No. 27464 - The Estate of Marjorie I. Verba by Sally Jo Nolan, Executrix
v. David A. Ghaphery, M.D.
Davis, J., concurring, in part, and dissenting, in part:
Three basic issues were presented to the Court in this case. First, we were asked to find that the State's medical malpractice damage cap statute, W. Va. Code § 55- 7B-8 (1986) (Repl. Vol. 2000), was per se unconstitutional.See footnote 1 1 As to this issue, I understand the per curiam opinion of the Court as simply reaffirming the unanimous decision by the then sitting CourtSee footnote 2 2 in Robinson v. Charleston Area Medical Center, Inc., 186 W. Va. 720, 414 S.E.2d 877 (1991), which held that the statute is per se constitutional. I concur with this conclusion.See footnote 3 3 Second, we were asked to find the medical malpractice statute unconstitutional on the basis that the present-day value of the one million dollar cap is actually less than it was when the cap was originally imposed. The per curiam opinion has determined that the statute is valid and constitutional notwithstanding the inflationary erosion of the present-day value of one million dollars. For the reasons that are forthcoming, I dissent from the Court's decision in this regard. Third, we were asked to permit plaintiffs to recover attorney's fees and costs in medical malpractice cases. The per curiam opinion, however, has resolutely failed to address this issue. Despite this conspicuous omission, I nevertheless feel that the merits of awarding attorney's fees and costs in such cases should have been addressed. Therefore, I also dissent also from the Court's effective dismissal of this matter.
I believe the majority correctly found that the Legislature did not offend our
constitution by exercising its authority to impose a one million dollar cap on noneconomic
damages in medical malpractice cases. Furthermore, I adhere to the principle that it is the
Legislature's right and public responsibility to formulate tort or liability legislation.See footnote 4
Victor E. Schwartz et al., Illinois Tort Law: A Rich History of Cooperation and Respect
Between the Courts and the Legislature, 28 Loy. U. Chi. L.J. 745, 761 (1997). I do not
believe that it is within the province of this Court to engage in judicial nullification to
achieve a result that clearly lacks a basis in constitutional law.See footnote 5
Nor is it the role of this
Court to find the damage cap statute unconstitutional merely because we 'consider it born
of unwise, undesirable, or ineffectual policies.' Ledbetter v. Hunter, 652 N.E.2d 543,
545 (Ind. Ct. App. 1995) (quoting Johnson v. St. Vincent Hosp., Inc., 273 Ind. 374, 382,
404 N.E.2d 585, 591 (1980) (citations omitted)).
In the final analysis, this Court is restricted to a determination of whether
there is a rational basis for the damage cap statute and whether the statute bears a
reasonable relationship to a proper governmental purpose. See Syl. pt. 4, Carvey v. West
Virginia State Bd. of Educ., 206 W. Va. 720, 527 S.E.2d 831 (1999). Other courts have
observed that [r]ational basis review is minimal in nature. Adams ex rel. Adams v.
Children's Mercy Hosp., 832 S.W.2d 898, 902 (Mo. 1992). Therefore, it is our duty to
uphold W. Va. Code § 55-7B-8 if the purpose of the act is not beyond legislative power
in whole or in part, and there is no language in it expressive of specific intent to violate
the organic law. Syl. pt. 29, in part, Coal & Coke Ry. Co. v. Conley, 67 W. Va. 129,
67 S.E. 613 (1910). In the instant case, the per curiam opinion has correctly applied these
principles in finding that creation of the damage cap statute did not offend our
constitution.See footnote 6
Illustrative of my point on the impact of inflation is the legislative history
attending W. Va. Code § 55-7A-2 (1995) (Repl. Vol. 2000), which imposes a damage cap
on a plaintiff's recovery against a parent for his or her child's tortious conduct. By
Chapter 1 of the 1957 Acts of the Legislature, the Legislature imposed a cap of $300 in
civil actions brought against a parent for tortious conduct by the parent's child. See 1957
Acts of the Legislature of West Virginia, Regular Session, Ch. 1, at 2. This legislation
remained dormant until 1981. At that time, the Legislature increased the liability cap on
parents for tortious conduct of their children to $2,500. See 1981 Acts of the Legislature
of West Virginia, Regular Session, Ch. 3, at 4. The new cap was left undisturbed until
1995. Then, by Chapter 56 of the 1995 Acts of the Legislature, the Legislature again
raised the cap on the recovery from a parent for tortious conduct of the parent's child to
the presently recoverable amount of $5,000. See 1995 Acts of the Legislature of West
Virginia, Regular Session, Ch. 56, at 326.
