IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA
January 1998 Term
Plaintiff Below, Appellant,
IRENE ADAIR KLEISS,
Defendant Below, Appellee,
AETNA, THE STANDARD FIRE INSURANCE COMPANY,
Intervenor Below, Appellee.
Appeal from the Circuit Court of Berkeley County
Honorable Thomas W. Steptoe, Jr., Judge
Civil Action No. 93-C-1153
REVERSED IN PART, AFFIRMED IN PART, AND REMANDED.
Submitted: March 18, 1998
Filed: June 12, 1998
Lawrence M. Schultz
D. Michael Burke
Burke & Schultz
Martinsburg, West Virginia
Attorneys for the Appellant
Michael D. Lorensen
Bowles Rice McDavid Graff & Love, P.L.L.C.
Martinsburg, West Virginia
Attorney for the Appellee,
Irene Adair Kleiss
Paul B. Weiss
Martin & Seibert, L.C.
Martinsburg, West Virginia
Attorney for the Appellee,
Aetna, The Standard Fire Insurance Company
CHIEF JUSTICE DAVIS delivered the Opinion of the Court.
SYLLABUS BY THE COURT
1. "Separate written instruments will be
construed together and considered to constitute one transaction where the parties and the
subject matter are the same, and where there is clearly a relationship between the
documents." Syllabus point 3, McCartney v. Coberly, ___ W. Va. ___, 250
S.E.2d 777 (1978), overruled on other grounds by Syllabus point 2, Overfield v.
Collins, 199 W. Va. 27, 483 S.E.2d 27 (1996).
2. "W. Va. R. Civ. P.
67 contemplates that a deposit or payment into court be with leave of court and that the
money ordered deposited be subject to the exclusive control of the court. The party making
the deposit must surrender all control over the money to the court, not to other persons
claiming an interest in the money." Syllabus point 4, Arcuri v. Great Am. Ins. Co.,
176 W. Va. 211, 342 S.E.2d 177 (1986).
3. When a party deposits
with a circuit court a sum of money or any other thing capable of delivery, and does so in
compliance with the provisions of W. Va. R. Civ. P. Rule 67, the
circuit court may enter an order finding the judgment satisfied and released upon
determining that the sum of money or other thing deposited is at least equal to the amount
of the final judgment. Where an appeal is taken, the authority of the circuit court to
enter an order finding satisfaction and release of a final judgment is stayed pending the
ultimate resolution of the appeal by this Court. Furthermore, where there is no appeal,
the release and settlement order may be entered upon the expiration of the period for
Davis, Chief Justice:
The plaintiff in this case, Jeffrey McDaniel, appeals two separate orders entered by the Circuit Court of Berkeley County on March 25, 1997, in a personal injury action. The first order denied McDaniel's motion to alter or amend a prior order of the court that had distributed, to McDaniel's underinsured motorist insurance carrier, funds that the defendant had deposited with the circuit court pursuant to W. Va. R. Civ. P. Rule 67. The second order found that the judgment against the defendant had been satisfied and released by the aforementioned deposit. We conclude that the circuit court erred in distributing the funds to McDaniel's insurance carrier. We further conclude that the court did not err in finding that the judgment against the defendant had been satisfied and released. Therefore, we affirm, in part, and reverse, in part, the rulings of the circuit court.
FACTUAL AND PROCEDURAL HISTORY
The event underlying the present dispute was an automobile accident between appellant Jeffrey McDaniel [hereinafter McDaniel], plaintiff below, and appellee Irene Adair Kleiss [hereinafter Kleiss], defendant below. McDaniel subsequently filed a lawsuit against Kleiss seeking damages for bodily injuries he sustained in the automobile accident. At the time of the collision, Kleiss had liability insurance coverage in the amount of $100,000.00 through an automobile insurance policy issued by USAA Insurance Company [hereinafter USAA]. In addition, McDaniel had $100,000.00 in underinsured motorist coverage under a policy of automobile insurance issued by Aetna, The Standard Fire Insurance Company [hereinafter Aetna], appellee herein, and intervenor below. Thus, the combined liability and underinsured motorist coverage for the above referenced accident was limited to $200,000.00.
USAA, acting on behalf of Kleiss, offered to
settle the case prior to trial for $100,000.00, the limits of the liability policy issued
to Kleiss. However, the offer was conditioned upon a consent to settlement and waiver of
subrogation rights by Aetna. Aetna contends that it rejected the settlement offer based
upon its determination that Kleiss possessed substantial personal assets that might be
reached to satisfy any subrogation interest that might accrue to Aetna. It is undisputed
that Aetna and McDaniel anticipated that the trial would result in a jury verdict in
excess of $200,000.00. In other words, any jury verdict was expected to exceed the
combined policy limits of Kleiss's liability coverage and McDaniel's underinsured motorist
After efforts to settle the claim with Kleiss
and USAA failed, but prior to trial, Aetna and McDaniel entered into a release agreement.
