to have occurred in Wyoming County. Neither the complaint nor
arguments made in response to Petitioners’ motion to dismiss set forth any allegations
whatsoever that would establish venue in Wyoming County with respect to their outrage
or civil conspiracy claims.
C. Slander
The allegations as to the slander claim are equally infirm in light of a
plaintiff’s burden. Respondents allege in their complaint that “[a]fter EIN and [American
Staffing] entered into the Purchase Agreement, [The Chestnut Group] and Wells began
soliciting EIN’s clients by falsely advising them that EIN was engaging in improper
Marketers Co., 927 F. Supp. 187, 189 (S.D. W. Va. 1996) (“When challenged, plaintiff has
the burden of establishing proper venue.”).
13
business practices, including not paying the taxes it had withheld from its clients’
employees.”20 Respondents then generally alleged that “Wells and [The Chestnut Group]
have made defamatory comments against EIN and Mullins to third-parties. Wells and
[The Chestnut Group’s] defamatory comments specifically referenced EIN and Mullins,
were made negligently by Wells and [The Chestnut Group], and caused resulting injury to
EIN and Mullins.”21
Respondents argued that
[o]nly once the discovery process is complete will Plaintiff be
able to confirm whether defendants made defamatory
statements against the Plaintiff’s [sic] in Wyoming County.
However, at this point, the Plaintiffs have alleged that the
Defendants made defamatory statement to EIN’s clients, some
of which have actual work locations in Wyoming County.
The circuit court agreed, and viewing these facts in the light most favorable to Respondents
(plaintiffs below), assumed that defamatory statements were made to employees of
Respondents’ client-employers in Wyoming County and found that sufficient to establish
venue there.
Petitioners asserted in their motion to dismiss that venue could not properly
lie in Wyoming County because there was no evidence whatsoever that any slanderous
20
Emphasis added.
21
Emphasis added.
14
statement was made there or reached any third-party there.22 Respondents effectively rest
on their pleadings that Petitioners had made defamatory statements to EIN clients,
generally.23 The circuit court took those pleadings one step further at the behest of
Respondents, reading into the complaint that some of the client-employers had employees
at work locations in Wyoming County and those employees might have heard a slanderous
statement.24
Initially, we note that the complaint alleges that Mr. Wells and The Chestnut
Group had been soliciting EIN’s “clients” and that slanderous statements had been made
to “third-parties.” To belabor the point made above, EIN’s clients are client-employers,
not the employees. Respondents have not alleged that EIN lost any client with a principal
place of business in Wyoming County as a result of slander or otherwise. Rather, the only
relevance of Wyoming County to these proceedings whatsoever is the allegation that at
22
This Court has not specified where a slander cause of action arises for purposes
of determining venue, nor do we need to reach that issue in light of Respondents’ failure
to plead any connection whatsoever with Wyoming County in relation to its slander claim.
23
Respondents did file an affidavit relating to the number of client-employers’
employees located in Wyoming County mimicking the assertions made in their response
to the motion to dismiss. This affidavit contained no information that could be plausibly
tied to an allegation of slander occurring in Wyoming County.
24
But see Hancock v. American Tel. and Tel. Co., Inc., 701 F.3d 1248 (10th Cir.
2012); Murphy v. Schneider Nat’l Inc., 362 F.2d 1133 (9th Cir. 2004); Pierce v. Shorty
Small’s of Branson, Inc., 137 F.3d 1190, 1192 (10th Cir. 1998) (“Plaintiff contends that in
responding to a motion to dismiss for improper venue, he was entitled to rely upon the well
pled facts of his complaint. This is true, however, only to the extent that such facts are
uncontroverted by defendant’s affidavit.”).
15
least one client-employer has a work site in Wyoming County. Yet, there is no allegation
that any slanderous statement was made to employees in Wyoming County or that Mr.
Wells or The Chestnut Group had any communication at all with anyone in Wyoming
County. Much more than taking the allegations as true, the circuit court did Respondents
the favor of rewriting their complaint.
As to the circuit court’s finding that only discovery would reveal whether a
slanderous statement had been made in Wyoming County, we believe that under some
circumstances, limited discovery may be available to address the propriety of venue based
on controverted facts.25 But, noticeably absent here are controverted facts. There are no
controversies surrounding the allegations the resolution of which could be accomplished
by or would even support discovery; we utterly lack even a single allegation tying a
slanderous statement to Wyoming County or tying any party alleged to have made a
slanderous statement to Wyoming County. 26 We have a bald assertion that because EIN
has client-employers who have work locations in Wyoming County, some unspecified
25
See, e.g., Bowers v. Wurzburg, 202 W. Va. 43, 48, 501 S.E.2d 479, 484 (1998);
Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 n.13 (1978).
