IN THE SUPREME COURT OF APPEALS OF
September 1997 Term
CHARLES K. BLAKE, SR.,
AND ADELIA A. BLAKE,
Plaintiffs Below, Appellants,
CHARLESTON AREA MEDICAL CENTER, INC.,
Defendant Below, Appellee.
Appeal from the Circuit Court of Kanawha
Honorable Irene C. Berger, Judge
Civil Action No. 95-C-192
REVERSED AND REMANDED
Submitted: October 8, 1997
Filed: November 25, 1997
W. Dale Greene
Charleston, West Virginia
Attorney for the Appellants
Kevin A. Nelson
Crystal S. Stump
Kay, Casto, Chaney, Love & Wise
Charleston, West Virginia
Attorneys for the Appellee
JUSTICE DAVIS delivered the Opinion of the Court.
SYLLABUS BY THE COURT
review of a circuit court's order granting a motion for judgment
on the pleadings is de novo." Syllabus point 1, Copley v.
Mingo County Board of Education, 195 W. Va. 480, 466
S.E.2d 139 (1995).
2. "When a
motion for judgment on the pleadings under Rule 12(c) of the West
Virginia Rules of Civil Procedure is converted into a motion for
summary judgment, the requirements of Rule 56 of the West
Virginia Rules of Civil Procedure become operable." Syllabus
point 1, in part, Kopelman & Associates, L.C. v. Collins,
196 W. Va. 489, 473 S.E.2d 910 (1996).
circuit court's entry of summary judgment is reviewed de novo.'
Syl. pt. 1, Painter v. Peavy, 192 W. Va. 189, 451
S.E.2d 755 (1994)." Syllabus point 1, Davis v. Foley,
193 W. Va. 595, 457 S.E.2d 532 (1995).
4. Before the prosecution of a lawsuit may be barred on the basis of res judicata, three elements must be satisfied. First, there must have been a final adjudication on the merits in the prior action by a court having jurisdiction of the proceedings. Second, the two actions must involve either the same parties or persons in privity with those same
parties. Third, the cause of action identified for resolution
in the subsequent proceeding either must be identical to the
cause of action determined in the prior action or must be such
that it could have been resolved, had it been presented, in the
The plaintiffs below and appellants
herein, Charles K. Blake, Sr., and Adelia A. Blake, appeal from
an order entered June 17, 1996, by the Circuit Court of Kanawha
County. Ruling in favor of the defendant below and appellee
herein, Charleston Area Medical Center, Inc., the circuit court
dismissed the plaintiffs' claims of fraud and misrepresentation
against the defendant, finding that an earlier lawsuit between
the parties barred the plaintiffs' present suit on res
judicata grounds. Upon a review of the parties' arguments,
the record before us, and the relevant authorities, we disagree
with the rationale of the circuit court and find that dismissal
of the plaintiffs' claims was improper. Accordingly, we reverse
the lower court's judgment and remand this case for further
proceedings consistent with this opinion.
FACTUAL AND PROCEDURAL HISTORY
On, or about, April 26, 1991, Adelia A. Blake underwent extensive heart bypass surgery at Charleston Area Medical Center [hereinafter CAMC]. At the time of her hospitalization, Mrs. Blake had medical insurance coverage through Mountain State Blue Cross and Blue Shield, Inc. [hereinafter Blue Cross]. Upon the completion of her medical treatment, Mrs. Blake had incurred hospital expenses of approximately $35,000.
It appears from the record that while Blue Cross reimbursed
CAMC for a substantial portion of these expenses, Mrs. Blake's
account at CAMC nevertheless reflected an amount due and owing of
$3,092.10. When Mrs. Blake and her husband, Charles K. Blake, Sr.