The release provided that Aetna would pay to McDaniel $100,000.00 "underinsured
motorist coverage benefits" and would waive its right to reimbursement of medical
payments made to McDaniel pursuant to the medical payments coverage provided in the
automobile insurance policy issued to him. In exchange, McDaniel would release Aetna
from all claims, demands, damages, actions, cause of actions [sic] or suits at law or in equity of whatsoever kind or nature arising out of the . . . contract of automobile insurance [between Aetna and McDaniel] with regard to a motor vehicle collision involving Jeffrey McDaniel which occurred on or about the third day of December, 1991 . . . .
McDaniel would further agree to subordinate to the interests of Aetna any right he possessed or might acquire to proceed against the personal assets of Kleiss for satisfaction of any unpaid portion of any judgment in excess of $200,000.00 arising from the civil action McDaniel filed against Kleiss.
Following trial, the jury found that McDaniel
was contributorily negligent with respect to the accident. The jury apportioned McDaniel's
fault at forty percent, and returned a verdict in favor of McDaniel in the amount of
$154,823.42. However, the trial judge reduced the verdict by forty percent and awarded
McDaniel $92,893.80, plus prejudgment interest in the amount of $7,080.44, for a total
award of $99,974.24.
Aetna subsequently issued a letter to McDaniel's
lawyer expressing its position that
McDaniel's obligation to protect Aetna's subrogation rights against the Defendant, both pursuant to his insurance contract with Aetna and the Release executed by him in consideration of Aetna's good faith settlement, encompasses taking necessary measures including retrial either before or after appeal to assure that this verdict is vacated and a proper one entered.
Aetna demanded that McDaniel "seek a new trial . . . and, if denied, pursue reversal in the Supreme Court of Appeals."
McDaniel then filed a motion requesting the
circuit court to alter or amend the judgment as provided for in Rule 59(e) of the West
Virginia Rules of Civil Procedure.See footnote 1 1 McDaniel argued that the court had erred by reducing the jury award by the
forty percent of liability assigned to him, because the jury had already reduced the
verdict by that amount. Thereafter, McDaniel also filed a motion, pursuant to
W. Va. R. Civ. P. Rule 60(b),See
footnote 2 2 for relief from the final judgment order. The circuit court
agreed that the verdict was twice reduced by the forty percent apportioned as McDaniel's
contributory negligence. Consequently, the court increased the award to $154,823.42 plus
prejudgment interest of $30,615.95, for a total amended award of $185,439.37. Kleiss
appealed the amended verdict to this Court. We found that the circuit court had erred, and
we reinstated the original judgment of $99,974.24. See McDaniel v. Kleiss,
198 W. Va. 282, 480 S.E.2d 170 (1996).
Meanwhile, USAA, acting on behalf of Kleiss, obtained the trial court's permission to deposit the $100,000.00 proceeds of Kleiss's liability insurance coverage in the registry of the circuit court, pursuant to W. Va. R. Civ. P. Rule 67.See footnote 3 3 Aetna sought leave to intervene and participate in the proceedings related to the disposition of the $100,000.00 deposited by USAA. A dispute then arose between McDaniel and Aetna over which of them was entitled to the deposited funds. Both Aetna and McDaniel moved to receive distribution of the funds. By order entered January 14, 1997, the trial court ordered the distribution of $99,974.24, the amount of the original jury verdict, plus interest, that had been reinstated by this Court, to Aetna.See footnote 4 4
Upon entry of the order distributing the funds to Aetna, Kleiss filed a motion asking the circuit court to deem the judgment against her discharged and satisfied. In the meantime, McDaniel sought, pursuant to W. Va. R. Civ. P. Rule 59(e), an order altering or amending the judgment reflected in the order of January 14, 1997. By order entered March 25, 1997, the circuit court denied McDaniel's motion. On the same day, the court entered a second order granting Kleiss's motion to deem the judgment against her discharged and satisfied. It is from these two orders that McDaniel now appeals.
STANDARD OF REVIEW
In the case sub judice, we are asked to rule upon the correctness of an order issued by the circuit court distributing funds that had been deposited with it pursuant to W. Va. R. Civ. P. Rule 67. Resolution of this issue requires that we review the provisions of a contract entered between the parties to this appeal. As explained below, we find that the contractual language is clear and unambiguous. Thus, there are no factual findings by the circuit court that must be considered to interpret the contract. We are also asked to determine whether the circuit court correctly found that a judgment had been satisfied and released. These issues present questions of law, which we will review de novo. See Syl. pt. 1. Chrystal R.M. v. Charlie A.L., 194 W. Va. 138, 459 S.E.2d 415 (1995) ("Where the issue on an appeal from the circuit court is clearly a question of law or involving an interpretation of a statute, we apply a de novo standard of review.").