Thus, the legislative history of W. Va. Code § 55-7A-2 suggests that the
Legislature has been alerted on several occasions that inflation has eroded its intent to
provide a meaningful maximum recovery under the statute. When so reminded, the
Legislature has responded by increasing the cap to compensate for the effects of
inflationary pressures.See footnote 7
With respect to the present case, the Legislature created the medical
malpractice damage cap statute in question in 1986. W. Va. Code § 55-7B-8 provides that
[i]n any medical professional liability action brought against a health care provider, the
maximum amount recoverable as damages for noneconomic loss shall not exceed one
million dollars and the jury may be so instructed. In order to safeguard the expressed
legislative intention, it is imperative to view the precise language and terms employed in
the statute at issue. Webster County Comm'n v. Clayton, 206 W. Va. 107, 112, 522
S.E.2d 201, 206 (1999). The precise language of W. Va. Code § 55-7B-8 provides that
noneconomic damages shall not exceed one million dollars. There is no ambiguity in
this statute. Therefore, we must apply, rather than construe its terms. See Syl. pt. 1,
VanKirk v. Young, 180 W. Va. 18, 375 S.E.2d 196 (1988).
A strict application of W. Va. Code § 55-7B-8 in the year 2000 is
problematic, though, because the legislative intent of allowing a maximum recovery of one
million dollars cannot be achieved. Applying the statute's one million dollar damages limit
in conjunction with the present-day value of one million dollars means that a plaintiff may
only receive a maximum noneconomic award of $648,147. As I view the matter, the per
curiam opinion's holding on this issue serves as a de facto legislative reduction in the
maximum amount recoverable under the statute. Because the reduction is de facto and not
de jure,See footnote 8
I believe this Court should have invalidated the statute on the grounds that it no
longer fulfills the legislative intent of allowing a maximum recovery of one million dollars
in real value.See footnote 9
Had the Court invalidated this statute, because of the de facto reduction in
the maximum amount recoverable thereunder, I do not feel that any crisis would have
resulted. This is so because the Legislature could easily respond to such a decision by
making an upward adjustment of the statute to compensate for the erosion caused by
inflation as other state legislatures have done.
This Court has long held that as a general rule each litigant bears his or her
own attorney's fees[.] Syl. pt. 2, in part, Sally-Mike Properties v. Yokum, 179 W. Va.
48, 50, 365 S.E.2d 246, 248 (1986). This rule, however, known as the 'American rule,'
is subject to a number of judicially created exceptions. Daily Gazette Co., Inc. v.
Canady, 175 W. Va. 249, 250, 332 S.E.2d 262, 263 (1985).See footnote 10
Consequently, this issue
should be addressed in the context of the limitations imposed by the American rule in
authorizing the award of attorney's fees.See footnote 11
This Court succinctly stated the contours of the American rule in Syllabus
point 9 of Helmick v. Potomac Edison Co., 185 W. Va. 269, 406 S.E.2d 700 (1991), as
follows: As a general rule each litigant bears his or her own attorney's fees absent a
contrary rule of court or express statutory or contractual authority for reimbursement
except when the losing party has acted in bad faith, vexatiously, wantonly or for
oppressive reasons.See footnote 12
See also Syl. pt. 2, Sally-Mike (As a general rule each litigant
bears his or her own attorney's fees absent a contrary rule of court or express statutory or
contractual authority for reimbursement.); Nelson v. West Virginia Pub. Employees Ins.
