Maureene Stanley v. The Huntington National Bank

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 12-1145
MAUREENE E. STANLEY, Individually and as Personal
Representative of the Estate of Charles F. Stanley,
deceased,
Plaintiff - Appellant,
v.
THE HUNTINGTON NATIONAL BANK, a banking corporation,
Defendant - Appellee.
Appeal from the United States District Court for the Northern
District of West Virginia, at Clarksburg. Frederick P. Stamp,
Jr., Senior District Judge. (1:11-cv-00054-FPS-JSK)
Submitted: June 15, 2012 Decided: August 21, 2012
Before TRAXLER, Chief Judge, and NIEMEYER and KING, Circuit
Judges.
Affirmed by unpublished per curiam opinion.
Edward R. Kohout, Morgantown, West Virginia, for Appellant.
Joshua S. Rogers, David M. Thomas, DINSMORE & SHOHL LLP,
Morgantown, West Virginia, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Plaintiff Maureene Stanley (“Stanley”) appeals the district
court’s order granting a motion for summary judgment filed by
the defendant The Huntington National Bank (“Huntington”) on her
claims for breach of contract and for violations of the West
Virginia Consumer Credit and Protection Act (the “WVCCPA”), W.
Va. Code §§ 46A-1-101 through 46A-8-102. Stanley also appeals
the district court’s order denying her motion for leave to amend
her complaint. We affirm.
I.
In March 2009, Stanley and her husband, Charles Stanley
(“Charles”), opened a $100,000 Personal Credit Line (“PCL”)
account with Huntington that was secured by their residence and
other real estate. At the closing, the Stanleys were offered
and purchased debt cancellation protection on their loan. Debt
cancellation is described as
a two-party, in-house, product offered by Huntington
in which Huntington agrees to cancel or forgive all or
part[] of a qualifying customer’s indebtedness upon
the occurrences of certain events such as death and
the diagnosis of a terminal medical condition.
J.A. 139 (internal quotation marks omitted). The debt
cancellation product carried a “maximum protection of [the]
Outstanding Credit Line Balance up to: $50,000.” J.A. 111.
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To obtain the debt cancellation product, the Stanleys were
required to execute a Personal Credit Line Agreement Rider for
Debt Cancellation (the “Rider”), confirming that they were
eligible for the protection. The Rider asks a series of medical
and employment questions including whether the applicant has
been diagnosed with, or treated for, any “brain, nervous system
or mental/neurological disorder,” and disqualifies any
individual who has been diagnosed with or treated for such a
condition during the preceding two-year period. J.A. 111.
Section 4.0 of the Rider provides Huntington with the right to
terminate the Rider and deny benefits if the applicant made a
material misrepresentation in connection with the loan agreement
or Rider:
We require You to furnish evidence of Your eligibility
for the protections You selected. If You make any
material misrepresentation or misrepresentations to Us
in connection with this Rider or the PCL Agreement,
whether in writing or otherwise (i) protection will be
voided; (ii) We will credit to the Outstanding Credit
Line Balance the amount of the monthly Fees You have
paid; and (iii) We will deny any Debt Cancellation
Protection request You file under this Rider. A
misrepresentation is material if knowledge by Us of
the truth of the facts misrepresented would have led
to Our rejection of Your eligibility for the selected
protections based upon criteria in effect on the
Protection Effective Date.
J.A. 113.
It is undisputed that when the PCL Agreement and Rider were
completed and signed, Charles had been diagnosed with, and was
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being treated for, Parkinson’s disease. However, the Stanleys
both signed the Rider stating that neither of them had been
diagnosed with, or treated for, such a condition at any time
within the past two years. Charles died on November 29, 2009,
from pneumonia. Parkinson’s disease was listed on his death
certificate as an underlying cause of death.
On December 21, 2009, Stanley submitted a claim form to
Huntington, requesting benefits under the debt cancellation
product. After reviewing Charles’ death certificate and
consulting with his physician, Huntington denied benefits based
upon the misrepresentation in the Rider.
