Mountaineer Fire & Rescue Equipment, LLC. v. City National Bank of West Virginia and Joe Beam ( 2020 )

No. 18-0984 – Mountaineer Fire & Rescue Equipment, LLC, Brian Cavender, and
Walter Cavender v. City National Bank of West Virginia, and Joe
Beam
FILED
Jenkins, Justice, concurring, in part, and dissenting, November 23, 2020
released at 3:00 p.m.
EDYTHE NASH GAISER, CLERK
in part, joined by Chief Justice Armstead: SUPREME COURT OF APPEALS
OF WEST VIRGINIA
The majority’s opinion in this case correctly finds that the circuit court was
well within its discretion to consider (1) the 2011 and 2013 Resolutions; and (2) the 2011
and 2013 account applications in making its decision on the motion to dismiss.
Additionally, the opinion also properly determines that the circuit court erred when it
dismissed Petitioners’ counterclaims pertaining to Respondent Joe Beam, for failure to
state claims upon which relief could be granted pursuant to Rule 12 (b)(6) of the West
Virginia Rules of Civil Procedure.
However, this is the extent of my agreement with the majority in this case. I
do not agree with the majority’s determination that the circuit court should have rejected
City National’s proffer of checks and bank statements or converted the motion to dismiss
into one for summary judgment under Rule 56 of the West Virginia Rules of Civil
Procedure. I also disagree with the majority’s assessment that the circuit court erred in
dismissing the counterclaims as they pertain to Respondent City National.
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City National instituted an interpleader action against Petitioners and Joe
Beam after a dispute arose among the parties as to Mountaineer Fire’s commercial
checking account. In their answer, Mountaineer Fire and the Cavenders (collectively
“Petitioners”) asserted counterclaims against City National stemming from their allegation
that they were “unaware” of the commercial checking account at City National. However,
despite these claims, City National states that multiple checks were written to and cashed
by the Petitioners from this account over a period of many months. Therefore, due to this
inconsistency, City National filed a motion to dismiss the counterclaims for failure to state
a claim upon which relief could be granted. The circuit court granted the motion to dismiss.
A. Documents Considered by the Circuit Court
First, the majority opinion properly determines that the circuit court was well
within its discretion to consider (1) the 2011 and 2013 Resolutions; and (2) the 2011 and
2013 account applications in making its decision on the motion to dismiss. However, I
disagree with the majority’s determination that the circuit court should have rejected City
National’s proffer of checks and bank statements or converted the motion to dismiss into
one for summary judgment under Rule 56 of the West Virginia Rules of Civil Procedure.
It is the general rule that circuit courts considering motions to dismiss under
Rule 12(b)(6) should confine their review to the four corners of the complaint or other
disputed pleading and may not consider extraneous documents. However, Rule 10(c) of
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the West Virginia Rules of Civil Procedure provides that “[a] copy of any written
instrument which is an exhibit to a pleading is a part thereof for all purposes.” Therefore,
this Court has recognized a limited exception. In Syllabus point 1 of Forshey v. Jackson,
222 W. Va. 743, 671 S.E.2d 748 (2008), we held that “[a] circuit court ruling on a motion
to dismiss under Rule 12(b)(6) of the West Virginia Rules of Civil Procedure may properly
consider exhibits attached to the complaint without converting the motion to a Rule 56
motion for summary judgment.” See e.g., Pension Ben. Guar. Corp. v. White Consol.
Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993) (“[A] court may consider an undisputedly
authentic document that a defendant attaches as an exhibit to a motion to dismiss if the
plaintiff’s claims are based on the document.”).
The majority opinion properly uses this logic in correctly finding that the
2011 and 2013 Resolutions, and the 2011 and 2013 account applications were “specifically
relied upon, and quoted extensively from,” and therefore were properly considered by the
circuit court. However, the majority abandoned this logic when examining the copies of
checks and account statements that were incorporated into City National’s motion to
dismiss and later reply.
Petitioners repeatedly alleged in their pleading that they were unaware of the
City National account opened by Mr. Beam. City National argued in its motion to dismiss
that not only did Petitioners know about the account, but also that Petitioners used the
account. To rebut Petitioners’ allegations and to demonstrate Petitioners’ knowledge, City
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National provided checks payable to the Petitioners from this account which were then
cashed by Petitioners.
When “evaluating a motion to dismiss, we may consider documents that are
attached to or submitted with the complaint . . . and any ‘matters incorporated by reference
or integral to the claim, items subject to judicial notice, matters of public record, orders,
[and] items appearing in the record of the case.’” 5B Charles A. Wright & Arthur R. Miller,
Federal Practice & Procedure § 1357 (3d ed. 2004). Here, Petitioners’ counterclaims are
grounded in their contention that they were unaware of the account. When City National
countered these allegations by producing checks and account statements, they were
properly considered by the circuit court because they were “integral to the claim”—did
Petitioners know or did they not know about the account. Therefore, I disagree with the
majority opinion’s determination that the circuit court erred in considering these
documents.
