6. “Statutes of limitations are not applicable in equity to subjects of
exclusively equitable cognizance.” Syllabus Point 3, in part, Felsenheld v. Bloch Bros.
Tobacco Co., 119 W.Va. 167, 192 S.E. 545 (1937).
7. “Where a suit based on fraud is not for damages but seeks to rescind a
writing or impose a trust or other equitable relief, it is not a common law action for fraud but
is equitable in nature. Consequently, the doctrine of laches is applicable rather than any
specific statute of limitations period.” Syllabus Point 3, Laurie v. Thomas, 170 W.Va. 276,
294 S.E.2d 78 (1982).
8. A civil conspiracy is a combination of two or more persons by concerted
action to accomplish an unlawful purpose or to accomplish some purpose, not in itself
unlawful, by unlawful means. The cause of action is not created by the conspiracy but by the
wrongful acts done by the defendants to the injury of the plaintiff.
9. A civil conspiracy is not a per se, stand-alone cause of action; it is
instead a legal doctrine under which liability for a tort may be imposed on people who did
not actually commit a tort themselves but who shared a common plan for its commission with
the actual perpetrator(s).
10. The statute of limitation for a civil conspiracy claim is determined by
the nature of the underlying conduct on which the claim for conspiracy is based.
11. “West Virginia adopts the continuous representation doctrine through
which the statute of limitations in an attorney malpractice action is tolled until the
professional relationship terminates with respect to the matter underlying the malpractice
action.” Syllabus Point 6, Smith v. Stacy, 198 W.Va. 498, 482 S.E.2d 115 (1996).
12. The doctrine of respondeat superior imposes liability on an employer
for the tortious acts of its employees, not because the employer is at fault, but merely as a
matter of public policy. Because the employer may only be held liable to the extent that the
employee can be held liable, and only for acts committed by the employee in the course of
his or her employment, the applicable statute of limitation is determined by the tortious act
of the employee.
Ketchum, Justice:
In this appeal from the Circuit Court of Jefferson County we are asked to
review two orders granting summary judgment to two defendants below: the law firm of
Martin & Seibert, and Carol Rockwell. In both orders, the circuit court concluded that the
statutes of limitation for the various causes of action alleged against both of the defendants
had expired, and ruled that all of the causes of action against the two defendants were time-
barred.
As set forth below, we affirm the circuit court's summary judgment order
dismissing the causes of action against Martin & Seibert. However, we conclude that
questions of material fact exist for the finder of fact to resolve regarding whether the statutes
of limitation on five of the causes of action alleged against Carol Rockwell had expired, and
conclude that there is no statute of limitation applicable to two equitable causes of action
alleged against Ms. Rockwell. We therefore reverse the circuit court's summary judgment
order as to her.
On June 27, 2002, Stanley Dunn and Hugh Hoover executed the option, which
permitted the Dunns to buy “460 acres more or less by survey” of the Hoover/Gray farmland
for $6,000.00 per acre. The property subject to the option surrounded the three-acre parcel
bought by the Rockwells in 2001. The 2002 option agreement was set to expire 12 months
from the date it was executed.
In November or December 2002, Lawyer Rockwell and his wife sought to buy
additional land surrounding their three-acre parcel. Knowing that the land was subject to Mr.
Dunn's June 27, 2002 option _ the three-acre parcel was bordered on one side by the river
and the other three sides by the Hoover/Gray farmland _ Lawyer Rockwell orally asked Mr.
Dunn if he could buy some of the optioned acreage from Mr. Hoover and Ms. Gray in order
to “square up” or “round off” his three-acre parcel. Mr. Dunn agreed, and later told Hugh
Hoover that this was acceptable.
In December 2002, a surveyor prepared a map of the acreage that Lawyer
Rockwell and his wife sought to purchase out of the optioned property. The map designated
a 6.87 acre tract that squarely surrounded the Rockwells' three-acre residential lot, but which
also extended north in a panhandle or dogleg along the Shenandoah riverbank approximately
115 feet wide and 589 feet long. The Rockwells paid with two checks _ one from Carol
Rockwell and the other from Lawyer Rockwell _ and on December 27, 2002, the 6.87 acre
tract was deeded solely to Ms. Rockwell. The closing on the Rockwells' acquisition of the
6.87 acre tract was handled at the Martin & Seibert law offices.
The Dunns allege that they never agreed that the Rockwells could purchase the
589-foot long strip fronting the Shenandoah River. The Dunns also assert that Lawyer
Rockwell never advised them, orally or in writing, of the survey, the purchase or the precise
size and location of the 6.87 acre tract. The Dunns also assert that Lawyer Rockwell never
advised them that they should seek independent advice to protect themselves with regard to
the Rockwells' December 2002 purchase.
In March 2003, Mr. Dunn asked Lawyer Rockwell to draft an extension for the
2002 option to purchase, which Lawyer Rockwell did. The written extension made no
mention of the 6.87 acre tract that had been deeded to Lawyer Rockwell's wife, nor did it
exclude the 6.87 acre tract from the new option. The extension extended the option end date
from June 27, 2003 to August 1, 2003, when the option expired without Mr. Dunn
purchasing the property. However, Mr. Dunn asserts that he and Mr. Hoover and Ms. Gray
continued negotiating toward a purchase as though the option were still in effect.
Sometime during the Summer of 2003, Mr. Dunn and Mr. Hoover negotiated
a new option agreement which was also drafted by Lawyer Rockwell. The option agreement
was for a 24-month period, and raised the price to $6,500.00 per acre “which the parties
estimate shall contain approximately 500 acres.” Again, the Rockwells' 6.87 acre tract was
not excluded from the new option written by Lawyer Rockwell. Mr. Dunn and Mr. Hoover
signed the agreement on August 26, 2003, and Mr. Dunn tendered a check for $50,000.00
in exchange for the option.
