854 S.E.2d 870
W. Va.2020Background
- In 2011 Brian and Walter Cavender and Joe Beam formed Mountaineer Fire & Safety Equipment, LLC; a 2011 City National banking resolution named Brian and Beam as authorized signatories.
- In 2013 Beam (allegedly without the Cavenders’ authorization) opened a new City National account using a partially completed resolution and was made sole signatory to that account.
- The Cavenders allege Beam deposited company receipts into the 2013 account, diverted funds to himself and related entities, failed to pay a third‑party commission, and later filed false Secretary of State paperwork to list himself as a member.
- City National filed an interpleader and moved to dismiss the Cavenders’ crossclaims/counterclaims; City National attached resolutions, account documents, checks, and statements to its 12(b)(6) motion.
- The circuit court dismissed all Cavender claims under Rule 12(b)(6); the Cavenders appealed. The West Virginia Supreme Court reversed and remanded, reinstating the claims and clarifying 12(b)(6) and when courts may consider documents attached to dismissal motions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standard for Rule 12(b)(6) dismissal | Cavenders: pleading gave fair notice and alleged facts that, if proven, state cognizable claims | Respondents: pleadings were carelessly drafted and failed to plead required elements | Court: West Virginia follows notice pleading; dismiss only if plaintiff can prove no set of facts entitling relief (de novo review). |
| Consideration of documents attached to a 12(b)(6) motion | Cavenders: City National’s attachments should be excluded or motion converted to summary judgment | City National: attachments are integral and authentic, so court may consider them on dismissal | Court: A court may consider an extraneous document on a 12(b)(6) motion only if (1) the pleading refers to it, (2) it is integral to the pleading, and (3) authenticity is not disputed; abuse of discretion review of that decision. |
| Claims vs. Beam (fiduciary duty, conversion, tortious interference, fraud) | Cavenders: Beam breached statutory duties of loyalty/care, converted funds and property, interfered with business, and committed fraud | Beam: claims are vague, cite non‑existent subsections, lack specificity, so dismissal appropriate | Court: Pleading provided fair notice; erroneous statutory citation not fatal; fiduciary, conversion, and interference claims survive; fraud pleader must satisfy Rule 9(b) but allegations as whole suffice to proceed and be refined in discovery. |
| Breach of contract / implied covenant against City National | Cavenders: Bank breached contract/resolution and duty of good faith by refusing to close account and withholding funds | City National: no actionable breach; petitioners failed to identify specific contract term breached | Court: Notice‑pleading satisfied; claim for breach and bad faith adequately pled; dismissal improper. |
| Aiding and abetting (City National) fiduciary breach and tortious interference | Cavenders: City National knew or should have known Beam’s misconduct and substantially assisted it via the 2013 account | City National: no duty to monitor accounts; parties were in privity so no tortious interference | Court: Plaintiffs alleged Beam’s breach and substantial assistance by the bank; aiding/abetting theories sufficiently pled and dismissal was improper. |
Key Cases Cited
- State ex rel. McGraw v. Scott Runyan Pontiac-Buick, Inc., 194 W. Va. 770, 461 S.E.2d 516 (W. Va. 1995) (appellate review of 12(b)(6) is de novo)
- Chapman v. Kane Transfer Co., 160 W. Va. 530, 236 S.E.2d 207 (W. Va. 1977) (complaint not to be dismissed unless no set of facts supports relief)
- Keesecker v. Bird, 200 W. Va. 667, 490 S.E.2d 754 (W. Va. 1997) (rules interpretation reviewed de novo)
- U.S. Fid. & Guar. Co. v. Eades, 150 W. Va. 238, 144 S.E.2d 703 (W. Va. 1965) (general rule excluding extraneous matters on 12(b) motions)
- Forshey v. Jackson, 222 W. Va. 743, 671 S.E.2d 748 (W. Va. 2008) (court may consider exhibits attached to complaint on 12(b)(6))
- Sedlock v. Moyle, 222 W. Va. 547, 668 S.E.2d 176 (W. Va. 2008) (pleadings construed in plaintiff’s favor on dismissal)
- Swierkiewicz v. Sorema N.A., 534 U.S. 506 (U.S. 2002) (plaintiffs need only provide notice pleading; not required to plead prima facie case)
- Leatherman v. Tarrant Cty. Narcotics Intell. & Coord. Unit, 507 U.S. 163 (U.S. 1993) (notice pleading standard explained)
- Torbett v. Wheeling Dollar Sav. & Tr. Co., 173 W. Va. 210, 314 S.E.2d 166 (W. Va. 1983) (elements of tortious interference)