Robert Edward Reed v. Jance Ann Reed Collins

STATE OF WEST VIRGINIA
SUPREME COURT OF APPEALS
Robert Edward Reed, individually
and as the Executor of Racheal Ann Reed, deceased, FILED
Plaintiff Below, Petitioner
November 21, 2018
EDYTHE NASH GAISER, CLERK
vs.) No. 18-0009 (Kanawha County 17-C-332) SUPREME COURT OF APPEALS
OF WEST VIRGINIA
Janice Ann Reed Collins,
James E. Collins II,
Calhoun County Bank, Inc., a
West Virginia Corporation,
United Bankshares, Inc., a
West Virginia Corporation,
United Bank, Inc., a
West Virginia Corporation,
Pioneer Funds Distributor, Inc.,
an unauthorized foreign corporation,
Defendants Below, Respondents
MEMORANDUM DECISION
Petitioner Robert Edward Reed, individually and as the Executor of Racheal Ann Reed,
deceased, by counsel Gregory H. Schillace, appeals the Circuit Court of Kanawha County’s
November 30, 2017, order granting respondents’ motions to dismiss for lack of venue.
Respondents Calhoun County Bank, Inc. (“Calhoun”), by counsel Leslie L. Maze; Pioneer Funds
Distributor, Inc. (“Pioneer”), by counsel J. Mark Adkins and Andrew C. Robey; and United
Bankshares, Inc. (“United Bankshares”) and United Bank, Inc. (“United Bank” or, collectively,
the “United respondents”), by counsel Floyd E. Boone Jr. and Patrick C. Timony, filed
responses. Petitioner argues that the circuit court erred in granting respondents’ motions to
dismiss because respondent United Bankshares has its principal place of business in Kanawha
County, thereby conferring venue in that county.
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.
On March 9, 2017, petitioner filed a complaint in Kanawha County, West Virginia,
against respondents, and also Prudential Insurance Company of America, and Prudential Asset
Resources, Inc. (collectively, the “Prudential defendants”) seeking declaratory and other relief
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relative to certain financial accounts owned by the decedent Racheal Anne Reed. Of relevance to
the instant appeal, petitioner asserted in the complaint that the decedent’s “mental frailty . . . was
known to agents and representatives of [respondents] United Bankshares, . . . United Bank, [and]
Calhoun . . . working in their Gilmer County branches[.]” Respondents Janice Anne Reed Collins
and James E. Collins II, who were residents of Gilmer County, West Virginia, allegedly took
advantage of the decedent’s diminished capacity to access certain of the decedents’ safe deposit
boxes maintained at branches of respondents Calhoun, United Bankshares, and United Bank
“located in Gilmer County, West Virginia.” Petitioner also alleged that respondent Ms. Collins
stole funds from the decedent’s checking account maintained at respondent Calhoun. Finally,
petitioner asserted that the decedent owned an individual retirement account through respondent
Pioneer, and that respondent Ms. Collins, through her undue influence over the decedent, was
improperly designated as a beneficiary of this account.1
On May 1, 2017, the United respondents moved to dismiss petitioner’s complaint for lack
of venue and failure to state a claim. See W.Va. R. Civ. P. 12(b)(3) and (6). Respondent United
Bankshares argued that it is a holding company that exists separately from its subsidiary,
respondent United Bank, and that it does not operate branches, accept cash deposits from the
public, or lease safe deposit boxes to the public. Respondent United Bankshares also noted that
petitioner’s complaint contained no allegations of specific action that it took that would support a
claim against it. Finally, the United respondents asserted that the events at issue all occurred in
Gilmer County, and not Kanawha County, where the complaint was filed.2
On June 26, 2017, Calhoun moved to join the United respondents in their motion to
dismiss. On July 24, 2017, Pioneer separately moved to dismiss petitioner’s complaint for lack of
venue, and it also joined in the United respondents’ arguments relative to venue.