Stanley filed this civil action in state court, asserting
claims for breach of contract, breach of the implied duty of
good faith and fair dealing, breach of the WVCCPA, and punitive
damages. Huntington timely removed the action to the district
court. Pursuant to Federal Rule of Civil Procedure 16(b), the
district court issued a scheduling order requiring, in part,
that all motions to amend pleadings be filed by August 1, 2011.
On September 23, 2011, Stanley filed a motion to amend her
complaint to include a count for fraud in the inducement, based
upon alleged misrepresentations made by Huntington’s loan
officer, Ms. Briana Arbogast, at the time of the loan closing.
The district court ruled that Stanley had not demonstrated “good
cause” for her failure to timely request the amendment under the
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scheduling order, and denied the motion. See Fed. R. Civ. P.
16(b)(4) (“A schedule may be modified only for good cause and
with the judge’s consent.”).
On October 17, 2011, Huntington filed a motion for summary
judgment on all counts. The district court granted Huntington’s
motion and denied Stanley’s motion for reconsideration. This
appeal followed.
II.
A.
We review the district court’s grant of summary judgment de
novo, see Higgins v. E.I. DuPont de Nemours & Co., 863 F.2d
1162, 1167 (4th Cir. 1988), and examine the evidence in the
light most favorable to the nonmoving party while drawing all
reasonable inferences in her favor, see Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 255 (1986). Summary judgment is
appropriate when the pleadings, depositions, answers to
interrogatories, admissions and affidavits show that there is no
genuine issue of material fact and that the moving party is
entitled to judgment as a matter of law. See Fed. R. Civ. P.
56(c).
B.
Count I of Stanley’s complaint asserts a claim for breach
of contract. Stanley argues that the district court erred in
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granting summary judgment on this claim because a genuine issue
of material fact exists as to whether she and Charles
misrepresented Charles’ health when the Rider was signed. We
disagree.
1.
Under West Virginia law, contract interpretation is a
question of law and requires a court to determine the meaning
and legal effect solely from the document’s contents. Where the
contract language is clear and unambiguous, it “cannot be
construed and must be given effect and no interpretation thereof
is permissible.” Berkeley Cnty. Pub. Serv. Dist. v. Vitro Corp.
of Am., 162 S.E.2d 189, 200 (W. Va. 1968); see also Kanawha
Banking & Trust Co. v. Gilbert, 46 S.E.2d 225, 232-33 (W. Va.
1947). A contract is ambiguous only if it is “reasonably
susceptible of two different meanings or is of such doubtful
meaning that reasonable minds might be uncertain or disagree as
to its meaning.” Mylan Labs. Inc. v. Am. Motorists Ins. Co.,
700 S.E.2d 518, 524 (W. Va. 2010) (per curiam).
Here, the district court held that the Rider was clear and
unambiguous, and that it gave Huntington the right to deny debt
protection coverage based upon the Stanleys’ representation that
Charles did not suffer from a neurological disorder. We agree.
The Rider clearly provides for debt cancellation up to
$50,000, subject to the borrowers’ confirmation that they are
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eligible. Section II of the Rider, titled “CONFIRM that You are
eligible,” asks a series of questions pertaining to the
borrowers’ health status. Question 1(b) asks if the applicant
has been treated for specific conditions in the past two years
including any “brain, nervous system or mental/neurological
disorder.” J.A. 111. The Rider plainly states that “Any YES
answer in Section 1 means You are not eligible for any
protection.” J.A. 111. The Stanleys answered “no” to this
question, although it is undisputed that Charles had been
diagnosed with and was being treated for Parkinson’s disease at
the time. Both Stanley and Charles signed the Rider, at the
bottom of the same page, confirming that they had “receiv[ed]”
and “carefully read all of the pages of th[e] Rider.” J.A. 111.
Section 4.0 of the Rider gives the bank the right to void
the protection and deny benefits in any case of material
misrepresentation on the part of the borrower. Thus, under the
clear and unambiguous language of the Rider, Huntington was
within its rights to deny payment based upon the Stanleys’
misrepresentation regarding Charles’ health.
2.