[hereinafter collectively referred to as the Blakes], failed to
satisfy this bill, CAMC, on August 29, 1992, filed an action
against them in the Circuit Court of Kanawha County [hereinafter
Believing that they owed the sum sought by CAMC, the Blakes did not challenge CAMC's actions in filing "Suit 1" or otherwise appear to defend that action.See footnote 1 1 In due course, CAMC, acknowledging the Blakes' failure to answer or otherwise appear, sought a default judgment. By order entered January 13, 1993, the Circuit Court of Kanawha County granted the requested relief and, in the default judgment order, adjudged that the Blakes owed to CAMC $3,585.99, the amount of the original shortage in payment plus pre-judgment interest, as determined by the court, from May 27, 1991, to December 30, 1992.See footnote 2 2 The Blakes indicate that CAMC then executed the default judgment and attempted to complete its recovery by garnishing and otherwise attaching Mr. Blake's
wages, beginning in, or around, February, 1993.
Subsequently, the Blakes began to
question whether they, in fact, owed the monies claimed by CAMC.
In September, 1993, Mrs. Blake learned from Blue Cross that there
was an agreement between Blue Cross and CAMC whereby CAMC would
accept, as payment in full, amounts paid by Blue Cross on behalf
of its insureds. In November, 1993, the Blakes received a copy of
this agreement from Blue Cross.See footnote 3 3
Thereafter, on January 23, 1995, the Blakes filed a civil action against CAMC in the Circuit Court of Kanawha County [hereinafter "Suit 2"]. The complaint alleged that CAMC acted "falsely and fraudulently" in failing to disclose its agreement with Blue Cross and in attempting to recover, from the Blakes, the remainder of Mrs. Blake's hospital expenses. CAMC responded and asserted that the Blakes were precluded from bringing their lawsuit because "Suit 2" was barred, on res judicata grounds, by the prior resolution of "Suit 1". Accordingly, CAMC moved to dismiss, on the pleadings, "Suit 2". Following a hearing on this matter, the circuit court, by letter to the parties
dated May 17, 1996, found:
[t]he defendant in the instant case argues that the plaintiffs' lawsuit is precluded by the doctrine of res judicata. After a careful review of the relevant case law, this Court finds that the Blakes were (without dispute) given notice of the earlier lawsuit, and failed to answer. As a result, default judgment was entered. This resulted in a judgment on the merits. Both lawsuits involve the same parties, and thus, there is identity of the parties. Lastly, the initial lawsuit was for an unpaid medical bill, and the instant lawsuit is for damages as a result of "overcharge" for the same unpaid medical bill. This Court finds there is identity of the cause of action since these issues of "overcharge" could have been adjudicated in the earlier lawsuit. The status of the earlier lawsuit was such that the "overcharge" issues "might have been disposed of on the merits."
although harsh in its results under the circumstances of this
case, the Court finds this suit is barred by the applicability of
the doctrine of res judicata, and therefore, grants the
motion to dismiss[.]
By order entered June 17, 1996, the circuit court formally rendered the above-described decision granting CAMC's motion to dismiss. In the circuit court's final "Order Granting Defendant's Motion to Dismiss," the court noted that CAMC had moved to dismiss "Suit 2" pursuant to Rule 12(c) of the West Virginia Rules of Civil ProcedureSee footnote 4 4 and acknowledged its consideration of the doctrine of res judicata. It is from this final order of the circuit court that the Blakes appeal to this Court.
On appeal to this Court, the Blakes assert that the circuit court improperly disposed of their lawsuit by way of a dismissal on the pleadings when, given the court's consideration of matters outside of the pleadings, disposition through summary judgment would have been more appropriate. The Blakes contend further that the circuit court improperly dismissed their claims of fraud and misrepresentation against CAMC on the basis of res judicata. First, we will discuss the proper standard of review. Then, we will address the merits of the parties' contentions.
A. Standard of Review
Generally, when determining the propriety of a circuit court's ruling, we employ a multifaceted standard of review. "'This Court reviews the circuit court's final order and ultimate disposition under an abuse of discretion standard. We review challenges to findings of fact under a clearly erroneous standard; conclusions of law are reviewed de novo.' Syl. pt. 4, Burgess v. Porterfield, 196 W. Va. 178, 469 S.E.2d 114 (1996)." Syl. pt. 1, State ex rel. Hechler v. Christian Action Network, ___ W. Va. ___, ___ S.E.2d ___ (No. 23573 July 16, 1997). See also Clark v. Kawasaki Motors Corp., U.S.A., ___ W. Va. ___, ___, ___ S.E.2d ___, ___, slip op. at 5 (No. 23395 July 16, 1997) (same); Syl. pt. 2, Walker v. West Virginia Ethics Comm'n, ___ W. Va. ___, ___
S.E.2d ___ (Nos. 23881, 23890 July 15, 1997) (same).