B. Dismissal of Counterclaims
Next, the majority spends a considerable amount of its analysis reiterating
the parameters of Rule 12(b)(6). While I generally agree with the majority’s explanation
that complaints are to be construed in the light most favorable to the plaintiff, and its
allegations are to be taken as true, this Court has also
made equally clear that complaints must minimally place a
defendant on notice of the claim against it. West Virginia Rule
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of Civil Procedure 8(a)(2) requires a “short and plain statement
of the claim showing that the pleader is entitled to relief[.]” In
that regard, the Court has explained that “Rule 8 of the Rules
of Civil Procedure requires clarity but not detail.” State ex rel.
McGraw v. Scott Runyan Pontiac-Buick, Inc., 194 W. Va. 770,
776, 461 S.E.2d 516, 522 (1995). Moreover, we have observed
that “[t]he primary purpose of these provisions is rooted in fair
notice. Under Rule 8, a complaint must be intelligibly
sufficient for a circuit court or an opposing party to understand
whether a valid claim is alleged and, if so, what it is.” Id.(emphasis added).
Malone v. Potomac Highlands Airport Auth., 237 W. Va. 235, 240, 786 S.E.2d 594, 599
(2015). Further, despite recognizing a more liberal policy for notice pleading, it
does not justify a carelessly drafted or baseless pleading. As
stated in Lugar and Silverstein, West Virginia Rules of Civil
Procedure (1960) at 75: “Simplicity and informality of
pleading do not permit carelessness and sloth: the plaintiff’s
attorney must know every essential element of his cause of
action and must state it in the complaint.”
Sticklen v. Kittle, 168 W. Va. 147, 164, 287 S.E.2d 148, 158 (1981).
Recently, this Court discussed the parameters of Rule 12(b)(6) in another
case, Newton v. Morgantown Mach. & Hydraulics of W. Virginia, Inc., 242 W. Va. 650,
838 S.E.2d 734 (2019). In Newton, we emphasized that although plaintiffs are given
considerable deference in drafting their complaints,
“a plaintiff may not ‘fumble around searching for a meritorious
claim within the elastic boundaries of a barebones
complaint[,]’ see Chaveriat v. Williams Pipe Line Co., 11 F.3d
1420, 1430 (7th Cir.1993), or where the claim is not authorized
by the laws of West Virginia.” Scott Runyan Pontiac-Buick,
Inc., 194 W. Va. at 776, 461 S.E.2d at 522 (1995). “[I]f a
plaintiff does not plead all of the essential elements of his or
her legal claim, a [trial] court is required to dismiss the
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complaint pursuant to Rule 12(b)(6).” Louis J. Palmer, Jr. and
Robin Jean Davis, Litigation Handbook on West Virginia Rules
of Civil Procedure, 406-07 (5th ed. 2017) (quotations and
citation omitted).
As recently noted by this Court in Doe v. Logan County Board
of Education, 242 W. Va. 45, 829 S.E.2d 45 (2019), “[t]he
purpose of a motion under Rule 12(b)(6) of the West Virginia
Rules of Civil Procedure is to test the sufficiency of the
complaint.” Id. at ___, 829 S.E.2d at 49 (quotations and
citation omitted). When testing the sufficiency of a complaint,
“‘“[w]hether a complaint states a claim upon which relief may
be granted is to be determined solely from the provisions of
such complaint[.]” Syl. pt. 3, in part, Barker v. Traders Bank,
152 W. Va. 774, 166 S.E.2d 331 (1969).’ Syl. Pt. 2, Par Mar
v. City of Parkersburg, 183 W. Va. 706, 398 S.E.2d 532(1990).” Syl. pt. 11, Vanderpool v. Hunt, 241 W. Va. 254, 823
S.E.2d 526 (2019).
Newton, 242 W. Va. at 653, 838 S.E.2d at 737.
In the case sub judice, the majority finds that the counterclaims alleged
against City National were wrongly dismissed by the circuit court. More specifically, it
finds that the counterclaims properly stated claims for breach of contract; breach of the
duty of good faith and fair dealing; aiding and abetting the breach of fiduciary duties; and
aiding and abetting tortious interference.
All of the counterclaims against City National are based on the false
allegation that the Petitioners were unaware of the commercial checking account at issue.
However, as stated above, City National has not only demonstrated that the Petitioners
were aware of the bank account, but also that the motion to dismiss failed to state a claim
upon which relief could be granted.
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Petitioners’ first counterclaim was for breach of contract. To establish a
breach of contract claim in West Virginia, three elements must be presented. “A claim for
breach of contract requires proof of the formation of a contract, a breach of the terms of
that contract, and resulting damages.” Sneberger v. Morrison, 235 W. Va. 654, 669, 776
S.E.2d 156, 171 (2015). However, Petitioners never identified any specific provision that
they believe was breached; rather, they simply stated that a breach occurred.
While I acknowledge that a plaintiff pleading a claim has no duty to plead a
prima facie case, this Court has stated
that “[g]eneral allegations in this regard are insufficient” and
there must be more than “mere sketchy generalizations of a
conclusive nature unsupported by operative facts.” Fass v.