Stanley does not dispute that the representation regarding
Charles’ medical condition on the application was false. Nor
does she assert that the language of the Rider itself is
ambiguous. Rather, she contends that she is entitled to the
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benefits of the Rider based upon verbal statements that she
claims were made to and by Huntington’s loan officer, Ms.
Arbogast, prior to or contemporaneously with the Rider’s
execution.
Specifically, Stanley avers that she and Charles informed
Ms. Arbogast that Charles suffered from Parkinson’s disease, and
that Ms. Arbogast told them that Charles’ condition did not
disqualify him and that their loan would be repaid in full if
they were ever to file a valid claim. Stanley further asserts
that Ms. Arbogast completed the Rider, representing that Charles
did not suffer from a disqualifying condition, and that Stanley
did not read the Rider before signing it. Stanley contends that
this extrinsic evidence creates an ambiguity in the Rider and
demonstrates that a genuine issue of material fact exists as to
whether she and Charles actually misrepresented Charles’ health
on the Rider. We disagree.
As the district court correctly noted, the parol evidence
rule bars the admission of oral statements made prior to or
contemporaneously with the execution of a clear and unambiguous
contract, unless there are allegations of fraud, mistake, or
material misrepresentation. See Kanawha Banking, 46 S.E.2d at
232-33. The “written contract is considered to merge all of the
negotiations and representations made prior to its execution,
and extrinsic evidence is not available to alter or interpret
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language which is otherwise plain and unambiguous on its face.”
Iafolla v. Douglas Pocahontas Coal Corp., 250 S.E.2d 128, 135
(W. Va. 1978).
Here, the Rider is clear and unambiguous, and Stanley’s
complaint makes no allegations of fraud, mistake, or material
misrepresentation. Accordingly, the alleged oral statements
made at the time of execution of the Rider cannot be relied upon
to vary, contradict, or explain its terms. Stanley’s claim that
she had a reasonable expectation of insurance, based upon these
statements, likewise fails. Stanley cannot avoid the
unambiguous terms of the Rider by claiming that she did not read
it before signing it. See Boggs v. Camden-Clark Mem. Hosp.
Corp., 693 S.E.2d 53, 63 (W. Va. 2010) (“This Court has made
clear that, as a general rule, . . . the doctrine of reasonable
expectations is limited to those instances in which the policy
language is ambiguous.” (internal quotation marks omitted)).
The doctrine of reasonable expectations is simply not applicable
in these circumstances. Accordingly, we affirm the grant of
summary judgment on Stanley’s breach of contract claims.
C.
Count II of Stanley’s complaint alleges a violation of the
WVCCPA, which provides a cause of action to “[a]ny person who
purchases or leases goods or services and thereby suffers any
ascertainable loss of money or property, real or personal, as a
9
result of the use or employment by another person,” W. Va. Code
§ 46A-6-106(a), of certain “[u]nfair methods of competition and
unfair or deceptive acts or practices,” W. Va. Code § 46A-6-104.
The elements for a colorable claim brought under this section
include “unlawful conduct by the seller, an ascertainable loss
on the part of the consumer, and a causal connection between the
ascertainable loss and the [seller’s] conduct.” White v. Wyeth,
705 S.E.2d 828, 835 (W. Va. 2010). Huntington asserts that
Stanley failed to provide the requisite notice to bring a claim
under the Act and that she failed to properly allege the claim
with the requisite particularity.
Before a claim can be brought pursuant to the WVCCPA, a
plaintiff must comply with a mandatory condition precedent set
forth in § 46A-6-106(b), which states that:
[n]otwithstanding the provisions of subsection (a) of
this section, no action may be brought pursuant to the
provisions of this section until the consumer has
informed the seller or lessor in writing and by
certified mail of the alleged violation and provided
the seller or lessor twenty days from receipt of the
notice of violation to make a cure offer . . . .
W. Va. Code Ann. § 46A-6-106(b). The district court held that
Stanley’s failure to comply with this mandatory prerequisite
bars her claim. We agree.