With respect to the instant appeal,
the procedural posture of the case indicates that it has been
appealed to this Court following a judgment on the pleadings.
Both CAMC and the circuit court adopt this characterization of
the case's prior disposition. Rule 12(c) of the West Virginia
Rules of Civil Procedure allows, in part, "[a]fter the
pleadings are closed but within such time as not to delay the
trial, any party may move for judgment on the pleadings."
Tailoring our general standard of review to the specific review
of a judgment on the pleadings, we have held that
"[a]ppellate review of a circuit court's order granting a
motion for judgment on the pleadings is de novo." Syl. pt.
1, Copley v. Mingo County Bd. of Educ., 195 W. Va.
480, 466 S.E.2d 139 (1995). Explaining the reasoning for this
standard, we stated that "[a] motion for judgment on the
pleadings presents a challenge to the legal effect of given facts
rather than on proof of the facts themselves." Syl. pt. 2,
in part, Copley, id. For this reason,
[a] circuit court, viewing all the facts in a light most favorable to the nonmoving party, may grant a motion for judgment on the pleadings only if it appears beyond doubt that the nonmoving party can prove no set of facts in support of his or her claim or defense.
Syl. pt. 3, Copley, id.
Despite the facial appearance of the lower court's disposition of this case as
a judgment on the pleadings, the Blakes contend that, because
the circuit court referred to and relied upon matters outside of
the pleadings in rendering its decision, the motion for judgment
on the pleadings was, in fact, converted to one for summary
judgment. In this manner, the Blakes point to the circuit court's
acknowledgment in its letter of decision that it had
"reviewed the Motion to Dismiss, the Response, the
memoranda, as well as the submissions made after the hearing in
this matter." Accordingly, the Blakes urge that we review
this case as we would an appeal arising from a summary judgment
Rule 12(c) of the West Virginia Rules
of Civil Procedure specifically provides for this particular
If, on a motion for judgment on the pleadings, matters outside the pleadings are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.
Thus, a court's consideration of material extraneous to the pleadings could, in fact, result in the conversion of a motion for judgment on the pleadings into a motion for summary judgment. See, e.g., Kopelman & Assoc., L.C. v. Collins, 196 W. Va. 489, 495, 473 S.E.2d 910, 916 (1996) ("Due to the fact the circuit court considered matters outside the pleadings, we must review the record de novo under summary judgment standards."); Gunn v. Hope Gas, Inc., 184 W. Va. 600, 603, 402 S.E.2d 505, 508 (1991) (per curiam)
(noting that "the [circuit] court's consideration of
documents which supported the pleadings converted the defendant's
Rule 12(c) motion into a Rule 56 motion for summary
judgment"). Accordingly, "[w]hen a motion for judgment
on the pleadings under Rule 12(c) of the West Virginia Rules of
Civil Procedure is converted into a motion for summary judgment,
the requirements of Rule 56 of the West Virginia Rules of Civil
Procedure become operable." Syl. pt. 1, in part, Kopelman
& Assoc., L.C. v. Collins, 196 W. Va. 489, 473 S.E.2d
Pursuant to Rule 56(c) of the West
Virginia Rules of Civil Procedure, summary judgment is proper
when "there is no genuine issue as to any material fact and
. . . the moving party is entitled to a judgment as a
matter of law." As with an order granting a motion for
judgment on the pleadings, we review de novo a circuit
court order granting summary judgment: "'[a] circuit court's
entry of summary judgment is reviewed de novo.' Syl. pt.
1, Painter v. Peavy, 192 W. Va. 189, 451 S.E.2d 755
(1994)." Syl. pt. 1, Davis v. Foley, 193 W. Va.