McDaniel first argues that the circuit court erred by denying his motion to alter or amend the judgment entered on January 14, 1997, which distributed to Aetna $99,974.24 of the funds deposited by USAA. In support of this argument, McDaniel contends that the court misinterpreted his release agreement with Aetna.See footnote 5 5 McDaniel submits that the release is clear and unambiguous, and was an agreement between McDaniel and Aetna which modified their original agreement made via the insurance policy. According to McDaniel the $100,000.00 consideration he was paid was exactly that: consideration given in exchange for McDaniel giving up certain rights in favor of Aetna. McDaniel argues that Aetna did not buy any right to the USAA insurance proceeds. Moreover, the money was paid prior to entry of the jury verdict and therefore could not have been paid in satisfaction thereof. More simply put, Aetna did not pay McDaniel's damages, rather it purchased his rights. Therefore, McDaniel argues, Aetna is not entitled to a subrogation claim against the jury award.
Although McDaniel states that the release
contract is clear and unambiguous, he nevertheless proceeds to argue that the intent of
the parties is at issue. He avers that Aetna anticipated a jury verdict in this case in
excess of $200,000.00. It was this anticipated verdict, McDaniel suggests, that prompted
Aetna to enter into the release agreement to improve its ability to execute against the
personal assets of defendant Kleiss. Furthermore, noting that the agreement was executed
shortly after this Court's opinion in Marshall v. Saseen, 192 W. Va. 94, 450
S.E.2d 791 (1994),See footnote 6 6 McDaniel
contends that Aetna, by virtue of the release, bought protection for itself against a
potential excess underinsured claim under Marshall. McDaniel also argues that Aetna
can point to no language in the release that permits it to proceed against defendant
Kleiss's liability policy limits, and the release did not require McDaniel to reimburse
Aetna for the $100,000.00 if he lost the case. Additionally, McDaniel claims that a letter
from Aetna, dated January 10, 1995, which demanded that McDaniel challenge the jury
verdict as part of his duty to protect Aetna's subrogation rights, is evidence that Aetna
did not believe it was entitled to Kleiss's insurance proceeds. Finally, McDaniel argues
that an insurer's subrogation rights do not attach unless and until a defendant's
liability coverage is exhausted. Since the verdict was less than Kleiss's liability
coverage, McDaniel was not entitled to any disbursement of underinsured coverage, and
likewise, Aetna's subrogation rights did not attach.
In reply, Aetna contends that it is entitled to
subrogation under the plain and unambiguous language of the policy of insurance,See footnote 7 7 under the plain and
unambiguous language of the release agreement, and under W. Va. Code § 33-6-31(f)
(1995) (Repl. Vol. 1996).See footnote 8 8
Aetna argues that because the release is unambiguous, McDaniel cannot use parole
evidence to create ambiguity that does not exist on the face of the document. Moreover,
Aetna contends that, assuming arguendo the existence of some ambiguity on the face
of the release, the parole evidence relied on by McDaniel does not clarify the release.
Aetna maintains that the letter of January 10, 1995, addressed Aetna's valid concerns that
Kleiss and/or McDaniel would seek to compromise its subrogation claim.
Aetna argues further that it is well-established
that the provisions of both a prior and subsequent contract between the same parties,
referencing the same subject matter, will be enforced except as to those provisions of the
prior contract which are inconsistent with the subsequent contract. Aetna submits that
there is no inconsistency between the original insurance contract and the release.
The plain meaning of the contract, according to
Aetna, is that, in the event of an excess verdict wherein McDaniel would have priority in
pursing the personal assets of Kleiss, that priority would be subordinated to the rights
of Aetna to proceed against those same personal assets in satisfaction of its rights of
subrogation arising from payment to McDaniel of the policy limits of his underinsured
motorist coverage. Aetna argues that this was an eventuality that never materialized and
the rights afforded Aetna by McDaniel in the release have no bearing upon the present
issue because the language in the release did not alter Aetna's rights of subrogation
under the basic insurance contract or W. Va. Code § 33-6-31(f).
In addition, Aetna argues that even if the
release is found to be ambiguous, the rules of judicial construction of contracts do not
permit the inference that Aetna's preexisting rights of subrogation were waived or
modified by the release. According to Aetna, the release references only two purposes: (1)
to discharge McDaniel's claims against Aetna and (2) to subordinate to Aetna McDaniel's
rights as to Kleiss in the event of a judgment in excess of all available insurance
coverages. Aetna argues further that reference to "$100,000.00 underinsured motorist
coverage benefits" in the release unequivocally references payment of funds on the
same terms as they would have been payable if McDaniel had established his legal right to
underinsured motorist proceeds.