On August 7, 2017, before petitioner responded to respondents’ motions to dismiss, he
filed a notice indicating that he had voluntarily dismissed the Prudential defendants with
prejudice. Shortly thereafter, on October 13, 2017, petitioner filed a response to respondents’
motions to dismiss asserting that the Prudential defendants were “venue[-]giving defendants,”
that Pioneer operates in Kanawha County, and that the United respondents have “interlocking
officers and directors and are engaged in the operation of United Bank throughout West
Virginia.”
On November 30, 2017, the circuit court granted respondents’ motions to dismiss for lack
of venue. The court found that United Bankshares is a distinct entity from United Bank; thus, the
court dismissed it without prejudice given petitioner’s failure to allege any facts that would
impose liability upon it. Given that dismissal, the court did not consider United Bankshares in
determining venue. Due to petitioner’s voluntary dismissal of the Prudential defendants, they,
too, were not considered in determining venue. Finally, because petitioner failed to allege any
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Ms. Collins was convicted of financially exploiting the decedent as a result of the
actions alleged in the complaint. This conviction was obtained in Gilmer County, West Virginia.
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United Bank argued that the statute of limitations also barred petitioner’s claims, but this
argument is not relevant to the instant appeal.
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systematic contacts by Pioneer with Kanawha County, the court found that petitioner had not
established that Pioneer did business in that county. Consequently, the court determined that
venue was not proper in Kanawha County because none of the remaining respondents resided
there and the claims asserted in the complaint arose from events that occurred in Gilmer County.
It is from this order that petitioner appeals.
On appeal, petitioner asserts that venue is proper in Kanawha County because United
Bankshares acknowledged that its principal place of business is in Kanawha County. Petitioner
argues that, because the allegations in his complaint concerning the interrelationship of the
United respondents must be taken as true, the court erred in disregarding United Bankshares in
its venue analysis. Although petitioner’s primary assignment of error concerns United
Bankshares, he also argues that the Prudential defendants, as parties to the action at the time it
was filed, should have been considered for purposes of determining venue despite their
dismissal, and that Pioneer is engaged in business in Kanawha County, thereby providing
another justification for maintaining his suit there.
We review the circuit court’s order granting respondents’ motion to dismiss for improper
venue under an abuse of discretion standard. Syl. Pt. 1, United Bank, Inc. v. Blosser, 218 W.Va.
378, 624 S.E.2d 815 (2005). Civil actions may be brought “in the circuit court of any county . . .
[w]herein any of the defendants may reside or the cause of action arose[.]” W.Va. Code § 56-1-
1(a)(1). With respect to a corporate defendant, actions may brought
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 has jurisdiction of all actions at law or suits in equity
against the corporation or other corporate entity, where the cause of action arose
in this state or grew out of the rights of stockholders with respect to corporate
management[.]
Id. at § 56-1-1(a)(2). Finally, “West Virginia follows the venue-giving defendant principle: once
venue is proper for one defendant in an action, venue is also proper for all other defendants in
that same action, but only if the venue-giving defendant was properly joined.” State ex rel.
Energy Corp. of Am. v. Marks, 235 W.Va. 465, 468, 774 S.E.2d 546, 549 (2015).
With respect to the United respondents, petitioner’s complaint alleged that they “are West
Virginia Corporations with interlocking offices [sic] and directors, engaged in the operation of
United Bank throughout West Virginia” and that United Bankshares maintained its principal
office in Kanawha County. Petitioner’s complaint then treats both United respondents as though
they are the same entity. However, petitioner’s complaint is devoid of any claim for piercing the
corporate veil, thereby disregarding the well-established rule that “[t]he law presumes that two
separately incorporated businesses are separate entities and that corporations are separate from
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their shareholders.” Syl. Pt. 3, S. Elec. Supply Co. v. Raleigh Cty. Nat’l Bank, 173 W.Va. 780,
320 S.E.2d 515 (1984). Moreover, “[t]he mere showing that one corporation is owned by another
or that they share common officers is not a sufficient justification for a court to disregard their
separate corporate structure.” S. States Coop., Inc. v. Dailey, 167 W.Va. 920, 930, 280 S.E.2d
821, 827 (1981) (citations omitted). Because petitioner’s complaint failed to set forth allegations
to rebut the presumption that the United respondents are separate corporate entities, and because
the venue-giving defendant principle is applicable “only if the venue-giving defendant was
properly joined[,]” we find no error in the circuit court’s dismissal of United Bankshares or its
exclusion of that entity in its venue analysis. Marks, 235 W.Va. at 468, 774 S.E.2d at 549
(citation omitted).
