Submitted: January 24, 1995
Filed: February 17, 1995
Scott S. Segal
Jeffrey V. Mehalic
Segal and Davis, L.C.
Charleston, West Virginia
Attorneys for Appellant
Peter J. Conley
Siegrist, Spelsberg, White,
Martin & Conley
Clarksburg, West Virginia
Attorney for Appellees
The Opinion of the Court was delivered PER CURIAM.
JUSTICE BROTHERTON did not participate.
JUDGE FOX sitting by temporary assignment.
"Where a plaintiff has not filed any claim against a
third-party defendant, but after the statute of limitations has run
seeks to amend his complaint to add that third-party defendant as
a party defendant to the original complaint because a new cause of
action was discovered in the development of the original law suit
within a reasonable time, it is within the trial judge's discretion
under Rule 15(c), W. Va. R.C.P. to determine whether the ends of
justice are served by permitting the complaint to be amended and
'relate back,' thereby avoiding the effect of the statute of
limitations." Syllabus Point 3, Peneschi v. National Steel Corp.,
170 W. Va. 511, 295 S.E.2d 1 (1982). (Emphasis in original).
This action was brought by the appellant and plaintiff
below, Sharron D. Brown, as administratrix of the Estate of Sidney
D. Brown, to recover damages for the wrongful death of her husband
resulting from an accident which occurred on July 21, 1988. Mr.
Brown's vehicle was struck by a truck belonging to Community Moving
& Storage, Inc., (Community Moving) and driven by Roy W. McNemar,
appellees and defendants below.See footnote 1 In Brown v. Community Moving &
Storage, Inc., 186 W. Va. 691, 414 S.E.2d 452 (1992), we held that
Home Insurance Company had no duty to defend and indemnify
Community Moving in this suit because the policy was void ab initio
after Leonard Papa, President of Community Moving, fraudulently
obtained the policy.See footnote 2
On June 23, 1992, the plaintiff moved to amend her
complaint to add Mr. Papa as a defendant in his personal capacity.
Her motion was granted, and a fraud count against Mr. Papa was
added to this civil action. The Circuit Court of Harrison County
held a hearing following Mr. Papa's motion to dismiss the amended
complaint as untimely filed. On November 16, 1993, the circuit
court granted the motion. On appeal, the plaintiff argues the dismissal was improper because she filed the amended complaint
within the applicable statute of limitations if the discovery rule
is applied, and Mr. Papa had notice of the amended complaint and
was not prejudiced by the relation back to the original complaint.
The first issue for resolution is whether the amended
complaint was timely filed. The accident occurred on July 21,
1988, and the original complaint was filed on August 3, 1989. An
amended complaint adding Home Insurance Company was filed on
September 15, 1989. On September 21, 1992, the amended complaint
at issue in this appeal was filed after this Court held Mr. Papa's
acts constituted fraud. Although four years separate the injury
and the filing of this amended complaint, the plaintiff asserts the
discovery rule would toll the statute of limitations period.See footnote 3
Syllabus Point 3 of Stemple v. Dobson, 184 W. Va. 317, 400 S.E.2d
561 (1990), states:
"Where a cause of action is based on tort or on a claim of fraud, the statute of limitations does not begin to run until the injured person knows, or by the exercise of reasonable diligence show know, of the nature of his injury, and determining that point in time is a question of fact to be answered by the jury."
The circuit court found that the cause of action against
Mr. Papa alleging fraud should have been discovered by the
plaintiff after Mr. Papa's deposition on February 1, 1990, and/or
at the completion of the depositions of the Home Insurance agents
on April 27, 1990. At that point, it was clear Mr. Papa aspired to
obtain insurance to cover an accident that had already taken place
without informing the insurance agent of the pending claim.
The plaintiff asserts that, consistent with Stemple, the
point in time the cause of action was discoverable is a question of
fact to be answered by the jury and, therefore, the circuit court
erred in dismissing the amended complaint. We do not, however,
find Stemple applicable to the case at hand because it is
undisputed that the nature of the injury, i.e., wrongful death, was
recognized by the plaintiff on the date of the accident.
The plaintiff further contends that the appropriate date
for accrual of the cause of action is February 6, 1992, the date
this Court decided in Brown, supra, that Mr. Papa's conduct
constituted fraud. She argues it would have been against her
interests to assert from the outset that the policy was procured by
fraud because she was seeking recovery under the policy. Finally,
she states the circuit court found Home Insurance Company was
obligated to defend and indemnify and, accordingly, she could not
at that time demonstrate a good faith basis for the fraud claim
under Rule 11 of the West Virginia Rules of Civil Procedure.