26
Compare with United Bank, Inc. v. Blosser, 218 W. Va. 378, 384, 624 S.E.2d 815,
821 (2005) (affirming denial of motion to dismiss for improper venue because “there is
evidence in the record, which was before the circuit court prior to its rendering of a decision
as to venue, establishing that the assets . . . are located in Wood County.”). See also,
Bowers, 202 W. Va. at 48, 501 S.E.2d at 484 (citing Filus v. Lot Polish Airlines, 907 F.2d
1328, 1332 (2d. Cir. 1990) (“generally a plaintiff may be allowed limited discovery with
respect to the jurisdictional issue; but until she has shown a reasonable basis for assuming
jurisdiction, she is not entitled to any other discovery.”)) (emphasis added).
16
discovery, once conducted, might lead to a conclusion that some unknown statement was
made to some unknown third-party who might have had some connection with Wyoming
County. While we do not foreclose the use of discovery to resolve factual disputes that
may arise in the context of a motion to dismiss for improper venue, we cannot conclude
that it would have been appropriate here where there exists only a hypothetical and wholly
unalleged scenario, rather than an allegation by Respondent to be investigated. Venue
cannot lie by virtue of a request for a fishing expedition, and Respondents have altogether
failed to meet their burden to satisfy the requirements of West Virginia Code § 56-1-1 with
respect to their slander claim.
Respondents contend that the Hoover factors recommend against issuance of
a writ of prohibition and hint that this posture is procedurally flawed in that Petitioners
have an adequate means to obtain the requested relief under West Virginia Code § 56-1-
1(b) and failed to avail themselves of it. We disagree. That statute provides:
Whenever a civil action or proceeding is brought in the county
where the cause of action arose under the provisions of
subsection (a) of this section, if no defendant resides in the
county, a defendant to the action or proceeding may move the
court before the action is pending for a change of venue to a
county where one or more of the defendants resides and upon
a showing by the moving defendant that the county to which
the proposed change of venue would be made would better
afford convenience to the parties litigant and the witnesses
likely to be called, and if the ends of justice would be better
served by the change of venue, the court may grant the motion.
Two portions of this statute render it either inapplicable or inadequate to the present
circumstances. First, it presupposes that venue has been properly brought in the county
17
where the cause of action arose. This statute merely provides a mechanism to request to
move the venue of an action, once properly established, to a more convenient location for
the parties at the discretion of the court. Conversely, we have held that a motion to dismiss
under Rule 12(b) is the method to challenge improper venue.27 Second, the statute contains
the permissive language “the court may grant the motion.” The discretion that
accompanies this remedy is inadequate insofar as Petitioners are entitled to proper venue
as determined under West Virginia Code § 56-1-1.
Similarly, we have explained that issues of venue are appropriately addressed
in prohibition given the “inadequacy of the relief permitted by appeal.”28 We have further
justified this extraordinary remedy in the context of venue determinations on prejudice
grounds: “[w]e reached [the conclusion that prohibition was appropriate to resolve the issue
of where venue for a civil action lies] after noting that the issue of venue had the potential
of placing a litigant at an unwarranted disadvantage in a pending action and that relief by
appeal would be inadequate.”29 For those reasons, we find that the first and second Hoover
27
See syl. pt. 9, Lester v. Rose, 147 W. Va. 575, 130 S.E.2d 80 (1963), overruled
on other grounds by State ex rel. Sutton v. Spillers, 181 W. Va. 376, 382 S.E.2d 570 (1989).
28
State ex rel. Riffle v. Ranson, 195 W. Va. 121, 124, 464 S.E. 2d 763, 766 (1995).
See also Thornhill Group, supra n.6.
29
State ex rel. Huffman v. Stephens, 206 W. Va. 501, 503, 526 S.E.2d 23, 25 (1999).
18
factors weigh in favor of granting Petitioners’ requested writ of prohibition to halt litigation
of their claims in Wyoming County.
IV. CONCLUSION
For the foregoing reasons, Respondents have not demonstrated in accordance
with West Virginia Code § 56-1-1 that venue for their civil action properly lies in Wyoming
County. We therefore grant Petitioners’ requested writ of prohibition and direct the circuit
court to dismiss the case from its docket without prejudice.
Writ granted.
19