Barefield v. DPIC Companies, Inc.

when the conclude that therefore We 600 S.E.2d 256 pension surviving spouse bene right of a Plaintiff, BAREFIELD, Hubert J. remarriage has terminated fits been 8-22-26(a)(2), W.Va.Code, but pursuant annulled, subsequently remarriage is COMPANIES, INC., Defendant. DPIC rights prior surviving spouse’s pension held The remarriage should be restored. No. 31226. as if it marriage is erased deemed second Virginia. Appeals of West Supreme Court surviving spouse place, and the took never prior position held should be restored Sept. 2003. Submitted: remarriage.2 25, 2004. Filed: June holding to the instant Applying this case, refusing court the circuit erred appellant’s annulment force

give the 2000, the order of As of December

effect. appellant’s March

annulment rendered the initio, remarriage void ab and the re legal

marriage of no effect. was therefore entitled to have appellant was therefore rights as of that order’s pension restored

her Further, might considered while

date. to some credit appellee that the is entitled

n forthe benefits paid after March instant reveals no fault ease

record appellant causing the con part of the prejudice on nor

tinuation those benefits being part appellee denied circuit court's or for the same. The

credit must therefore be reversed.

der

IV.

Conclusion February circuit court’s order J., Davis, opin- separate concurred and filed reversed, summary judgment granting ion. proceedings ease is remanded opinion. inconsistent with Maynard, part and dissent- C.J. concurred opinion. part separate ed filed and Remanded. Reversed J., separate Albright, and filed concurred DAVIS, deeming herself Justice opinion. participate. disqualified, did not PRATT, sitting by Judge DARRELL

temporary assignment. only proceeding. today applies in the context relations decision Our annulment, and no other form of domestic of an Mehalic, Charleston,

Jeffrey Esq., for V. Plaintiff. Farrell, Jr., Wilson, Frame, Esq.,

Paul T. PLLC, Benninger Metheney, Morgantown, & Romano, Esq., Romano Law Michael J. Of- fice, Clarksburg, for Amicus Curiae West Virginia Lawyers Trial Association. Stowers, Esq., R. L. Gerard Ronda Har- Bowles, Glover, vey, Esq., Esq., L. Rochelle McDavid, Charleston, Rice, Love, Graff & for Defendant. Cecil, Esq., Humphreys

J. David James F. Associates, L.C., Charleston, for Amici & Curiae, Plaintiffs in Trade “Asbestos-Unfair Practices Cases”. ARCHER,

ST Justice. This a certi- ease before Court question from United States District fied District of Court the Northern West Vir- ginia Martinsburg. plaintiff in Barefield, lawsuit, federal court Hubert J. questioned length him at company, established alleges defendant Inc., filing mal- Companies, predicates violated the West factual a medical DPIC Practices Act Virginia Trade practice Unfair lawsuit. malprac- legal of a litigation and settlement malprac- Attorney A filed a medical never plain- action Mr. Barefield. The tice filed behalf, lawsuit on Mr. Barefield’s there- tice hired de- tiff contends the defendant by missing Virginia of limitation. statute attorney its represent insured fense firm another law Mr. Barefield then retained action, per- legal malpractice underlying represent legal malpractice him in a claim required to violate the mitted A, Attorney April 1999 Mr.

Act. attorneys Attorney new informed Barefield’s con- question from the district court insurer, malpractice A’s defendant DPIC company may cerns whether (“DPIC”), legal mal- Companies, Inc. of a under the Act for the conduct held liable practice claim. then retained de- DPIC in- represent hired S,” “Attorney attorney, fense action, of an insured terests Attorney subsequent A. All discussions and company can be held whether an insurance negotiations plaintiff on behalf of occur for violations of the Act that liable solely by apparently DPIC were conducted against is after a lawsuit filed insured. Attorney S. portion the first of the district We answer question negative, in but court’s answer legal malpractice Mr. Barefield filed his portion in the affirmative. the second Attorney against claim A in October February and trial was for scheduled I. filing legal 2001. and mal- Before after Background

Facts & lawsuit, attorneys practice Mr. Barefield’s to At- submitted various settlement demands 1992, plaintiff In Hubert J. Barefield was torney starting high injured sought as as Virginia. in Mr. Barefield S—demands $2,000,000.00 Virginia, reports in treatment from a doctor included indicat- medical —and through malpractice to treatment ing continued receive that actionable medical had 1994. June Virginia against law been committed under doctor, by Virginia his and that Mr. Barefield 17, 1994, October Mr. Barefield met On Attorney legal malpractice A had committed A,” “Attorney Virginia attorney, with a West by failing timely malprac- file the medical filing investigate possibility a medi- time, Attorney At tice lawsuit. the same S Virginia against malpractice cal action in repeatedly was told that Mr. was in Barefield Virginia signed a con- doctor. Mr. Barefield poor physical straits in 21, 1995, financial health.1 February Attorney A on tract with S, DPIC, Attorney rejected on behalf of Attorney videotaped A later a sworn Barefield, plaintiffs in with Mr. which she settlement demands.2 statement instance, nearly assign priority long For on June four this case a status and avoid 1. 1999— legal malpractice delays action was months before between communications and ex- attorneys changes in a filed—one of Mr. Barefield’s stated of information. Attorney letter to S: Attorney initially rejected 2. DPIC asserts that S know, you working to assem- As have been demands, and made no counter- settlement complete Package and List of ble a Demand offers, two-year Virginia on the belief that the Damages you on behalf of Mr. Barefield. As malpractice medical statute of limitation had al- probably anticipated, have his clear totals are ready spoke expired when Mr. Barefield first rapidly approaching dollar lev- a multi-million Attorney A in Mr. Bare- October 1994. request you notify me of el. I would attorneys gave Attorney subsequently field's S a expediently possi- policy limits as Ms.[A.]’s law, report showing Virginia likely making that under medical policy we will be limits ble as malpractice "continuing tort” that occurs so demand. being long plaintiff/patient you as the treated ... [has] I remind that Mr. Barefield allegedly-negligent living poverty doctor. Mr. Barefield been years at the line for a number of Virginia Accordingly, in June an immense amount was last treated his doctor now. Attorney appreciation if we both could five months before he visited A. would be felt February ney liability reasonably DPIC authorized Attor- A’s became clear. 33-11-4(9) ney W.Va.Code, its S to make first offer settle the case See [2002]. “high-low” arrangement, such that DPIC acts, plaintiff alleged DPIC’s its fail- payment plain- act, would interim make ures were not isolated but resulted $25,000.00 exchange cap tiff for on general practices from DPIC’s business $250,000.00. liability plaintiff DPIC’s violation the Act. offer,3 rejected eventually but DPIC DPIC removed the action from state court payment made an interim to Mr. Barefield the United States District Court (and $5,000.00 April parties Virginia. Northern District of DPIC West agreed this amount would credited subsequently summary judgment moved for settlement). any final action, contending Mr. dismiss Barefield’s 29, 2000, On after set- November further that an insurance cannot be held negotiations tlement included discus- liable under the of a UTPA the actions Mr. sions about financial and Barefield’s an in- hired situation, agreed medical Mr. Barefield in a Fur- sured insurance matter. $250,000.00, highest settle his claim for thermore, DPIC contended that UTPA Attorney proposed amount S had Febru- apply litigation, does not to claims that ary Mr. now he Barefield contends apply protracted did not therefore more, believed his ease was worth but that negotiations that settlement occurred after accepted this primarily he settlement be- legal malpractice Mr. Barefield his suit. filed poor cause his financial and medical condi- tion at the time. II. later, 29, 2001, year Mr. One November Question action Barefield filed the instant Cir- Certified Berkeley County against cuit Court of DPIC did The district court not rule alleging Virgi- that DPIC the violated West summary judgment motion for DPIC’s (“UTPA”), nia Unfair Trade Practices Act Instead, plaintiffs dismiss the action. the W.Va.Code, -10, in 33-11-1 to its and defense following question district court the certified legal malpractice of settlement the action. to this Court: DPIC, alleged through Mr. Barefield that the Virginia the West Unfair Trade Under S, attorney, Attorney actions of its defense Act, specifically Practices W.Va.Code delayed acting on Mr. Barefield’s claim even 33-11^(9), § a is an insurer to third liable though Attorney liability reasonably A’s was attorney party for of an the conduct hired clear, thereby advantage and took of Mr. insurer, by that attorney is hired the when physical Barefield’s and financial difficulties represent the insurer to the insurer’s negotiate a far than settlement lower what insured, attorney’s the when worth, his claim was in violation of Act. the place during took and after initiation of the position Mr. took that Barefield the on behalf a civil action the insured insurer’s DPIC, Attorney of S had breached several malpractice? legal for Act, including him duties the owed under directly court not duty promptly conduct a The district did answer reasonable inves- claim, of tigation duty good part question relating his to in that to whether and a attempt prompt, company faith effect a fair and could be held liable for attorney equitable claim of his once Attor- the actions hired to settlement defend S, February Attorney desperate In a 2000 letter to financial Barefield’s situation.... rejected why counsel Mr. Barefield the setdement be for would interested to learn DPIC feels $250,000.00 woefully inadequate damages capped offer as offer "a under should be at circumstances." past at least when medical bills alone total $196,848.59. know, liability reasonably Mr. will Barefield continue As we all clear. It throughout require appears only arguing medication his life we are as to $12,000.00 year. you per damages.... help will If Mr. total least amount of Please us and anything just DPIC have to indicate our understand that this is or Barefield not are, damages say they get please are not we effort DPIC to out the case for less what deserves, money knowing immediately. the case Mr. us than advise However, separate liability discern that there are two the We insured in a matter. Act under Practices issues the Unfair Trade did conclude that “because the district court district court’s certified contained within the attorney’s place in this ease took actions after initiated, question, namely: Virginia West was apply.” not Practices Act does Trade Unfair (1) company liable Can an insurance conduct of a defense

under Act company to by the insurance HI. hired company’s insurance insured Discussion matter; answering questions certi Before company under Can an insurance court, important it is fied district liable for its violations circumstances be held appel sitting as an point out that we are filing a civil Act that occur after rather, court; pursuant to the Uniform late against an insured? action Act, Questions of Law W.Va. Certification ques- the district court’s We reformulate Code, [1996], simply to -13 we are 51-1A-1 separately. tion to these two issues consider questions law. Accord asked to answer below, answer the As we discuss in detail we ingly, regarding legal factual record “no,”4 question question and the second first sufficiently precise dispute must be issue “yes.” this will undisputed, Court assume findings certifying fact A. Further, legal issue court are correct. Syl substantially must control case. See Liability insurance under anof labus Point Bass Coltelli UTPA the actions (1994); v. Erie Ins. S.E.2d 350 Mutafis 328 S.E.2d Exchange, 174 W.Va. action, plaintiff Mr. in the instant Barefield, compa- that an contends avoid, ny duty has under the UTPA plenary employs This Court stan among things, engaging other in unfair when answer certified dard of review we practices. plaintiff abusive settlement court. questions from a federal district duty cannot be further contends Co., Syllabus Light Ins. Point 1 of v. Allstate person, including delegated any to other (1998), 27, we 203 506 S.E.2d 64 held W.Va. by attorney com- defense hired insurance applied by that novo standard is this “[a] de in pany to the interests of an insured defend present addressing legal issues Court in words, liability plain- In other matter. by question from a federal ed a certified argues compa- tiff that because the insurance Accord, Syllabus appellate district court.” or UTPA, not, ny legally could refuse under the 1, Corp., Elec. Westinghouse Point Bower liability plaintiffs claim to settle the once (“This 133, 424 206 522 S.E.2d W.Va. clear, reasonably com- the insurance became plenary legal Court undertakes review legally Attorney pany could not then instruct presented by question from a issues certified S, agent company, an to as of the insurance court.”). appellate or Howev federal district way plaintiffs to claim as a refuse settle the er, question is framed when a certified so avoiding responsibility the UTPA. under fully that is not to this able address Court DPIC, question, company, insurance law in the The defendant involved argues attorney that an insur- power to an retained then this retains the refor Court must, Syllabus company to an insured questions to it. ance defend mulate certified Conduct, 404, 3, Mangum, under the Rules Point Kincaid v. 189 W.Va. of Professional (1993). in the best of the 432 defend case interests S.E.2d 74 in, However, upon, wrongful relies or ratifies we discuss in more detail in both as III.B., company attorney infra, hired the insurance defense Sections III.A. and liability represent in a matter. See company own to an insured can be held liable for its actions 6, UTPA, Syllabus St. & Marine Rose v. Paul Fire that when the insurance com- Point violate Co., 250, (2004). directs, encourages, participates 673 pany knowingly Ins. W.Va. 599 S.E.2d 215