It was during this time period, in mid-2003, that events occurred giving rise to
the Dunns' statute of limitation problems and to the instant appeal.
At the north edge of the 589-foot dogleg of river front land bought by the
Rockwells there was an unrelated parcel of land owned by Mr. Hoover and Ms. Gray _ but
not subject to the Dunn option _ with a house. In July 2003, Henry and Dale Walter bought
the parcel and house. The house, however, was exposed to flooding from the river and the
Walters wanted additional land to build above the flood plain.
Sometime in August or September 2003, Hugh Hoover approached Mr. Dunn
seeking permission to sell some of the land surrounding the Walters' tract _ land which was
subject to the Dunns' exclusive option to purchase _ to the Walters. Mr. Dunn says he
responded (with emphasis added):
I told him I had no problem with him adding onto the back of it,
it was just a rough hillside. But I told him, also, that I did not
want to give him anything between the two, the Rockwell
property . . . and that house. And he looked at me real funny and
said, well, Stanley, Doug [Rockwell] has already taken that . .
. .
As we relate in greater detail in the discussion, infra, by no later than September 29, 2003,
the Dunns learned that the Rockwells had purchased river front property subject to the 2002
option that not only “squared up” their three-acre property, but which extended far from their
residence along the Shenandoah River. The Dunns state they did not conduct further
investigation of the size or location of the Rockwells' purchase at that time, partly because
they did not want to upset Mr. Hoover and Ms. Gray and lose the opportunity to purchase the
Hoover/Gray farmland, and partly because they feared that Lawyer Rockwell might steer the
Hoover/Gray farmland to another buyer.
Lawyer Rockwell stopped working for defendant Martin & Seibert on March
31, 2004. The Dunns, however, contend that in the Spring of 2005, Mr. Dunn asked Lawyer
Rockwell to prepare another extension agreement relating to the 2003 option. Lawyer
Rockwell prepared the extension agreement for Mr. Dunn (but the agreement was never
executed).
In late 2005, the Dunns were financially able to purchase the Hoover/Gray
farmland. On October 27, 2005, the Dunns closed on the purchase of the Hoover-Gray
farmland. The Dunns allege that at the closing, for the first time, they saw the December 27,
2002, deed to Carol Rockwell for the 6.87 acre tract with an accompanying survey plat
showing the 589-foot dogleg along the Shenandoah River. The Dunns contend that this is
when they first learned of the survey and the precise size and location of the Rockwells'
acquisition of land that was subject to the 2002 option.
The Dunns and the Rockwells then engaged in several discussions and
exchanged correspondence about the 6.87 acre tract. When the Rockwells refused to give
any portion of the tract to the Dunns (the Dunns appear to have offered the Rockwells the
purchase price they paid plus interest), on August 21, 2006, the Dunns filed this lawsuit
against the Rockwells and the Martin & Seibert law firm.
After extensive discovery, the parties filed various motions and counter-
motions for full or partial summary judgment.
In an order dated June 19, 2008, the circuit court granted summary judgment
to the law firm of Martin & Seibert. In a separate order, dated August 15, 2008, the circuit
court granted summary judgment to Carol Rockwell. The circuit court concluded that the
causes of action against Martin & Seibert and against Carol Rockwell were governed by a
two-year statute of limitation. The circuit court found that it was undisputed that the Dunns
knew or reasonably should have known, by September 29, 2003, that the Rockwells had
engaged in some form of misconduct which caused the Dunns some sort of harm.
Nevertheless, the Dunns did not file their lawsuit until August 2006. (See footnote 1) The circuit court
therefore ruled that the plaintiffs' causes of action were time barred.
The Dunns now appeal the circuit court's June 19, 2008, and August 15, 2008,
summary judgment orders.
In our cases we have articulated two conflicting definitions of the discovery rule. In Syllabus Point 4 of Gaither v. City Hosp., Inc., 199 W.Va. 706, 487 S.E.2d 901 (1997), we adopted the following definition:
In tort actions, unless there is a clear statutory prohibition to its application, under the discovery rule the statute of limitations begins to run when the plaintiff knows, or by the exercise of reasonable diligence, should know (1) that the plaintiff has been injured, (2) the identity of the entity who owed the plaintiff a duty to act with due care, and who may have engaged in conduct that breached that duty, and (3) that the conduct of that entity has a causal relation to the injury.
This articulation of the discovery rule “tolls the statute of limitations until a plaintiff, acting
as a reasonable, diligent person, discovers the essential elements of a possible cause of
action, that is, discovers duty, breach, causation and injury.” 199 W.Va. at 714, 487 S.E.2d
at 909.
A competing definition of the discovery rule was propounded in Cart v.
Marcum, supra. In Syllabus Point 1 of Cart, we adopted the standard, common-law
definition of the discovery rule that had been used in prior cases, stating that:
Generally, a cause of action accrues (i.e., the statute of
limitations begins to run) when a tort occurs; under the
“discovery rule,” the statute of limitations is tolled until a
claimant knows or by reasonable diligence should know of his
claim.
However, Cart then severely constrained that definition, holding in Syllabus Point 3 that:
Mere ignorance of the existence of a cause of action or of
the identity of the wrongdoer does not prevent the running of the
statute of limitations; the “discovery rule” applies only when
there is a strong showing by the plaintiff that some action by the
defendant prevented the plaintiff from knowing of the wrong at
the time of the injury.
Under this latter articulation of the discovery rule, we stated that “mere ignorance of the
existence of a cause of action or of the identity of the wrongdoer does not prevent the
running of a statute of limitations. In order to benefit from the rule, a plaintiff must make
a strong showing of fraudulent concealment, inability to comprehend the injury, or other
extreme hardship[.]” 188 W.Va. at 245, 423 S.E.2d at 648.