Nowsco Well Serv., Ltd., 177 W. Va. 50, 53, 350 S.E.2d 562,
564 (1986) (affirming circuit court’s dismissal of complaint
which failed to state a claim for wrongful discharge in
contravention of substantial public policy). Rather,
“[e]specially in the wrongful discharge context, sufficient facts
must be alleged which outline the elements of the plaintiff’s
claim.” Id. at 53, 350 S.E.2d at 564-65.
Newton, 242 W. Va. at 654, 838 S.E.2d at 738.
Here, the counterclaims are “sketchy generalizations” that fail to identify any
contractual provision allegedly breached by City National. The Petitioners’ counterclaims
and response go no further than to generally state that a breach of contract occurred—even
the majority opinion concedes that Petitioners’ claims are poorly drafted. These
generalizations put forth by Petitioners are specifically troubling because not only does this
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warrant dismissal of the breach of contract claim, but also the other counterclaims
propounded by Petitioners. For instance, without a breach of contract, there can be no
breach of implied covenant of good faith and fair dealing. See e.g., Highmark West
Virginia, Inc. v. Jamie, 221 W. Va. 487, 655 S.E.2d 509 (2007) (“[A]n implied covenant
of good faith and fair dealing does not provide a cause of action apart from a breach of
contract claim.”).
As noted by the majority opinion, “[a] complaint must be intelligibly
sufficient for a circuit court or an opposing party to understand whether a valid claim is
alleged and, if so, what it is.” State ex rel. McGraw v. Scott Runyan Pontiac-Buick, Inc.,
194 W. Va. 770, 776, 461 S.E.2d 516, 522 (1995). In the case sub judice, without
identifying specific provisions of the contract, City National is left “fumbling around”
trying to decipher the claims being asserted against it. As such, Petitioners fail to assert a
proper claim for breach of contract under Rule 12(b)(6). And, because the counterclaim
fails to state a claim for breach of contract, there also can be no cause of action for breach
of an implied covenant of good faith and fair dealing. Therefore, the circuit court was
correct in dismissing these claims.
Further, the other claims put forth by Petitioners—aiding and abetting breach
of fiduciary duty; and aiding and abetting tortious interference—were not briefed before
this Court, and therefore are presumed to have been abandoned. See Syl. pt. 6, Addair v.
Bryant, 168 W. Va. 306, 284 S.E.2d 374 (1981) (“Assignments of error that are not argued
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in the briefs on appeal may be deemed by this Court to be waived.”). However, for the
sake of argument, even had the claims been properly briefed, I believe the circuit court was
correct in dismissing these claims.
This Court has expressly found that “[w]here there is a general deposit of
money in a bank, the title to and beneficial ownership of the money is vested in the bank,
and the relation between it and the depositor is that of debtor and creditor.” Southern Elec.
Supply Co. v. Raleigh County National Bank, 173 W.Va. 780, 320 S.E.2d 515 (1984).
Importantly, the relationship between a bank and an individual who deposits money in the
bank is not a fiduciary relationship. See, e.g., United States Fidelity & Guaranty Co. v.
Home Bank, 77 W. Va. 665, 88 S.E. 109 (1916) (“A deposit creates an ordinary debt, and
not a privilege or right of a fiduciary character.”). Here, Petitioners deposited money into
the bank account at City National—therefore, the relationship is properly categorized as
debtor and creditor. Because I find that there is no fiduciary duty on behalf of City
National, I find that this claim also falls short under Rule 12(b)(6).
Finally, with regard to the aiding and abetting tortious interference
counterclaim, this also must fail. The Petitioners, City National, and Mr. Beam were all
parties to the contractual relationships at issue in this matter; however, the majority opinion
fails to recognize that one cannot tortuously interfere with one’s own relationship. See
Hatfield v. Health Management Associates of West Virginia, 223 W. Va. 259, 267, 672
S.E.2d 395, 403 (2008) (“Because they were acting within the scope of their employment,
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appellees Ms. Atkins and Ms. Ball were acting on the hospital's behalf-and, as our law is
clear, the appellee hospital cannot be held liable for tortious interference with its own
contract with the appellant.”). I agree with City National’s assessment of this allegation.
The parties in this case were all parties to the contract at issue, and this State’s caselaw is
clear that a party cannot interfere with its own contract. Therefore, Petitioners have failed
to allege a justiciable claim for aiding and abetting tortious interference.
Ultimately, contrary to the holding reached by the majority, I would have
come to a different conclusion. The checks and bank statements were properly considered
by the circuit court, and the counterclaims at issue simply fail to state a claim upon which
relief could be granted. Accordingly, I would affirm the circuit court’s order dismissing
the counterclaims against City National because Petitioners have not adequately pled
claims for breach of contract; breach of implied covenant of good faith and fair dealing;
aiding and abetting breach of fiduciary duty; or aiding and abetting tortious interference.
For these reasons, I respectfully concur, in part, and dissent, in part. I am authorized to
state that Chief Justice Armstead joins in this separate opinion.
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