551 company company and insured—-not the insurance insurance the insured.... —and company infringe attorneys’ attorney- cannot [T]he the insurance defense ethical attorney’s obligations duties to the insured.5 The client to were the insured.... Any obligations imposed by an defendant therefore contends the de- insurance attorney agent is not an of the insur- contract [the insured] fense were between company, any allegations company], and that [the ance insurance and the defense against attorney ag- attorneys parties unfair conduct were neither to nor gressive wrongful litigation bound or actions cannot contract.

constitute a violation of the UTPA. 257, at 599 at 680. W.Va. S.E.2d recently precise Syllabus in Point 5 of addressed We concluded

We Rose that: issue Rose v. St. Paul Fire & Marine Ins.

As W.Va.Code bad faith cause UTPA business 11-1 we noted S.E.2d 215 W.Va. ^[1974] “[t]he “is to apply §§ 33-11-1 insurance (emphasis regulate Unfair Trade Practices only Rose, quoting [.]” trade to to those added). -10, S.E.2d practices W.Va.Code, purpose and the tort of W.Va. This is persons at (2004). in the Act, 38- be Trade Practices to -10. sured in a A insurance provisions business defense is therefore not liability attorney company of the West Act, W.Va.Code, insurance. The defense matter who is to directly subject is not represent Virginia employed by engaged 33-11-1 Unfair an in- to agents engaged entities and who their We see no difference between the Syllabus the business of Point insurance.” facts of the instant case and those in Rose.6 Hawkins v. Ford Motor S, attorney, Attorney The defense was em S.E.2d DPIC, ployed by company, the insurance insured, of an the interests Attor Examining phrase “business of insur- A, ney against seeking impose a lawsuit UTPA, ance” used we stated liability legal malpractice. civil We see Rose that: nothing presented suggest in the record Attorney any way engaged was in S ... perceive attorney, we do not a defense Accordingly, the business of insurance. employed by rep- subject pro was not matter, in a resent insured UTPA, actions, visions of his stand person be a who is “in the business alone, ing cannot form the basis of an action nothing suggest insurance.” There company. the insurance attorneys in that the defense this case had obligations pay ap- contractual mean, however, pellee’s anything suggest claim ... nor This does not made, solicited, attorneys fully any from the defense ne- the defendant absolved gotiated, directly potential responsibility by holding. or in our otherwise acted We pursuant compa manner of an insur- in the terms made clear Rose that an insurance attorneys ny contract. in of must ance The defense the business insurance continue UTPA, employed by company comply insurance with and can were the the be held insured; for its actions that defend the interests the the liable own violate the only regardless at of a insurance contract issue bound the actions de- UTPA — III.B., attorney argument 5. We this in Section We did not consider "the case of an who address by company is hired an insurance in other cir- infra. investigate give cumstances—such as to upon or advice validity of a claim in the same fashion holding We that 6. made clear our Rose was company representative; as a the interests of the insurance attorney claims to defend solely attorney, independent limited to "an hired company; or an by company an insurance to defend the interests company who 'in for the works house' of a under defendant-insured insurance 'captive' employed or in a sively by law firm exclu- that by policy against plaintiff!.]” a claim made represent company the insurance 7, only company's 215 W.Va. at 257 n. S.E.2d at 680 n. 7. insureds.” Id. 599 552 distinguished by practice” and can be ness attorney might employ to defend

fense (cid:127) from an isolated event. 6 of fair minds Syllabus Point As we said insured. Rose: question court’s certified The district asked, part, the UTPA “an whether under a violation A claimant can establish party to a third for the [is] liable Virginia Trade Practices West Unfair insurer, by attorney conduct of an hired -10, Act, W.Va.Code, by show- 33-11-1 attorney that is hired the insurer when through company, its ing that represent We an- insured[.]” the insurer’s actions, its duties under the own breached ques- portion of district court’s swer encouraging, directing, by knowingly Act “no,” attorneys are not tion because defense in, ratifying relying upon, or participating insurance, and the engaged in the business of a wrongful litigation conduct company liable for insurance cannot be held company insurance attorney hired represent merely hiring an insured. may, company insurance how- insured. The course, established, if a It is well ever, if it is be liable for its own conduct compa alleging that an insurance plaintiff is company Act shown that the breached the by committing an un ny violated the UTPA directing, participat- knowingly encouraging, practice, as set forth fair claim settlement in, relying upon ratifying wrongful ing 33-11-4(9) [2002], W.Va.Code, plaintiff insurance conduct of an hired company the insurance must establish .company. “general practice” of commit had a business practices ting unfair claim settlement B. not an isolated that the breach the law was Duties under the UTPA Syllabus Point v. See Jenkins J.C. event. after a civil action initiation Co., Penney 167 280 Cas. Ins. W.Va. (1981), on other 252 overruled S.E.2d in its The district court concluded answer grounds by ex rel. Farm Fire & State State question it had concluded to the certified —as Madden, 451 Cas. Co. W.Va. opinion, in an McDaniel v. Travelers earlier possible that “It is multi S.E.2d F.Supp.2d Property Ins. Cas. W.Va.Code, 33-11-4(9), oc ple violations of (N.D.W.Va.2000) by an in- all conduct —that curring in same claim would be sufficient place company surance which takes after the ‘general practice.’]” business [to establish filing against a civil action the insurance Jenkins, at 280 S.E.2d at W.Va. insured, company’s regardless of the nature stated, Syllabus Point 4 of 259-60. As we conduct, any circum- of that cannot under Mut. Ins. Dodrill v. Nationwide support of action stances cause (1996): 491 S.E.2d As insurance under the UTPA. order, court in its certification district stated private To maintain a action based McDaniel, quoting opinion its “an earlier § 33-11- alleged violations of W.Va.Code company’s litigation is insurance actions after 4(9) single of a the settlement properly cannot introduced as instituted claim, should the evidence establish McDaniel, F.Supp.2d bad faith.” See question conduct in constitutes more words, district court other ruled single § 33- violation of W.Va.Code than absolutely company has no that an insurance 11^1(9), sepa- arise from the violations duty comply require- whatsoever rate, in claim acts or omissions the discrete of a claimant files a ments the UTPA once settlement, they that arise from a and company’s in- against lawsuit an insurance habit, custom, usage, policy or business sured. that, insurer, viewing conduct as the so the company argues whole, of fact is able to con- The defendant insurance the finder interpretation of practices that the district court’s the practice that the or clude correct, argues that sufficiently sanc- is and the UTPA sufficiently pervasive or UTPA designed regulate relating to company that is to conduct insurance the tioned the “claims,” relating “litigation.” to “general busi- not conduct conduct can considered be zealous, plaintiff independent, professional judgment counters that the UTPA does client, distinguish prac- not between unfair trade in of a the defense and should never tices committed before or after has doing be read so. We that an believe commenced, argues and that the UTPA does company retained provisions' that the law state the be- to an ethically required defend insured is to inoperative a civil action is come when filed. independently vigorously in- defend the plaintiffs attorney As summarized oral terests the insured. argument, practice “if it’s an unfair trade begin analysis by looking We our to filed, day before suit is it’s an unfair trade language of the UTPA. “Where the lan practice day suit is after filed.” guage of a is statute clear and without ambi arguments parties illustrate guity plain meaning accepted is to be differing public policy, views of views that we resorting without to interpreta the rules of hand, can be believe reconciled. On the one Syllabus Elder, tion.” Point State v. plaintiff argues that the defendant insur- 571, 165 accord, S.E.2d company claiming complete immunity ance Syllabus Epperly, Point State v. 135 W.Va. post-litigation for its conduct that violates the (1951) (“A statutory provi S.E.2d plaintiff suggests adopting UTPA. The unambiguous sion which is clear and arguments permit the defendant’s would an plainly expresses legislative intent will company legal system insurance to abuse the interpreted by not be courts but will be delay the resolution of valid claims. The effect.”). given full force and public policy encompassed by plaintiffs arguments is that the UTPA was so enacted prohibits The UTPA individuals companies required insurance would be engaging business of insurance from in cer- fairly, promptly to act valid claims resolve practices, tain unfair including acts and legitimately where the issues are not in dis- host of practices unfair claim settlement pute, protracted, expensive legal and not use W.Va.Code,33-11-4(9) [2002], are set forth in injured proceedings party to an exhaust into states, part: That section accepting a low settlement. person No perform shall commit or hand, theOn other the defendant insur- such frequency general as to indicate company argues ance that both defendants practice any following: business ... companies and insurance are entitled to a (d) Refusing pay claims without con- zealous defense an a lawsuit once ducting investigation a reasonable based insured, filed that it should information; upon all ... available permitted employ attorneys (f) attempting good Not faith to effec- (indirectly) by any defend their assets means prompt, equitable tuate fair and settle- filed, regardless once a lawsuit has been of claims in which ments has interposed, the merits of that is the defense clear; reasonably become ... delay and to the resolution of until a ease compa- settlement (n) favorable the insurance Failing promptly provide a rea- ny can be reached. explanation of basis in sonable policy insurance facts relation language We believe of the UTPA applicable law for denial of a claim or positions somewhat reconciles the both the compromise of a the offer settle- plaintiff and in- defendant. The UTPA is ment[.] require companies tended insurance fairly seeking with individuals deal to recover Legisla- The defendant asserts that policy, promptly and to under ture’s choice the word “claim” reasonably valid claims that resolve are not UTPA indicates intent to exclude from dispute regardless of whether or not a — regulation by the UTPA insurance lawsuit has been filed. However, relating “litigation.” However, as we discuss more detail the definition of the word “claim” includes below, decidedly meanings something is as “a UTPA intended such demand for due; attorney’s right interfere with the exercise of an of a assertion some- 554 proscribed the Act to that something or conduct that is due