Bd., 171 W. Va. 445, 450, 300 S.E.2d 86, 91 (1982) (As a general rule awards of costs
and attorney fees are not recoverable in the absence of a provision for their allowance in
a statute or court rule.).
Helmick makes clear that an exception to the American rule may be created
by rule of court.See footnote 13
This exception articulates recognition of the inherent authority of
courtsSee footnote 14
to do all things necessary in the administration of justice.See footnote 15
Court has sparingly exercised its inherent authority to permit attorney's fees to be awarded
in specific types of litigation in the absence of a statute or contract by the parties.
Following are examples of the limited occasions we have exercised such authority.
In Bowling v. Ansted Chrysler-Plymouth-Dodge, Inc., 188 W. Va. 468, 425
S.E.2d 144 (1992), we were asked to determine whether attorney's fees could be awarded
to a plaintiff who prevailed in a fraud action. In order to answer the question
affirmatively, this Court found that fraud conduct fell under the judicially adopted bad
faith exception to the American rule. We further held that where it can be shown by
clear and convincing evidence that a defendant has engaged in fraudulent conduct which
has injured a plaintiff, recovery of reasonable attorney's fees may be obtained in addition
to the damages sustained as a result of the fraudulent conduct. Bowling, 188 W. Va. at
475, 425 S.E.2d at 151.
We were similarly requested, in Hayseeds, Inc. v. State Farm Fire &
Casualty, 177 W. Va. 323, 352 S.E.2d 73 (1986), to decide whether attorney's fees could
be recovered by an insured against his or her insurer when the insurer had wrongfully
refused to pay a claim filed by the insured. We held in Syllabus point 1 of Hayseeds that
[w]henever a policyholder substantially prevails in a property damage suit against its
insurer, the insurer is liable for: (1) the insured's reasonable attorneys' fees in vindicating
its claim; (2) the insured's damages for net economic loss caused by the delay in
settlement, and damages for aggravation and inconvenience.
In the case of Aetna Casualty & Surety Co. v. Pitrolo, 176 W. Va. 190, 342
S.E.2d 156 (1986), we were asked to determine whether attorney's fees may be awarded
to an insured in a declaratory judgment proceeding against an insurer. We held in Syllabus
point 2 of that case: Where a declaratory judgment action is filed to determine whether
an insurer has a duty to defend its insured under its policy, if the insurer is found to have
such a duty, its insured is entitled to recover reasonable attorney's fees arising from the
declaratory judgment litigation.
In Daily Gazette Co., Inc. v. Canady, 175 W. Va. 249, 332 S.E.2d 262
(1985), this Court was called upon to resolve the question of whether attorney's fees could
be directly assessed against an attorney for egregious type trial conduct. We held in the
single Syllabus point of that case:
A court may order payment by an attorney to a prevailing party reasonable attorney fees and costs incurred as the result of his or her vexatious, wanton, or oppressive assertion of a claim or defense that cannot be supported by a good faith argument for the application, extension, modification, or reversal of existing law.
This Court created an additional exception to the American rule in Nelson v. West Virginia Public Employees Insurance Board, 171 W. Va. 445, 300 S.E.2d 86. In that case we were asked to determine whether attorney's fees may be awarded in a mandamus action when no express statutory authority provided for such fees. Utilizing its inherent authority, this Court ruled that, under limited circumstances, attorney's fees could be awarded. We specifically stated that [i]n mandamus proceedings where a public officer willfully fails to obey the law, attorney fees will be awarded. Nelson, 171 W. Va. at 451, 300 S.E.2d at 92.
In the decision of Jenkins v. J. C. Penney Casualty Insurance Co., 167 W. Va. 597, 280 S.E.2d 252 (1981), we were requested to ascertain whether there was an implied private cause of action by a third party against an insurer for violation of the unfair insurance settlement practice statute. In finding that such an action did exist, this Court, sua sponte, addressed the issue of attorney's fees in such a cause of action. We acknowledged that [c]ertainly, increased costs and expenses including the increase in attorney's fees resulting from the failure to offer a prompt fair settlement could be recovered. Jenkins, 167 W. Va. at 609 n.12, 280 S.E.2d at 259 n.12.