595, 457 S.E.2d 532 (1995). In determining whether the circuit
court properly granted summary judgment, we have stated that:
"'[a] motion for summary judgment should be granted only when it is clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not desirable to clarify the application of the law.' Syl. pt. 3, Aetna Casualty & Surety Co. v. Federal Insurance Co. of New York, 148 W. Va. 160, 133 S.E.2d 770 (1963)." Syl. pt. 2, Miller v. Whitworth, 193 W. Va. 262, 455 S.E.2d 821 (1995).
Syl. pt. 2, Davis v. Foley, 193 W. Va. 595, 457
S.E.2d 532. Likewise, "'"[s]ummary judgment should be
denied 'even where there is no dispute as to the evidentiary
facts in the case but only as to the conclusions to be drawn
therefrom.'"'" Bailey v. Kentucky Nat'l Ins. Co.,
___ W. Va. ___, ___, ___ S.E.2d ___, ___, slip op. at 10
(No. 24013 Oct. 3, 1997) (quoting Gaither v. City Hosp., Inc.,
___ W. Va. ___, ___, ___ S.E.2d ___, ___, slip op. at 6-7
(No. 23401 Feb. 24, 1997) (quoting Williams v. Precision Coil,
Inc., 194 W. Va. 52, 59, 459 S.E.2d 329, 336 (1995)
(quoting Pierce v. Ford Motor Co., 190 F.2d 910, 915 (4th
Thus, it appears from our discussion of the various applicable standards of review that, regardless of the precise characterization of the circuit court's disposition of this matter, the standard of review is virtually the same be it an appeal from a judgment on the pleadings or an appeal of a summary judgment order. That is, the appropriate standard of review is de novo. When employing the de novo standard of review, we review anew the findings and conclusions of the circuit court, affording no deference to the lower court's ruling. See West Virginia Div. of Envtl. Protection v. Kingwood Coal Co., ___ W. Va. ___, ___, ___ S.E.2d ___, ___, slip op. at 23 (No. 23876 July 16, 1997) ("'De novo refers to a plenary form of review that affords no deference to the previous decisionmaker.'" (quoting Fall River County v. South Dakota Dep't of Revenue, 1996 S.D. 106, ___, 552 N.W.2d 620, 624 (1996) (citations omitted))). See also West Virginia Div.
of Envtl. Protection v. Kingwood Coal Co., ___
W. Va. at ___, ___ S.E.2d at ___, slip op. at 21 ("The
term 'de novo' means '"[a]new; afresh; a second
time."'" (quoting Frymier-Halloran v. Paige, 193
W. Va. 687, 693, 458 S.E.2d 780, 786 (1995) (quoting Black's
Law Dictionary 435 (6th ed. 1990)))).
We turn now to the Blakes' contentions
that the circuit court erroneously characterized its decision of
this case as a judgment on the pleadings when, in fact, the
court's consideration of additional matter converted it into a
summary judgment. We agree with the Blakes and find that the
circuit court's determination of this case resulted in a summary
disposition. "'We are not bound by the label employed below,
and we will treat the dismissal as one made pursuant to' the most
appropriate rule." Kopelman, 196 W. Va. at 494
n.6, 473 S.E.2d at 915 n.6 (quoting Murphy v. Smallridge,
196 W. Va. 35, 36 n.4, 468 S.E.2d 167, 168 n.4 (1996)). The
record before us indicates that the circuit judge did, in fact,
consider matters outside of the pleadings in rendering her
decision in this matter. Nonetheless, because our standard of
review of either a judgment on the pleadings or a summary
judgment is virtually identical, and because, as discussed below,
we find this case was not ripe for summary disposition, we do not
find that the Blakes were harmed by this misnomer.
B. Applicability of Res Judicata
The Blakes argue that the circuit court improperly dismissed their claims of fraud and misrepresentation against CAMC on the basis of res judicata. During the proceedings below, CAMC moved for judgment on the pleadings, and, following a hearing, the circuit court granted the same.See footnote 5 5 Before this Court, the Blakes contend that dismissal of their claims on the basis of res judicata was erroneous because their lawsuit and the suit earlier filed by CAMC, though involving the same parties, did not involve the same cause of action.