We have examined the application of these competing versions of the discovery
rule and find that this Court, the trial courts, and litigants have struggled to apply them with
any analytical consistency. See, e.g., Merrill v. West Virginia Dept. of Health and Human
Resources, 219 W.Va. 151, 156, 632 S.E.2d 307, 312 (2006) (per curiam) (“A studious
observer will note that this Court stated one form of the discovery rule in Cart v. Marcum,
and then stated a different, more lenient form of the discovery rule in Gaither v. City
Hospital[.]”). One court begins by applying the discovery rule espoused in Cart v. Marcum (See footnote 2) ,
another begins with the discovery rule espoused in Gaither v. City Hospital (See footnote 3) , while a third
will find a plaintiff's cause of action is barred by a statute of limitation without any mention
of either variation of the discovery rule. (See footnote 4)
We have examined our cases expounding upon the discovery rule which pre-
date Cart and Gaither, (See footnote 5) and find that Syllabus Point 3 of Cart is an aberration in our
jurisprudence. Prior to Cart, our cases universally stated the discovery rule in simple terms:
a plaintiff's duty to file suit is not triggered until the plaintiff knows, or by the exercise of
reasonable diligence should have known, of a cause of action against the defendant. The Cart decision, without any substantive analysis, limited the discovery rule exclusively to
cases where the defendant engaged in some fraud and concealed the cause of action from the
plaintiff. As one commenter noted, “the court's opinion in Cart inexplicably muddies the
clear evolution of the discovery rule[.]” James R. Leach, “Cart v. Marcum: The Discovery
Rule as an Exception to the Statute of Limitations in West Virginia,” 96 W.Va. L.Rev. 1197,
1210 (1994).
In many jurisdictions, in addition to the discovery rule, courts have adopted a
separate tolling doctrine that essentially estops a defendant who has fraudulently concealed
a cause of action from raising a statute of limitation defense. In those jurisdictions, courts
have held that the statute of limitation does not begin to run until discovery of a tort if the
defendant has fraudulently concealed the tortious conduct from the plaintiff. “Fraudulent
concealment involves the concealment of facts by one with knowledge or the means of
knowledge, and a duty to disclose, coupled with an intention to mislead or defraud.” Trafalgar House Const., Inc. v. ZMM, Inc., 211 W.Va. 578, 584, 567 S.E.2d 294, 300 (2002).
Syllabus Point 3 of Cart does not reflect the discovery rule, but rather reflects this fraudulent
concealment tolling doctrine.
We believe that the simplest way to eliminate the tension between these
competing definitions of the discovery rule, and to clarify the application of the discovery
rule to future cases, is to explicitly overrule Cart v. Marcum and its progeny and to restate
our case law as it relates to the discovery rule. “Although this Court is loathe to overturn a
decision so recently rendered, it is preferable to do so where a prior decision was not a
correct statement of law.” Murphy v. Eastern American Energy Corp., 224 W.Va. 95, ___,
680 S.E.2d 110, 116 (2009). (See footnote 6) As we said in State v. Guthrie, 194 W.Va. 657, 679 n. 28, 461
S.E.2d 163, 185 n. 28 (1995),
[A] precedent-creating opinion that contains no extensive
analysis of an important issue is more vulnerable to being
overruled than an opinion which demonstrates that the court was
aware of conflicting decisions and gave at least some persuasive
discussion as to why the old law must be changed.
Cart v. Marcum substantially deviated from our prior decisions discussing the discovery rule,
yet contained no discussion, persuasive or otherwise, why the deviation was necessary.
Accordingly, we now hold that Cart v. Marcum,188 W.Va. 241, 423 S.E.2d 644 (1992) and
its progeny are hereby overruled.
To bring analytical clarity to the resolution of statute of limitation questions,
we believe that courts should employ a step-by-step process that synthesizes the competing
discovery doctrines. We first considered such a process in Keesecker v. Bird, 200 W.Va.
667, 490 S.E.2d 754 (1997), where we stated:
The first step in analyzing any statute of limitation question is to
determine the applicable statute.
The second step in evaluating a statute of limitation
question is to establish when the requisite elements of the
alleged tort occurred . . .
The next step is to determine whether the plaintiff is
entitled to the benefit of the ameliorative effects of the discovery
rule [as stated in Gaither v. City Hospital] . . . .
The last step in the statute of limitation analysis is to
determine if the limitation period is tolled by some misconduct
of the defendant. . . . [I]n some circumstances causal
relationships are so well established that we cannot excuse a
plaintiff who pleads ignorance. In those instances where a cause
of action should be patently obvious . . . the plaintiff cannot
claim ignorance. The only way a plaintiff can toll the statute of
limitation in such circumstances is to make a strong showing .
. . that some action by the defendant prevented the plaintiff from
knowing of the wrong at the time of the injury.
200 W.Va. at 682-684, 490 S.E.2d at 769-771 (quotations and citations omitted).
To formally clarify our case law, we now hold that the “discovery rule” is
generally applicable to all torts, unless there is a clear statutory prohibition to its application.
“In tort actions, unless there is a clear statutory prohibition to its application,
under the discovery rule the statute of limitations begins to run when the plaintiff knows, or
by the exercise of reasonable diligence, should know (1) that the plaintiff has been injured,
(2) the identity of the entity who owed the plaintiff a duty to act with due care, and who may
have engaged in conduct that breached that duty, and (3) that the conduct of that entity has
a causal relation to the injury.” Syllabus Point 4, Gaither v. City Hosp., Inc., 199 W.Va. 706,
487 S.E.2d 901 (1997). In most cases, the typical plaintiff will “discover” the existence of
a cause of action, and the statute of limitation will begin to run, at the same time that the
actionable conduct occurs.