thing;”7 “a demand a prior filing law due;”8 occurred and “a for which demand believed to be (as accord, ex rel. Mitro v. benefits, suit. O’Donnell ... payment or compensation, (Pa.Su 901 Ins. 734 A.2d Allstate policy an insurance made under one (bad may per.1999) faith suits extend contingency against which of the happening pen- during misconduct of issued).”9 words, Legisla- In other is Ins. dency litigation); Federated Mut. Co. “claim” in of the word repeated use ture’s Anderson, 297 Mont. 991 P.2d 915 v. impose duties an intent UTPA indicates (insurance company’s prosecution of a of insurance to in the business upon those support a appeal” could be used to “meritless asserting right persons a or fairly deal practices); Gooch v. claim for unfair trade something is to be demanding believed Mut. Automobile Ins. 712 State Farm policy. A rightfully due under (insurance compa (Ind.App.1999) N.E.2d 38 simply a litigation is means lawsuit or ny’s litigation in deter conduct admissible demanding something by asserting right or mining company made a bad-faith whether judicial process.10 using the attempt to to settle uninsured force insured Furthermore, purpose of the claim); Airport Authority v. motorist Tucson W.Va.Code, UTPA, plainly stated which is London, Lloyd’s, Certain Underwriters [1974],is to: 33-11-1 (Ariz.App.1996) P.2d 1063 186 Ariz. practices in the busi- regulate ... trade (wrongful litigation of insurance by defining, pro- ... or of insurance ness during coverage company toward insured of, such viding all for the determination due to lawsuit was not rendered inadmissible which constitute un- practices in this State “litigation by Diacon v. privilege”); Palmer competition or unfair or fair methods 91, 121, Exchange, 261 Mont. Farmers Ins. by prohibit- practices or deceptive acts (1993) (“[A]n duty 861 P.2d insurer’s or ing practices so defined deter- the trade fairly payment of and not to withhold deal mined. valid claims does not end when insured insurer.”). heart, “legisla- complaint against files At its the UTPA establishes tive Jenkins, promise meritorious standing policy We and settlement judicial 167 W.Va. at encouraging prompt find no caveat claims policy that [that] 607, 280 parallels our disputed encourages com- S.E.2d settlement UTPA, elaimsf.]” at 258. long- before and after the intended Legislature also ^[14] individuals in compelled by Our regulate regulates conclusion the manner the actions of initiation of a business of premiums insur in which the Legislature companies insurance, lawsuit, language, us to no such the defendant directs charge, profits companies may and the ance company or that an insurance states companies may “The insurance busi earn. person character, of insurance other the business quasi-public in its and the ness is duty “unfair only pre has a to refrain from meth may, police power, ... state under its deceptive acts competition or unfair or ods of conditions on which it scribe the terms and filing prior regulate of a lawsuit practices” may generally be conducted and duty by party, persons engaged but has no such thereafter. in it.” it and all Swearin public Bond, 193, 197, 122 nothing to show that gen find S.E. We (1924). W.VaCode, Legislature regulates 33-11-1 policy established companies charge premiums once ensues. We there obviated public by regu language promote of the so as “to welfare must conclude fore they scope lating insurance rates to the end not restrict UTPA does (5th Ed.1979) (1970). Dictionary Dictionary Law English 10.Blacks’s II Oxford "[cjonlest “litigation” in a court of defines as a Dictionary Collegiate 8. Meniam-Webster’s enforcing right[.]” purpose A law for the Ed., (10th 2001). process one "lawsuit” is “a in law instituted justice.” party compel Id. another to do him Dictionary 9. Webster's Third New International at 799. excessive, inadequate unfairly compelled by conclusion is shall not be Our also W.Va.Code, disparity power discriminatory[.]” bargaining 33-20-1 in economic be- W.Va.Code, goal, companies average To this 33- tween insurance and the [1957]. achieve 20-3(a) litigant. Poling As v. an insurance we discussed Motor- [1976] states when 46, 48, company ists Mutual Ins. premium sets the rates that will (1994): customers, S.E.2d charge company give must past prospective due consideration “to and lawsuits, disparity Often is a there experience” margin and loss “to reasonable bargaining power plaintiff between the and underwriting profit.”11 for insurance The cases, defendant. most the defendant company’s proposed premium rates are re- advantage plaintiff has a resource over the approved by and viewed the insurance com- and is to draw trial able out a into a missioner. motions, prolonged blizzard of mindless continuances, delay. countless and dreadful So, might while there be some theoretical appeal liability in the notion that a insurer delay fact that The mere after months of right has a to maximize its financial well- company deigns and hassle the insurance by being aggressively litigating refusing and injured speak party to to and settles claims, pay ignores to valid such a notion policy realizing case for the limits after that, law, premiums fact under the plaintiff going accept is not charges already account offer, some outlandish low-ball does not for well-being the insurance automatically preclude plaintiff from financial company. company An is not insurance like bringing later a bad faith action.... average defending citizen or business simply, goal Put UTPA is to make lawsuit; their assets an insurance bad-faith behavior those in the business of claims, company pay exists to valid and insurance —whether or not a lawsuit has charges premiums provide sufficient re economically been filed un- claimant — pay regulated claims. sources those attractive. charged by premiums company paid by adopt argu- and the insurance consumer have Were we the defendant’s ment, approved by been the State at a level that and hold that the did not UTPA apply profit company a fair occurring ensures after the insurance com to insurance af- ensues, pany paid past prospective suggest has all and valid ter would be to company Legislature obstinacy claims. To allow an then insurance intended reward underwriting profit by companies compromise its increase unrea insurance claims, sonably defending charging interpre- while still and of claims. settlement Such premiums, public policy provide tation of a disturb- the same violates the the UTPA would underlying premium-rate ing companies push Al statutes. incentive for insurance thereby lowing employ litigation, un claims into meritorious resources, consuming judicial practices fair market disadvan limited further “create[s] dockets, tages companies” crowding congested burying other honest insurance practices unfairly “prolonged illicit in claimants in a blizzard of mind- because these motions, continuances, profits, thereby placing pressure its crease less countless adopt delay.” companies Poling, to also dreadful 192 W.Va. at other insurance equally reprehensible Campbell prompt at 637. tactics. v. 450 S.E.2d resolution delayed Farm Mut. Ins. 65 P.3d claims would in- State Auto. meritorious (Utah 2001) (reversed companies, liability was on other surance even where clear, reasonably grounds by simply Farm Mut. Auto. Ins. out” State Co. “starve 408, 123 1513, 155 Campbell, claimants to obtain a more favor- U.S. S.Ct. settlement (2003)). L.Ed.2d 585 able to the owners or shareholders of the larly requires companies providing practice W.Va.Code, "past insurance to prospective 33-20B-2(a) give loss "[d]ue experience (b) consideration” medical mal- ^[2003] within simi- and outside margin ing premium rates. underwriting profit” state” and "to when determin- a reasonable 556 argument in reject agree in- with the defendant’s company. such an We