Broadly phrased, res judicata refers to "'claim preclusion.'" Sattler v. Bailey, 184 W. Va. 212, 217, 400 S.E.2d 220, 225 (1990). We similarly have described res judicata, in general terms, as "preclud[ing] relitigation of the same cause of action." Christian v. Sizemore, 185 W. Va. 409, 412, 407 S.E.2d 715, 718 (1991). In this manner,"'[u]nder the doctrine of res judicata, a judgment on the merits in a prior suit bars a second suit involving the same parties or their privies based on the same cause of action.'" Porter v. McPherson, 198 W. Va. 158, 166, 479 S.E.2d 668, 676 (1996) (quoting Parklane Hosiery Co., Inc. v. Shore, 439 U.S. 322, 326 n.5, 99 S. Ct. 645, 649 n.5, 58 L. Ed. 2d 552, 559 n.5 (1979)) (footnote omitted). See also Conley v. Spillers,
171 W. Va. 584, 588, 301 S.E.2d 216, 220 (1983) (noting
that "the central inquiry on a plea of res judicata
is whether the cause of action in the second suit is the same as
in the first suit"); Hannah v. Beasley, 132
W. Va. 814, 821-22, 53 S.E.2d 729, 733 (1949) ("'A
cause of action between persons who were parties to a former
adjudication, set up in a subsequent action between them, is not res
judicata by the former decision, unless it is identical with
the one actually or constructively heard and determined in the
former suit.'" (quoting Syl. pt. 1, Lutz v. Williams,
84 W. Va. 216, 99 S.E. 440 (1919))).
The rationale underlying the
preclusive effect of res judicata is to avoid "the
expense and vexation attending relitigation of causes of action
which have been fully and fairly decided." Sattler v.
Bailey, 184 W. Va. at 217, 400 S.E.2d at 225. Stated
simply otherwise, "a man should not be twice vexed for the
same cause." Hannah v. Beasley, 132 W. Va. at
821, 53 S.E.2d at 732 (internal quotations and citation omitted).
Thus, we have announced:
"[f]or a second action to be a second vexation which the law will forbid, the two actions must have (1) substantially the same parties who sue and defend in each case in the same respective character, (2) the same cause of action, and (3) the same object."
Id., 132 W. Va. at 821, 53 S.E.2d at 733 (quoting Syl. pt. 1, State ex rel. Connellsville By-Product Coal Co. v. Continental Coal Co., 117 W. Va. 447, 186 S.E. 119 (1936)). We further have explained, with specific respect to the identity of the two causes of action:
of res judicata, "a cause of action" is the fact or
facts which establish or give rise to a right of action, the
existence of which affords a party a right to judicial
relief. . . . The test to determine if the
. . . cause of action involved in the two suits is
identical is to inquire whether the same evidence would support
both actions or issues. . . . If the two cases
require substantially different evidence to sustain them, the
second cannot be said to be the same cause of action and barred
by res judicata.
White v. SWCC, 164 W. Va. 284, 290, 262 S.E.2d 752, 756 (1980) (citations omitted).
More explicitly, the requirements of
the doctrine of res judicata contemplate:
"'[a]n adjudication by a court having jurisdiction of the subject-matter and the parties is final and conclusive, not only as to the matters actually determined, but as to every other matter which the parties might have litigated as incident thereto and coming within the legitimate purview of the subject-matter of the action. It is not essential that the matter should have been formally put in issue in a former suit, but it is sufficient that the status of the suit was such that the parties might have had the matter disposed of on its merits. An erroneous ruling of the court will not prevent the matter from being res judicata.' Point 1, Syllabus, Sayre's Adm'r v. Harpold [sic], 33 W. Va. 553[, 11 S.E. 16 (1890)]." Syllabus Point 1, In re Estate of McIntosh, 144 W. Va. 583, 109 S.E.2d 153 (1959).
Syl. pt. 1, Conley v. Spillers, 171 W. Va. 584, 301 S.E.2d 216 (emphasis in original). Thus, res judicata may operate to bar a subsequent proceeding even if the precise cause of action involved was not actually litigated in the former proceeding so long as the claim could have been raised and determined.