We further hold that under the discovery rule set forth in Syllabus Point 4 of Gaither v. City Hosp., Inc., supra, whether a plaintiff “knows of” or “discovered” a cause of
action is an objective test. The plaintiff is charged with knowledge of the factual, rather than
the legal, basis for the action. This objective test focuses upon whether a reasonable prudent
person would have known, or by the exercise of reasonable diligence should have known,
of the elements of a possible cause of action.
Finally, a five-step analysis should be applied to determine whether a cause of action is time-barred. First, the court should identify the applicable statute of limitation for each cause of action. Second, the court (or, if material questions of fact exist, the jury) should identify when the requisite elements of the cause of action occurred. Third, the discovery rule should be applied to determine when the statute of limitation began to run by determining when the plaintiff knew, or by the exercise of reasonable diligence should have known, of the elements of a possible cause of action, as set forth in Syllabus Point 4 of Gaither v. City Hosp., Inc., supra. Fourth, if the plaintiff is not entitled to the benefit of the discovery rule, then determine whether the defendant fraudulently concealed facts that prevented the plaintiff from discovering or pursuing the cause of action. Whenever a plaintiff is able to show that the defendant fraudulently concealed facts which prevented the plaintiff from discovering or pursuing the potential cause of action, the statute of limitation is tolled. And fifth, the court or the jury should determine if the statute of limitation period was arrested by some other tolling doctrine. (See footnote 7) Only the first step is purely a question of law; the resolution of steps two through five will generally involve questions of material fact that will need to be resolved by the trier of fact.
As we demonstrate below, the depth to which these five steps are analyzed is
naturally dependent upon the procedural posture and facts of the case under review. And to
reiterate: only the first step is a question of law for resolution by the trial court. The
remaining steps generally involve mixed questions of law and fact, and a trial court is
required to analyze mixed questions of law and fact (such as those raised in the present case)
in order to determine “whether there is . . . [a] genuine issue of fact to be tried and inquiry
concerning the facts is . . . desirable to clarify the application of the law.” Syllabus Point 3, Aetna Cas. & Sur. Co. v. Federal Ins. Co. of N.Y., 148 W.Va. 160, 133 S.E.2d 770 (1963).
When the resolution of a step requires resolution of a genuine issue of material fact, the issue
should be submitted to the finder of fact.
In this case, the plaintiffs filed a ten-count complaint against the three
defendants. (See footnote 8) The parties agree that only seven of the causes of action apply to defendants
Douglas and Carol Rockwell, while the remaining three apply solely to the Martin & Seibert
law firm. We will now analyze these various causes of action and the various statutes of
limitation in the context of each defendant, to determine whether the circuit court was correct
in its determination that there were no genuine issues of fact to be tried.
The first two causes of action _ for rescission, cancellation and reformation of
a deed, and for unjust enrichment _ are both equitable causes of action. Both causes of
action seek equitable relief. The plaintiffs seek to have the deed of 6.87 acres of land to
Carol Rockwell in December 2002 rescinded and a corrected deed filed with the county
clerk, and to have the Rockwells disgorged of any benefits and value they have received from
(allegedly) unjustly taking possession and ownership of the river front property.
Our law is clear that there is no statute of limitation for claims seeking
equitable relief. As we stated in Syllabus Point 1 of Patrick v. Stark, 62 W.Va. 602, 59 S.E.
606 (1907), “[s]tatutes of limitation are never applicable to causes of action falling within
the exclusive jurisdiction of courts of equity.” We said, to the same effect, in Syllabus Point
3, in part, of Felsenheld v. Bloch Bros. Tobacco Co., 119 W.Va. 167, 192 S.E. 545 (1937),
that “[s]tatutes of limitations are not applicable in equity to subjects of exclusively equitable
cognizance.” (See footnote 9)
Moreover, we have specifically ruled that there is no statute of limitation for claims seeking to rescind a deed to land, and to account for rents and profits. In Syllabus Point 3 of Laurie v. Thomas, 170 W.Va. 276, 294 S.E.2d 78 (1982), we stated:
Where a suit based on fraud is not for damages but seeks
to rescind a writing or impose a trust or other equitable relief, it
is not a common law action for fraud but is equitable in nature.
Consequently, the doctrine of laches is applicable rather than
any specific statute of limitations period.
Ms. Rockwell argues that if a lawsuit, like this case, involves causes of action
in equity and others that arise in law, then a trial court is obligated to apply a statute of
limitation to all of the causes of action. In her brief, Ms. Rockwell asserts that because the
circuit court “was asked to resolve both legal and equitable claims together,” then the
equitable claims should be governed by a statute of limitation. As authority, Ms. Rockwell
cites Syllabus Point 4 of Bennett v. Bennett, 92 W.Va. 391, 115 S.E. 436 (1922), which
states:
Where there is concurrent jurisdiction in law and equity
for the assertion of claims, equity will apply the statute of
limitations as a bar to such claims, following the law, and will
recognize and apply exceptions to the running of the statute.
We do not, however, think that Bennett means what Ms. Rockwell thinks that it means. To
understand Syllabus Point 4 of Bennett requires an understanding of Bennett's facts.
In Bennett, the plaintiff (and her husband) owned land that was being auctioned
to satisfy an unpaid deed of trust. In 1887, the plaintiff convinced the defendant (her
husband's brother) to buy the land at auction. The parties agreed that when the land was sold
in the future, the parties would split the profits. However, between 1898 and 1905 the
defendant sold the mineral rights to the land, and sold the surface rights in 1910, all for a
substantial profit, and never shared the profits with the plaintiff When the plaintiff
approached the defendant in 1911 seeking her share of the profits, the defendant refused to
pay. The plaintiff waited seven years, until 1918, to file her lawsuit.