Aetna also declares that it was not motivated to
enter into the release agreement by this Court's opinion in Marshall v. Saseen.
Aetna states that it was under no obligation to settle the claim with McDaniel because, as
Aetna interprets the events, Kleiss and USAA merely made a request for an offer to settle,
and never made an unconditional proffer of the limits of Kleiss's liability insurance
Finally, Aetna argues that equitable principles
provide: (1) that one who answers for the obligation of another is subrogated to the
payee's rights against the responsible party, and (2) the law disfavors and seeks to avoid
We begin our analysis of this case by
determining whether the policy of insurance and the release comprise a single contract or
two distinct agreements. We have previously held that "[s]eparate written instruments
will be construed together and considered to constitute one transaction where the parties
and the subject matter are the same, and where there is clearly a relationship between the
documents." Syl. pt. 3, McCartney v. Coberly, ___ W. Va. ___, 250 S.E.2d
777 (1978), overruled on other grounds by Syllabus point 2, Overfield v. Collins,
199 W. Va. 27, 483 S.E.2d 27 (1996). See also Ashland Oil, Inc. v. Donahue,
159 W. Va. 463, 469, 223 S.E.2d 433, 437 (1976) ("It is a well-recognized
principle of law that, even though writings may be separate, they will be construed
together and considered to constitute one transaction when the parties are the same, the
subject matter is the same, and the relationship between the documents is clearly
apparent." (citations omitted)).
After examining the two documents in question, we conclude that the release and the initial insurance policy do not comprise a single contract; instead, we find that they are two separate and distinct contracts. Generally, an insurance policy sets forth an agreement between parties whereby the insured agrees to pay a specified premium, and, in exchange, the insurer agrees to indemnify the insured against the type of losses contemplated within the terms of the policy yet unknowable at its issuance. See W. Va. Code § 33-1-1 (1957) (Repl. Vol. 1996) ("Insurance is a contract whereby one undertakes
to indemnify another or to pay a specified amount upon determinable
contingencies."). See also Fraser-Yamor Agency, Inc. v. County of Del Norte,
68 Cal. App. 3d 201, 213, 137 Cal. Rptr. 118, 125 (1977) ("an insurance
policy is a contract between the insurer . . . and the
insured . . . whereby for a premium paid by the insured the insurer
undertakes to indemnify the insured against loss, damage, or liability arising from a
contingent or unknown event" (citations omitted)); Huff v. St. Joseph's Mercy
Hosp. of Dubuque Corp., 261 N.W.2d 695, 700 (Iowa 1978) ("'"'the term
"insurance," or "insurance contract," or "insurance
policy," . . . denotes a contract by which one party, for a
compensation called the "premium," assumes particular risks of the other party
and promises to pay to him or his nominee a certain or ascertainable sum of money on a
specified contingency'"'" (citation omitted)). Given this general definition, we
can infer that the insurance policy issued by Aetna to McDaniel specified a premium to be
paid by McDaniel in exchange for the promise that Aetna would indemnify him should he
suffer the type of loss contemplated within the terms of the policy, but nevertheless
unknowable at that time.See footnote 9 9
By contrast, the main purpose of a release
typically is the voluntary relinquishment of a claim or right by one who, absent the
release, could have enforced such claim or right. See generally 16 Michie's
Jurisprudence Release § 2, at 62 (1987) ("A release is the act or writing by
which some claim or interest is surrendered to another person. It is the giving up or
abandoning a claim or right to the person against whom the claim exists or the right is to
be exercised and enforced."). The release document at issue in this case, therefore,
was not a subsequent policy of insurance. Rather, the release document was a separate
contract entered into by the parties with respect to a particular known loss, in this case
the automobile accident, which had already occurred. In this regard, the release contract
sets forth certain rights and obligations of the parties specific to that particular loss.
In addition to having two distinct purposes, the
remaining aspects of the insurance policy and the release agreement indicate a difference
in the subject matter addressed in each document. Particularly noteworthy of the
documents' independence from one another is the fact that the parties' rights and
obligations had changed between the issuance of the insurance policy and the time the
release agreement was made. At the time of the release agreement, a loss had occurred and
was no longer an unknown contingency. While the release agreement is related to the
insurance policy, it does not address the same subject matter such that it must be read
together with the policy as if they are one contract.