Petitioner’s argument concerning the Prudential defendants is similarly unavailing.
Petitioner asserts that the Prudential defendants should have been considered in determining
whether venue was proper in Kanawha County, but that position ignores our pronouncement in
State ex rel. Sutton v. Spillers, 181 W.Va. 376, 382 S.E.2d 570 (1989). In that case, we held that
a court is vested with the discretion to retain jurisdiction over a case when a venue-giving
defendant has been dismissed. Id. at 377, 382 S.E.2d at 571, Syl. Pt. 1 (“[N]otwithstanding the
dismissal of the venue giving defendant in an action involving multiple defendants from different
counties, the circuit court has the discretion to retain jurisdiction of the action when the venue
was initially proper and the plaintiff had a reasonable belief that he had a bona fide cause of
action against the venue giving defendant, if the dismissal would result in substantial delay.”). In
reaching this holding, we
note[d] that the plaintiff, in choosing to bring the suit in a particular county,
makes a strategic choice with full knowledge that the suit may be dismissed or
transferred if the plaintiff chooses to settle. Thus, we believe the plaintiff must
show some degree of delay or harm before the circuit court can choose to exercise
its discretion to retain the case.
Id. at 379, 382 S.E.2d at 573. Petitioner’s resolution of his claims against the Prudential
defendants occurred in the infancy of this matter, and he does not argue that any harm results
from the early dismissal of these claims. Accordingly, we find no error in the circuit court’s
exclusion of the Prudential defendants from its venue analysis. See also Marks, 235 W.Va. at
471, 774 S.E.2d at 552 (“When a venue-giving defendant is severed or dismissed from an action
in its initial phase, and venue for the remaining defendant is improper under West Virginia Code
§ 56-1-1, the circuit court is required to grant the remaining defendant’s timely filed motion to
dismiss for improper venue.”) (citations omitted).
Finally, petitioner’s allegation that Pioneer is a venue-giving defendant because it “does
business in Kanawha County” is similarly insufficient to confer venue in that county.
Whether a corporation is subject to venue in a given county in this State under the
phrase in W.Va. Code [§] 56-1-1[], “wherein it does business” depends upon the
sufficiency of the corporation’s minimum contacts in such county that
demonstrate it is doing business, as that concept is used in [determining personal
jurisdiction].
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Syl., in part, State ex rel. Huffman v. Stephens, 206 W.Va. 501, 526 S.E.2d 23 (1999).
Petitioner’s complaint lacks any allegations of contacts with Kanawha County. Rather, the
complaint alleges that Ms. Collins resides in Gilmer County, that the decedent resided in Gilmer
County, and that Pioneer, through whom the decedent owned a retirement account, improperly
disbursed funds to Ms. Collins after Ms. Collins allegedly improperly and unduly influenced the
decedent to designate Ms. Collins as beneficiary of the account. There are simply no allegations
of Pioneer’s contacts with Kanawha County or any conduct relative to Pioneer occurring in
Kanawha County. We, therefore, find no error in the circuit court’s finding that there is no
venue-giving defendant in Kanawha County, and petitioner’s complaint was properly dismissed
for lack of venue.
For the foregoing reasons, we affirm the circuit court’s order granting respondents’
motions to dismiss for lack of venue.
Affirmed.
ISSUED: November 21, 2018
CONCURRED IN BY:
Chief Justice Margaret L. Workman
Justice Elizabeth D. Walker
Justice Tim Armstead
Justice Evan H. Jenkins
Justice Paul T. Farrell sitting by temporary assignment
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