The Court found that, on these facts, an express trust was created in 1887
whereby the defendant held the plaintiff's share of the profits in trust. The Court further
found that no statute of limitation applied while the trust was in effect, or while the plaintiff
believed the trust was still in effect. 92 W.Va. at 398, 115 S.E. at 438. However, once the
plaintiff discovered in 1911 that the defendant was refusing to live up to his end of the
bargain _ that is, that he was repudiating the trust _ the Court believed that a statute of
limitation was triggered. As the Court stated, “[n]either the statute of limitations nor laches
will apply to an express trust until there is a denial or repudiation of the trust, of which the
beneficiary has notice; after that time the statute begins to run[.]” Id. The Court went on to
find that the plaintiff's claim was governed by a 10-year statute of limitation, and found that
the claim had been filed timely.
Bennett's central holding is that as long as a trust _ a creation of equity _ is in existence, no statute of limitation applies; once the trust is repudiated or terminated, and a litigant seeks damages against the trustee at law, then the statutory limitation period applies. (See footnote 10) Read in light of its facts, Bennett does not mean that if a lawsuit involves causes of action in equity and other causes of action arising in law, then a trial court is obligated to apply a statute of limitation. Instead, Syllabus Point 4 of Bennett should be read to say that if a particular cause of action sounds in both equity and law, then a trial court should apply a statute of limitation to that particular cause of action. Likewise, if a lawsuit involves causes of action that sound in equity, and other causes of action in law, only the causes of action sounding in law would be subject to statutes of limitation. Read in this way, it is clear that Bennett is inapplicable to the instant case.
Accordingly, we believe that in this case, the Dunns' two equitable causes of action are not governed by any statute of limitation. Our analysis on these two causes of action is at an end, and we need not consider the remaining steps in our five-step analysis. (See footnote 11)
The next four causes of action filed by the Dunns _ for misappropriation and conversion; fraud; professional negligence; and breach of fiduciary duty _ are governed by the two-year statute of limitation found in W.Va. Code, 55-2-12 [1959]. (See footnote 12) See, e.g., Cart v. Marcum, 188 W.Va. at 243, 423 S.E.2d at 646 (“The statute of limitation for this type of tort [conversion] is two years.”); Brown v. Community Moving & Storage, Inc., 193 W.Va. 176, 178 n.3, 455 S.E.2d 545, 547 n.3 (1995) (per curiam) (“The two-year statute of limitations period set forth in W.Va. Code, 55-2-12 (1959), is applicable to the fraud claim[.]”); Trafalgar House Const., Inc. v. ZMM, Inc., 211 W.Va. 578, 583, 567 S.E.2d 294, 299 (2002) (“[C]laims in tort for negligence, professional negligence, and misrepresentation (fraudulent or negligent) are governed by a two-year statute of limitation.”); Vorholt v. One Valley Bank, 201 W.Va. 480, 486, 498 S.E.2d 241, 247 (1997) (applying the “catch-all” periods of limitation in W.Va. Code, 55-2-12 to action for breach of fiduciary duty).
The seventh and final cause of action filed by the Dunns against the Rockwells is for civil conspiracy. “The law of this State recognizes a cause of action sounding in civil conspiracy.” Kessel v. Leavitt, 204 W.Va. 95, 128, 511 S.E.2d 720, 753 (1998). At its most fundamental level, a “civil conspiracy” is “a combination to commit a tort.” State ex rel. Myers v. Wood, 154 W.Va. 431, 442, 175 S.E.2d 637, 645 (1970). We defined a civil conspiracy in Dixon v. American Indus. Leasing Co., 162 W.Va. 832, 834, 253 S.E.2d 150, 152 (1979):
[A] civil conspiracy is a combination of two or more persons by
concerted action to accomplish an unlawful purpose or to
accomplish some purpose, not in itself unlawful, by unlawful
means. The cause of action is not created by the conspiracy but
by the wrongful acts done by the defendants to the injury of the
plaintiff.
We went on to hold, in Syllabus Point 1, in part, of Dixon that “[i]n order for civil conspiracy
to be actionable it must be proved that the defendants have committed some wrongful act or
have committed a lawful act in an unlawful manner to the injury of the plaintiff[.]” In
accord, Syllabus Point 7, Cook v. Heck's Inc., 176 W.Va. 368, 342 S.E.2d 453 (1986). See
also, Adcock v. Brakegate, Ltd., 164 Ill.2d 54, 62, 645 N.E.2d 888, 894 (1994) (“Civil
conspiracy consists of a combination of two or more persons for the purpose of
accomplishing by some concerted action either an unlawful purpose or a lawful purpose by
unlawful means.”).
A civil conspiracy is not a per se, stand-alone cause of action; it is instead a legal doctrine under which liability for a tort may be imposed on people who did not actually commit a tort themselves but who shared a common plan for its commission with the actual perpetrator(s). Kessel v. Leavitt, 204 W.Va. 95, 129, 511 S.E.2d 720, 754 (1998). See also, Gulf Atlantic Life Ins. Co. v. Hurlbut, 696 S.W.2d 83, 102 (Tex.App. 1985), reversed on other grounds by Hurlbut v. Gulf Atlantic Life Ins. Co., 749 S.W.2d 762 (Tex.,1987) (“The gist of a civil conspiracy is the damage resulting from commission of a wrong that injures another and not the conspiracy itself. Thus an actionable civil conspiracy must consist of wrongs that would have been actionable against the conspirators individually.”); Fitzgerald v. Seamans, 384 F.Supp. 688, 693 (D.D.C. 1974) (“[A] civil conspiracy is not in itself actionable, but rather, it is the acts causing injury undertaken in furtherance of the conspiracy which give rise to the action.”); Roche v. Blair, 305 Mich. 608, 614, 9 N.W.2d 861 (1943) (“The conspiracy standing alone without the commission of acts causing damage would not be actionable. The cause of action does not result from the conspiracy but from the acts done.”). As the Wisconsin court of appeals once stated,
A conspiracy may produce one or more torts. If it does, then
every conspirator is liable for that tort, including a conspirator
who promoted but did not commit the tort. A conspiracy is not,
itself, a tort. It is the tort, and each tort, not the conspiracy, that
is actionable.