To determine whether the automobile insurance
policy and the release constitute a separate or a singular agreement, we must also examine
the relationship between the two documents. Certainly, absent the existence of the
automobile insurance policy, there would have been no reason for Aetna to negotiate the
release. However, this fact alone is insufficient upon which to find that the two
documents are so closely related that they become a single contract. Previously, we have
found a single contract to exist where the two agreements were signed contemporaneously or
where the earlier contract was specifically referenced in the later contract. For example,
in McCartney v. Coberly, a mother transferred custody of her small child by signing
several documents on the same occasion. The documents included a "written custody
agreement" and a "'consent to permit adoption.'" McCartney at ___,
250 S.E.2d at 778. The custody agreement permitted revocation of the change in custody;
however, the adoption consent apparently did not. In response to the defendant's argument
that the adoption consent was irrevocable, this Court, observing that "the consent
for adoption was qualified by the custody agreement," found the multiple documents
comprised a single contract. Id. at ___, 250 S.E.2d at 780. The McCartney
Court reasoned that "the consent to adopt form was signed along with the written
custody agreement and other documents, all of which clearly indicate that [the mother] did
not intend to relinquish permanent custody of her child during the six-month probationary
period." Id. at ___, 250 S.E.2d at 779.
Likewise, Ashland Oil, Inc. v. Donahue,
involved a lease agreement and dealer contract that were entered into on the same day. The
Donahue Court observed
The lease agreement and the dealer contract involved in this case are clearly agreements between the same parties; the relationship between the documents is apparent, since they deal with the operation of a gasoline station at identified premises and provide for the same initial term and automatic extensions from year to year; they provide for the sale and delivery of gasoline; they provide for the conduct of the business on the part of Donahue with skill and diligence; and the rental in the lease is tied directly to the gasoline which is provided for in the dealer contract.
Donahue at 469, 223 S.E.2d at 437. This Court also addressed a similar issue in Art's Flower Shop v. C & P Telephone Co., 186 W. Va. 613, 413 S.E.2d 670 (1991). In that case the parties had entered into a contract in 1978, and subsequently executed another contract in 1981. The 1981 contract specifically stated "ALL OTHER TERMS AND CONDITIONS WILL REMAIN AS PREVIOUSLY SIGNED." Art's at 616, 413 S.E.2d at 673. The Art's Flower Shop Court found that the terms of the 1978 contract were properly incorporated by reference into the 1981 contract. Id. The Court further concluded that the criteria set forth in Ashland Oil, Inc. v. Donahue, that the parties and subject matter be the same and the relationship between the documents be clear, were fulfilled in this instance.
In the case sub judice the insurance
policy and the release agreement were not entered contemporaneously as were the documents
in the McCartney and Donahue cases.See
footnote 10 10 Moreover, unlike Art's Flower Shop, there was no
attempt to incorporate the policy into the terms of the release. Comparing the facts of
this case to those discussed above, we can find no clear relationship between the
insurance policy and the release such that we can conclude that they represent a single
contract. Therefore, the terms of the release, standing alone, determine the proper party
to receive the proceeds of the judgment against Kleiss.
We have reviewed the language contained in the release agreement and find that it is clear and unambiguous. Therefore, we need not resort to the rules of construction. See Syl. pt. 1, Fraternal Order of Police, Lodge No. 69 v. City of Fairmont, 196 W. Va. 97, 468 S.E.2d 712 (1996) ("'"It is not the right or province of a court to alter, pervert or destroy the clear meaning and intent of the parties as expressed in unambiguous language in their written contract or to make a new or different contract for them." Cotiga Development Co. v. United Fuel Gas Co., 147 W. Va. 484, 128 S.E.2d 626 (1962), Syllabus Point 3.' Syllabus Point 2, Bennett v. Dove, 166 W. Va. 772, 277 S.E.2d 617 (1981)."). Cf Syl. pt. 2, Louk v. Isuzu Motors, Inc., 198 W. Va. 250, 479
S.E.2d 911 (1996) ("'"Where the provisions of an insurance
policy contract are clear and unambiguous they are not subject to judicial construction or
interpretation, but full effect will be given to the plain meaning intended."
Syllabus, Keffer v. Prudential Ins. Co., 153 W. Va. 813, 172 S.E.2d 714
(1970).' Syllabus point 1, Russell v. State Automobile Mutual Insurance Company,
188 W. Va. 81, 422 S.E.2d 803 (1992).").
With respect to Aetna's right to recover a
payment made to McDaniel, the release plainly states:
For the consideration above set forth the said Jeffrey McDaniel does further agree to subordinate to the interests of Aetna the Standard Fire Insurance Company all present and future rights and interests which he may possess or which may hereinafter accrue to him, including, but not limited to, any right of priority established or recognized by the Supreme Court of Appeals of West Virginia in the case of Allstate Insurance Co. v. Karl, [190 W. Va. 176,] 437 S.E.2d 749 (1993), to proceed against the personal assets of Irene Adair Kleiss, her heirs or assigns, for satisfaction of any unpaid portion of any judgment arising from the aforesaid Civil Action in excess of $200,000.00 which is the total amount of the liability insurance coverage of the defendant therein, Irene Adair Kleiss, and the said Jeffrey McDaniel's underinsured motorist coverage herein tendered until such time as the subrogation interests of Aetna, the Standard Fire Insurance Company arising from the payment of the consideration herein have been satisfied in full.