The foregoing cases illustrate the willingness of this Court to use its inherent authority to depart from the American rule. While we have acknowledged that the American rule on fee-shifting makes sense in most cases . . ., the fact that the general rule concerning fees works well most of the time does not necessarily imply that the rule works well all of the time. Garnes v. Fleming Landfill, Inc., 186 W. Va. 656, 662, 413 S.E.2d 897, 903 (1991). The point I am stressing was aptly stated as follows: On what principle of justice can a plaintiff[,] wrongfully run down on a public highway[,] recover his doctor's bill but not his lawyer's bill. Judicial Council of Massachusetts, First Report, 11 Mass. L.Q. 1, 64 (1925). See also Rodulfa v. United States, 295 F. Supp. 28, 29 (D.D.C. 1969) (In fact, under our system of law, a person who is successful in the litigation is a part loser because he has to pay his own expenses and counsel fees, except a few minor items that are taxable as costs.). It is because of the recognized potential negative consequences of the American Rule that this Court has, though sparingly, exercised our inherent authority to craft rules that provide remedies in situations where the American rule worked an injustice.See footnote 16 16
I believe that, as a practical matter, the medical malpractice damage cap statute can be used in an unfair manner to cause injured plaintiffs to incur unnecessarily large litigation expenses. This is true because defendants, who know that their noneconomic damages exposure is statutorily limited in such actions and that the American rule will preclude the imposition of attorney's fees, will act to increase litigation costs in an effort to compel plaintiffs to drop their law suits or prematurely settle their claims because of the huge costs incidental to a trial. See John F. Vargo, The American Rule on Attorney Fee Allocation: The Injured Person's Access to Justice, 42 Am. U. L. Rev. 1567, 1619 (1993) (noting a California study showing one effect of the American rule is that defendants use it to force injured plaintiffs to drop actions by driving up litigation costs); Bradley L. Smith, Three Attorney Fee-shifting Rules and Contingency Fees: Their Impact on Settlement Incentives, 90 Mich. L. Rev. 2154, 2155 (1992) (The American rule has been attacked on grounds of inefficiency and unfairness. Opponents claim the rule promotes wasteful litigation expenditures, implausible claims, strike suits, onerous discovery demands, and spurious defenses. Moreover, the American rule violates the equitable principle that a party who suffers injury should be made whole.).
While I am not prepared to suggest that prevailing plaintiffs should recover
attorney's fees in all medical malpractice cases, I do believe that the denial of attorney's
fees in medical malpractice cases resulting in a plaintiff's verdict of one million dollars or
more in noneconomic damages demonstrates one of the prominent instances where the
American rule concerning attorneys' fees works badly. Miller v. Fluharty, 201 W. Va.
685, 693, 500 S.E.2d 310, 318 (1997) (quoting Hayseeds, Inc. v. State Farm Fire & Cas.,
177 W. Va. 323, 328, 352 S.E.2d 73, 78 (1986)). Plaintiffs in such cases usually will
have been forced to incur large litigation expenses that can be traced back to the artificial
ceiling imposed by the damage cap statute and the preclusion of attorney's fees by the
American rule. For the prevailing plaintiff, the logical result of these artificially imposed
limits on his or her recovery is a substantial reduction in his or her ultimate recover due
to unnecessarily large litigation expenses. In this regard, it has been correctly observed
that [p]ayment for pain and suffering has, for years, served substantially to pay claimants'
lawyers. Jeffrey O'Connell, A Proposal to Abolish Defendants' Payment for Pain and
Suffering in Return for Payment of Claimants' Attorneys' Fees, 1981 U. Ill. L. Rev. 333,
351 (1981). Consequently, I believe it was the duty of this Court to hold that in a medical
malpractice action where a plaintiff obtains a verdict awarding the maximum amount (or
more) allowable under the damage cap statute, the plaintiff is entitled to a recovery of costs
and reasonable attorney's fees.