Segall v. Hurwitz, 114 Wis.2d 471, 481, 339 N.W.2d 333, 338 (Wis.App.,1983) (citations
omitted).
Accordingly, we hold that the statute of limitation for a civil conspiracy claim
is determined by the nature of the underlying conduct on which the claim of conspiracy is
based _ which, as we have just held in this case, is two years. See 16 Am.Jur.2d
“Conspiracy”§ 65 [2009] (“the statute of limitations applicable to civil conspiracy is that
applicable to the underlying wrong.”); 12 Cal.Jur.3d “Civil Conspiracy” § 11 (“Because there
is no cause of action for conspiracy in and of itself, the statute of limitations is determined
by the nature of the action in which the conspiracy is alleged or appears.”). See also, Terlecki v. Stewart, 278 Mich.App. 644, 754 N.W.2d 899 (2008) (“the gravamen of the
action is not the conspiracy but the wrongful act. Consequently, an allegation of conspiracy
is “superfluous” as far as determining the applicable statute of limitations. It follows that the
conspiracy claim takes on the limitations period for the underlying wrong that was the object
of the conspiracy. Further, it is the wrongful act, not the agreement to commit a wrongful
act, that commences the running of the limitations period.”); Segall v. Hurwitz, 114 Wis.2d
at 481 n 2, 339 N.W.2d at 338 n. 2 (“Identifying the wrong should be the proper approach
to fixing the date the cause of action accrues for purposes of the statute of limitations.”); Auld v. Mobay Chemical Co., 300 F.Supp. 138, 140 (D.C.Pa. 1969) (“the applicable period
of limitation is the state statute of limitation on the overt act”); Kenworthy v. Brown, 248
Cal.App.2d 298, 301, 56 Cal.Rptr. 461, 463 (1967) (“There is no cause of action for civil
conspiracy itself; an actionable wrong that is the subject of the conspiracy must be alleged
in order to state a cause of action. . . . In any action based on a civil conspiracy the statute of
limitations is determined by the nature of the action in which the conspiracy is alleged.”)
With the limitation periods for these five causes of action in mind, we turn to
the next steps in our analysis: determining when the requisite elements of the causes of action
occurred, and when the statutes of limitation began to run.
Mr. Dunn concedes that in late 2002 he gave Lawyer Rockwell permission to
buy some of the Hoover/Gray farmland subject to the option to “round off” or “square up”
his adjacent three-acre tract. The Dunns assert that they had no idea that the Rockwells
would buy more land than needed to “round off” or “square up” their three-acre tract, nor any
idea the Rockwells would buy a dogleg strip of land that fronted 589 feet on the Shenandoah
River. Furthermore, the Dunns argue that Lawyer Rockwell had a duty to tell them he had
made the purchase of the 6.87 acre tract, to tell them what he had purchased, and a duty to
inform them they had a right to seek the advice of another lawyer to protect them regarding
his proposed purchase.
The acts giving rise to the plaintiffs' causes of action occurred in December
2002, when defendants Douglas and Carol Rockwell purchased the 6.87 acre tract from Mr.
Hoover and Ms. Gray, and titled the deed in Ms. Rockwell's name. There are clear material
questions of fact in the record regarding whether the Dunns were aware of the extent of the
Rockwell's purchase in 2002, and thereby aware of the Rockwells' alleged misconduct.
The record, however, appears just as clear that by September 29, 2003, the
Dunns knew that they had been harmed by the Rockwells. In the Summer of 2003, Hugh
Hoover asked Mr. Dunn for permission to sell a small piece of the optioned acreage to
another buyer, Mr. Walters. Mr. Dunn acceded to the sale, which occurred on September 29,
2003. Mr. Dunn conceded that, in his conversation with Mr. Hoover, he learned that Douglas
and Carol Rockwell had purchased the swath of land along the Shenandoah River out of the
optioned acreage. Mr. Dunn also conceded that he deliberately chose not to confront Lawyer
Rockwell in September 2003, and offered at least four reasons: (a) he thought that Mr.
Hoover and Ms. Gray might be upset by getting caught in the confrontation, back out of the
option and sell their farmland to another buyer; (b) he thought Lawyer Rockwell was his
friend and, when confronted, would recognize his error and give the excess land back; (c) he
feared that Lawyer Rockwell might find a competing buyer, and then convince Mr. Hoover
and Ms. Gray to sell the optioned land to that other buyer to protect his 6.87 acre tract; and
(d) he thought that the statute of limitation was three years. (See footnote 13)
These facts, taken together, suggest that the statutes of limitation on five of the Dunns' causes of action were tolled until no later than September 29, 2003. By September 29, 2003, the Dunns clearly knew, or by the exercise of reasonable diligence, should have known (1) that they had been injured, (2) that the Rockwells owed the Dunns a duty to act with due care (and a duty not to engage in misappropriation and conversion, or fraud) and that the Rockwells may have engaged in conduct that breached that duty, and (3) that the conduct of the Rockwells was the cause of their injury. See Syllabus Point 4, Gaither v. City Hosp., Inc., supra.
The plaintiffs filed their lawsuit in August 2006, more than two years later and,
on the surface, it would appear that the plaintiffs' causes of action against the Rockwells are
time-barred.