insurance attorney, instant that a defense em- case terpretation of the UTPA. liability in a ployed represent an insured however, UTPA, was not in matter, by and is not is not bound the UTPA attorney’s repre to restrict defense tended company, agent of the insurance because attorney’s or of a client deter sentation obligated attorney professionally is vigorous protection of the client’s interests. represent only of the the interests client/in- being attorney is fact that the defense sured, com- not of the insurance the interests company not by should paid pany. actions, attorney’s and the UTPA alter the rel. Ins. v. Gau State ex Allstate Co. infringe upon an be read to should never (1998), 358, ghan, 203 508 S.E.2d 75 W.Va. the, attorney’s legitimate actions taken attorney repre we concluded that defense of a lawsuit. course insured, only and not the insurer sents struggled Attorneys long with the have paying attorney’s that the defense fee. quandaries presented contractual and ethical attorney argued it has been that the While “tripartite” relationship de- between insured, represents both the insurer and we company, in- attorney, and fense acknowledged reality, “[i]n that the insurer Supreme Mississippi Court of sured. The represent actually attorney to hires the dilemma thus once observed the “ethical at 508 S.E.2d insured.” carrier-employed imposed upon the defense attorney” by relationship between insur- client-insured, er, insuranee-eompany- and Our examination of the Rules of Profes- tax paid defense is one “would supports our statement sional Conduct Indemnity Accident & Socrates.” Gaughan. find that there are at least We Hartford (Miss.1988). Foster, 528 So.2d Co. applicable provisions in the Rules three attorney paid by preclude an an insur- However, holding in as our Rose v. jointly company representing from both ance Ins. 215 W.Va. St. Paul Fire & Marine company the insurance and the insured (2004) supports, Leg S.E.2d 5.4(e).12 1.7, 1.8(f), matter: Rules impose not an addition did intend islature weighs upon insurance-company- 1.713 is the first rule that al dilemma Rule ethical attorney’s joint representation against an paid attorneys by requiring them to defense company and actions in of a client both the insurance the insured. measure their defense UTPA, adopted attorney’s attorneys not Rule 1.7 was to ensure under the because are loyalty preclude to a client and in the business of insurance. We therefore 12. The W.Va. L.Rev. viewers.” to a Virginia likely in Rule 1.6 legal lar Defense lease.” See auditors.” ance Conduct, Bermuda confidentiality insured. The Ethical Dilemmas Raised "pursuant to Rule 1.6 a entities if the insured consents to this legal bills to outside Litigation to be requirement counsel to submit bills Lawyer Disciplinary Legal can also be Triangle ethics Amy ^[1989] infringed by LEI confidentiality requirement is most of client Bills to retains a Management inquiry, 99-02, "Submitting S. in the 529-530 of the Rules of Professional auditors, reviewers, that a Moats, implicated information, Outside lawyer lawyer Tripartite Relationship: "insurers' lawyer of the Student Board, (2003). The West directly Guidelines,” Insurers’ may only Auditors or Re- when an insur- maintain the opinion requests Work, Insurance to outside response specified or simi- submit Billing re- "A 13. Rule 1.7 of the Rules states: lawyer’s own When shall include single matter is sentation will not be another client or to a third ally ship with the other sentation will not adverse to another tages and risks involved. (2) each client consents after consultation. (1) (a) (2) the client consents after consultation. (b) (1) representation representation common limited A A representation lawyer lawyer lawyer reasonably lawyer reasonably explanation interests, representation shall shall not undertaken, adversely of that client of that client will be client, client; lawyer’s responsibilities adversely unless: of Professional multiple unless: represent a represent affect the relation- believes believes the person, and the advan- the consultation implications affected; clients in a be materi- a client if or client Conduct directly repre- repre- if undertaking represen- Legal simultaneous from another.” Committee on Ethics v. Frame, 641, 645, tation another client interests 189 W.Va. S.E.2d (citation actually potentially omitted). adverse to the jointly representing whenever their common realize reason ness —the insurance tion fore rial 776, real surance haps unconsciously, in the interests mistic view of human nature from whom ty 585 future. surance existing other.” “may a current Group, edgeable and limitation on F.2d client —the of is 780-81 the be” of that an the Guaranty 89 required by A conflict Spindle company client without company consent. conflict [the attorney 932, such Cal.App.3d one he (1979). lawyer’s] representation 938 n. 5 a conflict hopes attorney employed by one v. Chubb/Pacific the of interest Co. will slant his rendered less effective of interest The rule and may who is two clients. company.” Rule attorney’s v. Louis A. to “Even the most 706, 713, both lawyer’s representa an (8th receive future be or paying 1.7 or insured “occurs limitation in the does not precluded between Cir.1978). clients’ requires current mate- is that 152 behavior be- efforts, U.S. Fideli his fee Rather, Indemnity Roser Cal.Rptr. require knowl- of an an there us to busi from opti per and An his in in all Rules Professional representation will exist ney the insured and the insurance taneously pect bility matter. limitations insurance future be terests between Keeton and attorney ance.”).14 Accordingly, 809 hood, insurance attorney’s In insurance Rules substantial ^[1988] liability is hired and may Rule of Professional 1.8(f)15 from in regard represents actual or materially company company (“There joint upon 1.7 be covered Alan insurance context. These two Conduct also likelihood that jointly representing generally defense, of and an representation of both an an I. paid either is a potentially and attorney and to almost Widiss, limited. See Robert E. the interests of both the 5.4(c)16 of very because Conduct if an the the client/insured precludes by liability party company, weigh against a third substantial insured in a when the attor- and Insurance Law attorney the conflicting of that the Rules may discuss an insured tort claim attorney’s a defense both the party there is in the simul- insur- likeli- pros- lia- in- an to of represent a two attorney client. These rules do not permitted put should “not be to prohibit where, attorney being paid by position in a from himself even uncon client, sciously, tempted individual other than pedal’ he will such as an be ‘soft his Rather, company. in furthering zeal the interests of client insurance the Rules im- one duty attorney pose order avoid an obvious clash with those 1.8(f) example, 14.For 15. Rule of the Rules Con- Professional may duct states: client later date reveal [t]he lawyer that someone else—not the insured— (f) lawyer compensation accept A shall not for car; actually driving the was or that in- representing a one client from other than the intentional than sured’s conduct was negligent.... rather client unless: may An come offer settlement consultation; (1) The client consents after high, which the insurer is too believes but (2) lawyer's There is no interference with the may strong preference insured have a independence professional judgment time, irritations, or with avoiding the and anxieties of Or, client-lawyer relationship; and preparation. proceeds as the trial case may relating representation apparent exposure become that there is Information of a punitive damages, damages beyond or protected required client is Rule 1.6 [insurance], creating limits of the [relating thus confidentiality]. a conflict situation if an offer to settle within policy limits is made. Or the insured 5.4(c) Rule the Rules Con- Professional understandably simple have a and humane duct states: preference plaintiff injured that the he has (c) lawyer permit person A shall not who insurer, paid compensation by the or whether recommends, lawyer employs, pays or plaintiff family are related insured legal members, friends, service strangers. render for another direct or lawyer's regulate professional judgment Stephen Pepper, "Applying L. the Fundamentals Lawyers” rendering legal such Ethics to Insurance Defense Prac- services. tice, 4 Conn.Ins.LJ. attorney’s company pays for ser fully and to of the client the sole interests accord, In re payment vices. Rules of the individual’s inform client Professional Imposed Billing Rules prohibits individual and Insurer arrangement, and Conduct 321, 333, Procedures, 2 P.3d interfering 299 Mont. from paying who (2000); zealous, Higgins Karp, 239 v. Conn. attorney’s independent rep- 802, 810, (1997); A.2d Petition the client.17 resentation of (Tenn. Youngblood, 895 S.W.2d language Arguably, of both Rules 1.7 Bell, 1995); Intern. Atlanta Ins. Co. 1.8(f) hired and might allow 512, 520, (1991); Mich. 475 N.W.2d protect paid Carriers, Kroger Inc. v. First American interests, comply company’s 669, 86, 89-91, 302 Ark. 787 671 S.W.2d company’s the insurance directives with (1990). restrictions, representation of an in- in the if consulta- the insured “consents after sured attorney is defense Because However, require Rules also that tion.” the ethically indepen to an obligated maintain must “no interference the there also be in the professional judgment of de dence lawyer’s professional judg- independence elient/insured, compa aof an insurance fense 1.8(f)(2), ment,” attorney Rule must the ny possesses right no to the methods control reasonably representation that “the believe by attorney to or means chosen the defend joint adversely by not be the will affected” stated, an As court the insured. one insur 1.7(b)(1). specif- More representation. Rule company ance “cannot control the details of 5.4(c) prohibits third-party ically, Rule who attorney’s performance, the the dictate strat attorney’s from pays for an “di- services employed, egy or tactics or limit the attor lawyer’s profes- rect[ing] regulat[ing] or the regard ney’s professional to discretion with judgment rendering legal such ser- sional representation insured].” [of Peti vices.” 328. Youngblood, tion 895 at Ac S.W.2d sum, cordingly, attorney In “an an insurer our Rules hired of Professional considered, to at compel us to conclusion that defend an insured must be Conduct enjoy an company initially, status of inde an hires least when insurance liability pendent an in a contractor.” Givens v. Mullikin ex insured 383, matter, attorney’s obligations of McElwaney, rel. Estate 75 S.W.3d 394 ethical (Tenn.2002).18 and not to the insurance owed the insured apply.” supports this have found 17. The to Rule 5.4 con- courts difficult Sand- Comment 621, 625, Corp., Georgia-Pacific ers v. W.Va. clusion: 159 218, because, 221 225 S.E.2d This is pays When other than a client someone acknowledgedU [previously] "we have ... salary, arrangement lawyer's ... fee or independent contractor defense is riddled with modify lawyer's obligation to not does exceptions applicability.” numerous limit its (c), paragraph such client. stated ar- As 303, Pasquale, W.Va. at 418 187 S.E.2d 749. rangement with die law- should interfere Corp., See also v. National Mines 168 W.Va. West yer’s professional judgment. 578, 588, 670, (1981) (“The gen- 285 S.E.2d 1.5, Rule which relates to attor- The Comment to employer eral rule an not liable for the is fees, similarly: neys’ states independent subject torts an contractor is may agreement An not made whose terms exceptions”). numerous lawyer might improperly to curtail induce many independent exceptions perform One of to the them in a services for the client way contrary contractor defense (Second) contained Restatement to the client's interest. Torts, provides § which pursuant general employer independent an when contractor acts rule is that the an employer, independent for harm or directions of the then the contractor not liable orders employer subject ... as or omission "is same caused another act though Pasquale were that independent v. Ohio the act or omission of the contractor. Power 292, 302, employer although "Consequently, himself.” 418 S.E.2d W.Va. (1992), Corp., clearly right lacks the to control attor- quoting Steel Peneschi National insured, ney simply we to defend an retained 295 S.E.2d (Second) reality ignore practical § (iquoting cannot that the insur- Torts Restatement "However, (1976)). years, er to exercise control over its over the the defense seek actual Givens, attorneys in this proved one retained context.” a slender reed and has to be appeal’s It that an company therefore clear ratified the insurance in a man- company insurance cannot be held liable un contrary ner Act. der the UTPA for the actions of an district question court’s certified insured, hired to defend of an the interests asked, in part, whether under the UTPA an attorney’s strategy

when the defense company insurance could be liable for “con- attorney’s indepen tactics are a result of the place during duct took [that] and after the dent, professional regard discretion with initiation of a civil action the insurer’s representation of the client-insured. See portion insured[J” We answer this O’Donnell v. Allstate Ins. 734 A.2d 901 question “yes.” district court’s certified (insurance (Pa.Super.1999) company’s statu tory duty good to act faith did not end lawsuit; however, initiation of “the stat IV. clearly contemplate

ute does not actions for upon allegation bad faith discovery based Conclusion violations.”).19 In question answer to the certified summary, hold that we the conduct of court, district we that an conclude person or other in the company directly cannot be held liable under during pendency business of insurance the of for the UTPA the misconduct of a defense may support a lawsuit a of cause action un- attorney by hired the company insurance Virginia der the West Unfair Trade Practices of an interests insured in a Act, W.Va.Code, 33-11-1 to -10. In so hold- matter, particularly when the de- ing, reject we district court’s conclusion attorney’s fense conduct results from at- McDaniel, supra, that the word “claim” in torney’s independent, professional judgment, precludes application the UTPA of the may but be held liable for its own acts “litigation” UTPA to knowingly encouraging, directing, participat- company person or other business ing, relying upon ratifying or that behavior. insurance. We also conclude that an company insurance However, also hold we that an insurance duty comply has a with the UTPA after company cannot be held liable under the insured, filing against civil action Act, Virginia West Unfair Trade Practices and can be held liable for violations of the W.Va.Code, -10, 33-11-1 to for the actions of litigation UTPA that occur after commences. a defense retained defend insured, attorney’s when the defense strate- Having question answered the certified gy and tactics attorney’s are a result of the court, from the district case dismissed independent, professional discretion with re- from the of this docket Court. gard representation to of the client-in- sured, upon and are not Question otherwise relied or Certified Answered. tiff, company alleging S.W.3d process, at 395. When an insurance tort of abuse of stated claim seeks, directly indirecdy, either or to affect the upon granted alleging which relief could be attorney's independent professional judg- defense company attorneys insurance directed defense attorney’s duty ment or interfere with the engage discovery purpose in excessive in- client/insured, loyalty impru- "it would be ducing plaintiff against to dismiss tort claim in- attorneys dent for this Court to hold that sured); Campbell v. State Farm Mut. Auto. Ins. insurers, independent contractors vis-á-vis but (punitive damages 65 P.3d at 1148 award ignore practical then to realities of that rela- company supported by insurance evi- tionship injury." Accordingly, when it causes Id. company published dence instruction manual for vicariously "an insurer can be held liable for the attorneys mandating they defense harass repre- acts or omissions of an hired to and intimidate claimants and witnesses to deter sent an insured when those acts or omissions litigation, they "employ dog and that 'mad de- directed, commanded, knowingly were au- using company’s large fense re- tactics’— thorized the insurer." Id. opposing attorneys by pro- sources to 'wear out’ longing litigation, arises, however, making objections, question meritless