For the foregoing reasons, I respectfully concur, in part, with and dissent, in part, from the Court's per curiam opinion in this case. I am authorized to state that Chief Justice Maynard joins me in this separate opinion.
Judicial nullification takes place when state courts use
state constitutional provisions to overturn legislative decisions
about civil justice reform in situations where there was a clear,
rational public policy basis for the legislation. This practice
hampers past tort reform efforts by undoing the good that
legislators have worked to accomplish[.]
Victor E. Schwartz et al., Tort Reform Past, Present and Future: Solving Old Problems and Dealing With New Style Litigation, 27 Wm. Mitchell L. Rev. 237, 246 (2000).
(West Main Vol. 2000) (The limitation on awards for noneconomic damages provided for in this section shall be increased or decreased on an annual basis effective January first of each year in accordance with the Implicit Price Deflator for Personal Consumption Expenditures as published by the Bureau of Economic Analysis of the United States Department of Commerce. . . .); Va. Code Ann. § 8.01-581.15 (1999) (Michie Repl. Vol. 2000) (The maximum recovery limit of $1.5 million shall increase on July 1, 2000, and each July 1 thereafter by $50,000 per year; however, the annual increase on July 1, 2007, and the annual increase on July 1, 2008, shall be $75,000 per year. . . .).
The American Rule, which has been law since the
eighteenth century, has four traditional policy justifications:
first, that shifting fees would have a penalizing effect on
losing participants in litigation, which is, after all, inherently
uncertain; second, that awarding prevailing parties their
attorney's fees would tend to discourage litigants of small
means from seeking to vindicate their rights in court; third,
that it would overburden the judicial system to have to
determine reasonable attorney's fees in each case; and fourth,
that lawyers might subordinate client interests to avoid
irritating judges who later would be determining the lawyers'
John S. Beckerman, Confronting Civil Discovery's Fatal Flaws, 84 Minn. L. Rev. 505, 549 (2000).
(d) Cost. -- Except when express provision therefor is
made either in a statute of this State or in these rules, costs
shall be allowed as of course to the prevailing party unless the
court otherwise directs; but costs against the State, its
officers, and agencies shall be imposed only to the extent
permitted by law. The clerk shall tax the costs within 10 days
after judgment is entered, and shall send a copy of the bill of
costs to each party affected thereby. On motion by any party
served within 10 days after receipt of the bill of costs, the
action of the clerk may be reviewed by the court.
We have interpreted the costs provision of this rule to require that, [w]hen a trial court assesses costs by relying on the provisions of West Virginia Rules of Civil Procedure 54(d), the record must contain specific predicate findings for that decision when the costs are assessed against a prevailing party. Syl. pt. 1, Perdomo v. Stevens, 197 W. Va. 552, 476 S.E.2d 223 (1996). It is also noteworthy that costs never make the successful party whole because they do not include counsel fees[.] 3 Stein on Personal Injury Damages § 17:49, at 17-63 (3d ed. 1997).
Cook, 162 W. Va. 161, 248 S.E.2d 602 (1978) (appointing special prosecutor). For further examples, see authorities cited in Daily Gazette Co., Inc. v. Canady, 175 W. Va. at 251-52, 332 S.E.2d at 331-32.
not necessary to the administration of justice. In fact, it is in many ways an international oddity.); Albert A. Ehrenzweig, Reimbursement of Counsel Fees and the Great Society, 54 Cal. L. Rev. 792, 797 (1966) ([T]he prospect of recovery of counsel fees on meritorious claims would probably greatly increase the number of clients seeking lawyer's assistance.). At least one jurisdiction, Alaska, has abandoned the American rule altogether. See Susanne Di Pietro & Teresa W. Carns, Alaska's English Rule: Attorney's Fee Shifting in Civil Cases, 13 Alaska L. Rev. 33, 34 (1996) (Alaska Civil Rule 82 entitles the prevailing party in a civil lawsuit to partial compensation of his or her attorney's fees from the losing party.).