(Emphasis added). Pursuant to the above quoted language, Aetna's right to recover was contingent upon a judgment in excess of $200,000.00. Because the judgment in this case was less than $200,000.00, Aetna had no right under the release agreement to the funds deposited with the circuit court by Kleiss's insurer.
Furthermore, we find Aetna's argument that it
has a right to subrogation under W. Va. Code § 33-6-31(f) to be unpersuasive.
W. Va. Code § 33-6-31(f) states, in relevant part: "An insurer paying a claim
under the endorsement or provisions required by subsection (b) of this section
shall be subrogated to the rights of the insured to whom such claim was paid against the
person causing such injury, death or damage to the extent that payment was made."
(Emphasis added). W. Va. Code § 33-6-31(b) contains provisions related to uninsured
and underinsured motorist coverage.See footnote 11 11 Because the money paid as consideration for McDaniel's release was made
prior to a determination of Kleiss's liability to McDaniel for the accident, and because
the judgment was within the limits of Kleiss's liability insurance (and therefore
McDaniel's underinsured motorist coverage would not have been triggered), the $100,000.00
payment by Aetna was not "required by subsection (b)." Therefore, W. Va.
Code §33-6-31(f) does not apply to the circumstances presented by this case. Accordingly,
we conclude that the circuit court erred, as a matter of law, by distributing to Aetna the
funds Kleiss's insurer deposited with the circuit court to satisfy the judgment against
DISCHARGE AND SATISFACTION OF JUDGMENT BY KLEISS
McDaniel argues that because he has received no funds in satisfaction of his judgment, the circuit court erred in deeming the judgment discharged and satisfied. McDaniel argues that the $100,000.00 he received from Aetna was not to satisfy the judgment, which did not even exist when Aetna paid the money. McDaniel characterizes the money paid by Aetna as a collateral source payment that cannot reduce his judgment against Kleiss. See Syl. Pt. 4, in part, Johnson v. General Motors, 190 W. Va. 236, 438 S.E.2d 28 (1993) ("The collateral source rule operates to preclude the offsetting of uninsured or underinsured benefits since the benefits are the result of a contractual arrangement which is independent of the tortfeasor.").
Aetna replies that McDaniel has misapplied the
collateral source rule, which operates to preclude a tortfeasor from offsetting or
reducing his liability to a plaintiff -- not to prevent a third party from discharging
that liability. Aetna states that in the present case there has been no set off on the
basis of the payment at issue, and the collateral source rule has not been invoked.
Appellee Kleiss argues that payment in full to a person authorized to receive such payment
operates as a discharge of the judgment.
We conclude that the circuit court's order
finding the judgment against Kleiss was satisfied and discharging such judgment was
correctly entered. USAA deposited with the circuit court the amount of the judgment
against Kleiss pursuant to W.Va. R. Civ. P. Rule 67.See footnote 12 12 In Syllabus point 4 of Arcuri v.
Great Am. Ins. Co., 176 W. Va. 211, 342 S.E.2d 177 (1986), we held:
W. Va. R. Civ. P. 67 contemplates that a deposit or payment into court be with leave of court and that the money ordered deposited be subject to the exclusive control of the court. The party making the deposit must surrender all control over the money to the court, not to other persons claiming an interest in the money.
Thus, upon receiving leave of the court to deposit the funds, a party is required to surrender all control over the money to the court. Under such circumstances, it is absurd to argue that the judgment is not satisfied. We therefore hold that when a party deposits with a circuit court a sum of money or any other thing capable of delivery, and does so in compliance with the provisions of W. Va. R. Civ. P. Rule 67, the circuit court may enter an order finding the judgment satisfied and released upon determining that the sum of money or other thing deposited is at least equal to the amount of the final judgment. Where an appeal is taken, the authority of the circuit court to enter an order finding satisfaction and release of a final judgment is stayed pending the ultimate resolution of the appeal by this Court. Furthermore, where there is no appeal, the release and settlement order may be entered upon the expiration of the period for appeal. Other courts have reached a similar conclusion. See United States Overseas Airlines, Inc. v. Compania Aerea Viajes Expresos De Venezuela, S.A., 161 F. Supp. 513, 515 (1958) (interpreting Rule 67 of the Federal Rules of Civil Procedure and Rule 14 of the General Rules of the United States District Court, Southern District of New York, and concluding that when a judgment debtor is "ready, willing and able" to pay a judgment, but is unsure as to whom the judgment should be paid, the judgment debtor "should be permitted to pay the amount of the judgment into court and to have the Clerk enter a satisfaction of judgment" (emphasis added)); Treadwell Ford, Inc. v. Courtesy Auto Brokers, Inc., 426 So. 2d 859, 861 (Ala. Civ. App. 1983) (recognizing payment of a judgment to the clerk of the circuit court was permitted under state code, and stating "[p]ayment to some person authorized by law to receive the judgment may operate as a release or satisfaction of a judgment"); Hart v. Jett Enterprises, Inc., 744 P.2d 561, 562 (Okla. 1985) (stating "[a]ppellant acknowledges the generally accepted rule that actual payment of a judgment in full to a person authorized to receive it operates as a discharge of the judgment" (footnote omitted)). See generally 23 Am. Jur. 2d Deposits in Court §3, 739 (1983) ("[A] judgment debtor ready, willing, and able to pay the judgment but in doubt as to who to pay because of conflicting claims asserted by creditors of the judgment creditor is entitled to deposit the amount of the judgment in court and receive a satisfaction thereof from the clerk." (footnote omitted)); 47 Am. Jur. 2d Judgments § 1019, 451 (1995) ("Actual payment of a judgment in full to a person authorized to receive it operates as a discharge of the judgment. Thus, where the clerk of the court is authorized by law to receive the judgment, a defendant may satisfy the judgment by paying it to the clerk." (footnotes omitted)).