We now turn to the fourth step of our analysis to determine if any fraudulent
conduct of the defendants acted to toll the statutes of limitation. Both of the Dunns admitted
in their depositions that the Rockwells did nothing deliberate subsequent to September 29,
2003, to prevent them from investigating or pursuing a lawsuit against the Rockwells. The
Dunns conceded that the Rockwells did nothing to fraudulently conceal any facts which
would have led the Dunns to discover or to pursue their causes of action.
The fifth and final step of our analysis requires us to determine if the statute
of limitation periods were arrested by some other tolling doctrine. We have previously
adopted a doctrine that tolls statutes of limitation in negligence actions against attorneys.
The continuous representation doctrine, (See footnote 14) which we adopted in Smith v. Stacy, 198 W.Va.
498, 482 S.E.2d 115 (1996), tolls a statute of limitation in an attorney malpractice action
“until the professional relationship terminates with respect to the matter underlying the
malpractice action.” Syllabus Point 6, Smith v. Stacy, supra. Justice Workman, writing for
the Court, noted that the continuous representation doctrine “is designed, in part, to protect
the integrity of the professional relationship by permitting the allegedly negligent attorney
to attempt to remedy the effects of the malpractice and providing uninterrupted service to the
client.” 198 W.Va. at 503, 482 S.E.2d at 120. See also, VanSickle v. Kohout, 215 W.Va.
433, 438, 599 S.E.2d 856, 861 (2004) (applying continuous representation doctrine, and
holding that “when a victim of legal malpractice terminates his or her relationship with the
malpracticing attorney, subsequent efforts by new counsel to reverse or mitigate the harm
through administrative or judicial appeals do not toll the statute of limitations.”). (See footnote 15)
The continuous representation doctrine requires something more than a lawyer-
client relationship. The doctrine requires a showing that the lawyer's representation of the
client relates to the same transaction or subject matter as the allegedly negligent acts. See Syllabus Points 7, 8, and 9, Smith v. Stacy, supra. (See footnote 16) The Court offered the following public
policy argument behind adopting the doctrine:
The purpose of the continuous representation rule is to avoid unnecessarily disrupting the attorney-client relationship. Adoption of the rule was a direct reaction to the illogical requirement of the occurrence rule, which compels clients to sue their attorneys although the relationship continues and there has not been and may never be any injury. The rule, limited to the context of continuous representation, also is consistent with the purpose of the statute of limitations, which is to prevent stale claims and enable the defendant to preserve evidence. When the attorney continues to represent the client in the subject matter in which the error has occurred, all such objectives are achieved and preserved. The attorney-client relationship is maintained and speculative malpractice litigation is avoided.
The rule of continuous representation is available and
appropriate in those jurisdictions adopting the damage and
discovery rules. The policy reasons are as compelling for
allowing an attorney to continue efforts to remedy a bad result,
even if some damages have occurred and even if the client is
fully aware of the attorney's error. The doctrine is fair to all
concerned parties. The attorney has the opportunity to remedy,
avoid or establish that there was no error or attempt to mitigate
the damages. The client is not forced to end the relationship,
although the option exists. This result is consistent with any
expressed policy basis for the statute of limitations.
198 W.Va. at 505, 482 S.E.2d at 122 (quoting Ronald E. Mallen and Jeffrey M. Smith, Legal
Malpractice § 21.12, at 817 (4th ed. 1996) (footnotes omitted)). (See footnote 17)
The evidence in the record below suggests that Lawyer Rockwell continued to
have a professional legal relationship with the Dunns, a relationship that was directly related
to the Dunns' negotiation and attempt to purchase the Hoover/Gray farmland, until the Spring
of 2005. While the exact dates are unclear, it appears that Lawyer Rockwell prepared an
extension agreement for the Dunns in the Spring of 2005. And although the Dunns never
executed the extension agreement (and consummated their purchase of the farmland in Fall
2005), it appears that Lawyer Rockwell sent the Dunns a bill for his services.
On this record, it appears that there is evidence sufficient to say that questions
of material fact exist for the finder of fact to resolve regarding whether the two-year statutes
of limitation on the Dunns' five causes of action (See footnote 18) against Lawyer Rockwell were tolled. In
other words, on remand, the finder of fact should resolve whether the statute of limitation
was tolled until the Spring of 2005 by his continuous representation of the Dunns in their
effort to purchase the Hoover/Gray farmland.
As to Ms. Rockwell, we believe that questions of material fact likewise exist
concerning whether the statutes of limitation were tolled as to the five causes of action
against her as well. Ms. Rockwell argues that because she is not an attorney, and was not in
a continuous professional relationship with the Dunns, that she ought to receive repose
because the Dunns did not file their actions against her within two years after September 29,
2003. However, Ms. Rockwell's argument overlooks one of the causes of action asserted
against her: civil conspiracy. The Dunns allege that Ms. Rockwell conspired with her
husband, and profited from his misdeeds during his continuous legal representation of the
Dunns. While many of the Dunns' allegations concern tortious acts by Lawyer Rockwell
affecting the 6.87 acre tract, the record clearly establishes that the tract was titled solely in
Ms. Rockwell's name. The general rule is that if the statute of limitation is tolled as to one
defendant in a civil conspiracy, it is tolled as to all alleged co-conspirators. (See footnote 19) Because we
believe that questions of material fact exist concerning whether the statutes of limitation were
tolled as to Lawyer Rockwell, then questions of material fact also exist as to whether the
statutes of limitation were tolled as to his co-conspirator, Ms. Rockwell.
In summary, we find that there are no statutes of limitation for the two
equitable causes of action against the Rockwells, and find that questions of material fact exist
for resolution on remand regarding whether the statutes of limitation for the five other causes
of action against the Rockwells were tolled until the termination of Mr. Rockwell's
representation of the Dunns in the Spring of 2005. We therefore conclude that the circuit
court erred in holding that the causes of action against Ms. Rockwell were time-barred as a
matter of law, and reverse the circuit court's August 15, 2008, summary judgment order.