Stanley sent two letters to Huntington dated February 2010
and March 2011, requesting a status update on her claim and
seeking documents, which she claims was “effective” notice under
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the Act. However, the letters do not assert a violation of the
WVCCPA and do not meet the mandatory notice prerequisite to
filing suit. Thus, Stanley’s claim fails because she did not
provide the required notice to Huntington under § 46A-6-106(b).
Accordingly, we affirm the district court’s dismissal of
Stanley’s WVCCPA claim.
III.
Finally, Stanley appeals the district court’s order denying
her motion to amend her complaint to add a claim for fraud in
the inducement based upon the misrepresentations made by Ms.
Arbogast during the loan closing. We review the district
court’s order for an abuse of discretion. See Equal Rights
Center v. Niles Bolton Assocs., 602 F.3d 597, 603 (4th Cir.
2010).
Under Federal Rule of Civil Procedure 15(a)(2), Stanley
could “amend [her] pleading only with the opposing party’s
written consent or the court’s leave.” Fed. R. Civ. P. 15(a).
“Although leave to amend should be freely given when justice so
requires, a district court has discretion to deny a motion to
amend a complaint, so long as it does not outright refuse to
grant the leave without any justifying reason.” Equal Rights
Ctr., 602 F.3d at 603 (internal quotation marks, alteration and
citation omitted). “A district court may deny a motion to amend
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when the amendment would be prejudicial to the opposing party,
the moving party has acted in bad faith, or the amendment would
be futile.” Id.In order to ensure efficient case management, however, Rule
16(b) requires the district court to issue scheduling orders,
see Fed. R. Civ. P. 16(b)(1) & (2), which, among other
deadlines, “must limit the time to . . . amend the pleadings,
complete discovery, and file motions,” Fed. R. Civ. P.
16(b)(3)(A). The “schedule may be modified only for good cause
and with the judge’s consent.” See Fed. R. Civ. P. 16(b)(4).
“Therefore, after the deadlines provided by a scheduling order
have passed, the good cause standard must be satisfied to
justify leave to amend the pleadings.” Nourison Rug Corp. v.
Parvizian, 535 F.3d 295, 298 (4th Cir. 2008).
Stanley filed her complaint in March of 2011. Huntington
timely removed the action to the district court and answered,
asserting the parol evidence rule as a defense. Pursuant to
Federal Rule of Civil Procedure 16(b), the district court issued
a scheduling order requiring, in part, that all motions to amend
pleadings be filed by August 1, 2011, and that all dispositive
motions be filed by October 17, 2011.
On September 22, 2011, at a motions hearing regarding
expert witnesses, Huntington’s counsel advised the court of its
intent to file a motion for summary judgment “based upon the
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clear language of the subject contract and the parol evidence
rule.” J.A. 51. Stanley contends that she was surprised by
Huntington’s position that oral statements and other extrinsic
evidence at the time of the closing were inadmissible under the
parol evidence rule, and she filed an untimely motion to amend
her complaint to include a count for fraud in the inducement the
following day.
The district court held that Stanley’s “explanation does
not address the diligence required to show good cause under Rule
6(b)” and pointed out that Stanley had “offer[ed] no reasons as
to why her fraud in the inducement claim could not have been
asserted through a timely amendment pursuant to th[e] Court’s
scheduling order.” J.A. 51. We cannot say that the district
court abused its discretion by finding that the plaintiff failed
to demonstrate “good cause” to amend her complaint. Huntington
clearly asserted the parol evidence rule as a defense in its
answer several months prior to the motions deadline, and
Stanley’s motion appears to be little more than a belated
reaction to Huntington’s intent to file a motion for summary
judgment based upon the clear and unambiguous language of the
subject contract. Consequently, we affirm the district court’s
denial of the motion for leave to amend.
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IV.
For the foregoing reasons, we affirm the district court’s
order granting Huntington’s motion for summary judgment and
denying Stanley’s motion for leave to amend her complaint. We
dispense with oral argument because the facts and legal
contentions are adequately presented in the materials before the
court and argument would not aid the decisional process.
AFFIRMED
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