In this case, the fact that a dispute arose between Aetna and McDaniel over the identity of the proper party to receive distribution of the funds deposited with the circuit court does not alter the fact that the full amount of the judgment was paid to the circuit court on behalf of Kleiss. The circuit court is authorized by our rules of civil procedure to receive such payments, upon its own consent. The court agreed to receive the amount of the judgment on behalf of Kleiss. Payment of that amount was deposited with the court by Kleiss's insurer. In this case, the amount of the judgment was not finally established until the appeal of that judgment was resolved by this Court. McDaniel v. Kleiss, 198 W. Va. 282, 480 S.E.2d 170 (1996). Once the judgment had been affirmed by this Court, and it could be ascertained that the amount deposited with the court on behalf of Kleiss was at least equal to the amount of the judgment, the circuit court properly concluded that the judgment against Kleiss had been satisfied and released.See footnote 13 13
For the reasons explained in this opinion, we find that the circuit court erred when it distributed to Aetna the funds deposited with the court pursuant to W. Va. R. Civ. P. Rule 67. Therefore, the March 25, 1997, order of the Circuit Court of Berkeley County that denied McDaniel's motion to alter or amend judgment is reversed, and this case is remanded with directions to enter an order consistent with this opinion. In addition, we conclude that the circuit court correctly found that the judgment against Kleiss had been satisfied and released. Accordingly, the March 25, 1997, order of the Circuit Court of Berkeley County that found the judgment against Kleiss had been discharged and satisfied is affirmed.
Reversed, in part, affirmed, in part, and remanded.
Footnote: 11 W. Va. R. Civ. P. Rule 59(e) states:
Motion to Alter or Amend a Judgment. -- A motion to alter or amend the judgment shall be served not later than 10 days after entry of the judgment.
Footnote: 22 W. Va. R. Civ. P. Rule 60(b) provides that the circuit court may relieve a party from a final judgment when the judgment is the result of mistakes, inadvertence, excusable neglect, or unavoidable cause, or when there is newly discovered evidence or
proof of fraud, etc.
Footnote: 33 See infra note 12 for text of W. Va. R. Civ. P. Rule 67.See footnote 14
Footnote: 44 The remaining portion of the $100,000.00 deposited by USAA apparently
remains in the circuit court registry.
Footnote: 55 The relevant portion of the release agreement states:
For the consideration above set forth the said Jeffrey McDaniel does further agree to subordinate to the interests of Aetna the Standard Fire Insurance Company all present and future rights and interests which he may possess or which may hereinafter accrue to him, including, but not limited to, any right of priority established or recognized by the Supreme Court of Appeals of West Virginia in the case of Allstate Insurance Co. v. Karl, [190 W. Va. 176,] 437 S.E.2d 749 (1993), to proceed against the personal assets of Irene Adair Kleiss, her heirs or assigns, for satisfaction of any unpaid portion of any judgment arising from the aforesaid Civil Action in excess of $200,000.00 which is the total amount of the liability insurance coverage of the defendant therein, Irene
Adair Kleiss, and the said Jeffrey McDaniel's underinsured motorist coverage herein tendered until such time as the subrogation interests of Aetna, the Standard Fire Insurance Company arising from the payment of the consideration herein have been satisfied in full.
Footnote: 66 Syllabus point 7 of Marshall v. Saseen, 192 W. Va. 94, 450 S.E.2d 791 (1994), states:
Where an uninsured or underinsured motorist insurance carrier fails to settle within its policy limits, it may be liable in a separate suit for the excess verdict returned by a jury for its failure to make a good faith settlement within its policy limits under the principles set out in Shamblin v. Nationwide Mutual Insurance Co., 183 W. Va. 585, 396 S.E.2d 766 (1990).