As for the third cause of action, the doctrine of respondeat superior imposes
liability on an employer for the acts of its employees within the scope of employment, not
because the employer is at fault, but merely as a matter of public policy. See Cochran v.
Michaels, 110 W.Va. 127, 130-131, 157 S.E. 173, 174-75 (1931) (“the rule is based on public
policy”). (See footnote 20) See also, Oelschlager v. Magnuson, 528 N.W.2d 895, 899 (Minn.App.,1995)
(“Respondeat superior imposes liability on an employer for the acts of its employees, not
because the employer is at fault, but as a matter of public policy.”); Kocsis v. Harrison, 249
Neb. 274, 280, 543 N.W.2d 164, 168-69 (1996) (citations omitted) (“Under the doctrine of
respondeat superior, an employer is held vicariously liable for the negligent acts of an
employee committed while the employee was acting within the scope of the employer's
business. If an employee is not liable, the employer cannot be liable under the doctrine of
respondeat superior. The principal's liability is derived solely from that of its agent.”). We
stated the doctrine of respondeat superior this way in Syllabus Point 3 of Musgrove v.
Hickory Inn, Inc., 168 W.Va. 65, 281 S.E.2d 499 (1981):
An agent or employee can be held personally liable for
his own torts against third parties and this personal liability is
independent of his agency or employee relationship. Of course,
if he is acting within the scope of his employment, then his
principal or employer may also be held liable.
See also, Griffith v. George Transfer & Rigging, Inc., 157 W.Va. 316, 201 S.E.2d 281 (1973)
(“The universally recognized rule is that an employer is liable to a third person for any injury
to his person or property which results proximately from tortious conduct of an employee
acting within the scope of his employment. The negligent or tortious act may be imputed to
the employer if the act of the employee was done in accordance with the expressed or implied
authority of the employer.”); Syllabus Points 3 (in part) and 4, O'Dell v. Universal Credit
Co., 118 W.Va. 678, 191 S.E. 568 (1937) (“The legal relationship of master and servant is
commonly understood to arise when one person subordinately serves another, both
consenting thereto. . . . The master is answerable to a stranger for the negligent act of a
person employed by the [master or] master's authorized agent, if the act is within the scope
of the person's employment.”)
Determining the applicable statute of limitation when a plaintiff alleges that
an employer is vicariously responsible for the acts of an employee is more difficult. Because
the employer may only be held liable to the extent that the employee can be held liable, and
only for acts committed by the employee in the course of his or her employment, the statute
of limitation applicable to an employer is determined by the act of the employee. (See footnote 21) We must
therefore examine Martin & Seibert's potential liability under respondeat superior in view
of the causes of action against Lawyer Rockwell.
As previously discussed, the plaintiffs allege seven causes of action against
Douglas Rockwell. The first two of those causes of action _ to rescind or reform a deed, and
for unjust enrichment _ seek equitable relief. While we held above that those causes of
action are not governed by any statute of limitation, the plaintiffs concede that they are not
seeking any equitable relief from Lawyer Rockwell's employer, Martin & Seibert.
Furthermore, as to the plaintiffs' final cause of action _ civil conspiracy _ the plaintiffs'
likewise concede that there is no evidence that Martin & Seibert conspired with Lawyer or
Ms. Rockwell.
Accordingly, it appears that the plaintiffs may only conceivably recover
damages on a respondeat superior theory from Martin & Seibert for the remaining four
causes of action. The Dunns allege that Lawyer Rockwell, while employed by Martin &
Seibert, and within the scope of his employment, engaged in the misconduct that supports
the four causes of action (misappropriation and conversion; fraud; professional negligence;
and breach of fiduciary duty). The Dunns point out that many of the legal documents in the
record prepared by Mr. Rockwell before March 2004 bear the name and address of the
Martin & Seibert law firm, and Mr. Dunn asserts before March 2004 he communicated with
Mr. Rockwell at Martin & Seibert's law offices. We conclude, on these facts, that the
statutes of limitation for the respondeat superior cause of action against Martin & Seibert
would be the same as for the four causes of action _ that is, two years under W.Va. Code, 55-
2-12.
Crippling to the plaintiffs' case against Martin & Seibert is the fact that by
September 29, 2003, the plaintiffs' knew that they had a potential claim against the
Rockwells but did nothing. We do not believe, on these facts, that the statute of limitation
was tolled beyond September 29, 2003, under the discovery rule as outlined in Gaither, supra.
The next step in our analysis is to determine whether some act of concealment
by Martin & Seibert tolled the statute of limitation. The Dunns have directed us to no fact
in the record suggesting that Martin & Seibert engaged in any fraudulent act that deterred the
Dunns from promptly filing suit.
The final step in our analysis is to determine whether some other tolling
doctrine arrested the statute of limitation. The only doctrine cited by the Dunns is the
continuous representation doctrine. The record is clear that Douglas Rockwell continuously
represented the plaintiffs in their attempt to acquire the Hoover/Gray farmland during his
employment with Martin & Seibert. However, that employment terminated on March 31,
2004.
We believe that, under the continuous representation doctrine, the two-year
statutes of limitation against Martin & Seibert were tolled until March 31, 2004. However,
because the plaintiffs did not bring their lawsuit until August 2006, on this record we find
that Martin & Seibert is entitled to repose. Accordingly, we hold that the circuit court was
correct to find that the plaintiffs' three causes of action against Martin & Seibert were barred
by the statutes of limitation, and hold that the circuit court's June 19, 2008, summary
judgment order should be affirmed.