It should be noted, however, that an exception to the preclusion of claims that previously could have been determined exists where the party bringing the subsequent lawsuit claims that fraud, mistake, concealment, or misrepresentation by the defendant of the second suit prevented the subsequent plaintiff from earlier discovering or litigating his/her claims. See Restatement (Second) of Judgments § 26 cmt. j (1982); 8B Michie's Jurisprudence Former Adjudication or Res Judicata § 49 n.2 (1994). See also Harnett v. Billman, 800 F.2d 1308, 1313 (4th Cir. 1986) (recognizing exception, but finding it inapplicable to facts of Harnett). This is so because
[a] defendant cannot justly object to being sued on a part or phase of a claim that the plaintiff failed to include in an earlier action because of the defendant's own fraud. . . .
The result is
the same when the defendant was not fraudulent, but by an
innocent misrepresentation prevented the plaintiff from including
the entire claim in the original action.
Restatement (Second) of Judgments § 26 cmt. j. Nevertheless, in assessing whether the claim at issue could have been litigated, "'the essential question becomes whether the claims asserted by the [plaintiff] in the present and prior actions are closely enough related to justify the conclusion that the defendant should have foreseen the consequences in the present action of his failure to litigate his defenses in the prior action.'" Matter of Townview Nursing Home, 28 B.R. 431, 445 (Bankr. S.D.N.Y. 1983) (quoting United States v. Martin, 395 F. Supp. 954, 959 (S.D.N.Y. 1975)) (citation omitted).
Thus, the above-cited authorities
indicate that three essential elements must exist to preclude the
litigation of a subsequent action on res judicata grounds.
Accordingly, consolidating and reiterating these authorities, we
hold that before the prosecution of a lawsuit may be barred on
the basis of res judicata, three elements must be
satisfied. First, there must have been a final adjudication on
the merits in the prior action by a court having jurisdiction of
the proceedings. Second, the two actions must involve either the
same parties or persons in privity with those same parties.
Third, the cause of action identified for resolution in the
subsequent proceeding either must be identical to the cause of
action determined in the prior action or must be such that it
could have been resolved, had it been presented, in the prior
With respect to the third and final element, for the purposes of applying the doctrine of res judicata, it is imperative that the party bringing the subsequent lawsuit was, during the prior action, able to foresee the consequences of his/her failure to raise the subsequently raised issue in the prior action. Thus, where a plaintiff bringing a subsequent lawsuit was not able to discover or otherwise ascertain his/her claim until after the final adjudication of the prior action, his/her subsequent suit may not automatically be precluded on the basis of res judicata. As we noted above, a limited exclusion to the doctrine of res judicata exists in those cases in which a defendant's fraud or misrepresentation has prevented a plaintiff from discovering the existence of his/her claims until after the
conclusion of the prior action. Accordingly, the circuit court
should very carefully evaluate the claims raised by the plaintiff
in the subsequent proceeding and scrutinize the plaintiff's
reasons as to why he/she was unable to earlier discover the
nature of his/her claim during the course of the prior action
when determining whether res judicata operates to bar the
subsequent lawsuit. Notwithstanding this scrupulous assessment of
the applicability of res judicata to a particular case, we
reiterate our prior admonishment that, even though the
requirements of res judicata may be satisfied, we do
"not rigidly enforce[ this doctrine] where to do so would
plainly defeat the ends of Justice." Gentry v. Farruggia,
132 W. Va. 809, 811, 53 S.E.2d 741, 742 (1949). See also
White v. SWCC, 164 W. Va. at 291, 262 S.E.2d at 757
Applying these elements to the case sub judice, we find that the doctrine of res judicata does not preclude litigation of the claims raised by the Blakes in their lawsuit against CAMC.See footnote 6 6 It is true that the default ruling in the initial case between CAMC and the Blakes satisfies the criteria for a final adjudication on the merits by a court of competent jurisdiction. See Christian v. Sizemore, 185 W. Va. at 412, 407 S.E.2d at 718
(recognizing that "a default judgment may in certain
circumstances preclude a second suit based upon the same cause of
action under res judicata"); 11A Michie's Jurisprudence Judgments
and Decrees § 200 (1997) (noting that "[a] default
judgment is final" (citing Intercity Realty Co. v. Gibson,
154 W. Va. 369, 175 S.E.2d 452 (1970))); 8B Michie's
Jurisprudence Former Adjudication or Res Judicata § 60
(1994) (indicating that a default judgment is final and presents
the same conclusive effect as if the judgment had been rendered
following a trial on the merits). Furthermore, both "Suit
1" and "Suit 2" involve the same parties: CAMC and
Mr. and Mrs. Blake. Regardless of the satisfaction of the first
two elements of the applicability of res judicata, the
third element, identity of the cause of action, is not present in
the instant proceedings.