19. Another when the documents, claiming privileges, destroying false seeks to exercise control abusing process.”). attorney's strategy over tire the law and motion It is and tactics. See, e.g., Givens v. Mullikin ex rel. Estate not clear whether the record in the instant case (Tenn.2002) McElwaney, (plain- 75 S.W.3d 383 involves such a situation. 909, 166 S.W.2d 140 Tex. concurs and reserves Justice DAVIS Inns, Inc., 211 . v. Red also Collins See concurring opinion. right to file Roof 461-66, 598-603 566 S.E.2d concurs reserves ALBRIGHT Justice (2002) “This privilege). (discussing litigation opinion. concurring right to file any statement made privilege extends counsel, jurors, parties or wit- judge, part MAYNARD concurs Justice nesses, aspects all of the and attaches right to file part, and reserves the dissents including made proceedings, statements opinion. separate court, depositions, pre-trial hearings, open DAVIS, J., concurring. pleadings or other affidavits Brown, 637 papers the case.” James proceeding the question In this certified (Tex.1982). public 917-18 S.W.2d holdings. majority opinion has made two litigation privi- with the policies associated First, majority opinion has concluded candid, (1) promoting the lege include: the unfair trade faith action under bad of evi- objective and undistorted disclosure against an instituted practices statute (2) dence; testing placing burden of litiga- occurring misconduct after insurer for during tri- litigants the evidence Second, underlying action. began in the tion (3) resulting al; avoiding chilling effect in Rose v. St. with the decision consistent subsequent litigation; from the threat Co., 215 Insurance W. Paul Fire & Marine (4) finality judgments; reinforcing (2004), majority 599 S.E.2d Va. (5) upon judg- limiting attacks collateral may be opinion has concluded that an insurer (6) ments; advocacy; promoting zealous misconduct de- liable held litigation prac- discouraging abusive knowingly when the insurer fense counsel (8) tices; encouraging settlement.” and in, directs, participates relies encourages, Co., de Nemours & v. E.I. du Pont Matsuura wrongful I such conduct. upon, or ratifies (2003). 687, 149, 693 Hawai’i 73 P.3d 102 by majority opin- holdings in the concur both beyond litigation privilege extends “[T]he separately to ion. I have chosen to write of abuse of of defamation to claims claims points.1 several underscore infliction emotional process, intentional on Post- Bad Faith Action Premised A. distress, misrepresentation, inva- negligent Exception litigation Conduct is an ... privacy, ... and interference sion of Privilege Litigation prospective advan- and economic contract of “liti- parties did not brief the issue The v. Bear tage.” & Elec. Co. Gas Pacific post-litiga- privilege” as a gation defense 1118, 1132, 270 50 & Cal.3d Steams to an insur- misconduct that is attributed tion (citation (1990) 1, Cal.Rptr. 791 P.2d However, this is an issue believe er. omitted). Lauletta, Baglini v. But see by majority opin- implicitly the was decided 833-34 N.J.Super. 768 A.2d ion. (“The excepted from the reach of the one tort “ prosecution, litigation privilege malicious ‘[a]ny litigation privilege, com- Under the process.”). or malicious use munication, written, pub- oral or uttered judicial proceed- litigation privilege to application of a of the due course The lished the was against action an insurer privileged ... and cannot constitute a bad faith ing is appellate Arizona squarely addressed the action[.]”’ of a civil Jenevein the basis Authority v. Friedman, (Tex.App. Airport in Tucson Certain court 114 S.W.3d London, Ariz. 2003) Lloyd’s, at Ins. quoting Reagan v. Underwriters Guardian Life litigation occurring commenced. This majority opinion after was point out that the 1. I should expressly implicit holding ad implicitly has now been expressly an issue that was ruled Thus, Rose, opinion. in West dressed in the instant In the Court in the Rose decision. decided recognized duty good Virginia, faith in resolv an insurer's under the a bad faith cause of action matter, Act, "any stage ing against a claim extends to Virginia Unfair Trade Practices West initiated, litigation in or out of after counsel before or an insurer for misconduct Ag-Prods., Acci Inc. v. Implicit trial.” Texoma in the resolu- certain conditions. under Hartford (5th Rose, Cir. & Indem. 755 F.2d determination dent was a tion of this issue 1985). for misconduct a of action existed cause 45, Airport, litigation, instituting 918 P.2d 1063 Tucson defense of while itself against suit and to class action was the insured determine whether what filed provide it extent it must those It harm released a toxic benefits. caused when reasonably argued could not be under such groundwater.2 into The insured chemical declaratory circumstances either insurer no subsequently judgment filed longer any contractual owes duties against its cov action insurers determine insured, perform not or that it need those erage underlying During action. fairly faith. good duties declaratory course action, judgment insured amended its 885-86, Cal.Rptr. Id. at at 710 P.2d complaint faith claim state bad engaging misconduct dur the insurers gravamen [the The bad insured’s] ing declaratory judgment action. “The communication, faith claim is not a but a dismiss, arguing insurers moved of “wrongful course and tortious” conduct alleged misconduct did constitute bad evidenced insurers’ actions did, that, absolutely if it was faith during coverage communications ac- law.” privileged under Arizona Tucson Air Furthermore, [the claim tion[ ]. insured’s] grant trial

port, P.2d at 1065. The court pleading does not assail a but instead al- the motion and dismissed the bad faith ed leges that its insurers followed course of appeals appeal, claim. On court of found they perform conduct in which failed to litigation privilege that the did not bar the fairly good their faith. duties To be appellate faith claim. court bad The rea sure, ... the insurers in this case do not as follows: soned filing coverage contend that good aetion[] ... contend that if erased duties faith insurers even their dealing. and fair duties complaint stated a cause of nonetheless [insured’s] if, action, meaningless would privileged be rendered we the claim is based argue, understand these insurers during pending coverage statements made litigation privilege employed could actions the insurers’ counsel. Whether duties, excuse breach of those privilege question is a the defense of exists part coverage occurs as conduct of a Assuming, deciding, of law. without action. privilege faith applies proceed- in bad even hold, therefore,

ings, that in apply we it does in We the circum- conclude the case, presented in- per- [the of this ease. We stances circumstances by reasoning of sufficiently pled sured] suaded the California bad faith claim the Supreme unprivileged v. Western on Court White Title based 870, Co., 509, Accordingly, 221 Cal.Rptr. Ins. 40 its the trial court Cal.3d insurers. (1985). There, by dismissing [the 710 P.2d 309 the court erred bad insured’s] recognized faith claim in between a bad its amended com- the difference second privileged plaint. squarely faith claim on a “based communication, such as an action for defa- at Airport, Tucson 918 P.2d 1066. See also

mation, upon underlying an and one based Kahn, Moss, Shafton, Berger, v. Fi Shafer course of conduct the com- evidenced Gladstone, 54, Cal.App.4th 107 gler, & Simon 888, 221 Cal.Rptr. munication.” Id. at (2003) (“[T]he 78, Cal.Rptr litiga 131 .2d 777 Applying 710 P.2d at 318. that dis- privilege does not shield from tion LaBelle tinction, pre- litigation privilege would fraud.”); Matsuura, liability for 73 P.3d at clude action but would not bar the former (holding privilege litigation does not 694 prove evidence of the communications to subsequent proceeding liability in a “limitf] the latter. allegation an of fraud commit where there is prior proceeding”). ted White court The noted indicated, majority compa- it As I is not unusual for an insurance have decision that, benefits, found for ny provide policy implicitly such as in the instant case only aspects litiga- litigation far will in this matter was more com- discuss relevant However, plex tion. and involved actions. several action, following discovery egregious faith miscon- purpose of a bad the exclusive duct: litigation privilege defense to is no there underlying occurring According plaintiff, claim. as as an to the soon