Footnote: 77 The policy provisions referred to by Aetna state:
6. OUR RIGHT TO RECOVER PAYMENT
A. If we make a payment under this
policy and the person to or for whom payment was made has a right to recover damages from
another we shall be subrogated to that right. That person shall do whatever is necessary
to enable us to exercise our rights and shall do nothing after loss to prejudice them.
B. If we make payment under this policy and the person to or for whom payment is made recovers damages from another, that person shall hold in trust for us the proceeds of the recovery and shall reimburse us to the extent of our payment.
Footnote: 88 W. Va. Code 33-6-31(f) (1995) (Repl. Vol. 1996) states, in relevant part:
An insurer paying a claim under the endorsement or provisions required by subsection (b) of this section [which contains provisions related to uninsured and underinsured motorist coverage] shall be subrogated to the rights of the insured to whom such claim was paid against the person causing such injury, death or damage to the extent that payment was made.
Footnote: 99 At this juncture, we note that the parties failed to submit the entire policy as part of the record on appeal. Thus, our review of the policy is limited to the portion before us.
Footnote: 1010 The time that elapsed between the formation of the insurance policy and the execution of the release agreement is not apparent from the record presented on appeal.
Footnote: 1111 W. Va. Code § 33-6-31(b) (1995) (Repl. Vol. 1996) states:
Nor shall any such policy or contract be so issued or delivered unless it shall contain an endorsement or provisions undertaking to pay the insured all sums which he shall be legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle, within limits which shall be no less than the requirements of section two, article four, chapter seventeen-d of this code, as amended from time to time: Provided, That such policy or contract shall provide an option to the insured with appropriately adjusted premiums to pay the insured all sums which he shall be legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle up to an amount of one hundred thousand dollars because of bodily injury to or death of one person in any one accident and, subject to said limit for one person, in the amount of three hundred thousand dollars because of bodily injury to or death of two or more persons in
any one accident and in the amount of fifty thousand dollars because of injury to or destruction of property of others in any one accident: Provided, however, That such endorsement or provisions may exclude the first three hundred dollars of property damage resulting from the negligence of an uninsured motorist: Provided further, That such policy or contract shall provide an option to the insured with appropriately adjusted premiums to pay the insured all sums which he shall legally be entitled to recover as damages from the owner or operator of an uninsured or underinsured motor vehicle up to an amount not less than limits of bodily injury liability insurance and property damage liability insurance purchased by the insured without setoff against the insured's policy or any other policy. Regardless of whether motor vehicle coverage is offered and provided to an insured through a multiple vehicle insurance policy or contract, or in separate single vehicle insurance policies or contracts, no insurer or insurance company providing a bargained for discount for multiple motor vehicles with respect to underinsured motor vehicle coverage shall be treated differently from any other insurer or insurance company utilizing a single insurance policy or contract for multiple covered vehicles for purposes of determining the total amount of coverage available to an insured. "Underinsured motor vehicle" means a motor vehicle with respect to the ownership, operation, or use of which there is liability insurance applicable at the time of the accident, but the limits of that insurance are either: (i) Less than limits the insured carried for underinsured motorists' coverage; or (ii) has been reduced by payments to others injured in the accident to limits less than limits the insured carried for underinsured motorists' coverage. No sums payable as a result of underinsured motorists' coverage shall be reduced by payments made under the insured's policy or any other policy.
Footnote: 1212 W. Va. R. Civ. P. Rule 67 states:
Except as otherwise provided in Rule
68(b), in an action in which any part of the relief sought is a judgment for a sum of
money or the disposition of a sum of money or the disposition of any other thing capable
of delivery, a party, upon notice to every other party and by leave of court, may deposit
with the court all or any part of such sum or thing, whether or not that party claims all
or any part of the sum or
thing. The party making the deposit shall serve the order permitting deposit on the clerk of the court. Money paid into court under this rule shall be deposited and withdrawn in accordance with applicable statutes and with orders of the court entered in the action. The fund shall be deposited in a
federally insured interest-bearing account or invested in an interest-bearing instrument approved by the court.
Footnote: 1313 McDaniel also argues that he is entitled to post-judgment interest. This issue was not addressed by the circuit court. Therefore, we will not address it on appeal. "We frequently have held that issues which do not relate to jurisdictional matters and which have not been raised before the circuit court will not be considered for the first time on appeal to this Court." Kronjaeger v. Buckeye Union Ins. Co., 200 W. Va. 570, 585, 490 S.E.2d 657, 672 (1997) (citations omitted).
Footnote: 144 See supra note 10 for text of