In "Suit 1", CAMC sought to collect upon a debt it alleged was owed to it by the Blakes. While "Suit 2" also involves the same underlying debt asserted by CAMC, the Blakes do not seek simple repayment of these funds. Rather, the Blakes allege that CAMC acted fraudulently in claiming entitlement to repayment by the Blakes; misrepresented information pertaining to its right to collect this purported debt; and wrongfully enforced its judgment on the same. The Blakes allege further that the fraudulent conduct and misrepresentations perpetrated by CAMC hindered their discovery of the contractual relationship between CAMC and Blue Cross and prevented them from knowing that they did not owe the debt claimed until long after the default judgment had
been entered against them. Thus, the causes of action asserted
by the Blakes set forth claims that are clearly different and
distinct from the cause of action determined in "Suit
Moreover, the facts and circumstances alleged by the Blakes suggest that they were unable to litigate their claims against CAMC in "Suit 1" because, as they allege, CAMC's misrepresentations and fraudulent conduct prevented them from learning of these claims until after the final adjudication of "Suit 1". In this regard, not only were the Blakes unable to raise their fraud and misrepresentation causes of action and to obtain a final resolution of these claims in "Suit 1"; but, they similarly were unable to foresee the consequences of not raising these assertions in the earlier action. Therefore, the claims raised by the Blakes in "Suit 2"could not have been litigated in the prior suit as a result of the alleged fraudulent conduct by and misrepresentations of CAMC. Based upon the particular facts and circumstances of the instant appeal, we find that the elements of res judicata are not satisfied in this caseSee footnote 7 7 and that this doctrine does not preclude the Blakes'
claims against CAMC.See
footnote 8 8
In conclusion, we find that the circuit court erroneously barred further prosecution of the Blakes' claims by holding the doctrine of res judicata applicable to this case. Moreover, we also find that this matter was not ripe for disposition by way of summary judgment. Not only have the Blakes' allegations of fraud and misrepresentation
raised a question as to whether CAMC is entitled to judgment
as a matter of law, but there also remain "genuine issue[s]
as to . . . material fact[s]." See
W. Va. R. Civ. P. 56(c). For example, the record evidence,
at present, does not contain information sufficient to establish
the elements of either fraud or misrepresentation as alleged by
the Blakes. See, e.g., Syl. pt. 3, Cordial v. Ernst
& Young, ___ W. Va. ___, 483 S.E.2d 248 (1996)
(reciting elements for cause of action for fraud); Lengyel v.
Lint, 167 W. Va. 272, 277, 280 S.E.2d 66, 69 (1981)
(explaining components of actionable "fraudulent
representations"). Likewise, the sparse record evidence has
not yet been adequately developed to sustain the burden of proof
required of the Blakes to prevail upon their claims of fraud and
misrepresentation. See Bowling v. Ansted
Chrysler-Plymouth-Dodge, Inc., 188 W. Va. 468, 472, 425
S.E.2d 144, 148 (1992) (stating that the elements of a cause of
action for fraud "must be proved by clear and convincing
evidence"). Therefore, consistent with our oft-repeated
prior directive, we deem it necessary to remand this case to the
circuit court for further factual development. See Syl.
pt. 3, Heydinger v. Adkins, 178 W. Va. 463, 360
S.E.2d 240 (1987) ("'When the record in an action or suit is
such that an appellate court can not in justice determine the
judgment that should be finally rendered, the case should be
remanded to the trial court for further development.' Syl. pt. 2,
South Side Lumber Co. v. Stone Construction Co., 151
W. Va. 439, 152 S.E.2d 721 (1967).").
Accordingly, for the foregoing
reasons, we reverse the decision of the Circuit Court of Kanawha
County and remand this case for further proceedings consistent
with this opinion.