misconduct Firm, Allstate hired the Richardson Aggressive do not Defense Tactics B. began discovery process Firm anew Equal Bad Faith Misconduct her, to to suffer harass cause her unneces- sary expense, [her] and to “weaken resolve this case the Rose The decisions pursue the extent that suit she permit interpreted not to as opinion are be abandon it.” The Richardson [would] upon ag of action mere ting a cause based alleged, agent Firm is first of All- as is, That counsel. gressive tactics defense tortfeasor], to have submit- [and state aggressive of the insurer’s “an inter interrogatories, number of ted excessive Jung is not bad faith.” v. Nationwide est totaling questions subparts, about Co., F.Supp. Ins. Mut. Fire though already possessed much even (E.D.Pa.1997). “improper general liti When requested by interrog- information issue, ... ... gation conduct is at Rules plaintiff Although atories. asserts that provide adequate means of Procedure of Civil objected initial submission of she redress, strike, compel such as motions to Firm, interrogatories by Richardson orders, protective or im discovery, secure trial court she relates that the overruled sanctions.” Timberlake Const. Co. v. pose objection. her (10th Fid. & Guar. 71 F.3d U.S. plaintiff alleges also Cir.1995). rel. Mitro v. See O’Donnell ex deposed Richardson Firm her a sec- (Pa.Su 901, 909 Allstate Ins. 734 A.2d time, subjecting ond her to “intense (“If subject party it is per.1999) believes every aspect of questioning about so- her discovery, ... improper Rules of Civil cial, educational, employment, and medi- remedy[.]”). provide an Procedure exclusive hours, history.” Lasting eight cal about “[tjhere penalize Consequently, no need alleged deposition is this second to have attorneys when their insurers inquired plaintiff as to “had whether zealously within the bounds them sleeping been the Defendant McEl- jury allow find that To conduct. waney,” “every ailment with zealously insurer acted bad faith de beset, mat- [she] has ever been no fending impose penalty.” is to such a itself plaintiff ter how trivial.” The was also Anderson, Mut. Ins. Federated Co. called to furnish the names of ev- P.2d To Mont. sus doctor, dentist, ery and other healthcare premised faith action tain a bad cause of professional her who treated these misconduct, plaintiff post-litigation must ailments. sufficiently egregious allege “conduct Further, alleged Firm is Richardson [grossly] considered reckless otherwise seventy to have than discov- issued more [specific] with the intent im committed ery subpoenas to various records custodi- avoiding payment [a] claim.” properly Despite knowing many ans. that of these O’Donnell, 734 A.2d in at 910. Viewed this possessed to records no relevance the is- in which be light, “eases an insurer held suit, plaintiffs sues the Richardson will post-litigation misconduct] [for liable subpoenas alleged Firm is to have sent ex indeed.” Givens v. Mullikin rel. rare (1) “every every custodian for healthcare McElwaney, 75 396 Estate S.W.3d suspected professional was ... who (Tenn.2002). plaintiff have rendered treatment type life,” illustrates the The decision Givens during including time her her egregious sup- tactics that could psychologist, obstetrician/gynecologist, defense her others; (2) against port third-party every “hospital Memphis bad faith action a and (where upon post-litigation plaintiff conduct. Chattanooga insurer based and once lived), instances[,] many During plaintiffs against though action tortfea- even injuries had no for in an automobile the Richardson Firm reason sor sustained accident, had engaged counsel believe the Plaintiff received substitute defense (3) there”; every employer for In treatment Insurance Co. O’Keefe Safeco (4) worked; plaintiff America, whom the has ever Or.App. 639 P.2d every repair agency (1982), to which automobile the insured filed a faith action bad plaintiffs has automobile ever been against upon her insurer based defense coun- taken; every defending sel’s conduct in the insured policy has written insurance for personal injury Specifically, case.4 in- plaintiff. (a) argued sured that defense counsel: failed (b) plaintiffs deposition; to take the failed to Givens, Supreme at 391-392. S.W.3d The (e) records; plaintiffs obtain the medical Court Tennessee held the above con- plaintiffs to obtain failed financial rec- support against duct could a bad faith claim (d) ords; deposition failed take the the insurer to the extent that the insurer had (e) doctors; plaintiffs failed secure knowledge of conduct.3 adequate medical consultation for the benefit case, In the instant we were asked jury of the insured. A returned verdict allega- determine whether Mr. Barefield’s insured, appealed. and the insurer counsel, tions of misconduct defense in the appellate court found that a cause of action action, underlying legal malpractice could against could be maintained support against a bad faith claim the insurer. However, ap- defense conduct. counsel’s Because ease is this Court on a before pellate court reversed the verdict based question, majority opinion certified sim- jury remanding an erroneous instruction. In action, ply recognized a cause without appellate the case for a new trial the noted examining the of Mr. merits Barefield’s evi- “[tjhere adequate was ... evidence of my judgment, purported dence. mis- negligence.” O’Keefe, [the insurer’s] extremely defense counsel falls Co., Boyd P.2d at 1315. Transp. See Bros. support short of conduct that would a bad Cos., Inc. v. Fireman’s Fund Ins. 729 F.2d against faith of action cause the insurer. (11th Cir.1984) (“[W]e dealing presented in The record this matter did not who, with an no doubt aware that contain a showing any scintilla of evidence apparently his client the insurer owed noth- counsel, type of misconduct let ing policy, accordingly under the elected to egregious alone misconduct. All that oc- perform duty his to his client the insured at curred this case was routine settlement haphazardly.”); Majorowicz best v. Allied negotiations. exactly This situation is Mut. Ins. 212 Wis.2d 569 N.W.2d type of situation trial courts wherein must (1997) (“Other obtaining than medi- grant summary judgment. records, investiga- cal the defense did little opinion instant case the Rose discovery respect [plain- tion or to what third-party against bad faith actions involved experts going say in tiffs] medical were However, nothing insurers. in either deci- case.”). sion limits this of action third- new cause Similarly, Sims v. Travelers Insurance party litigants, suggests that the cause (Okla.Civ.App.2000), in- P.3d 468 first-party of action is also maintainable as a brought sureds an action the insurer mind, point bad faith action. With this recover underinsured motorist medi- present will illustrations of con- few case action, During cal benefits. that the in- duct that has been sufficient or in- deemed a faith sureds filed bad cause of action for first-party support sufficient to a bad faith litigation misconduct. The trial court en- against action for insurer defense counsel partial summary judgment tered in favor of misconduct. died, my During any prosecuted unable to find 4. The and her research was insured estate judicial addressing against other decision the issue of action the insurer. third-party in a bad misconduct insurer faith action. This is no doubt attributable to the only very recognize a fact that few states statu- tory third-party bad faith cause of action. at preclusion for and sanctions claim. court motion bad faith The insurer litigation.... as follows:5 outset appeals affirmed complaints were that the The [insureds’] further, multiplying examples Without insurer] had treated lawyers [the for that in- [the conclusion is obvious adversaries; motions filed [them] up attempt to dress its sured’s] belated dismiss; objected discovery; did not disputes as a discovery pre-trial and other depositions [insureds] times the take Moreover, must fail. new counterclaim deposi- for produce witnesses offered potpourri allegations if the even and, tion; meetings; rejected misdocketed proposed includes its new [the insured] request for mediation.... [insureds’] they greater than counterclaim had merit litigation alleged conduct find the [W]e do, joinder stage at this with this their for a bad faith cannot be the basis here straightforward insurance cover- otherwise action. only age dispute could create confusion Sims, 16 P.3d at 471. consequent prejudice, and thus the deny Additionally, in Zurich American Insur- obliged would still be Court Inc., Industries, ABM ance Co. v. motion to amend. (S.D.N.Y.2003), F.Supp.2d 302 an insurer Zurich, F.Supp.2d at 309-10. seeking declaratory judgment action Sled a Moreover, Equitable As- Krisa Life coverage for of the extent of determination (M.D.Pa. Soc., surance F.Supp.2d 316 interruption business losses suffered 2000), disability the insurer denied benefits janitorial service that had serviced insured-a insured. The insured thereafter filed premises the World Trade Center. against complaint the insurer. When Subsequent to filed a counterclaim. insured resolved, filed a bad case was the insured discovery, a motion to the insured filed faith action the insurer based pleadings to a bad faith cause amend its state the first case.7 The post-litigation misconduct. of action for and dismiss the bad insurer moved strike judge motion to district court denied the judge faith claim. The district denied the gave following reasons:6 amend motion as follows: motion to amend its coun- [the insured’s] case, plaintiff] is ad- [the In the instant [insurer] to add a claim that en- terclaim vancing bad faith claims based on more gaged during in bad faith the course of the discovery Specifically, [the than abuses. purported litigation must be denied. The plaintiff] “alleges that [the defendant] untimely, simply hodge podge claim is Complaint wrongly responded plaintiffs immaterial, nit-picks. It as- futile and/or first with a counterclaim [the action] serts, example, [the insurer] has plain- asserting, among things, that other coverage improperly asserted applications tiff had fraud his committed interpreta- positions inconsistent disability insurance.” [the defendant] Policy by [the insurer’s] tion of the offered alleges that plaintiff] [the “further [The whereas, assuming ar- ... own witnesses false, allegations defendant’s] were base- true, entirely guendo this it would be were fraudulent_” plaintiff] has [The less proposed counterclaim permissible. The just discovery more than abuses asserted alleges improperly [the insurer] also Moreover, part [the defendant]. on the discovery lawsuit com- before the obtained light policy of liberal construction guise seeking to ad- under the menced claim, .whereas, of statutes so as effectuate the statute’s assuming just .. ar- its purpose Pennsylvania Superior and the guendo such behavior occurred “that the conduct of properly Court’s determination improper, it should have was pendency litiga- bringing during [the insured] been addressed stated, 7. There were other causes of action but were involved in the case that are 5. Other issues my only presented relevant to discussion. claim is here. not the bad faith were also decid- Other issues not relevant here opinion. ined failing tion of bad claim as of action. be construed evidence state cause plaintiffs] [the faith ...” claims are court judge under The district the motion denied by Pennsylvania not following: barred law. Accord- and stated plaintiff] ingly, has [the because asserted ... Plaintiffs bad base their insurance jury facts from which could conclude that on just discovery faith claim than more litigation used faith [the defendant] bad Complaint alleges abuses. The also that obligations, to avoid insurance defen- [the misrepresentations Fund Fireman’s made motion to strike and Count dant’s] dismiss court and motions filed abusive dur- II will be denied. ing Coverage Action. the Insurance Since Plaintiffs cause of action Krisa, for insurance bad F.Supp.2d at 321. entirely faith is not founded on Defendants Finally, in General Co. v. Refractories tactics, discovery say, cannot the Court Co., Fireman’s Fund Ins. 2002 WL 376923 time, prove that this Plaintiffs cannot (E.D.Pa.2002), part and rev’d in affd which set of facts would entitle them (3d Cir.2003), part, 337 F.3d I of Complaint. relief on Count Conse- insureds a bad faith action filed quently, the Motion to Dismiss will be conduct in an based earlier respect denied with I of Count coverage action.8 Some of al the conduct Complaint. (1) leged complaint pattern included: Refractories, General 376923 at*3. WL delay, stonewalling, deception, obfuscation (2) pretense; intentionally withholding and Post-litigation C. that Use Misconduct (3) orders; documents; critical ignoring court is not Actionable as Evidence in Pre- (4) testifying falsely at depositions, with liti Litigation Conduct Bad Faith Case. gation fully aware of counsel the false testi The final issue wish to address (5) concerns mony; misrepresenting facts to the trial admissibility of post-litigation misconduct (6) counsel; opposing court and providing sustain evidence insufficient to an objec incomplete responses, unreasonable independent bad faith cause of action. The tions, in privilege unfounded claims of and general jurisdictions rule on other this tentionally incomplete privilege logs in re that, issue is “while evidence insurer’s sponse requests; reasonable relevant may, in rare instanc- (7) some broad, using overly clearly untenable es, faith, on be admissible the issue bad theory privilege knowledge, to conceal the inadmissible, generally such will evidence activity and intent formed the basis probative high as it lacks value carries (8) action; coverage actively the insurance prejudice.”10 risk of Timberlake Const. Co. hiding highly probative documents while v. & U.S. Fid. Guar. 71 F.3d moving summary judgment on issues (10th Cir.1995). in Palmer v. The decision (9) related; to which the documents hidden Exchange, Farmers Insurance Mont. using during deposition; hidden documents (1993), fully gen- 861 P.2d 895 addressed the (10) continuing docu to locate hundreds of eral as follows: rule produced put ments should have been on privilege logs, claiming each time courts Several have considered whether (11) found; they just engaging during had of an been evidence insurer’s conduct conduct, including litigation of underlying actions suit is admissi- obdurate demon strating discovery subsequent attempt obstruct in a bad action. ble faith After process encouraging examining reasoning witnesses of courts that issue, provide testimony.9 misleading we false have considered the conclude continuing duty faith good The insurer moved dismiss the bad faith does involved, 10.Obviously parties general application 8. Other and issues were are no but rule has exclusively relevant here. to a bad faith action that is based post-litigation misconduct. In the latter situa- allegations complaint 9. The in the set out presumptively tion evidence admissible. such appellate decision. See General Co. Refractories (3d Fireman’s Fund Ins. 337 F.3d Cir.2003). technically was an in- insurer’s conduct necessarily render evidence of the not Thus, In- reluc- post-filing improper. conduct insurers would be surer’s admissible. deed, questionable rarely coverage should such evi- courts allow tant to contest adopted balancing and dence we have claims. for rare circumstances.