The defendants respond that the circuit court was correct
in dismissing the amended complaint because all the facts relied
upon in the fraud claim were discovered by the plaintiff nearly
three and one-half years before the amended complaint at issue was
filed. At the close of Mr. Papa's and the insurance agents'
depositions, it was clear that Mr. Papa had committed fraud.
Furthermore, Home Insurance Company recognized the fraud claim
against Mr. Papa and timely asserted the defense, and it possessed
no greater information than the plaintiff.
Because the amended complaint was untimely filed, the
defendants assert it is within the discretion of the circuit court
to determine whether the amended complaint could date back to the
original filing date. Syllabus Point 3 of Peneschi v. National
Steel Corp., 170 W. Va. 511, 295 S.E.2d 1 (1982), states:
"Where a plaintiff has not filed any claim against a third-party defendant, but after the statute of limitations has run seeks to amend his complaint to add that third-party defendant as a party defendant to the original complaint because a new cause of action was discovered in the development of the original law suit within a reasonable time, it is within the trial judge's discretion under Rule 15(c), W. Va. R.C.P. to determine whether the ends of justice are served by permitting the complaint to be amended and 'relate back,' thereby avoiding the effect of the statute of limitations." (Emphasis in original).
Furthermore, the defendants assert Mr. Papa had no notice
of the fraud claim. Although Mr. Papa is President of Community
Moving, they contend he could not have foreseen being brought into the suit in his personal capacity because the amended complaint
asserts a different cause of action against a new defendant four
years after the accident occurred.
After reviewing the record in this matter, we hold the
circuit court was correct as a matter of law in granting the motion
to dismiss the amended complaint. We first focus on our earlier
decision in Brown, supra. The evidence was clear on the record
that Mr. Papa fraudulently obtained the insurance policy. We
disagree with the plaintiff's conclusion that until this Court
declared Mr. Papa's actions constituted fraud, she could not in
good faith bring the claim. Her assertion that the circuit court
ruled as a matter of law that Mr. Papa had not committed fraud is
incorrect. The circuit court found that Ms. Brown, as an innocent
third-party beneficiary, should not suffer the consequences of Mr.
Papa's misrepresentations. In fact, the plaintiff argued she
should receive the proceeds of the policy and Home Insurance
Company could then pursue its claims against Community Moving. See
186 W. Va. at 692 n.1, 414 S.E.2d at 453 n.1.
We recognize the plaintiff's reluctance to bring the
fraud action against Mr. Papa because to do so effectively would
block recovery of the valuable insurance proceeds. However, we do
not find this fact to be persuasive. It is not a rare situation in
which a plaintiff must choose to add a party he would rather not
bring into the suit or plead alternative theories to the circuit court. We agree with the circuit court's finding that the
plaintiff possessed all facts necessary to bring the fraud claim at
the close of Mr. Papa's depositions. In fact, the circuit court
granted her the more liberal date to begin the tolling of the
statute of limitations--the completion of the insurance company
agents' depositions on April 27, 1990.
Because the amended complaint was not filed within the
two years proceeding April 27, 1990, we find our analysis set forth
in Syllabus Point 3 of Peneschi, supra, controlling. It is within
"the trial judge's discretion under Rule 15(c), W. Va. R.C.P. to
determine whether the ends of justice are served by permitting the
complaint to be amended and 'relate back,' thereby avoiding the
effect of the statute of limitations." The circuit court
determined that Mr. Papa did not have "notice of the fraud claim
against him prior to being served with the Second Amended
Complaint." Because there is no adequate evidence to the contrary,
we find no abuse of discretion in this case.See footnote 4
For the foregoing reasons, the November 16, 1993, order
of the Circuit Court of Harrison County is affirmed.
Footnote: 1 Mrs. Brown also brought suit on behalf of the couple's three infant daughters, Bethany Brown, Kelly Brown, and Melissa Brown.
Footnote: 2 Mr. Papa procured the insurance policy after the accident had taken place and attempted to seek coverage.
Footnote: 3 The two-year statute of limitations period set forth in W. Va. Code, 55-2-12 (1959), is applicable to the fraud claim against Mr. Papa. The statute states, in part: "Every personal action for which no limitation is otherwise prescribed shall be brought: . . . (b) within two years next after the right to bring the same shall have accrued if it be for damages for personal injuries[.]"
Footnote: 4 In arguing that Mr. Papa had proper notice of the fraud claim, the plaintiff is faced with a Catch-22: on the one hand, she argues the evidence clearly shows Mr. Papa had sufficient notice he would be brought into the suit in his personal capacity; yet, on the other hand, she argues she could not discover the claim against Mr. Papa until this Court ruled he committed fraud.