Reversed and remanded.
Footnote: 1 1 The record does not indicate whether the Blakes were represented by counsel at, or around, the time of the filing of "Suit 1".
Footnote: 2 2 The circuit court calculated pre-judgment interest from thirty days after the last date on which CAMC rendered services to Mrs. Blake (May 27, 1991) to the date on which CAMC requested relief by default judgment (December 30, 1992).
Footnote: 3 3 It appears from the record that the effective date of this contract was March 4, 1991, indicating that this agreement was in place prior to Mrs. Blake's surgery and accompanying medical treatment. Given the sparse factual development of the record before us, though, we are unable to determine precisely to which group of patient insureds Mrs. Blake belonged, and thus, we cannot determine the specific percentage of hospitalization benefits Blue Cross paid to CAMC on her behalf (92%, 93%, or 100% of the expenses actually incurred).
Footnote: 4 4 The Blakes contend that the circuit court, in granting CAMC's motion to dismiss, erroneously considered matters outside the pleadings, thereby effectively transforming CAMC's motion to dismiss, on the pleadings, into a motion for summary judgment. We will further address this contention in Section II.A., infra.
Footnote: 5 5 However, as noted in the preceding section, we will treat this case as an appeal from an order of summary judgment.
Footnote: 6 6 We wish to emphasize that our decision today, finding that res judicata does not bar the Blakes' claims against CAMC, is in no way intended as a blanket holding that would permit a defendant to sit on his/her rights, allow a default judgment to be entered against him/her, and attempt to later assert his/her defense(s) to the prior action by filing a subsequent lawsuit. Rather, as our analysis of the facts and circumstances of the instant case will demonstrate, the application of res judicata is very much dependent upon the distinctive characteristics of a particular case.
Footnote: 7 7 That is not to say, however, that the Blakes will necessarily prevail in their lawsuit against CAMC upon remand to the circuit court. Our decision demonstrates that the Blakes have failed to satisfy the first two elements of res judicata. Further discovery in this case may very well indicate that the Blakes also cannot satisfy the third res judicata element in that they could have actually litigated their claims of fraud and misrepresentation in "Suit 1". Therefore, it is quite possible that CAMC may prevail upon a subsequent motion for summary judgment. These questions we do not decide, though, as the record presently before this Court does not contain sufficient evidence from which
to make such a determination.
Footnote: 8 8 The Blakes suggest that their action against CAMC was properly before the circuit court, regardless of the applicability of res judicata, because Rule 60(b) of the West Virginia Rules of Civil Procedure permits a party to file an independent action in order to obtain relief from a final judgment. Although our resolution of this query is unnecessary given our determination of the case on the basis of res judicata, we opine that the Blakes' lawsuit most likely would have been appropriate pursuant to the independent action theory. See Syl. pt. 2, N.C. v. W.R.C., 173 W. Va. 434, 317 S.E.2d 793 (1984) ("The definition of an independent action, as contemplated by W.Va.R.Civ.P. 60(b), is an equitable action that does not relitigate the issues of the final judgment, order or proceeding from which relief is sought and is one that is limited to special circumstances."). See also Syl. pt. 3, N.C. v. W.R.C., id. ("In order to obtain relief from a final judgment, order or proceeding through an independent action, the independent action must contain the following elements: (1) the final judgment, order or proceeding from which relief is sought must be one that, in equity and good conscience, should not be enforced; (2) the party seeking relief should have a good defense to the cause of action upon which the final judgment, order or proceeding is based; (3) there must have been fraud, accident or mistake that prevented the party seeking relief from obtaining the benefit of his defense; (4) there must be absence of fault or negligence on the part of the party seeking relief; and (5) there must be no adequate legal remedy.").