test those policy Public favors the exclusion of evi- litigation insurers’ permit To evidence of litigation post-filing of an insurer’s dence strategies impede and to insur- tactics is First, respects. two conduct at least right ers’ access to the courts de- unnecessary permitting fend, such evidence it them reluctant because makes action, during initial trial because the coverage questionable contest claims_ dictates, can do not courts assure defendants policy Public there- Next, impor- improperly. act more fore, that courts must caution use extreme tantly, of such the introduction evidence in deciding to admit such even if evidence impairs right to defend and hinders it initial deci- is relevant insurer’s access courts. deny underlying claim. sion to point, brings This us to another crucial The Rules of Procedure control the Civil and, instances, litigation process post-filing in most of the insurer’s the relevance general, litigation provide adequate improper for an insurer’s remedies conduct. litigation strategy defending a during process. tactics and conduct claim parties assumed not insurer’s decision to Once the have adversarial relevant roles, Indeed, coverage. if generally judge deny it is for the in the the insured post- underlying rely on insurer’s jury and not to deter- must evidence of the case prove should faith in party penalized filing conduct bad denial mine whether coverage, questions as to the valid- for bad faith tactics. arise ity insured’s initial claim bad litigation ethically An faith_ zealously bound to the client of litigation, the onset After provided by statutes within framework begins supporting to concentrate on and the of Civil Procedure. These Rules deny decisions that led the claim. procedural define clear boundaries rules heavily attorneys on its The insurer relies litigation If a conduct. litigation strategies and using common tac- boundaries, judge can exceeds the against tics to defend a debatable claim. for judgment strike the and enter answer Consequently, after in- actions taken summary plaintiff, judgment for enter marginally pro- suit are at sured files best impose plaintiff, or sanctions on the deny of the insurer’s decision bative attorney-The con- policy most serious coverage. allowing in- evidence of the sideration post-filing punish- instances, conduct is that it however, surer’s In some evidence of legitimate pursuing insurers for lines of es post-filing insurer’s bear right their to contest defense and obstructs deci- the reasonableness of the insurer’s coverage of claims.... dubious its state of mind when it evaluat- sion and underlying ed and denied claim. litigation strategies Allowing evidence Therefore, impose do we blanket expose and tactics the insurer’s en- would prohibition on such evidence. coverage in a action to scruti- tire defense approach is ny by won believe the jury, unless the insurer We correct then, jury deterring improp- underlying with the strike a balance between suit. The allowing hindsight, and without the er conduct the insurer assistance of spu- against insight litigation into tech- insurers defend themselves assistance of guess provides claims. Rule 403 niques, “second the defen- rious could taking post-filing the insurer’s particular balance. When dant’s rationales relevance, addition, jury some could con- conduct has court course.” In probative weigh its value the defendant’s must sider evidence of prejudicial showing inherently high effect such strategy tactics without evidence, in keeping mind tract the insurer’s and bad faith action the insurer. trial, right jury fundamental The case went to defend itself. returned verdict favor of In the insurer. her (internal Palmer, 861 P.2d at 913-16 citations appeal, plaintiff assigned error Southerland, omitted). Argonaut See Ins. trial court’s jury refusal to instruct the Co., (Colo.App.1990) 794 P.2d it could consider insurer’s misconduct (permitting post-litigation by conduct after the commenced. prove to be used as evidence to a bad faith opinion The claim); O’Donnell set out the fol- Gooch v. State Farm Mut. Auto. Ins. lowing plaintiff misconduct evidence Co., (same); 712 N.E.2d 42 (Ind.App.1999) jury wanted the to consider: Shelby Inc. v. T.D.S. Mut. Ins. 760 F.2d (11th trial, 1520, 1527 Cir.1985) (same). At Appellant claimed that All- investigating state’s bad faith conduct in my In judgment, the decision Palmer tactics, claim “dilatory her involved re- presents approach that should be used questing unnecessary and infor- frivolous Virginia trial courts in deciding West when requesting mation and information which whether to admit post-litigation evidence of previously had Appel- been submitted.” premised misconduct in a bad faith action lant occurring during raises two instances upon pre-litigation is, conduct. That trial which, process discovery argues, she apply courts should 403 to “Rule determine should jury. have been considered probative whether the value the evidence Specifically, without much elabora- more substantially outweighed by was danger tion, Appellant claims that Allstate acted prejudice.” Sopher, unfair Coleman v. faith propounding interrogatories bad 588, 600, (1997).11 S.E.2d requesting “regarding repairs information point final I wish to is that make trial property, [the] renovations to its foun- distinguish ¡allegations courts must of an in plumbing dation and the contained there- post-litigation surer’s post- misconduct from inquiries, in.” according Appel- These litigation conduct. suggested, As have lant, are “frivolous” and fail to further balancing test should be used when consider investigation Allstate’s of her claim. She ing the introduction of post-litiga evidence of also characterizes as bad faith Allstate’s tion balancing inap misconduct. This test accept deny failure either or her claim plicable post-litigation to mere conduct lengthy deposi- after she “submitted to a post-litiga insurer. Evidence of an insurer’s tion.” tion conduct that any does not demonstrate Appellant baldly asserts that because impropriety is irrelevant and should not be everything “Allstate had needed its in a claim for admitted bad faith. A case possession accept deny to either or illustrating point this final is O’Donnell ex claim, yet did ... [t]his never conduct is in rel. Mitro v. Allstate Ins. 734 A.2d 901 argument faith.” sug- bad This seems (Pa.Super.1999). gest that accept because Allstate failed deny conducting or claim her after O’Donnell, plaintiffs home was al- lengthy investigation prior to the com- legedly burglarized. plaintiff submitted suit, Appellant’s any mencement action a claim to the insurer to recover the cost part in requesting of Allstate addi- allegedly items from stolen her home and during pendency tional information damaged. During investigation the insurer’s trial is in bad faith. claim, the insurer found numerous O’Donnell, 734 A.2d at 907. pertaining inconsistencies the information damaged to lost and items. As a result of reviewing pur- After the above evidence of delay providing coverage misconduct, the insurer’s ported opinion in O’Donnell claim, plaintiff her filed a of eon- breach held: issues, Virginia misleading jury,

11. Rule 403 of the West Rules of Evi- confusion of the provides: dence delay, or time, considerations of undue waste of relevant, Although presentation evidence be excluded or needless of cumulative probative substantially if its weighed by value is out- evidence. danger prejudice, of unfair supports private that it law, pre- expressly indicate the evidence As a matter Rather, Court, many of action. cause by Appellant of Allstate’s sented present years of its members before litigation does during course of arrived, judicial legis- example perfect in a therefore, and, such faith bad constitute lation, action from such a cause of created from the properly excluded was evidence Penney v. J.C. cloth. See Jenkins whole jury’s consideration. 597, 280 S.E.2d Ins. 167 W.Va. Cas. (1981), grounds by State overruled other any which evidence In the absence & v. Mad- State Farm Fire Cas. Co. ex rel. Allstate was motivated that demonstrates 155, den, 451 S.E.2d 192 W.Va. motive, or ill purpose by á dishonest 10 of ex rel. As I in footnote State stated fiduciary or con- it[s] breached otherwise Recht, 457, 213 W.Va. Medical Assurance discovery duty by utilizing the tractual (2003), among 583 S.E.2d investiga- improper process to conduct recognize a minority of states small attempt tion, reject Appellant’s we must arising from of action their private cause interrogatories equate propounding statutes, claim unfair settlement investigative type bad faith with the recognize third-party bad only a handful claim]. a bad faith practices [for actionable rel. According [State ex claims[.] faith O’Donnell, 734 A.2d at 907-909. Gaughan W.Va. v.] [203 Ins. Co. Allstate foregoing, I concur In view of the [1998], [75], 358], 369, n. S.E.2d majority opinion. a courts which have considered “[m]ost action not al third-party bad faith have MAYNARD, concurring, in Chief Justice against third-party claim lowed such a dissenting, part. part, and (Citation omitted). tortfeasor’s insurer.” majority’s Barefield, Rice, I concur with the In A is in accord Paul R. This liable holding that an insurer cannot be held Quasi-Attomey-Client Privilege? West Virginia Prac- Unfair Trade under the West Fiduciary Duty Ex Virginia’s Mislabeled actions of a defense tices Act ception, 101 L.Rev. attorney’s strategy and tactics are when the third-party ac says, “[b]ecause profes- independent, of his or her result plaintiff to whom insur tion involves a However, I dissent to the sional discretion. company not a contractual did owe ance during holding conduct of an insurer that the policy, most duty insurance state under the may support a pendency of a lawsuit jurisdictions that addressed the issue have Act. of action under the statutory cause implied to find have refused duty legislative schemes similar under Rose, reversing Similarly, I concur with (Footnote Virginia.” omit those West extent that the circuit court’s order ted). attorney, by an hired that a defense ruled company to defend the interests I this Court insurance do believe Because matter, subject to third-party statutory is an insured should have created claims, expan- Trade Practices provisions disagree of the Unfair I with the bad faith However, affirming majority cir- I dissent to of action Act. sion of such a cause company ruling cuit court’s instant cases. liable, circum- can be held under certain third-party bad faith fact stances, byAct for violations of the claims, being wholly unsupported in besides attorney employed by law, First, statutory simply a bad idea. are an insured. defend already unnecessary. they Insurers good implied duty of a contractual and third-party have Both and Rose are Barefield dealing to their insureds previously faith and fair

statutory As bad faith eases. Sylla- clear, private claims the insureds. that a settle I do not believe made v. Nationwide Mut. action, third-party bus Point of Shamblin especially cause of 396 S.E.2d 766 action, Ins. 183 W.Va. under the Unfair should exist cause (1990), this Court held: Act does not Act. The itself Trade Practices part competing Wherever there a failure on the an insurer owes duties to both policy of an within settle limits third-party insureds and claimants. Howev- opportunity where there exists the to set- er, can “[n]o servant serve two masters.”1 poli- tle and such where settlement within problem competing greatly duties is cy limits would from release insured majority’s exacerbated decisions personal liability, and all the insurer insurer, the instant If cases. as we have prima has facie failed to act in its insured’s seen, adversary is an third-party of a claim- best interest and such failure so settle ant in process, the settlement it is prima even more facie constitutes bad faith toward its adversary of an litigation insured. once is instituted Yet, against its majority says insured. Thus, when an insurer refuses to settle with potentially insurers now are to liable and, result, third-party a claimant as a third-party every claimants they decision claimant is a in personal awarded verdict a defending make the course of their in- injury against trial the insured in excess of sureds, they may limits, be liable for policy the actions pri- the insured’s the insurer is attorneys they represent ma guilty facie of bad faith hired toward its in- point, sured. At that majority attempts insureds. While the distinguish the actions of insurers from the It prove will be the insurer’s burden to attorneys, actions of acting indepen- convincing clear and it evidence attempted dently, such a good negotiate practice faith distinction in is a set- tlement, fancy. chimera —a vain and failure enter into a idle Now third- opportunity party settlement where simply to do so claimants allege will in their existed was based reasonable and sub- complaints wrongful failure to both settle grounds, stantial and that accorded the pre post-litigation. Claimants will fur- —and rights interests of the insured at least ther aver that attorney the insured’s defense great as respect as its own. acting insurer, was not independently of the Syllabus Shamblin, Point but supra. the insurer its Accord- “breached duties ingly, powerful insurers by knowingly have under Act encouraging, incentive claims of third-party settle directing, in, claimants absent participating relying upon, or bringing third-party bad faith actions. ratifying wrongful litigation conduct of a de- fense Second, compa- hired the insurance third-party bad faith claims create ny Syllabus potentially insured.” Point conflicting duties of insurers to Consequently, Rose. third-party ward both all claimants and decisions their insureds, own to the detriment of in made the insurer and the those insured’s de- above, As sureds. noted open scrutiny insurers have both fense will duty implied a contractual duty and an appalling the courts. Such a is result in a good dealing faith and fair to their justice insureds. system every such as ours where contrast, In relationship between an in party is representation. due zealous Our third-party surer and a claimant is adversari system adversary system. sys- is an Such representative al. is “[T]hat the insurer tems, they proper- when are allowed work logically imports of the insured that the third ly, great mechanisms to find the truth party tort claimant’s adversary status as the and ensure fair trials. But when one adver- him, facto, ipso of the insured renders sary party punished simply being ad- adversary agent.” of the insured’s Linscott versarial, system down breaks and de- v. Farm State Mutual Auto. Ins. 368 generates into an unfair and biased exercise (Me.1977). A.2d 1163-64 insur “[T]he in bullying. boxing It is about as fair as a er stands the shoes of the insured match where one boxer has a hand tied dealing Long victim.” McAllis behind his back. (Iowa 1982). ter, 319 N.W.2d Nev ertheless, recognizing third-party recognized problems Other courts bad faith have claims, illogically post-litigation Court mandates that that arise when 1. Luke 16:13. ability them- compromising to defend their subject of bad faith claims

