Charles J. and Cynthia B. Evans v. United Bank, Inc.
235 W. Va. 619
W. Va.2015Background
- Thirty-three Walnut Springs lot owners sue United Bank and McQuade Appraisal Services for fraud, negligence, and related torts arising from inflated property values.
- Second amended complaint asserts a 2005 fraudulent transaction with a Schonberger/5.88-acre lot as the basis for inflated comps; the Schonberger transaction allegedly never occurred.
- Petitioners learned of the alleged fraud in 2009–2010, after subpoena discovery in a related action against developers; claims include fraud, negligence, emotional distress, fiduciary breach, and constructive fraud.
- The circuit court dismissed time-barred claims as barred by a two-year limitations period, and dismissed implied covenant and detrimental reliance claims on contract/equity grounds.
- The court also considered, but limited, its reliance on prior tax-appeal adjudicative facts, including a 2007 Board of Equalization hearing and Mountain America v. Huffman.
- On appeal, the West Virginia Supreme Court partially reverses, holding discovery rule applies to certain claims and remands for those claims, while affirming dismissal of implied covenant and detrimental reliance claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the discovery rule toll the limitations period for fraud-related claims? | Evans asserts discovery of fraud occurred in 2009–2010, tolling under the discovery rule. | Bank argues discovery rule tolled only to 2007 based on Board of Equalization proceedings. | Discovery rule applies; limitations not time-barred for certain claims; reversal of dismissal. |
| Was judicial notice of tax-appeal adjudicative facts proper to fix limitations? | McQuade/Petitioners contend prior adjudications are irrelevant to current claims. | Respondents argue judicial notice supported tolling through 2007. | Circuit court erred in using prior adjudications to fix start date for limitations. |
| Can a standalone claim for breach of implied covenant of good faith and fair dealing survive without a breach of contract claim? | Petitioners contend implied covenant exists alongside contract claims. | Court should follow West Virginia law that implied covenant sounds in contract absence independent tort. | Affirmed dismissal; no independent claim for implied covenant without a contract breach. |
| Is detrimental reliance an equitable claim requiring relief other than monetary damages? | Detrimental reliance restates fraud and seeks damages, not equitable relief. | Equitable relief not appropriate where monetary damages available. | Claim waived; affirmed dismissal on basis of lack of equitable relief. |
Key Cases Cited
- Dunn v. Rockwell, 225 W.Va. 43 (2009) (five-step discovery-rule framework for timeliness)
- Mountain America, LLC v. Huffman, 224 W.Va. 669 (2009) (Board of Equalization adjudications and tax-appeal context)
- Highmark West Virginia, Inc. v. Jamie, 221 W.Va. 487 (2007) (implied covenant generally not independent of contract)
- Gaddy Engineering Co. v. Bowles Rice McDavid Graff & Love, LLP, 231 W.Va. 577 (2013) (covenant of good faith does not provide independent action)
- Miller v. Robinson, 171 W.Va. 653 (1983) (Rule 2: abolition of strict law/equity procedural distinctions)
- Gaither v. City Hosp., Inc., 199 W.Va. 706 (1997) (discovery rule: know injury, duty, and causation to trigger period)