made the by third-party brought in actions selves insurers. so Actually, I we have claimants. believe litigation conduct to serve Allowing cases insureds these crippled and hobbled bad faith would undermine evidence right of access that their constitutional questionable right to contest insurer’s effect, the de courts has been denied. against such to defend itself claims and litigation, parties in now is that facto rule court in this Circuit As a district claims. insureds, exception insurers and with the noted, liti allegations of aptly permitting right representation. to zealous have “chilling would have gation misconduct Also, blatantly majority opinions are insurers, unfairly could effect on consumer) (insurance in that by inhibiting attorneys anti-consumer their penalize them policies they value of insurance effectively representing decrease the zealously and from duty by reducing contractual of insurers permitted the bounds clients within their Any litigation. their insureds Surplus defend Lines Ins. law.” International representation challenge by an insured to the University Wyoming Research v.Co. lawyer can now be insurer-provided of his (D.Wyo. F.Supp. Corp., 850 (10th Cir.1995). claim that insurer had with the 1994), answered aff'd, F.3d 901 52 adversary, duty equal to the insured’s placed in an would be Insurers’ counsel Finally, increasing litigation third-party claimant. legitimate if position untenable litigation and third-party bad faith frivolous as of bad could be used evidence conduct litigation to insur- concomitantly cost of improper conduct faith. Where companies, majority opinion will issue, of ance generally the Federal Rules is at increasing pur- of the cost adequate have the effect provide means of Civil Procedure Virginia strike, chasing for all con- redress, compel insurance West such as motions increase, orders, premiums im That means will protective sumers. discovery, secure paid only by consumers. premiums are id. at 1528-29. pose sanctions. See reasons, respectfully I For all of these Fidelity and v. U.S. Timberlake Const. Co. Cir.1995). majority’s holdings post- (10th 335, dissent to the Co., 71 F.3d Guar. may support litigation conduct of an insurer v. Mut. Ins. Co. also Federated See action, statutory and that an bad faith 33, 42, 915, Anderson, 991 P.2d 297 Mont. may actions of (“Public insurer be liable (1999) policy favors the exclusion by the insurance com- hired nor- postfiling conduct] under [an insurer’s represent its pany to insured. it can because hinder mal circumstances impair to the right and can access to defend Justice, ALBRIGHT, concurring. therefore, courts; must use extreme courts sepa my colleagues have written deciding to admit such evidence Two of caution in (Citation omitted.)); rately How- in this on matters which believe if ease even relevant.” impor given Ins. Farm Mut. Auto. invite further discussion ard v. State (1994) 582, companions, its Rose v. of this ease and S.E.2d tance S.C. (“Evidence and Marine Insurance that arises after the denial Paul Fire St. (2004), and Mad propriety the W.Va. 599 S.E.2d claim is not relevant to the Company, No. of its v. Allstate Insurance insurer the time den — (June omitted.)). (Citation , 601 S.E.2d 25 refusal.” - 2004). sum, majority’s holdings post- In concurring part opinion, support separate In his litigation conduct of an insurer dissenting part this to the decision Trade action under the Unfair a cause of Paul Fire poten- and the decision Rose St. case Act and that Practices Insurance, May- Chief Justice attor- and Marine tially actions of a defense liable for the vitality of nard concerns about the the insured are articulates ney it hired to system deci- because of those They infringe our adversarial on of common sense. devoid ques- particular, In the Chief Justice right to the sions. of access constitutional (1) allowing prosecu- by seriously tions the wisdom and insureds courts of insurers third-party equal faith claims claim that tion of bad “the the insurer had an litiga- for conduct in duty adversary, insurers the course to the insured’s the third- tion, case, approved as in the instant party Finally, claimant.” the author assures allowing third-party bad faith claim to be premiums inevitably us that will prosecuted against an insurer unlawful as a result of two increase these decisions. conduct effectuated a defense my experience, soaring flight such a insured, employed approved to defend an as rhetoric, “parading often referred as in Rose. horribles,” merely serves obfuscate or di- The first basis which Chief Justice deserving vert from attention the true issues Maynard opposi- attacks both is his decisions Moreover, consideration discussion. tion, general principles, existence suggests examination of these “horribles” statutory third-party bad faith claims. See dreadful, occur, they likely not as or as 33-11-4(9) (2002) § (Repl. W.Va.Code Vol as the Chief Justice would us have believe. 2003). action, type That of civil as the Chief us principal complaints: Let look at the acknowledges, Justice was first created Conflicting third-party duties owed claim- 1981, long this Court in before the arrival of duty ants and insureds: The of an insurer present membership.1 of its im- More claimant, third-party owed a to avoid acts however, portantly, party pro- no to these bad-faith, performed in hardly can be seen ceedings assigned as error the existence of contrary duty to the like not to deal statutory such a cause of action. Without Certainly, insureds bad faith. question, an attack on the wisdom of continu- any duty insurer does not owe to its in- ing permit particular of action cause regarding any- to act in bad faith sured nothing to contributes the task with which thing. by pre- this Court was confronted the issues Potentially third-party liable to claimants in instant in sented the ease or Rose. every defending decision made in- for Beyond lamenting pri- the existence of a every Only sureds: if is decision tainted third-party vate cause of action for bad faith with bad faith! suggesting by claims and that law created Party punished being adversarial: this in Court v. Nationwide Mutu- Shamblin for Only acting if in bad faith! 585, al Insurance 183 396 W.Va. S.E.2d (1990), statutory for obviates the need Seriously compromising insureds’ and in- claims,2 third-party faith bad the Chief Jus- ability By surers’ themselves: defend expresses creating “poten- tice concern over requiring insurers to not act in bad faith? tially conflicting duties of insurers toward Claiming equal that the insurer had an third-party both claimants and in- their own duty adversary, to the insured’s the third- unduly sureds.” In his effort to dramatize party only duty equally claimant: The concern, suggests this the Chief Justice that by owed to its and a insured potentially “insurers now are liable to third- third-party claimant insurer owes party every they claimants for decision make duty third-party to its insured and a claim- insureds,” in defending of course their ant alike not act in bad faith. suggests that such actions will result in a Unfortunately, Premiums will rise: a like- “party [being] punished simply being for ad- ly possibility for customers of who insurers posits versarial.” The Chief Justice further commit acts of bad faith. infringe upon that both decisions the consti- reasonably I am rights “by tutional of While certain that insurers and insureds “parade seriously compromising ability employed by their to de- horribles” the Chief merely opines hyperbole, fend Justice is in I themselves.” He further exercise subject give every appreciate in decisions rise case also that wholesale abuse of the Penney involving third-party 1. See Jenkins v. J.C. Cas. Ins. address instances bad-faith 597, (1981). W.Va. duty 280 S.E.2d 252 claims where there is no contractual be- making party tween the insurer and the a claim. duty recognized good 2. Shamblin faith insured; that an insurer has to its it did not opin- question. Our reformulation by two tion to the action authorized causes of bring reality questions is utilized to remove might soon one certified ions at issue addressing dissenting may fully my impediment In there be of those horribles. or more by specific legal problem v. Allstate Insurance to same raised opinion to Madden 705, 601 S.E.2d is not a mecha- Company, question. 215 W.Va. Reformulation (2004), legal every standards recognized I that the nism this Court should use address develop faith cases for adopted by implication this Court bad which conceivable attorney-client privilege invading under proceedings question which arose. from opened Coltelli, exception “had crime-fraud v. As observed Bass we lawyer” (1994), to undertake any practicing for door 453 S.E.2d privilege in such cases invasion of that questions “Only those should be certified 621, 601 Id. at than valid reasons. less judgment bring with up before them *9). J., dissenting, at (Albright, 44at S.E.2d allow this a framework sufficient to Court Likewise, suggest respectfully pertinent which will be issue decision watchful for and bar should both be bench disposition and inevitable the case and, therefore, completely unwar- groundless below.” of action au- of the causes ranted assertions State, quoting Id. at 453 S.E.2d majority through this case thorized Transportation City Winoo Agency and Rose.' ski, A.2d 147 Vt. obvious first line of defense litigational thought improper conduct hearing question to us certified existing and sanc- various rules found court, case, federal judicial provided by system. our It tions state, highest we sit under a court of another plaintiffs would be serious mistake jurisdiction. special statutory grant of See routinely premised on file bad faith cases cases, § seq. 51A-1-1 et In such W.Va.Code occurring during the course de- record, only us a limited we have before fending not clear- insurance claims does no fully developed trial. We have one ly bad faith. rise to the level demonstrable only ques- judgment to review: We have unduly and insur- To harass defense counsel and, instances, posed the an- tions some potential alleging bad faith with lawsuits ers proposed by submitting court. swer substantially could without merit that are Therefore, beyond addressing the sub- issues easily statutory lead to the abolition question as certified would no stance in these two cases— cause action issue giving about mat- doubt lead to “direction” by a by legislative enactment or reversal pending in case or ters that do not exist recognizing private this cause of the case law advantage unwittingly providing to one clearly action,3 Maynard ad- Justice Chief controversy by pronouncing in stan- side vocates. dards, fa- procedures, or other conclusions party opinion deserving to one or another. her separate vorable

The second concurring opinion, Davis chose to concurring opinion Justice comment is the following applicabili- case, issues: The Barefield, in which Justice Davis se- address the ty litigation privilege; of the defense issues for elucidation lected three which, my proposition aggressive tactics do not before this Court were misconduct; appropriate equate not to bad faith and the judgment, ripe were occurring question of misconduct after in this case. use evidence discussion certified authority court to sustain an Although has to re- a suit is filed this Court certified, of action.4 independent bad faith cause questions properly we do formulate liberty expound any con- these well be matters related While not have the involving bad faith claims under the anticipate may cases which we arise rela- cern occurring Penney have after claims Ins. concerns 3. See Jenkins v. J.C. Cas. they 280 S.E.2d 252 rather than after have been filed court litigated. been "post-litiga- not to use the term I have chosen appears the reference tion misconduct” as Act, Unfair Trade Practices none these

subjects required our attention order to questions

answer actual certified raised.

Those three issues were without addressed litigants’ perspective

the benefit devel-

oped Moreover, arguments. briefs and legal principles at issue were enunciated

in a Simply put, factual vacuum. I believe

this Court should strive to limit its certified

question opinions specific issues raised questions I respectfully certified. addressing

submit that beyond issues those questions

raised the certified serves no

purpose regard clarifying the status

of the law. majority opinion believe the written fully succinctly

Justice Starcher answers questions posed by the federal district Accordingly,

court. I concur.

600 S.E.2d 285

TRIAD ENERGY CORPORATION OF VIRGINIA, INC., Virginia

WEST a West

Corporation, Below, Appellee, Plaintiff RENNER, Worden,

Barbara Trunk Billie heirs, assigns,

and all or creditors of Worden, Mary

James Thorn

Anderson, Below, Defendants RENNER,

Barbara Trunk Defendant

Below, Appellant.

No. 31243.

Supreme Appeals Court of Virginia. of West

Submitted: Feb. 2004. May 27,

Filed:

Case Details

Case Name: Barefield v. DPIC Companies, Inc.

Court Name: West Virginia Supreme Court

Date Published: Jun 25, 2004

Citation: 600 S.E.2d 256

Docket Number: 31226

Court Abbreviation: W. Va.